Wednesday, March 21st, 2018


Malaysia’s debt profile can mitigate currency, interest rate shocks, says Moody’s

KUALA LUMPUR, March 21 — Malaysia’s debt profile, mainly funded by the ringgit, acts as a mitigating factor in the event of currency or interest rate shocks. Moody’s Investors Service, Sovereign Risk Group Assistant Vice President and…

SC warns against ‘pump and dump’ schemes

PETALING JAYA: The Securities Commission Malaysia (SC) has warned investors on the growing “pump and dump” schemes, which have been using online platforms to spread false and misleading information on companies to invoke a hype over shares and eventually selling it at inflated prices.

The authority said in a statement that perpetrators operating through blogs, forums and social media platforms would accumulate shares at lower prices before posting positive sentiments about the companies, with the intention to spur interest in the shares in order to drive up its price.

“When unsuspecting investors buy the shares, it gives the perpetrators an opportunity to sell the shares they hold at a profit. Investors who have bought shares at the inflated price will suffer losses when the hype eases,” it added.

Bonescythe Stock Watch is one such online platform identified by the SC to have published various articles containing statements and forecasts which were misleading and deceptive, and seen as an offence under Section 178 of the Capital Markets and Services Act 2007 (CMSA). The blog has since been taken down following the SC’s intervention.

“The SC advises investors to always exercise diligence and verify the legitimacy of information before making an investment decision. Investors are reminded to be cautious of the risk of fraud and when in doubt, to seek advice from persons who have been licensed by the SC,” it said.

Members of the public who have come across any suspicious websites, as well as emails relating to investment advice or any other capital market activities and services, may alert the SC at the contact number 03-6204 8999 or e-mail [email protected], while investors could reach out to the InvestSmart website and InvestSmartSC Facebook page.

Titijaya Land, Bina Puri reorganise Brickfields joint-venture project

PETALING JAYA: Titijaya Land Bhd has terminated the joint venture (JV) agreement with Bina Puri Construction Sdn Bhd (BPCSB) to jointly participate in a mixed development project in Brickfields, Kuala Lumpur, given its plan to buy the remaining 30% stake in Prosperous Hectares Sdn Bhd (PHSB) for RM900,000.

However, it has entered into a new JV agreement with property developer Bina Puri Properties Sdn Bhd (BPPSB) and Bina Puri Development Sdn Bhd (BPDSB) for the development of the land.

Titijaya said the proposed acquisition of a 30% stake in PHSB is in line with a proposed new JV arrangement with BPDSB, a wholly owned subsidiary of BPCSB.

Meanwhile, Titijaya also proposed to buy a 70% stake in BPDSB from BPCSB for RM28,000.

BPCSB and BPPSB are the wholly owned subsidiaries of Bina Puri Holdings Bhd, while BPDSB is an indirect wholly owned subsidiary of Bina Puri through BPCSB.

Syarikat Prasarana Negara Bhd (Prasarana), the registered lessee of the land, had in 2013 awarded to BPCSB a mixed development project on portion of the land in Brickfields on design and build basis. The project involves the construction and completion of a mixed residential and commercial strata development.

BPCSB has been appointed as the developer of the project. Subsequently, Prasarana has consented the appointment of BPDSB as the special purpose vehicle nominated by BPCSB to undertake the project via the execution of a Joint Land Development Agreement in 2014 made between Prasarana and BPDSB (JLDA).

Prasarana, via Prasarana Integrated Development Sdn Bhd, had given its written consent for the change in BPDSB’s shareholding structure.

Prasarana and BPDSB will enter into a supplemental agreement to the JLDA to amend, vary and otherwise supplement the terms and conditions in the JLDA, allowing the equity participation of Titijaya up to 70% of the shareholding in BPDSB.

“Given the strategic location of the land in Kuala Lumpur City Centre with high development value, the group is confident that the exercise would further enhance the future revenue stream of the group and contribute positively to the group’s financial performance,” Titijaya said.

Sumatec proposes to settle Hoe Leong, Ebony Ritz lawsuit for RM27 million

PETALING JAYA: Sumatec Resources Bhd has proposed to settle a lawsuit with Hoe Loeng Corp Ltd and Ebony Ritz Sdn Bhd for RM27 million.

In Bursa Malaysia filing, the oil and gas service provider said it has entered into an agreement with the parties, which have agreed to end all litigation upon Sumatec’s successful completion of ts corporate exercise no later than Oct 30.

Sumatec has proposed to settle the RM27 million through the payment of RM7 million cash and the issuance of redeemable convertible preference shares in the value equivalent to RM20 million to Ebony Ritz.

However, it said the settlement agreement is conditional upon approvals from the official receiver of Malaysia on behalf of Ebony Ritz as well as Sumatec’s and Hoe Leong’s board of directors.

“All such approvals (need) to be provided no later than 45 days from the date of the settlement agreement,” Sumatec said.

Upon having obtained the approvals, the group said the parties shall withdraw all litigation cases involving between the parties within one week, including Ebony Ritz’s claim in the High Court of Singapore against Sumatec, Sumatec’s counterclaim and Sumatec’s appeal to Singapore’s Court of Appeal against the High Court’s judgement on Nov 9, 2017.

