Monday, March 26th, 2018


Stocks In Focus (27-03-2018)

KUALA LUMPUR (March 26): Based on corporate announcements and news flow today, stocks in focus for Tuesday (March 27) may include: Eduspec Holdings Bhd, Serba…

US stocks surge amid bargain hunting

NEW YORK, March 26 — Wall Street stocks bounced early today as investors jumped back into equities at bargain prices following last week’s rout over trade war fears. About 35 minutes into trading the Dow Jones Industrial Average was at…

Property Guru: Asking price down in Q4 2017

PETALING JAYA: The PropertyGuruMarket Index, which tracks the asking price of homes in Malaysia, continued to fall by 1.6% in the fourth quarter (Q4) of 2017 compared with a 0.2% decline in the third quarter.

On a yearly basis, the prices contracted 3.7%.

Save for June, February and October, all other months in 2017 showed a decline in asking prices across all classes of residential properties.

The index is derived from PropertyGuru’s proprietary data, which includes (but is not limited to) the asking prices of over 250,000 residential property listings on its website.

PropertyGuru Malaysia country manager Sheldon Fernandez cautioned on greater downward pressure on asking prices as unaffordability continues to be a major issue.

“While desire to transact remains strong, most property buyers – about 67% can only afford homes priced between RM300,000 and RM500,000. In addition, PropertyGuru data shows that three out of four Malaysians believe the market to be oversupplied. Hence, many buyers are opting to adopt a wait-and-see approach, especially with talk of general election throughout 2017,” he explained.

Nonetheless, he said the declining trend is consistent with prevailing market sentiments and that the ongoing price correction is healthy for the residential sector in the medium and long-term.

“The declining trend has been evident throughout 2016 and 2017, so it’s no surprise. Importantly, it has been gradual so there are no significant shocks to the market, and both buyers and sellers can adjust themselves accordingly. Declining prices usually co-relate to improved consumer satisfaction. In fact, our last consumer sentiment survey showed consumer positivity towards the real estate sector has improved,” he added.

However, certain key locations across all four property epicentres have experienced price stability or sellers are still able to relatively maintain their price offerings.

“In the Klang Valley, these would be Sentul and Bangsar. Up north, Balik Pulau and Tanjung Bungah in Penang have remained comparatively stable.”

In Johor, although prices have largely been on an uptrend, popular locations such as Nusajaya have seen prices decline slightly in Q4 2017, while emerging hotspot – Gelang Patah shows upward price movements.

“This is probably due to consumers searching for homes in alternative areas compared to the established areas of Nusajaya, Johor Baru city and so on. However, given that Johor prices have been on a high for a while, on a year-on-year basis, prices are still holding,” said Fernandez.

More downgrades than upgrades in 2017

PETALING JAYA: RAM Ratings, which saw more rating downgrades in 2017 as opposed to upgrades, expects the downward bias trend to continue into 2018.

It has a dim outlook on the media sector from which three out of the 10 rating downgrades came from.

The agency issued 10 downgrades in 2017 against five upgrades. In 2016, it recorded eight downgrades and three upgrades. Some 180 rated-entities were in its portfolio.

Its 20th instalment of its “Corporate Default and Rating Transition Study” noted that downgrades-to-upgrades ratio eased to 2.0 times in 2017 (2016: 2.7 times) amid higher number of rating upgrades relative to 2016.

While there were no defaults seen in 2017, the magnitude of downgrades remained relatively unchanged, averaging at 1.5 rating notches against 1.3 notches in 2016. This was still below the long-term average of 2.1 rating notches. From 1992 to 2017, the cumulative number of defaults stood at 51, with a combined rated programme value of RM13.2 billion.

“Despite still downward-bias rating actions, the overall credit quality of RAM Ratings rated portfolio is expected to remain intact. As at end-2017, some 82% of the portfolio (by programme value) or 137 out of 180 issuers carried at least AA ratings. This underscores the portfolio’s high credit quality due to the low risk of default associated with these ratings,” said RAM Ratings head of Data Analytics Julie Ng.

The agency expects overall rating actions to still remain downward biased in 2018.

As at end of 2017, the ratings of 14 entities either had a negative outlook or had been placed on Rating Watch, as opposed to four issuers which had a positive outlook.

However, the severity of forward rating actions is expected to be maintained or improved on the back of healthy economic growth and resilient corporate credit quality. The study covered a total of 589 corporations and financial institutions rated by RAM between 1992 and 2017.

On another note, based on RAM Ratings estimated pipeline anchored largely by financial institutions and infrastructure sector, bond issuance is expected to moderate to RM90 billion-RM100 billion in 2018.

FBM KLCI bucks trend of foreign outflow

PETALING JAYA: Foreign investors bought a net of RM447.1 million worth of stocks last week, bucking the outflow trend seen regional with foreign investors selling US$687.7 million (RM2.7 billion) in seven Asian exchange MIDF Research tracks.

