Monday, December 11th, 2017
FRANKFURT, Dec 11 — Wall Street stocks edged higher early today as investors shrugged off an explosion near Times Square that resulted in a handful of injuries, none life-threatening. New York Mayor Bill de Blasio said the explosion, which…
FRANKFURT, Dec 11 — A previously undetected group of Russian-language hackers silently stole nearly US$10 million (RM40.7 million) from at least 18 mostly US and Russian banks in recent years by targeting interbank transfer systems, a…
KUALA LUMPUR, Dec 11 — Khazanah Nasional Bhd today announced the appointment of two deputy managing directors, namely Ahmad Zulqarnain Onn and Tengku Datuk Seri Azmil Zahruddin Raja Abdul Aziz, effective Jan 1, 2018. The investment fund said…
NEW YORK: Bitcoin surged past US$18,000 (RM73,400) after it began trading on its first major global exchange yesterday, the latest in a series of highs that have excited some investors while leaving others nervous of a bubble.
Trading of the controversial digital currency on a futures contract began at 6pm (2300 GMT) on the Chicago board options exchange (Cboe) at a price of US$15,000.
Heavy traffic made the Cboe website inaccessible in the first 20 minutes, but it said that “trading runs on very separate systems and was totally unaffected by the website issues.”
Around 0320 GMT, bitcoin was trading at US$17,750 per unit for the futures contract expiring on Jan 17, thus exceeding the highest value it had reached on alternative non-regulated internet platforms. It even climbed past US$18,000.
A futures contract is a financial product that allows investors to bet on whether the currency’s price will rise or fall.
Bob Fitzsimmons, a futures manager at Wedbush Securities, described the opening as “quiet and steady”, as Cboe data showed around a thousand trades were made in the first two hours.
The Cboe debut is expected to be followed a week later by a rival listing on Chicago Mercantile Exchange.
It marks the first opportunity for professional traders to invest in bitcoin, even as some steer away because of a lack of regulations surrounding the currency.
“It gives it legitimacy. It recognises that it’s an asset you can trade,” said Nick Colas, of Data Trek research.
Among those cheering the launch are the Winklevoss twins, who have been called the first bitcoin billionaires. Critics include financial commentator Jim Cramer, who warns that prices could tumble once the new trading venues open the door to “short sellers”, who bet on downward moves in assets.
The two launches were made possible after a key US regulator, the Commodities and Futures Trading Commission (CFTC), gave the green light to the exchanges on Dec 1, while warning “of the potentially high level of volatility and risk in trading these contracts.”
Anticipation of the first mainstream listings for the digital currency has been a catalyst for a sharp price increase in recent weeks. Bitcoin opened 2017 at around US$1,000, surged past US$10,000 for the first time last month and soared as high as US$16,777 on Thursday before retreating somewhat.
The actual opening of the Cboe market, an electronic trading venue, was a low-key affair, lacking the pomp of an initial public offering, which is often marked by the new entrant ringing the bell of the New York Stock Exchange.
The embrace by mainstream exchanges of bitcoin futures marks a sea change from the days when the digital currency was associated with drug dealing and other illicit activities.
The Cboe said it has taken precautions to address wild fluctuations: trading will be suspended for two minutes if bitcoin prices go up or down 10%, for instance.
“We are committed to continue to work closely with the CFTC to monitor trading and foster the growth of a transparent, liquid and fair bitcoin futures market,” the Cboe said.
Still, plenty of key figures in and around markets are taking a cautious approach to bitcoin, which has no central bank backing it, and no legal exchange rate.
The Futures Industry Association, which includes some of the world’s biggest derivatives brokerages, criticised the CFTC’s move in a letter to the regulator, saying contracts are being rushed through without properly weighing the risks.
“A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses,” the association said.
Several leading financial heavyweights are still studying bitcoin and not serving as financial intermediaries. This group includes JPMorgan Chase, Bank of America Merrill Lynch, Citigroup, Barclays, Morgan Stanley and Societe Generale, said people close to the matter.
Of the larger banks, only Goldman Sachs and ABN Amro are serving as intermediaries for the trades. That means most of the terrain will be dominated by smaller entities that are typically requiring larger than usual margin requirements – funds set aside as collateral in case of losses.
The Cboe, for its part, sought to reassure investors.
“We are committed to continue to work closely with the CFTC to monitor trading and foster the growth of a transparent, liquid and fair bitcoin futures market,” it said in a statement.
Wedbush Securities has lifted its margin requirements and is only permitting trades from clients on a “selected” basis, said Fitzsimmons.
“We are commissioning only the select clients who have experience in bitcoins,” he said.
“Our risk systems are ready and we have made sure we have our customers and firm protected by increased margins and increased scrutiny.” – AFP
PETALING JAYA: Bank Negara Malaysia (BNM), Bank Indonesia (BI) and Bank of Thailand (BoT) have launched local currency settlement frameworks to promote wider use of local currencies for trade and investment.
