Wednesday, September 6th, 2017

 

Canada posts Can$3b July trade deficit

OTTAWA, Sept 6 — Canada posted a Can$3.0 billion (RM10.24 billion) trade deficit in July, as widespread price decreases pushed down both import and export figures, the government statistical agency said today. The deficit was less than the…


UK offshore oil, gas sector urges ‘clarity’ on Brexit

LONDON, Sept 6 — The UK must provide “clarity” over its Brexit strategy in order to stimulate jobs and investment in the offshore oil and gas sector, industry body Oil & Gas UK urged today. The clarion call came as the organisation also…


CIMB to acquire Jupiter Securities

PETALING JAYA: CIMB Group Holdings Bhd is acquiring the entire stake in stockbroking firm Jupiter Securities Sdn Bhd for RM55 million cash. The proposed acquisition is a strategic initiative taken in connection with the group’s proposed partnership with China Galaxy International Financial Holdings Ltd, a subsidiary of China Galaxy Securities Co Ltd, wherein Jupiter Securities will be the platform for the partnership’s Malaysia operations.

In a filing with Bursa Malaysia today, CIMB said its wholly owned subsidiary CIMB Group Sdn Bhd has signed a conditional share purchase agreement with the shareholders of Jupiter Securities for the proposed acquisition.

Jupiter Securities is a subsidiary of Olympia Industries Bhd and is a participating organisation of Bursa Malaysia Securities Bhd. It engages in the business of dealing with securities and acting as a stock broker.

Jupiter Securities’ subsidiaries are JS Nominees (Tempatan) Sdn Bhd, JS Nominees (Asing) Sdn Bhd, Jupiter Equities Sdn Bhd and Jupiter Research Sdn Bhd.

In a separate filing, Olympia said it will dispose of its entire 76.55% shareholding in Jupiter Securities for RM42.1 million, enabling the Olympia group to realise its investment in Jupiter Securities and reduce the group’s borrowings.

It expects to use the net proceeds to repay borrowings of RM15 million while the balance of RM26.3 million will be used as working capital for the group.

Based on the latest audited financial statements ended Dec 31, 2016, Olympia said the total estimated gain from the proposed disposal is RM24.6 million and is expected to increase its net assets per share from 38 sen to 40 sen, while reducing its gearing from 44.3% to 37.9%. It expects to complete the proposed disposal by the first quarter of 2018. The transaction is subject to approval from the relevant authorities.

CIMB’s share price fell 0.15% or 1 sen to close at RM6.75 today with 6.84 million shares traded, giving it a market capitalisation of RM61.10 billion.


Toshiba board reaches no verdict on new Western Digital chip proposal, say sources (VIDEO)

TOKYO, Sept 6 — Toshiba Corp’s board, under pressure to clinch a deal for its prized memory chip unit soon, met today to review a revised bid proposed by Western Digital Corp but no agreement was reached, people familiar with matter said.


RM13.3b more in debt funding needed for power sector: RAM Ratings

KUALA LUMPUR: RAM Ratings expects an additional debt funding of RM13.3 billion is required for the local power sector, particularly to fund the large-scale solar plants.

A total of 10,000 MW of capacity will be added to Malaysia’s grid by 2021, based on the Energy Commission’s data as well as the expectation of capacity plant-up in Sabah and Sarawak.

“We envisage the local bond and sukuk markets to be key funding sources for the sector, and estimate that independent power producers would require another RM13.3 billion of debt funding to finance most of these upcoming facilities, including large-scale solar plants,” RAM’s co-head of infrastructure and utilities Chong Van Nee said in a statement today.

The rating agency said the capacity-expansion prospects remain favourable for the power sector and will largely be dominated by fossil-fuel plants, which will remain at the core of Malaysia’s electricity generation despite the push for renewable energy.

To date, up to RM17 billion worth of bonds and sukuk has been raised for the new plants since 2014.

RAM, in its special commentary on the Malaysian power sector “Charging Up Capacity”, maintains the industry’s stable outlook, underpinned by its sound regulatory framework. All RAM-rated sukuk issued by IPPs, except for one, carry a stable outlook.

In line with the country’s resilient economic growth, it expects power demand to keep increasing at around 2%-3% per annum.

