Thursday, April 26th, 2018


ECB keeps massive stimulus in place as trade headwinds rise

FRANKFURT, April 26 — European Central Bank chief Mario Draghi warned today of storm clouds on the horizon for the eurozone as fears mount of a global trade war, prompting the bank to keep its massive stimulus scheme in place. Early hints a…

Facebook surges as US stocks open higher

NEW YORK, April 26 — Wall Street stocks rose early today following a batch of mostly good earnings from Facebook and others but airline shares tumbled on worries about higher fuel costs. About 10 minutes into trading, the Dow Jones Industrial…

Indonesia central bank ready to adjust rates if rupiah endangers stability

JAKARTA, April 26 — Indonesia’s central bank governor said today he would be prepared to adjust the benchmark interest rate if weakness in the rupiah currency threatened its inflation target or the stability of the financial system. The rupiah…

DACSEE planning ICO in Malaysia

PETALING JAYA: Cryptocurrency centric ride-hailing service operator DACSEE is planning its first initial coin offering (ICO) in Malaysia despite a much publicised failed attempt by another issuer, CopyCash Foundation early this year.

After having funding activities elsewhere, including Bangkok, DACSEE is now eyeing to have its footprint in the country and claims to be in talks with the regulators for the exercise.

“We are currently still in the midst of obtaining the regulations in Malaysia… once we have finalised it then we will proceed to embark on this coin offering here (Malaysia),” DACSEE co-founder and COO Lim Chiew Shan told SunBiz.

DACSEE is now available for users in Malaysia to download, it is expected to be available on iOS App store April 27.

Acknowledging cryptocurrency as a grey area in Malaysia, he said the company is working very closely with authorities such as the Land and Transport Commission (SPAD) and other government authorities to ensure that safety and requirements of passengers are met when they use the platform.

“DACSEE prior to this had engaged with SPAD and presented their business model and sought advice (in January). Pertaining to certain elements in their business model they have been advised to get certification from Bank Negara Malaysia and Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK). Other than that, they haven’t come back to us,”a spokesman from SPAD told SunBiz.

The Securities Commission had recently announced that they were engaging with 12 ICO issuers, however it is understood that DACSEE is not one of them.

Lim highlighted that the company sees raising funds by way of an ICO as a better strategy compared with the traditional way of looking for investors, especially with the presence of well-funded e-hailing players such as Grab in the market.

To sum up, there will be three fundraising stages – namely angel contributor round, pre-ICO and ICO, after which DACSEE tokens will only be available at exchanges. A total of three billion DACSEE tokens were pre-mined on the Ethereum network on Oct 3, 2017.

According to its website with less than 30 days left for the ICO to end, the company has thus far raised about US$24.23 million (RM94.8 million). Worth noting is that it has seen participation from Malaysian investors, accounting for less than 5% of the total funds raised.

Conversation threads sighted by SunBiz in a closed telegram group used by the company for engagement with drivers and investors, revealed that the pre-ICO ended in February and the minimum amount of participation is US$3,000, while the ongoing ICO round is US$20. One DACSEE token is priced at US$0.062 (24sen).

The DACSEE platform enables drivers to build their own fleet with partner drivers, and users registering with DACSEE automatically become a rookie driver and passenger, which gives drivers and referees a 1-2% overriding commission in the form of DACSEE token, offering opportunities to earn passive income.

Lim explained that drivers pay commission in the form of a token, unlike other ride-hailing platforms which requires drivers to pay a deposit before accepting passengers.

“This makes a market demand, as all drivers on the platform will have to purchase the token through the integrated exchange using the application.”

A promotional literature on the company’s Facebook page read that DACSEE enables back-end cryptocurrency trading with aim of currency rewards and it does not make profit from drivers.

The SC and BNM had early this year cautioned ICO issuers that no person is permitted to carry out any regulated activities such as fundraising, fund management and dealing in capital market products without obtaining necessary approval or authorisation.

EU monitoring aluminium imports after US tariffs

BRUSSELS: The European Union has started monitoring imports of aluminium to determine whether US tariffs have led to a surge in shipments of the metal into Europe, the EU official journal said today.

Data collected on the quantity and value of incoming aluminium products will help the bloc decide whether to take measures to limit imports.

The European Commission began an investigation last month to assess the need for potential “safeguard” measures for steel.

