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1,373,935 | ACE Market-bound BWYS aims to raise RM56.4mil from IPO | KUALA LUMPUR: BWYS Group Bhd aims to raise RM56.4 million from its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia.
The sheet metal products manufacturer and scaffoldings supplier said the IPO, scheduled for July 22, comprises a public issuance of 256.3 million new ordinary shares, representing 25 per cent of its enlarged share capital, as well as an offer for sale of 100 million existing shares, or 9.8 per cent of its enlarged share capital, by way of private placement to selected investors.
"Based on the IPO price of RM0.22 per share and its enlarged issued shares of 1,025.2 million shares, BWYS’ market capitalisation upon listing is approximately RM225.5 million,” it said in a statement today, in conjunction with the launch of the company’s prospectus.
Out of the 256.3 million issue shares, 51.3 million will be offered to the Malaysian public through a balloting process, 61.5 million to eligible directors, employees, and contributors of the company via pink form allocations, 128.2 million to Bumiputera investors via private placement, and 15.4 million to selected investors via private placement.
BWYS managing director Kang Beng Hai said most of the IPO proceeds will be used to set up a new factory to expand its manufacturing facilities for sheet metal products.
"In addition, we are purchasing new machinery and equipment including a new automated powder coating line as well as roll-forming machines and related equipment to improve our manufacturing capabilities for roof trusses and industrial racking systems,” he said.
Kang said the company is also expanding its product range by venturing into the manufacture of polyurethane foam sandwich panels, which offer insulation from heat and noise, and also implementing information and communications technology systems to digitalise its production and inventory management processes to improve its production workflow.
Following the prospectus launch, the company said the applications for the public issue are open from today and will be closed on July 5, 2024, at 5 pm.
M&A Securities Sdn Bhd is the IPO’s principal adviser, sponsor, underwriter and placement agent. - Bernama | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,BWYS Group,ACE Market,IPO,Listing,sheet metal products,Kang Beng Hai | KUALA LUMPUR: BWYS Group Bhd aims to raise RM56.4 million from its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia. | https://www.thestar.com.my/business/business-news/2024/06/18/ace-market-bound-bwys-aims-to-raise-rm564mil-from-ipo | |
1,373,913 | Open AP policy from July 1, 2024 to benefit more bumiputera entrepreneurs | KUALA LUMPUR: Any bumiputera company, including companies that have never been involved in automotive activities, can apply to be appointed as an Open AP company to engage in vehicle importation and sales activities in Malaysia, effective July 1.
The Ministry of Investment, Trade and Industry (MITI) said the move is in line with MITI's efforts to continue to increase inclusiveness and transparency in the Open AP application process.
"The implementation of this policy is expected to attract more bumiputera companies to engage in the automotive industry. The increase in the number of companies will make this segment more competitive," the ministry said in a statement today.
For bumiputera companies that are interested, MITI said the main conditions are 'sendirian berhad' status, 100 per cent bumiputera ownership, have a minimum paid-up capital of RM1 million and be in operation for at least two years.
Therefore, MITI invites interested and eligible bumiputera companies to apply with the guidelines, application form and checklist which can be consulted at https://www.miti.gov.my/index.php/pages/view/3796.
MITI added that the government's main objective is to continue empowering the bumiputera socio-economic agenda by giving more competitive bumiputera entrepreneurs the opportunity to be involved in the automotive sector.
According to the ministry, the Open AP policy implemented since 1970 has successfully produced viable bumiputera companies, not only in the segment of importing and selling vehicles, but also in key activities along the supply chain such as after-sales service, insurance and logistics.
The policy is one of the policies related to bumiputera that is still maintained until now and is important to achieve the target of 30 per cent ownership of bumiputera equity in the national economy as outlined under the New Economic Policy. - Bernama | Business | Auto | Complimentary | Short | null | 2024-06-18 00:00:00 | Auto,Automotive,MITI,Open AP,Bumiputera companies | KUALA LUMPUR: Any bumiputera company, including companies that have never been involved in automotive activities, can apply to be appointed as an Open AP company to engage in vehicle importation and sales activities in Malaysia, effective July 1. | https://www.thestar.com.my/business/business-news/2024/06/18/open-ap-policy-from-july-1-2024-to-benefit-more-bumiputera-entrepreneurs | |
1,373,851 | Berjaya explores collaborations in smart tech, NEV | KUALA LUMPUR: Berjaya Corp Bhd has inked two memoranda of strategic collaboration in the fields of smart technologies and new energy vehicles (NEV) respectively in an effort to expand across these vital sectors in Malaysia and the broader Asean region.
In a statement, the group said it was exploring a potential partnership with Skyworth Group Co Ltd, a leading Chinese company specialising in smart home appliances and technology.
It said the the venture will focus on advancing smart home technology, systems and new energy solutions.
"Leveraging each other's strengths, BCorp is poised to explore using its extensive distribution network to enhance the reach of Skyworth’s innovative smart home appliances and systems across Malaysia, introducing consumers to cutting-edge advancements," it said.
It said the the parties would also explore developing and implementing green energy solutions, such as residential, commercial and industrial photovoltaic systems.
Meanwhile, Berjaya's subsidiary, Berjaya Eco-Drive Sdn Bhd, is exploring a collaboration with Chinese NEV manufacturer Skywell New Energy Automobile Group Co Ltd to establish Skywell as a prominent NEV brand in Malaysia and Asean.
The group said the endeavour may include exploring strategic partnership to advance essential NEV technologies and bolster the NEV ecosystem in the country, thus enhancing the entire NEV landscape in Malaysia.
"The strategic collaborations with Skyworth and Skywell herald transformative prospects, poised to revolutionise various sectors across Malaysia and Southeast Asia.
"By combining our collective expertise and leveraging regional strengths, we stand at the forefront to catalyse innovation, foster sustainable development, and illuminate the path towards a more prosperous future for the entire region," said Berjaya Corp founder and advisor Tan Sri Vincent Tan Chee Yioun. | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,Berjaya,Vincent Tan,smart technology,NEV | KUALA LUMPUR: Berjaya Corp Bhd has inked two memoranda of strategic collaboration in the fields of smart technologies and new energy vehicles (NEV) respectively in an effort to expand across these vital sectors in Malaysia and the broader Asean region. | https://www.thestar.com.my/business/business-news/2024/06/18/berjaya-explores-collaborations-in-smart-tech-nev | |
1,373,841 | FBM KLCI rises amid weaker broader market | KUALA LUMPUR: Malaysian benchmark stock index rose on Tuesday morning trade, in line with other regional indices, as markets tracked Wall Street's bullish performance overnight.
At 12.30pm, the FBM KLCI was up 4.39 points to 1,611.71 although the broader market saw the number of declining stocks outpace gainers 639 to 460, while 472 stocks remained unchanged.
The share turnover was 3.58 billion valued at RM2.07bil.
Six of the 13 market sectors put on gains, with the most improved being plantations and healthcare.
Leading the blue chips higher were Telekom up seven sen to RM6.59, MISC gaining eight sen to RM8.43 and SD Guthrie rising nine sen to RM4.31.
Some notable gainers on the broader market included ATA IMS surging 16.5 sen to 51 sen, Notion VTec gaining 11 sen to RM1.92 and Heineken adding 12 sen to RM23.32.
In the technology sector, Frontken climbed 16 sen to RM4.64, KESM added 13 sen to RM7.54 and Vitrox put on 11 sen to RM4.71.
Regionally, Japan's Nikkei jumped 0.86% to 38,428 while China's composite index rose 0.36% to 3,026.
Hong Kong's Hang Seng slipped 0.18% to 17,902 and Singapore's Straits Times index added 0.16% to 3,302. | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,Bursa Malaysia,FBM KLCI,equities,trading,investor,commodity,stocks | KUALA LUMPUR: Malaysian benchmark stock index rose on Tuesday morning trade, in line with other regional indices, as markets tracked Wall Street's bullish performance overnight. | https://www.thestar.com.my/business/business-news/2024/06/18/fbm-klc-rises-amid-weaker-broader-market | |
1,373,793 | BOJ chief Ueda signals chance of July rate hike | TOKYO: Bank of Japan Governor Kazuo Ueda said the central bank could raise interest rates next month depending on economic data available at the time, underscoring its resolve to steadily push up borrowing costs from current near-zero levels.
While rising import costs from a weak yen may weigh on household spending, increasing wages will underpin consumption and keep the economy on track for a moderate recovery, Ueda told parliament on Tuesday.
"Our decision on bond-buying taper and interest rate hikes are two different things," Ueda said. "There's a chance we could raise interest rates at our next policy meeting, depending on economic, price and financial data and information available at the time."
At its policy meeting on Friday, the BOJ decided to start trimming its huge bond purchases and announce a detailed plan in July on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus.
The decision has heightened uncertainty on whether the BOJ could also hike short-term rates at its July 30-31 meeting or hold off until later in the year to avoid upending markets.
Ueda said the BOJ was not yet fully convinced that inflation will sustainably hit its 2% target, stressing the need to spend "a bit more time" to scrutinise data before raising rates again.
But he said corporate price- and wage-setting behaviour has clearly changed amid record profits and a tightening job market.
"The economy will likely see more clear signs of a positive wage-inflation cycle" as nominal wages rise, he said.
Ueda offered no clues on the pace and size of the BOJ's bond taper plan to be announced next month. He said the central bank will avoid using its bond-buying operation as a monetary policy tool, or a means to communicate its policy intention.
The BOJ exited negative rates and bond yield control in March in a landmark shift away from a decade-long, radical stimulus programme.
With inflation exceeding its 2% target for two years, it has also dropped signs that it will raise short-term rates to levels that neither cool nor overheat the economy - seen by analysts as being somewhere between 1-2%.
A weak yen complicates the BOJ's policy path. While it accelerates inflation by pushing up imported goods prices, the subsequent rise in living costs has weighed on consumption and cast doubt on the strength of Japan's economy.
Many economists expect the BOJ to hike interest rates to 0.25% this year, though they are divided on whether it will come in July or later in the year. - Reuters | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,Bank of Japan,interest rate,yen | TOKYO: Bank of Japan Governor Kazuo Ueda said the central bank could raise interest rates next month depending on economic data available at the time, underscoring its resolve to steadily push up borrowing costs from current near-zero levels. | https://www.thestar.com.my/business/business-news/2024/06/18/boj-chief-ueda-signals-chance-of-july-rate-hike | |
1,373,825 | Maybank leads 89 Malaysian firms on Fortune's SEA 500 list | KUALA LUMPUR: A total of 89 Malaysian companies, led by Malayan Banking Bhd (Maybank), have made it into Fortune's inaugural list of the Top 500 Southeast Asian countries by revenue.
The Fortune Southeast Asia 500 rankings for 2024, which ranks companies by revenue for the 2023 fiscal year, includes companies from seven nations, namely Indonesia, Thailand, Malaysia, Singapore, Vietnam, the Philippines, and Cambodia.
The minimum revenue threshold to be included on the list was US$460.8mil.
According to Fortune, a global multi-platform media company, the focus on the region comes as Southeast Asia gains greater significance in the global economy due to shifting supply chains and the rapid development of the region's economies.
“The Fortune Southeast Asia 500 reflects a dynamic and fast-changing region — one whose core economies are growing notably faster than those of Europe or the US.
"This is partly due to Southeast Asia taking on far greater significance in the global economy, not least because a host of Global 500 multinationals have shifted more of their supply chains to Southeast Asian nations,” said Fortune executive editor for Asia Clay Chandler in a statement.
In this year's list, Indonesia makes the biggest splash with 110 companies in the rankings while Thailand follows with 107.
Malaysia has 89 entrants on the list, which is just five more than Singapore's 85, while Vietnam makes the list with 70 companies, Philippines, 38, and Cambodia, two.
Malaysia's largest company by market capitalisation, Maybank, is the country's only entrant into the Top 20 companies by revenue at No.17 with US$14.15bil.
Ranked by profitability, three Malaysian companies made the Top 20, namely Maybank, CIMB Group Holdings Bhd and Public Bank Bhd at No.11, 17 and 19 respectively.
Topping the list at No.1 is Singapore-based commodities trader Trafigura with sales revenue of US$244bil. Thailand's PPT is the first runner-up while Indonesia's Pertamina rounds off the Top 3.
Fortune noted that the 10 largest companies on the list reported a combined revenue of US$640bil, which made up more than a third of the US$1.8 trillion revenue recorded across all the Southeast Asia 500 companies in the 2023 fiscal year. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Fortune,Maybank,ranking | KUALA LUMPUR: A total of 89 Malaysian companies, led by Malayan Banking Bhd (Maybank), have made it into Fortune's inaugural list of the Top 500 Southeast Asian countries by revenue. | https://www.thestar.com.my/business/business-news/2024/06/18/maybank-leads-89-malaysian-firms-on-fortune039s-top-500-sea-countries-list | |
1,373,704 | Malaysia, China likely to discuss wide range of issues to enhance economic collaboration - experts | KUALA LUMPUR: Malaysia and China are likely to discuss issues focusing on innovation and inclusiveness, alongside green energy and commodities to enhance investments and economic collaboration during the visit of Chinese Premier Li Qiang to Malaysia, say experts.
Li, who assumed office as China's premier in March last year, is scheduled to arrive in Malaysia later today to kick-off his three-day official visit in conjunction with the 50th anniversary of diplomatic ties between Malaysia and China.
Li’s visit is at the invitation of Prime Minister Datuk Seri Anwar Ibrahim.
On the meeting of the two leaders, Malaysian Institute of Economic Research (MIER) executive director Dr Anthony Dass expected both nations’ focus to be on innovation and inclusiveness, which would support the MADANI framework and further strengthen the trade, investments and services relationship.
"Looking at the MADANI framework, China could play an important role as our framework aligns with the values and principles advocated in 2013 under China’s Community Shared Principle,” he told Bernama.
Anthony said while Malaysia’s focus is to improve its competitiveness, fiscal position, debt levels, service delivery and governance, discussions between the two leaders are expected to centre around these areas for the benefit of both nations.
Malaysia-China Friendship Association president Datuk Abdul Majid Ahmad Khan said the two countries have been forging healthy and dynamic relations over the past five decades, evidenced by the strong trade performance recorded over the years.
He said that apart from further consolidating existing links and identifying new sectors for cooperation, Anwar and Li are anticipated to facilitate the growth of Malaysian commodities, such as palm oil and durian-related products as well as enhance technology cooperation, which has been on the rise in recent years.
"Other new areas of focus may include aerospace, communications and green energy sectors," he said.
China has been Malaysia’s largest trading partner for 15 consecutive years since 2009. Last year, total trade with China was valued at RM450.84 billion (US$98.80 billion), contributing 17.1 per cent to Malaysia’s global trade.
Discussions on renewable energy on the cards
Echoing Abdul Majid’s views, Anthony said as both Malaysia and China are investing in clean technologies like solar, wind and hydro power, discussions on renewable energy are likely to be held to harness the green technology besides merely focusing on technology.
"Such discussions will assist us to reduce greenhouse gas emission, address climate change and unlock new opportunities,” he said.
He also anticipated that electrical and electronics (E&E) related trade and investment issues would be put on the table, as developments in the segment would have economic spillovers across industries like E&E and electric vehicles (EVs) -- a key strategy in the New Industrial Master Plan 2030 (NIMP 2030).
"Other areas of discussions would be on data centre, infrastructure, information and communication technology (ICT), digital related services, connectivity, rare earth, new EVs and future growth areas,” he said.
Malaysia, China to further deepen economic cooperation
Abdul Majid said that over the years, Malaysia and China have been utilising three main platforms, namely the Five-Year Programme for Economic and Trade Cooperation, the Belt and Road Initiative (BRI) and ASEAN-China Free Trade Agreement to advance and deepen their economic collaboration.
"During Premier Li’s visit, the contents of these platforms are expected to be further enriched to deepen the cooperation between the two countries,” he said.
Taking the BRI for example, he said new sectors, such as skill training and areas that could directly impact people's living standards, could be included in the initiative.
Others included greater emphasis on people-to-people exchanges among think-tanks, media and cultural institutions, he said.
Abdul Majid believed that Li’s visit will further strengthen the existing ties between Malaysia and China.
"There is much goodwill on both sides and a commitment to further deepen relations.
"Given the past remarkable achievements and the mutual benefits from the relationship, we can be optimistic that Malaysia-China relations will be further elevated and deepened in the future,” he said.
Nonetheless, Anthony cautioned that the changes in global and regional dynamics, including shifts in global economic power, geopolitical realignments and regional security concerns could influence Malaysia-China relationship.
"For instance, the export-oriented industries like E&E and solar could face potential impact from the geopolitical tension between the United States and China.
"Here, we need to focus on global market diversification to avoid concentration risk,” he said.
On issues such as territorial claims in the South China Sea, he said Malaysia, like other Southeast Asian nations, should continue to balance its economic interests with China while safeguarding its sovereignty and stability. - Bernama | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,Malaysia,China,Anwar Ibrahim, Li Qiang,Anthony Dass, Abdul Majid Ahmad Khan | KUALA LUMPUR: Malaysia and China are likely to discuss issues focusing on innovation and inclusiveness, alongside green energy and commodities to enhance investments and economic collaboration during the visit of Chinese Premier Li Qiang to Malaysia, say experts. | https://www.thestar.com.my/business/business-news/2024/06/18/malaysia-china-likely-to-discuss-wide-range-of-issues-to-enhance-economic-collaboration---experts | |
1,373,702 | Top Glove to trim losses as operating dynamics improve | KUALA LUMPUR: Top Glove Corp Bhd could be poised for a meaningful share price recovery in 2024 as the glove industry's operating dynamics have turned favourable.
In a note, RHB Research said customers have been more receptive to the increase in average selling prices (ASP).
It said Chinese glove makers have also raised their ASPs to US$17-18 from US$15-16, according to channel checks.
In terms of demand, Malaysia’s glove exports volume surged 46% year-on-year (y-o-y), representing its highest-ever y-o-y growth post-pandemic, and 3.6% month-on-month (m-o-m), while exports value grew 39% y-o-y and 3.8% m-o-m.
"This came after Malaysia recorded exports volume growth of 6% quarter-on-quarter (q-o-q) in 1Q24, indicating that the recovery momentum of global glove demand remains healthy," said RHB.
RHB expects Top Glove to register a narrower quarter-on-quarter core loss of RM40-45mil as it releases its financial result for 3QFY24 tomorrow.
The research firm's projection marks an improvement from a core loss of RM66mil that the glove maker recorded in 2QFY24 as RHB takes into consideration improving operating efficiency and a recovery in average selling price.
However, these catalysts should be offset by the recent 5-6% uptick in natural gas tariff and escalation of raw material prices, it said.
RHB upgraded its call to "buy" from "neutral" with a higher target price of RM1.32 from 83 sen previously. | Business | Analyst Reports | Complimentary | Short | null | 2024-06-18 00:00:00 | Analyst Reports,Top Glove,gloves,profit,export,RHB | KUALA LUMPUR: Top Glove Corp Bhd could be poised for a meaningful share price recovery in 2024 as the glove industry's operating dynamics have turned favourable. | https://www.thestar.com.my/business/business-news/2024/06/18/top-glove-to-trim-losses-as-operating-dynamics-improve | |
1,373,691 | Singapore's May exports down 0.1% y/y, better than forecast | SINGAPORE: Singapore's non-oil domestic exports edged down 0.1% in May from the same month a year earlier, data on Tuesday showed, with electronics exports growing for a second straight month, Enterprise Singapore said in a statement.
The almost flat result compared with a Reuters poll forecast of a 1.0% fall, and followed a downwardly revised 9.6% drop in April.
On a month-on-month seasonally adjusted basis, non-oil exports decreased by 0.1% in May after a 7.3% increase in April.
Electronic exports expanded by 21.9% in May, compared to 3.3% in April, posting the first double-digit growth in 22 months, according to Enterprise Singapore.
Non-oil exports to Singapore's top markets as a whole grew in May.
The biggest jump was the 73.4% expansion to Hong Kong due to an increase in exports of integrated circuits, non-monetary gold and personal computers. - Reuters | Business | Economy | Complimentary | Short | null | 2024-06-18 00:00:00 | Economy,Singapore,oil,export | SINGAPORE: Singapore's non-oil domestic exports edged down 0.1% in May from the same month a year earlier, data on Tuesday showed, with electronics exports growing for a second straight month, Enterprise Singapore said in a statement. | https://www.thestar.com.my/business/business-news/2024/06/18/singapore039s-may-exports-down-01-yy-better-than-forecast | |
1,373,690 | Ringgit firmer against US$ in early trade | KUALA LUMPUR: The ringgit moved higher against the US dollar in early trade today as investors maintained their cautious stance while awaiting fresh economic data and insights on global economic outlook.
At 9 am, the ringgit rose to 4.7100/7140 versus the greenback from Friday’s close of 4.7190/7225.
The market was closed yesterday for Hari Raya Aidiladha celebration.
ActivTrades trader Anderson Alves noted that market participants will shift their focus on a series of US Federal Reserve speeches and the US Retail Sales report due later today.
"Additionally, the Reserve Bank of Australia is expected to keep the Official Cash Rate on hold at 4.35 per cent for the fifth consecutive time.
"Meanwhile, China will also report its industrial production, retail sales, fixed asset investment, and employment data which may elicit mixed reactions," he told Bernama.
The ringgit mostly traded higher against a basket of major currencies in early trade.
The local unit increased versus the Japanese yen to 2.9871/9898 from Friday’s close of 3.0046/0072 and appreciated vis-a-vis the British pound to 5.9864/9915 from 5.9955/9999, but weakened against the euro to 5.0567/0610 from 5.0418/0455 previously.
Similarly, the ringgit traded higher against its ASEAN peers.
The local note was better vis-a-vis the Indonesian rupiah at 287.0/287.2 from 287.5/287.8 at Friday’s close and strengthened against the Philippine peso to 8.02/8.04 from 8.04/8.05 previously.
It also rose against the Singapore dollar to 3.4842/4875 from 3.4857/4886 last Friday and went up versus the Thai baht to 12.7986/8136 from 12.8328/8475 previously. - Bernama | Business | Forex | Complimentary | Short | null | 2024-06-18 00:00:00 | Forex,Ringgit,US dollar,ActivTrades,Anderson Alves,Federal Reserve | KUALA LUMPUR: The ringgit moved higher against the US dollar in early trade today as investors maintained their cautious stance while awaiting fresh economic data and insights on global economic outlook. | https://www.thestar.com.my/business/business-news/2024/06/18/ringgit-firmer-against-us-in-early-trade | |
1,373,687 | Foreign interest in local equities continues with RM202.4mil net purchases | KUALA LUMPUR: Foreign funds continued to flow into Bursa Malaysia for the second consecutive week with a net purchase of RM202.4mil in equities.
The net buying over three out of the five trading days was underpinned by the US Federal Reserve's Federal Open Market Committee meeting last Wednesday, which saw the central bank tweaking its rate cut projections for the year.
MIDF Research noted a significant shift in the forecast rate cuts for the year as the FOMC raised its 2024 outlook for the Federal Fund Rate to 5.1% from 4.6% previously, signalling one rate cut from three to four previously.
According to the research firm, foreign investors recorded net buying amounts of RM10.7mil on Monday, RM135.1mil on Tuesday and RM197.4mil on Thursday.
They net sold RM82.7mil on Wednesday and RM58.1m on Friday.
The sectors which recorded the highest net foreign inflows last week were utilities (RM240.8mil), industrial products and Services (RM142.8mil), and technology (RM100.8mil) while the sectors with the highest net foreign outflows were Financial Services (RM330.9mil), plantation (RM126.2mil) and telecommunications and media (RM77.2mil).
Meanwhile, local institutions remained net sellers for the second consecutive week at a smaller quantum of RM25.9mil.
Local retailers were net sellers of local equities for a second straight week at RM176.5mil.
"Regarding participation, retail investors experienced an increase in average daily trading volume (ADTV) by 26.9%, local institutions by 14.1%, whereas foreign investors saw a decline of 4.8%," said MIDF in its weekly fund flow report. | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,MIDF,Bursa Malaysia,fund flow,equities | KUALA LUMPUR: Foreign funds continued to flow into Bursa Malaysia for the second consecutive week with a net purchase of RM202.4mil in equities. | https://www.thestar.com.my/business/business-news/2024/06/18/foreign-interest-in-local-equities-continue-with-rm2024mil-net-purchases | |
1,373,681 | FBM KLCI opens higher after long weekend break | KUALA LUMPUR: While the FBM KLCI started Tuesday on a positive performance following Wall Street overnight rally, analysts are offering contrasting opinions over how the domestic market will perform moving forward.
According to Apex Securities Research, the consolidation on the domestic market is expected to pick up pace following dovish remarks from the US Federal Reserve on interest rate cuts
The local benchmark index ended lower last Friday amid a broad-based pullback, which is expected to continue as the positive momentum continues to fade, it said.
"Economy-wise, investors will be keeping a close tab on US industrial production data, manufacturing production and retail sales data to gauge any weaknesses within the economy," said the research firm in a note.
Malacca Securities Research, however, anticipates buying support to persist on the local front given the positive sentiment in the US stock markets.
"With Apple’s buying interest reignited with the incorporation of AI into its products, there might be spillover of buying support towards stocks on the local front within the technology sector.
"Also, we like the ongoing AI and Data Center catalysts to boost the appetite for the HDD, cloud, cybersecurity segments," it said in its outlook.
After a long weekend, the FBM KLCI opened 2.32 points higher at 1,609.39 as investors started the week on some bargain-hunting.
Blue chips taking the lead included YTL Power up nine sen to RM5.37, Press Metal rising four sen to RM5.84, Tenaga Nasional adding 10 sen to RM14.18 and Telekom climbing 14 sen to RM6.66.
Other active stocks included Heineken adding 18 sen to RM23.38, Petron Malaysia rising 12 sen to RM4.98, Notion Vtec gaining 10 sen to RM1.91 and KESM climbing nine sen to RM7.50.
Hibiscus Petroleum, which announced its acquisition of the entire stake in TotalEnergies EP (Brunei) for US$259.4mil, rose nine sen to RM2.52.
Top actives included DFX up one sen to 21 sen, K1 adding 2.5 sen to 29.5 sen and Harvest Miracle gaining one sen to 10.5 sen. | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,Bursa Malaysia,FBM KLCI,equities,trading,investor,commodity,stocks | KUALA LUMPUR: While the FBM KLCI started Tuesday on a positive performance following Wall Street overnight rally, analysts are offering contrasting opinions over how the domestic market will perform moving forward. | https://www.thestar.com.my/business/business-news/2024/06/18/fbm-klci-opens-higher-after-long-weekend-break | |
1,373,670 | Oil jumps, settles at highest in over a month on demand optimism | NEW YORK: Oil prices surged nearly $2 a barrel on Monday to their highest settlement levels in over a month, adding to last week's gains as investors grew more optimistic on the demand outlook.
U.S. West Texas Intermediate crude futures gained by $1.88, or 2.4%, to settle at $80.33 a barrel, the highest since the end of April. Global benchmark Brent crude gained $1.63, or 2%, to $84.25 a barrel, also the highest since April.
Last week, both benchmarks posted their first weekly gain in four weeks after reports from the OPEC+ producer group, the International Energy Agency and U.S. Energy Information Administration raised confidence that oil demand will improve in the second half of the year and help inventories draw down.
Reassurances from OPEC+ that a plan to raise supplies from the fourth quarter of this year could be paused or reversed based on market conditions also helped prices firm. That plan, unveiled after the group's meeting on June 2, had led to a sharp selloff in prices.
"The outlook for strong fuel demand into the coming quarter and Saudi reassurance about the October hike being subject to prevailing conditions and added focus on quota breakers to bring production down and into line all seems to be supporting," said Ole Hansen of Saxo Bank.
Investors last week repurchased some of the petroleum they had sold the week before, data from the Commodity Futures Trading Commission showed on Friday.
"Those funds who thought we were heading into a production battle, had their concerns quickly assuaged when OPEC+ members went on a PR campaign to assure the world their changes to production would be market dependent," said Alex Hodes, oil analyst at brokerage firm StoneX.
Economic data from China also supported hopes of stronger oil demand from the top importer, Hodes said.
Manufacturing investment in China in the first five months of this year showed robust growth of 9.6%, government data showed on Monday. Other data was mixed, however, with industrial output lagging expectations.
Oil prices have also been supported by a rising geopolitical risk premium, AEGIS Hedging analysts noted on Monday.
Concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation. (Additional reporting by Alex Lawler, Mohi Narayan and Colleen Howe; editing by Jason Neely, Josie Kao, Susan Fenton and David Gregorio) | Business | Commodities | Complimentary | Medium | null | 2024-06-18 00:00:00 | Commodities,Oil,petroleum,Brent,WTI,crude,Opec | NEW YORK: Oil prices surged nearly $2 a barrel on Monday to their highest settlement levels in over a month, adding to last week's gains as investors grew more optimistic on the demand outlook. | https://www.thestar.com.my/business/business-news/2024/06/18/oil-jumps-settles-at-highest-in-over-a-month-on-demand-optimism | |
1,373,668 | S&P 500, Nasdaq hit record closing highs ahead of data, Fed comments | THE S&P 500 and Nasdaq scored record closing highs on Monday as technology shares rallied on enthusiasm over artificial intelligence ahead of this week's economic data and Federal Reserve officials' speeches that could shed light on monetary policy.
Megacaps Apple and Microsoft rebounded from early losses to end 1.97% and 1.31% higher respectively.
Apple shares extended their rally from last week when the company announced new AI features meant to rekindle demand for iPhones.
"This is continuing to be driven by AI," said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management in Champaign, Illinois.
Broadcom and U.S.-listed shares of Taiwan Semiconductor Manufacturing Co were up 5.41% and 2.74% respectively while Micron Technology rose 4.58% after price-target raises by brokerages.
The Philadelphia SE Semiconductor index hit an all-time high even as artificial intelligence chip leader Nvidia retreated from a record high to lose 0.66%.
Consumer discretionary and technology were the biggest gainers among the 11 S&P 500 sector indexes, while utilities and real estate led declines.
"There is hope that lower interest rates might come into play looking forward, reducing housing costs and helping consumers out," said Evans.
Goldman Sachs lifted its 2024 year-end target for the S&P 500 Index to 5,600 from 5,200, while Evercore ISI raised its forecast for the benchmark index to 6,000 from 4,750.
Both brokerages cited technology strength and enthusiasm for AI as reasons for their upgrades.
The tech-heavy Nasdaq and S&P 500 hit multiple all-time peaks in the previous week.
The Fed will be able to cut its benchmark interest rate once this year, Philadelphia Fed President Patrick Harker said on Monday, if his economic forecast plays out.
Fed Board Governor Lisa Cook will speak later on Monday.
This week's economic roster includes May retail sales data on Tuesday, followed by industrial production, housing starts and the S&P flash Purchasing Managers' Index.
Markets will be closed on Wednesday for the Juneteenth holiday.
The Fed held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December.
However, markets still expect about two 25-basis-point cuts this year, LSEG data showed. The CME FedWatch tool shows easing is still seen beginning at the September meeting.
The Dow Jones Industrial Average rose 188.94 points, or 0.49%, to 38,778.10. The S&P 500 climbed 41.63 points, or 0.77%, to 5,473.23 and the Nasdaq Composite advanced 168.14 points, or 0.95%, to 17,857.02.
Autodesk jumped 6.48% after a report that activist investor Starboard Value had bought a roughly $500 million stake in the software maker.
Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE, which had 250 new highs and 126 new lows.
The S&P 500 posted 37 new 52-week highs and six new lows while the Nasdaq Composite recorded 61 new highs and 214 new lows.
Volume on U.S. exchanges was 11.12 billion shares, compared with the 11.87 billion average for the full session over the last 20 trading days. - Reuters | Business | Markets | Complimentary | Medium | null | 2024-06-18 00:00:00 | Markets,Wall Street,NYSE,Dow Jones,S&P500,Nasdaq,dollar,commodities,trading | THE S&P 500 and Nasdaq scored record closing highs on Monday as technology shares rallied on enthusiasm over artificial intelligence ahead of this week's economic data and Federal Reserve officials' speeches that could shed light on monetary policy. | https://www.thestar.com.my/business/business-news/2024/06/18/sp-500-nasdaq-hit-record-closing-highs-ahead-of-data-fed-comments | |
1,373,667 | Trading ideas: Hibiscus, Genting, TDM, Destini, GUH, Trive, PIE, Oriental Kopi, OSK, Tropicana, Kerjaya Prospek, PPB, Fitters and KYM | KUALA LUMPUR: Here are the headlines from Corporate Malaysia.
Hibiscus Petroleum Bhd is venturing into gas-producing assets in Brunei with the acquisition of a 100% interest in TotalEnergies EP (Brunei) for USD259.4mn cash.
Genting Bhd is still looking at opportunities to list in the US, with the intention of unlocking shareholder value.
TDM Bhd 's subsidiary, PT Rafi Kamajaya Abadi has filed for a judicial review against the decision of Indonesia's supreme court for PTRKA to compensate Indonesia and rehabilitate a 2,650-hectare area in West Kalimantan province after a fire incident in 2019.
Destini Bhd said its indirect subsidiary has been served with a winding-up petition for purportedly failing to pay RM18.6mn owed to the tax authority.
