Thursday, September 7th, 2017
LONDON, Sept 7 — The euro and world stocks inched higher today, as markets waited for clues on just how close the European Central Bank is to scaling back its more than €2 trillion (RM10.06 trillion) stimulus program. Traders were left…
LONDON, Sept 7 — HSBC has offered compensation to at least two of the small British businesses caught up unintentionally in a crackdown on illicit money, seeking to limit the damage from an operation that has been criticised by lawmakers and…
PARIS, Sept 7 — Finnish telecoms giant Nokia said today it planned to cut around 600 jobs in France as it seeks to make cost-savings and refocus its loss-making businesses. The group said it planned to reduce its headcount in France by 597, a…
PETALING JAYA: Securities Commission Malaysia (SC) has cautioned investors on the emergence of the digital token-based fundraising activities or investment schemes, following the recent crackdown on illegal foreign exchange trading schemes in the country.
SC said in a statement yesterday that these activities may also be referred as “initial coin offerings” (ICO), “initial token offerings”, “token pre-sale” and “token crowd-sale”.
ICO scheme operators typically raise funds through the issuance and sale of digital tokens, in exchange for investors paying for these tokens through virtual currencies, such as Bitcoin or Ethereum.
SC noted that these schemes can be structured in many forms, including direct investments in projects that enable token holders to participate in a share of the returns, seeking funding through foundations where investors are not entitled to any returns, and issuance of tokens which entitle the investors to enjoy rights to a future product or service.
Hence, investors are urged to be mindful of the potential risks involved in ICO schemes as the operators may not have presence in Malaysia and it would be difficult to verify the authenticity of the scheme and the recovery of invested monies may be subject to foreign laws or regulations; some ICO schemes and the parties involved operate online and may not be regulated, which expose investors to heightened risks of fraud, money laundering and terrorism financing; digital tokens traded on a secondary market may give rise to risks of insufficient liquidity or volatile and opaque pricing; the structure of ICO schemes might limit the legal protection and recourse for investors against scheme operators.
As the terms and features of ICO schemes may differ in each case, the SC reminded investors to seek legal or other professional advice if there are doubts on the legitimacy of the schemes.
SC also noted that investors should fully understand the features of an ICO scheme, and carefully weigh the risks before parting with their money.
“For example, investors should be aware that ICO scheme operators issue a ‘white paper’, which typically contains descriptions of the ICO scheme but may also carry disclaimers which absolve the operators from certain responsibilities and obligations.”
KUALA LUMPUR: Malaysian universities are not producing the type of graduates needed to drive innovation and research and development (R&D), both of which are necessary to move the nation forward.
Professor Dwight H. Perkins, the Harold Hitchings Burbank Professor of Political Economy, Emeritus, at the Faculty of Arts and Sciences of Harvard Kennedy School, said Malaysia is at a point where it will have to innovate very substantially.
“The question becomes whether Malaysia has the capacity here in the country to carry out that kind of innovation. Are the institutions, supporting infrastructure adequate to support that kind of activity? The first and foremost question is whether the education system is capable of producing the people that Malaysia needs to lead this endeavour,” he said at a seminar yesterday.
The seminar titled “Policy Imperatives to Drive Future Growth” is the third in a four-part seminar series jointly organised by the Jeffrey Cheah Institute on Southeast Asia and Malaysian Economic Association.
“Going forward, I think the big problem is where we are going to get human capital that is going to lead a nation towards an economy where innovation – domestic innovation by domestic people – is absolutely essential and where do you get the human resources to do that,” he added.
Perkins noted the brain drain issue in Malaysia, whereby many students who move up to tertiary level go abroad. In addition, a large number of Malaysians who go abroad for training do not come home but remain or move to countries like Singapore, China and the US.
He said one of the problems with the education system is the nature of Malaysian universities whereby the presidencies are picked by the government.
Although there was an effort to bring quality into the faculties, he noted that there was a lot of politics involved as well. While Malaysian universities picked their management, faculties and students primarily on the basis of merit, a very substantial portion of the population is still excluded.
While efforts to eliminate the relationship between ethnic group and occupation continue to this day, Perkins said, the biggest problem in universities is that all the privileges are going to people who are already privileged.
This is a major reason why the universities are not what they should be, he said, adding that if teachers are brought in without merit, it would be cheating the students.
“A few years ago I was pretty optimistic that Malaysia was going to make the necessary changes; I am a lot less optimistic today,” he said.
PETALING JAYA: Analysts have maintained their earnings forecasts on CIMB Group Holdings Bhd after news that it will acquire the entire equity stake in stockbroking firm Jupiter Securities Sdn Bhd for RM55 million cash.
In a report yesterday, MIDF Research said the research house is “neutral on the announcement but understands the need for such acquisition”.
The acquisition of Jupiter Securities is related to CIMB’s proposed partnership with China Galaxy International Financial Holdings Ltd.
CIMB’s existing stockbroking licence is mainly for its investment banking division, while the Jupiter licence will be utilised by CIMB-Galaxy JV to operate in Malaysia. Jupiter Securities is a 74.43% subsidiary of Olympia Industries Bhd.
