Thursday, July 20th, 2017

 

Banks hope to keep staff in London if soft Brexit deal struck

LONDON, July 20 — Banks which are shifting operations to avoid disruption once Britain leaves the European Union hope only a handful of people will eventually have to leave London, industry sources say. Wall Street’s Citigroup Inc and Morgan…


US stocks keep climbing, euro jumps after Draghi

NEW YORK, July 20 — US stocks opened higher today, continuing their record run. Central banks dominated European markets, with the euro, bonds and stocks whipsawing as the ECB held interest rates and President Mario Draghi signalled the bank…


Syarikat Takaful Malaysia posts higher Q2 pre-tax profit

KUALA LUMPUR, July 20 — Syarikat Takaful Malaysia Bhd posted a marginally higher pre-tax profit of RM59 million in the second quarter ended June 30, 2017 (2Q17) from RM58 million in the same quarter a year ago. Revenue increased to RM485.3…


Asia, Europe track Wall Street records, dollar under pressure

HONG KONG, July 20 — Asian and European markets extended their latest rally today following across-the-board records on Wall Street where traders were buoyed by another day of strong earnings. Better-than-forecast results from New York titans…


Average job turnover for a person is 2½ years

KUALA LUMPUR: Human resource (HR) practices in Malaysia must change and accept the fact that the average turnover for any individual in this day and age is two-and-a-half years, according to one panellist at the Global Business Services Forum 2017 yesterday.

“In a HR organisation, have we evolved to the point that we really understand what talent management really means in the current day and age, and what it means five years down the road? It is not so much about how much you are going to pay, what great office painting you have on the wall, how big the CEO’s office is,” BAE Systems head of Malaysia engineering centre Rishesingar Ramasamy said during a panel discussion at the forum yesterday.

He said the industry has a huge part to play in adapting to changes in talent management and it is unfair to put the onus on the government to enable job creation opportunities.

“The average turnover for any individual is two to two-and-a-half years in any organisation here. That is the kind of turnover you are going to see and we have to accept and adapt to that fact. Does the recruitment engine understand that? Do we know that we are supposed to be prepared for the next attrition that is coming six months down the road? No, we are not.

“Those are the challenges that we need to be addressing, not just assuming the government is going to fix it all for us,” he added.

Malaysia Australia Business Council chairman Leigh Howard said there would be a lot more activity if the government were to retreat from the employment sector as jobs get created when businesses are allowed to get on with doing business.

“While I applaud everything that the government agencies do to try and create jobs, on the other side of the equation, the number one thing the government should do to create jobs is to get out of the way,” he said.

He said in a lot of economies including Malaysia, the people are so acclimatised to the regulation and involvement of government, especially in terms of employment, that they are desensitised to it.

Commenting on the rising trend of contract work against permanent employment, Howard said companies should embrace and plan for it.

“The employment relationship that existed 50 years ago is gone. It is archaic and we are just clinging to the remnants of that relationship by having employment contracts, having it protected and regulated,” he said.

He said talented employees get to go out and try their skills in various areas, and are doing that more frequently today. These employees are also creators and more mobile, bringing more diversity to the nature of the employment relationship.

“One mega trend that you can bank on is that change in the nature of employment relationship will continue,” he added.

Rishesingar said the perception that a contract position is “bad” shows that Malaysia has not adapted to changes in employment trends.

“If you look at the western world, that is an accepted norm, to get hired and fired on contract. That gives you the flexibility to move around and change, to do whatever you want, but it also pushes people to make sure that they are constantly learning. The protective environment that we are in is what’s artificially preventing people from wanting to change. So that is the issue with the labour market that we are seeing,” he said.


Oman Air flew 47% more passengers in 2016

KUALA LUMPUR: Oman Air, which saw a 47% growth passenger numbers out of Kuala Lumpur last year from 2015, is targeting 10 to 10½ million flyers from all its routes this year amid the Qatar crisis.

Oman Air carried 90,000 passengers in 2015 and in 2016 it carried 132,000.

“Obviously we want more Malaysians flying with Oman Air. A target may not be the real objective. The main thing is we want repeat customers,” said the airline’s regional vice-president Far East, Gerry Oh at a media briefing held in conjunction with the airline’s seventh anniversary in Malaysia yesterday.