RAM Ratings said Malaysia’s power sector delivered yet another steadfast performance in 2016, recording a 5.6% year-on-year rise in electricity demand for the year, mainly driven by the commercial segment and partly due to the increase in electricity consumption for cooling amid the warming effects of the El Nino phenomenon in the middle of the year.

It noted that the market also welcomed the debut of the country’s first H-Class combined-cycle, gas-turbine plant owned byTNB Northern Energy Sdn Bhd (1,071 MW) in Seberang Prai, and Tanjung Bin Energy Sdn Bhd’s 1,000-MW ultra-super critical coal-fired power plant in Johor.

Taking into account the commencement and retirement of plants owned by the utility companies, Malaysia’s collective installed capacity totalled up to about 29,000 MW as of end-2016.


‘RM13b more debt funding needed for power sector’

KUALA LUMPUR: RAM Ratings expects an additional debt funding of RM13.3 billion is required for the local power sector, particularly to fund the large-scale solar plants.

A total of 10,000 MW of capacity will be added to Malaysia’s grid by 2021, based on the Energy Commission’s data as well as the expectation of capacity plant-up in Sabah and Sarawak.

“We envisage the local bond and sukuk markets to be key funding sources for the sector, and estimate that independent power producers would require another RM13.3 billion of debt funding to finance most of these upcoming facilities, including large-scale solar plants,” RAM’s co-head of infrastructure and utilities Chong Van Nee said in a statement today.

The rating agency said the capacity-expansion prospects remain favourable for the power sector and will largely be dominated by fossil-fuel plants, which will remain at the core of Malaysia’s electricity generation despite the push for renewable energy.

To date, up to RM17 billion worth of bonds and sukuk has been raised for the new plants since 2014.

RAM, in its special commentary on the Malaysian power sector “Charging Up Capacity”, maintains the industry’s stable outlook, underpinned by its sound regulatory framework. All RAM-rated sukuk issued by IPPs, except for one, carry a stable outlook.

In line with the country’s resilient economic growth, it expects power demand to keep increasing at around 2%-3% per annum.

RAM Ratings said Malaysia’s power sector delivered yet another steadfast performance in 2016, recording a 5.6% year-on-year rise in electricity demand for the year, mainly driven by the commercial segment and partly due to the increase in electricity consumption for cooling amid the warming effects of the El Nino phenomenon in the middle of the year.

It noted that the market also welcomed the debut of the country’s first H-Class combined-cycle, gas-turbine plant owned byTNB Northern Energy Sdn Bhd (1,071 MW) in Seberang Prai, and Tanjung Bin Energy Sdn Bhd’s 1,000-MW ultra-super critical coal-fired power plant in Johor.

Taking into account the commencement and retirement of plants owned by the utility companies, Malaysia’s collective installed capacity totalled up to about 29,000 MW as of end-2016.


KL shares mixed at end of morning trade

KUALA LUMPUR, Sept 6 — Bursa Malaysia ended the morning session mixed in range bound trading and in taking cue from the weaker performance of its Asian peers, as well as the overnight slide on Wall Street, dealers said. At 12.30pm, the FTSE…


DRB-HICOM quashes talk of change at the helm of Proton

KUALA LUMPUR, Sept 6 — DRB-HICOM Bhd today stressed that its priority now was to formulate a business plan for the national car maker, quashing market talk of changes of key personnel at Proton Holdings Bhd (Proton). “We refer to the various…


Second-quarter corporate results weaker than expected: PublicInvest Research

PETALING JAYA: PublicInvest Research said the corporate results reported in the second quarter (Q2 2017) were weaker than expected, in contrast to the gradual improvements seen in the recent quarters.

“While that may be so, a number of disappointments are coming about as a result of delayed (but now on-track) work schedules and/or higher capacity utilisation expected in the second half of the year, hence the headline numbers looking worse than it actually is,” it said in a report today.

The research house said it recognises companies’ struggles with higher operating costs and lower business volumes being more pronounced than expected, particularly in the consumer and media sectors.

PublicInvest noted that the seeming calm in oil and gas (O&G) stocks seen in the previous Q1 2017 reporting period proved to be a false dawn, with the sector providing the bulk of disappointments in the Q2 2017 results session.

“The slight consolation however is that a number of them will see better second halves of the financial year owing to previously delayed work schedules.”