GUH Holdings Bhd and Chinese battery manufacturer Shenzhen Xixin Electronic Technology Co Ltd, have mutually agreed to terminate a plan to develop a lithium battery assembly plant in Malaysia.
Trive Property Group Bhd has proposed a bonus issue of warrants on the basis of 2 warrants for every 5 existing shares, to reward its shareholders and strengthen its financial position and capital base.
PIE Industrial Bhd , whose share price rose 18% on Friday, said it is not aware of any corporate development, rumour or report that may have triggered the jump in a reply to the unusual market activity query by Bursa Malaysia Securities.
Oriental Kopi Holdings Bhd has filed for an initial public offering on the ACE Market to raise funds to add the number of outlets, set up new kitchens and stores.
OSK Property Holdings Bhd, the property arm of OSK Holdings Bhd has partnered with Affin Bank Bhd in the bank’s new mortgage programme “Affinita”, aimed at providing women with financial solutions towards homeownership.
Tropicana Corp Bhd has announced a partnership with Samsung Malaysia Electronics Sdn Bhd to offer artificial intelligence home appliances in its upcoming developments.
Kerjaya Prospek Property Bhd , via its wholly owned subsidiary Kerjaya Property Sdn Bhd, has officially opened Bloomsvale Shopping Gallery on Jalan Puchong, Kuala Lumpur, in a door-opening ceremony last Saturday.
PPB Group Bhd has emerged as a substantial shareholder of Techbond Group Bhd (Not Rated) after acquiring a 15% stake in the company.
Fitters Diversified Bhd said Cita Realiti Sdn Bhd has ceased to be its largest shareholder after selling a 6.3% stake in the fire protection equipment supplier on last Friday.
KYM Holdings Bhd ’s 1QFY25 net profit declined 94.8% YoY to RM585k, due to the absence of a one-off gain amounting to RM15.3mn from the sale of a piece of land and building during the same period last year. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Trading ideas,Hibiscus Petroleum,Genting,TDM,Destini,GUH,Trive,PIE,Oriental Kopi,OSK,Tropicana,Kerjaya Prospek,PPB,Fitters,KYM | KUALA LUMPUR: Here are the headlines from Corporate Malaysia. | https://www.thestar.com.my/business/business-news/2024/06/18/trading-ideas-hibiscus-genting-tdm-destini-guh-trive-pie-oriental-kopi-osk-tropicana-kerjaya-prospek-ppb-fitters-and-kym | |
1,373,532 | Goldman Sachs raises S&P 500 target to 5,600 | NEW YORK: Goldman Sachs has raised its 2024 year-end target for the S&P 500 Index to 5,600 from 5,200 earlier, citing strong earnings growth by five mega-cap US tech stocks and a higher fair value price-to-earnings ratio multiple.
Microsoft, Nvidia, Google, Amazon.com and Meta Platforms have collectively surged by 45% and now comprise 25% of the S&P 500 equity cap, the brokerage said in a note.
“The drivers of the rally include upward revisions to consensus 2024 earnings estimates for these same tech companies, and valuation expansion stemming from increased investor enthusiasm about artificial intelligence (AI).”
The upgraded target reflects an upside of about 3.1% to the index’s last close of 5,431.60.
The brokerage expects roughly unchanged real yields by the end of the year and strong earnings growth to support a 15 times price-to-earnings for the equal weight S&P 500 Index.
“The US election is a key risk to the S&P 500 level and falls between our three-month and year-end forecast horizons,” said analysts at Goldman Sachs. — Reuters | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,Goldman Sachs,S&P500,Wall Street,equities | NEW YORK: Goldman Sachs has raised its 2024 year-end target for the S&P 500 Index to 5,600 from 5,200 earlier, citing strong earnings growth by five mega-cap US tech stocks and a higher fair value price-to-earnings ratio multiple. | https://www.thestar.com.my/business/business-news/2024/06/18/goldman-sachs-raises-sp-500-target-to-5600 | |
1,373,541 | Activity in oil and gas industry heating up again | HANOI: A decade after its peak, the oil and gas industry is seeing a new investment boom with exploration and production (E&P) activity heating up again globally.
The upstream oil and gas sector has witnessed a resurgence of investment activity over the past few years, according to data from the US Energy Information Administration (EIA).
After hitting a floor in 2020, upstream investments increased by 11% in 2022 and grew another 7% in 2023. The upward trend in upstream oil and gas investment is expected to continue into 2024.
The renewed investment surge is particularly prevailing in North America, where favourable market conditions and technological advancements are driving a significant inflow of capital.
Similarly, countries in the Middle East and Asia are also ramping up their E&P investments to meet growing domestic energy demands as well as export commitments.
In South-East Asia, the upstream oil and gas sectors in Malaysia and Indonesia are poised for further investment and expansion.
In Malaysia, PETRONAS is ramping up its upstream spending, with a focus on growing E&P activities to boost domestic oil and gas output.
Earlier this year, Malaysia awarded seven new production sharing contracts covering six exploration blocks and one resource exploration opportunity.
PETRONAS estimates these deals will generate over RM1.3bil in investment for exploration work.
Indonesia has also outlined ambitious investment plans for its oil and gas industry. The country intends to invest US$17bil in the sector in 2024, a 29% increase compared with 2023.
This capital inflow is aimed at boosting Indonesia’s oil and gas production capabilities, with the plan to drill around 930 wells in 2024, up from 790 wells the previous year.
In Vietnam, E&P projects have been lacking since 2014 due to the plunging and prolonged low prices for crude oil, making new oil and gas development projects economically unviable.
However, with the recovery of crude oil prices, the Vietnam Oil and Gas Group (PetroVietnam) is planning to invest around 49.2 trillion dong this year, up nearly 57% from last year. Over 25.7 trillion dong will be invested in the upstream sector.
The renewed upstream investment by PetroVietnam and its subsidiaries signals Vietnam’s efforts to ramp up oil and gas production capabilities amid the recovery in global energy prices, aiming to boost the country’s domestic energy supplies.
PetroVietnam Technical Services Corp (PTSC) plans to invest over 1.8 trillion dong in 2024, 4.4 times more than 2023. During the first quarter of the year, it invested 301 billion dong.
PetroVietnam Exploration Production Corp (PVEP), a subsidiary of PetroVietnam, is leading the investment plan for 2024, with over 20.6 trillion dong. PVEP will dedicate resources to develop activities at various key oil and gas projects.
Meanwhile, PV Drilling expects stable high oil prices will increase domestic and regional drilling and well activity, boosting demand for rigs and services.
It plans more than 2.6 trillion dong in investments this year, versus less than 50 billion dong in 2023.
The company plans to shift from buying new US$130mil rigs to acquiring used rigs for US$90mil, and spend US$19.8mil on equipment.
Vietnam’s major domestic oil and gas fields, exploited between the 1980s and 2015, are now being exhausted, however growing industrial and energy demand requires accelerating exploration and production.
Key upcoming projects like Lac Da Vang Cuu Long, Su Tu Trang Pha 2B, Nam Du-U Minh, and especially Block B-O Mon will provide substantial, stable work for upstream companies. — Vietnam News/ANN | Business | Commodities | Complimentary | Medium | null | 2024-06-18 00:00:00 | Commodities,Oil,petroleum,Brent,WTI,crude,Opec | HANOI: A decade after its peak, the oil and gas industry is seeing a new investment boom with exploration and production (E&P) activity heating up again globally. | https://www.thestar.com.my/business/business-news/2024/06/18/activity-in-oil-and-gas-industry-heating-up-again | |
1,373,540 | UBS sees bond spreads widening slightly | NEW YORK: US corporate bond spreads may widen modestly from current levels by the end of the year, but generally demand for the bonds is strong and companies are performing well, according to strategists at UBS Group AG. Spreads on US blue-chip bonds could widen to 95 basis points from their current level of 88 basis points, strategists led by Matthew Mish wrote in a June 12 note.
Meanwhile, spreads on junk bonds may be pushed out to 325 basis points from 305 basis points.
On a total return basis, high-grade bonds could gain about 5.8%, outperforming high-yield debt which is forecast to gain 5.2%, they wrote.
“These are equity-like returns, and that is a strong statement in support of credit as an asset class,” Mish said.
“We are not seeing an acceleration of stress, if anything we are seeing a bit of relief.”
Corporate earnings growth has been solid, debt growth has been low, and consumers have been relatively resilient, the strategists noted.
“Canaries in the coalmine for the credit cycle are singing albeit softly,” they wrote, citing rising defaults among leveraged loan borrowers as well as across office buildings. — Bloomberg | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,bonds,assets,investment | NEW YORK: US corporate bond spreads may widen modestly from current levels by the end of the year, but generally demand for the bonds is strong and companies are performing well, according to strategists at UBS Group AG. Spreads on US blue-chip bonds could widen to 95 basis points from their current level of 88 basis points, strategists led by Matthew Mish wrote in a June 12 note. | https://www.thestar.com.my/business/business-news/2024/06/18/ubs-sees-bond-spreads-widening-slightly | |
1,373,539 | Global rate cut juggernaut is struggling to start | NEW YORK: Central banks cagey about joining the global interest rate cutting cycle may reveal themselves this week with a quartet of decisions in advanced economies.
Days after the Federal Reserve (Fed) pared back projections for US monetary easing this year, policymakers from the United Kingdom to Australia are likely to signal that they’re still not convinced enough about disinflation to start lowering borrowing costs themselves.
Such outcomes would reaffirm how June, originally pencilled in as a month-long opening ceremony to a series of global rate cuts, may increasingly turn out to be a widespread display of hesitancy.
While Canada did deliver the first such move of the Group of Seven on June 5, the European Central Bank’s reduction in borrowing costs a day later, accompanied by a higher inflation projection, showed limited enthusiasm for further easing.
At the Bank of England (BoE) on Thursday, a looming election and some lingering price pressures are adding to the case to wait at least until August before cutting rates.
Peers in Australia and Norway, also meeting this week, are in no rush to do so either, while half of economists surveyed reckon the Swiss National Bank (SNB) may avoid a second reduction for now following its bold move in March to ease before its neighbours.
Decisions elsewhere may showcase the different stages of global monetary cycles, with Brazil and Paraguay expected to keep borrowing costs on hold, and Chile anticipated to slow rate cuts.
“Major central banks look set to keep interest rates on hold, having looked more likely to cut only a few weeks ago,” said an economist.
“The BoE is almost certain to keep policy unchanged in June ahead of the UK election. It’s a closer call for the SNB.”
Elsewhere, US retail sales, a raft of Chinese data and inflation numbers from the UK and Japan will be among highlights for investors this week.
A week after a series of reports showed moderating US inflationary pressures, investors will get a look at fresh figures on consumer demand, the housing market and industrial production.
Fed officials also return to the public speaking circuit after pencilling in just one rate cut for 2024.
Minneapolis Fed president Neel Kashkari said on Sunday that the central bank is in a good position to take its time and watch incoming data before starting to cut rates.
Retail sales figures are projected to show shoppers reengaged somewhat in May after pulling back a month earlier, underscoring a resilient consumer.
Separate data are seen showing an increase in production at the nation’s factories, mines and utilities.
On Thursday, housing data may show a modest increase in May construction from a month earlier as builders adjust to swings in underlying demand while staying diligent on inventories.
A limited number of listings in the resale market, along with the recent rise in mortgage rates, is taking a toll on sales of existing homes.
On Friday, the National Association of Realtors is projected to report another decline in previously owned home sales.
Looking north, the Bank of Canada will release a summary of the deliberations that led it to cut rates this month, providing further insight into how policymakers reached the decision and the conditions for a rate cut at their next meeting on July 24.
Statistics Canada will publish population estimates for the first quarter, and retail sales data will also offer new insight into the strength of the Canadian consumer. — Bloomberg | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,central bank,policy,interest rate,easing | NEW YORK: Central banks cagey about joining the global interest rate cutting cycle may reveal themselves this week with a quartet of decisions in advanced economies. | https://www.thestar.com.my/business/business-news/2024/06/18/global-rate-cut-juggernaut-is-struggling-to-start | |
1,373,538 | US mops up a third of global capital since Covid | NEW YORK: In the face of calls around the world to diversify out of the dollar in recent years, the US has nabbed almost one-third of all the investment that flowed across borders since Covid struck.
An International Monetary Fund (IMF) analysis sent by request to Bloomberg News showed that the share of global flows has climbed – not fallen – since a shortage of dollars in 2020 spooked global investors and the 2022 freezing of Russian assets stoked questions about respect for free movement of capital.
The pre-pandemic US average share was just 18%, according to the IMF.
For all the angst over the US dollar’s dominance, a run-up in US interest rates to the highest levels in decades proved a major draw for overseas investors.
The United States has also pulled in a fresh wave of foreign direct investment (FDI) thanks to billions of dollars worth of incentives under President Joe Biden’s initiatives to spur renewable energy and semiconductor production.
The trend marks a major shift from the pre-pandemic days when capital poured into emerging markets, including a rapidly growing China.
The big US geopolitical rival has seen its share of gross global inflows more than halve since the pandemic hit.
But with Donald Trump pledging to reverse the key elements of Bidenomics if he wins the November election, and the US Federal Reserve signalling it will start lowering interest rates later this year, the US advantages may not last.
“FDI flows into China and portfolio flows into the United States have changed dramatically from the years prior to the start of the pandemic,” said Stephen Jen, chief executive of Eurizon SLJ Capital.
“This new pattern of capital flows will likely only change when the policies in the United States and China change.”
China’s share of gross cross-border capital flows amounted to 3% over the 2021 to 2023 period, down from around 7% during the decade through 2019, according to IMF data.
Those figures showcase why President Xi Jinping and his lieutenants have for some time now been fighting to revive foreign investor interest in the country.
Xi is also preparing for a Chinese Communist leadership confab where new reform steps are expected – potentially shifting the investor narrative over China.
Even so, April data showed overseas investment into China slowed for a fourth straight month.
And, with interest rates around the lowest levels in modern times, domestic Chinese capital is pouring out, with local firms buying the most foreign exchange since 2016 in April.
The US economic engine, by contrast, has pulled in an increasing share of global capital.
The World Bank last week Tuesday raised its world growth forecast for 2024 on the back of a strong US expansion – illustrating the global impact.
IMF data showed that, on a net basis, the United States received inflows amounting to some 1.5% of gross domestic product over the 2021 to 2023 period.
For emerging markets that need more international capital to catch up with advanced economies, the situation is hardly ideal.
The Washington-based IMF said emerging nations saw an outflow of net capital in recent years, for only the second time since 2000.
Last year, gross FDI to emerging markets was 1.5% of gross domestic product – the lowest level since the start of the century.
“The big boy in town has been getting all of the attention,” according to Jonathan Fortun, an economist at the Institute of International Finance, which tracks global capital.
“It has dried out some of the money flows into emerging markets.”
Inflows to the “big boy” include projects supported by Biden administration economic initiatives.
One example: South Korea’s Samsung Electronics Co is slated to get US$6.4bil in grants to increase chip production in Texas, as part of a broader initiative to invest a total of more than US$44bil.
There’s a lot that could change.
Fed policymakers last Wednesday pencilled in forecasts for a rate cut cycle to start by the end of the year.
That could reduce the appeal for global fixed-income investors of higher return US assets.
Meanwhile, a divisive presidential election is looming in November, teeing up policy uncertainty – with taxes, tariffs and worsening geopolitical tensions top of the worry list.
Soaring debt has also prompted concerns that the United States is headed for an inevitable financial cliff. That threatens some of the key reasons the United States is attractive for investors, according to Alexis Crow, who heads the geopolitical investing practice for PWC – including treasury securities’ reputation as a safe investment.
“What would undermine that? The rapid expansion of the finanical deficit in the United States. It’s a rare moment of political cohesion among Republicans and Democrats that the deficit doesn’t matter,” she said. — Bloomberg | Business | Markets | Complimentary | Medium | null | 2024-06-18 00:00:00 | Markets,capital,Covid,investment | NEW YORK: In the face of calls around the world to diversify out of the dollar in recent years, the US has nabbed almost one-third of all the investment that flowed across borders since Covid struck. | https://www.thestar.com.my/business/business-news/2024/06/18/us-mops-up-a-third-of-global-capital-since-covid | |
1,373,537 | Infratil seeks more investment | WELLINGTON: New Zealand’s infrastructure investor Infratil says it is looking to raise NZ$1.15bil (US$703.8mil) to fund further investment into data centre operator CDC for increased demand for cloud adoption and generative artificial intelligence.
The fund raising will comprise of an underwritten placement of NZ$1bil and a non-underwritten retail offer of NZ$150mil.
The placement shares will be issued at NZ$10.15 apiece, representing a discount of 6.8% to the company’s close of NZ$10.89 last Friday, while shares to be issued under the retail offer will be issued at a price that is lower than the placement, Infratil said. — Reuters | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,Infratil,investment,AI,data centre | WELLINGTON: New Zealand’s infrastructure investor Infratil says it is looking to raise NZ$1.15bil (US$703.8mil) to fund further investment into data centre operator CDC for increased demand for cloud adoption and generative artificial intelligence. | https://www.thestar.com.my/business/business-news/2024/06/18/infratil-seeks-more-investment | |
1,373,536 | Citigroup starts targeting growth in mid-cap firms | Tokyo: Citigroup Inc is seeking to strengthen its business with medium-size companies in Japan as the Wall Street bank accelerates efforts across the globe to broaden its customer base.
The US firm has created a team in Tokyo to offer them tailored products in areas ranging from global cash management to financing, under the brand of Citi Commercial Bank, according to a statement yesterday.
Yutaka Naito will lead the group targeting firms with cross-border business needs.
Citigroup set out two years ago to hire hundreds of workers worldwide to boost the commercial brand, betting that mid-size firms need similar tools from international banks as large corporate clients.
The lender began the service in recent years in countries from France to Germany and Canada as well as in some other locations in Asia.
Japan has around 9,000 mid-size companies, according to the country’s Trade Ministry, which counts firms that employ up to 2,000 workers while meeting some other conditions. The government is stepping up efforts to help those entities grow by offering capital investment subsidies and support for foreign expansion. — Bloomberg | Business | Banking | Complimentary | Short | null | 2024-06-18 00:00:00 | Banking,Citigroup,Japan | Tokyo: Citigroup Inc is seeking to strengthen its business with medium-size companies in Japan as the Wall Street bank accelerates efforts across the globe to broaden its customer base. | https://www.thestar.com.my/business/business-news/2024/06/18/citigroup-starts-targeting-growth-in-mid-cap-firms | |
1,373,523 | Australia expected to keep key interest rate at 12-year high today | SYDNEY: Australia’s central bank will likely hold its key interest rate at a 12-year high today as it tries to restrain consumer prices that have been underpinned by an ultra-tight employment market.
The Reserve Bank of Australia (RBA) will keep the cash rate at 4.35% for a fifth straight meeting, economists surveyed by Bloomberg predicted.
The decision will be released in Sydney, followed by governor Michele Bullock’s press conference.
Australia’s policy meeting follows a highly-anticipated decision by the US Federal Reserve last week, when chairman Jerome Powell signalled he wasn’t in a rush to ease monetary policy even after a soft inflation report.
Bullock is likely to draw on the same playbook by retaining her mild hawkish bias in acknowledgment of sticky consumer prices.
Bullock has retained maximum policy optionality this year, and said she needs to be confident that price growth is moving sustainably back to the 2% to 3% target and as a result the board isn’t ruling anything in or out.
The central bank forecasts inflation will only return to target late next year, an extended timeframe as it tries to hold onto post-pandemic job gains.
“We expect the RBA to comfortably maintain its somewhat hawkish hold stance,” said Carl Ang, a Singapore-based fixed income analyst at MFS Investment.
“Looking ahead, we think RBA rate cuts from early 2025 onwards strike the balance between supporting growth and controlling inflation, thus helping mitigate the risk of recession.”
That’s in line with most economists and money market pricing.
“The board is likely to consider the option of a rate hike given the stronger-than-expected April inflation data,” said economist James McIntyre.
“We still think the next rate move will be a cut, but the RBA is unlikely to start easing until later in the second half of 2024.”
Since the RBA’s last meeting, data indicate that Australia’s economy has slowed markedly, with the gross domestic product contracting on a per-person basis, while tepid retail sales reflect downbeat consumer sentiment.
Stubborn inflation and high borrowing costs are largely to blame.
At the same time, the labour market remains tight with unemployment at 4%, giving policymakers optimism that they can engineer a soft landing.
“An unambiguously strong jobs report has further strengthened our conviction in higher-for-longer,” said Micaela Fuchila of Bank of America Corp.
“While the labour market is still in great shape, the economy has continued to weaken.
‘The bank will focus on the impact of financial policy on growth and employment before thinking of easing, in our view.”
Government income tax cuts and cost-of-living rebates on power bills to Australia’s 10.4 million households will begin on July 1.
Bullock expects consumers will either save the extra cash or put it towards mortgage repayments, rather than spending.
She doesn’t anticipate the stimulus will have a material impact on the RBA’s inflation forecasts. — Bloomberg | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,RBA,interest rate,inflation,employment,Australia | SYDNEY: Australia’s central bank will likely hold its key interest rate at a 12-year high today as it tries to restrain consumer prices that have been underpinned by an ultra-tight employment market. | https://www.thestar.com.my/business/business-news/2024/06/18/australia-expected-to-keep-key-interest-rate-at-12-year-high-today | |
1,373,534 | External debt up in 1Q, say Philippine government officials | Manila: The Philippines’ total foreign debt inched up to US$128.7bil in the first quarter amid “positive investor sentiment” that encouraged many private companies to tap the global capital market, the Bangko Sentral ng Pilipinas (BSP) reported.
Central bank data showed total external obligations of both the public and private sector went up by 2.6% in the first three months of the year, from the US$125.4bil recorded in the last quarter of 2023.
As a share of the economy, total offshore liabilities rose to 29% from 28.7% previously, staying at manageable levels, the BSP said.
At the same time, 86.7% of the entire external debt pile consisted of borrowings that are payable in more than one year.
Data showed the weighted average maturity for all medium to long-term debts stood at 16.8 years, with public sector borrowings having longer average tenor of 20.1 years versus 7.6 years for the private sector.
Major creditor countries were Japan (US$15.2bil), Britain (US$4.6bil), and the Netherlands (US$3.9bil).
Overall, the central bank said “positive investor sentiment” pushed up foreign investments in Philippines debt securities by US$1.2bil.
Broken down, the rise in offshore debt in the first quarter was mainly due to fresh borrowings largely by private banks, which raised US$2.1bil from foreign creditors to be used for budgetary support and to refinance old debts.
That, in turn, pushed up private sector debt by 4.7% quarter-on-quarter to US$49.8bil, accounting for 38.7% of the total.
The government, meanwhile, was able to borrow US$331mil from foreign lenders during the period to bankroll various programmes, including initiatives to enhance tax-system efficiency.
This brought the country’s total public-sector external debt to US$78.9bil, growing by 1.4%.
In terms of currency mix, the country’s debt remained largely denominated in US dollar at 76% of the total, followed by the Japanese yen with 8.6% share.
The BSP monitors and analyses major debt indicators for debt sustainability assessments, as well as inputs for the development of policies on offshore debt management.
Debt data collected from various sources is also used by the central bank to prepare statistical and analytical reports provided to various stakeholders, including global organisations such as the International Monetary Fund and the World Bank. — Philippine Daily Inquirer/ ANN | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,Philippines,foreign debt,Bangko Sentral ng Pilipinas | Manila: The Philippines’ total foreign debt inched up to US$128.7bil in the first quarter amid “positive investor sentiment” that encouraged many private companies to tap the global capital market, the Bangko Sentral ng Pilipinas (BSP) reported. | https://www.thestar.com.my/business/business-news/2024/06/18/external-debt-up-in-1q-say-government-officials | |
1,373,533 | Huge rice imports won’t burden weak peso - Central bank reveals it has sufficient forex reserves | MANILA: There’s a minimal risk that the projected increase in inbound shipments of rice as a result of lower tariffs on the commodity will bloat the country’s total import bill and add pressure on the already volatile peso, analysts say.
This, while the Bangko Sentral ng Pilipinas (BSP) assured the public that it has enough reserves to defend the currency from “temporary” weakness.
Robert Dan Roces, chief economist at Security Bank, said the government was expected to ensure that the higher arrivals of imported rice would not trigger major US dollar outflows and weigh on the peso, which has been trading at 19-month lows in recent weeks.
“The increase in imports will technically put pressure on the Philippine peso by raising the import bill, boosting demand for foreign currency, and potentially widening the trade deficit,” Roces said.
“While factors such as global rice prices, domestic production and the overall health of the economy may mitigate some of the impact, the national government is expected to minimise the risk of the increased rice imports adversely affecting the peso and the broader economy,” he added.
The government earlier announced its decision to further slash tariffs on imported rice to 15% from 35% until 2028, a measure that state statisticians said could cut the domestic prices of the staple grain by six to seven pesos per kilogramme.
For that reason, the US Department of Agriculture’s Foreign Agricultural Service estimated the Philippines’ rice imports would reach 4.6 million tonnes in 2024, up by around 27% from the 3.6 million tonnes that arrived in 2023 and cementing the country’s spot as the world’s top rice importer.
The projected hike in rice imports could boost local demand for US dollars, which would pressure an already bearish peso.
At a press conference last Friday, BSP senior assistant governor Iluminada Sicat said the country has enough US dollar reserves to soothe any volatility in the foreign-exchange market.
The latest forecasts by the BSP showed the country is expected to end 2024 with a US dollar surplus of US$1.6bil, higher than the previous projection of a US$700mil windfall.
“So meaning to say we are anticipating more supply of forex in 2024 than what is being demanded,” Sicat said.
Aris Dacanay and Lenny Jin, analysts at HSBC Global Research, said the risk to the Philippines’ import bill was “minimal, which in turn, leads to minimal impact on the peso”.
“Rice only accounts for 1.2% of the country’s imports so the increase in the import bill shouldn’t be much,” Dacanay and Jin said.
“Nevertheless, we need to look at the policy holistically as well. The tariff cut can also lead to a significant reduction in inflation and free up 2% of household budgets to be spent elsewhere, thus, bolstering growth,” they added.
Miguel Chanco, economist at Pantheon Macroeconomics, shared the same view.
“Looking ahead, there will be quite significant downward forces on the total import bill, in particular the ongoing correction in global oil prices and the broad slowdown in Philippine domestic demand,” Chanco added. — Philippine Daily Inquirer/ANN | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,import,peso,Bangko Sentral ng Pilipinas,currency,rice, | MANILA: There’s a minimal risk that the projected increase in inbound shipments of rice as a result of lower tariffs on the commodity will bloat the country’s total import bill and add pressure on the already volatile peso, analysts say. | https://www.thestar.com.my/business/business-news/2024/06/18/huge-rice-imports-wont-burden-weak-peso | |
1,373,530 | Emerging market bond rally comes under threat | NEW YORK: The balmy days of dovish monetary policy that fuelled a rally in emerging market bonds looks to be over as central banks across the developing world turn more hawkish.
Returns from emerging market local currency debt are trailing their US dollar-denominated peers by the most in two years as resurgent inflation has damped the prospect of further interest rate cuts in Latin America and Eastern Europe.
At the same time, policymakers in emerging Asia have signalled an increasing unwillingness to ease policy before the US Federal Reserve (Fed).
“I definitely think the easy money is gone,” said Robert Samson, a fund manager in Singapore at Nikko Asset Management, which oversaw US$240bil at the end of March.
“Duration hasn’t really paid anywhere with curve inversion and the Fed higher for longer.”
The renewed hawkishness is upending a bet which earlier this year was hailed as a “once-in-a-generation” opportunity to buy emerging market local debt.
Not only has investor enthusiasm been damped by the diminishing prospect of rate cuts, but a super-charged US dollar is dragging down developing nation currencies.
Emerging market local bonds have handed investors a loss of about 1% this year, after rallying by more than 6% in 2023, based on a Bloomberg index.
In contrast, a corresponding gauge of US dollar debt has returned 2.5% since the end of December.
Amid the recent hawkish developments, Brazil’s inflation topped forecasts in May, while Mexico’s central bank said last month sticky prices pressures are a reason to be cautious about further easing. Meanwhile, Peru’s policymakers unexpectedly halted rate cuts last week amid concern about consumer prices.
In Europe, Hungary’s central bank said it’s near the end of its easing cycle, while the Polish government’s wage plan may delay rate cuts.
In Asia, Thailand’s policymakers kept rates on hold last week after inflation quickened, while their peers in Taiwan boosted the reserve requirement ratio for banks in a form of policy tightening.
“We think the relatively brighter growth outlook and still somewhat high inflation rates suggest that it is not yet time for Asian emerging markets central banks to start easing,” wrote Barclays Plc economists including Brian Tan in a note.
Looming over all is the Fed’s higher-for-longer mantra that’s shrinking the scope for policy easing in emerging markets.
The Fed “is a significant headwind for progress in the second half,” said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management SA in Singapore.
“All the central banks worldwide, even beyond emerging markets, were hoping that in a way the Fed would help them out by sticking to the initial plans of cutting rates.”
The growing hawkish signs are already helping to trigger investor selling.
The US$2.7bil VanEck JP Morgan EM Local Currency Bond exchange-traded fund (ETF), the world’s largest ETF tracking developing nation debt, has seen net outflows over the past three months, according to data compiled by Bloomberg.
Some see the recent pullback in local currency bonds as a reason to be bullish.
Value is re-emerging for emerging market debt after rate cuts have been priced out, and political risks in Mexico and Brazil are now accounted for, said Shamaila Khan, head of fixed-income for emerging markets and Asia Pacific at UBS Asset Management in New York.
“It’s probably looking more attractive than it has over the last several months,” she said.
“We do think that the local space has potential to perform quite well going into the end of this year, even whether it’s one rate cut or two rate cuts from the Fed.”
William Blair International Ltd also sees value re-appearing and is even funnelling money into frontier markets.
“We currently have between 12% and 15% in local frontier markets with a risk limit of 1% in each market, so we do have a good diversification there,” said Daniel Wood, a fund manager at William Blair in London.
He added that he favoured countries including Kenya, Nigeria and Pakistan.
“You’re in the sweet spot now where you’re enjoying high carry with strong multilateral support.” — Bloomberg | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,interest rate,central bank,policy,monetary,easing | NEW YORK: The balmy days of dovish monetary policy that fuelled a rally in emerging market bonds looks to be over as central banks across the developing world turn more hawkish. | https://www.thestar.com.my/business/business-news/2024/06/18/emerging-market-bond-rally-comes-under-threat | |
1,373,535 | Japan core machinery orders down in April | TOKYO: Japan’s core machinery orders fell in April for the first time in three months, government data showed yesterday, due to a pullback from the prior month’s big jump, but the Cabinet Office says capital spending remains on track for a recovery.
The data followed the Bank of Japan’s decision last week to start trimming its huge bond purchases, with it due to announce a detailed plan next month on reducing its nearly US$5 trillion balance sheet.
Core orders fell 2.9% month-on-month in April, versus a 3.1% decline expected by economists in a Reuters poll, the first drop in three months. It is a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months.
In March, there had been a 19.4% gain by manufacturers and a 11.3% decline by non-manufacturers from the prior month.
The Cabinet Office left its assessment of machinery orders showing signs of picking up unchanged.
“Taken together, the core orders are firming up and heading to a recovery due to demands related with inbound tourism and rising wages,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“We cannot expect much from overseas with the United States and European economies still struggling to cope with elevated interest rates and China grappling with its property market.”
External orders, which are not included in the core orders, grew 21.6% month-on-month in April after a 9.4% drop the previous month.
Japanese firms tend to compile big spending plans to boost factories and equipment but are often slow to implement them due to uncertainty over the economic outlook.
The weakening of the yen has not helped domestic capital investment much because of Japanese firms’ tendency to invest directly overseas where demand is stronger. — Reuters | Business | Economy | Complimentary | Short | null | 2024-06-18 00:00:00 | Economy,Japan,machinery,Bank of Japan,bond | TOKYO: Japan’s core machinery orders fell in April for the first time in three months, government data showed yesterday, due to a pullback from the prior month’s big jump, but the Cabinet Office says capital spending remains on track for a recovery. | https://www.thestar.com.my/business/business-news/2024/06/18/japan-core-machinery-orders-down-in-april | |
1,373,522 | UK inflation to hit 2% for first time in three years | LONDON: UK inflation is expected to fall to the Bank of England’s (BoE) target for the first time in almost three years, but the milestone may do little to help Prime Minister Rishi Sunak’s beleaguered government ahead of the July 4 general election.
Economists expect official figures tomorrow to show consumer prices rose 2% in May from a year earlier, slowing from 2.3% in April.
It would represent a symbolic moment after a painful battle to bring down inflation from double-digit levels just over a year ago.
However, consumers and businesses hoping for immediate relief from the highest interest rates in 16 years are likely to be disappointed.
On Thursday, the BoE is expected to leave its benchmark rate at 5.25%, with governor Andrew Bailey and his colleagues concerned about stubbornly high services inflation and anxious not to be drawn into the election campaign.
That’s bad news for Sunak’s Conservatives, which last Friday slumped to their lowest ebb in opinion polls going back to the start of 2021.
With the Labour opposition’s lead holding at over 20 percentage points during three weeks of campaigning, leader Keir Starmer is on track to become Britain’s next prime minister after 14 years of Tory rule.