The airline is, however, uncertain if the number of 10-10½ million for this year is achievable, as demand has been reducing from one end in the Middle East while growing at the other, due severed transport links between Qatar and Egypt, the United Arab Emirates, Saudi Arabia and Bahrain.

Speaking at the same event, Oman Air CEO Paul Gregorowitsch said Oman Air has also seen a 39% increase in forward bookings for the month of June to December 2017, for the Kuala Lumpur-Muscat route.

In addition to that it also saw a 21% increase in capacity on flights bound to and from Kuala Lumpur year-to-date, following the cancellation of its Kuala Lumpur-Singapore stopover service.

Gregorowitsch also alluded to an increase in flight frequency for the Kuala Lumpur-Muscat route, from two trips daily to three times a day, if there is demand.

However, he also did not rule out the possibility of reducing the frequency to 12 weekly flights during periods of low demand, such as winter.

“We will use this time to do some maintenance and refresh our cabins,” he said.

The airline, which flies to 53 destinations worldwide, is looking to increase the number to 75 within the next six years.

As part of its expansion plans, it also expects to increase its fleet size from the current 47 planes to around 68 by 2023.

Its current fleet comprises Dreamliners, Airbus 330-300s, 330-200s, Boeing 737-900s, 737-800s and Embraer 175s.


PTP to sue Rising Star for oil spill in 2016

PETALING JAYA: MMC Corp Bhd’s 70% owned subsidiary Port of Tanjung Pelepas is suing Rising Star Shipping Sdn Bhd (RSS) and The Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) Singapore Branch for RM31.86 million and interest, for an oil spill at its premises, which happened almost a year ago.

In a filing with the local stock exchange, MMC said it had filed the suit at the Kuala Lumpur High Court on July 18.

RSS, is the registered and beneficial owner of MV Trident Star, whereas the association is a mutual insurance association that offers protection and indemnity insurance to vessels’ owners, operators and charterers worldwide.

MMC said the vessel, in the course of loading a cargo of 2,500 tonnes of marine fuel oil in August 2016, had an overflow from one of its tanks onto the upper deck of the vessel, which spilled into the sea. The oil spill spread and entered PTP’s premises causing oil pollution damage. Maersk Line reportedly issued a note to divert ships from PTP to Singapore at the time.

RSS had earlier on Feb 17, 2017 obtained a declaration from the Kuala Lumpur High Court limiting its liability to the maximum amount of 4.51 million Special Drawing Rights (equivalent to RM25 million). The filing on July 18 is to secure the interest and right of PTP towards the special drawing rights. Any amount in excess will be claimed against the International Oil Pollution Compensation Fund in London.


VS Industry subscribes for rights shares in HK unit

PETALING JAYA: V.S. Industry Bhd plans to take up a 43.49%, or 200 million of the rights shares to be issued by V.S. International Group Limited (VSIG) at HK$0.23 (RM0.13) for RM25.2 million.

The subscription will be funded via bank borrowings. Trading in VS Industry’s shares, which were halted for an hour pending the announcement at opening, closed trade five sen higher at RM2.05 with some 4.18 million shares done.

VSIG plans to use the proceeds of not less than HK$102.8 million, to repay short-term bank borrowings, fund a new dual lane assembly line, new high tonnage injection machineries, automated equipment and general working capital.

V.S. Industry said it is taking part in the exercise because the group experienced significant increase in both revenue and profit for the six months ended Jan 31, 2017, thanks to a large manufacturing contract signed in mid-late 2016 with an existing customer.

The rights issue price is a 17.8% discount to the last trading price of VSIG of HK$0.28.


Tien Wah follows BAT lead

PETALING JAYA: Tien Wah Press Holdings Bhd is closing down its 57-year -old printing business in Petaling Jaya following the exit of its major customer British American Tobacco (Malaysia) Bhd (BAT) last year.

A total of 237 employees will be made redundant with the winding down of its factory operations here.

Tien Wah told Bursa Malaysia that its wholly owned subsidiary Tien Wah Press (Malaya) Sdn Bhd’s (TWPM) decision to cease its printing business is in line with the reorganisation of its production footprint, which is part of normal routine operational function to improve the group’s strategic positioning to service the customers and reduce operating cost over the longer term.

