Thursday, February 1st, 2018

 

Bitcoin slides 11% to lowest level since late November

LONDON: Bitcoin, the world’s largest cryptocurrency, skidded 11% today to its lowest since late November, as a Facebook ban on cryptocurrency adverts and a growing regulatory backlash against the nascent market frightened investors.

Today’s drop to as low as US$9,022 (RM35,095) on the Luxembourg-based Bitstamp exchange left bitcoin trading at less than half the peak price of almost US$20,000 it reached in December. It slid more than 26% last month, in its worst monthly performance since January 2015.

Other cryptocurrencies, including ripple, the third-largest by market value, and bitcoin cash, have also racked up double-digit declines in the last 24 hours, according to Coinmarketcap.com, which tracks the industry. Ethereum was up slightly on the day.

Last year’s explosive rise in the value of digital coins and the flood of new retail investors drawn to the market have rattled global regulators nervous about a sector used largely for speculation.

Officials have also warned cryptocurrencies can be used by criminals to launder money. India, which has likened the market to a Ponzi scheme, today vowed to eliminate their use.

Facebook said in a post on its website this week that it was banning all advertising that “promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency”.

It was not clear whether the ban would affect all cryptocurrency adverts on the site. Facebook could not immediately be reached for comment. – Reuters


With Yoodo, you get to call the shots

PETALING JAYA: Yoodo, a do-it-yourself kind of telecommunication offering, is the culmination of an idea for an agile and adaptable platform and giving customers their heart’s desire, freedom of choice and control.

Speaking to SunBiz recently, Yoodo’s head Farid Yunus (pix), who has been a Celcom employee since 2006, said the idea of creating a digital startup using Celcom’s network occurred to him following his return to Celcom in 2016 after being seconded to one of the telco’s mobile network virtual operators, Red One Network Sdn Bhd.

Farid pitched the idea of a digital startup using Celcom’s network, but operating independently of the group to the telco’s CEO, Michael Kuehner.

“Big companies are not very agile. We needed to move fast and he (Kuehner) agreed and bought the idea … we went to Celcom’s board of directors, they bought the idea … I got the budget and nine months later here we are,” Farid explained on the initial stages of the conception.

“The world is changing, people just do everything online on an app but old school telcos find it hard to cater to this. Overseas, in Europe. a lot of telcos have launched similar types of digital brands. We are not the first – by no means – so we looked at the model and how they did things,” he added.

Farid said what they needed to find out though, was what Malaysian consumers wanted.

“We did a whole bunch of focus groups here in Malaysia, and you know what works in France might not work in Malaysia. We tried various concepts with the focus groups, which included name your budget, suggest the plan or a long shopping list where you just check what you want or customise it yourself,” he said.

Their findings were that Malaysians resonated the most with having the liberty to customise their own plan and the power to make changes according to their needs.

Farid is confident that consumers will pay a premium for the offering.

“We are looking at a net promoter score (NPS) of around 40, meaning more people will recommend us rather than not recommend us. If you look at telcos today, their NPS is zero or negative, meaning more people would not recommend them.

“If you look at people like Uber and Grab, they have NPS scores of 50-60. We are targeting a 40 versus the zero of the old-school telcos,” Farid said, on his aspirations for the startup.

RHB Research analyst Jeffrey Tan said it is premature to gauge the impact of Yoodo in the telco market, but he believes that it would add to the “breadth of offerings in the market”.

“It’s premature to gauge the impact – the strategy here would be to complement current mainstream offerings (as opposed to cannibalising) with telcos serving a growing demography of digitally savvy users.”

However, Tan said Yoodo will provide mobile subscribers with greater choices, flexibility and convenience.

“With diminishing competitive advantage in pricing and network, the opportunities herein lie in the provision of innovative and cost-effective solutions to sustain and/or increase wallet share,” he said.

Tan noted that digitalisation is an essential path for a telco to stay relevant and to become the customer’s key digital lifestyle partner or provider. “Digitalisation is not confined to products and services but encompasses processes, procurement, customer service, network architecture, etc,” he opined.

With hybrid service providers such as Yoodo offering customised plans and Unifi Mobile offering no expiration to credit, will customers still gravitate to cheap packages and unlimited mobile data?