The sharp fall in inflation has allowed Sunak to declare victory over the cost-living crisis – one of the key pledges he made to voters at the start of last year.
But his party is getting little credit for what is largely the BoE’s achievement.
A bigger problem is that the damage is already done after inflation outpaced wages for almost two years until the middle of 2023.
Living standards for the average person remain lower than they were before the last election in 2019.
Investors will be scrutinising the consumer price index (CPI) report and BoE decision for clues on whether price pressures have cooled enough for officials to mull cutting borrowing costs in the first few months of the next government.
The election campaign has prevented rate setters from speaking publicly. They previously suggested a summer rate cut was in play, and economists expect the BoE to reiterate that guidance.
“A chunky overshoot for UK services inflation in April has ended hopes of a June interest rate cut,” said Andrew Goodwin, chief UK economist at Oxford Economics.
“Still, we expect the Monetary Policy Committee to stick to its message that rate cuts are coming soon if data fall roughly in line with its forecasts.”
Economists surveyed by Bloomberg expect the BoE to deliver the first of two rate cuts this year in August.
Money markets are more hawkish, only fully pricing in a reduction in November.
Another reading showing sticky services inflation, which was still running at almost 6% in April, could entrench those bets.
“All eyes will be on the services CPI reading, following April’s stronger-than-expected print,” said Dan Hanson and Ana Andrade of Bloomberg Economics.
“Looking ahead, headline inflation will probably fall below 2% in June, clearing the way for rates to be cut in August.”
They expect services inflation to slow to 5.5%, in line with the median Bloomberg survey forecast. The BoE forecast is for 5.3%, and 1.9% for overall CPI inflation, though the projections were made before April’s upside surprise.
Money market pricing is largely tracking rate bets in the United States, where Federal Reserve officials suggested last Wednesday that there will be only one cut this year in their dot-plot projections.
The European Central Bank began loosening policy earlier this month but left investors unclear about the outlook. — Bloomberg | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,UK,inflation,target,Bank of England | LONDON: UK inflation is expected to fall to the Bank of England’s (BoE) target for the first time in almost three years, but the milestone may do little to help Prime Minister Rishi Sunak’s beleaguered government ahead of the July 4 general election. | https://www.thestar.com.my/business/business-news/2024/06/18/uk-inflation-to-hit-2-for-first-time-in-three-years | |
1,373,542 | Elderly population offers economic opportunity for Vietnam govt | HANOI: The ageing population and the unique characteristics of the older cohort in Vietnam are golden opportunities for the country to develop a “silver economy”.
The older generation in Vietnam currently accounts for 8.3% of the total population, or 8.16 million.
It is forecast that the number will increase to 16.8 million people by 2039 and reach 25.2 million people by 2069.
The concept of the silver economy originated from the term “silver market” that appeared in Japan, the country with the highest proportion of people over 65 years old, in the 1970s, to refer to the market for the elderly and covering sectors such as healthcare, banking, energy, housing, telecommunications, entertainment and tourism.
Older people in Vietnam often face the burden of illness and can suffer from chronic diseases such as coronary artery disease, hypertension, diabetes, osteoarthritis and cancer.
In terms of spending ability, Vietnamese elderly people often have income from pensions, savings and investments and their spending ability depends on their level of financial stability and personal financial planning.
In recent years there has been a shift in the consumption behaviour of the elderly, with a tendency to increase spending on health, travel, education and entertainment.
The ageing population and the unique characteristics of the group in Vietnam pose many economic and social challenges, but there are also golden opportunities for the country to develop a silver economy, said Doan Van Binh, deputy president of Vietnam Real Estate Association.
Speaking to VTC News online he said that, based on Vietnam’s actual conditions and the experience of some countries, it was his opinion that the country should immediately begin researching, creating a vision, building policies and laws, specific strategies and action plans to activate and develop the silver economy.
To comprehensively develop the silver economy in Vietnam, first of all, it is necessary to have an accurate and complete vision and awareness of the needs, motivation and orientation of the senior demographic, he said.
A strong silver economy reflects a societal re-evaluation of the elderly, which no longer views them as an economic burden, but recognises their contribution to society and their potential as consumers, he said.
The country should perfect the policy on the silver economy while the elderly should be a focus of the government.
Policies should be developed with a focus on emphasising the role of elderly, orienting priority areas for development and supporting policies in Vietnam.
Binh also suggested improving laws regarding the older population, since currently, Vietnam has many legal regulations related to the elderly, showing concern, care and promoting the role of the elderly.
However, it is necessary to continue to improve the law in this direction as a basis and legal corridor for the development of the silver economy.
He also suggested determining the role of the silver economy in terms of the overall national economy, developing strategies including the National Strategy on the Vietnamese Elderly for the 2030-2050 period and develop an action plan specifically to activate and grow the silver economy.
He also recommended research into the scale and pervasiveness of the silver economy for people aged 50 and above, according to international standards. — Vietnam News/ANN | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,Vietnam,population,ageing,elderly | HANOI: The ageing population and the unique characteristics of the older cohort in Vietnam are golden opportunities for the country to develop a “silver economy”. | https://www.thestar.com.my/business/business-news/2024/06/18/elderly-population-offers-economic-opportunity | |
1,373,543 | Arbitrage trade backfires as TSMC frenzy grows | Taipei: The long-favoured arbitrage strategy of buying Taiwan Semiconductor Manufacturing Co’s (TSMC) Taipei shares while shorting its US listing is starting to become painful.
The enthusiasm over artificial intelligence (AI) in the United States has pushed TSMC’s American depositary receipts (ADRs) to their most expensive price versus the Taiwan stock since 2009 this quarter, data compiled by Bloomberg show.
As of last Friday, they traded at a premium of around 21%, compared with less than 8% for the five-year average.
It reached a high of 30% during the Lunar New Year in February, when the Taiwanese stock market was closed.
“A lot of people have set it up and are hoping that it collapses back to its longer-term, fair-value level,” said Jon Withaar, head of Asia special situations at Pictet Asset Management. But the premium could still go higher, “and then there’ll be a lot of pain”, he added.
TSMC’s cutting-edge technology and reasonable valuation have made it a favourite play among global investors in AI.
The ADRs have surged 66% this year through last Friday, compared with a 55% advance in Taipei shares. Yet both are trading much lower than their valuation highs of 2021.
The ADRs have outperformed because they’re more easily accessible to foreign investors. They’re also included in gauges like the Philadelphia Stock Exchange Semiconductor Index and in exchange-traded funds (ETFs) such as the VanEck Semiconductor ETF and iShares Semiconductor ETF, meaning funds tracking them must buy the US-listed securities.
“It’s supply/demand dynamics,” said Brian Freitas, founder of research firm Periscope Analytics. “Not all foreign investors can hold the Taiwan stock so they just prefer owning the ADRs. Plus there are some indices which only reference the ADR, so ETFs then basically buy up the US shares.”
Beyond that, TSMC’s ADRs have typically traded at a premium because they’re fungible, unlike the Taiwan shares, which need special regulatory approval to be converted into the US equivalent.
The Asian security is also already heavily owned by fund managers, making it difficult for them to increase their position further.
For now though, the AI sector remains hot, with Nvidia Corp worth more than US$3 trillion in market value and a gauge tracking semiconductor shares at a record high.
TSMC’s ADRs premium over the local stock has climbed to an average of almost 17% this quarter after reaching 30% in February. — Bloomberg | Business | Markets | Complimentary | Medium | null | 2024-06-18 00:00:00 | Markets,TSMC,arbitrage,trade,shorting,AI | Taipei: The long-favoured arbitrage strategy of buying Taiwan Semiconductor Manufacturing Co’s (TSMC) Taipei shares while shorting its US listing is starting to become painful. | https://www.thestar.com.my/business/business-news/2024/06/18/arbitrage-trade-backfires-as-tsmc-frenzy-grows | |
1,373,544 | Seoul labour market and domestic demand | AMONG numerous indicators used to measure a certain aspect or aspects of economic activities, labour market statistics are widely known for reflecting economic conditions belatedly compared to some other leading indicators such as sentiment indices.
Moreover, labour data is one of the least dynamic indicators in South Korea due to the country’s rigid labour market structure.
In contrast to countries with more flexible labour market structures, such as the United States, the unemployment rate in South Korea changes relatively slowly, making it all the more important to examine various subindices to better assess what is happening inside the labour market as well as in the economy as a whole.
In that sense, the labour market data for May, announced late last week, provides a good opportunity to assess the challenges facing South Korea’s economy, as well as a useful lesson to consider when making decisions on key economic policies.
Headline figures show the country’s labour market conditions worsened in May but were still holding up quite well.
Indeed, the unemployment rate rose to 3% in May from 2.7% during the same month of last year, and the number of unemployed people increased to 884,000 from 787,000.
Still, the number of employed people also grew by 80,000 in May from a year earlier as the country managed to keep creating jobs, according to the data released by Statistics Korea.
But the situation is far more serious when it comes to the quality of employment, as the increased number of jobs owed much to the growth in jobs for a few hours per week.
In May, those employed for less than 15 hours per week accounted for 9.4% of the total, up sharply from 7.4% in May last year and the highest on record for that month.
Regarding the January-May period, the average ratio of those employed for less than 15 hours per week stood at a record high of 8.8% this year, rising from 7.8% in 2023 and 7.9% in 2022, according to the Statistics Korea data.
As a result, the average length of employment per week fell to a record low of 37.1 hours for the five-month period this year, compared with 39.1 hours in both 2022 and 2023.
Some may say this is a welcome trend for South Korea, which had long been notorious for an extremely long work week when compared with other major countries, because that could mean more workers can now enjoy a better work-life balance.
However, an improving work-life balance is not necessarily good if it leads to a significant decline in labour income.
Other recent economic statistics, such as household balance sheet data and consumer sentiment indices, suggest that the decreasing average work week in fact reflects a worsening in household income that could result in a widening gap between recovering exports and sluggish domestic demand.
Underscoring the weakening signs of domestic demand, the number of self-employed people has been decreasing fast in recent months.
South Korea’s economic growth could face a sudden and severe hurdle when exports, for some reason, fail to post sharp growth for a long time because the country’s ratio of self-employed people stands high.
This means policymakers need to pay more attention to these subindices better reflecting what is really happening in the labour market and in the domestic demand.
The government and the central bank have repeatedly said they would manage fiscal and monetary policy independently from the US Federal Reserve, but their recent remarks provide little indication that they are ready to move ahead of the United States.
By the way, the trend of increasing employment for less than 15 hours per week also provides a lesson on making decisions in key economic policies, because that may be influenced by the steep increases in legal minimum wages in recent years and by the rigid regulations accompanying the minimum wage system.
For instance, employers are required to provide a paid leave day – or allowances for that – each week to the employee working for 15 hours or longer per week.
Many employers, such as those running small shops with poor profitability, decide to hire multiple workers each for 14 hours or shorter per week simply to avoid that paid leave requirement and other costs, according to media reports.
This provides a useful lesson for policymakers and labour union leaders alike: good intentions do not always bring the outcomes we hope for.
When it comes to economic policy, there have been many research reports pointing to the importance of targeting incentives as a means to affect economic players, instead of imposing rigid, direct changes in the way they undertake business.
There is no denying that steep increases in the minimum wage and the imposition of strict and rigid requirements for employers have been introduced for the purpose of helping workers earn more money and have better protection, among others.
But higher minimum wage and strict rules alone cannot solve the problem unless the economy grows. — The Korea Herald/ANN
Yoo Choon-sik is a business and media strategy consultant. The views expressed here are the writer’s own. | Business | Economy | Complimentary | Long | null | 2024-06-18 00:00:00 | Economy,Seoul,labour,employment | AMONG numerous indicators used to measure a certain aspect or aspects of economic activities, labour market statistics are widely known for reflecting economic conditions belatedly compared to some other leading indicators such as sentiment indices. | https://www.thestar.com.my/business/business-news/2024/06/18/seoul-labour-marketand-domestic-demand | |
1,373,529 | China industrial output cools, retail spending rises | Beijing: China’s industrial expansion slowed in May while retail spending beat forecasts in a sign that imbalances in the economic recovery may be easing.
Industrial production rose 5.6% in May from a year ago, the National Bureau of Statistics said yesterday.
That compares with April’s increase of 6.7%, and a median forecast of 6.2% in a Bloomberg survey. Retail sales accelerated, climbing 3.7% compared with a forecast of 3%.
The retail numbers are encouraging after years in which Chinese households were reluctant to spend, despite government efforts to boost consumption.
China turned to export-led growth instead as companies sold their products abroad, powering a factory boom that helped offset the housing slump and keep economic growth on track.
But that strategy faces growing uncertainty as major partners erect new trade barriers that threaten the export engine. Last week, the European Union followed the United States by imposing hefty tariffs on Chinese electric cars.
Investment in property development plunged 10.1% in the first five months of 2024 from a year earlier, after dropping 9.8% in the January-April period.
That weighed on fixed-asset investment, which rose 4% in January-May, compared with growth of 4.2% in the first four months – even though there’s been a pickup in government bond issuance to fund infrastructure spending.
The urban jobless rate was 5%, the same as in April.
China’s central bank kept a key interest rate unchanged yesterday for the tenth straight month, as liquidity in the financial system remains ample amid weak credit demand while the yuan still faces downward pressure with the US Federal Reserve reinforcing the high-for-longer message on interest rates.
China rolled out a programme in April that offers incentives for businesses and households to upgrade old machinery, in a bid to boost consumption.
The People’s Bank of China is providing as much as 500 billion yuan in cheap loans to 21 banks to encourage them to lend to technology start-ups and companies that carry out the upgrades.
Beijing and local governments are offering a combined 11 billion yuan in subsidies to help consumers purchase new cars.
Late last month, China also unveiled a broad rescue package to prop up housing sales as a credit crisis was engulfing some of the country’s biggest real estate developers.
It relaxed mortgage rules and encouraged local governments to buy unsold homes. Still, many investors and analysts caution that the financial incentives aren’t big enough and trial programmes in several cities have shown progress can be slow. — Bloomberg | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,China,industrial,production | Beijing: China’s industrial expansion slowed in May while retail spending beat forecasts in a sign that imbalances in the economic recovery may be easing. | https://www.thestar.com.my/business/business-news/2024/06/18/china-industrial-output-cools-retail-spending-rises | |
1,373,528 | Beijing’s goal of 5% growth achieveable for this year | Beijing: The annual growth target of around 5% is a feasible goal, as China has the potential to take on more debt to boost economic growth while not inflicting inflation, a senior economist says.
Yao Yang, director of the China Center for Economic Research at Peking University, said in an exclusive interview with China Daily his calculations show that China’s potential economic growth rate is currently about 5% to 5.5%.
Potential economic growth refers to the maximum rate at which the economy can expand without causing inflationary pressures, assuming full employment of resources.
With the actual growth rate not currently exceeding the potential growth rate, China therefore can boost the growth rate through taking on more debt, without worrying about inflation, Yao said.
His comments came as China is set to release key economic data.
Data from the National Bureau of Statistics showed that the country’s consumer price index, a main gauge of inflation, rose 0.3% year-on-year (y-o-y) in May, a rise on par with that in April.
The producer price index, which gauges factory-gate prices, dropped 1.4% y-o-y in May, narrowing from a 2.5% decline in April.
“The Chinese government probably needs to take a bigger step to boost demand,” he said, adding that the current bottlenecks to economic growth are mainly on the demand side, not the supply side.
In order to boost demand, consumption, which depends on people’s expectations for future income, is just one aspect. The country needs to drive demand through increasing government spending, said Yao, who is also executive dean of the Institute of South-South Cooperation and Development at Peking University.
The Chinese government has done a lot to boost government spending, particularly government investment, and more work can be done, he said.
China has announced plans to issue ultralong-term special treasury bonds for several consecutive years starting this year.
The issuance of one trillion yuan in ultralong-term special sovereign bonds for this year began last month and will run until mid-November.
In addition, the issuance of one trillion yuan of special treasury bonds was completed during the fourth quarter of last year.
Apart from such special sovereign bonds, Yao suggested that the country explore ways for local governments to raise debt in a regulated way, therefore expanding government investment and boosting demand.
He said it is good that the country has stepped up efforts to curb the commercial debt of local governments, which is borrowed through local-government financing platforms on financial markets and has problems such as lack of transparency and effective supervision and monitoring. — China Daily/ANN | Business | Economy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Economy,China,GDP,growth,production | Beijing: The annual growth target of around 5% is a feasible goal, as China has the potential to take on more debt to boost economic growth while not inflicting inflation, a senior economist says. | https://www.thestar.com.my/business/business-news/2024/06/18/beijings-goal-of-5-growth-achieveable-for-this-year | |
1,373,527 | Car makers zoom ahead overseas on high demand | Beijing: Chinese carmakers and auto-parts manufacturers are increasingly diversifying their overseas production bases to meet growing global demand and address heightened supply-chain security concerns, with Central European countries and Mexico becoming hot spots, experts and business executives say.
Their growing international presence shows they are keen to meet the rising demand from foreign clients who need quick responses and deliveries on time from parts suppliers, amid deglobalisation and geopolitical tensions, the experts said.
Their remarks came after trade frictions intensified recently, including increased US tariffs on imports of Chinese products like electric vehicles, and the European Commission’s decision on June 12 to impose extra duties of up to 38.1% on imported Chinese electric cars from July.
“Against the backdrop of deglobalisation, foreign clients are shifting their focus from minimising costs to supply-chain security, thus favouring suppliers capable of producing parts near their sites.
“Central European countries and Mexico are popular destinations for investment due to their strategic location, favourable policies and proactive efforts to attract Chinese manufacturers,” said Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers.
“The two regions also boast good industrial bases with established names that have already set up operations and need good-quality auto parts and systems, attracting Chinese automotive industry players and niche companies,” Chen said.
From July, Serbia will implement a free-trade agreement with China that will result in over 90% of trade between the two countries being tariff-free.
Sectors such as automotive, lithium-ion batteries and photovoltaics will benefit first.
In Hungary, a low corporate tax rate, the establishment of German vehicle production bases, as well as stable and favourable policies to welcome foreign investment also make it a hot spot for Chinese automotive and parts manufacturers.
“Several Central European countries, including Poland, Slovakia and Hungary, have been the main destinations for Chinese companies seeking to set up sites overseas,” said Wang Binlian, director of overseas projects at Zhejiang Shuanghuan Driveline Co Ltd.
The Shenzhen-listed auto transmission producer invested 122mil for the first phase of a project in Hungary. It is also expected to sign a long-term investment cooperation agreement with the local government in the coming months.
Wang said: “For us, Poland has an advantage in logistics over Hungary because our clients (automakers) are mainly located in Germany, Sweden and Belgium. This makes it convenient for us to transport our products via land from Poland.
“However, we chose Hungary because of its friendliness toward Chinese companies. Our foremost priority is a stable investment environment, even if it results in marginally higher logistics costs. In addition, Hungary’s cultural similarities to China enable us to adopt Chinese management systems effectively.
“Moreover, Hungary serves as a central hub for the eastward relocation of European manufacturing, with major firms like Audi and BMW setting up factories. The Hungarian government is also actively encouraging the development of its automotive manufacturing sector.”
Zhang Taixin, director of Halms Hungary KFT, Zhejiang Huashuo Technology Co Ltd’s overseas branch, agreed. Huashuo produces various auto parts.
Its Hungary site began construction in April 2022 and commenced production in March 2023.
Zhang highlighted the recent energy upgrade in Debrecen, Hungary, where Halms is based. The move was reportedly aimed at supporting auto and auto-parts manufacturers and securing reliable energy supplies for them, alongside the local government incentives and subsidies to attract foreign investment.
“We envision a strong research and development centre at the headquarters, complemented by powerful global production and manufacturing facilities. We leverage our global production capacity to address regional market imbalances, thus avoiding market fragmentation that does not serve manufacturers or consumers,” Zhang said. — China Daily/ANN | Business | Auto | Complimentary | Medium | null | 2024-06-18 00:00:00 | Auto,vehicles,autoparts,manufacturing,supply | Beijing: Chinese carmakers and auto-parts manufacturers are increasingly diversifying their overseas production bases to meet growing global demand and address heightened supply-chain security concerns, with Central European countries and Mexico becoming hot spots, experts and business executives say. | https://www.thestar.com.my/business/business-news/2024/06/18/car-makers-zoom-ahead-overseas-on-high-demand | |
1,373,545 | China continues to lift crude oil stockpiling amid weak refinery runs | THE world’s biggest crude importer has had a soft start to the year.
China added more than one million barrels per day (bpd) of crude oil to stockpiles in May as soft imports were outweighed by even weaker refinery processing volumes.
A total of 1.08 million bpd was added to China’s commercial or strategic inventories in May, up from 830,000 bpd in April, according to calculations based on official data.
Over the first five months of 2024, China boosted stockpiles by 790,000 bpd from the same period in 2023, and the pace of inventory builds is accelerating, rising from 700,000 bpd in the first four months of the year.
The surge in crude flowing into storage, coupled with a decline in oil imports in the first five months of the year, undermines expectations that China’s crude demand will grow strongly in 2024.
China doesn’t disclose the volumes of crude flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output.
The total crude available to refiners in May was 15.33 million bpd, consisting of imports of 11.06 million bpd and domestic output of 4.27 million bpd.
The volume of crude processed by refiners was 14.25 million bpd, leaving a surplus of 1.08 million bpd to be added to storage tanks.
Refinery throughput dropped from 14.30 million bpd in April and from 14.60 million bpd in May last year.
May was also the second consecutive month that refinery processing declined from the same month a year earlier.
For the first five months of the year refineries processed 301.77 million tonnes, according to data released by the National Bureau of Statistics, up 0.3% from the same period in 2023.
However, converting the refinery processing to barrels per day shows a rate of 14.49 million bpd in the January to May period, which is actually down from the 14.54 million bpd in the same period last year, which was one day shorter because of the leap year in 2024.
Crude oil imports were 11.0 million bpd in the first five months of the year, down 130,000 bpd or 1.2% from the same period in 2023.
Refinery processing has dropped by 50,000 bpd, and 790,000 bpd has been added to inventories.
There are some temporary factors behind some of the weak outcomes, such as several major refineries undergoing scheduled maintenance in May, but it’s hard to escape the conclusion that so far this year China’s oil demand is falling well short of expectations.
The Organisation of the Petroleum Exporting Countries (Opec) is still forecasting that China will drive global oil demand growth in 2024, accounting for 720,000 bpd of the world total increase of 2.2 million bpd.
While Opec’s June monthly report does show the producer group is expecting a stronger second half in China, it also shows that the first half is running well behind expectations.
Opec forecast China’s oil demand growth at 570,000 bpd in the second quarter, which would require a surge in June imports, given the soft outcomes in April and May.
While Opec remains bullish on China’s demand, other forecasters are more circumspect, with the International Energy Agency expecting demand growth of around 500,000 bpd in 2024.
Even this more modest forecast will require a strong second half, and will be reliant on China’s economy not only gaining momentum, but doing so in areas that boost the consumption of refined products.
This means construction will have to ramp up to boost diesel demand, air travel will have to continue to recover to lift jet fuel sales, and manufacturing will need to strengthen to increase demand for petrochemicals.
A stronger Chinese economy remains likely in the second half, but the question is whether it will be strong enough to allow for the bullish expectations for oil demand to be correct. — Reuters
Clyde Russell is a columnist for Reuters. The views expressed here are the writer’s own. | Business | Commodities | Complimentary | Medium | null | 2024-06-18 00:00:00 | Commodities,China,oil and gas,export,import,Opec | THE world’s biggest crude importer has had a soft start to the year. | https://www.thestar.com.my/business/business-news/2024/06/18/china-continues-to-lift-crude-oil-stockpiling-amid-weak-refinery-runs | |
1,373,526 | Kiwi services sector slumps | WELLINGTON: New Zealand’s services sector, which makes up two-thirds of the economy, recorded its weakest level of activity in almost three years as consumers rein in spending.
The Performance of Services Index dropped to 43 in May, the Bank of New Zealand said yesterday in Wellington.
That’s the lowest since August 2021 when largest city Auckland was in lockdown, and the weakest since the survey began in 2007 if months affected by pandemic lockdowns are excluded.
A reading below 50 signals the sector is contracting.
High interest rates have curbed household spending and stalled activity in construction, real estate, retailing and hospitality. — Bloomberg | Business | Economy | Complimentary | Short | null | 2024-06-18 00:00:00 | Economy,New Zealand,services,household,spending | WELLINGTON: New Zealand’s services sector, which makes up two-thirds of the economy, recorded its weakest level of activity in almost three years as consumers rein in spending. | https://www.thestar.com.my/business/business-news/2024/06/18/kiwi-services-sector-slumps | |
1,373,525 | Hydropower surge raises aluminium production | Beijing: China’s aluminum production hit a record last month as smelters brought back idled capacity, potentially setting up the market for further declines after prices hit a two-year high in May.
Heavy rains have improved hydropower reserves in Yunnan and allowed smelters to recommence operations after drought sapped their electricity supply in recent years. Another 330,000 tonnes of capacity is expected to resume in the southern province this month, according to Bloomberg Intelligence, which expects prices of the lightweight metal to slip in June as demand has also softened in the wake of higher prices.
Aluminium output surged 7.2% year-on-year to 3.65 million tonnes, according to the statistics bureau yesterday, although the daily rate slipped from the shorter month of April.
Steel production rose 2.7% to 92.86 million tonnes after declining in recent months, although again the foundations are wobbly. Mills are relying on manufacturing and exports to replace the collapse in real estate demand. But margins are still underwater and the government has pledged once again to restrain production this year to meet its climate goals.
Among energy products, the impact of weak consumption was also evident in the oil processing sector. Refining fell 1.8% as more plants turned to seasonal maintenance to escape sluggish demand.
Both natural gas and crude oil output rose as Beijing continues to reduce its reliance on imports. But coal production slipped again, and is now tracking 3% below last year’s record-setting pace over the first five months of the year.
Thermal power generation fell on an annual basis for the first time since September due to the surge in output from hydropower dams and solar farms.
The drop in fossil fuel burning is another sign that China’s emissions may have peaked after renewables installations jumped to record levels last year. — Bloomberg | Business | Energy | Complimentary | Short | null | 2024-06-18 00:00:00 | Energy,China,hydropower,aluminium,generation | Beijing: China’s aluminum production hit a record last month as smelters brought back idled capacity, potentially setting up the market for further declines after prices hit a two-year high in May. | https://www.thestar.com.my/business/business-news/2024/06/18/hydropower-surge-raises-aluminium-production | |
1,373,531 | Paris loses crown as Europe’s biggest stock market to London | PARIS: France’s political upheaval has led the country to lose its spot as Europe’s biggest equity market, less than two years after stealing that crown from the United Kigdom.
President Emmanuel Macron’s shock announcement of a snap election sparked a rout that wiped off about US$258bil from the market capitalisation of French firms last week.
Shares of banks Societe Generale SA, BNP Paribas SA and Credit Agricole SA – all big holders of government debt – lost more than 10% each.
Stocks in the country are now collectively worth about US$3.13 trillion, narrowly losing out to the United Kingdom at US$3.18 trillion, according to Bloomberg data.
The CAC 40 Index has erased all its gains for 2024, a sharp reversal from scaling record highs a month ago.
“We are in a period where there are no certainties for three-to-four weeks and the market could unfortunately become more unstable,” said Alberto Tocchio, a portfolio manager at Kairos Partners.
At the same time, a confluence of factors including improving global growth and a pickup in merger activity has made UK stocks popular with investors again.
Although the country is preparing for its own general election, the outcome is seen as being more stable with the opposition Labour party leading in polls by a wide margin.
“We like UK stocks for valuation reasons but also as a portfolio diversifier given their attractive sector profile,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “On top of that, the political uncertainty seems to be higher elsewhere, at least for the moment.”
The FTSE 100 Index has hit all-time highs this year, fuelled by export-reliant stocks such as Shell Plc and Unilever Plc.
It has outperformed the Euro Stoxx 50 index by far in the past three months, with jet-engine maker Rolls-Royce Holdings Plc among the biggest gainers.
On a global scale, the United Kingdom now ranks as the sixth-biggest stock market.
In France, market strategists aren’t convinced about flocking back into equities yet due to uncertainty related to public finances and policy.
Besides banks, toll-road operators Vinci SA and Eiffage SA have slumped on concern that highways could be re-nationalised if Macron’s party loses power.
The news comes at a time when France’s heavyweight luxury stocks were already under pressure from an uneven recovery in China.
“Given the unusual political conundrum currently and high headline risk between now and the election, we see no reason to rush to buy the dip,” Barclays Plc strategist Emmanuel Cau said in a June 12 strategy note. The two-round vote occurs June 30 and July 7.
To be sure, investors see some reasons to remain cautious on the United Kingdom, too.
The July 4 election will mark the biggest political shakeup since Brexit, and the new government will have limited financial headroom and face scrutiny from bond vigilantes.
The country’s stock market is also reeling from companies choosing to list either in Europe or in the United States, partly driven by pressure from activist investors seeking better valuations. — Bloomberg | Business | Markets | Complimentary | Medium | null | 2024-06-18 00:00:00 | Markets,Paris,stock,equities,London,Exchange | PARIS: France’s political upheaval has led the country to lose its spot as Europe’s biggest equity market, less than two years after stealing that crown from the United Kigdom. | https://www.thestar.com.my/business/business-news/2024/06/18/paris-loses-crown-as-europes-biggest-stock-market-to-london | |
1,373,524 | Greystar forms Dutch rental home venture | AMSTERDAM: Greystar Real Estate Partners LLC has formed a joint venture with a pension fund for Dutch government workers and teachers to build rental homes in the Netherlands.
The Dutch Essential Housing Venture includes an initial US$448mil commitment to build and operate about 1,500 homes in and around the Netherlands’ four largest cities, according to a statement yesterday.
It has already acquired a site in Leiden where about 780 homes will be built by Greystar for its venture with Stichting Pensioenfonds ABP.
Private equity firms have poured into residential property across Europe as cities struggle to deliver new housing to keep up with demand.
Real estate investors have been shifting their allocations away from traditional mainstays including offices and malls in favour of the steady returns offered by rental homes in the face of the mismatch between supply and demand.
“The Essential Housing Venture will invest Dutch institutional capital back into major employment hubs in the Netherlands to solve a real issue in the domestic housing market,” said Mark Kuijpers, senior managing director of Central Europe at Greystar. — Bloomberg | Business | Property | Complimentary | Short | null | 2024-06-18 00:00:00 | Property,Greystar,pension,rental,Netherlands | AMSTERDAM: Greystar Real Estate Partners LLC has formed a joint venture with a pension fund for Dutch government workers and teachers to build rental homes in the Netherlands. | https://www.thestar.com.my/business/business-news/2024/06/18/greystar-forms-dutch-rental-home-venture | |
1,373,498 | Keen competition a challenge for Bermaz Auto | PETALING JAYA: Bermaz Auto Bhd ’s (BAuto) earnings are anticipated to come under pressure amid the surging competitive environment.
Hong Leong Investment Bank (HLIB) Research expects BAuto’s earnings to normalise lower in subsequent quarters, in line with the industry’s downward trend and increasing competitive environment, especially with the emergence of Chinese original equipment manufacturers (OEMs).
“We expect Malaysia’s total industry volume (TIV) to slow down in 2024 following the record high base of 800,000 units achieved in 2023, alongside heightened competition with the entrance of new Chinese OEMs with aggressive pricing and marketing strategies.
“On a more positive note, BAuto has secured the exclusive distributorship for China-based XPeng electric vehicle (EV) in Malaysia with the starting model G6, to be launched in August this year.
“The Philippines market continues to recover post-pandemic and BAuto is expected to leverage onto the recovery – the newly launched CX-60 and CX-90 premium models have been well received there,” the research house added.
For the fourth quarter ended April 30, 2024, the company recorded a lower net profit of RM90.22mil compared with RM100.62mil in the same quarter a year ago.
Revenue for the quarter also decreased to RM937.5mil compared with RM1.072bil achieved in the similar quarter in 2023.
Meanwhile, for its full year, BAuto chalked up a higher revenue of RM3.93bil compared with RM3.54bil in the preceding financial year. Its net profit came in higher at RM351mil for the year compared with RM306mil previously.
The board also declared a fourth interim dividend of 4.75 sen per share and a special dividend of seven sen single-tier dividend per share, which will be payable on Aug 2, 2024.
AmInvestment Bank Research, which is maintaining its “buy” call on BAuto with an unchanged fair value of RM3.42 per share, said the company’s balance sheet remains solid with a net cash of RM368mil.
“Our positive outlook on the company is premised on its impressive new model pipeline, strong brand franchise with a highly loyal clientele, clean balance sheet with industry-leading return on equity, as well as the the stock which currently trades at 9.2 times its financial year 2025 price-earnings, which is at a 23% discount to its five-year historical average,” the research house added. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Bermaz Auto,auto,HLIB | PETALING JAYA: Bermaz Auto Bhd’s (BAuto) earnings are anticipated to come under pressure amid the surging competitive environment. | https://www.thestar.com.my/business/business-news/2024/06/18/keen-competition-a-challenge-for-bermaz-auto | |
1,373,508 | More renewable energy projects worth RM7bil likely to be rolled out | PETALING JAYA: With Malaysia expected to aggressively ramp up the installed capacity for renewable energy (RE), particularly solar, there is a likelihood of a huge pipeline of projects for players.
