Wednesday, December 20th, 2017


Wall Street takes a breather as tax bill nears passage

NEW YORK, Dec 20 — US stocks were little changed today as the long-awaited tax bill was all but assured of becoming law, allowing investors to take a breather after a month-long rally in anticipation of the largest overhaul of the US tax code in…

Selangor MB countersues Puncak Niaga

SHAH ALAM: Selangor Mentri Besar Datuk Seri Mohamed Azmin Ali has filed a counterclaim against Puncak Niaga Holdings Bhd alleging that the company’s lawsuit is an abuse of process.

Azmin is claiming general damages, interest and costs, according to Puncak Niaga’s filing with the stock exchange today.

Last month, Puncak Niaga filed a RM14 billion lawsuit against Azmin, his predecessor Tan Sri Abdul Khalid Ibrahim and the Selangor state government over the forced takeover of its water assets.

Azmin was previously expected to file an application to strike out Puncak Niaga’s lawsuit. At the case management of the Selangor government’s application to strike out Puncak Niaga’s suit today, judge Datuk Akhtar Tahir, in chambers, made directions for the filing of pleadings, the exchange of affidavits and submissions.

He fixed Jan 23, 2018 for the delivery of his decision of the Selangor government’s application to strike out the suit. Khalid’s application to strike out Puncak Niaga’s suit is also fixed for decision on the same day.

The Selangor government’s sealed strike-out application together with the affidavit in support was served on Puncak Niaga’s solicitors on Tuesday (Dec 19). Khalid had filed his strike-out application on Nov 27, 2017. Both Khalid and Azmin have filed and served their respective defences.

Akhtar had previously directed the parties to attempt mediation in January 2018. He fixed Feb 12, 2018 for pretrial case management and March 28-30, 2018 for trial.

Puncak Niaga claims Khalid and Azmin had abused their powers by threatening to cause, or attempting to cause, the federal government to invoke the use of the Water Services Industry Act 2006 to force a takeover of the state’s water industry. It said the Selangor government is vicariously liable for the acts of Khalid and Azmin.

In 2014, the Selangor government and the federal government signed an agreement which would see the state government take over four water concessionaires operating in the state, namely Puncak Niaga, Syarikat Bekalan Air Selangor Sdn Bhd, Konsortium Abbas Sdn Bhd and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash).

The state government has taken over water assets belonging to the three companies, except for Splash.

Puncak Niaga shares were unchanged at 62 sen today, with 139,000 traded.

Malaysian M&As, IPOs to climb in next two years, peak in 2019

PETALING JAYA: Malaysian mergers and acquisitions (M&A) and initial public offerings (IPOs) are forecast to climb over the next two years and peak in 2019, before easing back in 2020.

Wong & Partners, a member firm of Baker & McKenzie International, said in the third edition of the Global Transactions Forecast that IPOs will rise to US$2.74 billion (RM11 billion) in 2019.

The forecast predicts the number of M&A deals to rise to 390 in 2018, from 255 this year, with the value of these deals jumping from US$6.1 billion in 2017 to US$13.1 billion in 2018, and US$15.2 billion in 2019.

“After a few soft patches in 2017 we have a more optimistic outlook for the global economy and deal making in 2018, as long as the brakes are not put any further on global free trade,” Baker McKenzie’s global chair Paul Rawlinson said.

“We see an uplift in both M&A and IPO activity as deal makers and investors gain greater confidence in the business prospects of acquisition targets and newly listed businesses,” he added.

Additionally, the forecast said the easing of key economic and political risks as well as the emergence of positive macroeconomic deal drivers will accelerate global deal activity in 2018, after a period of apprehension for global deal makers earlier this year.

Following on the momentum created in recent months, the forecast, developed in association with Oxford Economics, predicts the global deal cycle to peak next year, while Malaysia and the wider Asia-Pacific region are set to peak a year later.

According to Oxford Economics, gross domestic product growth in Malaysia has accelerated to 5.6% in 2017, 1.5 percentage points faster than in 2016, largely because of increased government support for household spending.

“Alongside major government infrastructure investments and the solid outlook for world trade, conditions support a rebound in deal activity,” it said.

