Sunday, April 22nd, 2018


Macron may be Europe’s best chance to avert Trump’s tariffs

PARIS, April 22 — France’s Emmanuel Macron lands in Washington tomorrow with a mission to take the edge off Donald Trump’s “America First” foreign policy, for Europe at least. As Macron arrives for the first state visit of Trump’s…

Pound pundits puzzled by Carney stick to guns on May rate hike

LONDON, April 22 — Money-market traders in the UK may have capitulated, but not the analysts. While currency pundits were jolted by Governor Mark Carney’s surprise hint that a rate increase by the Bank of England next month isn’t a foregone…

AirAsia to step up flights within Sabah and Sarawak to grow domestic operations

SEPANG: Low-cost carrier AirAsia Bhd sees room for expanding its domestic operations, which contribute about 40% to its revenue currently, with intercity flights within Sabah and Sarawak.

The airline’s CEO Riad Asmat (pix), who recently took over the reins of the Malaysian unit, told SunBiz in an exclusive interview that the airline has a strong foothold in Sabah and Sarawak, but there are areas where it could “still serve”.

He said its domestic market share ranges between 50% and 60% depending on the state it operates in.

According to international aviation research entity Centre of Asia Pacific Aviation (CAPA), AirAsia’s share in the domestic market has significantly increased “over the past six months, benefiting from capacity reductions by both of its competitors at Kuala Lumpur International Airport (KLIA)”.

“AirAsia’s share of the domestic traffic at KLIA is now 66%, compared to 55% a year ago. KLIA accounts for 65% of total domestic traffic in Malaysia, which increased by 4% in 2017, to 25 million,” CAPA said.

Domestic flights account for 31% of the flight breakdown based on the number of routes and international 69%. AirAsia Malaysia’s total number of routes stands at 114.

“So we are working with authorities and state governments to see how we can get more rights to fly internally within the state … that is work in progress,” Riad, who marked his 100th day in office last week, said.

“We have also committed ourselves to aircraft that we are likely to put into Sabah and Sarawak and that is to increase our frequency, again because the current ones will serve a certain expectation … what we have learnt and what we have studied now is that there are still a lot more passengers who want our services,” he explained.

AirAsia, which has hubs in state capitals Kuching and Kota Kinabalu, its busiest routes, will look into timings, putting in the right aircraft and rescheduling flights once it obtains approvals for the routes, which Riad declined to reveal.

According to the Malaysian Aviation Commission, airports which can accommodate passenger jets in Sabah are Kota Kinabalu International Airport, Sandakan Airport, Tawau Airport and Labuan Airport while in Sarawak, it is the likes of Kuching International Airport, Sibu Airport, Bintulu Airport and Miri Airport.

Statistics provided by the commission showed Kota Kinabalu-Tawau as the busiest transcity route in Sabah while Kuching-Miri was the busiest for Sarawak. The least busiest are Kota Kinabalu–Lahad Datu and Miri–Sibu respectively.

Malaysia Airports Holdings Bhd noted that passenger traffic from Kota Kinabalu to Tawau rose to 630,864 in 2017 from 586,570 in 2016, while Tawau to Kota Kinabalu rose to 630,949 from 586,567.

As for Sarawak, Miri to Kuching increased to 546,235 from 543,295, and Kuching to Miri to 549,646 from 546,351.

The route with the highest increase in passenger traffic is Bintulu-Kuching which saw a passenger traffic growth of 50,859, to 343,081 from 292,222.

The airline has also been strategising its asset and resources utilisation, by releasing capacity from certain segments and increasing flights to routes with good pickup in terms of load factor and better earnings potential.
Terengganu is one of the routes to have seen an increase in flights, to 24 weekly flights from 21 previously.

On whether there are any untapped markets, Riad said the group is constantly on the lookout for new destinations.

IMF lauds Japan’s preference for TPP over bilateral deals

WASHINGTON: A multilateral framework like the Trans-Pacific Partnership (TPP) pact works better in fixing trade imbalances than a bilateral deal, International Monetary Fund (IMF) deputy managing director Mitsuhiro Furusawa said in an endorsement of Japan’s calls for Washington to rejoin TPP.

Japan and the United States are at loggerheads on how to frame trade talks, with US President Donald Trump rebuffing Tokyo’s calls to rejoin the pact, instead preferring a two-way trade deal.

