Tuesday, March 6th, 2018


Trump facing `Dow Vigilantes’ in stock market verdict on tariffs

NEW YORK, March 6 — Donald Trump’s yardstick for his own success is going rogue. That’s the Dow Jones Industrial Average, a regular feature in the US president’s commentary over the past year as the equity bull market raged on. Take…

US stocks join global rebound to open higher

NEW YORK, March 6 — US stocks joined the global relief rally today amid the perception that the threat of a trade war, and the chance of a nuclear war, had both receded. About 10 minutes into trading, the Dow Jones Industrial Average was up…

Mida expects slight improvement in approved investments this year

KUALA LUMPUR: After seeing a 7.4% drop in approved investments last year, Malaysia is targeting a slight improvement this year to RM200 billion, given RM69.5 billion worth of investments in the pipeline.

Speaking at a media briefing here today on Malaysia’s investment performance last year, Malaysian Investment Development Authority (Mida) Datuk Azman Mahmud said the RM69.5 billion consists of manufacturing (RM51.1 billion) and services (RM18.4 billion) investments.

The country’s total approved investments declined 7.4% to RM197.1 billion in 2017 from RM212.9 billion in 2016, due to a fall in the services sector emanating from lower contribution from the real estate subsector.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the real estate subsector declined 28.7% to RM45.7 billion, which led to a 17.2% contraction in the services sector to RM121.1 billion.

However, the number of projects approved in the real estate subsector soared 43.1%, reflecting a change in investment strategies towards smaller projects.
The services sector continued to be the main contributor to approved investments in the country.

Meanwhile, the manufacturing and the primary sectors grew 8.9% and 51.2% to RM63.7 billion and RM12.4 billion in 2017, respectively.

Johor retained top spot with RM21.9 billion of approved investments, representing 34% of total investments in the manufacturing segment, spurred mainly by the Pengerang Integrated Complex.

Overall, the number of projects approved rose 5.8% from 5,166 projects in 2016 to 5,466 projects in 2017, which generated an additional 139,520 job opportunities.
Foreign direct investments (FDI) accounted for 27.8% of total approved investments at RM54.7 billion, while the remaining 72.2% from domestic direct investments at RM142.4 billion.

Despite China being the top FDI source for the past two years, its value of investments went down 18.7%, from RM4.8 billion in 2016 to RM3.9 billion in 2017.

China’s investments have diversified into many industries, including non-metallic mineral products, transport equipment, rubber products and electrical and electronic products.

Looking ahead, Mustapa said Malaysia is aiming to attract more than 12 companies to set up their principal hubs here.

Meanwhile, speaking on the US plan to impose hefty tariffs on imported steel and aluminium, he said Malaysian companies have not been impacted, but the government is closely monitoring developments in the matter.

US President Donald Trump is expected to issue a formal order on the tariffs later this week.

MMC’s Northport granted 30-year extension to concession for Port Klang

KUALA LUMPUR: MMC Corp Bhd’s indirect subsidiary Northport (Malaysia) Bhd has been granted a 30-year extension to its concession for Northport and Southpoint in Port Klang, which ended in Dec 1, 2013, following a privatisation agreement signed among the port services provider, the government and Port Kelang Authority (PKA) today.

In December 2011, the then listed parent NCB Holdings Bhd said it received approval in principle from the government for a 30-year and a 21-year extension for Northport and Southpoint, respectively.

The privatisation agreement signed today, however, stated that Northport Malaysia will hold the concessions for both Northport and Southpoint until Nov 30, 2043, wherein it is authorised to provide as well as operate, maintain, manage and control port operations.

At the signing, Northport was represented by its chairman, Datuk Seri Che Khalib Mohamad Noh, the government by Transport Ministry secretary-general Datuk Seri Saripuddin Kasim, and PKA by its chairman, Tan Sri Kong Cho Ha.

“We are delighted to have signed this agreement and to have the opportunity to continue working for the progress of Port Klang and the nation’s economic growth as a whole. We thank the government and PKA for their confidence in Northport and we are very positive that Northport will continue to contribute to make Port Klang, Asia’s Preferred Logistics Hub” Che Khalib said.

On Bursa Malaysia today, MMC Corp fell 0.56% to close at RM1.79 with 739,100 shares done.

Stocks climb on Korea hope, opposition to tariffs: Markets wrap

LONDON, March 6 — Appetite for risk assets picked up across global markets today as investors digested an apparent diplomatic breakthrough with North Korea and judged fears of a full-blown trade war overdone. European stocks followed Asian…

South Africa economy grows 1.3pc in 2017, beats expectations

JOHANNESBURG, March 6 — South Africa’s economy grew by a better-than-expected 1.3 per cent in 2017, driven by agriculture and finance, Stats SA said today, beating forecast growth of 1 per cent. The improved economic performance “was…

Malaysia extends bauxite mining ban to June 30

KUALA LUMPUR: Malaysia has extended a moratorium on bauxite mining, as it grapples with a stockpile that has yet to be cleared despite an official halt to mining activities more than two years ago.

The moratorium was put in place in January 2016, after run-off from unsecured stockpiles of the mineral, dug up by largely unregulated miners, turned rivers and coastal seas red in Pahang, contaminating water sources.

Natural Resources and Environment Minister Datuk Seri Wan Junaidi Tuanku Jaafar said the ban has been extended to June 30, to give the government time to finalise a regulatory framework to prevent a repeat of the environmental damage.