UOB Kay Hian (UOBKH) Research, in a report initiating coverage on the RE sector, expects a total value of RM5.6bil to RM7bil in engineering, procurement, construction and commissioning (EPCC) contracts to be rolled out in the next one to two years under the Corporate Green Power Programme (CGPP) and the fifth round of the Large-Scale Solar (LSS5).
“Multiple solar projects with a total capacity allocation of 2,800MW will be awarded through the CGPP and LSS5 schemes in the coming one to two years.
“Assuming a construction cost of RM2mil to RM2.5mil per MW, we estimate total EPCC replenishment opportunities at a staggering RM5.6bil to RM7bil in the next one to two years,” it added.
The research house said EPCC margins for the projects would likely be better than that for LLS4 given the former’s higher tariffs.
“Our channel checks suggest that the typical gross margins for utility-scale solar power projects would be in the range of 10% to 15%.
“While we expect gross margins for LSS4 projects to be lower in the range of 8% to 10% due to an unexpected rise in input costs and a drop in tariffs, we believe the margins would revert to normal for projects, and this would propel the earnings growth trajectory of solar companies that secured the projects,” said the research house.
It pointed out that solar companies would build up a resilient recurring income stream through ownership of solar assets under various schemes, such as Net Energy Metering, LSS and CGPP.
These assets will comprise rooftop solar photovoltaic systems and large-scale solar plants.
For instance, it noted that Solarvest Holdings Bhd targeted to grow its recurring income assets to 30% of revenue in the coming years, while Samaiden Group Bhd aimed to derive 10% of its revenue from the recurring income segment by the financial year 2027 (FY27).
According to UOBKH Research, the decline in solar module prices is a boon, which could provide room for accelerated growth in the adoption of solar energy as well as potential margin expansion.
It said solar modules typically account for 30% to 60% of the construction cost of a solar project.
“Solar module prices have plunged significantly from the peak of US$0.28/watt in the third quarter of 2021 (3Q21) to US$0.11/watt currently.
“Moreover, solar module prices have plunged by a shocking above 90% from above US$1.00/watt back in 2010.”
According to the research house, the oversupply of solar modules in China’s solar power segment, which accounts for 80% of the world’s solar module supply chain, will continue to keep global solar module prices low in the near term.
China’s annual production capacity for finished solar modules was 861GW as at end-2023, more than double the global installations of 390 GW.
The capacity is expected to grow by 500GW to 600GW in 2024.
UOBKH Reseach’s sector pick is Pekat Group Bhd with a target price of RM1.09, pegged to 2025 price-earnings of 28 times.
The research house expected better performances across Pekat’s solar, earthing and lightning protection; and trading segments.
The company’s ongoing acquisition of EPE Switchgears would also bring about synergies, thus propelling its earnings momentum, according to the research house. | Business | Energy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Energy,RE,solar,UOB KayHian | PETALING JAYA: With Malaysia expected to aggressively ramp up the installed capacity for renewable energy (RE), particularly solar, there is a likelihood of a huge pipeline of projects for players. | https://www.thestar.com.my/business/business-news/2024/06/18/more-renewable-energy-projects-worth-rm7bil-likely-to-be-rolled-out | |
1,373,510 | BP Plastics expects higher sales of its premium products | PETALING JAYA: BP Plastics Holding Bhd is looking for a 10% sales volume growth for the financial year 2024 (FY24), driven largely by export sales of premium products such as thinner gauge nano stretch film.
In a post-results engagement with its management, Kenanga Research said the manufacturer of plastic products expects higher orders from existing customers, the onboarding of new customers and higher export sales of innovative premium offerings such as nano stretch film to Europe and the United States.
“It is putting onto the market its new stretch hood product, commonly used for securing palletised items like cement and resins for outdoor storage, as the product has met quality and safety tests. The key selling points of the product is recyclability and durability,” said the research house. BP Plastics is also putting onto the market a new blown film packaging product used in the food and beverage sector in the fourth quarter of 2024.
According to Kenanga, the company plans to market the product directly to domestic brand owners as this blown film product offers greater flexibility in terms of customisation (versus stretch film) backed by state-of-the-art printing and cutting machines.
The higher-margin value-added product should help to cushion higher labour and electricity costs.
“We also keep our target price of RM1.42 based on 10 times FY25 price-to-earnings ratio (PER) at a discount to the sector’s average historical forward PER of 13 times, largely to reflect BP Plastics’ relatively smaller market capitalisation and thinner share liquidity.
Elaborating on its investment case, the research house said it liked the stock for its strong foothold in the South-East Asia market which is expected to remain resilient despite global economic uncertainties. It also noted that the group’s expansion plans are backed by a strong balance sheet being in a net cash position.
“However, its valuations are fair after the recent run-up in its share price,” it added. | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,BP Plastics,plastic,manufacturing,film | PETALING JAYA: BP Plastics Holding Bhd is looking for a 10% sales volume growth for the financial year 2024 (FY24), driven largely by export sales of premium products such as thinner gauge nano stretch film. | https://www.thestar.com.my/business/business-news/2024/06/18/bp-plastics-expects-higher-sales-of-its-premium-products | |
1,373,518 | S. Korea to ease REIT rules to help normalise financing market | SEOUL: The finance ministry says it will ease regulations on real estate investment trusts (REITS) as part of efforts to help normalise the real estate project financing sector.
The government said yesterday it will create “project REITs” after drastically lifting regulations so as to allow a greater number of small investors to join the projects and will expand REIT investment targets to health care, data centres and other promising fields, according to the Economy and Finance Ministry.
REITs are a type of security that invests in real estate to be traded on major exchanges and provides investors with stakes in real estate, such as office buildings, apartments and hotels.
The measure came as South Korea is facing risks stemming from rising delinquencies in the real estate project financing sector amid the property market slump and high interest rates, and the government is striving to support an “orderly soft landing” for the debt to minimise its potential impact on the economy.
“The government will help allow more people to enjoy benefits from real estate developments,” Finance Minister Choi Sang-mok said during an economy-related ministers’ meeting.
“We will continue efforts to normalise the project financing market.” — The Korea Herald/ANN | Business | Property | Complimentary | Short | null | 2024-06-18 00:00:00 | Property,South Korea,REIT,regulations,investment,security | SEOUL: The finance ministry says it will ease regulations on real estate investment trusts (REITS) as part of efforts to help normalise the real estate project financing sector. | https://www.thestar.com.my/business/business-news/2024/06/18/s-korea-to-ease-reit-rules-to-help-normalise-financing-market | |
1,373,519 | Hyundai Motor shares rise as Indian unit files for IPO | Seoul: Plans for what may be one of India’s largest-ever initial public offerings (IPOs) boosted shares of Hyundai Motor Co, putting them on course for a record high.
Hyundai – which will collect all of the proceeds from the IPO of its local unit – saw its stock jump as much as 6.3% in Seoul.
The South Korean automaker is selling a 17.5% stake in Hyundai Motor India Ltd, according to a draft prospectus filed.
The maker of the Genesis sedan is seeking to raise about US$2.5bil in the IPO, with a potential listing planned by the end of the year, Bloomberg News reported last week, citing people familiar with the matter. That would rival the 2022 listing of Life Insurance Corp of India for the nation’s largest IPO on record.
Hyundai has been locked in competition with rivals including Maruti Suzuki India Ltd and Mahindra & Mahindra Ltd as India’s car demand shifts toward sports utility vehicles and electric models.
Shares of Maruti’s parent Suzuki Motor Corp fell as much as 5.1% in Tokyo.
Meanwhile, Hyundai’s suppliers and subsidiaries climbed. SL Corp jumped as much as 14% while HL Mando Co gained 5.2% and Kia Corp rose 4.6%.
The IPO sends “a clear message that Hyundai Motor’s India investment will increase”, said Shin Yoonchul, an analyst at Kiwoom Securities Co.
“While investors had expected higher investments in North America and Europe, they had not expected a big output increase in India.
“Investors are searching for the companies that have entered India and will see high growth in orders.” — Bloomberg | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,Hyndai,motor,IPO,listing,auto | Seoul: Plans for what may be one of India’s largest-ever initial public offerings (IPOs) boosted shares of Hyundai Motor Co, putting them on course for a record high. | https://www.thestar.com.my/business/business-news/2024/06/18/hyundai-motor-shares-rise-as-indian-unitfiles-for-ipo | |
1,373,517 | Top business groups convene strategy meetings | SEOUL: Top conglomerates in South Korea are set to hold their strategic meetings this month to navigate the ongoing economic slowdown and geopolitical uncertainties according to industry sources.
Samsung Electronics, the country’s biggest conglomerate in terms of assets, will kick off its series of strategic meetings from today till Thursday.
Top executives are expected to convene to discuss the company’s global strategies in key technology sectors, including artificial intelligence (AI), which touches all of its businesses, from smartphones to home appliances to chips.
The company’s smartphone and home appliance business divisions will present their mid to long-term goals and strategies this week. Its chip business division will hold the meeting on June 25, the first meeting after vice-chairman Jun Young-hyun took office as the head of the division in May.
Having suffered its worst earnings last year, Samsung, the world’s largest memory chip maker, replaced its semiconductor business chief. Jun, an engineering specialist, is tasked with consolidating Samsung’s memory leadership and accelerating its push for AI chips.
Keen attention is also being paid to the upcoming meetings as they are held after Samsung Electronics chairman Lee Jae-yong’s two-week business trip to the United States. Lee held some 30 meetings with tech leaders, including those of Meta, Amazon and Qualcomm.
SK Group, the country’s second-largest conglomerate, will hold its top executive meeting June 28-29 to review business plans across affiliates.
This year, the theme is known to be “going back to the basics”, the management philosophy established during the tenure of late chairman Chey Jong-hyun in the 1970s.
At the meeting, chairman Chey Tae-won, son of the late chairman, and other members of the founding family, including SK Innovation vice-chairman Chey Jae-won and SK Supex council chairman Chey Chang-won, are expected to attend, along with other heads of SK companies.
The group’s overall business portfolio is expected to be reviewed to improve management efficiency and nurture new growth drivers. Following chairman Chey’s recent divorce settlement ruling worth US$1bil, the meeting is also likely to discuss risk-management measures.
Hyundai Motor Group, third in line in terms of assets, will convene a global strategy meeting later this month, with executive chair Chung Euisun in attendance.
After years of aggressive expansion in the all-important US market, especially in the burgeoning electric-vehicle (EV) sector, its executives are expected to discuss strategies to navigate the Inflation Reduction Act in the US and the post measures to the November presidential election.
Last year, Hyundai Motor and Kia hit the one-million-unit milestone in US exports, largely driven by strong sales of EVs and hybrids.
The executives are also expected to discuss growth plans in India and South-East Asia, the two strategic markets for the carmaker to de-risk with regards to Russia and China.
Hyundai Motor India recently filed for an initial public offering on the Indian stock market, reportedly aiming to raise up to US$3bil – the largest in India’s IPO history.
LG Group, the fourth largest group in South Korea, had already conducted strategic meetings for two weeks last month, with key affiliates, including LG Electronics and LG Innotek reporting their performance and sharing their operation plans for the next half of this year.
According to news reports, chairman Koo Kwang-mo is taking off to the US this week to meet with business partners, especially those in batteries, AI and biopharmaceuticals. His US trip comes almost 10 months after his previous one in August last year.
The production site of Ultium Cells, LG Energy Solution’s battery joint venture with GM, in Tennessee, and Silicon Valley are cited as potential stops for Koo’s trip. — The Korea Herald/ANN | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Samsung,SK,Korea,conglomerate,technology | SEOUL: Top conglomerates in South Korea are set to hold their strategic meetings this month to navigate the ongoing economic slowdown and geopolitical uncertainties according to industry sources. | https://www.thestar.com.my/business/business-news/2024/06/18/top-business-groups-convene-strategy-meetings | |
1,373,516 | Mainland investors rush for offshore assets | HONG KONG: Hong Kong investment products such as insurance and high-yield time deposits are seeing resurgent demand from wealthy Chinese who are aiming to shield returns from a domestic economic and property sector downturn and also a weaker currency.
The trend became evident last year but has accelerated in recent months after China relaxed investment rules for the “wealth connect” programme in February, Hong Kong wealth managers said.
It has sparked a scramble among financial firms in Hong Kong to seize the opportunity and should help the city burnish its status as a wealth hub that has been hit in recent years by pro-democracy protests, Beijing’s tighter control and geopolitical tensions.
Those factors had pushed clients and wealth managers to foray into or expand in rival Singapore.
“There are about 45 million affluent individuals in China, and increasingly they want more international exposure, education and protection,” said Maggie Ng, HSBC’s Hong Kong head of wealth and personal banking.
“There is an increasing demand to manage wealth outside of China.”
Launched in late 2021, “wealth connect” allows residents of nine cities in the southern province of Guangdong, which borders Hong Kong, to buy investment products sold by banks in Hong Kong and Macau, while allowing residents of the two offshore centres to do the same in the world’s second-largest economy.
Under the programme, investments by mainland investors into Hong Kong and Macau hit a record monthly high of 13 billion yuan (US$1.8bil) in March, up nearly eight times from February, data from the Chinese central bank showed.
Inflows in April grew 70.5% from the preceding month to 22.3 billion yuan, the data showed, while northbound investments in April by Hong Kong and Macau residents were just 14 million yuan, largely unchanged since the programme was launched.
HSBC, a leading wealth manager in Hong Kong, saw new account openings in the city rise by more than three times in 2023 from the pre-Covid level in 2019, driven mainly by Chinese mainland retail wealth clients, said Ng.
The strong momentum has continued in the first quarter of this year, she said, declining to give details.
Apart from the mass affluent who are utilising the cross-border investment channels, ultra rich people from China and South-East Asia are also exploring their options in Hong Kong, according to executives at global wealth managers.
“If we look at the inquires from potential family office clients that we received last year versus the previous year, we are talking about an 85% increase,” said L.H. Koh, the head of global family and institutional wealth Asia–Pacific, at UBS.
More than 60% of the inquiries are about setting up family office type entities in Hong Kong by mainly Chinese clients, he said, adding that the trend has continued this year.
While there are still tight capital controls in China, with an individual allowed to remit a maximum US$50,000 per year, the tripling of the investment cap to three million yuan under the “wealth connect” programme in February has bolstered outflows.
China presumably is less worried about outflows under the programme because the investments are eventually required to be remitted back to the country.
Wealth managers in Hong Kong are pushing the authorities to further relax the investment scheme to meet the demand of richer clients to move larger sums to Hong Kong, industry executives said.
The Hong Kong Monetary Authority would “continue to explore further enhancement measures in due course, taking into account the industry’s feedback as appropriate”, the city’s de-facto central bank said in a statement to Reuters.
To capitalise on the momentum, some banks in Hong Kong have started offering as much as 10% a year interest rates on short-duration term deposits as part of the wealth link programme compared to about 2% offered by the banks in the mainland.
Besides banks, Hong Kong-based insurers have also seen a surge in demand from mainland customers since border controls previously installed to curb the spread of Covid were lifted in early 2023.
Horace Yep, Citigroup’s private banking head of Hong Kong and Greater Bay Area, said the bank saw record new account openings in Hong Kong in 2023.
He added that the momentum remained strong this year, thanks to the demand from mainland Chinese clients.
The surge in demand comes against the backdrop of Chinese mainland investors facing limited options to park their cash at home, as yields of long-dated bonds have dropped to record lows.
China’s currency is hovering around its weakest since 2008. And stocks and property have seen returns plung.
“Many mainland people are now sitting on cash,” said a 51-year-old owner of an Internet firm in Shenzhen, whose bets on opaque investment products at home soured after the collapse of a leading shadow bank late last year.
She said she has since parked her money in a current account in the mainland, and is studying the “wealth connect” programme now. — Reuters | Business | Investment | Complimentary | Long | null | 2024-06-18 00:00:00 | Investment,Hong Kong,wealth,assets,insurance,deposits | HONG KONG: Hong Kong investment products such as insurance and high-yield time deposits are seeing resurgent demand from wealthy Chinese who are aiming to shield returns from a domestic economic and property sector downturn and also a weaker currency. | https://www.thestar.com.my/business/business-news/2024/06/18/mainland-investorsrush-for-offshore-assets | |
1,373,520 | Paytm in talks to sell movie ticketing business | NEW DELHI: Paytm is in talks to sell its movie and ticketing business to Zomato Ltd, as the Indian financial technology (fintech) pioneer seeks to unload non-core assets and revive sales hurt by a regulatory crackdown.
The fintech firm is considering a potential transfer of its entertainment business but has yet to enter into any binding agreements, the company officially known as One97 Communications Ltd, said in a stock exchange filing on Sunday.
Zomato acknowledged in a separate statement it’s in discussions with Paytm for such a deal, to boost what it called its “going-out” business.
The discussions between Paytm and online food delivery firm Zomato are in advanced stages, though there are other suitors for the business, Bloomberg News first reported.
Paytm’s potential sale of its events and movie ticketing businesses to Zomato would enable the fintech company to focus on its main payments service as it launches promotional campaigns to acquire new users and reactivate previous customers affected by its shuttered banking arm.
A deal may be margin accretive for Zomato over the long term as the ticketing assets – valued at 20 billion rupees – would be part of a segment comprising less than 2% of its financial year 2024 adjusted sales, said analyst Nathan Naidu.
Paytm, run by billionaire founder and chief executive officer Vijay Shekhar Sharma, last month reported its first sales decline on record, and vowed to trim non-core assets.
It also warned of job cuts, reflecting the fallout from regulatory action on Paytm Payments Bank Ltd that curtailed much of the fintech’s business and forced it to forge new partnerships with lenders.
Paytm does not control the bank but relied on it for digital wallets and payments traffic before the central bank’s move earlier this year.
Paytm does not disclose standalone numbers for its movie and events ticketing arm.
It reported annual sales of 17.4 billion rupees (US$208mil) in the financial year through March 2024 in its marketing services business, which includes movie and events as well as credit card marketing and gift vouchers.
The sale, if successful, would allow Paytm to sharpen its focus on travel, deals and cash-backs – businesses that are important for broadening its merchant base and growing its own sales.
“As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses,” Paytm said in the statement.
The purchase could help food delivery firm Zomato expand its digital business into a new high-growth area.
In 2020, it acquired Uber Technologies Inc’s India food unit. — Bloomberg | Business | e-Commerce | Complimentary | Medium | null | 2024-06-18 00:00:00 | e-Commerce,Paytm,ticketing,Zomato,fintech | NEW DELHI: Paytm is in talks to sell its movie and ticketing business to Zomato Ltd, as the Indian financial technology (fintech) pioneer seeks to unload non-core assets and revive sales hurt by a regulatory crackdown. | https://www.thestar.com.my/business/business-news/2024/06/18/paytm-in-talks-to-sell-movie-ticketing-business | |
1,373,514 | UK’s muddy fields are a threat to food security | LONDON: From tractors stuck in muddy paddocks to raw sewage washing up from clogged waterways, extreme rain and flooding have wreaked havoc on British farmers this year.
The soggy and turbulent weather – exacerbated by climate change – has stunted their ability to provide homegrown crops for bread, beer and nearly every grocery aisle.
Britain has seen its sixth wettest spring since records began in 1836, according to the Met Office.
The outcome has devastated fields for growing grains like wheat and barley, which the UK usually produces to levels that can mostly meet domestic needs.
The unseasonable conditions have also delayed supplies of British strawberries and even led to the death of livestock.
As a result, the UK will become 8% less self-sufficient for food this year – meaning it will need to ramp up imports, according to the Energy and Climate Intelligence Unit think tank. The potential for this adding to food price inflation is a reminder of the growing threat climate change poses to the UK economy.
For crops like potatoes, “we are seeing shrinkflation in the supermarkets as they try and keep pricing the same,” says Harry Campbell, a fruit and vegetable analyst at commodity data firm Mintec.
Campbell says procurement companies are looking elsewhere to shore up supplies of impacted crops and using contracts to mitigate risk, but their goal is to “make a profit and so it will eventually be passed down to the consumer if the situation is not improved with the weather.”
After volatile commodity prices in the wake of Russia’s invasion of Ukraine fuelled a cost-of-living crisis across the world, countries have begun to assess how to limit their exposure to global supply chains.
The department for environment, food and rural affairs last month introduced the UK’s first ever food security index, finding food supply was “broadly stable” but wet weather had “potentially significant impacts” on the domestic production of some crops. Around 60% of the food eaten by Britons is grown domestically, a number that the government is desperately seeking to boost.
The UK’s ruling Conservative party, which is polling dismally ahead of a general election in July, has been looking to avoid more bad news and gain support among voters – including those in agricultural communities.
Prime Minister Rishi Sunak launched a £50mil (US$64mil) flood support scheme for farmers in April, but for many of them the relief won’t help with this year’s crops.
Frequent flooding
Farmer Henry Ward was only able to begin work on his farm in Lincoln, England on June 4 – after its fields were destroyed by floods that hit twice in six months.
Ward’s Short Ferry Farm usually supplies wheat for breadmaker Warburtons and spring barley to brewers Coors and Budweiser. Ward missed out on planting in March because the fields didn’t dry in time.
“We are then losing out on over a £100,000 worth of revenue from crops that we should be harvesting,” he said from inside the grain store whose supplies are slowly running out.
Across the 200 acres of Short Ferry Farm, only one survived the floodwater: a green patch in a field with a cracked surface that looks as though it experienced a drought.
Ironically, however, the thick crust was created by water pressure. It smells rotten, and Ward compares its appearance to a creme brulee.
Underneath there is a gooey, oxygen-starved mess that will struggle to grow crops without cultivation.
It’s not just grains being hit by unseasonable weather. British-grown strawberries appeared in supermarkets two weeks later than usual due to dull and cool weather and Scottish-grown broccoli may materialise later than expected too.
Livestock has also struggled with the weather. Around 15% of Ward’s lambs were stillborn after Short Ferry Farm had to evacuate heavily pregnant ewes.
This year’s heavy rains are the latest climate twist for British agriculture.
In 2022, the UK experienced its worst period of drought in almost 50 years. Reservoirs ran dry, while crops shrivelled.
Helen Hooker, a research scientist in the Department of Meteorology at the University of Reading, says the UK will be hit particularly hard by these trends.
“Our winters are likely to continue to become wetter,” she says. “And in the summer we’ll see more of these very heavy showers.”
Problems compounded
Britain will have imported 60% more wheat this season than the year before to shore up supplies, according to forecasts from the Agriculture and Horticulture Development Board.
Still, it is a challenge to find a supplier in Europe that isn’t being impacted by extreme conditions. Soggy fields are limiting crop planting in France.
Unseasonable cold snaps and droughts have hit Black Sea grain growth. Germany flooded earlier this month.
It may leave the country having to look further afield to Canada for quality wheat, says Tom Molnar the CEO of London-based bakery Gail’s, which has primarily sourced from British producers in the past six years. UK prices for wheat have continued to climb even as the costs of the crops elsewhere have been rolling back from this year’s peak.
Molnar said companies that produce bread on a large scale may be hit harder by rising grain costs than more upscale shops like Gail’s.
Other risks faced by the UK supply chain may lie in the hands of private companies controlling the nation’s creaking water infrastructure. Storm overflows designed to help cope with intense periods of rain are old and increasingly flooded by water companies with sewage, resulting in public health warnings to avoid swimming in streams and even boil water before use in one area. — Bloomberg | Business | Business | Complimentary | Long | null | 2024-06-18 00:00:00 | Agriculture,climate,weather,food,security | LONDON: From tractors stuck in muddy paddocks to raw sewage washing up from clogged waterways, extreme rain and flooding have wreaked havoc on British farmers this year. | https://www.thestar.com.my/business/business-news/2024/06/18/uks-muddy-fields-are-----------a-threat-to-food-security | |
1,373,513 | Hydrogen energy plans draw foreign interest | MANILA: Numerous companies from Australia, Europe and North America have expressed interest to develop hydrogen sources in the country for power generation, according to the Department of Energy (DoE).
Energy undersecretary Alessandro Sales said the DoE was “pleasantly surprised at the level of interest” among international players to participate in future biddings for hydrogen contracts.
“These hydrogen contracts are in fact novel in today’s world because apparently, it’s only the Philippines that has bid an area purposely for hydrogen exploration,” Sales said.
The DoE has offered two areas for hydrogen exploration – one is in Zambales and the other is at the western portion of Central Luzon.
It will evaluate all proposals in August.
Energy secretary Raphael Lotilla had said that the discovery of natural hydrogen deposits in Mali and Europe was one of the reasons behind the “high interest” of European entities to consider venturing into hydrogen.
“I am sure that even our East Asian neighbours will also be looking at the opportunities in this area,” Lotilla said.
Signed in January this year, the DoE issued Department Circular No. 2024-01-0001 to incentivise entities that will help the government secure its power supply by investing in hydrogen energy for power generation.
The said DoE policy governs the national policy and general framework, roadmap and guidelines for hydrogen in the energy sector.
It also consolidates and harmonises all existing issuances to ensure and accelerate investments in safe, effective and efficient hydrogen development, production and utilisation.
Under the policy, hydrogen energy projects with the primary purpose of producing, importing and exporting green hydrogen and green hydrogen derivatives for power generation and other applications may avail certain incentives from the government.
These include income tax holiday, special tax rates, net operating loss carry-over, tax exemption of carbon credits, 0% value added tax rate and exemption from duties on renewable energy (RE) machinery, equipment and materials.
The DoE issued the policy as it considers hydrogen as another viable alternative and cleaner energy source and aims to increase the use of renewables nationwide to meet its future requirements.
“The potential for utilizing hydrogen resources, if optimally developed, will play a major role in improving the country’s energy security by reducing dependence on imported fossil fuels,” the circular said. -- Philippine Daily Inquirer/ANN | Business | Energy | Complimentary | Medium | null | 2024-06-18 00:00:00 | Energy,Hydrogen,power | MANILA: Numerous companies from Australia, Europe and North America have expressed interest to develop hydrogen sources in the country for power generation, according to the Department of Energy (DoE). | https://www.thestar.com.my/business/business-news/2024/06/18/hydrogen-energy-plans-draw-foreign-interest | |
1,373,512 | The late Ta was a generous and genuine person | PETALING JAYA: The late Waz Lian group founder and chairman Tan Sri Ta Kin Yan (pic) was well known for his generosity and genuine nature, dedicating much of his time to philanthropic work.
Fajarbaru Builder Group Bhd group executive chairman Tan Sri Chan Kong Choy said the passing of Ta saddened him deeply.
“He was a fantastic man, very generous and kind. He will never say no when help is needed. I have lost a good, close friend. One of the best persons I have come across in my life. My condolences to the family.”
Carlsberg Brewery Malaysia Bhd chairman Tan Sri Chor Chee Heung said the news of Ta’s passing came as a shock as Ta was only in his early seventies.
“I was saddened by the news. I first got to know him when I became a deputy minister through introductions by mutual friends.
“Ta was a jovial and generous person with diverse business interests.
“He was always friendly to everyone and was always willing to help his friends. He was also a very generous person who contributed to a lot of charities,” he said.
Ta passed away on June 15 at the age of 72. According to company officials, Ta, who just celebrated his birthday last month, passed away in his sleep.
The founder of Majestic Gen Sdn Bhd, Ta also held positions in several associations, societies and/or organisations locally and/or overseas such as the Associated Chinese Chambers of Commerce and Industry of Malaysia, The Community Chest and The Socio-Economic Research Centre.
Waz Lian commenced operations in 1987 with club management before venturing into hotel and resort management and then property development.
Meanwhile, former MCA president Tan Sri Liow Tiong Lai said Ta’s passing was a loss to both the Chinese community and the nation.
“I am deeply shocked and saddened by his demise. He did a lot of charity work, particularly community projects, and maintained a close connection with the Chinese community. Being a man of honour, he was a role model to many,” Liow told StarBiz.
Liow, who was elected as MCA Youth Chief in 2005, added that Ta was exceptionally kind and supportive of the youth movement, especially in the fundraising and community work efforts.
“Whenever we carried out community work on the ground, he was always the first to come forward and offer his support. He was always there, giving encouragement to the youth and sharing his thoughts with them.
“He was a true leader, never asking for anything in return for his assistance. He did not just do this once but he spent many years helping out the youth,” he said.
Having known Ta for more than two decades, Bernama chairman and Star Media Group adviser Datuk Seri Wong Chun Wai described the businessman as a “generous and genuine person”.
“He made it a point to keep in touch with his friends.
“He was certainly not the type who only called someone when he needed something or a favour, unlike many. No one was too big or small to him,” he said.
Wong noted Ta donated generously to schools, charities and non-governmental organisations, but insisted on remaining anonymous.
“His demise came as a shock to me as I had just received his daily motivational messages that he sent out to friends without fail. I also attended his birthday party last month. We will miss him but we will surely treasure his friendship forever,” he said.
For Maju Holdings Sdn Bhd group executive chairman, Tan Sri Abu Sahid Mohamed, Ta was “more than a business associate”.
“He was a good friend and we were comrades for many decades. No doubt, we had many business deals together but we were first and foremost, buddies.
“I will miss him dearly and I pray for his family that they will be strong during this time,” he said. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Waz Lian,Ta Kin Yan | PETALING JAYA: The late Waz Lian group founder and chairman Tan Sri Ta Kin Yan (pic) was well known for his generosity and genuine nature, dedicating much of his time to philanthropic work. | https://www.thestar.com.my/business/business-news/2024/06/18/the-late-ta-was-a-generous-and-genuine-person | |
1,373,511 | Oil dips after weekly gain | NEW YORK: Oil slips after its biggest weekly advance since early April as traders weigh a raft of data from China that shows slow industrial expansion, while retail sales beat forecasts.Brent traded above US$82 a barrel after climbing 3.8% last week, the first weekly gain in four.
West Texas Intermediate was near US$78.
Industrial output and fixed-asset investment posted slower growth, and oil refining fell to the lowest rate this year after more plants shut for maintenance.The spending numbers offered some encouragement after households were reluctant to spend, despite government stimulus measures. — Bloomberg | Business | Commodities | Complimentary | Short | null | 2024-06-18 00:00:00 | Commodities,Oil,petroleum,Brent,WTI,crude,Opec | NEW YORK: Oil slips after its biggest weekly advance since early April as traders weigh a raft of data from China that shows slow industrial expansion, while retail sales beat forecasts.Brent traded above US$82 a barrel after climbing 3.8% last week, the first weekly gain in four. | https://www.thestar.com.my/business/business-news/2024/06/18/oil-dips-after-weekly-gain | |
1,373,515 | Growth in installed capacity of power batteries | BEIJING: China’s installed capacity of power batteries went up in the first five months of the year, according to data from the China automotive battery innovation alliance.
During the period, the installed capacity of the batteries stood at 160.5 gigawatt-hours (GWh), up 34.6% year-on-year (y-o-y).
In May alone, the output gained 41.2% y-o-y to 39.9 GWh, the data showed.
The country’s new energy vehicle (NEV) sector sustained a sound growth momentum in the January to May period.
The NEV output surged to 3.93 million units in the first five months, up 30.7% compared with the same period a year earlier, while the NEV sales rose 32.5% to 3.9 million units.
China has retained its top position worldwide in terms of NEV production and sales for nine consecutive years. — China Daily/ANN | Business | Energy | Complimentary | Short | null | 2024-06-18 00:00:00 | Energy,China,power,batteries,NEV | BEIJING: China’s installed capacity of power batteries went up in the first five months of the year, according to data from the China automotive battery innovation alliance. | https://www.thestar.com.my/business/business-news/2024/06/18/growth-in-installed-capacity-of-power-batteries | |
1,373,509 | DRB-Hicom expects flattish vehicle sales | PETALING JAYA: DRB-Hicom Bhd has guided for flattish vehicle sales in the financial year 2024 (FY24) as it expects subdued sales for less popular brands.
Kenanga Research said it came away from the automotive manufacturer’s first quarter of FY24 results briefing feeling mixed about its near-term prospects.
“DRB-Hicom guided for sales of 160,000 units (up by 3.4% year-on-year (y-o-y) of Proton vehicles and around 80,000 units of Honda vehicles (flattish y-o-y) in 2024.
“Meanwhile, it expects subdued sales for less popular brands such as Mitsubishi and Isuzu due to limited new model offerings. We keep our assumptions of unit sales of 158,000 and 80,000 in FY24 and 166,000 and 80,000 in FY25 for Proton and Honda, respectively,” the research house said in a report recently.
DRB-Hicom will be riding on its parent Zhejiang Geely group’s technology and ecosystem’s in its transition to electric vehicles (EVs), Kenanga Research said.
“Proton will transition to EV in three phases with phase one in 2023 to 2027 (EV pioneering), phase two in 2025 to 2030 (EV growth), and phase three in 2027 to 2030 (EV right-hand development hub),” the research house said. Proton recently launched the X50 RC, and it will be launching the X70 facelift soon.
