Monday, September 25th, 2017

 

Wall Street lower as technology stocks drag

NEW YORK, Sept 25 — A selloff in technology stocks, led by Facebook and Apple, drove down major Wall Street indexes today. Apple fell more than 1 per cent, extending its losses from last week due to a lukewarm response to its iPhone 8…


Golden Palm Growers plantation investment scheme withering?

PETALING JAYA: Golden Palm Growers Bhd’s plantation investment scheme, which allows investors to own oil palm plots without the hassle of becoming a smallholder, appears to be shrivelling, disappointing its investors who have waited more than seven years to reap promised returns.

The company, previously known as SPC Sawit Sdn Bhd, began its operations in August 2010. It is part of Australian stock exchange-listed Sterling Biofuels International Ltd.

Golden Palm Growers recorded RM3.48 million in revenue with net loss of RM23.98 million for the financial year ended June 30, 2016, based on its latest filing with the Companies Commission of Malaysia.

Sterling Plantations Ltd owns a 99.7% stake in the company, while the remainder is owned by Saham Bangga Sdn Bhd. It counts Datuk Paragash C.R. Suberamaniam, group managing director and executive chairman of Sterling Plantations, as its director.

The company previously said that in the first six years of development, investors will receive a guaranteed return of 6% a year plus a discretionary bonus.

In a recent note, the local think-tank Minority Shareholder Watchdog Group (MSWG) said the management company of the investment scheme has called its investors to a meeting on Oct 2, 2017 to determine the scheme’s future.

The organisation said the management is seeking approval from the growers for a grace period of 12 months to find an “optimal realisation” for the plantation; and an immediate sale of the plantation which “may result in a distressed and lower price sale”.

“Notwithstanding the bar for governance had been set reasonably high (being governed by the Companies Commission of Malaysia under the ‘Sharefarming Scheme’ category), losses are now looming for the investors.

“While it might have appeared fundamentally sound and backed by real plots of land at the time, investors need to realise that annual income yields of between 8% and 9% are difficult to achieve on a consistent basis, especially in a sector as cyclical and susceptible to other asset classes as crude palm oil, so the appropriate caution should have been exercised,” it said.

The local think-tank said it believes that the scheme’s promoter failed to take into consideration of the rising operation cost of managing oil palm plantations, which could then have adversely affected its financial position and caused the scheme to default on the payment of the income yield.

Meanwhile, MSWG has been making efforts to engage with the regulator, management company and investors to get an insight and explanation on the issues concerning the scheme.

MSWG will hold a forum with affected growers today to facilitate a discussion on the issues with the scheme.

The country’s first oil-palm farm sharing scheme, Country Heights Growers Scheme, founded by Tan Sri Lee Kim Yew, went bust in 2012 five years after its launch. Some 10,000 growers were compensated however a year later, with three payments totalling RM319 million. This was reportedly compared to the RM215.5 million raised in 2007.


MISC selling stake in Langat tank terminals to partner Dialog for RM193m

PETALING JAYA: MISC Bhd is disposing of a 45% stake in Centralised Terminals Sdn Bhd (CTSB) to its joint venture partner Dialog Group Bhd for RM193 million.

MISC said the disposal sum consists of the purchase consideration for MISC’s shares amounting to about RM137 million and the repayment of shareholder’s advances and accrued interest by Dialog on behalf of CTSB amounting to RM56 million.

After proposed disposal, CTSB will cease to be a joint venture company of MISC, but will become Dialog’s wholly owned subsidiary.

MISC said the proposed disposal is in line with its initiative to divest non-core tank terminal business and focus on its core business in the energy-related maritime solutions and services.

CTSB owns an 80% stake in Langsat Terminal (One) Sdn Bhd and Langsat Terminal (Two) Sdn Bhd, which are involved in the provision of centralised tankage and tank terminal facilities to the oil, gas and petrochemical industry.

Operational since 2009, both terminals have a total storage capacity of 647,000 cubic metres and are currently fully utilised on term contracts.

Dialog noted that the proposed acquisition presents the right opportunity for the group to increase its equity ownership of existing tank terminals with proven track records.

“Full ownership would allow control and enhance accelerated decision-making to align CTSB to Dialog’s strategic direction as well as to facilitate future expansion by CTSB.”

At yesterday’s market close, MISC shares were unchanged at RM7.38 on 924,900 done, while Dialog shares fell one sen to RM1.99 with 13.76 million traded.


More US business economists see risks of slowdown: Survey

NEW YORK: Amid uncertainty over President Donald Trump’s growth agenda, US economists increasingly are worried about risks to the economy, though they see little chance of a recession near term, according to a survey released today.

The National Association for Business Economists (NABE) quarterly survey showed little change in the forecasts compared with June in key areas such as economic growth, which was projected at 2.2% in 2017 and 2.4% in 2018.