On this note, PublicInvest said the current quarter’s earnings hits (above and/or in-line) weakened to 62%:38% versus the 71%:29% as at 1QCY17, though still with a positive bias.

It highlighted that most of the downward earnings revisions were in the O&G sector, while gaming, consumer and media sectors saw revisions on account of higher operating cost.

“While construction saw some adjustments, they were predominantly non-operational in nature.”

However, PublicInvest said the bulk of earnings adjustments this current quarter have no significant impact on the KLCI basket of stocks.

“Our earnings growth assumptions for 2017 and 2018 are 3.8% (1QCY17: 4.1%) and 5.6% (1QCY17: 5.4%) respectively,” it added, noting its year-end 2017 index target is maintained at 1,820 points.

PublicInvest’s suggested picks are Century Logistics, Serba Dinamik, LBS Bina, Chin Hin Group, Sapura Energy, VS Industry, Mega First Corporation, SCGM, Yong Tai and Hock Seng Lee.

The research house said it retained its “overweight” stance on the power, O&G and construction sectors, while suggested selective exposure in the banking and manufacturing sectors.

PublicInvest said it continues to like the power sector’s defensiveness and its longer-term earnings stability, intermittent operational challenges notwithstanding.

Meanwhile, it said it anticipates greater pick-up in activity in the O&G sector in the coming year on the back of crude oil price stability, with upstream-based players to benefit more.

On the construction sector, PublicInvest said it expects the sector’s news flows will continue to be positive, as regional economies step up infrastructure-related spending.

“On the cards is the RM55 billion East Coast Rail Line, RM13 billion Pan Borneo Sabah Highway and RM9 billion Gemas-Johor Baru double-track rail project, amongst others.”


Second-quarter corporate results weaker than expected

PETALING JAYA: PublicInvest Research said the corporate results reported in the second quarter (Q2 2017) were weaker than expected, in contrast to the gradual improvements seen in the recent quarters.

“While that may be so, a number of disappointments are coming about as a result of delayed (but now on-track) work schedules and/or higher capacity utilisation expected in the second half of the year, hence the headline numbers looking worse than it actually is,” it said in a report today.

The research house said it recognises companies’ struggles with higher operating costs and lower business volumes being more pronounced than expected, particularly in the consumer and media sectors.

PublicInvest noted that the seeming calm in oil and gas (O&G) stocks seen in the previous Q1 2017 reporting period proved to be a false dawn, with the sector providing the bulk of disappointments in the Q2 2017 results session.

“The slight consolation however is that a number of them will see better second halves of the financial year owing to previously delayed work schedules.”

On this note, PublicInvest said the current quarter’s earnings hits (above and/or in-line) weakened to 62%:38% versus the 71%:29% as at 1QCY17, though still with a positive bias.

It highlighted that most of the downward earnings revisions were in the O&G sector, while gaming, consumer and media sectors saw revisions on account of higher operating cost.

“While construction saw some adjustments, they were predominantly non-operational in nature.”

However, PublicInvest said the bulk of earnings adjustments this current quarter have no significant impact on the KLCI basket of stocks.

“Our earnings growth assumptions for 2017 and 2018 are 3.8% (1QCY17: 4.1%) and 5.6% (1QCY17: 5.4%) respectively,” it added, noting its year-end 2017 index target is maintained at 1,820 points.

PublicInvest’s suggested picks are Century Logistics, Serba Dinamik, LBS Bina, Chin Hin Group, Sapura Energy, VS Industry, Mega First Corporation, SCGM, Yong Tai and Hock Seng Lee.

The research house said it retained its “overweight” stance on the power, O&G and construction sectors, while suggested selective exposure in the banking and manufacturing sectors.

PublicInvest said it continues to like the power sector’s defensiveness and its longer-term earnings stability, intermittent operational challenges notwithstanding.

Meanwhile, it said it anticipates greater pick-up in activity in the O&G sector in the coming year on the back of crude oil price stability, with upstream-based players to benefit more.

On the construction sector, PublicInvest said it expects the sector’s news flows will continue to be positive, as regional economies step up infrastructure-related spending.

“On the cards is the RM55 billion East Coast Rail Line, RM13 billion Pan Borneo Sabah Highway and RM9 billion Gemas-Johor Baru double-track rail project, amongst others.”