Wednesday, August 16th, 2017


US housing starts, permits down sharply in July

WASHINGTON, Aug 16 — US homebuilding unexpectedly fell in July amid broad declines in single- and multi-family home construction, suggesting the housing market was struggling to rebound after slumping in the second quarter. Housing starts…

US stocks rise ahead of Fed minutes

NEW YORK, Aug 16 — Wall Street stocks rose early today ahead of the release of Federal Reserve meeting minutes expected to shed light on the prospects of another interest rate increase in 2017. Key issues in the minutes include commentary on…

Trump renews attack on Amazon, claiming ‘jobs lost’

WASHINGTON, Aug 16 — President Donald Trump today lashed out at Amazon, claiming the US online colossus is doing “great damage” to other retailers and destroying jobs. Trump, who has criticised Amazon in the past, offered no specific facts…

IRB drops winding-up petition against Country Heights unit after tax liability settled

PETALING JAYA: The Inland Revenue Board (IRB) has withdrawn its winding-up petition on a major subsidiary of Country Heights Holdings Bhd after major shareholder Tan Sri Lee Kim Tiong @ Lee Kim Yew settled a RM22.7 million tax liability, including penalties.

The move marks the end of a prolonged dispute between IRB and Country Heights on the tax liabilities at Country Heights Sdn Bhd (CHSB) level, incurred during the Asian Financial Crisis in 1997/98.

In a filing with Bursa Malaysia, the group said the settlement was made in Lee’s capacity as major shareholder, and not personal.

No mention was made, however, of the RM126 million in fixed deposits that Lee placed with a foreign-owned bank that was seized by the IRB in May 2017.

Lee, who is also executive chairman of Country Heights, had taken the action by the IRB as being done in relation to the tax liability and expressed his willingness for the IRB to extract the sum due from CHSB, from the deposits. At that point, the IRB had not given confirmation on whether the seized funds had been, or would be, applied to settle the tax liability.

As at June 22, 2017, Country Heights independent non-executive director Nik Hassan Nik Mohd Amin said IRB was yet to confirm that the seizure was to do with the tax liability at CHSB level.

Despite the lack of confirmation, the board of Country Heights agreed to pay Lee the amount forwarded to IRB, at no interest, once it had the funds to do so. The group, which registered a net loss of RM7.8 million for the first quarter ended March 31, 2017, only had RM5.2 million in cash then.

Low reserve coverage of debt payments a key risk for Malaysia: Moody’s

PETALING JAYA: Moody’s Investors Service said Malaysia’s credit profile is relatively resilient despite external vulnerabilities, but cautioned that low reserve coverage of annual external debt payments is a key risk indicator.

The rating agency said although foreign reserves are still larger than short-term debt by original maturity, once currently maturing medium- and long-term debt is added, the ratio of annual external liabilities due to reserves – as measured by its external vulnerability indicator (EVI) – has been significantly above the 100% threshold for years. Moody’s expects the EVI to stand at 143% for 2018.

It noted that while foreign currency reserves have climbed from a recent trough, they remain lower than aggregate cross-border debt due over the next year.

“An active non-resident investor presence in Malaysia’s financial markets also leaves it vulnerable to sudden swings in capital flows.”

Moody’s said the reserve volatility will be amplified as well due to high foreign investor participation as a result of the exposure to to sudden movements in portfolio investment flows.

Foreign holdings of outstanding Malaysian government debt stand at about 24%, while non-residents account for nearly 27% of total stock market capitalisation.

Moody’s said a rise in short-term external debt could exacerbate fragilities, with total external debt accounting for 72.6% of gross domestic product (GDP), which is in line with the median for A-rated sovereigns.

“However, since mid-2016, short-term external debt by original maturity has risen to 45.1% of external debt, presenting rollover risks. Almost 60% of total external debt is denominated in foreign currency, which gives rise to some exchange rate risk.”

Moody’s said while prudent monetary policy and a large domestic institutional investor base buffer the impact of capital flow volatility, the current account surplus has steadily narrowed, providing less of a cushion now.

Overall, Moody’s said Malaysia’s credit profile is resilient to an escalation in external vulnerabilities.

