Wednesday, May 16th, 2018

 

Bursa freezes lower limit prices for MyEG, George Kent

KUALA LUMPUR: Bursa Malaysia Securities has frozen the lower limit prices for MyEG Services Bhd and George Kent (M) Bhd effective today, following the sharp fall of the companies’ share prices in the past two days.

In an announcement today, Bursa Malaysia Securities had set the lower limit for MyEG at RM1.27 and George Kent at RM1.94.

It added that the freeze was due to the counters trading at the static limit down for the two consecutive days.

On Monday, MyEG shares plunged 53 sen to RM1.27 from RM1.80 on Tuesday last week, while George Kent fell 77 sen to RM1.94 from RM2.76 at the close of the previous trading day.

Both shares were suspended for the whole day on Tuesday, along with Gabungan AQRS Bhd and Excel Force MSC Bhd. – Bernama


Dialog Q3 profit rises to RM122m

KUALA LUMPUR: Dialog Group Bhd’s net profit for the third quarter ended March 31 jumped 25.1% to RM122.37 million from the previous corresponding quarter’s RM97.82 million.

Revenue for the period, however, declined 5.1% to RM867.37 million from RM913.61 million.

In a filing with Bursa Malaysia today, the group said both its Malaysian and international operations recorded higher profits compared with the same corresponding period in 2017.

“The better performance in Malaysia was contributed by the midstream and downstream activities in particular, from the engineering, construction and plant maintenance services for various projects.

The financial performance for the current quarter included the consolidation of Langsat Terminals since they became subsidiaries in September 2017. – Bernama


June CPO export tax to stay at 5%

KUALA LUMPUR: Malaysia, the world’s second-largest palm oil producer, kept its crude palm oil export tax at 5% in June, according to the Malaysian Palm Oil Board today, citing the national customs department.

The Southeast Asian nation calculated a palm oil reference price of RM2,421.19 per tonne for June. Any price above RM2,250 incurs a tax.

Malaysia resumed export taxes on crude palm oil in May at a 5% rate, after suspending it for four months at the start of the year to increase demand and boost prices.

Palm oil’s benchmark prices were last trading down 0.7% at RM2,718 today afternoon. – Reuters


Euro slides below US$1.18 on Italy debt concerns and dollar jump

LONDON, May 16 — The euro slumped to a five-month low today after reports that a likely future Italian government would seek debt forgiveness from European creditors and as the dollar resumed its powerful, month-long rally. The reversal in…


Britain to renationalise East Coast rail line as profits fall short

LONDON, May 16 — The British government is renationalising the rail route between London and Edinburgh, taking back the line from private operator Stagecoach after the company over-estimated the profits it could make on the route. It is the third…


Malaysia’s Q1 GDP growth to soften slightly to 5.5%: MIDF Research

PETALING JAYA: MIDF Research has forecast Malaysia’s gross domestic product (GDP) growth for the first quarter (1Q18) to slightly moderate at 5.5%, as economic activities maintain an upward trajectory amid of strong domestic spending and continuous surging in external trade performances.

“However, unfavourable base effects, inflationary pressure and slight deceleration in private spending will be among dragging factors in economic growth for the first quarter. As for the whole year, we remain firmly on our call of GDP to record growth of 5.5% in 2018,” the research house said today.

Based on the recently released Malaysian Institute of Economic Research (MIER) survey results for 1Q18, it said business conditions index fell below 100-threshold line at 98.6 points while consumer sentiment index improved further to 91 points, highest since 4Q14.

“The drop in business confidence could be a result of concerns over international risks such as the possibility of a trade war.”

Trade surplus widen further to RM33.4 billion, highest in eight years. Thanks to the robust external trade performance, trade surplus registered more than RM30 billion marks in 1Q18. The large size of trade surplus will translate into higher size of real trade balance and thus supporting GDP growth in the first quarter.

“We foresee the deceleration in external trade performance would drag economic growth in 1Q18.”

Overall industrial production’s average growth for 1Q18 is 3.9% year-on-year (y-o-y), higher than 3.6% registered in the last quarter. The continuous expansion is driven by sturdy growth in manufacturing and electricity productions by 5.2% y-o-y and 3.8% y-o-y respectively.

“Regional and global macro indicators are still indicating optimistic signs and therefore reflecting upbeat demand remains in global trade radar. Plus, we believe the gradual rise in commodity prices will further progress commodity-related industries in 1Q18.”

MIDF is expecting a slight slowdown for private expenditures in 1Q18. Distributive trade continued to expand at a slower pace of 7.3% y-o-y in 1Q18 as compared to 8.4% y-o-y in 4Q17.

“Main dragging factor is dipped motor vehicles sales as consumers slowed back their ramp-up spending during year-end sales in the final quarter of last year. Similarly, we foresee a decelerating pace in private investment given that key indicators such as working capital loan shrank by 17% y-o-y whereas imports of capital goods slowed to 3.3% y-o-y during the quarter.”