By the end of 2024, Proton will launch the all-new Proton e.MAS EV (completely built up unit) using the Global Modular Architecture platform. The company hopes to sell 200,000 units yearly built on the platform by 2030. | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,DRB-Hicom,Proton,vehicle,auto | PETALING JAYA: DRB-Hicom Bhd has guided for flattish vehicle sales in the financial year 2024 (FY24) as it expects subdued sales for less popular brands. | https://www.thestar.com.my/business/business-news/2024/06/18/drb-hicom-expects-flattish-vehicle-sales | |
1,373,521 | L’Occitane chairman offers different takeover plan | HONG KONG: Hong Kong-listed L’Occitane International says its chairman Reinold Geiger has offered minority shareholders an alternative takeover proposal, as he pursues to take the skincare firm private.
Geiger, whose firm owns about 72.4% of L’Occitane, is now offering the remaining shareholders an option between the existing HK$34 apiece cash offer and a scrip alternative of 10 shares in the new private entity for every share held.
The cash offer values the shares Geiger does not already own at a maximum value of HK$13.88bil (US$1.78bil), including the value of vested options, L’Occitane said in a filing to the Hong Kong Stock Exchange.
The offer comes at a time when several Hong Kong-listed companies are exploring take-private options in a volatile stock market affected by China’s economic slowdown and a lack of strong stimulus policies.
L’Occitane shares, trading in which was halted earlier in the day, closed at HK$32.65 on June 14, and have risen more than 10% since the privatisation offer was first announced on April 29. — Reuters | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,L’Occitane,HKEX,skincare,takeover | HONG KONG: Hong Kong-listed L’Occitane International says its chairman Reinold Geiger has offered minority shareholders an alternative takeover proposal, as he pursues to take the skincare firm private. | https://www.thestar.com.my/business/business-news/2024/06/18/loccitane-chairman-offers-different-takeover-plan | |
1,373,507 | PMB Technology to raise output | KUCHING: PMB Technology Bhd ’s metallic silicon plant in Samalaju Industrial Park, Bintulu will raise its annual production by 36,000 tonnes more when its phase three expansion project is operational by September this year.
The furnaces for the phase are currently under testing and commissioning, and are expected to commence production by third quarter 2024 (3Q24).
The related capital expenditure together with the improvement works for the existing facilities, RM320mil, was incurred in financial year 2023 (FY23).
“With both phase one and two up running, the group’s combined annual installed capacity is 108,000 tonnes with a total power of 129MW secured with Syarikat Sesco Bhd,” according to PMB Technology in its 2023 annual report.
PMB Technology is an associate of Press Metal Aluminium Holdings Bhd, which is South-East Asia’s largest integrated aluminum producer having manufacturing facilities in Samalaju Industrial Park and Mukah, Sarawak.
PMB Technology embarked on the phase three expansion project after securing an additional 25MW of electricity from Sesco in October 2022.
The plant’s phase one, which also has an installed production capacity of 36,000 tonnes per annum, started production six years ago. The plant’s capacity was doubled to 72,000 tonnes per annum on commissioning of the phase two in 2020.
The group will continue to explore its potential expansion in Sabah despite an earlier decision not to further extend the period of the memorandum of understanding (MoU) that PMB Technology signed with Sabah Oil & Gas Development Corp, which lapsed on March 28, 2024.
Under the MoU, PMB Technology was exploring the potential sub-lease or sale of 200 acres of land at Sipitang Oil and Gas Industrial Park, Sabah, and the development of a new silicon metal production plant there, with sufficient, constant and steady supply of natural gas at acceptable rates to the company.
Its wholly-owned subsidiary PMB Silicon Sdn Bhd undertakes the metallic silicon manufacturing operations.
Global silicon prices, according to PMB Technology, exhibited a steady decline throughout most of 2023 and ended the year down about 23% despite a strong rebound in 4Q23.
Output outside of China fell during the year as several producers curtailed output due to the challenging market conditions.
This reduction in output was, however, insufficient to offset the lacklustre demand outside of China which remained below the level reached in 2018.
And as output in China during the year was stable and adequate to meet demand, the industry was tipped over into an oversupply situation.
In 1Q24, PMB Technology group chief executive officer Koon Poh Ming said the silicon market indices registered a divergence in performance between Asian and western markets.
“Despite a pickup in activity, price levels in China fell during the quarter as supply continued to outstrip demand, prompting destocking efforts across the industry.
“However, market conditions in China are likely to improve going forward as government measures to revive the property sector and bolster the country’s economic recovery should have a positive impact on the industry.
“On the other hand, persistent supply-side constraints caused prices in Europe and the United States to continue to trend upwards from the preceding quarter. Reduced imports and shipping disruptions contributed to the surge in price levels.
“The sustainability of the higher price levels will eventually depend on underlying demand conditions, which displayed signs of improvement in the first quarter, however, lingering concern about inflation and interest rates cloud the outlook for the rest of the year,” he said when commenting on current year prospects when the company released its 1Q24 financial results recently.
Koon said the group continues to place emphasis on further improving its competitiveness in the global market by driving improvement in operational efficiency and cost reduction.
“In particular, our ongoing efforts to improve the mix of our raw material supply, by seeking supply from reliable sources that are within a closer proximity to our production facilities, have begun yielding encouraging results.
“Our persistent focus on strengthening our position in the industry will improve our chances of capturing a greater share of the market opportunities going forward,” added Koon. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,PMB,Samalaju,metallic silicon,industrial | KUCHING: PMB Technology Bhd’s metallic silicon plant in Samalaju Industrial Park, Bintulu will raise its annual production by 36,000 tonnes more when its phase three expansion project is operational by September this year. | https://www.thestar.com.my/business/business-news/2024/06/18/pmb-technology-to-raise-output | |
1,373,506 | Synergy’s revenue likely to grow in FY26 | PETALING JAYA: Synergy House Bhd revenue stream will expand by financial year 2026 (FY26) with it being the first Malaysian authorised service partner for a leading US online home retailer.
With minimal capital impact, RHB Research said Synergy House has advanced from being a Malaysian cross-border eCommerce furniture seller and a furniture developer to becoming the authorised on-boarding service partner for the world’s leading eCommerce home retailer.
Its current valuation of 15.7 times FY25 price earnings ratio offers a compelling investment opportunity, especially with a three-year earnings compounded annual growth rate of 34%, according to RHB Research.
The research house said the company would generate recurring income streams by hosting and supporting various vendors in the future.
RHB Research has a “buy’’ call on Synergy House with a target price of RM2.01 a share.
It said Synergy House’s strategic pivot to becoming an eCommerce vendor on third-party platforms since 2019, amid US-China geopolitical tensions, has proven timely.
“As an authorised service partner, Synergy House will primarily support local Malaysian manufacturers and vendors, ensuring a smooth integration into the retailer’s global eCommerce system.
“It will collaborate with the US retailer to co-host online and offline events aimed at on-boarding new vendors of various home furnishing products and raising awareness about the latter’s eCommerce ecosystem.”
Once vendors are successfully on-boarded, Synergy House will work closely with them, offering various services. | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,Synergy House Bhd,US Retailer,e-commerce | PETALING JAYA: Synergy House Bhd revenue stream will expand by financial year 2026 (FY26) with it being the first Malaysian authorised service partner for a leading US online home retailer. | https://www.thestar.com.my/business/business-news/2024/06/18/synergys-revenue-likely-to--grow-in-fy26 | |
1,373,505 | Prospects looking up for Coastal Contracts | PETALING JAYA: TA Research has turned optimistic on the prospects of Coastal Contracts Bhd , underpinned by a number of positive developments surrounding the oil and gas services provider.
With discussions still ongoing between Coastal Contracts and Mexico’s national oil company Petroleos Mexicanos (Pemex) on the jack-up gas compression service unit (JUGCSU) contract extension, the research house updated that Pemex is inclined to convert the JUGCSU into mobile offshore production units (Mopus).
TA Research said the move would suggest a high likelihood of a contract extension for Coastal Contracts, with the Mopus operating at a production capacity of approximately 40 barrels per day (bpd).
With the group posting a net profit of RM94.9mil for the first quarter ended March 31 (1Q24), the research outfit deemed this a strong financial showing which fulfilled 43% of consensus’ full-year forecasts.
“We attribute Coastal Contracts’ results to higher volume of gas processed and engineering, procurement and construction (EPC) profit at the Papan Plant.
“We understand that no EPC revenue was billed in 1Q24, suggesting that the strong profit for the quarter should be sustainable throughout financial year 2024 (FY24),” it said in a note to clients.
The research outfit reported that gas processing volumes for Coastal Contracts at both the Mexican Perdiz and Papan plants continue to ramp up as planned, with the Papan plant currently processing at an average of 340 million standard cubic feet per day (mmscfd), close to its maximum capacity of 345 mmscfd.
“Meanwhile, the Perdiz plant’s daily average is hovering at 160 mmscfd, also close to its capacity of 180 mmscfd.
“Since both plants are expected to reach full capacity soon, Pemex plans to expand Papan Plant’s capacity followed by modification of Perdiz Plant to include liquefied petroleum gas or LPG recovery capabilities,” it said.
TA Research added that the expansion plan is expected to finalise by early next year.
On the group’s Pulau Mabul luxury resort project, TA Research said Coastal Contracts has been in discussion with luxury hotel operators to potentially manage the resort, which is situated off Semporna in Sabah.
The research unit believes this significantly lowers the execution risk for the group with luxury hotel operators taking the helm of the resort’s operations, as the capital expenditure for phase one is estimated to be about RM85mil and the room rate is expected to be more than RM500 per person per night.
“Considering that phase one of the project will take one to two years to complete and discussions are still ongoing, we do not expect the hospitality segment to generate revenue until FY26,” it said.
Elsewhere, Coastal Contracts is also targeting two medium-sized production related infrastructure projects like floating production, storage and offloading vessels and Mopus within South-East Asia, participating in bidding with another experienced partner who will hold the majority stake.
TA Research said that the decision was prudent, considering that the group will be loaded with cash of nearly RM1bil once the amount due from the Mexican joint-venture is repaid by 4Q24.
It has upgraded its call on Coastal Contracts to a “buy”, predicting a target price of RM2. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Coastal Contracts,oil and gas,offshore | PETALING JAYA: TA Research has turned optimistic on the prospects of Coastal Contracts Bhd, underpinned by a number of positive developments surrounding the oil and gas services provider. | https://www.thestar.com.my/business/business-news/2024/06/18/prospects-looking-up-for-coastal-contracts | |
1,373,504 | Worst likely over for glove sector | KUALA LUMPUR: The rubber glove sector could be supported by potential growing export prospects moving forward although it is presently operating within a constrained space.
Any upside in exports which is being priced in could come from gains from the trade war between the United States and China, which may benefit Malaysian players in this space.
The United States had last month announced an increase in the import tariffs on China-made rubber gloves to 25% by 2026. But some analysts and the Malaysian Rubber Glove Manufacturers Association are cautious on any gains when the time comes, as they expect the United States to also source rubber gloves from its domestic producers.
The immediate outlook appears to still be challenging for domestic rubber glove players, according to Rakuten Trade’s head of equity sales Vincent Lau.
However, he said the worst was likely over, which is a key factor to consider when looking into the sector.
Proper management of costs amid the cautious outlook in the new normal post-Covid pandemic would be key to deliver returns to shareholders.
“Some of these companies need time to fully recover. Some have already reported profits though, while average selling prices (ASPs) have only seen marginal gains,” Lau told StarBiz.“The tariffs that US president Joe Biden had announced appear to be just academic. We’re not sure what will happen if Donald Trump takes over the US presidency in November.
“The stock market is looking for ideas and since these stocks are relatively cheap, I have a trading view on this matter,” he added.
Top Glove Corp Bhd , the biggest rubber glove maker in the world, will announce its third-quarter financial results ended May 31 tomorrow.
Hartalega Holdings Bhd , meanwhile, saw a turnaround in its fourth-quarter financial performance ended March 31 as it churned out a new profit of RM15.12mil from a net loss in the same quarter of the previous year based on slightly higher year-on-year revenue.
It said the better performance was due to higher ASPs, mainly attributable to favourable foreign currency exchange movements.
UOB Kay Hian (UOBKH) Research recently said it expects rubber glove companies to deliver sequentially better results in the upcoming quarters throughout 2024.
“From Top Glove, Hartalega and Kossan Rubber Industries Bhd ’s recent operating statistics, we observed that earlier ASP declines have come to a halt and are gradually trending up, while volume sales have seen a steep quarter-on-quarter improvement,” UOBKH Research said.
Moreover, it noted of input cost moderation, which would lift overall operating margins as cost of goods sold falls on lower natural gas tariffs and raw material costs.
It maintained its “overweight” stance on the rubber glove sector, noting the risk-reward view remains favourable.
UOBKH Research maintained its “buy” call on Hartalega and Kossan with target prices of RM3.92 and RM2.73, respectively.
It also maintained its “buy” call on Top Glove with a higher target price of RM1.28 following a recalibration of financial year 2025’s earnings to adjust for higher sales volume and utilisation rates. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,gloves,latex,manufacturing,Top Glove,Hartalega,Kossan,Supermax | KUALA LUMPUR: The rubber glove sector could be supported by potential growing export prospects moving forward although it is presently operating within a constrained space. | https://www.thestar.com.my/business/business-news/2024/06/18/worst-likely-overfor-glove-sector | |
1,373,503 | Bursa average daily value on upward trajectory | PETALING JAYA: With the average daily value (ADV) of the local equity market having exceeded expectations, UOB Kay Hian (UOBKH) Research has revised Bursa Malaysia’s ADV forecasts for 2024 and 2025 upward to RM3.1bil and RM2.7bil, respectively, from RM2.8bil and RM2.5bil.
This adjustment positions the research firm’s latest ADV assumptions significantly above consensus forecasts of RM2.3bil to RM2.8bil for 2024.
“Bursa’s ADV has continued to exceed expectations, with a year-to-date average of RM3.1bil surpassing our initial 2024 assumption of RM2.8bil.
“The current equity ADV upcycle is only six months old, compared with historical upcycles lasting six to 18 months. Therefore, we remain optimistic on Bursa’s near to medium-term prospects, which prompt us to raise our ADV assumptions,” UOBKH Research said in a report.
The research house said recent economic data in the United States bolstered expectations for an interest rate cut later this year.
“The eventual Federal Reserve interest rate pivot is a key underlying catalyst to help sustain net foreign inflows into Bursa and consequently overall market sentiment and ADV.
“After two consecutive months of net selling, foreign investors became net buyers in May 2024 with net inflows of RM1.5bil, reversing the RM1.4bil net outflows in April. As a result, the cumulative net foreign outflow for the five months of 2024 decreased to RM0.8bil,” it said.
The research house maintained a “buy” call on Bursa Malaysia Bhd with a higher target price of RM9.42, up from RM8.76 after an earnings adjustment.
It said the stock’s share price could potentially peak above RM10 if the current equity market ADV continues into late-2024 and early next year.
The stock closed at RM8.83 last Friday, translating into a market cap of RM7.15bil. | Business | Markets | Complimentary | Short | null | 2024-06-18 00:00:00 | Markets,Bursa Malaysia,FBM KLCI,equities,trading,investor,commodity,stocks | PETALING JAYA: With the average daily value (ADV) of the local equity market having exceeded expectations, UOB Kay Hian (UOBKH) Research has revised Bursa Malaysia’s ADV forecasts for 2024 and 2025 upward to RM3.1bil and RM2.7bil, respectively, from RM2.8bil and RM2.5bil. | https://www.thestar.com.my/business/business-news/2024/06/18/bursa-average-daily-value-on-upward-trajectory | |
1,373,502 | Deleum’s latest job win to bolster FY24 showing | PETALING JAYA: The latest contract bagged by Deleum Bhd from PETRONAS Carigali Sdn Bhd for offshore services will contribute positively to the former’s financial year 2024 (FY24) performance in the duration of the contract, says MIDF Research.
The research firm said the contract win was also in line with robust upstream activities expected this year.
The contract, secured via subsidiary Deleum Technology Solutions Sdn Bhd is worth RM105mil and entails providing offshore maintenance, construction, and modification services for Peninsular Malaysia Assets (Gas Package) throughout 2024.
“The award reflects the positive trajectory anticipated for the upstream oil and gas sector in 2024. Global upstream capital expenditure (capex) is expected to reach US$580bil, while locally, PETRONAS has announced a capex of RM50bil to RM60bil in 2024, of which 40% to 60% is expected to be allocated for the upstream segment,” said MIDF Research.
The research firm said the robust outlook for the upstream division in relation to an elevated yet relatively stable Brent crude oil price will continue to benefit oil and gas services and equipment companies, including Deleum.
“We upgraded our earnings forecast for FY24 and FY25 by 2% and 3% respectively,” it added. In line with the revised forecast, it revised the stock’s target price to RM1.62 (from RM1.58), pegging a price-earnings ratio of 11.2 times to a revised 2024 earnings per share of 14.5 sen. | Business | Corporate News | Complimentary | Short | null | 2024-06-18 00:00:00 | Corporate News,Deleum,PETRONAS,oil and gas | PETALING JAYA: The latest contract bagged by Deleum Bhd from PETRONAS Carigali Sdn Bhd for offshore services will contribute positively to the former’s financial year 2024 (FY24) performance in the duration of the contract, says MIDF Research. | https://www.thestar.com.my/business/business-news/2024/06/18/deleums-latest-job-win-to-bolster-fy24-showing | |
1,373,500 | Upward earnings trend forecast for healthcare | PETALING JAYA: Healthcare companies expect a steady year ahead for the industry, underpinned by increased spending on healthcare products and services.
KPJ Healthcare Bhd chairman Datuk Md Arif Mahmood said he expects the economic growth momentum in 2023 to carry through to 2024.
“The Malaysian healthcare landscape is expected to remain dynamic, with significant growth driven by private and public-sector spending,” he said in the company’s annual report.
He noted that health tourism is set to witness an 18% growth in 2024 compared to 2023.
“This forecast expansion presents excellent opportunities for KPJ and we are well-positioned to capture them.”
Going forward, Md Arif said KPJ will continue to focus on putting its patients and customers first and strive “to get the basics done well”.
“We will invest in upgrading our facilities and deploying new systems and technology. Our 30th specialist hospital is expected to be operational in early 2025.
“Also, as part of our efforts to create long-term sustainable value, we shall continue to explore new opportunities beyond our core specialist hospital business.”
Taking a glimpse into the outlook of the healthcare industry, UMediC Group Bhd (UMC) chairman Datuk Ng Chai Eng noted in the group’s annual report that healthcare remains the centre stage of the government’s agenda.
“In light of this, healthcare expenditure, from both the public and private hospitals, has been growing at an exponential rate with higher allocation each year focusing on modernising and expanding healthcare facilities.
“Overcrowding in hospitals has also become one key area which the public and private hospitals are looking to address through the setting up of more hospitals, which will ultimately increase healthcare expenditure as well as the demand for medical devices.”
Looking ahead to the upcoming year, Ng said the group is braced to further diversify its portfolio by entering the segment on nursing home management and ambulance services.
“It is in line with our commitment to provide essential healthcare services to our community,” he said.
Additionally, Ng emphasised that UMC is actively staying ahead of evolving trends by looking to promote digital healthcare equipment.
“This is to keep up with the overwhelming industrial demand catering to the needs of our customers,” he said.
Ng pointed out that UMC recently acquired Patho Solutions (M) Sdn Bhd to further diversify its offerings into the laboratory segment.
It will do this by leveraging on its existing marketing and distribution networks as well as manufacturing capabilities.
“Given the overall positive outlook of the healthcare industry, our group is eager to pursue new opportunities. This is to ensure that we are able to further grow the business and provide long-term value for our stakeholders.
“We are confident that the next few years will be pivotal for us as we continue to build on our strengths and expertise in the medical device and consumable industry.”
Meanwhile, IHH Healthcare Bhd chairman Tan Sri Mohammed Azlan Hashim and group chief executive officer Prem Kumar Nair said transparency and accountability remain the “bedrock of trust” for healthcare firms.
“Trust is essential in every business and perhaps more so in the healthcare industry, where lives are being entrusted to medical professionals, systems, and organisations.
“Often times, it is this matter of trust that becomes the deciding factor for patients choosing between one hospital and another,” they said in a joint statement in IHH’s annual report.
They also noted that sustainability is “not a fad nor a checkbox,” but a long-term commitment towards real and actionable change.
“Every action that we take today and every plan that we make for our future determines the kind of impact we have on healthcare, society and the environment.”
In spite of the positive outlook for the sector, KPJ’s Md Arif said he does expect the healthcare industry to continue to face challenges, especially in securing talent and meeting rising costs.
“We have put concerted efforts into addressing these challenges to remain competitive while creating value for our stakeholders.”
Meanwhile, Kenanga Research in a recent report noted that global healthcare expenditure is projected to reach a total of US$10 trillion by 2026, increasing from US$8.4 trillion in 2022 and representing a compounded annual growth rate of 3.5% during the five-year period.
“Amplifying the demand for private healthcare are rising chronic diseases across the globe.
“Specifically, the World Health Organisation reported that almost half of the global healthcare expenditure (US$4 trillion) will be spent on three leading causes of death, namely, cardiovascular diseases, cancer and respiratory diseases.” | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,KPJ,spending,healthcare | PETALING JAYA: Healthcare companies expect a steady year ahead for the industry, underpinned by increased spending on healthcare products and services. | https://www.thestar.com.my/business/business-news/2024/06/18/upward-earnings-trend-forecast-for-healthcare | |
1,373,499 | SimeProp to gain from tech wave | PETALING JAYA: Sime Darby Property Bhd is in a good position to benefit from the technology investment inflows to Malaysia, thanks to its ample land bank and robust balance sheet.
According to RHB Research, the property company could see further upside potential from Google’s recent announcement of its US$2bil investment in the country, noting the market has not fully priced in the positive effect from the US tech giant’s investment.
“The tech giant’s announcement of RM1.74bil in capital expenditure for the first Google data centre and GoogleCloud region may just be the beginning.
“The potential impact of this on earnings may be under-estimated,” the brokerage wrote in its report yesterday.
It noted that Google had only announced its data centre and Google Cloud region at Sime Darby Property’s Elmina Business Park (EBP) in Selangor, adding there could be further investments for subsequent phases, which could be worth RM7.5bil, at the development at a later stage.
Citing the upside potential, RHB Research raised its target price for Sime Darby Property to RM2 from RM1.54 previously, and it reiterated “buy” on the counter.
“Our new target price reflects the incremental value of the contribution from the Google facility, as well as the faster turnaround of Sime Darby Property’s industrial parks ahead,” it explained.RHB Research said while the initial Google data centre was estimated to have a capacity of 80MW, the entire 49-acre site earmarked for Google at EBP could accommodate up to 200MW to 250MW capacity.
It noted the data centre investment is expected to boost Sime Darby Property’s total asset under management from RM4.4bil currently to around RM6bil to RM7bil by 2026.
At that level, the group could generate a total recurring income of RM120mil to RM130mil at the operating level.
As such, RHB Research raised its 2026 earnings forecast for Sime Darby Property by about 3% to reflect the initial contribution from the Google data centre as the facility might only be completed in the second half of 2026.
The Google data centre at EBP will power the tech giant’s popular digital services, such as Search, Maps and Workspace. When operational, Malaysia will join the 11 countries in which Google has built and now operates data centres.
RHB Research said Sime Darby Property has land bank and robust balance sheet to accommodate more data centre demand, allowing the group to capture the prevailing investment wave, driven by global tech giants, in the South-East Asia region.
“The company currently has five industrial park projects with a remaining total land area of more than 2,000 acres, and we believe that the basic infrastructure facilities are ready at these industrial sites, since projects are ongoing,” it explained.
“Sime Darby Property is an experienced player in industrial development, and the segment now accounts for 30% of its total property sales,” the research house added. | Business | Corporate News | Complimentary | Medium | null | 2024-06-18 00:00:00 | Corporate News,Sime Darby Property,property,investment | PETALING JAYA: Sime Darby Property Bhd is in a good position to benefit from the technology investment inflows to Malaysia, thanks to its ample land bank and robust balance sheet. | https://www.thestar.com.my/business/business-news/2024/06/18/simeprop-to-gain-from-tech-wave | |
1,373,323 | Shanghai shares end at two-month low as traders gauge lacklustre data | SHANGHAI: Mainland China and Hong Kong stocks ended lower on Monday, with the key benchmark closing at its lowest level in more than two months, dented by a flurry of weaker-than-expected data that showed the property sector remains a key drag on the economy.
China's central bank left a key policy rate unchanged, as expected, when rolling over maturing medium-term loans, and drained some funds from the banking system.
The Asian country's May industrial output lagged expectations and a crisis in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth, though retail sales beat forecasts due to a holiday boost.
China's new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, with the property sector struggling to find a bottom despite government efforts to rein in oversupply and support debt-laden developers.
Data on Friday showed new bank lending in China rebounded far less than expected in May and some key money gauges hit record lows, suggesting the world's second-largest economy is still struggling for footing.
At the close, the Shanghai Composite index was down 0.55% at 3,015.89 points, the lowest close since April 16.
The blue-chip CSI300 index was down 0.15% at 3,536.20 points.
The session's losses were led by weakness in the real estate sector. A sub-index tracking the industry closed 2.6% lower.
The smaller Shenzhen index ended flat for the day and the start-up board ChiNext Composite index was higher by 0.8%.
At the close of trade, the Hang Seng index was flat at 17,936.12 points. The Hang Seng China Enterprises index was also roughly flat at 6,373.48 points.
The sub-index of the Hang Seng, tracking energy shares, dipped 1.6% and the property sector slipped 0.7%.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.2%, while Japan's Nikkei index closed 1.8% lower.
The yuan was quoted at 7.2560 per U.S. dollar, as of 0809 GMT, compared with the previous close of 7.2557. - Reuters | Business | Markets | Complimentary | Short | null | 2024-06-17 00:00:00 | Markets,China,CSI300,Hang Seng,industrial output | SHANGHAI: Mainland China and Hong Kong stocks ended lower on Monday, with the key benchmark closing at its lowest level in more than two months, dented by a flurry of weaker-than-expected data that showed the property sector remains a key drag on the economy. | https://www.thestar.com.my/business/business-news/2024/06/17/shanghai-shares-end-at-two-month-low-as-traders-gauge-lacklustre-data | |
1,373,295 | Gold subdued as investors await further data for Fed rate cues | GOLD prices eased on Monday, as investors were cautious ahead of more U.S. economic data release, while reports from last week showed that inflation was stabilising, lifting expectations that the Federal Reserve will likely cut interest rates this year.
Spot gold was down 0.5% at $2,318.79 per ounce, as of 0753 GMT, after rising more than 1% on Friday. U.S. gold futures fell 0.6% to $2,333.50.
"Today's small move is probably just a little bit of an unwind of the move that we saw on Friday," said Kyle Rodda, a financial market analyst at Capital.com, adding that in the long run, fundamentals are very constructive for gold, but are data-dependent.
The U.S. retail sales data is due on Tuesday, weekly jobless claims on Thursday and flash PMIs on Friday. Several Fed officials are also scheduled to speak this week.
"With some signs of weakness emerging in the U.S. economy, which could weaken the U.S. dollar and also increase expectations of rate cuts going forward, gold is in a great position to take advantage," Rodda added.
Data released last week showed some weakening in price pressures in the U.S., suggesting that the labour market was losing momentum, keeping hopes alive for a September rate cut.
Traders are seeing a 67% probability of a September cut, according to the CME Group's FedWatch Tool, compared to 63% before the producer prices data on Thursday.
However, Minneapolis Fed President Neel Kashkari on Sunday said it's a "reasonable prediction" that the U.S. central bank will cut rates once this year, waiting until December to do it.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Elsewhere, spot silver fell 1.4% to $29.11 per ounce, platinum was down 0.9% at $949.05 and palladium was little changed at $890.58. - Reuters | Business | Commodities | Complimentary | Short | null | 2024-06-17 00:00:00 | Commodities,Gold,Federal Reserve,interest rates,inflation | GOLD prices eased on Monday, as investors were cautious ahead of more U.S. economic data release, while reports from last week showed that inflation was stabilising, lifting expectations that the Federal Reserve will likely cut interest rates this year. | https://www.thestar.com.my/business/business-news/2024/06/17/gold-subdued-as-investors-await-further-data-for-fed-rate-cues | |
1,373,293 | BOJ to forgo July rate hike, taper US$152bil per year, says ex-policymaker | TOKYO: The Bank of Japan is likely to trim bond buying by around 24 trillion yen ($152 billion) annually in new guidance due next month, but forgo raising interest rates at least until September, former board member Makoto Sakurai said on Monday.
At its policy meeting on Friday, the BOJ decided to start trimming its huge bond purchases and announce a detailed plan in July on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus.
Governor Kazuo Ueda gave few clues on how much the BOJ will actually trim its bond buying, saying only that the taper size will be significant.
"The BOJ has the option of reducing its monthly purchase amount by just one trillion yen. But with the governor having said the size would be 'significant,' there's a good chance it will taper by around 2 trillion yen," Sakurai told Reuters in an interview.
The BOJ currently buys roughly 6 trillion yen of government bonds per month with an allowance of 5-7 trillion yen. It will likely trim the purchase to 4 trillion yen per month, he said.
The BOJ's decision to announce its bond-tapering plan at its next meeting in July 30-31 has heightened uncertainty on whether it will hike short-term interest rates at the same meeting, or hold off until later in the year to avoid upending markets.
Sakurai, who retains close ties with incumbent policymakers, said the BOJ will likely forgo raising rates in July and wait for more clarity on whether summer bonus payments and wage gains will help consumption will rebound.
"The BOJ is probably in no rush to raise short-term rates as doing so would push up mortgage loan rates and hurt already weak housing investment," Sakurai said. "The next interest rate hike will likely happen in autumn or early next year."
If economic and price developments move roughly in line with its projection, the central bank may raise interest rates to 0.5% by the end of next year, Sakurai said.
After ending eight years of negative interest rates in March, the BOJ currently sets the short-term policy rate target in a range of 0-0.1%.
Many economists expect the BOJ to hike interest rates to 0.25% this year, though they are divided on whether it will come in July or later in the year.
Sakurai said the yen's sharp falls likely forced the BOJ to proceed quicker than initially planned in embarking on quantitative tightening (QT) and scale back its balance sheet.
Japan's battered currency has become a headache for policymakers by inflating import prices, which in turn boosts living costs and hurting consumption.
Rather than trying to slow the yen's declines through rate hikes, the BOJ likely opted to allow long-term interest rate to rise more by announcing a bond tapering plan, he added.
"The BOJ made a big step forward in normalising policy by deciding to taper," Sakurai said, adding that many bankers likely saw the need to steadily trim its balance sheet.
"In a way, the weak yen helped BOJ policymakers get what they wanted." - Reuters | Business | Banking | Complimentary | Medium | null | 2024-06-17 00:00:00 | Banking,Japan,BOJ,interest rates | TOKYO: The Bank of Japan is likely to trim bond buying by around 24 trillion yen ($152 billion) annually in new guidance due next month, but forgo raising interest rates at least until September, former board member Makoto Sakurai said on Monday. | https://www.thestar.com.my/business/business-news/2024/06/17/boj-to-forgo-july-rate-hike-taper-us152bil-per-year-says-ex-policymaker | |
1,373,269 | Oil prices slip on weaker US consumer demand, rise in China output | NEW DELHI: Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker U.S. consumer demand and as May crude production rose in China, the world's biggest crude importer.
Global benchmark Brent crude futures for August delivery were down 40 cents, or 0.5%, at $82.22 per barrel at 0631 GMT. U.S. West Texas Intermediate crude futures for July delivery fell 36 cents to $78.09 a barrel.
The more-active August delivery WTI contract slipped 0.5% to $77.7 per barrel.
That followed prices slipping on Friday after a survey showed U.S. consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.
However, both benchmark contracts still gained nearly 4% last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand.
"Last week's robust rally was fuelled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC's vested interest in crude oil, there is some scepticism around OPEC's forecasts," said Tony Sycamore, a market analyst at IG in Singapore.
"Friday's soft U.S. consumer confidence numbers suggest that the resilience of the American consumer and the U.S. economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures," he added.
Meanwhile, China's May domestic crude oil production rose 0.6% on year to 18.15 million tons, according to data released by the National Bureau of Statistics on Monday.
Year-to-date output was 89.1 million tons, up 1.8% from a year earlier. National crude oil throughput fell 1.8% in May over the same year-ago level to 60.52 million tons, with year-to-date totalling 301.77 million tons, up 0.3% from a year ago.
The country's May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth.
The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world's second-largest economy.
On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon's Hezbollah movement into Israel could trigger serious escalation.
After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several airstrikes against the group in southern Lebanon.
Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday. - Reuters | Business | Energy | Complimentary | Medium | null | 2024-06-17 00:00:00 | Energy,OPEC,Brent,WTI | NEW DELHI: Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker U.S. consumer demand and as May crude production rose in China, the world's biggest crude importer. | https://www.thestar.com.my/business/business-news/2024/06/17/oil-prices-slip-on-weaker-us-consumer-demand-rise-in-china-output | |
1,373,226 | Thai baht declines in thin holiday trading across Asian markets | Emerging Asian currencies slipped in holiday-thinned trade on Monday, with the Thai baht leading the declines, as the dollar stayed firm and China data pointed to an uneven recovery in the world's second-largest economy.
Trading was dull across Asia as markets were closed in Singapore, Malaysia, Indonesia, the Philippines and India.