This is in accordance with two bilateral memorandums of understanding on local currency settlement framework that were signed between the three central banks, on Dec 23, 2016.
The frameworks consist of the rupiah-ringgit, rupiah-baht and an expansion of the existing ringgit-baht one to include direct investment to enrich the existing trade transactions. All three frameworks will be effective from Jan 2, 2018.
In a joint statement today, the central banks said the establishment of the three frameworks: rupiah-ringgit; rupiah-baht; and expanded baht-ringgit frameworks mark a key milestone in strengthening regional financial cooperation between the banks.
“Appointed banks are those, which are among the resilient and healthy banks in each country, have experience in facilitating trade between the two countries, have experience in business relationship with the bank in the counterparty country, and have broad customer base and branch offices in the home country,” they said.
BNM has appointed CIMB Bank, Hong Leong Bank, Maybank, Public Bank, RHB Bank, Bangkok Bank, Bank of Tokyo-Mitsubishi UFJ Malaysia and United Overseas Bank for the operationalisation of the frameworks between Indonesia and Thailand.
“In 2016, Malaysia shared a bilateral trade volume of US$13.8 billion (RM56.3 billion) with Indonesia and US$13 billion with Thailand. However, only 5.8% and 11.4% of our trade with Indonesia and Thailand were settled in local currencies. This is an enormous business opportunity for the financial sector, which has yet to be realised,” BNM governor Tan Sri Muhammad Ibrahim said in his opening remarks at the launch of the frameworks in Jakarta today.
In 2016 intra-regional trade contributed US$521 billion or 23.5% of total trade. Intra-Asean investments rose to a record level of US$24 billion in 2016 and accounted for 25% of total foreign direct investment flows into the region.
SINGAPORE: Malaysia’s Qualitas Medical Group aims to launch a Singapore Exchange IPO of up to S$200m (RM603.8m) sometime between January and February, according to two persons with knowledge of the plans.
We are tentatively looking to lodge the prospectus in January, said one of them.
Majority shareholder Southern Capital postponed a similar-sized Bursa Malaysia IPO in March 2015, following tepid response from investors. The IPO was pulled at the premarketing stage. In addition to Malaysia, Qualitas runs healthcare services in Australia, India and Singapore.
CIMB, Credit Suisse and DBS are working on the IPO. DBS was not part of the original syndicate.
The healthcare services provider was earlier listed on Singapore’s Catalist exchange for small companies before delisting in 2011. – Reuters
TOKYO: Virtual currency Bitcoin – or “digital gold” to its fans – has enjoyed a gravity-defying rise along with wild price swings, sparking fears it could be the latest financial market “bubble”.
Bitcoin was worth just a few US cents when it began life in 2009 and last week changed hands for a staggering US$17,000 (RM69,400) despite having no central bank backing and no legal exchange rate.
Here are some of the most wild speculative bubbles in history – ranging from tulips to teddy bears.
At the beginning of the 17th century, exotic tulips became the ultimate luxury accessory and status symbol for rich and poor alike.
People mortgaged houses and sold businesses just to buy a bulb. At one point, a single tulip bulb fetched up to US$150,000 at today’s prices.
With prices rising to more than 100 times the average annual income, bulbs were being traded for land, livestock and houses – a rare bulb was even considered an acceptable dowry for a bride.
During what is commonly viewed as the first speculative bubble, rumours were deliberately spread to influence prices and there were reports of skullduggery such as training animals to dig up tulip fields.
The bubble burst in 1637 after a disappointing turn-out to a tulip auction in Haarlem. Prices plunged, banks failed and people lost their life savings – all for a pretty flower.
Japanese asset bubble
In the mid-1980s, the Japanese economy ruled the world. Its high-quality, technologically advanced products dominated export markets and everything seemed to be “made in Japan”.
Fuelled by this success – and ultra-loose monetary policy – Japan’s Nikkei index tripled between 1985 and 1989 and Japanese firms were worth nearly half of the entire world’s corporate sector.
With all this money sloshing around and credit cheap and easy to obtain, speculators piled into real estate and prices exploded.
At the height of the boom, it was said the Imperial Palace in central Tokyo was worth the same as the whole of California.
Government policies aimed at deflating the bubble ended up pricking it violently. The stock market plummeted and house prices went through the floor, ruining millions.
The bust ushered in what economists called a “lost decade” of economic stagnation and deflation, the effects of which are still being felt today.
The internet and tech boom of the late 1990s resulted in some “dot.com” companies being valued at billions of dollars despite not having made a cent in profits.
Young internet tycoons became millionaires overnight as investors piled into any company with a dot.com domain name in the belief the web had upended the rules of business.
At the height of the boom came the AOL-Time Warner merger, at the time the biggest in corporate history.