On this, Tan foresees that there are still opportunities across different market segments for telcos to monetise their mobile internet traffic.


Dollar rallies briefly after Fed keeps rates unchanged

LONDON: The dollar briefly clawed back some of its recent falls this morning after the Federal Reserve said inflation was likely to rise this year, but with expected monetary tightening priced in, traders are waiting

The dollar, which is stuck near three year lows after its worst monthly performance since mid-2016, rose in Asian trading before giving up those gains.

Traders said that non-farm payroll numbers due later this week, as well as a host of other economic indicators, will need to be strong to help push the dollar higher.

The US currency has struggled this year as expected monetary tightening in other parts of the world, alongside stronger global economic growth, encourage investors to put more of their money elsewhere, and particularly back into the eurozone.

The Fed kept interest rates unchanged on Wednesday but said inflation is likely to quicken this year, bolstering expectations borrowing costs will continue to climb under incoming central bank chief Jerome Powell.

Against a basket of currencies, the dollar was flat on the day at 89.082. It touched a fresh three-year low of 88.438 earlier this week.

Against the euro, the dollar also gave up its gains and was down 0.1 % as the single currency once again pushed past US$1.24 to trade at US$1.24275.

The dollar did hold on to its gains against the yen. It edged up 0.3% to ¥109.56, moving away from a four-month low of ¥108.28 plumbed last Friday.

“While the kneejerk reaction has been a higher dollar, we expect the positive effect on the dollar to fade rather soon,” ING analysts said.

Earlier, in Washington, the Fed, citing solid gains in employment, household spending and capital investment, said it expected the economy to expand at a moderate pace and the labor market to remain strong in 2018.

“Inflation on a 12-month basis is expected to move up this year and to stabilise” around the Fed’s 2% target over the medium term, the central bank said in a statement following a two-day policy meeting, the last under Fed chair Janet Yellen.

It also said its rate-setting committee had unanimously selected Powell to succeed Yellen, effective Saturday. – Reuters


Facebook reassures investors, says digital ad sales to rise despite usage dip

WASHINGTON: Facebook Inc offered reassurances to investors on Wednesday that its digital ad business would remain highly profitable, despite a dip in usage on the social media network and an overhaul of its flagship News Feed.

The company said in an earnings report that quarterly revenue jumped 47% from a year earlier, and executives said on a conference call that they saw more chances to make money even if people spend less time on Facebook.

Analysts had wondered about the resilience of the world’s largest social media network, which is making changes to its products to deter foreign influence campaigns like ones that it says Russia has carried out and to stem the spread of sensationalism.

Facebook added to jitters after the bell on Wednesday when, in its earnings report, it said that at the end of last year time spent by users had fallen by about 50 million hours a day. Shares fell more than 4% in after-hours trading.

Shortly afterward, though, Facebook executives expressed optimism on the call with analysts, saying the changes they were making in response to criticism would be healthy for the business in the long term and might not even hurt much in the short term.

“I want to be clear: The most important driver of our business has never been time spent by itself. It’s the quality of the conversations and connections,” chief executive Mark Zuckerberg said on the call.

The upbeat forecast led to a rebound in shares, which in late after-hours trading were higher by 1.4% at US$189.50 (RM737 billion).

Total revenue rose 47% to US$12.97 billion (RM50.45 billion) and beating analysts’ estimate of US$12.55 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to Facebook shareholders rose to US$4.27 billion, or US$1.44 per share, in the fourth quarter ended Dec 31 from US$3.56 billion, or US$1.21 per share, a year earlier.

Excluding a tax provision, the company earned US$2.21 per share, topping analysts’ estimates of US$1.95, according to Thomson Reuters I/B/E/S. Facebook said it increased its provision for 2017 income taxes by US$2.27 billion, citing US tax changes. – Reuters


Revenue Group eyes ACE listing

PETALING JAYA: Cashless payment solutions provider Revenue Group Bhd (RGB) is looking to list on the ACE Market of Bursa Malaysia and will use the proceeds from its proposed initial public offering (IPO) for capital expenditure and regional business expansion.

In a draft prospectus exposure on the Securities Commission website, the group said the proceeds raised will also be used for development of new products, expansion of IT team and enhancement of its “revPAY” platform.

