Thursday, December 21st, 2017


Wall Street set to rise after GDP data, tax bill passage

NEW YORK, Dec 21 — Wall Street was set to open higher today after data showed US economy grew at its fastest pace in more than two years in the third quarter, and investors eyed gains from sweeping tax cuts passed by Congress this week. GDP…

Luxury projects freeze could lead to glut in properties below RM1m: Knight Frank

PETALING JAYA: While the freeze on luxury developments will provide a breather for the high-end residential market, it poses a risk of oversupply of units below RM1 million as developers may divert to the more affordable segment.

Noting that housing prices in the capital and key cities have been on the rise since 2010, Knight Frank Asia Pacific’s 2017 round-up and 2018 outlook said developers may shift their focus to the affordable housing segment given the increased allocation under the Budget 2018 to address rising cost of living and affordable housing issues among the lower to middle-income segments of the population.

Income levels were not in tandem with the rise in house prices, bringing the median house prices beyond the reach of most Malaysians. This coupled with a slew of cooling measures implemented progressively since 2012 has led to a continuous decline in sales volume.

“Developers are expected to take stock of the situation by reviewing and replanning their proposed products and may further defer property launches.We expect to see more bite-size units which translate to lower quantum pricing (below RM1 million) coming into the market although moving forward, there may be risk of oversupply in this category of units,” said Knight Frank Malaysia, executive director research & consultancy, Judy Ong.

Meanwhile commercial segment demand for office space situated at key locations such as along rail transport routes as well as serviced office and co-working space, is expected to be positive.

The development and infrastructure progression at the upcoming international financial district of Tun Razak Exchange is expected to revive demand for office space in the Kuala Lumpur city centre.

Serviced office and co-working segments are gaining popularity with changes in technology which supports flexible working culture, particularly among technology start-ups and small and medium enterprises.

“Kuala Lumpur offers opportunities that parallel other western and regional markets, supported by improving pool of premium and good grade office space and transport infrastructure, a multi-lingual educated workforce and competitive cost of doing business amongst others,” said Ong.

Despite it being an unexciting year for mainstream residential markets across the continent, affordability was seen as a key theme in major cities across Asia Pacific.

“On the policy side, we have seen significant house building programmes in a number of markets, restrictions on foreign buyers introduced in New Zealand; while developers in a number of major cities across the region have responded by trending to developing smaller units,” said Knight Frank Asia-Pacific head of research Nicholas Holt.

“The outlook for 2018 is positive but muted, with interest rate increases and a low probability of the lifting of restrictions likely to keep a lid on price growth in many markets. There will, however, be pockets of stronger sentiment across the region,” Holt said of the outlook for 2018.

Singapore is set for a stronger 2018 driven by the buoyant collective sales market while Manila continues to see strength in demand for condominiums. The Indian residential market could start to emerge from its slumber as it absorbs the policy, regulatory and tax changes of the last 16 months.

In the commercial segment, the market was buoyed by demand due the higher than expected economic growth in Asia.

Going into 2018, the office market segment is likely to see increased demand over the next 12 months.

Public Bank, AIA extend regional bancassurance tie-up till 2037

HONG KONG: AIA Group Ltd and Public Bank Bhd have announced a 15-year extension to their existing exclusive regional bancassurance agreement that extends the partnership to 2037.

This new agreement reflects the strength and success of the existing partnership and will enable Public Bank to provide its customers with a broadened range of high-quality life insurance protection and long-term savings solutions from AIA.

Over the next 20 years, AIA and Public Bank will work together, building on the significant progress already achieved, to increase the penetration of life and health insurance across Public Bank’s more than nine million customers.

AIA group CEO and president Ng Keng Hooi said the agreement is aligned with its bancassurance strategy of partnering with leading financial institutions to broaden its distribution capabilities across the region, and it is the most recent in a succession of major new partnerships that AIA has entered into this year.

“We expect the strengthening of our long-term partnership with Public Bank to deliver strong value for AIA’s customers and shareholders over the next 20 years,” he said in a statement.

Public Bank managing director and CEO Tan Sri Tay Ah Lek said this new agreement reflects the success that it has delivered in partnership with AIA and will see the bank further deepening its collaboration as it takes its bancassurance business to the next level not only in Malaysia, but in Asia-Pacific markets where Public Bank has a presence.

JPMorgan breached rules in 1MDB dealings: Swiss authority

PETALAING JAYA: The Swiss Financial Market Supervisory Authority (Finma) found JPMorgan (Switzerland) Ltd to have seriously breached anti-money laundering regulations in connection with business relationships and transactions associated with Malaysian sovereign wealth fund 1Malaysia Development Bhd (1MDB).

In a statement published on its site today, Finma said given the inadequacy of the bank’s controls and the serious breaches which have been identified in the case, Finma will conduct an in-depth review of the bank’s anti-money laundering systems.