The boom prompted then Federal Reserve chairman Alan Greenspan to warn about “irrational exuberance” in asset prices, widely seen as a warning about the dot.com bubble.
Funding dried up as it became clear many internet companies held wildly inflated valuation based on pie-in-the-sky profit forecasts.
Thousands of internet companies bit the dust and investors lost trillions of dollars as the tech-heavy Nasdaq market spiralled downwards.
The subprime boom-and-bust of the late 2000s was based on extremely complex financial instruments that “sliced and diced” risky mortgage assets and bundled them together.
Banks and mortgage lenders offered credit to uncreditworthy homeowners in the belief that by packaging these loans together, the risks could be reduced.
The financial wizardry fuelled a housing market boom as speculators snapped up houses they never intended to live in to build up their “collateralised” portfolio.
The bust came when investors realised that the flip-side of packaging risk together was that they could not tell where the bad loans were lurking.
The subprime-fuelled housing boom turned to bust and prices plunged, with millions of families losing their homes.
The stock market crashed, unemployment ballooned and the US banking system buckled to the point of implosion, with Lehman Brothers collapsing in 2008.
Beanie Baby boom
A lesser known tale of boom-and-bust is the Beanie Baby craze that occurred around the same time as the internet bubble.
Small stuffed toys worth around US$5 became such a hot craze that people bought them for thousands of dollars, convinced their prices would continue to rise.
The firm that manufactured them, Ty, enjoyed sales of more than US$1 billion and at one point, trade in Beanie Baby toys represented as much as one tenth of the trade on eBay.
The crash came at the end of the 1990s when Ty announced it was ending the toy.
Far from creating excitement by reducing supply, the market was spooked, and soon bears that had been fetching thousands were selling three for US$10. – AFP
BATU KAWAN: The penetration of energy-efficient vehicles (EEVs) in the country is expected to reach 80% of total industry volume (TIV) by 2022.
Second International Trade and Industry Minister Datuk Seri Ong Ka Chuan said this is in line with the National Automotive Policy (NAP) 2014 to make Malaysia a regional EEV hub by 2022.
“The NAP has placed emphasis on green initiatives, with the ultimate objective of establishing Malaysia as a regional EEV hub.
“To date, EEV penetration in our market has been very encouraging and we have set a penetration rate of 80% in 2022,” he told reporters after attending the Boon Siew Honda Motorcycles 60th Anniversary celebration today.
He said the EEV penetration in Malaysia was expected to be ramped up to as much as 50% of TIV by end of 2017, after hitting 42.8% last year.
Ong said the EEV policy was tailored to meet future demand in vehicle technology, alongside the need to produce skilled labour, investments in technology and sustainable mobility.
He commended Boon Siew Honda for its effort in promoting the EEV initiative in Malaysia as it has benefited both consumers and the environment, and contributed to the development of EEVs in Malaysia.
“Such initiative will attract high-quality investments in domestic automotive manufacturing activities and improve the competency of our automotive industry in EEV technology,” he said.
He said Boon Siew Honda had already started the process to introduce hybrid electric vehicles in 2018 and electric vehicles in 2020 in its effort to continue producing reliable, economical and affordable motorcycles for Malaysians.
Ong said that although the local automotive business and motorcycle industry had been declining since 2014, 330,578 units of motor vehicles were sold in the January-September 2017 period compared with 397,918 units for the whole of 2016.
“We anticipate an uptrend in the automotive and motorcycles industry next year, especially in the EEV segment,” he said. – Bernama
PETALING JAYA: SkyWorld Development Group has raised RM50 million through the first tranche of its Sukuk Musharakah Islamic Medium-Term Notes (IMTN) Programme, which forms part of its RM1 billion Islamic bonds issuance.
The property developer said in a statement today, its first landmark RM1 billion financial programme has been set up comprising RM600 million Sukuk Musharakah IMTN Programme and a RM400 million Sukuk Murabahah Islamic Commercial Papers (ICP) Programme, through its special purpose financial vehicle SkyWorld Capital Bhd.
Under the financial programme, SkyWorld and its group of companies will sell their beneficial interest under the respective development projects. The future progress billings with regard to the relevant development projects will be used to fund the remaining construction costs as well as to meet the issuer’s fees, expenses and obligations under each facility.
SkyWorld founder and group managing director Datuk Ng Thien Phing said this is the first structured transaction in Malaysia involving unbilled sales and the first to involve affordable housing.
“Globally, this is also the first shariah-compliant securitisation of progress billings in the market, allowing SkyWorld to more efficiently manage project development cash flows. Despite being a relatively young and emerging developer, SkyWorld is always on the lookout for innovative funding.”
“With over 130 acres of quality land banks totalling more than RM13 billion in gross development value, we are on the right track of transforming the city and unlocking our land value.”