The group’s IPO involves a public issue of 55.71 million new shares, of which 11.14 million shares will be made available for Malaysian public, 11.14 million for eligible directors and employees who have contributed to the group’s success, while the remaining 33.4 million shares will be made available by way of private placement to selected investors.

There will also be an offer-for-sale of 16.7 million of existing shares via private placement to selected investors.

Established in 2003, RGB offers a single platform that provides multi-channel payment solutions to different customers including financial institutions, physical store merchants, online store merchants and e-payment money schemes.

Through its revPAY platform, the group offers a single platform which facilitates the acceptance of multiple payment methods, thereby providing cost effective solutions to its customers.

“revPAY is our flagship platform that provides the connectivity between front-end interface to back-end solutions. We provide products and services principally to local banks and non-bank institutions, physical store merchants and online store merchants,” it noted.

RGB’s products and services can be divided into three segments, namely deployment of electronic data capture terminals, electronic transaction processing and solutions and services related to payments infrastructure.

RGB’s businesses are currently concentrated in Malaysia. During the financial year ended 2015 to 2017, more than 97% of the group’s revenue is derived locally.

Its FY17 net profit jumped 54.6% to RM6.98 million from RM4.51 million in FY16.

The group plans to further expand its business into Cambodia and Myanmar, as it believes there is growth potential in the provision of electronic payment solutions in view that their electronic payments system is still at its growing stage.

M&A Securities Sdn Bhd has been appointed as the adviser, sponsor, underwriter and placement agent for the IPO.


FBM KLCI tipped to hit new high of 1,907 points this year

PETALING JAYA: The FBM KLCI is expected to move to a fresh record high of 1,907 points during 2018, Inter-Pacific Research said, adding that the index’s recovery has been finally engineered by cheaper relative valuations vis-a-vis regionals peers as a result of prolonged lethargy even as other markets surged.

“Rising tide globally finally lifts the KLCI. Foreign sellers have been solidly net buyers for more than two months now and though KLCI gains are not quite V-shaped, some sectors will see fairly spectacular gains,” the research house said in its strategy report.

It said the local market’s forward price-to-earnings ratio (PER) valuation is expected to approach the post-global financial crisis peak of 15.92 times, which was last observed in Dec 2013, equivalent to a KLCI level of 1,907 points.

In 1H2018, Inter-Pacific said the KLCI will again tread higher in a series of rallies exhibiting modestly higher highs and modestly higher lows reflecting the view that a gradual recovery in earnings growth is setting in. At the currently expected pedestrian 5% pace of earnings growth for 2018, the 15.9 times PER ceiling will be consistent with a KLCI reading of 1,907.

“Over the course of 2018, we expect a modest further upside in the KLCI. Earnings growth over 1H2017 of 11% versus our expected 6.8% had allowed the KLCI to close 1H2017 at 1,763.67, bettering our expectations of 1,753 only on account of a last hour push. We believe that a genuine rethink by foreign funds of the relative appeal of this market is not yet at hand despite their abrupt about-face late last year. Malaysia’s foreign weightage in international investors’ portfolio is most likely only approaching market weight (neutral) levels in our estimation after spending a long spell being underweight,” it added.

Inter-Pacific said the doldrums that settled over exports of emerging economies dependent on commodities weighed on Bursa Malaysia more than any of the regional stock markets.

“Consequently, notwithstanding any recovery in crude oil prices, the KLCI has decisively lost a measure of its previous aura of appeal vis-à-vis regional peers. Funds will be right to be wary of rushing into the sector and potentially again paying a price again for participation in an overly crowded trade.”

The research house said it would have been happier to see the recent KLCI rally with prices concurrently moving in respect of CPO but that has not happened. It had hoped to see increasingly benefits flow from a secular climb in palm oil prices that will stretch for years as plantings eased back gradually after spiking between 2007-2012 in response to high CPO prices.

“Among the various sectors, the view we hold is that any boost to Malaysia’s domestic economy will be most palpable and broad-based if it came from the palm oil sector as price increases flow straight into incomes in a broad swath of the rural heartland of the country. Investor apathy towards plantation stocks robbed the KLCI of one leg any rally in the KLCI could have perched on.”