Slightly softer Q1 GDP growth of 5.5% forecast

PETALING JAYA: MIDF Research has forecast Malaysia’s gross domestic product (GDP) growth for the first quarter (1Q18) to slightly moderate at 5.5%, as economic activities maintain an upward trajectory amid of strong domestic spending and continuous surging in external trade performances.

“However, unfavourable base effects, inflationary pressure and slight deceleration in private spending will be among dragging factors in economic growth for the first quarter. As for the whole year, we remain firmly on our call of GDP to record growth of 5.5% in 2018,” the research house said today.

Based on the recently released Malaysian Institute of Economic Research (MIER) survey results for 1Q18, it said business conditions index fell below 100-threshold line at 98.6 points while consumer sentiment index improved further to 91 points, highest since 4Q14.

“The drop in business confidence could be a result of concerns over international risks such as the possibility of a trade war.”

Trade surplus widen further to RM33.4 billion, highest in eight years. Thanks to the robust external trade performance, trade surplus registered more than RM30 billion marks in 1Q18. The large size of trade surplus will translate into higher size of real trade balance and thus supporting GDP growth in the first quarter.

“We foresee the deceleration in external trade performance would drag economic growth in 1Q18.”

Overall industrial production’s average growth for 1Q18 is 3.9% year-on-year (y-o-y), higher than 3.6% registered in the last quarter. The continuous expansion is driven by sturdy growth in manufacturing and electricity productions by 5.2% y-o-y and 3.8% y-o-y respectively.

“Regional and global macro indicators are still indicating optimistic signs and therefore reflecting upbeat demand remains in global trade radar. Plus, we believe the gradual rise in commodity prices will further progress commodity-related industries in 1Q18.”

MIDF is expecting a slight slowdown for private expenditures in 1Q18. Distributive trade continued to expand at a slower pace of 7.3% y-o-y in 1Q18 as compared to 8.4% y-o-y in 4Q17.

“Main dragging factor is dipped motor vehicles sales as consumers slowed back their ramp-up spending during year-end sales in the final quarter of last year. Similarly, we foresee a decelerating pace in private investment given that key indicators such as working capital loan shrank by 17% y-o-y whereas imports of capital goods slowed to 3.3% y-o-y during the quarter.”


Market reaction post-GE 14 ‘a lot better than expected’

PETALING JAYA: Market reaction post-election has been a lot better than anticipated, according to PublicInvest Research, adding that the knee-jerk reaction was short-lived.

“Expectations are running high that the country will actually come out stronger post-adjustments, though we will also have to acknowledge that there will likely be short-term pains (potentially slower GDP growth from reprioritising of investments, higher budget deficits from revenue loss) for the longer-term gains of structural reform and Malaysia hitting its full potential,” the research house said.

Given the lack of details at this point, it is still unable to assess the true economic impact. Nonetheless, its estimates are still for the FBM KLCI to close the year-end at 1,860 points.

“We see greater opportunities in the mid and small cap space however, with some share prices having been beaten down despite no discernible changes in fundamentals.

“Market conditions will remain encouraging, underpinned by improving global growth and earnings, and still hold the view that significant market weaknesses should be taken as opportunities to accumulate,” said PublicInvest.

The research house had the privilege of hearing from Tun Daim Zainuddin and Tan Sri Zeti Akhtar Aziz, two esteemed members of the Council of Eminent Persons, in a meet-up session with the investment fraternity yesterday. Various topics were broached, but most widely discussed was the issue of revenue shortfalls and mitigating actions.

While details are still patchy at this juncture, unsurprisingly so considering it’s barely been a week since the change in government, it would seem that the new administration has hit the ground running.

“With Prime Minister Tun Mahathir busy on the political end of things, the Council has already met up with government-linked investment companies, the various pension funds, international ratings agencies, ministries and workers unions amongst many others, despite only having been set up this recent Saturday,” said PublicInvest Research.


ECRL work running as usual

KUALA LUMPUR: It’s business as usual for Malaysia Rail Link Sdn Bhd (MRL) with 14% progress achieved on the East Coast Rail Link (ECRL) project as of yesterday, says head of corporate communication Rosmah Mahmud.

“The Council (of Eminent Persons) is fully aware of the progress (made thus far) on the ECRL. There is no stop order of work on ECRL,” she told reporters after a 40 minute meeting between the council and MRL CEO Datuk Darwis Abdul Razak today.

The ECRL is owned by MRL, a special purpose vehicle wholly owned by the Minister of Finance Incorporated (MoF Inc).

Rosmah pointed out that 14% progress made was mostly related to technical work and land acquisition.

Asked on what transpired during the meeting earlier, she said what was discussed is the prerogative of the council to reveal.

“The council is expected to issue a statement by the end of this week,” said Rosmah.

The project has come under scrutiny because of its burgeoning cost, which critics say is the most expensive on a per kilometre basis. – Bernama


Italy draft government deal proposes exit from euro

ROME, May 16 — Leaving the euro, renegotiating EU treaties and writing off €250 billion (RM1.2 trillion) of Italian debt are some of the measures proposed in a draft government agreement between Italy’s rebellious Five Star Movement (M5S) and…