Sunday, November 5th, 2017

 

Fed chief nominee Powell’s approach could benefit ringgit: Economist

PETALING JAYA: The ringgit could benefit should US Federal Reserve chairperson nominee Jerome Powell be approved, considering his “gradualist” approach towards US monetary policy, which could see the local unit stabilising against the greenback.

US President Donald Trump announced the nominee on Friday, which is now subject to approval of the US Senate.

IHS Markit Asia Pacific chief economist, IHS Markit, Rajiv Biswas said the ringgit has already benefited from the resurgent gross domestic product (GDP) growth and booming exports in 2017.

Expectations of the new Fed chairman will take a gradualist approach to further tighten US monetary policy should help to keep the ringgit relatively stable against the dollar in the near term.

“Nevertheless, Asian financial markets still face medium-term challenges as the US Fed continues to gradually tighten monetary policy over 2018-19, with the Fed Funds rate expected by IHS Markit to reach 3% by the end of 2019 and 10-Year US Treasury yields also expected to rise. Consequently, Asian capital markets, which have become intoxicated by very low interest rates and waves of liquidity for the past decade, will face a changing landscape due to the rising US Fed Funds rate,” Biswas said on Asian financial markets.

Powell as the potential successor to Janet Yellen, whose term ends in February, will give the Asian financial markets an assurance that the Fed may not significantly alter its approach to gradual tightening of monetary policy, which will prevent disruptive movements in Asian equities and currency markets by allaying global investor fears that the US Fed could adopt a more hawkish monetary policy.

This, in turn, will help prevent sharp volatility in Asian currency markets, due to anticipation of moderate US Fed rate increases.

The yuan could find stability through renewed investor confidence due to the strengthening of China’s economy and increasing Chinese foreign exchange reserves.


Felda Global Ventures announces VSS, 15% cut in allowances

PETALING JAYA: Felda Global Ventures Holdings Bhd last Friday announced a Voluntary Separation Scheme (VSS), which extends to 236 senior managers, and a 15% cut in allowances for those who stay, as part of its manpower optimisation and frugal cost management exercise.

“This initiative has to begin from the top and it is a signal that we are making tough decisions in order to enhance the confidence of our shareholders and stakeholders,” said group president and CEO Datuk Zakaria Arshad, who is also taking the allowance cut, in a statement. The group expects a 15% take-up of the VSS.

Zakaria, however, clarified that there is no change in the current management structure, citing that S. Palaniappan, who has almost 40 years of experience in the plantation and research and development (R&D) industry will remain as COO of plantation sector in charge of palm upstream, palm downstream and R&D activities while Datuk Khairil Anuar Aziz is COO of the sugar and logistics and others sector, with an added responsibility of overseeing the sugar sector effective January 2018.

The initiatives are in line with FGV’s strategic intent to deliver sustainable performance in the face of a challenging industry and to improve the operational and financial performance of FGV’s core business, the company said.


Growth without scale: Deutsche Telekom’s T-Mobile headache (VIDEO)

FRANKFURT, Nov 5 — The collapse of the attempt by T-Mobile US to merge with Sprint Corp will underline its importance as a driver of growth when its main owner, Deutsche Telekom, reports quarterly results this week. T-Mobile, under charismatic…


Pintaras Jaya confident jobs will pile up for FY18

SHAH ALAM: Foundation and piling specialist Pintaras Jaya Bhd is confident of securing an order book of RM250 million for the financial year ending June 30, 2018 (FY18) and retaining a healthy margin in its tender prices despite having to lower rates in the face of competition.

Chairman and managing director Dr Chiu Hong Keong said it has secured an order book of RM80 million so far, with only RM170 million left in the remaining nine months to meet its order book target. It has tendered for RM1.3 billion worth of jobs, mainly residential and infrastructure projects in the Klang Valley as it wants to rebuild its order book for FY18.

“We think the piling market will improve with the launch of infrastructure projects, especially when the LRT3 site works commence and this is expected to take up a lot of the available piling market capacity. There are also more residential projects (now) compared to 12 months ago. We think that going forward there is enough jobs and we’re confident of securing more,” he told SunBiz recently.

Huge projects like the East Coast Rail Line, Kuala Lumpur-Singapore High Speed Rail and Mass Rapid Transit 3 (MRT3) when implemented will sustain the job flows. The company believes the property market will recover, especially with developments centred around the MRT and light rail transit stations and railway terminals. These developments are generally high density with smaller built-ups and affordable pricing. In addition, the government’s emphasis on PR1MA housing schemes to build affordable homes will boost demand for piling services.

Chiu said the sizeable contracts of infrastructure projects have attracted foreign players from Singapore, Europe, Korea and China. Their presence is increasingly felt and this has resulted in a more competitive environment.

“We have to be more competitive. Pricing is one (aspect), and the other is to depend on our reputation for quality work, timely completion and availability of equipment. These are the factors that will (enable us to) compete against (the other players),” Chiu said, adding that new players could be slower to assemble their fleet and resources as they may not have the equipment in place.