To this end, Finma has appointed a monitor to carry out an on-site review of the appropriateness and functioning of the bank’s controls and monitor them on an ongoing basis. This review focuses primarily on the handling of high-risk transactions including, in particular, the monitoring of transactions between personal and business accounts.
Finma has also brought this case to the attention of the Office of the Comptroller of the Currency, the US regulator with overall responsibility for JPMorgan.

Finma, however, has decided not to initiate enforcement proceedings against any individuals based on the outcome of its investigation. Additionally, no monetary penalties or business restrictions have been imposed on JPMorgan, which displayed good cooperation during the Finma-led investigation.

These enforcement proceedings are one in a total of seven such cases brought by Finma in relation to 1MDB. One of these cases remains open.

Enforcement proceedings conducted by Finma into JPMorgan between May 2016 and June 2017 uncovered that the bank had inadequate controls and insufficient monitoring of transactions.

Finma’s ruling, which has not been appealed, is final and binding.

Affin Holdings to boost stake in AXA Affin General Insurance

PETALING JAYA: Affin Holdings Bhd has proposed to acquire an additional 12.87% stake in AXA Affin General Insurance Bhd (AAGI) from Felda Marketing Services Bhd (Felma), an indirect subsidiary of Felda Global Ventures Holdings Bhd (FGV), for RM180.54 million cash.

In a filing with Bursa Malaysia, the group said its unit Affin Bank Bhd has entered into a share purchase agreement with Felma for the proposed acquisition.

Currently, AXA AFFIN GI is a 37.07%-owned associate company of Affin Bank. Upon completion of the proposed acquisition, the bank will hold 49.95% equity interest in the general insurance company, allowing it to record a higher share of AAGI’s results.

FGV considers the proposed disposal as a good opportunity to monetise its investment in AAGI at a commendable return and is in line with the company’s present strategy which is to focus on enhancing its core business performance and strategic divestment of non-core businesses in its effort to maximise the shareholders’ value.

Nonetheless, it said the proposed acquisition is not expected to have a material effect on the group’s earnings and earnings per share for the financial year ending December 31, 2017.

Barring any unforeseen circumstances, the board expects the proposed acquisition to be completed within the fourth quarter of 2017.

Affin Holdings slipped 3 sen or 1.29% to RM2.30 with 134,000 shares traded. FGV's share price was up one sen to close at RM1.70 with some 2.76 million shares traded.

South Africa’s central bank says nationalisation plan would be costly

JOHANNESBURG, Dec 21 — South African governing party’s plan to buy-out private shareholders of the central bank would be expensive as some existing investors are likely to sell their stakes at a premium, the regulator said today. “The…

South Africa ANC decides central bank must be state-owned

JOHANNESBURG, Dec 12 — South Africa’s ruling party has ratified a proposal for the state rather than private shareholders to own the central bank. Delegates at the African National Congress’s elective conference in Johannesburg decided…

Oil falls as UK North Sea oil pipeline moves closer to restart

LONDON, Dec 21 — Oil prices fell today after the operator of Britain’s Forties pipeline in the North Sea said it was expected to restart in early January after repairs over Christmas. Forties is the largest of the five North Sea crudes that…

Palm oil falls on stockpile concerns

KUALA LUMPUR: Malaysian palm oil futures tumbled in early trade today, as worries over soft demand leading to high stockpiles in December lingered while weakness in rival oils compounded the bleak picture.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange dropped 1.32% to RM2,466 a tonne at the midday break, and looked set for a third straight session of falls.

Trading volumes stood at 16,130 lots of 25 tonnes each.

“Demand has not been promising. The market is closely watching how exports will turn out (this month),” a Kuala Lumpur-based trader said, noting that stocks could rise for another month.

Malaysian palm oil shipments fell 2% on Dec 1-20 compared with the same period last month, data from cargo surveyor Intertek Testing Services showed.

Inventory levels in Malaysia rose to their highest in nearly two years, by 16% to 2.56 million tonnes, while exports for November fell 11.9% on-month, data from the Malaysian Palm Oil Board last week showed.

Demand from Europe and China, key regions for palm oil exports, typically dwindles at the end of the year, as colder weather in the northern hemisphere solidifies the tropical oil.

Another trader said weakness in rival vegetable oils has exerted further pressure on palm, but the market could be slightly relieved by bargain hunters.

“Overall the market lacked positive news. Bargain buyers could come in and there could be buying for a year-end rally,” the trader said.

In other related edible oils, the January soybean oil contract on the Chicago Board of Trade slid 0.4%, while the May soybean oil contract on the Dalian Commodity Exchange was down 1.3%.

The Dalian January palm olein contract fell 1.6%.

Palm oil prices are impacted by movements in other edible oils, as they compete for a share of the global vegetable oils market. – Reuters

Muhibbah Engineering accepts RM189m contract from MRT Corp

KUALA LUMPUR, 21 December – Muhibbah Engineering (M) Bhd has accepted the award from the Mass Rapid Transit Corporation Sdn Bhd for the Design, Supply, Installation, Testing and Commissioning of Noise Barriers and Enclosures (Package V201 to V210)…