Wednesday, August 9th, 2017

 

Oil inches higher after data points to declining US inventories

NEW YORK, Aug 9 — Oil prices edged higher on Wednesday after a report showed US refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited price gains. US…


Bank Negara: Ringgit futures trading in Singapore against Malaysia’s policy

PETALING JAYA: Trading of ringgit in any shape or form overseas is against Malaysia’s policy, Bank Negara Malaysia said yesterday in censuring the recent introduction of ringgit futures trading at the Singapore Exchange and the Intercontinental Exchange, or ICE Futures Singapore.

Calling the move inconsistent with Malaysia’s Foreign Exchange Administration (FEA) policy and rules, Bank Negara reminded all market participants to observe existing rules, adding that appropriate action under the law would be taken against any person not complying with its rules.

The ringgit is a non-internationalised currency and, thus, offshore trading of ringgit, in any form whether as a non-deliverable forward traded out of offshore financial centres or as a futures, options and other derivative contracts on exchanges outside of Malaysia, is against the country’s policy.

Contravention of the FEA is an offence under the Financial Services Act 2013 and the Islamic Financial Services Act 2013.

Foreign participants should access the onshore ringgit foreign exchange market to meet their financial needs, either directly with onshore licensed financial institutions or their appointed overseas office.

Bank Negara has taken a strong stand against the trading of the ringgit in the offshore market under governor Datuk Muhammad Ibrahim, going as far as to seek written commitment from foreign banks to stop trading the ringgit in the offshore non-deliverable forwards market in November 2016.


MISC net profit down 58.7% in Q2

PETALING JAYA: MISC Bhd’s net profit plunged 58.7% to RM556.5 million for the second quarter ended June 30, 2017 against RM1.35 billion in the previous corresponding period, dragged down by impairment loss on ships, property, plant and equipment as well as the absence of disposal gain.

Revenue dropped 3.8% from RM2.39 billion to RM2.3 billion.

MISC has proposed to declare an interim dividend of 7 sen per share for the quarter under review.

The group said in a filing with the stock exchange that it expects the global oil market rebalancing to continue, impacted by the Opec and non-Opec production cuts, rising drilling activity in the US and uncertainty over Libyan and Nigerian production.

Meanwhile, MISC noted that the liquefied natural gas (LNG) shipping market continues to be affected by newbuild deliveries and expiry of older vessel charters, which have depressed spot rates.

However, the group said it will have limited impact on the LNG segment due to its present portfolio of long-term charters in place.

MISC said the offshore segment will continue to experience stable financial performance due to its long term contracts in hand.

MISC’s first-half net profit fell 35.7% from RM1.92 billion to RM1.23 billion on the back of a 10.5% rise in revenue from RM4.79 billion to RM5.29 billion.

The stock fell 17 sen to close at RM7.33 yesterday on some 1.22 million shares done, giving it a market capitalisation of RM32.72 billion.


HSS Engineers bags one of the first East Coast Rail Link jobs

PETALING JAYA: HSS Engineers Bhd’s (HEB) associate company HSS Integrated Sdn Bhd has been awarded a RM16.5 million job to provide preliminary design consultancy services for infrastructure works for the East Coast Rail Link (ECRL) by China Communications Construction Company (M) Sdn Bhd.

The job is for works from KM0 to KM220 of the ECRL and is to be completed by the end of the year.

The contract will contribute positively to the revenue, earnings and net assets of HEB Group for financial year ending Dec 31, 2017.

The company’s share price closed one sen higher to 96 sen yesterday, with some 5.38 million shares changing hands.


Tata Motors profit up 42pc on strong JLR sales, pensions change

MUMBAI, Aug 9 — Indian carmaker Tata Motors on Wednesday reported a 42 per cent rise in quarterly profits, buoyed by a one-time gain from changes it made to pension plans at British unit Jaguar Land Rover. Consolidated net profit for the three…


Qatar Air targets other US investments after American spat

DOHA, Aug 9 — Qatar Airways hasn’t given up on investing in the US after scrapping plans to buy a stake in American Airlines Group Inc. amid opposition from the Fort Worth, Texas-based company. “We have other opportunities, both in America…


XiDeLang shares flat despite news of deal

PETALING JAYA: China-based XiDeLang Holdings Ltd’s share price closed unchanged at 25 sen yesterday, despite announcing a memorandum of collaboration (MoC) with another Chinese company, Yeli International Ltd, which will see it secure original design manufacturing (ODM) production orders of no less than 210 million renminbi (RM133.8 million) over two years through subsidiary HongPeng Fujian Shoes & Garments Co Ltd.

Year-to-date the company’s stock has increased 150%, compared with the FBM KLCI which has gained 8.3%.

XiDeLang is a rare performer among the group of China-based companies which have been underperforming in the local market. The company’s net profit for the first quarter ended March 31, 2017, more than doubled to RM3.755 million, on a 20% jump in revenue for the first three months, compared with the same quarter in the preceding year. This came on higher sales of its own branding sports shoes and increased orders for ODM production.

For the financial year ended Dec 31, 2016, XiDeLang reported a net profit of RM6.93 million and revenue of RM503.8 million.

The company on Tuesday announced that HongPeng Fujian has signed an MoC with Yeli International, which specialises in high-end footwear products, and possesses better brand resources and a longer collaboration relationship with renowned international footwear and sporting goods companies such as Tempe SA (a subsidiary of Inditex Group) and Intersport (world’s largest sporting goods retailer).