While CIMB management had previously estimated there is a potential uplift of 100 basis points to cost-to-income ratio, MIDF Research does not foresee a positive impact in the immediate future.
“We believe the impact will only be felt in FY18 given the time it will take to clear the various jurisdictional issues.”
MIDF Research mainatained its “neutral” call on CIMB with an unchanged target price of RM7.10.
The research house continues to be optimistic of CIMB’s prospects, but is of the view that the positive outlook has already been priced in, thus making no changes to its FY17 and FY18 forecasts.
HLIB Research is also maintaining its forecasts on CIMB as the deal will only be completed in early FY18 after receiving all necessary approvals.
It believes that the purchase consideration will be offset with the huge cost savings from the JV.
“We strongly feel that FY17 will be a year of further tweaking of business operation with priority of cost and capital optimisation. Management’s guidance for a sustainable 40%-60% payout should entice the shareholders moving forward.”
HLIB Research kept its “hold” stance on CIMB with a target price of RM6.90.
At Thursday’s market close, CIMB shares rose 16 sen to RM6.91 on 16.76 million done.
Meanwhile, Olympia gained 1.5 sen or 10.3% to 16 sen, with 100.55 million shares changing hands, being the second most actively traded stock.
KUALA LUMPUR: The Malaysia Retail Chain Association (MRCA) is sticking to its retail growth forecast for Malaysia at 4.5% this year in view of the influx of tourists, despite the challenging retail landscape and other retail groups revising retail growth projection downwards.
Earlier this week, independent retail research firm Retail Group Malaysia (RGM) had revised its annual growth forecast downwards from 3.9% to 3.7% for the Malaysia retail industry in 2017, the second revision since end of last year on the back of lower purchasing power.
Nonetheless, MRCA president Datuk Garry Chua emphasised that it is still maintaining its retail growth projection at 4.5%, driven by tourism.
“I’m optimistic. I trust that the government is doing a lot to boost the economy. For the retail and franchising fraternity, one of the most important things is tourism. Hopefully the government doesn’t cut the budget (for tourism). With more budget, you can do more promotion overseas and bring in more tourists,” he told reporters at the MRCA’s Up Close & Personal with the Media 2017 event yesterday.
He said Malaysia has tremendous potential in terms of tourism and tourist arrivals bring an instant multiplier effect to the economy, from transport, hotel, food to shopping.
However, Chua opined that the implementation of the tourism tax is not expected to impact the retail industry.
“RM10 (tourism tax) is a small thing. We don’t think it will affect us adversely,” he said.
On the budget wishlist, Chua requested for government-friendly policies, including tax breaks and incentives for the retail industry, as well as some mechanism of support to boost online retail.
Today MRCA has over 400 members who have expanded locally and internationally, with franchise and retail store operators covering more than 25,000 outlets throughout Malaysia, providing over 100,000 job opportunities to Malaysians.
PETALING JAYA: Amanahraya Real Estate Investment Trust or Amanahraya REIT (ARREIT), is acquiring Vista Tower on Jalan Tun Razak, Kuala Lumpur, for RM455 million cash.
In an announcement to the stock exchange, it said AmanahRaya-Kenedix REIT Manager Sdn Bhd, the REIT’s management company, had entered into a conditional sale and purchase agreement with The Intermark Sdn Bhd for the proposed acquisition.
The purchase sum represents a 13% discount to Vista Tower’s current market value of RM523 million.
“Pursuant to this, the proposed acquisition is value accretive as there will be an immediate unrealised gain of RM67.1 million to be recognised by ARREIT,” it noted.
The proposed acquisition is in line with ARREIT’s key investment objective to invest in properties that are yield accretive, value accretive and are able to continuously generate sustainable return to the unitholders. Currently Vista Tower’s occupancy rate stands at 74.4%.
With the proposed acquisition, ARREIT’s total asset value will increase from RM1.04 billion as at June 30, 2017 to RM1.56 billion.
Trading in ARREIT shares was suspended pending the material announcement and will resume today.
PETALING JAYA: Mitrajaya Holdings Bhd has clinched two construction contracts worth a total of RM377.45 million.
It told Bursa Malaysia that its wholly owned subsidiary, Pembinaan Mitrajaya Sdn Bhd, has accepted its appointment as the contractor for the construction and completion of a building and car park for an institute of higher learning in Kuala Lumpur for RM333.55 million.
The contract will begin on Sept 5, 2017 for a duration of 24 months and is expected to be completed by September 2019.
Meanwhile, Pembinaan Mitrajaya also accepted a contract from Gema Padu Sdn Bhd to build three blocks of apartment residences at Kota Warisan, Sepang, under the Rumah Selangorku scheme for a contract sum of RM43.91 million.
The contract is for a duration of 36 months and is expected to be completed by August 2020.
Both contracts are expected to contribute positively to Mitrajaya’s future earnings.
The stock was up two sen to close at RM1.10 yesterday, with some 5.8 million shares changing hands.