International investors upped the ante in stocks listed on Bursa despite the nerve-wrecking developments coming from the US. This was despite global funds taking their money out of other Asian markets after a solid return in the previous week.

MIDF Research said most global equity markets retreated to the red zone last week amid escalated concerns of trade protectionism measures from the US and a batch of major central bank meetings.

Sentiment was further dampened towards the end of the week after President Trump announced tariffs on US$60 billion worth of Chinese imports on Thursday, re-igniting trade-war concerns. This triggered a sell-off in US which caused the Dow Jones to decline by more than 1,100 points between Thursday and Friday, ending the week in correction territory as it closed 10.4% below its late-January high.

The FBM KLCI advanced 1.02% last week to settle at 1,865 points, the largest weekly gain in four weeks. In contrast, the ringgit depreciated by 0.29% to US$/RM3.9185 as traders weighted the possible impact of a trade war between Beijing and Washington.

On a year-to-date basis, foreigners have accumulated RM2.50 billion worth of local equities compared to the RM4.49 billion mopped up during the same period last year. Foreign participation slightly eased last week as the average daily trade value (ADTV) retreated 33% to RM1.09 billion but marked its 12th week of staying above RM1 billion.

The retail market also took a breather as the retail ADTV declined to settle below RM1 billion for the first time in four weeks. Public Bank Berhad registered the highest net money inflow of RM22.45 million. Its share price outperformed with a 4.26% gain against the FBM KLCI, which gained by 1.02% during the week under review.

Serba Dinamik inks deal with Junaco for Tanzania plant

PETALING JAYA: Serba Dinamik Holdings Bhd’s subsidiary Serba Dinamik International Ltd (SDIL) has signed a shareholders agreement with Tanzania-based water related solutions provider Junaco (T) Ltd (JTL) to establish a 45 metric tonne per day Chlorine Skid Mounted Chlor-Alkali Plant in Tanzania.

The move follows a joint venture agreement signed with JTL in October 2017.

JTL and its subsidiary companies operate in more than 10 countries, namely, Tanzania, South Africa, Mauritius, the Netherlands, Malawi, Zambia, Uganda, Kenya, Democratic Republic of Congo and Dubai (UAE).

The company told Bursa Malaysia the shareholders agreement governs the material aspects of the joint venture as well as the conduct of the business and the management of the JV company, Sufini Holding Ltd.

It is a special purpose vehicle established for the purpose of holding 100% of equity in Msufini (T) Ltd, the direct owner of the plant, which also has the sole purpose of providing assistance and support to Msufini (T) Limited to execute the project.

The JV company was incorporated on Feb 20, under the Abu Dhabi Global Market.

Serba Dinamik’s shares were up 3 sen to close at RM3.38 with 939,200 shares changed hands.

Sapura Energy signs pact for NZ permit

PETALING JAYA: Sapura Energy Bhd’s wholly-owned subsidiary Sapura Exploration and Production (NZ) Sdn Bhd has secured farm-in agreements into five offshore exploration permits within the Taranaki Basin, in New Zealand, each of which it will hold 30% interest.

The group’s board of directors said the exploration permits are for the prolific oil and gas region, where a total of more than 2.5 billion barrels of oil equivalent have been discovered to date.

The farm-in agreements, which has secured the New Zealand government approval, are with OMV New Zealand Limited (OMV) and Mitsui E&P Australia Pty Limited, and provide access to a large acreage footprint of more than 8,900 sq km.

Sapura Energy was the most actively traded counter with 133.33 million shares changing hands. The stock gained 2.73% to close at 56.5 sen.

‘Online postings not from Hibiscus, MD’

PETALING JAYA: Hibiscus Petroleum Bhd has clarified that postings which appeared on a popular online platform seemingly from its managing director Dr Kenneth Pereira, were not from him or the company.

It said in a bourse filing that the postings on the site was made by a party who “wrongfully” used the name and picture of Pereira.

The company said it has informed the website administrator for the necessary action.

“The rights of the company and Dr Kenneth Pereira are fully reserved and further action will be taken, as appropriate.”

Hibiscus shares were up two sen to close at 85.5 sen with some 20.2 million shares changing hands.

OSK to list cables business on HK exchange

PETALING JAYA: OSK Holdings Bhd is considering listing its cables business on the Main Board operated by the Stock Exchange of Hong Kong Limited.

In a filing with Bursa Malaysia today, the group said the proposed listing is to enable its cables business to gain direct access to the capital market in Hong Kong for cost effective capital raising. The group is expected to undertake a re-organisation of its subsidiaries involved in the cables business.

Its share price fell 1.01% or 1 sen to close at 97.5 sen today with a total of 220,100 shares traded.

CIMB wins best retail bank award second year in a row

KUALA LUMPUR, March 26 — CIMB Bank Berhad has been recognised by The Asian Banker Awards as the Best Retail Bank in Malaysia for the second year in a row. CIMB Group Consumer Banking chief executive officer Samir Gupta said they were deeply…