Steel imports have been under surveillance since April 2016.

The United States imposed import tariffs of 25% on steel and 10% on aluminium in March, although the European Union and six other countries secured temporary exemptions.

The commission, which oversees trade policy in the 28-nation EU, believes that the 10% tariff introduced by the United States has increased the risk that more aluminium will be diverted to Europe at depressed prices.

The EU official journal said that aluminium product imports increased by 28% between 2013 and 2017, while prices of such imports fell by 5%.

Significant oversupply has built up since the early 2000s, with most of the new capacity in China, the journal said.

It added that although China exports very little primary aluminium, this has depressed prices of the globally traded commodity.

In the European Union, only 16 smelters are still in operation, compared with 26 in 2008, and a number are at risk of closure, it added. The surveillance will apply to imports of aluminium exceeding 2.5 tonnes. – Reuters

PPB buys stake in property firm from LTAT for RM59m

PETALING JAYA: PPB Group Bhd is acquiring a 16.8% stake in Hillcrest Gardens Sdn Bhd from Lembaga Tabung Angkatan Tentera (LTAT) for RM59.06 million cash.

PPB told Bursa Malaysia that it had on April 26 entered into a sale and purchase agreement with LTAT for the proposed acquisition, which will be funded through internal funds.

Hillcrest, which is involved in property development and property management, reported audited net assets and net profit of RM199.55 million and RM5.72 million for the financial year ended Dec 31, 2017.

LTAT’s original cost of investment in the sale shares, which was incurred in 1976, is RM1.2 million.

PPB said the proposed acquisition will enable the group to expand its investments in property-based activities and to continue diversifying its source of earnings.

In addition, it noted that the 147.78 acres of land owned by Hillcrest is strategically located in Taman Puchong Utama and Taman Sri Gombak. The land is expected to contribute positively to PPB’s future earnings.

PPB’s major shareholder Kuok Brothers Sdn Bhd has a direct and indirect interest of 51.9% in Hillcrest, hence is deemed interested in the proposed acquisition.

Other interested parties include PPB managing director Lim Soon Huat, chairman Tan Sri Oh Siew Nam and director Datuk Ong Hung Hock.

PPB shares gained 2 sen or 0.1% to close at RM19.20 today on some 957,400 shares changing hands.

No immediate impact from solar power plant delays: MARC

KUALA LUMPUR: The Malaysian Rating Corp Bhd (MARC) sees no immediate impact on Quantum Solar Park (Semenanjung) Sdn Bhd’s (QSP Semenanjung) AA-IS/Stable rating on its RM1 billion Green SRI Sukuk (sukuk) following delays in commercial operation dates (COD) for its three solar power plants.

The scheduled COD had been extended by Tenaga Nasional Bhd (TNB) to March 31, 2018 from Dec 31, 2017 for all three plants at Gurun, Merchang and Jasin. The CODs are now targeted to occur by end-June 2018 at the three plants.

“MARC’s view of no immediate rating impact is premised on QSP Semenanjung’s sufficient cash buffers and sponsors’ support to provide liquidity should the need arise,” it said.

Additional liquidity buffer will be provided by Scatec Solar Solutions Malaysia Sdn Bhd, the engineering, procurement and construction (EPC) contractor, through a deferment of the final 5% payment of the EPC contract (RM52.1 million) from QSP Semenanjung for up to one year after all plants have achieved COD.

“MARC notes that Scatec may receive partial payments if the Goods and Services Tax input refunds are received by the project companies or if QSP Semenanjung has excess cash after setting aside the finance service reserves for October 2018 and April 2019.”

The completion delays are not expected to result in a breach in the covenanted minimum finance service cover ratio (FSCR) with cash under the sukuk. Any project cost overruns (including liquidated damages payable to TNB if not claimable from the EPC contractor) will be paid by the sponsors either from the RM50 million contingency equity backed by a bank guarantee or cash injections.

MARC said it will continue to monitor construction progress and take the necessary rating action should the plants encounter extended delays beyond the revised target completion date that could result in a weakening of QSP Semenanjung’s FSCR and liquidity.

TM allocates up to 30% of revenue for capex

KUALA LUMPUR: Telekom Malaysia Bhd (TM) is allocating up to 30% of revenue for capital expenditure (capex) this year.