However, Tien Wah stressed that TWPM is not its major subsidiary as it only constitutes about 13.6% of the group’s audited net assets as at Dec 31, 2016.

TWPM contributed 20.1% and 11.8% to the group’s unaudited revenue and profit before tax for the first quarter ended March 31, 2017 respectively.

TWPM was incorporated in Malaysia in July 1960 and is engaged in rotogravure printing specialising in cigarette cartons and consumer goods packaging, as well as photolithography printing specialising in cartons, labels packaging and advertising materials.

Currently Tien Wah also has two plants in Vietnam, and one each in Australia and Indonesia. It is unknown if the new plant in United Arab Emirates has been completed.

Based on preliminary review, Tien Wah said the estimated cessation cost is RM12.19 million comprising employees redundancy and related costs (RM11.64 million) and asset impairment cost (RM552,000), being the impact to the consolidated earnings for the current financial year ending Dec 31, 2017.

This translates into a reduction of eight sen in earnings per share and net assets per share.

Under the proposed cessation, TWPM’s assets will also be disposed of for RM29.05 million, including plant, machinery and equipment, motor vehicles, repair parts and office equipment.

In explaining the closure, Tien Wah said there is no requirement for duplication of printing base in Malaysia following the cessation of its major customer’s operations in Malaysia and the subsequent shifts in production facilities to Singapore, Korea and Indonesia.

Hence, it noted that it will transfer its majority production volumes from TWPM to Vietnam and Indonesia to improve its strategic position to service the customer and reduce the group’s operating cost over the longer term.

“The board is of view that the reorganisation of its production footprint which involves the cessation of TWPM’s printing business is therefore timely,” it said, adding that the closure is expected to be completed by the end of the year.

Its shares fell one sen to close at RM1.90 yesterday on some 38,800 shares done, bringing it a market capitalisation of RM275 million.

Citing challenging business environment, BAT last year announced the closure of its plant in Petaling Jaya which affected about 230 employees. Its plant in Jalan Universiti will be closed down completely in the second half of the year.

BAT announced its second-quarter results ended June 30, 2017 with net profit jumping three fold to RM144.08 million from RM47.72 million in the previous corresponding period, due to the absence of restructuring expenses incurred last year.

Revenue, however, declined 19.6% from RM962.58 million to RM774.09 million, dragged down by the decline in volume.

It has proposed an interim dividend of 43 sen per share for the quarter under review.

BAT’s first half net profit soared 17.2% from RM220.33 million to RM258.31 million on the back of a 22.1% drop in revenue from RM1.98 billion to RM1.54 billion.

The group said it remains concerned over legal volumes continuing to be impacted by the current high incidence of illegal cigarette trade.

“The outlook of the second half of 2017 will be very much dependent on the recovery of the legal market,” it noted.

BAT’s share price ended the day 28 sen higher at RM43.88, with some 577,100 shares changing hands. It has a market capitalisation of RM12.53 billion.


Nam Cheong says it is halting debt repayments

SINGAPORE: Nam Cheong Ltd, which makes offshore support vessels, said it has temporarily stopped repayment of all borrowings and begun discussions with lenders to restructure its bank facilities.

Low oil prices, weak charter rates and delays to projects have hit the performance of Nam Cheong and other Singapore-listed companies in the offshore and marine sector, with many of them struggling to repay their debts.

Nam Cheong has previously said it was reviewing its options to restructure its businesses, operations and balance sheet to ride out the challenging market environment.

“While the restructuring is ongoing, the company has decided to temporarily cease repayment on all of the company’s borrowings,” it said yesterday.

The Malaysia-headquartered firm said it had total bank loans and notes outstanding of RM1.84 billion. It is also proposing to restructure the bonds, which comprise three issuances totalling S$365 million (RM1.1 billion).

Nam Cheong said it will not pay the coupon on one of the notes due on July 23.

It has appointed Pricewaterhouse-Coopers Advisory Services to advise it on restructuring options.

The company reiterated an April statement that it will be faced with a “going concern issue” if its restructuring was not favourably completed in a timely manner. – Reuters