Tuesday, May 15th, 2018

 

Islamic finance feels heat from US$700m Dana sukuk saga

DUBAI, May 15 — Islamic finance operators are scrambling to tighten the industry’s rules in order to make sure other companies cannot take the same path as Dana Gas, which this week forced a US$700 million (RM2.7 billion) debt restructuring….


Poll: Slower growth for Malaysian economy in Q1

KUALA LUMPUR: Malaysia’s economic growth slowed in the first quarter of 2018 as export growth lost momentum, a Reuters poll showed, and the outlook for the rest of the year was clouded by uncertainty over the new government’s policies following a shock election result.

The median forecast from the poll of 11 economists was for annual growth of 5.5% in January-March, compared with the previous quarter’s 5.9%.

If correct, it would mark a second straight quarter of slowing growth. First quarter growth forecasts ranged from 5.4% to 5.7%.

“It’s a bit of a modest slowdown … it seems from trade data that it has started to slowdown in Q1,” said Brian Tan, an economist with Nomura in Singapore.

Economists polled expect full-year 2018 growth to be at the lower end or below the central bank’s projection of 5.5% to 6.0%, though forecasts could change once the new elected government headed by veteran leader Tun Dr Mahathir Mohamad provides clarity on its fiscal policies.

“At this point it’s too premature to revise (full-year figures),” said Julia Goh, a Malaysia-based economist with UOB.

“We will relook the numbers once we get greater clarity on fiscal policy and after more details are released.”

Malaysia’s 2017 full-year growth came in at 5.9%, its best in three years and an acceleration from 2016’s 4.2%.

After posting 12.7% export growth, in ringgit terms, during the fourth quarter of 2017, export growth slowed to 5.8% in the first quarter of 2018.

Tan noted a fall off in crude palm oil exports, which totalled RM11.5 billion in the first quarter, down 5.7% from the same quarter a year ago.

Bank Negara Malaysia kept its key interest rate unchanged at 3.25% last Thursday, a day after Malaysia’s voters dumped incumbent prime minister Datuk Seri Najib Abdul Razak, inflicting the first ever defeat on the Barisan Nasional coalition that had led Malaysia since the country’s independence from British colonial rule.

The central bank raised its rate by 25 basis points in January, making its first increase since July 2014, and the first change since July 2016 when it slashed the rate by 25 basis points.


Crude oil slips as dollar strengthens and stock markets slump

NEW YORK, May 15 — Crude fell from the highest price in more than three years as the US dollar rallied and stocks weakened, overshadowing tensions in the Middle East. Futures in New York slipped after climbing within pennies of US$72 (RM285.16) a…


Mexico says Nafta deal unlikely this week, signing possible this year

MEXICO CITY, May 15 — Mexico’s economy minister said today that he saw diminishing chances for a new North American Free Trade Agreement ahead of a May 17 deadline to present a deal that could be signed by the current US Congress. US House…


Wall St drops on concerns over US-China trade woes, rising inflation

NEW YORK, May 15 — Wall Street indexes fell today as investors worried about a lack of progress in US-China trade talks and Treasury yields rose after US retail sales data indicated rising inflation. The United States and China are still “very…


Ringgit will do better when investor confidence is restored: Zeti

KUALA LUMPUR: Tan Sri Zeti Akhtar Aziz said today the ringgit will perform better when investor confidence in the economy and the country is restored.

The former central bank governor said the new government is working very hard to address all areas of concern.

“I believe the fundamentals are still there (intact). When the fiscal regime and conditions improve, they will contribute towards improved ratings.

“This is because all other categories – financial system, macroeconomic conditions, inflation, and financial stability – are ready and should have a higher rating.

“But because of the fiscal issue, I understand, we (have been accorded) a single ‘A’ when actually we (Malaysia) have the potential to be rated double ‘A’,” Zeti told reporters after chairing a meeting with fund managers here.

The government, she said, wants to improve the fiscal position both on the revenue and the expenditure sides so that there will be project reprioritisation, and efforts to increase efficiency and reduce wastage.

On the abolishment of the Goods and Services Tax, which was part of Pakatan Harapan’s election manifesto, Zeti said it will be done in accordance with existing rules and processes.

“Tun Mahathir has always mentioned that rules exist in our country,” she said, referring to Prime Minister Tun Dr Mahathir Mohamad.

“We are not going to deviate from any of the rules and the processes in order to undertake these kind of changes. Therefore, what we’ll do within the 100 days is to make an announcement of what we want to do. The process of whether it has to go through Parliament for approval will take place thereafter,” she said.