Group chief executive officer Datuk Seri Mohammed Shazalli Ramly said the allocation would exceed last year’s RM2.76 billion as the company focused on expanding the infrastructure for WiFi, high speed broadband and long-term evolution services.

“It is a balance in capex between mobile infrastructure and fiberisation,” he told reporters after TM’s annual general meeting today.

Mohammed Shazalli said last year’s capex was lower than guided due to internal reprioritisation of projects following the company’s decision to converge all of its businesses under the UniFi brand.

“With the strategic repositioning, UniFi is now the one and only brand in Malaysia that offers a truly comprehensive suite of converged services for home, mobile, WiFi and television.

“The convergence is expected to be completed by next year,” he said.

Mohammed Shazalli said as outlined by the Prime Minister Datuk Seri Najib Abdul Razak in Budget 2017, the company had introduced its e-biz and edu packages to benefit the e-entrepreneur and youth segments towards establishing a high-skilled workforce for the nation.

He said the move was a continuation of TM’s Broadband Improvement Plan to provide Malaysians with faster broadband access.

Going forward, Mohammed Shazalli said the company was on track to introduce a new product in the second half of this year that would replace Streamyx.

“The product would have better bandwidth speed and capacity compared with Streamyx,” he added. – Bernama

Frontken Q1 earnings jumps 26% on semiconductor business growth

PETALING JAYA: Engineering services provider Frontken Corp Bhd’s net profit jumped 26% to RM6.3 million in the first quarter ended March 31, 2018, from RM5.02 million in the previous corresponding quarter mainly due to improved revenue and lower forex losses.

Revenue for the quarter rose 5.8% to RM70.9 million, compared with RM67 million in the same period last year, mainly contributed by the group’s Taiwan-based subsidiary Ares Green Technology Corp (AGTC).

It told the stock exchange that the improved business performance achieved by AGTC was largely due to the positive growth of the semiconductor business in the current quarter.

However, it said slowdown in its customers’ business in the oil and gas sector resulted in a drop in business for the group’s subsidiaries engaged in that industry in Malaysia, Singapore and the Philippines.

On its prospects, the group anticipates that the overall business conditions this year will continue to be challenging amid uncertainties such as the future trade policy of the US.

Nevertheless, the group said it is cautiously optimistic that its performance for the remaining months will be satisfactory. It said it will also continue to be vigilant in its cost management and continually explore ways to improve its efficiency.

MARC affirms UEM Edgenta’s stable outlook

PETALING JAYA: Malaysian Rating Corp Bhd (MARC) has affirmed its rating on UEM Edgenta Bhd’s Islamic bonds with a stable outlook but warned of downward rating pressure from a sharp increase in leverage and/or significant changes in the non-concession business.

The ratings agency has a MARC-1IS and AA-IS ratings on UEM Edgenta’s Islamic commercial papers (ICP) and Islamic medium-term notes (IMTN).

The rating agency said in a statement its ratings primarily reflect the group’s strong business profile as a longstanding provider of hospital support and highway maintenance services.

“These businesses are undertaken through long-term agreements and generate steady income. The long-term rating is also underpinned by MARC’s assessment of parental support from UEM Group. The key moderating factor is the periodically high working capital requirement that has weighed on operating cash flow,” it added.

In addition, MARC said it views the dividend income from key subsidiaries in hospital support and highway maintenance services as stable and sufficient to meet the holding company’s financial obligations on its borrowings of RM301.7 million, including the outstanding RM50 million ICP and RM250 million IMTN under the rated programme as at end-March 2018.

MARC said the stable outlook also incorporates its expectations that the group would maintain credit metrics that are commensurate with the current rating band.

The agency views that UEM Edgenta’s recent disposal of its 61.2% subsidiary Opus International Consultants Ltd (OIC), a New Zealand-based company involved in asset consultancy, has strengthened the group’s credit metrics.

It believes the loss of earnings from the disposal of OIC would be offset by stable earnings from UEMS Pte Ltd (UEMS) as well as organic growth and expected margin improvements across UEM Edgenta’s key businesses.

MARC added that the group has further strengthened its position in this segment following the recent acquisition of Singapore-based UEMS, which also provides hospital support services to 90 hospitals and healthcare institutions in Singapore, Malaysia and Taiwan.