But the September survey of about 50 economists showed 48% believe the risks to the economy are weighted to the downside, indicating chances for an economic slowdown, while 43% see the risks tilted to the upside, meaning growth could outpace forecasts.

That is a shift from June, when upside risks outweighed downside risks by 60% to 36%.

Ken Simonson, a survey analyst for NABE and the chief economist of the Associated General Contractors of America, cited a number of factors behind the somewhat more pessimistic outlook.

“There probably is more concern about North Korea and perhaps the Federal Reserve seems closer to making a move towards tightening,” he told AFP.

However, “downside doesn’t translate into expectation of recession, but slower growth”.

Simonson also said decreased optimism about the success of Trump’s agenda in Washington likely contributed to the shift.

The survey showed 73% of respondents believe individual tax cuts will be enacted by the end of 2018, down from 83% in the June survey. And 61% now see an infrastructure plan enacted, down from 83% previously.

And those figures are much higher than those in NABE’s semi-annual survey of a larger group of economists released last month, which also showed rising concerns.

Simonson said he was highly sceptical Washington will produce a major tax overhaul by the end of 2018 given the complexity of the issue and the sharp political polarisation in Congress.

Still, nearly three-quarters of panelists viewed the odds of a 2018 recession as 25% or lower, with the remaining group seeing the chance as 26% to 50% probability.

The survey was conducted while Hurricane Harvey pummelled Houston, but before Hurricane Irma hit Florida. The report made no attempt to assess the impact of the storms.

Analysts say hurricanes typically depress short-term growth, but the hit is made up for later as rebuilding fuels economic activity.

The forecast for monthly non-farm payroll growth for 2017 was unchanged at 178,000, but unemployment is now seen as averaging 4.4%, down from the 4.5% in June.

Economists expect the Federal Reserve to continue with a strategy of gradual interest rate increases, with the centre of the federal funds target range seen at 1.375% at year-end, and 2.125% by the end of 2018, from 1.00-1.25% currently.

After the Federal Reserve’s two-day policy meeting last Wednesday, analysts foresee a good chance of an interest rate increase in December. – AFP


UOB Malaysia: Online banking users more than doubled over past three years

KUALA LUMPUR, Sept 25 — United Overseas Bank (Malaysia) Bhd (UOB Malaysia) registered a 106 per cent increase in the number of customers using its online banking services in the last three years. In a statement today, it said the number of…


AirAsia inks deal to establish low-cost airline in China

KUALA LUMPUR, Sept 25 — AirAsia Bhd has signed a non-binding term sheet with China Everbright Group, Plato Capital Ltd  and Oxley Capital Ltd to establish a joint venture for a low-cost airline in China. In a filing to Bursa Malaysia today,…


850 SMEs sign up for eTrade programme

KUALA LUMPUR: The Malaysia External Trade Development Corp (Matrade), which urged small and medium-sized enterprises (SMEs) to take advantage of the free trade agreements (FTAs) that have not been widely utilised, said over 850 SMEs have signed up for the eTrade programme. The programme seeks to accelerate exports via e-commerce.

Matrade deputy CEO II of exporters development Sharimahton Mat Saleh said, she expects to achieve the targeted 1,500 SMEs under the first phase of the eTrade programme by end of October, under a collaboration with Alibaba.com as part of the Digital Free Trade Zone initiative.

Matrade offers incentives in the form of e-vouchers for Malaysian SMEs who list their products on Alibaba.com.

“The fees are over RM6,000, but Matrade subsidises RM5,000 so SMEs pay only RM1,138. With the listing, SMEs also enjoy value-added services like microsite listing and showcase, with training by Alibaba and its Malaysian agents so that companies learn how to attract visitors to their products,” she told a press conference after a seminar titled Exploring International Markets organised by Matrade and Yayasan Amal Maaruf Malaysia here today.

Deputy Minister of International Trade and Industry (Miti) Datuk Ahmad Maslan said the eTrade platform helps businesses grow 13 times faster compared with the traditional brick and mortar model.

“When listed (on the eTrade platform), the market opportunity is big. It is one of the easiest approaches to enter the international market but one must fulfill the quality and standards, as well as be able to fulfill customers’ requests,” said Ahmad.

He also urged SMEs to utilise the FTAs available, as one of the reasons for low FTA adoption is that they do not know which countries have FTAs.

“If they export to nine countries in Asean, they get all the facilities under the FTA that has been signed under AFTA (Asean Free Trade Area). The details are in www.miti.gov.my,” said Ahmad.

He said Malaysia has signed seven bilateral FTAs with Japan, Pakistan, New Zealand, India, Chile, Australia, and Turkey. Malaysia is also actively involved with multilateral FTAs via Asean with six regional trading peers, which are China, Japan, Korea, India, Australia and New Zealand.

He said SMEs should focus on countries that have an FTA with Malaysia and export to these countries to benefit from tax breaks and reduced trade barriers.