Once a decision is made, everything, including strategy, process, technology and system, will be made known to the public. Everything undertaken will be comprehensive and will not done on a piecemeal basis, otherwise there will be other issues to be addressed, said Zeti.

About 180 local and international fund managers attended the meeting that lasted almost two hours.

“It’s (outcome) is going to be very positive. The meeting was helpful because the people involved in the Council (of Eminent Persons) have been involved in the economy before and fund managers are greatly assured by that,” she added. – Bernama


Ekuinas says yet to engage with new govt

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas) has yet to engage with the new government on its direction moving forward, said CEO Syed Yasir Arafat Syed Abd Kadir.

“I’ve not met anybody yet and we wait for the development on that,” he told a press conference after unveiling the Ekuinas Annual Report 2017 today.

Ekuinas is a government-linked private equity fund management company established during the premiership of former prime minister Datuk Seri Najib Abdul Razak. The government then provided an initial endowment in the form of a grant held in a trust known as Yayasan Ekuiti Nasional (YEN), whose mandate is to enhance and grow bumiputra equity interest. Trustees of YEN include Najib.

As a professional fund management firm, Syed Yasir said, Ekuinas continues to do its job.

Changes in the government have proven to be positive and the market has responded well to overall changes, he noted.

“Right steps are being taken to ensure that markets will remain positive and to strengthen the overall economy. That is positive messaging from the government,” he told reporters.

Ekuinas foresees 2018 to be another challenging year for the market, which may impact its portfolio companies due to internal and external factors, such as changes in the global economic and business landscape.

Ekuinas has increased the number of direct and outsourced investments to 58 in 2017 from 53 in 2016; and a total committed investment of RM3.6 billion compared with RM3.0 billion in 2016.

To date, Ekuinas has recorded total realisation proceeds amounting to RM2.3 billion from divestment activities, dividend income and interest income.

Ekuinas Direct (Tranche 1) Fund reached full deployment with the realisation of its assets, and recorded a gross portfolio return of RM476.7 million, translating into annualised gross internal rate of return (IRR) of 10.1% and a net IRR of 6.5%.

Ekuinas Direct (Tranche 2) Fund recorded a gross portfolio return of RM391.7 million, achieving annualised gross IRR and net IRR of 14.6% and 10.2% respectively.

Ekuinas Direct (Tranche 3) Fund recorded gross portfolio return of RM53.9 million with an annualised gross IRR of 10.7%.

Ekuinas’ unique private equity model has raised the game for local businesses and in increasing bumiputra economic participation through bumiputra equity ownership, which has climbed to RM4.4 billion or 1.5 times Ekuinas’ invested capital, as well as an increase in total shareholder value of RM6.3 billion, or 2.2 times the total invested capital.

Last year saw Ekuinas’ maiden foray into the manufacturing sector with the acquisition of Davex (Malaysia) Sdn Bhd.

“We’re always open to new investment opportunities as long as they meet our criteria,” said Syed Yasir.


Ekuinas to look at all options to strengthen Icon Offshore

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas), which is looking at strengthening the balance sheet of its 42.3%-owned loss-making Icon Offshore Bhd, is not dependent on listing companies via initial public offerings (IPO) as an exit strategy, preferring a clean exit to realise its investments.

“IPO is the least preferred option because you still have to deal with the rest of your assets. We like to see that (IPO) as an option but not preferring it. A clean exit of the entire stake we own in the company is a better option than IPO,” CEO Syed Yasir Arafat Syed Abd Kadir told a press conference after unveiling the Ekuinas Annual Report 2017 today.

He said Ekuinas is exploring all angles for ailing Icon Offshore and needs to look at the market itself to see whether is it the right time to sell the vessels.

“The best option is to dispose of the vessels but the market is also very depressed. We’re looking at all options for Icon Offshore to strengthen the balance sheet, restructure it to ensure it’s on stronger footing.”

Syed Yasir said Ekuinas is also exploring all possibilities for Cosmopoint College and Kuala Lumpur Metropolitan University College (KLMUC), which could include a merger.

“Divestment won’t happen so soon, but we’re exploring strategic collaboration or merger with other education groups. It’s too soon to explore divestment for KLMUC and Cosmopoint. That’s a lot of value that can be gained from that investment.”

On ILMU Education Group, which is the holding company for Ekuinas’ portfolio of education companies, Syed Yasir said its initial intention was to list ILMU but from the depth of the market and the valuation perspective, it will only go by a partial exit.