On Bursa Malaysia today, Sumatec was unchanged at 6.5 sen on some 10.26 million shares changing hands.

Trading on Bursa to remain jittery in short term: MIDF Research

PETALING JAYA: MIDF Research expects the Malaysian equity market to remain jittery in the short term, leading up to the 14th General Election and in the immediate weeks or even months after its conclusion.

“Our markets have been underperforming the peers for for the whole of 2017 and 2018 year to date, similar to the pattern seen in the months leading up to the 13th General Election five years ago. And subsequent to the election, market took a breather before rising back. We think that it will be the same this time around,” it said in a report on the second quarter market outlook issued today.

However, average daily volume (ADV) and average daily traded value (ADTV) for 2018 year to date have risen 41% and 27% to 3.4 billion shares daily and RM2.8 billion daily respectively, compared with the same period in 2017.

MIDF Research opined that corporate earnings growth will likely be a little subdued, due to a high base effect and a stronger ringgit this year.

Despite an increase in commodity prices in the past quarter, it said, corporate earnings might not be vastly impacted, owing to the corresponding strengthening of the ringgit since the currency broke the RM4.00 to US$1 level not too long ago.

Meawhile, the research house highlighted that an increase in interest rates would definitely signal that the era of cheap money is nearing its end.

“This literally means that investors who depend on cheap money for their investments abroad could potentially repatriate the money back.”

However, with interest rate increases being done in a gradual manner and magnitude, MIDF Research does not think that the impact would be so stark, especially for the equity market.

It also cautioned that the spike in bond yields could be a matter of concern because the yield gap between bond yields and stock returns gets smaller, incentivising investors to make a switch from stocks to bonds.

“Money will also look for assets that could provide the best balance between returns and risk. At the same amount of risk, the assets that provides the highest returns would be more attractive.”

MIDF Research has reaffirmed its year-end target for Bursa Malaysia’s FBM KLCI at 1,900 points, which is equivalent to 16.8 times of price-to-earnings ratio.

Commenting on the Malaysian economy, it expects gross domestic product (GDP) to expand 5.5% this year, with exports projected to grow by 9.3% and inflation to moderate to 2.6%.

“Based on the current development and indicators, we are optimistic that Malaysia’s economy will expand by 5.5% this year given the upbeat performance of domestic and global economy. Confluence of factors such as stable labour market, continued wage growth and moderating inflation will support and spur the domestic economy.

“Additional impetus from external sector will help boost the growth performance in 2018. Moving forward, we foresee the economic performance in 2Q18 will expand at a slower pace amid unfavourable high base effects,” it added.

Johan posts narrower net loss in fourth quarter

PETALING JAYA: Johan Holdings Bhd’s net loss narrowed to RM22.7 million in the fourth quarter ended Jan 31, 2018, from RM23.67 million in the previous corresponding quarter.

Revenue declined 19.24% to RM28.3 million compared with RM35 million in the same period a year ago.

For the full year, its net loss also narrowed to RM22.3 million against RM37.2 million a year ago, while revenue fell 4.8% to RM122.5 million, from RM128.8 million previously.

Johan is the franchise operator of Diners Club charge and credit cards. It is also involved in tour and travel operations, manufacturing and marketing of ceramic tiles, property development, resorts and hotels.

Commenting on prospects, Johan said it will continue to build up its Diners Club card business in Singapore. The group is collaborating with Alipay to expand the acceptance of Diners Club cards there.

“Diners E-Wallet with QR code acceptance is targeted to be launched in the second quarter of the year with our major co-brand partners to further increase revenue and market share for the financial year ending 2019,” it said.

Johan expects the process of conversion of its land in Puchong for property development will be approved during the current financial year. “This will have positive impact on our group’s profitability in the longer term,” it said.

On Bursa Malaysia today, Johan was unchanged at 28.5 sen with 128,000 shares traded.

EU greenlights controversial Bayer-Monsanto takeover

BRUSSELS, March 21 — The EU today approved the proposed blockbuster buyout of US agri-giant Monsanto by German chemical firm Bayer after securing concessions in order to win approval. “We have approved Bayer’s plans to take over Monsanto…

Brexiteers dump fish in Thames to protest at EU deal

LONDON, March 21 — Supporters of Britain’s exit from the European Union dumped crates of haddock into the River Thames today to protest against Prime Minister Theresa May’s Brexit transition deal which they say has betrayed the fishing…

Malaysia’s banking sector to benefit from stronger macroeconomic conditions in 2018, says Moody’s

KUALA LUMPUR, March 21 — Malaysian banks’ asset quality and profitability generally improved in 2017 and this trend is likely to continue into 2018 ,says international rating agency Moody’s Investors Service today. The agency noted that…

China names CBRC chief Guo as head of new banking, insurance regulator, reports Caixin

BEIJING, March 21 — China has named Guo Shuqing as the head of the newly formed regulator for the banking and insurance sectors, financial publication Caixin reported today without citing a direct source. Guo had been the head of the China…