Despite having to bring down rates due to competition, Chiu said Pintaras Jaya is comfortable with its pricing and is still able to achieve a higher margin than its competitors through cost management.

Pintaras Jaya is aiming for a better financial performance in FY18 compared with FY17 on the back of more construction job wins. The construction business contributes about 84% to its revenue. In FY17, it saw a disappointing fourth quarter slowdown in the construction segment, caused by a lack of job wins that blemished the year’s performance.

“There were fewer tenders and more competition, so prices didn’t meet our margin targets. But the future looks much better,” said Chiu.

After an expected slow Q118 as its new jobs are just commencing, he said, the company should do better in the subsequent quarters. Infrastructure projects will drive the growth of the construction industry.

Pintaras Jaya wants to increase its piling rigs, of it has 30 sets currently. It allocates about RM20 million in capital expenditure annually, which can be used to buy three sets of piling rigs.


Pintaras Jaya confident jobs will pile up

SHAH ALAM: Foundation and piling specialist Pintaras Jaya Bhd is confident of securing an order book of RM250 million for the financial year ending June 30, 2018 (FY18) and retaining a healthy margin in its tender prices despite having to lower rates in the face of competition.

Chairman and managing director Dr Chiu Hong Keong said it has secured an order book of RM80 million so far, with only RM170 million left in the remaining nine months to meet its order book target. It has tendered for RM1.3 billion worth of jobs, mainly residential and infrastructure projects in the Klang Valley as it wants to rebuild its order book for FY18.

“We think the piling market will improve with the launch of infrastructure projects, especially when the LRT3 site works commence and this is expected to take up a lot of the available piling market capacity. There are also more residential projects (now) compared to 12 months ago. We think that going forward there is enough jobs and we’re confident of securing more,” he told SunBiz recently.

Huge projects like the East Coast Rail Line, Kuala Lumpur-Singapore High Speed Rail and Mass Rapid Transit 3 (MRT3) when implemented will sustain the job flows. The company believes the property market will recover, especially with developments centred around the MRT and light rail transit stations and railway terminals. These developments are generally high density with smaller built-ups and affordable pricing. In addition, the government’s emphasis on PR1MA housing schemes to build affordable homes will boost demand for piling services.

Chiu said the sizeable contracts of infrastructure projects have attracted foreign players from Singapore, Europe, Korea and China. Their presence is increasingly felt and this has resulted in a more competitive environment.

“We have to be more competitive. Pricing is one (aspect), and the other is to depend on our reputation for quality work, timely completion and availability of equipment. These are the factors that will (enable us to) compete against (the other players),” Chiu said, adding that new players could be slower to assemble their fleet and resources as they may not have the equipment in place.

Despite having to bring down rates due to competition, Chiu said Pintaras Jaya is comfortable with its pricing and is still able to achieve a higher margin than its competitors through cost management.

Pintaras Jaya is aiming for a better financial performance in FY18 compared with FY17 on the back of more construction job wins. The construction business contributes about 84% to its revenue. In FY17, it saw a disappointing fourth quarter slowdown in the construction segment, caused by a lack of job wins that blemished the year’s performance.

“There were fewer tenders and more competition, so prices didn’t meet our margin targets. But the future looks much better,” said Chiu.

After an expected slow Q118 as its new jobs are just commencing, he said, the company should do better in the subsequent quarters. Infrastructure projects will drive the growth of the construction industry.

Pintaras Jaya wants to increase its piling rigs, of it has 30 sets currently. It allocates about RM20 million in capital expenditure annually, which can be used to buy three sets of piling rigs.


Bank of England’s Carney sees slower growth without Brexit deal

LONDON, Nov 5 — Britain’s economy will grow more slowly in the short term if the country fails to secure a future trading deal with the European Union after Brexit, Bank of England Governor Mark Carney said today. Asked in an interview with…


Malaysia bond market weekly updates 5 November 2017

The US Federal Reserve had decided to keep its benchmark interest rate unchanged during the Federal Open Market Committee (FOMC) meeting on Wednesday. However, it signaled a possible rate hike in December, citing that the economy has been expanding at a solid pace and on the back of a strengthened job market. Meanwhile, as widely […]


Saudi Prince Alwaleed has invested billions in companies around globe

DUBAI, Nov 5 — The detention of Saudi Arabia’s Prince Alwaleed bin Talal, known for his big bets on Citigroup and other top Western companies, could have an impact on billions of dollars of investments around the world. For many foreigners,…


Adnoc expected to sign this week US$6b loan with 13 banks, say sources

DUBAI, Nov 5 — Abu Dhabi National Oil Co (Adnoc), the United Arab Emirates oil giant, is expected to sign by the end of this week a US$6 billion (RM25.42 billion) loan which has received commitments from a group of 13 banks, sources close to the…


Crude Palm Oil Weekly Updates – November 4, 2017

Malaysian palm oil futures erased last week’s gains and edged down, after hitting a seven-week high, on weaker local demand and expected higher output, while traders stayed on the sidelines ahead of forecasts at an industry conference later in the day. The benchmark crude palm oil futures (FCPO) contract inched down 0.46 per cent to […]