The Thai baht fell up to 0.5%, tracking weakness in gold prices, while the South Korean won and the Taiwan dollar traded marginally lower.
"For the Thai baht specifically, there could be some pressures from gold-related flows as gold prices have moved lower from Friday levels," said Poon Panichpibool, a markets strategist from Krung Thai Bank.
Also, political turbulence in Southeast Asia's second-largest economy is likely to weigh more on its assets, including a court case that could potentially lead to the prime minister's dismissal.
"The rise in political uncertainties has already weighed on investor sentiment, with Thailand's currency and equity markets among the region's worst performers in the year-to-date," analysts from ANZ said in a client note.
Krung Thai Bank's Panichpibool said the baht could face more pressure from foreign fund outflows as the political turbulence will prevent foreign investors from buying Thai assets, even as its stocks and bonds seem to have a somewhat attractive valuation.
Meanwhile, the Chinese yuan traded flat while shares were down about 0.6%, as investors digested weaker-than-expected data showing the property sector remained a pain, and with the People's Bank of China leaving a key policy rate unchanged as expected.
Globally, investors are awaiting the U.S. May retail sales numbers on Tuesday in a data-light week for cues on when the central bank will cut interest this year.
The Federal Reserve last week published updated projections showing that median forecast from all 19 U.S. central bankers was for a single rate cut this year.
At 0525 GMT, the dollar index, which measures the strength of the greenback, was steady at 105.54.
Most Asian stock markets inched lower, with Seoul slipping about 0.5%. However, Hyundai Motor surged as much as 6.3% to hit its highest in more than three years, after the automaker unveiled plans to list its India unit in Mumbai.
Among other markets, Bangkok fell 1.2% to hover near its November 2020 lows, Tokyo dropped 2.1% and Taipei slipped 0.1%.
HIGHLIGHTS:
** Temasek to invest up to $198 mln in Australian ETF manager Betashares
** Philippines cash remittances up 3.2% y/y in April
** Taiwan is not seeking war with China, defence minister says - Reuters | Business | Forex | Complimentary | Medium | null | 2024-06-17 00:00:00 | Forex,Asian,currency,Thai Baht,Chinese yuan | EMERGING Asian currencies slipped in holiday-thinned trade on Monday, with the Thai baht leading the declines, as the dollar stayed firm and China data pointed to an uneven recovery in the world's second-largest economy. | https://www.thestar.com.my/business/business-news/2024/06/17/thai-baht-declines-in-thin-holiday-trading-across-asian-markets | |
1,373,211 | Asia shares muted on China data, euro on defensive | SYDNEY: Asian share markets were in the red on Monday as mixed Chinese economic news underlined the country's bumpy recovery, while political uncertainty in Europe soured risk appetites and kept the euro on the defensive.
Chinese blue chips were off 0.2% after retail sales topped forecasts by rising 3.7% in May, but industrial output and fixed-asset investment both underwhelmed.
Other data showed home prices fell at the fastest pace in a decade in May, highlighting the continued strains in the property sector.
The People's Bank of China (PBOC) kept its one-year rate unchanged, dashing some speculation of a cut following surprisingly soft bank lending data.
China's official Financial News on Monday reported there was still room to lower rates, but there were internal and external constraints on policy.
That made for cautious trading, and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2%.
Japan's Nikkei slipped 1.9%, with investors now facing a six-week wait to hear details of the Bank of Japan's next tightening steps.
EUROSTOXX 50 futures bounced 0.3% after last week's steep losses, while FTSE futures edged up 0.4%.
S&P 500 futures were steady, while Nasdaq futures added 0.1% following a run of record finishes.
Analysts at Goldman Sachs have raised their year-end target for the S&P 500 to 5,600, from 5,200 and the current 5,431.
"Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates," they wrote in a note.
The main U.S. data of the week will be retail sales for May on Tuesday, where a 0.4% bounce is expected after a 0.3% drop in April, while markets have a holiday on Wednesday.
At least 10 policymakers from the Federal Reserve are due to speak this week and will no doubt address the market's wagers for two rate cuts this year.
While the Fed itself sounded a hawkish note last week, a trio of soft inflation numbers led futures to price in a 76% chance of a cut as early as September and 50 basis points of easing for the year.
EYES ON SNB
Central banks in Australia, Norway and the UK are all expected to hold rates steady at meetings this week, though the Swiss National Bank (SNB) might well ease given the recent strength of the Swiss franc.
Markets have boosted the probability of a cut to 75% as political uncertainty in France drove the euro to a four-month trough at 0.9505 francs on Friday.
French markets endured a brutal sell-off last week ahead of a snap election that might give a majority to the far right, with risks to the country's fiscal position and the stability of the euro zone.
European Central Bank policymakers told Reuters they had no plans to launch emergency purchases of French bonds to stabilise the market after yield spreads over German bunds widened dramatically amid a flight to safety. "A French challenge to the region's fiscal arrangements would be problematic and have far-reaching implications," warned analysts at JPMorgan. "At this stage, the situation in the run-up to the first round of voting is still very fluid."
That left the euro pinned at $1.0703, after shedding 0.9% last week to touch a six-week low of $1.06678.
The dollar was stable on the yen at 157.45, after briefly spiking above 158.00 on Friday when the BOJ said it would start tapering bond buying a little later than many had wagered on.
In commodity markets, gold dipped 0.5% to $2,321 an ounce, unwinding some of last week's 1.7% bounce.
Oil prices eased a touch after rallying 4% last week amid hopes for stronger demand from the U.S. driving season.
Brent dipped 27 cents to $82.35 a barrel, while U.S. crude fell 28 cents to $78.17 per barrel. - Reuters | Business | Markets | Complimentary | Medium | null | 2024-06-17 00:00:00 | Markets,Asian,MSCI,PBOC,Nikkei | SYDNEY: Asian share markets were in the red on Monday as mixed Chinese economic news underlined the country's bumpy recovery, while political uncertainty in Europe soured risk appetites and kept the euro on the defensive. | https://www.thestar.com.my/business/business-news/2024/06/17/asia-shares-muted-on-china-data-euro-on-defensive | |
1,373,159 | L'Occitane chairman Geiger offers scrip alternative to take firm private | Hong Kong-listed L'Occitane International said on Monday its chairman Reinold Geiger has offered minority shareholders an alternative takeover proposal, as he pursues to take the skincare firm private.
Geiger, whose firm owns about 72.4% of L'Occitane, is now offering the remaining shareholders an option between the existing HK$34 apiece cash offer and a scrip alternative of 10 shares in the new private entity for every share held.
The cash offer values the shares Geiger does not already own at a maximum value of HK$13.88 billion ($1.78 billion) including the value of vested options, L'Occitane said in a filing to the Hong Kong Stock Exchange.
The offer comes at a time when several Hong Kong-listed companies are exploring take-private options in a volatile stock market affected by China's economic slowdown and a lack of strong stimulus policies.
L'Occitane shares, trading in which was halted earlier in the day, closed at HK$32.65 on June 14, and have risen more than 10% since the privatisation offer was first announced on April 29. - Reuters | Business | Corporate News | Complimentary | Short | null | 2024-06-17 00:00:00 | Corporate News,L'Occitane,Reinold Geiger, | Hong Kong-listed L'Occitane International said on Monday its chairman Reinold Geiger has offered minority shareholders an alternative takeover proposal, as he pursues to take the skincare firm private. | https://www.thestar.com.my/business/business-news/2024/06/17/l039occitane-chairman-geiger-offers-scrip-alternative-to-take-firm-private | |
1,373,156 | China stocks down on weaker-than-expected data, HK shares up | SHANGHAI: Mainland China stocks fell on Monday, hurt by a flurry of weaker-than-expected data that showed the property sector remains a key drag on the economy, while Hong Kong shares edged up.
Meanwhile, China's central bank left a key policy rate unchanged, as expected, when rolling over maturing medium-term loans, and drained some funds from the banking system.
China's May industrial output lagged expectations and a crisis in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth, though retail sales beat forecasts thanks to a holiday boost.
China's new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, with the property sector struggling to find a bottom despite government efforts to rein in oversupply and support debt-laden developers.
Data on Friday showed new bank lending in China rebounded far less than expected in May and some key money gauges hit record lows, suggesting the world's second-largest economy is still struggling for footing.
At the midday break, the Shanghai Composite index was down 0.51% at 3,017.12 points.
China's blue-chip CSI300 index was down 0.2%, with the real estate sector leading the losses. A sub-index tracking the industry was down 2.69% by the midday break.
Chinese H-shares listed in Hong Kong rose 0.25% to 6,390.47 points, while the Hang Seng Index was up 0.2% at 17,978.30 points.
The smaller Shenzhen index was up 0.12%, the start-up board ChiNext Composite index was higher by 0.8% and Shanghai's tech-focused STAR50 index was up 0.47%.
Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.08% while Japan's Nikkei index was down 2.12%.
The yuan was quoted at 7.2556 per U.S. dollar, 0% firmer than the previous close of 7.2557. - Reuters | Business | Markets | Complimentary | Short | null | 2024-06-17 00:00:00 | Markets,China,CSI300,Hang Seng | SHANGHAI: Mainland China stocks fell on Monday, hurt by a flurry of weaker-than-expected data that showed the property sector remains a key drag on the economy, while Hong Kong shares edged up. | https://www.thestar.com.my/business/business-news/2024/06/17/china-stocks-down-on-weaker-than-expected-data-hk-shares-up | |
1,373,131 | China new home prices fall at fastest clip in nearly 10 years | BEIJING: China's new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, with the property sector struggling to find a bottom despite government efforts to rein in oversupply and support debt-laden developers.
Prices were down 0.7% in May from the previous month, marking the 11th straight month-on-month decline and steepest drop since October 2014, according to Reuters calculations based on National Bureau of Statistics (NBS) data.
In annual terms, new home prices were down 3.9% from a year earlier, compared with a 3.1% slide in April.
China's indebted property sector, once a key engine of the country's economic growth, has been hit by several crises since mid-2021, including developers defaulting on debt and stalling construction on pre-sold housing projects.
Authorities have stepped up measures to prop up the crisis-hit property sector including facilitating 300 billion yuan ($41.35 billion) to clear massive housing inventory, cutting down payments and easing mortgage rules.
But analysts believe these moves will do little to absorb the massive housing inventory, and the lifting of home purchase restrictions in major cities might further dampen buying sentiment in smaller cities.
New home prices fell last month in nearly all 70 of the cities surveyed by the NBS.
"The latest policies have boosted the second-hand home market in major cities, but the liquidity problem of real estate enterprises has not yet been eased and the confidence crisis in the new-home market has not yet been resolved," said Xu Tianchen, senior economist at the Economist Intelligence Unit.
Separately, official figures on Monday also showed property investment fell 10.1% in the first five months of the year from a year earlier, after dropping 9.8% in January-April. Home sales fell at faster pace in January-May.
China's property market is set to diverge, said Nie Wen, an economist at Shanghai Hwabao Trust, with new home sales in large cities being driven by those who have been able to renovate and sell their existing homes, while real estate in small cities is expected to continue falling due to a housing oversupply and population outflows.
Policymakers are expected to support local governments and state-owned enterprises with discounted loans to buy unsold homes for low-cost housing and at the same time cut interest rates and fees to support homeowners improve their homes, Nie said. - Reuters | Business | Property | Complimentary | Medium | null | 2024-06-17 00:00:00 | Property,China,home prices,property,oversupply,developer | BEIJING: China's new home prices fell at the fastest pace in more than 9-1/2 years in May, official data showed on Monday, with the property sector struggling to find a bottom despite government efforts to rein in oversupply and support debt-laden developers. | https://www.thestar.com.my/business/business-news/2024/06/17/china-new-home-prices-fall-at-fastest-clip-in-nearly-10-years | |
1,373,124 | Asia shares muted on mixed China data, euro pressure | SINGAPORE: Asian share markets were mostly softer on Monday as mixed Chinese economic news underlined the country's bumpy recovery, while political uncertainty in Europe soured risk appetites and kept the euro on the defensive.
Chinese blue chips were off 0.2% after retail sales topped forecasts by rising 3.7% in May, but industrial output and fixed-asset investment both underwhelmed.
Other data showed home prices fell at the fastest pace in a decade in May, highlighting the continued strains in the property sector.
The People's Bank of China (PBOC) kept its one-year rate unchanged, dashing some speculation of a cut following surprisingly soft bank lending data.
China's official Financial News on Monday reported there was still room to lower rates, but there were internal and external constraints on policy.
That made for cautious trading, and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1%.
Japan's Nikkei slipped 1.7%, with investors now facing a six-week wait to hear details of the Bank of Japan's next tightening steps.
EUROSTOXX 50 futures bounced 0.3% after last week's steep losses, while FTSE futures edged up 0.4%.
S&P 500 futures were steady, while Nasdaq futures added 0.1% following a run of record finishes.
Analysts at Goldman Sachs have raised their year-end target for the S&P 500 to 5,600, from 5,200 and the current 5,431.
"Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates," they wrote in a note.
The main U.S. data of the week will be retail sales for May on Tuesday, where a 0.4% bounce is expected after a 0.3% drop in April, while markets have a holiday on Wednesday.
At least 10 policy makers from the Federal Reserve are due to speak this week and will no doubt address the market's wagers for two rate cuts this year.
While the Fed itself sounded a hawkish note last week, a trio of soft inflation numbers led futures price in a 76% chance of a cut as early as September and 50 basis points of easing for the year.
EYES ON SNB
Central banks in Australia, Norway and the UK are all expected to hold rates steady at meetings this week, though the Swiss National Bank (SNB) might well ease given the recent strength of the Swiss franc.
Markets have boosted the probability of a cut to 75% as political uncertainty in France drove the euro to a four-month trough at 0.9505 francs on Friday.
French markets endured a brutal sell-off last week ahead of a snap election that might give a majority to the far right, with risks to the country's fiscal position and the stability of the euro zone.
European Central Bank policymakers told Reuters they had no plans to launch emergency purchases of French bonds to stabilise the market after yield spreads over German bunds widened dramatically amid a flight to safety.
"A French challenge to the region's fiscal arrangements would be problematic and have far-reaching implications," warned analysts at JPMorgan.
"At this stage, the situation in the run-up to the first round of voting is still very fluid."
That left the euro pinned at $1.0698, after shedding 0.9% last week to touch a six-week low of $1.06678.
The dollar was a shade firmer on the yen at 157.52, after briefly spiking above 158.00 on Friday when the BOJ said it would start tapering bond buying a little later than many had wagered on.
In commodity markets, gold held at $2,325 an ounce, after bouncing 1.7% last week.
Oil prices eased a touch after rallying 4% last week amid hopes for stronger demand from the U.S. driving season.
Brent dipped 17 cents to $82.45 a barrel, while U.S. crude fell 18 cents to $78.27 per barrel. - Reuters | Business | Markets | Complimentary | Medium | null | 2024-06-17 00:00:00 | Markets,Asian,MSCI,PBOC,Nikkei, | SINGAPORE: Asian share markets were mostly softer on Monday as mixed Chinese economic news underlined the country's bumpy recovery, while political uncertainty in Europe soured risk appetites and kept the euro on the defensive. | https://www.thestar.com.my/business/business-news/2024/06/17/asia-shares-muted-on-mixed-china-data-euro-pressure | |
1,373,103 | China cbank leaves key policy rate unchanged as expected | SHANGHAI/SINGAPORE: China's central bank left a key policy rate unchanged as expected on Monday when rolling over maturing medium-term loans, and drained some funds from the banking system.
The People's Bank of China (PBOC) said it was keeping the rate on 182 billion yuan ($25.08 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.50% from the previous operation.
In a Reuters poll of 31 market watchers, 30, or 97%, of all respondents expected the PBOC to leave the interest rate on MLF rate unchanged.
With 237 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 55 billion yuan fresh fund withdrawal from the banking system.
The central bank also injected 4 billion yuan through seven-day reverse repos while keeping borrowing cost unchanged at 1.80%, it said in an online statement. - Reuters | Business | Banking | Complimentary | Short | null | 2024-06-17 00:00:00 | Banking,China,People's Bank of China,PBOC | SHANGHAI/SINGAPORE: China's central bank left a key policy rate unchanged as expected on Monday when rolling over maturing medium-term loans, and drained some funds from the banking system. | https://www.thestar.com.my/business/business-news/2024/06/17/china-cbank-leaves-key-policy-rate-unchanged-as-expected | |
1,373,094 | China's May industrial output misses forecasts, retail sales a bright spot | BEIJING: China's May industrial output lagged expectations with the property sector still weak, adding pressure on Beijing for policy support to shore up growth, but retail sales beat forecasts thanks to a holiday boost.
The industrial data released on Monday by the National Bureau of Statistics (NBS) came in below expectations for a 6.0% increase in a Reuters poll of analysts.
However, retail sales, a gauge of consumption, in May rose 3.7% on year, accelerating from a 2.3% increase in April and marked the quickest growth since February. Analysts had expected retail sales to grow 3.0% due to the five-day public holiday earlier in the month.
Fixed asset investment expanded 4.0% in the first five months of 2024 from the same period a year earlier, versus expectations for a 4.2% rise. It grew 4.2% in the January to April period.
China's property market downturn, high local government debt and deflation remain heavy drags on economic activity. The latest figures point to an uneven growth that reinforces calls for more fiscal and monetary policy support.
With narrowing interest margins and a weakening currency remaining key constraints limiting Beijing's scope to ease monetary policy, China's central bank left a key policy rate unchanged as expected on Monday.
The world's second-largest economy grew faster than expected at 5.3% in the first quarter, but analysts say the government's around 5% annual growth target is ambitious.
China's exports grew faster than expected in May helped by improved global demand, but imports growth slowed significantly.
Tepid demand at home has also kept a lid on consumer prices as confidence remains low in the face of a protracted property sector crisis. New bank lending rebounded far less than expected in May and some key money gauges hit record lows.
Property investment fell 10.1% year-on-year in January-May, deepening from a decline of 9.8% in January-April.
China's property sector has been hit by a regulatory crackdown and the government has slashed down payment requirements and cancelled the floor rate for mortgage interest rate.
The central bank last month announced a relending programme for affordable housing to accelerate sales of unsold housing stock.
The job market overall was steady. The nationwide survey-based jobless rate hit 5.0% in May, the same as that in April.
The government has vowed to create more jobs linked to major projects, roll out measures to promote domestic demand targeted at youths and has pledged greater fiscal stimulus to shore up growth. - Reuters | Business | Economy | Complimentary | Medium | null | 2024-06-17 00:00:00 | Economy,Chna,retail,industrial output,property | BEIJING: China's May industrial output lagged expectations with the property sector still weak, adding pressure on Beijing for policy support to shore up growth, but retail sales beat forecasts thanks to a holiday boost. | https://www.thestar.com.my/business/business-news/2024/06/17/china039s-may-industrial-output-misses-forecasts-retail-sales-a-bright-spot | |
1,373,098 | S.Korean shares retreat from 26-month high as e-commerce firms drag | SEOUL: Round-up of South Korean financial markets:
South Korean shares fell on Monday, with e-commerce firms dragging down the benchmark index from a 26-month high, while investors were cautious ahead of major economic indicators due later this week.
The benchmark KOSPI fell 7.40 points, or 0.27%, to 2,751.02 by 0144 GMT, after hitting its highest level since April 5, 2022 in the previous session.
Analysts say U.S. economic data, such as retail sales, will be the most closely-watched market mover this week. Domestically, South Korea will release its 20-day export data on Friday.
Search engine Naver and instant messenger Kakao fell 1.94% and 2.73%, respectively, making the services sector the biggest declining sub-index.
Chipmaker Samsung Electronics fell 1.26% but peer SK Hynix gained 1.81%, while battery maker LG Energy Solution slid 2.15%.
Hyundai Motor climbed 4.48% on a decision to list its India unit in Mumbai. Sister automaker Kia Corp gained 3.26%.
Of the total 927 traded issues, 382 shares advanced, while 480 declined.
Foreigners were net sellers of shares worth 87.2 billion won ($63.18 million) on the main board.
The won was quoted at 1,380.7 per dollar on the onshore settlement platform, 0.10% lower than its previous close at 1,379.3.
In money and debt markets, June futures on three-year treasury bonds rose 0.09 point to 105.02.
The most liquid three-year Korean treasury bond yield fell by 4.4 basis points to 3.209%, while the benchmark 10-year yield fell by 3.7 basis points to 3.274%. - Reuters | Business | Markets | Complimentary | Short | null | 2024-06-17 00:00:00 | Markets,South Korea,Kospi | SEOUL: Round-up of South Korean financial markets: | https://www.thestar.com.my/business/business-news/2024/06/17/skorean-shares-retreat-from-26-month-high-as-e-commerce-firms-drag | |
1,373,055 | Temasek to invest up to US$198 mln in Australian ETF manager Betashares | Singapore-based investment firm Temasek Holdings will invest up to A$300 million ($198.4 million) in Australian exchange-traded fund manager Betashares, the company said on Monday.
The funding is expected to drive the expansion of Betashares' offerings in Australia and overseas, it said in a statement.
With the investment, Temasek will hold an undisclosed minority stake in Betashares, joining its staff members and private equity firm TA Associates as shareholders, it added.
The Australian ETF industry's market capitalisation reached A$177.5 billion in 2023, boosted by net inflows of A$15 billion, according to the latest data compiled by Betashares.
Betashares, one of the country's biggest ETF firms, manages over A$38 billion in assets and serves over a million investors in Australia, according to its website.
"The investment by Temasek will help accelerate the next phase of our journey, both organically as well as through acquisitions and strategic investments," Betashares Founder and CEO Alex Vynokur said.
Temasek manages assets worth S$382 billion ($282.36 billion) as of March 31, 2023, and its portfolio includes companies like Alibaba, DBS Group, and Tencent, among others, according to Temasek's website. - Reuters | Business | Corporate News | Complimentary | Short | null | 2024-06-17 00:00:00 | Corporate News,Temasek,exchange-traded fund,Betashares | Singapore-based investment firm Temasek Holdings will invest up to A$300 million ($198.4 million) in Australian exchange-traded fund manager Betashares, the company said on Monday. | https://www.thestar.com.my/business/business-news/2024/06/17/temasek-to-invest-up-to-us198-mln-in-australian-etf-manager-betashares | |
1,372,920 | India in talks with Equinor on oil reserves | NEW DELHI: India is in talks with Norway’s Equinor ASA for its participation in the country’s strategic petroleum reserves, as well as for long-term liquefied natural gas deals from the company’s US and Qatar portfolios, says the Mint newspaper.
Securing a commitment from Equinor will mark the second such deal for India after a similar contract with Abu Dhabi National Oil Co, according to the newspaper.
India, the world’s third biggest energy consumer, is also asking Equinor to participate in its exploration and production program, Mint cited an unidentified Indian official as saying.
State-run Indian Oil Corp was in talks with nearly a dozen liquefied natural gas (LNG) suppliers for long-term supply contracts, Bloomberg News reported earlier this month.
The LNG deal with Equinor will help India to fortify future gas imports. — Bloomberg | Business | Energy | Complimentary | Short | null | 2024-06-17 00:00:00 | Energy,India,Equinor,LNG | NEW DELHI: India is in talks with Norway’s Equinor ASA for its participation in the country’s strategic petroleum reserves, as well as for long-term liquefied natural gas deals from the company’s US and Qatar portfolios, says the Mint newspaper. | https://www.thestar.com.my/business/business-news/2024/06/17/india-in-talks-with-equinor-on-oil-reserves | |
1,372,907 | Lula: Haddad will not be weakened | MILAN: Brazil’s President Luiz Inacio Lula da Silva denies that Finance Minister Fernando Haddad is weakened after Congress refused to act on a provisional measure considered crucial for the country’s fiscal balance.
“Haddad will never be weakened as long as I am president because he is my finance minister, chosen by me and held by me,” Lula said last Saturday at a press conference in Italy.
Haddad had suffered a major blow last Tuesday when senate leader Rodrigo Pacheco swatted down a proposal to limit tax credits to cover the cost of an exemption from payroll levies, casting doubts about the minister’s ability to control fiscal deficits.
The plan drew severe backlash from Congress and industries that rely heavily on such credits. The setback has increased the chances that Haddad will have to scale back the government’s fiscal target for 2024.
Lula told journalists that the obligation to find a solution to compensate for the tax benefit lies with businessmen, not the government. If an exit isn’t found, payroll relief for 17 sectors and small town municipalities can be voided.
The market reacted negatively, and last Thursday Haddad waived a review of government spending. — Bloomberg | Business | Business | Complimentary | Short | null | 2024-06-17 00:00:00 | Brazil,Luiz Inacio Lula da Silva | MILAN: Brazil’s President Luiz Inacio Lula da Silva denies that Finance Minister Fernando Haddad is weakened after Congress refused to act on a provisional measure considered crucial for the country’s fiscal balance. | https://www.thestar.com.my/business/business-news/2024/06/17/lula-haddad-will-not-be-weakened | |
1,372,909 | How convenience stores become big names in Asia - Seoul capitalises on demand for sophisticated outlets | SEOUL: South Korean convenience store operators facing a saturated market at home are now eyeing expansion overseas, especially in South-East and Central Asia where rapid economic growth and the popularity of South Korean content are leading to a growing demand for South Korean-style comprehensive convenience stores.
Currently, the nation’s top two chains, BGF Retail and GS25, operate a combined 1,168 convenience stores overseas.
While GS25 operates 573 namesake stores in Vietnam and Mongolia, BGF Retail has 543 CU stores in Mongolia, Malaysia and Kazakhstan. Their smaller rival, Emart24, owned by Shinsegae Group, also runs 52 stores in Malaysia.
The companies said they were expanding their presence in the Central Asian market with their expertise in operating compact stores with centralised product distribution systems.
“Just as neighbourhood supermarkets in South Korea were not seen as standard nationwide until around the 1980s, supermarkets in Central Asian countries weren’t modernised until the entry of South Korean convenience stores,” said an official from one of the South Korean operators, speaking on condition of anonymity.
“As these Central Asian countries achieve economic growth, there is a growing demand for sophisticated and standardised convenience stores where consumers can enjoy consistent product quality no matter where they are.”
The very beginning of the convenience store industry in South Korea was not as sophisticated as it is today.
Only after the first three domestic convenience stores owned by Lotte Group –which opened in the early 1980s – all closed in 1984, did the first 7-Eleven store appear in Seoul in 1989, spreading convenience stores across the nation.
Since then, homegrown brands began to emerge, primarily focusing on benchmarking Japanese-style neat and modern convenience stores.
“The initial perception of convenience stores among South Koreans was not positive due to their higher prices for the sake of ‘convenience.’ However, they experienced rapid growth during the economic crisis in the late 1990s and early 2000s, as ready-made meals such as lunch boxes and instant cup noodles became popular for their affordability,” said Chang Woo-cheol, a professor of tourism and hospitality industry at Kwangwoon University.
“The increase in one-person households and the development of new towns in South Korea also fuelled the demand for convenience stores. In particular, conglomerate-led centralised logistics systems contributed to the modernised convenience stores we see today,” he added.
In the meantime, industry officials said that the nation’s convenience store industry boom came with various merchandising efforts from domestic companies in recent years.
“Not only South Korean customers but also foreign visitors love visiting convenience stores in South Korea due to their diverse and unique product offerings,” a BGF Retail official said.
“For instance, we release numerous collaboration products in partnership with various conglomerates, with over 1,000 new products launched annually, even including gold bars, cars and massage chairs that you wouldn’t typically associate with convenience stores.”
The BGF Retail official also highlights the growing popularity of South Korean culture as one of the key factors in their success both domestically and overseas.
“As South Korean convenience stores are frequently featured in media, the demand for South Korean-style convenience stores in other countries has also increased.
“Reflecting this demand, shelves in our stores in Mongolia and Kazakhstan have price tags and product descriptions written in both the local language and Korean.”
Meanwhile, the focus on overseas expansion by South Korean convenience stores comes amid the saturation of the market at home.
With BGF Retail and GS25 operating 18,000 and 17,390 stores, respectively, there are about 55,580 convenience stores in South Korea. The figure is a significant increase from 38,451 in 2018, but the growth rate began to slow down starting in 2021 after years of excessive competition and growing operating losses.
Over the same period, the number of overseas BGF Retail and GS25 stores started to jump, reaching 510 and 498 in 2023, respectively. — The Korea Herald/ANN | Business | Retail | Complimentary | Medium | null | 2024-06-17 00:00:00 | Retail,South Korea,BGF Retail,GS25,Emart24,convenience stores | SEOUL: South Korean convenience store operators facing a saturated market at home are now eyeing expansion overseas, especially in South-East and Central Asia where rapid economic growth and the popularity of South Korean content are leading to a growing demand for South Korean-style comprehensive convenience stores. | https://www.thestar.com.my/business/business-news/2024/06/17/how-convenience-stores-become-big-names-in-asia | |
1,372,903 | Roaring Kitty’s gain of US$262mil stirs sceptics | NEW YORK: As a renewed bout of GameStop Corp fever gripped the meme-stock faithful, fans of trading influencer Keith Gill waited for one moment: The day their hero, aka “Roaring Kitty” would become a billionaire.
The notion was hardly far-fetched. Over the course of two weeks, Gill had been posting images of a massive stake in GameStop and its call options in a portfolio that peaked at more than US$550mil on June 6.
Although he’s added even more stock since then, the dollar value of his holdings has dropped along with the company’s shares.
With the stock little changed since the early days of its latest mania, a new kind of anxiety is building among Wall Street and retail traders alike.
The original 2021 GameStop rally shook the idea of short-selling to its core – eroding the appeal of betting against a floundering company when you can wind up feeling the wrath of Redditors.
This time around, the existential question is about what counts as market manipulation.
Does posting a meme, potentially delivering an instant profit, violate the spirit of free and fair markets?
Has the David versus Goliath nature of meme stocks shifted?
What if Roaring Kitty is the Goliath?
And how exactly did he build a position bigger than Charles Schwab Corp’s?
“The original meme stock craze was us versus them, with ‘them’ being the guys who would short-sell millennials’ favourite companies like GameStop,” said Steve Sosnick, chief strategist at Interactive Brokers.
“But I’m not sure who ‘them’ is anymore.”
Gill didn’t reply to a request for comment.
Losing charm
The populist ringleader of a short squeeze that shook Wall Street in the original 2021 meme-stock rally, Gill is losing his folksy charm, at least for some followers.
Trading firms and even some former fans are eying Gill with more suspicion, as Redditors pose questions like: “How is Roaring Kitty coming back not a basic pump and dump scheme?”
By last Thursday, Gill’s brokerage account snapshots suggested he’d unwound an earlier position of 120,000 call options and added more GameStop, upping his portfolio to about nine million shares of the video game retailer, worth more than US$262mil.
Gill’s final post of 2021 showed he had 200,000 shares worth more than US$30mil. GameStop did a four-for-one stock split in July 2022.
Soaring again
As Gill’s actions sent the price soaring again, GameStop seized on the volatility to sell more than US$2bil worth of stock.
All told, anyone who bought shares over the past month and held was about as likely to lose money as profit.
To some, one major difference is hedge funds and other sophisticated investors have adapted from three years ago and are likely to come out ahead – at the expense of Gill’s retail-trading fans.
“Some of the quantitative managers have models to look at the trends in price and those models are extremely quick to get out of the stock if they see significant downside volatility,” said Don Steinbrugge, chief executive officer of Agecroft Partners, which helps hedge funds raise money.
“At some point retail investors are going to wise up and realise there’s a lot of danger.”
Manipulation concerns
The episode brought to the fore questions of what constitutes market manipulation.
The Wall Street Journal reported Morgan Stanley-owned brokerage E*Trade was considering barring Gill from its platform over such concerns, after previously banning other popular personalities like Dave Portnoy, the Barstool Sports founder who streams as Davey Day Trader and said he got kicked off of the brokerage.
A spokesman for E*Trade declined to comment.
What’s singular about Gill’s case is that market manipulation typically involves pushing a price higher to profit off the stock movement, said Craig Marcus, a partner and co-chair of the capital markets group at law firm Ropes & Gray.
If Gill’s snapshots are real, that hasn’t obviously been the case, he said.
“You can disagree with his thesis about the value of the stock, but if all he’s doing is executing on his thesis and not doing manipulative things to profit,” it’s difficult to prove ill intent, Marcus said in an interview.
To be sure, Gill was accused of using his clout to manipulate prices even three years ago when he first arrived on the public stage.
In 2021, a lawsuit against Gill and MassMutual alleged he was manipulating markets with his outsize influence on certain stocks.
“Three years ago this was funny,” said Peter Atwater, an adjunct professor of economics at William & Mary.
“People have become more bothered by this than amused by it, and that to me is an indication that it is unlikely that this behaviour will be allowed to continue.”
Highly anticipated return
When Gill scheduled a highly anticipated return to YouTube on June 6 without details of what he’d talk about, the stock shot up nearly 50%, adding US$16bil to its market value in a matter of hours.
In the livestream, which garnered hundreds of thousands of viewers, Gill vamped for about an hour against the backdrop of GameStop’s violently fluctuating share price. He seemed to sense the possibility he’d draw more scrutiny from fans, regulators and trading professionals.