SMEs constitute more than 98.5% of businesses registered in Malaysia, however, their contribution to Malaysian exports is a mere 18.6%. In the SME Masterplan, the government hopes to increase this figure to 23% by 2020.

Earlier, the seminar saw participation from 157 business owners, including bumiputra-owned companies who are keen to start their export venture. The seminar offered a platform for the companies to gain insights on market opportunities in global markets, particularly in East Asia, Asean, Middle East and Africa.

Malaysia’s total trade surpassed the 1 trillion mark in the January to July 2017 period, with a value of RM1.008 trillion, expanding by 22.7% from the corresponding period in 2016.

The expansion was supported mainly by trade with Asean, China, US, EU, Japan, India and Taiwan.


Berjaya Land makes RM11.5 million net profit for Q1

PETALING JAYA: Berjaya Land Bhd (BLand) saw a net profit of RM11.53 million in the first quarter ended July 31, 2017 from a net loss of RM27.24 million a year ago, on higher profit contribution from lower prize payout at Sport Toto Malaysia Sdn Bhd, property and hotels and resorts businesses arising from higher revenue, and lower finance costs.

The group saw a 3% jump in revenue to RM1.6 billion from RM1.55 billion in the previous year’s corresponding quarter, mainly due to higher revenue from H.R. Owen Plc arising from higher volume of new and used car sales coupled with certain new models available for sale; higher progress billings from property development and investment business; and higher revenue from the hotels and resorts business arising from higher overall occupancy and average room rates.

On its prospects, BLand said the directors expect the number forecast operation (NFO) business to be challenging for the remaining quarters of the financial year ending April 30, 2018 in view of the intense competition from illegal gaming activities coupled with rising costs and weak consumer sentiments.

“Notwithstanding these challenges, the directors are confident that the group will continue to maintain its market share in the NFO business for the remaining quarters of the financial year ending April 30, 2018,” BLand said.

The performance of the hotels and resorts business is expected to remain satisfactory while the property market outlook is expected to remain lukewarm.

“Under the foregoing circumstances, the directors are of the view that the operating performance of the group will continue to remain challenging in the remaining quarters of the financial year ending April 30, 2018.”


JB-S’pore rapid transit link cost depends on track alignment

KUALA LUMPUR: The cost of the Johor Baru-Singapore Rapid Transit System Link (RTS Link) will depend on the final alignment of the rail track, says Minister in the Prime Minister’s Department, Datuk Seri Abdul Rahman Dahlan.

He said Prasarana Malaysia Bhd had taken note of the Sultan of Johor, Sultan Ibrahim Sultan Iskandar’s advice, on an alternative alignment for the rail track.

“The company has agreed to look into it and should be able to complete a study on the new alignment in a month or so and present it to our Singaporean counterpart,” he added.

Abdul Rahman said the design possibilities included a high bridge, low bridge, diagonal bridge and a bridge parallel to the causeway.

He told a media conference this after witnessing the signing of a Memorandum of Understanding (MoU) between Prasarana and Singapore-based SMRT Corporation Ltd today.

The MoU involves the establishment of a joint venture (JV) RTS Link operating company (OpCo). It will design, build, finance, operate, maintain and renew RTS Link’s operating assets like trains, tracks and systems.

Abdul Rahman said the MoU would also pave way for the signing of the bilateral agreement between the two parties by December this year.

It was reported in August this year that Sultan Ibrahim had disagreed with RTS Link’s proposed design as the potentially costly curved concept would disrupt the city’s skyline.

Meanwhile, on the JV signed today, Abdul Rahman said it was unlikely to be a 50:50 venture as it would result in a deadlock in decision making.

“But both sides have agreed and acknowledged the fact that one party had to take a slightly smaller majority for decision making to be easier,” he said.

He did not disclose which party would have the smaller stake in the JV, but said overall, the railway project would be led by Prasarana.

Meanwhile, Prasarana Group CEO, Datuk Seri Azmi Abdul Aziz said construction for the project is expected to begin in 2019.

On financing, Azmi said the company would raise funds in the market with the guarantee issued by the government.

The four-kilometre long RTS Link, which is expected to connect the terminus stations at Bukit Chagar in Johor Baru and Woodlands in Singapore, is scheduled to materialise by end-2024. – Bernama


AirAsia, China Everbright rope in Singapore firms for China low-cost carrier

PETALING JAYA: AirAsia Bhd and China Everbright Group have entered into a non-binding term sheet with Singapore Stock Exchange listed Plato Capital Ltd and Oxley Capital Ltd to start a low-cost carrier in China.

In a filing with Bursa Malaysia, the group said the term sheet contains supplementary information to the Memorandum of Understanding signed between it and Everbright and Henan Government Working Group in May this year, and is intended to confirm the parties interest in establishing the joint venture.

They have 12 months to discuss and negotiate definitive agreements, which will be subject to the approval of the audit committee and board of drectors of AirAsia.

The term sheet is non-legally binding, save for provisions in relation to confidentiality, publicity and exclusivity.