Commenting on the report, Wong & Partners head of corporate, commercial & securities Brian Chia said while the forecast numbers prepared by Oxford Economics are quite bullish, the firm does see a definite pick-up in interest around deal making in Malaysia, both domestically and by foreign investors.

“Macro-economic conditions are set to remain favourable, and Malaysia is well positioned at the heart of Asean.”

Overall, the forecast predicts Asia-Pacific’s M&A activity to peak at US$754 billion and domestic IPOs at US$82 billion in 2019.

MyCC has collected RM3m of RM23.4m in total fines imposed so far

PETALING JAYA: The Malaysia Competition Commission (MyCC) has collected just over RM3 million of the total RM23.4 million in fines imposed for six cases since the establishment of the agency in April 2011.

This is due to two pending cases – Malaysian Airline System Bhd (MAS)-AirAsia Bhd and MyEG Services Bhd, with the former pending judicial review by the High Court in March next year after the Competition Appeal Tribunal agreed to set aside the fines against both airlines in February 2016.

MAS and AirAsia were imposed a financial penalty of RM10 million each as their collaboration agreement in 2011 had violated the Competition Act 2010.

Meanwhile, in June 2016, MyCC imposed RM2.27 million in financial penalty on MyEG after it was found to have abused its dominant position in the provision and management of online foreign worker permit renewals. It is now in under appeal.

On the dispute between between MyCC and the General Insurance Association of Malaysia (PIAM) over insurance claim payments for motor repairs, MyCC director of enforcement Iskandar Ismail said the decision will only be known next year.

“The oral representation session is still ongoing, it’s quite complicated as there are 22 general insurance members involving 11 lawyers. At this moment, we can’t disclose any details,” he said at a media workshop organised by the MyCC here today.

Last February, MyCC announced that a proposed decision to impose a RM213.45 million fine on PIAM and its members due to the agreement between PIAM and the Federation of Automobile Workshop Owners’ Association of Malaysia for fixed trade discount rates for parts of certain vehicle makes, and labour hourly rates for workshops under the PIAM Approved Repairers Scheme.

Both PIAM and Bank Negara Malaysia (BNM) had said the agreement was reached on a central bank’s directive to resolve significant consumer complaints regarding repair times in the motor insurance industry. BNM also noted that MyCC’s proposed decision would severely impact consumers’ interests.

MyCC, an agency under the Domestic Trade, Cooperatives and Consumerism Ministry, safeguards the process of free and fair competition in commercial markets for the benefit of consumer welfare, efficiency of enterprises and the development of the economy.

Customs slaps Westports with RM59.5m bills of demand

PETALING JAYA: Westports Holdings Bhd’s wholly owned subsidiary Westports Malaysia Sdn Bhd has been slapped with several bills of demand totalling RM59.50 million by the Royal Malaysian Customs.

The port operator said in a Bursa Malaysia filing that the bills of demand dated between July 17 and Sept 29, 2017 includes inter alia, time-barred assessments for the years 2008 to 2011, import duty remittance for purchases of equipment and Goods and Services Tax for purchases made after April 2015.

“Westports Malaysia Sdn Bhd has been engaging with the Royal Malaysian Customs and the Finance Ministry, and has also sought additional inputs to provide guidance to the company but received an unfavourable decision from the authorities on Dec 19, 2017,” Westports said.

Nonetheless, it noted that an appeal is in process to facilitate the convergence towards an amicable settlement in relation to the demands.

Westports is of the view that the demands will not impact the group’s net assets.

The stock gained 0.28% to close at RM3.57 with some 69,200 shares done.

UEM Sunrise to sell Johor land for RM82m

PETALING JAYA: UEM Sunrise Bhd has proposed to dispose of its 28.99-acre freehold land in Johor Baru to Kimlun Corp Bhd’s indirect wholly owned Kii Morris Sdn Bhd (KMRSB) for RM82.1 million.

UEM told the stock exchange today, its indirect wholly owned subsidiary Nusajaya Greens Sdn Bhd has entered into a sale and purchase agreement with KMRSB for the proposed land disposal.