“It would take a significant deterioration of external metrics from current levels for Malaysia’s credit profile to weaken. Other sources of credit risk would be a sharp growth slowdown or meaningful deterioration in the public finances, neither of which we deem likely at this time,” it opined.

Pharmaniaga’s Q2 net profit 36.5% lower

PETALING JAYA: Pharmaniaga Bhd's net profit for the second quarter ended June 30, 2017 fell 36.5% to RM9.52 million from RM15 million a year ago primarily due to lower production from temporary closure of certain production lines for preparatory works to facilitate the commercialisation of new products that were approved ahead of schedule.

Its revenue dropped 2.6% to RM517.97 million compared with RM531.80 million in the previous year’s corresponding quarter, mainly attributable to moderate orders from government hospitals.

For the six months period, Pharmaniaga's net profit declined 14.8% to RM28.44 million from RM33.37 million a year ago, largely due to lower production by its manufacturing facilities. Revenue of RM1.14 billion was slightly higher than the RM1.09 billion in the previous year's corresponding period.

Pharmaniaga said it registered positive contributions from its divisions during the period under review.

“Although earnings were impacted by the temporary closure of production lines, this will subsequently enable the group to move forward with the commercialisation of new products as some of the products were approved ahead of schedule. This is certainly testament to the group's strong research and development initiatives,” it said.

Moving forward, Pharmaniaga is confident that long-term prospects are bright for the pharmaceutical sector. The group remains focused on continuous improvements throughout its operations, coupled with its ongoing drive to reinforce its position as a leading generics manufacturer.

Merkel says unlikely German taxpayers will fund Air Berlin rescue

BERLIN — German taxpayers will very likely not have to pay for a rescue of Air Berlin, Chancellor Angela Merkel said today, a day after Germany’s second-largest airline filed for bankruptcy protection. Berlin has granted a bridging loan of…

Troubled Cathay loses HK$2.05b in first half 2017

HONG KONG, Aug 16 — Hong Kong flag carrier Cathay Pacific today reported a massive net loss of HK$2.05 billion (approx. RM1.125 billion) for the first half of the year as the airline struggled with intense competition from rivals. The results,…

Paramount Q2 net profit 38% lower

PETALING JAYA: Paramount Corp Bhd saw a 38.6% drop in net profit to RM14.67 million for the second quarter (Q2) ended June 30, 2017 from RM23.91 million in the previous corresponding period, due to lower contribution from its education business and the absence of disposal gain.

Revenue, however, rose 27% to RM184.56 million from RM145.31 million, underpinned by higher sales of RM176 million for the quarter under review. Its six-month sales of RM420 million surpassed the full-year sales of RM402 million for 2016.

The property developer has proposed an interim dividend of 2.5 sen per share for the quarter under review.

Paramount said in a filing with the stock exchange that its property segment’s performance will be underpinned by the breadth of its product portfolio. Its unbilled sales as at June 30, 2017 were RM534 million, higher than the RM503 million it achieved as at March 31, 2017.

Paramount’s first-half net profit fell 31.7% to RM22.97 million from RM33.6 million, with revenue increasing 26.6% to RM327.5 million from RM258.64 million.

On the education front, it sees challenges ahead, particularly in the tertiary segment where competition is intense and highly price sensitive.Barring any unforeseen circumstances, the group is expected to deliver better results for 2017.

Paramount shares were unchanged at RM1.86 with 19,400 traded, giving it a market capitalisation of RM789.19 million.

Paramount Q2 profit 38% lower

PETALING JAYA: Paramount Corp Bhd saw a 38.6% drop in net profit to RM14.67 million for the second quarter (Q2) ended June 30, 2017 from RM23.91 million in the previous corresponding period, due to lower contribution from its education business and absence of disposal gain.

Revenue rose 27% from RM145.31 million to RM184.56 million, underpinned by higher sales of RM176 million. Its six-month sales of RM420 million surpassed the full-year sales of RM402 million for 2016.

The property developer has proposed an interim dividend of 2.5 sen per share.

Paramount’s first-half net profit fell 31.7% from RM33.6 million to RM22.97 million, with revenue rising 26.6% from RM258.64 million to RM327.5 million.