HongPeng Fujian is a footwear and apparel manufacturing company with extensive internal capabilities and expertise on footwear product development and production management. Its existing overseas clientele consist of multiple renowned international brands, which include Zara, Pull & Bear and Diadora. It operates in a modernised eco-industrial park with a built-up area of 82,000 sq m with an annual output value of exceeding 600 million renminbi.


Prosma expects rent-to-own deal with YNH in September

PETALING JAYA: Prosma Bhd expects to finalise a sale and purchase agreement (SPA) with YNH Property Bhd in September, to implement the rent-to-own (RTO) scheme under Komuniti Prefer Malaysia.

Prosma said in a statement yesterday the SPA involves assets amounting to RM53 million in Manjung, Perak, and the rental rate is between RM950 and RM1,200 per month for 30 years.

“This SPA will involve several phases and the first phase is divided into several small fractions of residential units based on demand and Musyarakah Mutanaqisah contract which was successfully executed by applicants who succeeded in the interviews conducted,” it said.

“A total of 1,500 new applications have been recorded throughout the year and applicants will be called in stages for an interview session that will be held afterwards throughout the year,” said Sekretariat Komuniti Prefer Malaysia (SKPM) assistant secretariat Faiz Marzuki.

Under the scheme, Prosma provides a corporate guarantee of between 60% to 100% of the 30-year loan value to financial institutions involved in ensuring the effectiveness of the RTO scheme and as a guarantee of housing loan to be applied by Prosma through local banks.

SKPM is also preparing to call out the successful applicants for the execution of the Musyarakah Mutanaqisah contract with Prosma, which will be held later this month, involving 180 residential units in Telaris Gombak.

Telaris Gombak is being developed by Tiger Synergy Bhd. A total of 80 applicants have been identified and succeeded in the initial interview process conducted by SKPM.

The interview and contract signing session is also being actively conducted for the Prominence condominium in Penang for applicants involving 133 residential units with total assets of RM77 million so far.

Priced at RM500,000 to RM700,000, Prosma said the condominium is catered to the high-income group who wants to own a home without any mortgage facility. The rental rate is RM2,000 to RM3,000 per month including assessment fee borne by Prosma, for 30 years.

Due to low awareness of the RTO scheme, SKPM is now actively conducting briefing and interview sessions periodically to explain the methods and schemes implemented through SKPM.


HLIB Research maintains ‘hold’ on Oldtown

PETALING JAYA: Oldtown Bhd’s secured licensing in Shanghai, China, is not expected to have a significant effect on its earnings but the expansion of the café division to Hong Kong, Myanmar and Jiangsu and Fujian provinces in China since late-2016 represents part of Oldtown’s expansion plans for its fast-moving consumer goods (FMCG) segment, said HLIB Research.

Oldtown recently entered into a territorial licence agreement with Xiamen Kuaike Investment (XKI) to operate café outlets in Shanghai. HLIB noted that Oldtown also secured an agreement with XKI to operate café outlets in Fujian Province back in March 2017.

As part of the agreement, XKI will be granted the exclusive right to operate café outlets within the territory and/or to grant sub-licences in the territory to other operators.

“While we are positive on the latest development, we deem the latest development within our expectation,” HLIB said, adding that while it is positive on the announcement of this agreement, it does not expect it to have a significant effect on earnings.

It said Oldtown’s FMCG exports are accelerating at a rapid pace, which will provide significant revenue contributions for the group going forward.

“Additionally, the opening of new café outlets domestically should take advantage of the recovering consumer sentiment. Despite this, we reckon growth prospects are already priced in at current levels,” added HLIB.

The research house pointed out that risks include relatively elastic demand, rising raw material prices and the occurrence of ringgit strengthening would impact exports.

It maintained its “hold” call on Oldtown with a target price of RM2.75. The stock closed two sen higher at RM2.76, with some 106,700 share changing hands.


Oldtown growing FMCG segment

PETALING JAYA: Oldtown Bhd’s secured licensing in Shanghai, China, is not expected to have a significant effect on its earnings but the expansion of the café division to Hong Kong, Myanmar and Jiangsu and Fujian provinces in China since late-2016 represents part of Oldtown’s expansion plans for its fast-moving consumer goods (FMCG) segment, said HLIB Research.

Oldtown recently entered into a territorial licence agreement with Xiamen Kuaike Investment (XKI) to operate café outlets in Shanghai. HLIB noted that Oldtown also secured an agreement with XKI to operate café outlets in Fujian Province back in March 2017.

As part of the agreement, XKI will be granted the exclusive right to operate café outlets within the territory and/or to grant sub-licences in the territory to other operators.

“While we are positive on the latest development, we deem the latest development within our expectation,” HLIB said, adding that while it is positive on the announcement of this agreement, it does not expect it to have a significant effect on earnings.

It said Oldtown’s FMCG exports are accelerating at a rapid pace, which will provide significant revenue contributions for the group going forward.

“Additionally, the opening of new café outlets domestically should take advantage of the recovering consumer sentiment. Despite this, we reckon growth prospects are already priced in at current levels,” added HLIB.

The research house pointed out that risks include relatively elastic demand, rising raw material prices and the occurrence of ringgit strengthening would impact exports.

It maintained its “hold” call on Oldtown with a target price of RM2.75. The stock closed two sen higher at RM2.76, with some 106,700 share changing hands.