Spectrum payment to have minor impact on telco earnings, gearing

PETALING JAYA: AmInvestment Bank Bhd expects the RM118.4 million spectrum payment to have a minor impact on the earnings and gearings of Maxis Bhd, Axiata Group Bhd and Digi.Com Bhd.

The telcos each paid an upfront fee of RM118.4 million last Tuesday and agreed to an annual fixed fee of RM50 million for the 2100MHz spectrum that is currently deployed for 3G services. The annual fixed fee payment is payable by Dec 15 throughout the assignment period. The spectrum will be effective April 2 and valid for 16 years.

AmInvestment analyst Alex Goh said the additional annual costs of RM63 million, which include higher depreciation and interest charges would translate into 2% of Maxis’ 2019 earnings, 3% for Axiata and 3.5% for Digi.

“Given the lower base impact of the 2100MHz price component, we estimate that the lump sum payment will not have any significance to Maxis’ net debt/earnings before interest, taxes, depreciation and amortisation of 1.2 times, Axiata’s 1.4 times and Digi’s 0.7 times,” he added.

AmInvestment is maintaining a “neutral” call on the telco sector given the continued intense competition in the cellular segment while fixed broadband could face rising pressure from the government to cut tariffs to drive a knowledge economy. Its top “buys” remain Axiata and TM due to the game-changing merger prospects which will significantly enhance their earnings and market share trajectory.

Meanwhile, the research house maintained “hold” calls on Maxis and Digi due to the resistance in gaining traction in revenue growth amid potential loss in competitive advantage under a re-energised Axiata-TM brand.


Petronas wins six blocks from Mexico auctions

MEXICO CITY: PC Carigali, a unit of Malaysian oil giant Petronas, won six blocks from Mexico’s auction of 19 deep-water oil blocks located in the Gulf of Mexico, the largest such auction since the government opened the country’s hydrocarbons sector to private industry. The Petronas subsidiary specifically won two alone and four in alliance with […]


Sime Darby secures 70% take-up for Azira project in Bandar Bukit Raja

PETALING JAYA: Sime Darby Property Bhd's latest residential development in Bandar Bukit Raja (BBR) named Azira has received positive response from the public with over 70% take up rate within a week.

The group's COO Datuk Wan Hashimi Albakri said in a statement that the encouraging take up rate for Azira is achieved by its strategy of offering the right products at the right time, location and price, to fulfil the needs of home buyers.

“Residential launches at Bandar Bukit Raja are always anticipated by the public, as the township offers high quality homes at fair prices and excellent connectivity,” he added.

Azira comprises 111 units of double-storey link homes with a built up area from 1,901 sq ft to 2,275 sq ft and comes with four bedrooms and four bathrooms. Offering freehold ownership, prices start from RM678,888 before Bumiputera discount, with completion slated for January 2020.

Azira is Sime Darby Property's first launch in Bandar Bukit Raja that will fully incorporate the “BBR Home Design Principles” concept focusing on four key areas of natural ventilation, natural lighting, in harmony with nature and multi-generational homes.

Multi-generational homes are specially designed homes that can accommodate aging parents, grown children and young kids under the same roof. Azira homes feature natural ventilation and lighting and are designed to be in harmony with nature.

Bandar Bukit Raja is one of the group's showcase townships and an integrated and self-contained township in Klang. Since its launch in 2002, it has become a residential development synonymous with growth in value, spanning 4,405 acres with still over 90% of land area to be developed.

Several improvements are in the pipeline to make the town a more conducive township which include developing a 125-acre town park, the largest of its kind in North Klang, as well as safety and security features such as its single entry and exit point for each of its housing areas.

In addition, Sime Darby Property said there will be further improvements to the network of connectivity and highways surrounding the town such as the completion of the West Coast Expressway, LRT Line 3 extension to Klang, and the upgrading of Jalan Meru.


South-east Asia stocks mostly up, Philippines recovers

SINGAPORE, Feb 1 — Most South-east Asian stock markets rose today, with the Philippines snapping two sessions of falls on the back of gains in real estate shares. The Philippine Stock Exchange PSEI Index rose as much as 0.6 per cent after…