UEM said the land is currently used for a temporary workers accommodation and will be demolished prior to the completion of the proposed disposal.

Meanwhile, Kimlun said the proposed acquisition provides an opportunity for the group to increase its land size in strategic location. It plans to build commercial properties on the land.

Both UEM Sunrise and Kimlun shares were unchanged at RM1.05 and RM2.25 today.

Salcon sees potential RM3m liability from legal suit against Terra

PETALING JAYA: Salcon Bhd’s wholly owned subsidiary Salcon Engineering Bhd, which will be appealing to the Court of Appeal in relation to its lawsuit against Terra Environment Management Sdn Bhd, could see a potential liability of RM3 million from the litigation.

“A total of RM3 million will be provided for in the audited financial statements for the financial year ending Dec 31, 2017 in respect of above litigation,” the group explained on the financial impact that could arise from the suit.

However, Salcon Engineering could see positive financial impact for the financial year ending Dec 31, 2018, should it be successful in its appeal.

The judgement ruled against Salcon Engineering was in relation to a sewer pipes project awarded to Terra, for which the former is looking to appeal.

Terra sought RM2.31 million via a writ of summons claim filed in November 2015 on the basis of being underpaid for works completed as per the agreement.

The project based in Kota Kinabalu involved high power water jetting (HPWJ) cleaning, CCTV inspection work and non-dig repair works.

Salcon’s share price was unchanged at 46 sen with some 1.02 million shares done.

Asahi sells Tsingtao to Chinese firms

TOKYO, Dec 20 — Japanese brewer Asahi Group Holdings said today it would sell its 19.99-per cent stake in Tsingtao to the Chinese brewer itself and to Fosun Group. Fosun will pay US$847 million (RM3.4 billion) to purchase about 90 per cent of…

Bright prospects seen for glove industry

PETALING JAYA: There is plenty of optimism in the glove industry, underpinned by the expanding healthcare industry for both public and private sectors, as well as the rising hygiene standards that drive the demand for gloves over the long term, according to AmInvestment Bank.

On Tuesday, the country’s top three glove makers, namely Top Glove Corp Bhd, Hartalega Holdings Bhd and Kossan Rubber Industries Bhd (Big Three), saw their share prices jump to all-time highs.

Today, Top Glove gained 7.62% or 57 sen to RM8.05 on some 9.18 million shares done, while Hartalega rose 6.34% or 68 sen to RM11.40 with 4.9 million shares changing hands. Meanwhile, Kossan gained 1.93% or 16 sen to RM8.46 with 1.6 million shares traded.

However in its report today, AmInvestment said it is maintaining its “neutral” stance on the sector as it believes the market has fully priced in the sector’s strong fundamentals.

The research house noted that the Malaysian Rubber Glove Manufacturers Association has projected the global glove demand to grow by 8% to 10% per annum in the coming years.

Over the immediate term, it said Malaysian glove makers will also continue to benefit from the glove supply shortage in China, following the massive shutdown of vinyl glove factories in China recently due to environmental issues.

“However, we are mindful of a potential supply glut at some point, with most players having embarked on aggressive capacity expansion in recent years. This could end in severe price undercutting that would hurt margins,” it said.

Meanwhile, the research house said it estimates the combined production capacity of the “Big Three” will expand by a whopping 17% to 121 billion pieces annually in 2018, versus a 7.5% growth this year.

Additionally, it said with input costs denominated largely in ringgit while export sales in US dollar, glove makers stand to lose from a strengthening ringgit (a reversal from the windfall they enjoyed due to the weakening ringgit in recent years).

AmInvestment’s top pick for the sector is Kossan, with a fair value of RM7.51.

“We like Kossan for its strength in research and development which translates to product innovation; investments in automation which boost efficiency and cut reliance on foreign labour; and earnings buffer from a non-glove business,” it added.

Ringgit closes higher on heightened interest

KUALA LUMPUR, Dec 20 — The ringgit closed higher against the US dollar today on renewed buying interest despite higher consumer price index (CPI) recorded in November, said a dealer. At 6pm, the local unit was ended at 4.071/0770 against the…