Furusawa said multilateral frameworks like TPP were more effective in solving disagreements over trade and fixing imbalances in a globalised world with intertwined supply chains.

“Bilateral talks alone can’t solve imbalances. It’s therefore more efficient to solve them with a bigger framework,” Furusawa told Reuters on Saturday on the sidelines of the IMF and the World Bank spring meetings.

“In general, a multilateral framework is more efficient for the global economy,” said Furusawa, a former top Japanese currency diplomat.

Japan wants Trump to reconsider his decision to pull the US out of TPP, and is reluctant to meet Washington’s calls to open talks for a two-way trade deal for fear of coming under pressure to open up markets like agriculture.

The two countries agreed at a summit earlier last week to create a new framework focusing on trade talks to iron out differences, though Japanese officials say it will take time to reach a solution agreeable for both.

The US has also engaged in a tit-for-tat trade spat with China, stoking protectionism worries among IMF and Group of 20 finance leaders.
Furusawa said such concerns could hurt now-vibrant Asian economies through various channels.

“Trade negotiations take time, and during that process the uncertainty continues. That would affect not just goods trade but investment, consumption and sentiment,” he added.

While responding to Trump’s tariff threats with retaliation, China recently announced market liberalisation plans such as scrapping a limit on foreign ownership of automotive ventures.

“China has been pushing through market reforms for quite some time, so I don’t think it’s just in response to US pressure,” Furusawa said.

“It’s a move in the right direction. Pushing forward with reforms is good not just for the Chinese economy but for the global economy.”

Referring to Japan's fiscal policy, Furusawa said it was “obvious” the country must proceed with a scheduled sales tax increase next year to rein in its huge public debt.

The government should also take steps to ease the pain from
the tax hike on the economy, including through a temporary increase in fiscal spending, he said.

As the economy continues to strengthen, Japan must push through reforms to boost its potential growth, he said.

“We've seen some progress, such as in areas like corporate governance and trade,” Furusawa said. “The biggest challenge is labour market reform, so we're hoping there will be progress on that front.”

China will welcome US treasury secretary visit to talk trade

BEIJING: China said today it would welcome a visit from US Treasury Secretary Steven Mnuchin, who said he was considering a trip to the Chinese capital to hold talks on the trade dispute seen as a threat to the global economy.

Tensions between the world’s two largest economies have cast a shadow over the gathering of finance ministers in Washington, with concerns a trade war could undercut the global recovery.

Mnuchin had said Saturday during the spring meetings of the International Monetary Fund and the World Bank in the US capital that “a trip is under consideration”.

The Chinese Commerce Ministry today welcomed the move.

“China has received the information that the US side wishes to come in Beijing in order to conduct economic and trade consultations. China welcomes this.”

US President Donald Trump last month approved steep tariffs on tens of billions of dollars of Chinese imports, while Beijing has slapped duties on key US agricultural exports and has threatened to do likewise for the sensitive American soybean industry.

Among 18 bilateral meetings with his counterparts last week, Mnuchin said he had met with Chinese central bank chief Yi Gang.

While the meeting with Yi did not focus on trade with China, Mnuchin said he remains “cautiously optimistic” about the issue.

“The discussions were really around the governor’s actions at the PBOC and certain actions they’ve announced in terms of opening their markets which we very much encourage and appreciate,” Mnuchin said. – AFP

China’s ZTE seeks resolution of US export ban

BEIJING, April 22 — China’s ZTE is seeking a resolution to a US ban on selling it parts and software that it has said threatens its survival. ZTE “has learnt from its past experiences on export control compliance and attaches significant…

AirAsia rides on big data analytics

SEPANG: The airline that made flying more affordable for Malaysians since 2001 is now looking to up its game by using big data analytics to mine data on 80 million unique passengers at its disposal, to personalise and anticipate travelling patterns for marketing purposes.

“We have a database of about 80 million unique individuals. We know where they like to fly to, or when they like to fly during the year, or how many holidays they take maybe during the year.

“Now, the marketing side has already started employing data analytics there, to actually start targeting certain portions of passengers on specific dates or specific periods of the year that they go on holiday,” AirAsia Bhd CEO Riad Asmat told SunBiz last week.

“We can be more specific and will go further, not now but at one point, where maybe we can offer you as an individual, your preferred destination on the right date … and say we will give you a nice package at a discounted rate and all that,” he added.