“Once all that is ready, we will look at its implementation. We’re not here to ban mining, but it must follow best practices,” he said at a press conference outside Parliament.

Wan Junaidi said an estimated stockpile of 10 million tonnes of bauxite had yet to be cleared.

Local residents complained last year about ongoing mining activity, and the government noted in July last year that stockpiles had actually increased in size despite millions of tonnes of exports to top buyer China.

Malaysia was briefly the largest bauxite supplier to China, with shipments peaking at nearly 3.5 million tonnes a month at the end of 2015 as miners rushed to fill a supply gap after neighbouring Indonesia banned ore exports. – Reuters

MARC: Corporate bond issuance to be at RM90b-RM100b this year

KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) expects corporate bond issuance to stand at RM90 billion-RM100 billion this year.

Chief economist Nor Zahidi Alias said the issuance is expected to normalise from last year's RM122.9 billion, which was the highest in five years, driven by the better investment climate and robust external trade.

“We think that this year, it will moderate slightly, but is still going to be higher than the average of the past three years of between RM85 billion and RM86 billion annually,” he told reporters at the Malaysian Economic Outlook 2018 briefing here today.

He said the corporate credit outlook, however, is expected to be stable with some moderate downside risks, despite a softer projection of corporate bond issuance.

“The stable outlook is supported by a steady pace of economic growth that supports growing business and consumer sentiment, alongside expectations that the price recovery of key commodities will hold within ranges that are higher than recent lows,” he added.

Nor Zahidi said the outlook also considered the beneficial spillover from a spate of infrastructure projects to construction and construction-related companies.

He added that the rating agency also expected corporate earnings growth to be positive this year, while corporate leverage is expected to remain at a moderate level.

On a sectoral basis, Nor Zahidi said MARC considers the stable outlook on the construction sector to be supported by ongoing and planned government-initiated large projects.

He said the rating agency also expects the palm oil sector to be stable with crude palm oil (CPO) prices range-boundbetween RM2,400 and RM2,600 a tonne this year, despite a steady increase in CPO production volume weighing on price on the upside.

Nor Zahidi said the property sector would face a challenging time due to slow sales, particularly in the high-end segment.

The rating agency is of the view that the residential property overhang could worsen in the near term, although the pace of inventory build-up has slowed in the recent year on the back of fewer property launches and the targeting of more medium-cost developments where demand has been resilient.

Nor Zahidi said for the office and retail segments, both occupancy levels and rental rates have come under increasing pressure as supply continues to outstrip demand.

On the oil and gas sector, he said the improving operating environment for oil and gas companies on the back of an oil price recovery has come as a respite. However, the lower value and shorter tenure of contracts being awarded provide limited earnings visibility for some players in the upstream segment.

Commenting on last year’s corporate ratings, Nor Zahidi said only one rating downgrade occurred compared with four in 2016 and six in 2015. However, he said a default by an oil and gas company was recorded last year, a first in three years. – Bernama

Mah: We’ll respond with ‘might and tact’ if EU curbs palm oil

KUALA LUMPUR: Malaysia will respond with “might and tact” if the European Union proceeds with a plan to limit use of palm oil in biodiesel, a cabinet minister said today.

“Malaysia does not want a trade war with Europe but if one is foisted on us, we will respond with might and tact,” said Datuk Seri Mah Siew Keong, minister for plantation industries and commodities, speaking at an industry conference in Kuala Lumpur.

The EU in mid-January approved draft measures to reform its power market and reduce energy consumption to meet more ambitious climate goals. The draft includes banning the usage of palm oil in motor fuels from 2021.

Mah said Malaysia, the world’s second-biggest producer of the oil used in everything from soap to foodstuffs, would withhold cooperation on trade talks if the EU move is confirmed. A significant portion of the palm oil exported to the EU is used as feedstock to make biofuel, leaving Malaysia’s producers fearing overall demand will fall.

“There will be no trade negotiations until we solve the palm oil issue,” Mah said in a speech, describing the EU’s plan as “discrimination”.

The European Union is the world’s second-largest palm oil importer after India, having bought 6.7 million tonnes in 2016/17, according to US Department of Agriculture data.

Commenting on India’s recent move to increase import duties on palm oil, Mah said the trend of increasing duties is a protectionist policy.

“We will write to our Indian counterparts to ask them to consider,” he told, speaking to reporters at a news conference after his speech.

India has raised import tax on crude and refined palm oil to the highest level in more than a decade, the government said in a statement last Thursday, in a move designed to support local farmers. – Reuters

Jaks seeks arbitration in disputes with Star Media

PETALING JAYA: Solicitors of Jaks Resources Bhd’s (JRB) sub-subsidiary Jaks Island Circle Sdn Bhd (JIC) has served a notice of arbitration to resolve all disputes between JIC and Star Media Group Bhd, including issues arising from the claim by Star Media on interest and call on bank guarantees.

Last week, JRB was served with a letter of demand by Star Media to complete and deliver Tower A by end of June 2018, of which Star Media asked JRB to respond to in seven days.

Last month, the solicitors of JIC filed an injunction with the Kuala Lumpur High Court to restrain Star Media from receiving the proceeds of a bank guarantee of RM50 million provided for a development project in Section 13, Petaling Jaya.

Star Media claimed that JIC failed to deliver vacant possession of Tower A by the stipulated deadline enabling it to demand the RM50 million bank guarantees pledged as security.

Jaks shares closed unchanged at RM1.62 today with 5.27 million shares done, while Star Media closed down 0.77% at RM1.29 with 742,600 shares done.