“Do I have to be careful what I say here?” he asked. — Bloomberg | Business | Corporate News | Complimentary | Long | null | 2024-06-17 00:00:00 | Corporate News,GameStop,Roaring Kitty | NEW YORK: As a renewed bout of GameStop Corp fever gripped the meme-stock faithful, fans of trading influencer Keith Gill waited for one moment: The day their hero, aka “Roaring Kitty” would become a billionaire. | https://www.thestar.com.my/business/business-news/2024/06/17/roaring-kittys-gain-of-us262mil-stirs-sceptics | |
1,372,921 | Havas weaves its magic on Domino’s Pizza M’sia | KUALA LUMPUR: Havas Malaysia, a part of French advertising and global communications powerhouse, has secured a social media retainer for Domino’s Pizza Malaysia.
This will see the Havas Malaysia team being appointed to handle Domino’s Pizza Malaysia’s social media remit, overseeing the brand’s always-on strategies, activations and influencer marketing initiatives.
The decision to extend the remit to Havas Malaysia follows the successful and long standing relationship between Domino’s Pizza, Socialyse Singapore, which is Havas’ social media agency, and Havas Play.
Havas Play is Havas global network which is involved in creating enduring business impact through meaningful experiences at the intersection of entertainment, sports, technology and fandom.
Domino’s Pizza is part of Domino’s Pizza Enterprises Ltd, the Australian-owned master franchise holder for Domino’s in multiple countries including Australia, New Zealand, Japan, Taiwan, Malaysia, and Singapore.
Domino’s Pizza Malaysia is the largest Domino’s market in South-East Asia with over 270 stores in the country.
Havas Malaysia chief executive officer Nizwani Shahar is proud that the agency had secured the social media retainer for the company.
“This collaboration presents a wonderful opportunity, and the Havas Malaysia team admires Domino’s Pizza’s energy and its willingness to take creative risks.
“We are committed to building a strong rapport with the team and delivering impactful ideas that will help drive growth for Domino’s Pizza Malaysia,” she added.
The social media retainer win is largely attributed to the close integration and collaboration across the “Havas Villages”, notably between Singapore and Malaysia.
Fuelled by the “One Asia” approach, the teams supported each other to foster positive growth for the organisation, thereby creating opportunities.
The expanded remit not only signifies the deepening of the relationship between Havas and Domino’s Pizza but also opens doors to new possibilities and challenges.
Havas Village brings together talented people from across all disciplines and empower them to work side-by-side to best serve clients and learn from each other.
Founded in 1835 in Paris, Havas is one of the world’s largest global communications networks, with more than 23,000 people in over 100 countries sharing one single mission: to make a meaningful difference to brands, businesses, and people.
Havas has developed a fully integrated model through its 70 plus Havas Villages around the world, covering all communication activities.
Havas integrated into Vivendi, a global leader in media, entertainment and communications in December 2017.
Meanwhile, Linda Hassan, group chief marketing officer of Domino’s Pizza Malaysia, Singapore, and Cambodia, said: “We have been working with the Singapore team for a long time now and have been consistently impressed by their creative and integrated solutions.
“We have also seen how this model has worked seamlessly across both Singapore and Malaysia.
“The energy and creativity demonstrated by the Havas Malaysia team as well as their in-depth knowledge of social media trends and the ability shown to deliver strategies that are both meaningful and result-oriented, thoroughly impressed us.
“We are glad to extend this partnership and look forward to working with the team”.
In a recent interview with StarBiz, Nizwani said the agency intends to further strengthen its talent force amid a rapidly evolving creative landscape.
This year, she said the creative and digital agency had recruited a cohort of strong female leaders across various divisions including Wai Sim as general manager, Bowie Tiong as business director for Havas Creative and Shireen Ang as creative director, amongst others.
She said another key initiative which the agency has undertaken is the establishment of the Havas’ proprietary “Meaningful Brands Tool”, which provides invaluable insights into consumer sentiment across different categories, enabling Havas Malaysia to create campaigns that are meaningful.
Furthermore, the agency has reinstated training programmes with leading platforms and media partners including TikTok, Meta and X, ensuring its teams are equipped with the latest innovations and consumer experiences.
In terms of its competitive strength, Nizwani said its unique Village concept, driven by the agency’s One Havas approach, sets the company apart.
Unlike larger multinational groups where competition among advertising and media agencies is stiff, she said Havas excels in integrated work.
Towards this end, she said the agency’s collaborative culture brings together all its business units, fostering ongoing cooperation within its Village model.
“We leverage the diverse expertise of our teams to craft innovative and impactful campaigns, giving us a competitive edge rooted in creativity, effectiveness and strong client relationships,” she noted.
Moreover, Nizwani said the effectiveness of the agency’s regional network, One Asia, enables Havas to leverage its collective strengths to seize emerging opportunities in a dynamic environment.
“This collaborative framework has enabled us to undertake meaningful work for esteemed clients like Reckitt and a few others,” she said. | Business | Advertising & Media | Complimentary | Medium | null | 2024-06-17 00:00:00 | Advertising & Media,Havas Malaysia,advertising,Domino’s Pizza,Nizwani Shahar | KUALA LUMPUR: Havas Malaysia, a part of French advertising and global communications powerhouse, has secured a social media retainer for Domino’s Pizza Malaysia. | https://www.thestar.com.my/business/business-news/2024/06/17/havas-weaves-its-magic-on-dominos-pizza-msia | |
1,372,908 | Takeda signs option to market Ascentage’s drug | TOKYO: Takeda Pharmaceutical Co has signed an option agreement with Chinese drug developer Ascentage Pharma Group International for the development of a blood-cancer drug, as the Japanese drug maker attempts to revive its drug pipeline and boost growth.
Takeda will have the option to exclusive marketing for Olverembatinib outside of mainland China, Hong Kong, Macau, Taiwan and Russia, the Japanese company said in statement.
The drug, under development, is designed to treat a rare form of bone-marrow cancer called chronic myeloid leukemia and other blood cancers.
Ascentage Pharma would get US$100mil from Takeda for the licensing deal, and would be eligible for an option exercise fee and additional potential milestones of up to US$1.2bil, together with double-digit royalties on annual sales, the Chinese company said in a statement.
Ascentage will begin late-stage clinical development of the drug prior to any exercise of the option, the Hong Kong-traded company said.
As part of the deal, Takeda will take an unspecified minority stake in Ascentage.
Takeda, grappling with the loss of patent protection for its blockbuster ADHD medicine Vyvanse, said last month it will streamline its workforce and lean more heavily on data and technology to improve growth and profit margins.
It will also rigorously prioritise its research and development pipeline under a multi-year restructuring programme.
Tokyo-based Takeda agreed in May to develop AC Immune SA’s immunotherapies targeting toxic, abnormal proteins in Alzheimer’s patients’ brains in a licensing deal worth as much as US$2.2bil. —Bloomberg | Business | Corporate News | Complimentary | Short | null | 2024-06-17 00:00:00 | Corporate News,Takeda,Ascentage,Pharmaceutical | TOKYO: Takeda Pharmaceutical Co has signed an option agreement with Chinese drug developer Ascentage Pharma Group International for the development of a blood-cancer drug, as the Japanese drug maker attempts to revive its drug pipeline and boost growth. | https://www.thestar.com.my/business/business-news/2024/06/17/takeda-signs-option-to-market-ascentages-drug | |
1,372,906 | Adelson heir steers Mavericks, plays the long game on casino | NEW YORK: As Game 3 of the NBA Finals tipped off at the American Airlines Centre last Wednesday, Patrick Dumont, the new co-owner of the Dallas Mavericks (Mavs), sat courtside amid a pantheon of Texas athletic elite.
To his right: former NBA stars Dirk Nowitzki and Steve Nash, and three-time Super Bowl champion Emmitt Smith. Nearby, Kansas City Chiefs quarterback Patrick Mahomes, who played high school and college football in Texas, was also cheering.
Dumont, the president of gambling giant Las Vegas Sands Corp – and son-in-law of billionaire Miriam Adelson – bought a majority stake in the Mavs with his family late last year from Mark Cuban.
The deal valued the franchise at US$3.5bil. Since then, he’s been a regular at the games and is warmly acclimating to his new home away from home.
“I don’t think there are many cities in America where you can show up and everyone’s just warm and embracing,” Dumont said at the team’s practice facility ahead of Game 4 against the Boston Celtics, who have dominated the series and pushed Dallas to the brink of elimination.
The Mavs ended up winning, 122-84, though no NBA team has ever come back from a 0-3 playoff deficit. “There’s a lot of pride about being a Texan, and it’s just a lot of fun to be part of.”
The purchase of the Mavs punctuated the family’s effort to deepen its ties in the state, including Sands’ desire to build casino resorts that will draw dollars and jobs to Texas. But in a state that has resisted efforts for gambling for years, Dumont said he and his family are ready to play the long game.
“We really want to be in the state of Texas,” the 49-year-old said, referring to LVS and casino gambling. “We think this is a great investment opportunity and we’re here for the long term. We’re going to keep talking about the virtues of what this means for the state of Texas and how it can benefit the communities that these resorts will be located in.”
In the meantime, the business of basketball is flourishing and Dallas is in the midst of a professional sports renaissance. The Texas Rangers won baseball’s World Series last year. The Dallas Stars made it to the NHL’s Western Conference Finals.
And the Mavs exceeded the expectations of many basketball pundits. The city was on the short list to host the World Cup Final in 2026, and will host the most matches.
The NBA is close to signing new long-term broadcasting agreements that would pay the league about US$76bil over 11 years – three times its current deal.
NBA commissioner Adam Silver said before the Finals that the league will turn to expansion, possibly overseas, after it completes the new TV rights negotiations.
Las Vegas and Seattle are both looked at as favorites for new NBA franchises. Mexico City is also a contender. The WNBA has seen a surge of interest after Caitlin Clark joined the league.
“The NBA is a multifaceted business,” Dumont said, sitting in the team’s “Real MVP Conference Room,” where research for the upcoming NBA draft had to be covered for secrecy.
“It’s a media business, a hospitality business and a culinary business. It’s all about experience. Those are the types of things we do well and think we can bring to the city of Dallas.”
All that makes owning a team in one of the fastest-growing regions in the United States more compelling. Goldman Sachs Group Inc is building a new campus that will house about 5,000 employees in Dallas.
BlackRock Inc and Citadel Securities are among investors backing an upstart Texas stock exchange. The Dallas-Fort Worth area now has more finance workers than Chicago or Los Angeles, trailing only New York.
“The state’s growing for a reason,” he said. “There’s good schools. There’s good communities. People are working hard. A lot of companies are trying to move here now because they realise that not every state is run this way.”
Behind the scenes, the Adelson family is already laying the groundwork to face an immense political challenge to legalise gambling in Texas.
The family recruited an army of lobbyists and ramped up its political spending. Since 2022, Adelson has poured US$16.5mil into Texas campaigns and political action committees, Texas Ethics Commission records show.
That level of spending shouldn’t be at risk given Adelson’s deep pockets. With a net worth of US$33.1bil, the 78-year-old widow of Sands founder Sheldon Adelson is one of the 50 richest people on earth, according to the Bloomberg Billionaires Index.
This year, the Texas Legislature voted down bills that would have legalised online and casino gambling. Lieutenant governor Dan Patrick, who controls legislation in the state senate, has said he won’t bring a vote to the floor unless it has Republican support.
There are some early signs that the political tides are shifting. About 75% of Texans support legislation to bring casino-style resorts to Texas, according to a January 2023 poll by the Hobby School of Public Affairs at the University of Houston.
And a Republican-backed bill proposing a constitutional amendment authorising casino gambling at destination resorts made it out of a house committee last year – a first for Texas.
Governor Greg Abbott, who got US$1mil in campaign contributions from Adelson in 2022, has also signalled openness on casinos.
“The question is how to do it in a way that’s right for Texas,” Dumont said. “How do you deal with sports wagering? How do you deal with gaming? How do you ensure that you get the tourism benefit? That’s really what the discussion is about.”
For now, Dumont and his family have the support of other Texas tycoons.
Billionaire Tilman Fertitta, who owns the NBA’s Houston Rockets and the Golden Nugget casinos, has spent years advocating for Texas to join dozens of other states in allowing Las Vegas-style casino resorts, arguing they’d spur job growth and bring in more tourist dollars to restaurants, stores and hotels. — Bloomberg | Business | Corporate News | Complimentary | Long | null | 2024-06-17 00:00:00 | Corporate News,Patrick Dumont,Dallas Mavericks,Las Vegas Sands Corp,Miriam Adelson | NEW YORK: As Game 3 of the NBA Finals tipped off at the American Airlines Centre last Wednesday, Patrick Dumont, the new co-owner of the Dallas Mavericks (Mavs), sat courtside amid a pantheon of Texas athletic elite. | https://www.thestar.com.my/business/business-news/2024/06/17/adelson-heir-steers-mavericks-plays-the-long-game-on-casino | |
1,372,895 | Sarawak in logging road restoration plan | KUCHING: Sarawak will rehabilitate 14 abandoned logging roads under a RM543mil funding plan to provide convenience and safer travel into remote settlements.
Many logging roads, which were constructed by timber companies to transport out harvested logs from concession areas, have served as the sole road link to the interiors from towns for decades.
According to Sarawak Deputy Premier and Infrastructure and Port Development Minister Datuk Amar Douglas Uggah, out of the 14 abandoned logging roads, including those linking to famous highland Ba’Kelalan and interior villages in Northern Sarawak, four of them are currently being rehabilitated and the remaining 10 roads are under pre-contract stage.
He said the conditions of many of the logging roads had deteriorated due to irregular maintenance.
Under the Jiwa Murni programme, Uggah said 16 projects worth RM928mil have been implemented. The projects involved the construction of 461km of “Low Volume Rural Road” and 82 bailey bridges.
A total of 14 of these projects have been completed and handed over to the Sarawak Public Works Department for maintenance and the remaining two projects are still under the defect liability period.
Meanwhile, following the near full completion of the RM16bil Sarawak Pan Borneo Highway project (Phase 1), the Works Ministry plans to upgrade a 140-km stretch “redline” alignment along the highway.
Minister Datuk Alexander Nanta Linggi said recently the ministry has requested for RM1bil from the federal government to fund the upgrading work of the “redline” alignment, which refers to the existing original routes built before the construction of the Pan Borneo Highway.
He said these original routes have to be upgraded to meet the highway standards. The 145-km stretch involves areas in Kuching, Serian, Sibu, Bintulu, Julau and Miri.
Phase Two of the Sarawak Pan Borneo Highway will link Limbang and Lawas in the northern region via Brunei Darussalam.
Currently under construction, the Phase Two project,which connects Long Lopeng and Miri, is being implemented by various government agencies, including the Regional Corridor Development Authority and Rural Development Ministry.
Also under implementation is the Sarawak-Sabah Link Road (SSLR).
It includes a 77-km stretch from Simpang Gelugus to Long Lopeng in Lawas, which is being constructed by Samling Resources Sdn Bhd.
The 425-km SSLR project, which will connect 14 major towns in Sarawak and Sabah from Miri, was earlier targeted for completion in 2026.
The total cost of the Phase Two Pan Borneo Highway and SSLR projects were originally estimated to cost the federal government RM12bil.
Two other mega road projects – the Sarawak Second Trunk Road and Sarawak Coastal Road Network – are currently in various stages of implementation. | Business | Corporate News | Complimentary | Medium | null | 2024-06-17 00:00:00 | Corporate News,Sarawak,logging,timber,Amar Douglas Uggah | KUCHING: Sarawak will rehabilitate 14 abandoned logging roads under a RM543mil funding plan to provide convenience and safer travel into remote settlements. | https://www.thestar.com.my/business/business-news/2024/06/17/sarawak-in-logging-road-restoration-plan | |
1,372,913 | Serbia to green light Rio Tinto lithium mine, Europe’s largest ever | LONDON: Serbian President Aleksandar Vucic is preparing to give Rio Tinto the green light to develop Europe’s largest lithium mine two years after Belgrade called off the project, the Financial Times (FT) has reported.
Vucic told the newspaper that “new guarantees” from the global mining giant and the European Union (EU) looked set to address Serbia’s concerns over whether necessary environmental standards would be met at the Jadar site in the west of the country.
Rio Tinto did not immediately respond to request for comment outside regular business hours.
Regarded as a critical material by the EU and the United States, lithium is used in batteries for electric vehicles (EVs) and mobile devices.
“If we deliver on everything, (the mine) might be open in 2028” Vucic told the FT.
He added that the mine was projected to produce 58,000 tonnes of lithium per year which would be “enough for 17% of EV production in Europe – approximately 1.1 million cars”.
In 2022, Belgrade revoked licences for Rio’s US$2.4bil Jadar project after massive environmental protests.
If completed, the project could supply 90% of Europe’s current lithium needs and help to make the company a leading lithium producer.
In 2021 and 2022 Serbian environmentalists collected 30,000 signatures in a petition.
It demanded that parliament enact legislation to halt lithium exploration in the country. — Reuters | Business | Business | Complimentary | Short | null | 2024-06-17 00:00:00 | Serbia,Aleksandar Vucic,Rio Tinto,lithium | LONDON: Serbian President Aleksandar Vucic is preparing to give Rio Tinto the green light to develop Europe’s largest lithium mine two years after Belgrade called off the project, the Financial Times (FT) has reported. | https://www.thestar.com.my/business/business-news/2024/06/17/serbia-to-green-light-rio-tinto-lithium-mine-europes-largest-ever | |
1,372,894 | Impact on diesel vehicle sales minimal | PETALING JAYA: The implementation of the targeted subsidy for diesel, which saw the price of the fuel shoot up to RM3.35 per litre from the blanket subsidised price of RM2.15, is expected to pose minimal impact on the sales of diesel vehicles.
The move, however, might speed up the country’s transition to adopting cleaner-fuel vehicles.
TA Research auto sector analyst Angeline Chin said the impact of the rise in diesel prices on vehicle sales would be limited.
“Whether the price goes up or not, you still need diesel vehicles to transport goods. The sales impact will not be significant, especially with some sectors receiving subsidies from the government,” she told StarBiz.
Moreover, she opined the move might accelerate the nation’s push towards electric vehicles (EVs).
Similarly, Carsome group chief business officer Aaron Kee expects the rationalisation of diesel fuel prices to have minimal impact on the sales of diesel vehicles.
Small and medium enterprise (SME) owners, commercial fleet companies and lifestyle users form the primary market for diesel vehicles.
In addition, SME owners may not have the luxury of considering alternatives that meet their business needs.
“This category relies heavily on diesel vehicles for daily activities, which often involve long-distance travel with heavy loads. For them, diesel vehicles are practical due to their durability, longer range, and fuel efficiency,” he said.
Furthermore, if there is a move to rationalise petrol prices, the SME owners may not be incentivised to switch to petrol.
“The current EV charging infrastructure is inadequate to support frequent long-distance travel, making the shift to EVs impractical for this segment for now,” he added.
For commercial fleet users, Kee said they are able to claim cash subsidies based on fleet cards under the government’s subsidised diesel control system.
Furthermore, he noted that some business groups had been paying unsubsidised diesel rates even before the rationalisation was implemented.
Thus, the impact on demand for diesel vehicles from commercial fleet operators is expected to be minimal, as the exercise will not significantly affect their costs or shift dependence away from diesel vehicles.
Having said that, some commercial companies, such as Pos Malaysia Bhd , DHL Malaysia and Lazada Malaysia, had increased the number of EVs in their fleets even before the rationalisation for sustainability reasons.
“We believe the growth of the sustainability trend is highly dependent on the development of a more robust EV charging infrastructure which is still at a nascent stage. It is our hope that this sustainability trend will continue to grow organically in the long term,” Kee added.
The segment which is most likely to be affected will be the lifestyle users as the rationalisation may reshape their vehicle purchasing decisions, especially if they are not eligible for the Madani Subsidy Assistance Programme or Budi Madani, according to Kee.
The Budi Madani programme offers RM200 in monthly aid for private vehicle owners including farmers and smallholders
“Historically, private car buyers have chosen diesel vehicles due to their superior fuel efficiency and robust engine performance.
“However, rising diesel costs will reduce the savings gap,” he said.
Additionally, the introduction of cutting-edge electric vechicles will present a compelling alternative especially in areas well covered by an EV charging infrastructure.
The government’s move to rationalise diesel subsidy recently was aimed at alleviating the financial burden on the national coffers while ensuring a fairer subsidy distribution besides address smuggling issues.
It is projected to result in savings of RM4bil for the nation, which has been facing a fiscal deficit almost every year since the Asian financial crisis of 1997.
A total of 53,253 passenger vehicles (PVs) were sold in April, an increase of 25% from the 42,587 units sold a year earlier, while sales of commercial vehicles (CVs) fell 9% year-on-year (y-o-y) to 4,738 units from 5,215 units.
The Malaysian Automotive Association (MAA) reported that sales volume for the first four months of this year grew by 8% to 260,236 units from the 240,417 units registered in the corresponding period in 2023.
The total industry volume (TIV) comprised 238,247 PVs (up 11%) and 21,989 CVs (down 15%).
Commenting on the fall in CVs sales year-to-date, Chin said this is a normalisation process “because in the past two years, especially post Covid-19, the auto industry had seen a tremendous pickup in CVs sales.”
Chin said the full-year TIV should be about 700,000 units, up from her previous forecast of 650,000.
This is mainly due to backlog orders.
She, however, added the impact of the fuel subsidy rationalisation might cause some buyers to delay their purchases. | Business | Auto | Complimentary | Medium | null | 2024-06-17 00:00:00 | Auto,Automotive,Diesel,subsidy,fuel,electric vehicle,EV, | PETALING JAYA: The implementation of the targeted subsidy for diesel, which saw the price of the fuel shoot up to RM3.35 per litre from the blanket subsidised price of RM2.15, is expected to pose minimal impact on the sales of diesel vehicles. | https://www.thestar.com.my/business/business-news/2024/06/17/impact-on-diesel-vehicle-sales-minimal | |
1,372,892 | UUE Holdings poised for earnings uptrend on strong order book | PETALING JAYA: UUE Holdings Bhd is expected to register growth in its core earnings in the coming financial years, driven by its RM233.4mil worth of order book and helped by its project replenishment target of RM100mil per year and contribution from its subsea project, says TA Research.
The research house estimated UUE Holdings’ earnings to grow by 34.1%, 15.2% and 15.5% to RM19.2mil, RM22.1mil and RM25.6mil for financial year 2024 (FY24), FY25 and FY26, respectively.
The underground utilities engineering solutions provider is also looking to purchase new machinery in an effort to broaden its services range, as well as expand its business locally and regionally.
According to TA Research, UUE Holdings aims to bolster its underground utilities engineering capabilities by purchasing essential machinery worth some RM15.8mil and funded with cash proceeds from its initial public offering (IPO) on the ACE Market of Bursa Malaysia.
The group also plans to expand its service offerings by purchasing a maxi rig horizontal directional drilling (HDD) machine to enable entry into its subsea HDD works.
“Owning machinery enhances UUE Holdings’ competitive position, reduces risks and improves cost control.
“This strategic move not only enhances project capabilities but also increases efficiency, reliability and technical proficiency, positioning UUE Holdings as a leading player in the underground utilities engineering sector,” TA Research stated in its report on UUE Holdings.
On the firm’s expansion plans, TA Research noted the company aimed to strengthen its presence across Peninsular Malaysia, particularly on the East Coast states as it leverages on contracts worth RM83.9mil.
Meanwhile, UUE Holdings anticipates increased demand for underground utilities engineering solutions in Singapore attributable to population growth and infrastructure development.
The group plans to capitalise on this by actively participating in tenders.
That being said, TA Research stated that UUE Holdings’ expansion is expected to be driven by several factors, including sustained economic growth and urbanisation, which will spur investments in utility infrastructure.
Additionally, TA Research noted the government targets for renewable energy generation, which has an estimated capital expenditure (capex) of RM637bil, will also open up investment avenues in power infrastructure.
Tenaga Nasional Bhd (TNB), in support of the National Energy Transition Roadmap, is forecast to have a capex of RM10bil to RM20bil up to 2050 to enhance the utility infrastructure, particularly through underground cabling.
“Collectively, these factors are set to bolster demand for underground utilities engineering services in the energy sector across Malaysia,” it stated.
UUE Holdings had achieved a two-year compound annual growth rate (CAGR) of 31% in revenue to RM88.7mil from FY21 to FY23, largely driven by growing revenue recognition from the underground utilities engineering solutions division.
TA Research noted this growth was underpinned by robust industry demand for underground utilities engineering solutions from the electricity and telecommunications sectors, thanks to the higher capex earmarked for the replacement of the cabling and upgrading of the underground infrastructure.
In line with the revenue growth, UUE Holdings’ core earnings had surged to RM14.3mil in FY23 from RM7.6mil over the past three years.
TA Research stated that UUE Holdings’ financial position is set to improve on listing from a net debt position of RM1.7mil to a net cash position of RM24.4mil due to the fresh proceeds of RM30mil. It has yet to have a formal dividend policy.
“We believe a fair dividend payout assumption of 15% is justified, considering the steady earnings growth in the near future and positive operating cash flow,” said the research house.
UUE Holdings’ IPO entails a public issue of 124.9 million new ordinary shares and an offer for sale at an IPO price of 24 sen a share, which accounts for 26.7% of the group’s enlarged issued share capital.
At that IPO price, the firm is priced at a trailing price earnings (PE) multiple of 10.2 times FY23 core earnings per share.
TA Research has ascribed a target PE of nine times calendar year 2025 earnings per share and arrived at a fair value of 37 sen per share for UUE Holdings, which is scheduled to list on July 2. | Business | Analyst Reports | Complimentary | Medium | null | 2024-06-17 00:00:00 | Analyst Reports,UUE Holdings,order book,utilities | PETALING JAYA: UUE Holdings Bhd is expected to register growth in its core earnings in the coming financial years, driven by its RM233.4mil worth of order book and helped by its project replenishment target of RM100mil per year and contribution from its subsea project, says TA Research. | https://www.thestar.com.my/business/business-news/2024/06/17/uue-holdings-poised-for-earnings-uptrend-on-strong-order-book | |
1,372,893 | Mixed outlook for Glomac on below-expectation FY24 performance | PETALING JAYA: Analysts have mixed views on property developer Glomac Bhd , as its performance for financial year 2024 (FY24) came in below expectations.
Glomac closed its FY24 ended April 30 with a 25.11% year-on-year (y-o-y) drop in net profit to RM23.59mil, or an earnings per share of 3.07 sen, due to higher construction costs as well as a rise in interest expense.
Its FY24 revenue saw a 21.78% y-o-y fall to RM266.73mil, which was attributed to the completion of several development projects in FY23.
“Newly launched projects, although enjoying brisk sales, are still in the initial stage of development and yet to contribute significantly to group revenue,” Glomac stated in its filing with Bursa Malaysia.
AmInvestment Bank Research (AmInvest Research) noted that Glomac’s core net profit of RM7mil came in 55% below its earlier FY24 forecast and 53% below street forecast.
“The variance to our forecast was mainly due to a lower-than-estimated core net profit margin as a result of increased construction cost and finance expense,” it added.
AmInvest Research downgraded its “buy” call on Glomac to a “hold” with a lower fair value price of 40 sen per share based on a 31% to 37% downward adjustment to Glomac’s FY25 and FY26 core net profit after accounting for a lower-than-expected core net profit margin.
MIDF Research, meanwhile, stated the developer’s weaker earnings were in line with lower revenue as progress billings from its projects came in weaker-than-expected.
“The lower gross profit margin of 28% in FY24 against that of 31% in FY23 dragged earnings mainly due to earnings recognition from lower-margin projects, namely Seri Kenanga Rumah Selangorku.
“On a positive note, the balance sheet of Glomac remains healthy with a low net gearing of 0.06 times,” MIDF Research stated in a report on the developer.
It also downgraded Glomac from a “buy” call to “neutral” but kept its target price unchanged at 43 sen per share. The research house also slashed earnings forecast by 35% and 24% for FY25 and FY26 to factor in lower progress billings and lower margins.
On a brighter note, TA Research stated that despite missing earnings expectations, Glomac recorded a substantial increase in new property sales in its fourth quarter (4Q24) as it reached RM217mil as compared to RM148mil in the same quarter in the previous year.
This had boosted the total new property sales for FY24 to RM360mil, a 19.2% y-o-y spike, surpassing TA Research’s sales assumption of RM300mil.
“As a result of the strong property sales in 4Q24, the group’s latest unbilled sales increased from RM347mil in 3Q24 to RM504mil, providing earnings visibility over the next two years,” it said.
That being said, TA Research has slashed its earnings estimates for Glomac in FY25 and FY26 by 13% and 17%, respectively, after taking into account Glomac’s FY24 performance, the revised sales, progress billings and margin assumptions.
TA Research maintained its “buy” call on Glomac with a new target price of 63 sen per share.
This is as it believes better days are ahead for the property developer. | Business | Analyst Reports | Complimentary | Medium | null | 2024-06-17 00:00:00 | Analyst Reports,Glomac,developer,construction | PETALING JAYA: Analysts have mixed views on property developer Glomac Bhd, as its performance for financial year 2024 (FY24) came in below expectations. | https://www.thestar.com.my/business/business-news/2024/06/17/mixed-outlook-for-glomac-on-below-expectation-fy24-performance | |
1,372,896 | Property and construction likely to get bigger index representation | PETALING JAYA: The recent review of the Bursa Malaysia indices saw additions of a number of property and construction counters on key indices.
The FBM KLCI saw the addition of Sunway Bhd while the FBM70 Index saw the inclusion of IGB Real Estate Investment Trust (IGB-REIT), IJM Corp Bhd , IOI Properties Group Bhd (IOIProp), Pavilion-REIT, Sime Darby Property Bhd and Sunway Construction Group Bhd .
Their additions into the indices came in tandem with rising market capitalisation following the recovery in their share prices and valuations in the last one year.
This could also signal further investor interest in the counters particularly among asset or fund management companies.
The indices are regularly reviewed every half yearly by FTSE Russell and Bursa Malaysia Bhd and the recent review was announced on June 6.
The inclusions of IGB-REIT and Pavilion-REIT on the FBM70 index also indicated the resiliency of the domestic retail sector despite continued talks of an oversupply of retail space in Malaysia, according to analysts.
With the recent change, Sunway will also be the sole property-centric company to be part of the FBM KLCI.
Sunway has seen its shares rising by some 140% in the last one year.
The FBM KLCI which consists of 30 stock constituents and the FBM70 together constitute the Bursa Top100 index.
According to Bursa Malaysia, Malaysian companies listed on the Main Market and ACE Market are eligible for inclusion into the FBM indices if they met FTSE’s international standards of free float, liquidity and investability.
Other FBM indices include the FTSE4Good Bursa Malaysia index and the FBM hijrah syariah index.
Being included into such indices will provide more global exposure since they can be used as a reference point for the creation of investment products such as exchange-traded funds, derivatives, structured products and index tracking funds.Founder and chief executive officer of Fortress Capital Asset Management Datuk Thomas Yong said the higher index weightage of property counters would not affect ordinary active investors, who do not track the index constituents to their portfolio but have a bigger impact on passive investors who track these indices closely, he adds.
“Any higher portfolio demand for property stocks by foreign funds, as a result of the index adjustment, will largely be from passive index funds,” Yong told StarBiz.
“While structural change to sector weightage introduces some additional portfolio demand for property stocks, at least from passive funds, positive assessments of sector fundamentals are needed for sustained investor interests to see meaningful valuation upgrades.
“The property sector has been under-owned by institutional investors for some time,” he added.
But even as sector valuation has recovered from recent lows, investors need to be convinced that supply-demand dynamics have turned before putting in more money, he said.
“Key indicators which are actively monitored on this front include affordability measures, potential shift in demand from foreigners, asset inflation cycle and any beneficial regulatory changes,” he pointed out.
Housing and Local Government Minister Nga Kor Ming had said he anticipated the property sector to be resilient, underpinned by the government’s commitment to provide a conducive environment for the sector to expand.
Nga noted that property counters rose from January 2023 to June with 76 out of 100 property counters on Bursa experiencing an increase in share prices.
Meanwhile, Finance Minister II senator Datuk Seri Amir Hamzah Azizan had said in March that the property market was an extension of the financial sector since property loans constituted a large part of the banking system.
Among the recent inclusions into the FBM70, IOIProp had seen a 120% appreciation in its share price in the last one year, Sime Darby Property by almost 200% and IJM Corp by 86% one-year gain and Sunway Construction by 137% rise during the same period.
The construction sector could see further gains ahead as project progress gathers momentum and new jobs are anticipated to flow in, according to Kenanga Research.
It is bullish on the construction sector’s prospects on the back of the impending rollout of mega infrastructure projects such as Mass Rapid Transit 3, Pan Borneo phase two and flood mitigation projects. | Business | Markets | Complimentary | Medium | null | 2024-06-17 00:00:00 | Markets,FBM KLCI,Property,construction,Sunway | PETALING JAYA: The recent review of the Bursa Malaysia indices saw additions of a number of property and construction counters on key indices. | https://www.thestar.com.my/business/business-news/2024/06/17/property-and-construction-likely-to-get-bigger-index-representation | |
1,372,897 | Right time to resume FTA talks with EU | PETALING JAYA: Malaysia is better positioned to negotiate a free trade agreement (FTA) with the European Union (EU) this time around as geopolitics and supply chain realignment gives it some edge, say industry observers.