Icon Offshore, Cosmopoint Group, Unitar and Revenue Valley are four portfolio companies that are transferred to the Ekuinas Direct (Tranche 3) Fund from Ekuinas Direct (Tranche 2) Fund as it is being deployed.

“The landscape of the education sector has changed tremendously. It took us a long time to clean up the organisation. We’ve transferred it to Fund 3, give us some leeway to deal with these assets. We’ve seen the bottom of it, we’re confident of taking it to the next phase,” Syed Yasir said.

“We just want to ensure that whatever opportunity … it’s bought at the right value and opportunities within the sector are interesting enough for us to grow the business.”


Brighter outlook for Malaysian aviation industry: AirAsia boss

BANGKOK: Low-cost carrier AirAsia Group Bhd CEO Tan Sri Tony Fernandes sees a better outlook for the local aviation industry following the change in political landscape.

“I’m really super excited by the potential that could be fully realised by Malaysia. I’ve been fighting for low PSC (passenger service charge) and low-cost airports in Penang, Kota Kinabalu and Kuching. AirAsia X can also operate in these places, but we need low charges,” he said at a press conference today in conjunction with the group’s celebration of welcoming its 500th million customer since its inception 16 years ago.

However, Fernandes lamented that the Malaysian Aviation Commission (Mavcom) has lost its credibility of being fair to the aviation industry.

“I thought Mavcom would be great for the industry. I thought Mavcom is independent and looks at the industry fairly.”

“Aireen Omar (deputy group CEO of digital transformation and corporate services), Benyamin Ismail (AirAsia X Bhd CEO) and myself have had nothing to react now, it’s sort of torture dealing with these guys. I’m glad everything is coming out now.”

He added that Mavcom is no longer relevant to the aviation industry.

“With a fair Ministry of Transport, why do we need Mavcom?” he asked.

Looking forward, Fernandes said AirAsia will continue with its fleet expansion plan to add six to 10 wide-body aircraft and 30 to 35 narrow-body aircraft per annum.

“It is our dream when AirAsia flies to every continent, then you will have flights to Africa, but it depends on whether we have the right planes.”

AirAsia recently hit the 500 million mark in the number of customers served.

“Half a billion guests is no small feat – it’s seven times the population of Thailand, 16 times the population of Malaysia and about 80% of the entire Asean population.”

“Today, we have more than 200 planes, over 20,000 employees of 50 different nationalities and half a billion guests, 60% of which were first-time flyers,” said Fernandes.

In the past 16 years, AirAsia has flown over 500 million guests to over 130 destinations.


Brighter skies seen for aviation industry

BANGKOK: Low-cost carrier AirAsia Group Bhd CEO Tan Sri Tony Fernandes sees a better outlook for the local aviation industry following the change in political landscape.

“I’m really super excited by the potential that could be fully realised by Malaysia. I’ve been fighting for low PSC (passenger service charge) and low-cost airports in Penang, Kota Kinabalu and Kuching. AirAsia X can also operate in these places, but we need low charges,” he said at a press conference in conjunction with the group’s celebration of welcoming its 500th million customer since its inception 16 years ago.

However, Fernandes lamented that the Malaysian Aviation Commission (Mavcom) has lost its credibility of being fair to the aviation industry.

“I thought Mavcom would be great for the industry. I thought Mavcom is independent and looks at the industry fairly.”

“Aireen Omar (deputy group CEO of digital transformation and corporate services), Benyamin Ismail (AirAsia X Bhd CEO) and myself have had nothing to react now, it’s sort of torture dealing with these guys. I’m glad everything is coming out now.”

He added that Mavcom is no longer relevant to the aviation industry.

“With a fair Ministry of Transport, why do we need Mavcom?” he asked.

Looking forward, Fernandes said AirAsia will continue with its fleet expansion plan to add six to 10 wide-body aircraft and 30 to 35 narrow-body aircraft per annum.

“It is our dream when AirAsia flies to every continent, then you will have flights to Africa, but it depends on whether we have the right planes.”

AirAsia recently hit the 500 million mark in the number of customers served.

“Half a billion guests is no small feat – it’s seven times the population of Thailand, 16 times the population of Malaysia and about 80% of the entire Asean population.”

“Today, we have more than 200 planes, over 20,000 employees of 50 different nationalities and half a billion guests, 60% of which were first-time flyers,” said Fernandes.

In the past 16 years, AirAsia has flown over 500 million guests to over 130 destinations.