On data protection, Riad gave an assurance that the data trove is one of its most important assets which, as a “very responsible organisation”, the company is very protective of at all times and use responsibly.

“We don’t share our information with any other parties but ourselves. If you notice what we are doing is we bring expertise inhouse. We employ people and bring in expertise,” he explained.

Riad said while the airline is utilising its current resources, it is also on a continuous lookout for expertise and new technology.

Besides marketing and ticket purchases, digitalisation has enabled AirAsia to improve operational efficiency, through the use of data in features such as live reporting and operations review from the previous day, made available to the team on a daily basis.

This, according to Riad, enables the team to identify and tackle challenges and come up with preventive measures.

“The airline bit is the traditional bit but it will be 100 times enhanced with digitalisation,” he quipped.

Malaysian association among exhibitors at Giftionery Taipei 2018

TAIPEI: Taiwan’s largest gift fair Giftionery Taipei 2018 concluded its four-day exhibition at the Taipei World Trade Center today.

Organised by the Taiwan External Trade Development Council, the 72nd edition of Giftionery Taipei is a three-in-one expo, which also incorporated the Taiwan Houseware & Home Decor Show 2018 as well as Taiwan Souvenir 2018.

More than 20,000 visitors were estimated to have visited the expo that brought together 420 exhibitors, including the Malaysian Gifts and Premium Association, from over 10 countries. Other countries which participated included China, Japan, Nepal, Bhutan, Belize, El Salvador, Nicaragua, the United States, and South Korea.

Giftionery Taipei featured gifts & stationery, promotional items, school & office supplies, art & crafts, houseware & home décor, toys & children articles, handbags, jewellery, tech & trendies and brand licensing.

It also organised a most popular products awards, hot products launch, seminars on global design trends & retail expansion, seminar on licensing market, one-on-one procurement meetings and DIY workshop.

Research firms positive on IHH’s bid for India’s Fortis

PETALING JAYA: Research firms are positive over IHH Healthcare Bhd’s bid for India’s Fortis Healthcare Ltd, as it will further strengthen its presence in the region, which is already represented with the Continental Hospitals and Global Hospitals chain.

In a note last Friday, PublicInvest said it is confident over IHH’s deep experience in improving profitability of hospitals, through strategic decisions in enhancing revenue and management of costs.

The firm also noted that though the two hospital networks are much smaller in comparison to Fortis, it believes that similar approach to restructuring hospital management and operations would greatly benefit Fortis and lead to higher profitability level, especially with the larger scale of hospital chains.

IHH revealed plans to invest up to 40 billion rupees (RM2.35 billion) into Fortis through a preferential allotment of equity shares at a cap price of 160 rupees per share, in a bid to entice Fortis shareholders recently. This is on the back of its earlier non-binding offer of 160 rupees (RM9.40) per share, which was rejected by the Fortis board – citing a binding agreement with TPG-backed Manipal Health.

Fortis, however later released a statement that they have approved the appointment of an expert advisory committee to evaluate binding offers, in view of conformity and certainty.

PublicInvest said this could force IHH into making a binding offer instead, to be considered for the bid. Otherwise, IHH would just have to accept that they are out of the race, it said.

IHH will have to decide soon whether it will make such a binding offer as the independent advisory committee is set to present its findings for the board’s consideration by April 26.

At this point, PublicInvest said it is keeping its earnings estimates and “neutral” call for the group, with an unchanged target price of RM5.79, premised on FY18 blended enterprise value (EV)/ebitda.

On a separate note, RHB Research Institute said that with RM6.1 billion cash and a net gearing of 0.2 times, it is of the view that IHH has the balance sheet to fund the acquisition.

The firm said it believes that Fortis’ hospital assets are strategic for IHH’s plans to grow its footprint in India, but it risks entering into a bidding war to secure a strategic stake.

“Meanwhile, we do note that IHH has strong board and management discipline of not overpaying for acquisitions. It also has a proven track record of being able to integrate and turn around its acquisitions, case in point being Global and Continental Hospital assets in India, which were acquired in 2015,” it added.

Arab world’s top-performing stock joins the US$10b club

DUBAI, April 22 — It has risen a whopping 1,650 per cent since it started trading six years ago, more than any other company based in the Arab world. Abu Dhabi-based NMC Health Plc closed at a record on Friday in London, boosting its market value…