Universiti Tunku Abdul Rahman economics professor Wong Chin Yoong attributes this to the nation’s trade history with the EU as well as being one of the most prioritised destinations for integrated circuit investments.
He said the EU has been Malaysia’s third or fourth-largest trading partner while Malaysia is the EU’s third-largest trading partner within Asean.
“Our trade with the EU has exceeded €50bil in the last two years, which mainly include machinery and appliances along with some chemical goods and animal fats.
“Malaysia has long been a recipient of foreign direct investment (FDI) from the EU and is also an integral part of the electronics and electrical (E&E) supply chains.
“The E&E-related industries will be one of the most important components in the FTA looking at the ongoing geopolitical tensions. Hence, this puts Malaysia in a very advantageous position when it comes to negotiating with the EU,” he told StarBiz.
Negotiations for an FTA between the EU and Malaysia were launched in 2010 and put on hold after eight rounds of negotiations in 2012, at Malaysia’s request.
Both parties had exhausted their negotiating options at that time. It was then agreed that negotiations would resume when a new mandate and/or additional flexibilities were available to both sides.
In March this year, Prime Minister Datuk Seri Anwar Ibrahim said “the time is ripe to rekindle discussions on the Malaysia-EU FTA” and Europe will be able to capitalise on Malaysia as a gateway to Asia with an FTA.
Bilateral trade in goods between the EU and Malaysia totalled €50.3bil in 2022.
EU imports from Malaysia were valued at €35.6bil, while EU exports to Malaysia reached €14.7bil. Additionally, trade in services between the two partners amounted to nearly €7.6bil in 2021.
EU-Asean Business Council executive director Chris Humphrey said past talks for an FTA were put on hold partly due to local political considerations and concerns about voter reactions to ongoing FTA negotiations when the country is heading for a general election.
Humphrey added that negotiations have taken so long to restart largely due to political reasons in Malaysia and partly because the European Commission felt that the level of ambition on the Malaysian side did not match their own level of ambition for a deep and comprehensive FTA.
“The EU is always looking for new trade deals that not only remove tariffs but also non-tariff barriers and improve market access in both directions, address intellectual property rights, sustainability, and non-core trade issues like labour rights, and environmental protection.
“These may well have been some of the stumbling blocks for Malaysia at that time. Hence, the country needs to be ready to address these issues to secure an FTA with the EU,” he said in an interview with StarBiz.
Areas such as high-end electronics and semiconductors are where Malaysia can significantly enhance its role in its relationship with the EU, Humphrey noted.
“Traditional sectors like machinery, basic electronics and agricultural products will continue to grow, and an FTA would be beneficial by providing tariff-free access and facilitating easier entry into the European market.
“Similarly, European firms could potentially gain improved access to the Malaysian market and look to invest more here,” he said.
On this note, Wong said the new generation of FTAs that will benefit Malaysia the most would be those addressing non-tariff measures.
“After concluding so many rounds of FTAs, tariff barriers in trade have been largely removed. The average simple tariff rates for Malaysia in 2021 was approximately 3.6%.
“Further reduction in tariff rates would only bring about trivial gains from FTAs that are purely focusing on tariff reduction,” he said.
For instance, the biggest benefit of Regional Comprehensive Economic Partnership (RCEP) to Malaysia is not tariff removal but harmonisation of all the different rules of origins under different bilateral trade agreements rectified earlier by the members.
Sharing a single custom standard and procedures across member nations substantially reduces the cost of cross-border trading, making different markets as if a single large market and hence bolstering the gains from trade.
“I believe a proposed FTA between Malaysia and the EU will be heading towards that direction, with emphasis not just on the harmonisation of standards and procedures in goods but also service sectors.
“The benefits can be enormous for both sides, as Malaysian firms would have better access to the European market and capital while for the European companies, the access to the RCEP and Comprehensive and Progressive Agreement for Trans-Pacific Partnership markets,” Wong said.
In Asean, Singapore and Vietnam already have an FTA in place with the EU while negotiations are still ongoing with Indonesia, the Philippines and Thailand.
Humphrey said recent announcements by the EU and the Philippines show both sides are looking at a €6bil increase in trade from the signing of an FTA and this is coming from a lower base compared with what Malaysia presently has with the EU.
“With Vietnam, the growth rate in trade resulting from the FTA with the EU has far surpassed that between the EU and Malaysia.
“Malaysia is extremely well placed and is very active in Europe in terms of trying to attract investment. However, Malaysia probably has not been getting its fair share when you look at the investment flows that have been going elsewhere within South-East Asia.
“Having an FTA in place will definitely be a boost for Malaysia in that regard, going forward,” he said.
The rekindling of the Malaysia-EU FTA is also taking place at an opportune time as Malaysia edges closer to assuming the annually-rotating Asean chair in 2025 from Laos this year.
“Engagement between the EU and Asean is probably at an all-time high now, particularly regarding trade and investment issues. During Malaysia’s chairmanship of Asean next year, the Asean digital economy framework agreement should be reaching its conclusion.
“I hope that under Malaysia’s stewardship, we will achieve an agreement that is open and promotes the digital economy. This could perhaps lead to a broader agreement with Europe at the same time,” he said.
Wong said gaining access to the EU’s market, technology and finances through an FTA is important.
“We are accustomed to thinking of FDI primarily as a means of freeing trade in goods and services, promoting exports and imports as well as attracting more European investments to Malaysia.
“We must not forget that for Malaysia to become a developed country, it is crucial to have local companies that are globalised or internationalised. This is also how the country can really upgrade its overall industrial capacity,” he said. | Business | Economy | Complimentary | Long | null | 2024-06-17 00:00:00 | Economy,FTA,EU,FDI,Anwar Ibrahim,Wong Chin Yoong,RCEP, | PETALING JAYA: Malaysia is better positioned to negotiate a free trade agreement (FTA) with the European Union (EU) this time around as geopolitics and supply chain realignment gives it some edge, say industry observers. | https://www.thestar.com.my/business/business-news/2024/06/17/right-time-to-resume-fta-talks-with-eu | |
1,372,899 | Fuel subsidy revamp a dampener on loan growth | PETALING JAYA: The banking sector is anticipated to come under pressure and post slower loan growth this year amid weaker spending underpinned, among others, by the government’s fuel subsidy rationalisation policy.
RAM Rating Services Bhd co-head of financial institution ratings Sophia Lee told StarBiz she expects slower loan growth of 5% this year from 5.3% in 2023.
She foresees retail loans to likely moderate as credit demand may be dampened by possible squeeze on consumer disposable incomes and weaker spending sentiment, given the government’s re-targeting of subsidies.
Analysts generally expect the fuel subsidy rationalisation to spiral into higher cost of living from rising prices and would, in turn, affect consumer spending and slow loan growth.
However, she said loan growth would likely be driven by business loans as exports and global trade rebound.
“Recent exports data is already showing promising signs of reversal, with the first quarter of 2024 (1Q24) exports up 2.2% year-on-year (y-o-y) after three prior consecutive quarterly declines (2023: 8% contraction y-o-y),” she said.
On the whole, she said RAM Rating is maintaining a “stable” outlook for the domestic banking sector for 2024.
Notwithstanding some lingering uncertainties over global economic conditions and cost of living pressures from the rollout of targeted fuel subsidies in the second half of 2024, Lee expects banks to sustain their credit profiles this year.
RAM Rating Services Bhd co-head of financial institution ratings Sophia LeeUnder the fuel subsidy rationalisation policy, the targeted diesel subsidy took effect on June 10 that saw the retail price of diesel in Peninsular Malaysia at RM3.35 per litre.
For those in Sabah, Sarawak and Labuan, the price remains at the subsidised rate of RM2.15 per litre.
At the moment, the government has not set a timeframe on the timeline for targeted subsidy implementation for RON95 petrol.
Kenanga Research said market-wide, most banks are guiding conservatively on a possible easing in loan growth numbers.
Going forward, Kenanga Research said the outlook for the sector in 2024 has more caution than optimism.
It noted that most banks have seen previous net interest margin (NIM) pressure to be subsiding as the market is rationalising their cost of funds but on the flipside, greater prudence is ascribed against potential US Federal Reserve rate cuts in addition to the introduction of targeted fuel subsidies and prolonged weakness in the ringgit, which could spur inflation.
NIM, a measure of profitability, is the spread bank earns between borrowing and lending. A wider NIM indicates higher earnings for banks.
“This led the banks to anticipate a slower second half in 2024 and potential softening of investment markets. However, this could be counterbalanced by greater funding needs by infrastructure projects and the rejuvenation of exporters that benefit from a weak ringgit,” it noted.
In terms of profitability, RAM Rating’s Lee sees limited upside to profit outperformance this year as lower provisioning charges could be offset by a more moderate loan growth.
NIM, which were significantly compressed in 2023 as multiple rate hikes and heightened deposit competition drove up banks’ cost of funds, have stabilised this year following less intense deposit competition.
“Nonetheless, we expect NIMs to be flat this year. New dynamics in the banking sector brought on by three domestic digital banks that became operational are worth a close watch.
“However, we do not anticipate them to pose any threat to incumbent banks. The aggregate size of the five newly licensed digital banks remains small,” she added.
Meanwhile, Desmond Ch’ng who is a banking analyst with Maybank Investment Bank, said: “Our aggregate 2024 operating profit growth forecast is raised to 7.6% from 6.3% before, on faster domestic loan growth of 5.5% from 5.1% previously.
“We have raised our projected core net profit growth to 6.8% from 5.5%, driven by faster operating profit growth, mitigated in part by a higher credit cost average of 24 basis points (bps) versus 23 bps in 2023.
“Into 2025, we project operating profit growth of 5.5% and core net profit growth of 6.1%.”
Ch’ng expects return on equity (ROE) for banks to average 10.3% in 2024 and 10.4% in 2025.
“Dividend yields are attractive, with most banks offering yields of more than 5%, except for Hong Leong Bank Bhd and Public Bank Bhd . Bank Islam Malaysia Bhd (BIMB), Malayan Banking Bhd and RHB Bank Bhd potentially offering yields of 7% or more for financial year 2024,” he noted.
ROE is a gauge of a corporation’s profitability and how efficiently it generates those profits. The higher the ROE, the better a company is at converting its equity financing into profits.
Lee said asset quality is anticipated to remain healthy.
Favourable labour market conditions, with the unemployment rate recovering to the pre-Covid-19 pandemic level of 3.3%, should help contain the adverse impact from the rollout of subsidy rationalisation, he said.
“We do not expect the industry’s gross impaired loan (GIL) ratio for end-2024 to change too much from the 1.62% as at end-March 2024. Our projection is for the ratio to hover between 1.6% and 1.7%.
“While there could be potential weaknesses in the commercial real estate, construction, wholesale and retail trade sectors and lower-income households, banks’ prudent underwriting and write-offs against excess provisions should keep the GIL ratio in check,” she said.
Considering that loan impairments would be largely contained and factoring in sizeable management overlays still retained by banks, Lee foresees credit cost ratio to ease further to around 20 bps (2023 and 1Q24 ratio of eight selected banks was 23 bps and 22 bps, respectively).
Furthermore, she said banks’ loan loss coverage ratio remained solid at 134% (with regulatory reserves) as at end-March 2024.
“Some writebacks of these overlays are anticipated but banks are prudently assessing the quantum and timing of reversals in view of the macro headwinds.
“The system’s capitalisation remains robust, with the industry’s common equity tier-1 capital ratio at a sturdy 14.6% on the same date,” Lee noted. | Business | Banking | Complimentary | Long | null | 2024-06-17 00:00:00 | Banking,Fuel,subsidy,loan,RON95,net interest margin,Federal Reserve,interest rate | PETALING JAYA: The banking sector is anticipated to come under pressure and post slower loan growth this year amid weaker spending underpinned, among others, by the government’s fuel subsidy rationalisation policy. | https://www.thestar.com.my/business/business-news/2024/06/17/fuel-subsidy-revamp-a-dampener-on-loan-growth | |
1,372,911 | Japan to think about allowing nuclear plant expansions | TOKYO: Japan’s economy ministry is considering allowing the expansion of nuclear plants as older ones are being decommissioned, according to the Asahi newspaper.
The permission would likely be part of revisions to Japan’s national energy strategy, which is reviewed every three years, the paper reported, without saying where it got the information.
The revision is expected to include a provision allowing power companies that are decommissioning nuclear plants to build new reactors at existing nuclear power plants, according to the Asahi.
The revised energy strategy is expected to frame the change as “replacing” nuclear plants, and the number of plants will not increase, according to the report.
Nuclear plants are still a politically sensitive issue in Japan after the 2011 Fukushima nuclear disaster. The current version of the national energy strategy said that Japan will reduce dependency on nuclear as much as possible.
Japan has pledged to cut greenhouse gas emissions by 46% by 2030 and become carbon-neutral by the middle of this century. — Bloomberg | Business | Energy | Complimentary | Short | null | 2024-06-17 00:00:00 | Energy,Japan,Nuclear plant,Fukushima | TOKYO: Japan’s economy ministry is considering allowing the expansion of nuclear plants as older ones are being decommissioned, according to the Asahi newspaper. | https://www.thestar.com.my/business/business-news/2024/06/17/japan-to-think-about-allowing-nuclear-plant-expansions | |
1,372,915 | Adidas probes bribery allegations in China | LONDON: Adidas has launched an investigation into allegations of large-scale bribery in China after the company received a whistleblower complaint that accused senior staff of embezzling “millions of euros”, the Financial Times (FT) has reported.
The anonymous letter, which claims to have been written by “employees of Adidas China”, names several Chinese Adidas employees including a senior manager involved with the marketing budget in the country, which the document said stood at £212mil (US$267.5mil) a year, the FT reported.
Adidas media officials at its headquarters in Germany did not immediately respond to requests for comment on the report outside regular business hours.
According to the FT, the letter alleges that Adidas staff received kickbacks from external service providers who were commissioned by the company that include “millions in cash from suppliers, and physical items such as real estate”.
China sales of the German sportswear giant grew by 8% in the first quarter, the company reported earlier. — Reuters | Business | Corporate News | Complimentary | Short | null | 2024-06-17 00:00:00 | Corporate News,Adidas,China,investigation,bribery,whistleblower,kickbacks | LONDON: Adidas has launched an investigation into allegations of large-scale bribery in China after the company received a whistleblower complaint that accused senior staff of embezzling “millions of euros”, the Financial Times (FT) has reported. | https://www.thestar.com.my/business/business-news/2024/06/17/adidas-probes-bribery-allegations-in-china | |
1,372,923 | Republicans are inventors, Democrats are innovators | DOES it matter which political party your urologist belongs to? Or that inventors are more likely to be Republicans than Democrats?
Not everything is political, of course, but everything has a politics, including the professions.
Knowing which kinds of partisans tend to dominate which sectors can help you manage expectations not only as you go about your own life, but also as you try to understand trends in the broader economy.
Evidence from campaign contributions, for example, indicates that some professions are more right or left-leaning than others. And more recent research shows that partisanship matters for inventors too, first in the choice to become one and then about what to make.
The data show that oil workers and petroleum engineers are more likely to give to Republican candidates, while professional environmentalists, librarians and bartenders are more likely to support Democrats.
Given disputes over climate change, the breakdown in the fossil-fuel sector may be obvious – but what explains the Republican lean of truck drivers, farmers and urologists, or the Democratic lean of pediatricians and bartenders?
Causality undoubtedly runs both ways. If you are a bartender, you might be younger and rank somewhat higher in the personality trait of openness. Those traits are correlated with support for Democrats.
So it’s not necessarily the case that working as a bartender causes you to evolve into a Democrat, or that Democratic loyalties per se push you into bartending jobs.
In other cases, the profession itself may influence political leanings. Many small-business people are sensitive about the taxes they pay, since often they do not have the cash flow or profit margins of larger corporations.
So business owners and insurance agents lean more Republican, and some of that relationship may be causal.
Academics lean Democratic, and some of that inclination may come from the perception that Democrats support science and the academy more. Academics also work in environments less concerned with such traditional business constraints as accountability, profit and loss.
It turns out that partisanship matters for inventors, too. A study released last month shows that the modal or typical inventor in 2020 was Republican, accounting for 37% of the database of more than 250,000 US inventors, with Democrats making up 34% and independents 30%.
In part, this may stem from the desire of many inventors to become small-business owners.
And yet inventors have become more Democratic and less Republican since 2019, perhaps because educational polarisation means that more educated people are trending in the Democratic direction.
Furthermore, those shifts are strongest in Democratic-leaning states such as Washington. The partisan views of inventors are also correlated with what they invent.
Republicans are more likely to develop innovations for guns (the patent category is called “blasting weapons”), while Democrats are more likely to get new patents related to climate change.
These kinds of partisan effects are much stronger when the relevant work is done in teams, which is becoming more important. So invention may well become more partisan.
How should partisans view all this research? Well, conservatives who worry about the liberal domination of academia can console themselves that they have one area where they still hold sway – coming up with new and patentable ideas.
Furthermore, the stronger Republican presence influences which kinds of innovations get made. Some people might gladly give up a bigger presence in academia for a greater hand in invention.
At the same time, it is widely believed that patents can be a misleading measure of some kinds of innovation, as many new sectors of the US economy rely less on patents to protect their new ideas and advances.
Tech firms may well take out patents but their actual competitive advantage comes from network effects, talent, the ability to maintain and revise their software, and other factors.
Employees of major tech firms tend to be left-leaning and Democratic, as might be expected from high-income, highly educated people in California and Washington state.
It could be that Democrats are leading newer, more innovative fields, and leaving the older, more patent-heavy ones to Republicans.
If that’s the case, then the Democratic ideological ascendancy is stronger than it looks. But there is another way to look at it.
In the economy of the future, would you rather be developing the next generation of guns, or of artificial intelligence (AI)? I know which field I would prefer. Perhaps we should ask the AIs. — Bloomberg
Tyler Cowen is a Bloomberg Opinion columnist. The views expressed here are the writer’s own. | Business | Insight | Complimentary | Medium | null | 2024-06-17 00:00:00 | Commentary,Politics,Republicans,Democrats,climate change | DOES it matter which political party your urologist belongs to? Or that inventors are more likely to be Republicans than Democrats? | https://www.thestar.com.my/business/insight/2024/06/17/republicans-are-inventors-democrats-are-innovators | |
1,372,914 | Chile says Saudi Arabia mining minister to visit | SANTIAGO: Chile’s government says that Saudi Arabia’s mining minister will travel to the Latin American country in July and plans to meet with his counterpart in Santiago.
Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef said in March the kingdom was interested in sourcing lithium abroad, as it aims to enter the electric vehicle sector.
“He will indeed be in Chile (in July) and has asked for a meeting with the minister. But the date is not yet set,” the ministry said in an email.
A government source had told Reuters about the visit last Thursday, saying the two officials would discuss potential investments in lithium. Chile is the world’s second-largest producer of lithium. — Reuters | Business | Business | Complimentary | Short | null | 2024-06-17 00:00:00 | Chile,Saudi Arabia,mining | SANTIAGO: Chile’s government says that Saudi Arabia’s mining minister will travel to the Latin American country in July and plans to meet with his counterpart in Santiago. | https://www.thestar.com.my/business/business-news/2024/06/17/chile-says-saudi-arabia-mining-minister-to-visit | |
1,372,924 | Oklahoma outshines rival states in energy transition progress | OKLAHOMA may be better known as a top-five producer of oil and natural gas within the United States, but its energy sector is fast becoming a shining star in the renewables field as well.
Between 2018 and 2023, Oklahoma boosted clean electricity generation by 35%, more than twice the national average and exceeding the growth pace of clean energy giant California over that period, data from energy think tank Ember shows.
Oklahoma’s power producers also cut total fossil fuel-powered generation by nearly 12% since 2018, which again was double the rate seen nationally and sharply exceeded fossil fuel use cuts in Texas and California during the same time frame.
Higher clean power output along with cuts to fossil fuel use have helped Oklahoma’s power sector cut emissions by 20% since 2018, vastly exceeding the 7% emissions cut posted by Texas over the same period and the 14% drop in national emissions.
And thanks to continued growth in wind generation capacity so far in 2024, Oklahoma looks set to emerge as a key driving force behind national energy transition efforts alongside its better known clean power producers.
Aggressive expansions to wind generation capacity have been the main driver of Oklahoma’s clean energy growth, with wind’s share of the state’s electricity mix jumping from around 32% in 2018 to 42% in 2023.
Oklahoma’s electricity generation from wind farms jumped by 38% over that five-year span, and in 2022 the state produced more electricity from wind than from any other source.
Natural gas has re-emerged as Oklahoma’s primary power source from 2023, but sustained growth in wind capacity looks set to ensure clean power’s share of the electricity mix continues to expand.
From 2020 through 2023, Oklahoma’s wind capacity grew by an annual average of 1,049 megawatts (MW), which sharply exceeded the growth rates of all other states except Texas during that window, according to energy data portal Cleanview.
During the first quarter of 2024, Oklahoma added a further 403MW of wind capacity, which was second only to Texas’ 449MW and indicates that Oklahoma could set a new state record for wind capacity additions in 2024.
Oklahoma’s clean power drive has been a relatively recent development.
While Texas’ power system has generated more than 10% of its electricity from clean sources since 2000, Oklahoma’s clean power share only crossed the 10% threshold in 2012, Ember data shows.
But since then, clean power output has accelerated rapidly, and has accounted for more than 40% of Oklahoma’s annual electricity supply since 2021.
This retooling of Oklahoma’s power system from primarily fossil fuel based to heavily powered by clean sources has in turn led to a rapid reduction in the state’s power sector carbon intensity.
Since 2018, the carbon intensity of Oklahoma’s electricity generation has fallen from around 384 grams of carbon dioxide (CO2) per kilowatt hour (KWh) to 297 grams of CO2 per KWh by 2023.
That 23% fall in carbon intensity is again far greater than the 14% fall in national power intensity over the same period, and also exceeds the 10% fall in California and 18% drop in Texas over the same period.
Oklahoma’s carbon intensity has also dropped from registering consistently above the national average through 2016 to being consistently below the national average since then, which has further reinforced the state’s reputation as an emerging clean energy leader.
Oklahoma’s energy consumers have also made significant shifts to usage patterns and sources.
Oklahoma’s car drivers posted the largest yearly jump in electricity use for electric vehicle (EV) charging of all US states in 2023, according to the US Energy Information Administration (EIA).
The 74% jump in Oklahoma’s electricity demand for EV charging far exceeded the growth rate in surrounding states and the national average (45%) last year, and highlights how households can also help drive power sector decarbonisation.
But the state’s power producers remain the most critical source of clean energy progress. If they can continue to roll out new clean generation capacity while curbing fossil fuel use, the state could soon eclipse its larger rivals and emerge as a new darling of national energy transition efforts. — Reuters
Gavin Maguire is a columnist for Reuters. The views expressed here are the writer’s own. | Business | Insight | Complimentary | Medium | null | 2024-06-17 00:00:00 | Commentary,Oklahoma,oil and gas,energy,renewables | OKLAHOMA may be better known as a top-five producer of oil and natural gas within the United States, but its energy sector is fast becoming a shining star in the renewables field as well. | https://www.thestar.com.my/business/insight/2024/06/17/oklahoma-outshines-rival-states-in-energy-transition-progress | |
1,372,922 | The APPIES marketing awards to showcase brightest campaigns | PETALING JAYA: It is not the “Malaysia’s Got Talent” show but the format is similar.
Featured on stage will be the latest marketing campaigns in the country presented by their creators.
Also labelled the “TED Talks of Marketing”, The APPIES marketing campaigns awards 2024 showcases the creme de la creme marketing campaigns across 21 product and service ccategories.
“What sets The APPIES apart from the rest is that each featured campaign is presented live by the brand marketers and campaign creators before a panel of judges and a full audience.
“Only outstanding campaigns that have a unique marketing success story would go on to win The APPIES trophies,” said Harmandar Singh, president of APPIES Malaysia. Led by APPIES Malaysia 2024 senior advisers, Adam Wee Abdullah and Santharuban T Sundaram, all entries would be judged by a panel of 22 chief marketing officers – the Who’s Who in the marketing fraternity.
The keynote opening speaker would be Jamshed Wadia, Asia vice-chair of digital at Edelman.
He will delve into the impact of artificial intelligence (AI), with insights and thought starters for the marketing and communications Industry to consider.
It would steer away from cliches and the hype around this topic and focus on practical considerations like organisational readiness, safely integrating AI in Marcom workflows, re-examining the marketing technology stack, building a culture of innovation, protecting human ingenuity, and bringing ethical considerations of AI usage.
“Over the years, The APPIES has attracted the attention of top marketers, agencies and partners.
“It showcases the best campaigns, presenting an unparalleled opportunity to learn, network and celebrate with some of the brightest minds in marketing.
“It truly is an industry milestone you can experience on July 11 and 12 at the Eastin Hotel ballroom,” said Harmandar. | Business | Advertising & Media | Complimentary | Short | null | 2024-06-17 00:00:00 | Advertising & Media,APPIES, | PETALING JAYA: It is not the “Malaysia’s Got Talent” show but the format is similar. | https://www.thestar.com.my/business/business-news/2024/06/17/the-appies-marketing-awards-to-showcase-brightest-campaigns | |
1,372,916 | Seoul aims to raise US$1.3bil in dollar bond sale | SEOUL: South Korea is planning to raise as much as US$1.3bil in a dollar bond sale to set a stable reference rate for local companies, just as their own issuance climbs near a record.
The government is offering the notes to investors such as other governments and central banks that tend to hold securities longer, providing more stability to secondary market interest rates, according to a statement from the finance ministry.
The comments provide fresh details on the planned deal, after a source said last Friday that the nation was considering offering five-year dollar bonds.
The country is arranging investor meetings in London from June 20 and global calls from June 24.
When a nation issues sovereign debt in international markets, that helps show broader investor demand for exposure to the country.
That in turn can help companies venturing overseas for funding to fine-tune the terms they offer, potentially allowing them to borrow at cheaper costs.
There’s a lot at stake in South Korea’s case. Issuers including tech giant LG Electronics Inc have priced about US$19bil of dollar notes so far this year, near a record of almost US$20bil for the same period in 2021.
That’s helped drive a broader resurgence in Asian deals, including from Indonesia and the Philippines earlier in the year. The region has joined a global rush for funds, taking advantage of investor demand to lock in yields before any declines.
The South Korean finance ministry said it plans for the offering to attract sovereigns, supranational and agency investors or SSAs that avoid frequently trading.
South Korea last sold dollar notes in October 2021.
In April this year, the Finance Ministry said it had picked Bank of America Corp, Citigroup Inc, Credit Agricole SA, HSBC Holdings Plc and the Korea Development Bank for a potential sale of offshore bonds.
Those are the banks still working on the planned deal, the source said last Friday. — Bloomberg | Business | Business | Complimentary | Short | null | 2024-06-17 00:00:00 | South Korea,bond,LG Electronics | SEOUL: South Korea is planning to raise as much as US$1.3bil in a dollar bond sale to set a stable reference rate for local companies, just as their own issuance climbs near a record. | https://www.thestar.com.my/business/business-news/2024/06/17/seoul-aims-to-raise-us13bil-in-dollar-bond-sale | |
1,372,910 | Pakistan to raise power prices in move to secure IMF loan | LAHORE: Pakistan is raising power prices by an average of 20% to bolster its chances of securing a new loan from the International Monetary Fund (IMF).
The National Electric Power Regulatory Authority will increase the power tariff by an average 5.72 rupees to 35.50 rupees per kilowatt-hour for Pakistan’s 10 power distribution companies for the next fiscal year starting from July 1, authority spokesman Sajid Akram said by phone.
Pakistan cut power tariffs for industries last Friday to help make exports competitive.
Prime Minister Shehbaz Sharif’s government raised taxes in its budget last week to boost revenue as it engages in talks with the IMF for more emergency funding.
The nation expects to secure a staff-level deal for a programme that will last minimum three years by July, according to Finance Minister Muhammad Aurangzeb.
“The power tariff hike is critical for securing the IMF programme, as it is a key part of stalling the ongoing rise in debt across the energy sector,” said Uzair Younus, a principal at The Asia Group’s South Asia Practice.
The arrangement is part of a multiyear tariff regime, and any change will be applicable after the regulator decides on the government’s requests for a uniformed tariff for the state-owned power distribution companies and K-Electric.
In February, Pakistani industrialists had warned that if energy prices were not slashed by approximately 43%, various industries may not survive, as high input costs would lead to the loss of export markets, and eventually trigger industrial closures, reports had stated.
Pakistani industrialists had said the international competitiveness of the country’s textiles and apparel exports was being continuously eroded by ever-increasing energy prices that, on average, were over twice than those of competing countries. — Bloomberg | Business | Economy | Complimentary | Short | null | 2024-06-17 00:00:00 | Economy,Pakistan,International Monetary Fund,IMF | LAHORE: Pakistan is raising power prices by an average of 20% to bolster its chances of securing a new loan from the International Monetary Fund (IMF). | https://www.thestar.com.my/business/business-news/2024/06/17/pakistan-to-raise-power-prices-in-move-to-secure-imf-loan | |
1,372,912 | Shanghai’s solar carnival belies fight for survival - China’s flagship clean energy industry in dismal state | SHANGHAI: Visitors to the world’s biggest showcase of solar power could be forgiven for not realising just how dismal conditions are in China’s flagship clean energy industry.
Hundreds of thousands of people descended on Shanghai’s largest convention centre last week for the city’s annual solar gathering, where a carnival mood prevailed.
They were met by company mascots dressed as pandas and astronauts, and presenters in ball gowns hosting wheels of fortune. There were boothes serving popcorn, ice cream and cocktails, and video game competitions on massive screens rising toward cavernous ceilings.
Behind the scenes, executives were fretting over the crisis engulfing the sector. At home, prices have collapsed after a breakneck expansion created far too much capacity, forcing many firms to sell at a loss.
Abroad, China’s dominance of the world’s supply chains is being tested by an explosion in protectionism. And the rapid uptake of solar power, the best story going in the fight against climate change, is now facing resistance as electricity grids chafe at handling a flood of energy available in the day that then disappears at night.
“We’re entering into a deep down-cycle,” Amy Song, vice-president at solar material maker GCL Technology Holdings Ltd, said in an interview last Friday with Bloomberg TV. “Barely anyone is making money right now.”
Solar’s rise over the past two decades has been meteoric. The industry has grown from a niche sector for environmentalists to the planet’s dominant source of new energy. The world added 445 gigawatts of solar panels last year, more than all other power sources combined in any year of human history. Most of them were made in China.
That’s propelled the growth of multi-billion dollar companies, which are now comparable to the giants of oil and gas. But it’s also created the conditions that have bedeviled commodities markets through the ages.
China’s solar companies have boomed, and now they’re heading for a bust that could eclipse earlier downturns in the industry’s fortunes.
A surge in demand that began three years ago boosted prices, unlocking ambitious expansion plans that have resulted in too much supply.
Chinese companies ended 2023 with the ability to produce 1,154 gigawatts of solar modules – more than double the capacity at the close of 2021. Projected demand this year is just 585 gigawatts, according to BloombergNEF.
The rapid build-out is a typical tragedy of the commons.
Companies looked out for their own interests without considering the overall impact if all their rivals acted the same way, said Gao Jifan, chairman of Trina Solar Co, the world’s third-largest manufacturer of panels. They were helped along by local governments eager to meet their growth targets and banks hungry to make loans, he said.
Gao was one of several executives who called last week on the central government to intervene to help the industry get back on its feet. The menu of options presented included regulating which new factories can be built, cracking down on less-efficient facilities, capping price cuts, and promoting consolidation.
In the meantime, too many factories are bidding to supply too few projects, which has driven down prices to record lows. Recovery isn’t likely until 2025 or 2026, said BNEF analyst Youru Tan. Industry executives have warned that bankruptcies are in the offing.
Solar’s biggest backer is Beijing. The industry is one of the government’s new productive forces that it hopes will allow the economy to pivot from decades of growth driven by the property market, low-end manufacturing and state-led investment. Other clean energy sectors like batteries and electric vehicles are in the same stable.
The government’s support, which in years past included generous subsidies, has helped deliver a world-beating industry.
Chinese companies control more than 80% of capacity along every step of the supply chain.
That’s rankled foreign governments, which don’t want to rely on a geopolitical rival for energy, and crave some of the industry’s jobs for their own people.
US President Joe Biden last month toughened trade measures against solar equipment from China, and his administration is now targeting operations in South-East Asia, which are viewed as fronts that have allowed Chinese firms to bypass tariffs.
India has also imposed import duties, and there have been calls in Europe to follow suit.
It’s left Chinese companies looking to invest overseas and win customers in nations that have put up trade barriers. That includes the United States, after the Biden administration’s 2022 bill to provide incentives to boost domestic clean energy manufacturing.
Despite the dire outlook, there are reasons for optimism in the industry. Demand will continue to grow through the next decade. — Bloomberg | Business | Energy | Complimentary | Medium | null | 2024-06-17 00:00:00 | Energy,China,solar power | SHANGHAI: Visitors to the world’s biggest showcase of solar power could be forgiven for not realising just how dismal conditions are in China’s flagship clean energy industry. | https://www.thestar.com.my/business/business-news/2024/06/17/shanghais-solar-carnival-belies-fight-for-survival |