Tuesday, May 29th, 2018


Not enough time for tech customs solution to Brexit, warns Aston Martin CEO

GAYDON (England), May 29 — The boss of carmaker Aston Martin warned it was probably too late to roll out the kind of technology needed for the post-Brexit customs plan that is favoured by many British eurosceptics. Chief Executive Andy Palmer told…

US consumer confidence rises in May

WASHINGTON, May 29 — US consumer confidence rose in May, reversing the prior month’s modest decline as consumers’ mood grew rosier, according to a survey released today. The uptick in positive sentiment suggested the world’s largest economy…

Alibaba leads consortium in US$1.4b deal for stake in Chinese courier ZTO

SHANGHAI, May 29 —  Alibaba Group Holding Ltd today said it has led a consortium of investors to buy about 10 per cent of Chinese courier ZTO Express (Cayman) Inc for US$1.38 billion, as part of the e-commerce firm’s push into offline…

Dollar at 10-month high against euro as ‘Quitaly’ fears rise

NEW YORK, May 29 — The dollar rose today to a 10-month high against the euro after a sell-off in Italy’s debt market drove investors to dump the single currency. A deepening political crisis in Italy, the euro zone’s third-biggest economy,…

KWS seeks to buy Bayer’s vegetable business, countering BASF

FRANKFURT, May 29 — German seed seller KWS Saat has made an eleventh-hour bid for Bayer’s vegetable seed business, which Bayer is selling to BASF to get approval of its planned purchase of Monsanto. KWS, the world’s No.1 supplier of sugarbeet…

US stocks fall on political turmoil in Italy, Spain

NEW YORK, May 29 — US stocks retreated early today, following European markets lower as political turmoil in Italy and Spain accentuated worries about the eurozone. About 10 minutes into trading, the Dow Jones Industrial Average had dropped 0.8…

Canada govt steps in to buy controversial pipeline

OTTAWA, May 29 — The Canadian government said today it will buy Kinder Morgan Canada Ltd’s Trans Mountain pipeline project for C$4.5 billion (approx. RM13.95 billion) but does not intend to be the long-term owner of the project, which has faced…

Nestle to cut 500 jobs in biggest Swiss restructuring plan

GENEVA, May 29 — Nestle SA plans to cut as many as 500 computer-service jobs in its home market of Switzerland as Chief Executive Officer Mark Schneider aims to boost profitability at the world’s largest food company. Nestle is shifting…

US to continue trade actions against China, says White House

WASHINGTON, May 29 — The United States said today that it will continue pursuing action on trade with China, days after Washington and Beijing announced a tentative solution to their dispute and suggested that tensions had cooled. By June 15,…

KLCI earnings may rise by 5.3% in 2018

PETALING JAYA: AmBank Research, which called the first quarter reporting season “a tad discouraging”, has projected FBM KLCI’s earnings to grow by 5.3% and 7.1% in 2018 and 2019, underpinned by a gross domestic product growth of 5.5% and 5.3% respectively.

Its year-end targets of the local bourse are forecast at 1,900 points and 2,040 points in 2018 and 2019 respectively.

“While the 1Q 2018 reporting season has been a tad discouraging so far, it has not derailed the positive growth trajectory of FBM KLCI’s earnings,” the research house said.

It said at about two-thirds through the 1Q 2018 reporting season (68% of its stock universe having reported), corporate earnings have thus far been relatively unremarkable – with 9%, 64% and 27% beating, meeting and missing its projections respectively.

“In terms of earnings growth forecasts of ‘all sectors’ – a broader but slightly more volatile earnings gauge encompassing the entire universe of our stock coverage – the numbers for 2018 and 2019 have been adjusted to 11.4% and 10.4%, from 15.6% and 10.6% previously,” said AmBank.

It believes the key catalysts for the FBM KLCI could come from the normalisation of the market risk premium as greater clarity on new government policies emerges; improved sentiment towards emerging markets, which are experiencing an outflow of funds at present, and a more level playing field across sectors that may unleash the growth potential in corporate Malaysia.

On the other hand, FBM KLCI could also be weighed down by stronger-than-expected US inflation and wage growth which could lead to a steeper rate hike cycle in the US and a stronger US dollar, which could spur more outflows from emerging markets; the escalation in the US-China trade war and geopolitical tensions; as well as earnings disappointments from FBM KLCI heavyweights.

“For exposure to consumer spending, we pick banks with strong consumer banking franchise (Public Bank and BIMB), apart from consumer/auto stocks (Berjaya Food, Power Root and Bermaz). We like exporters that benefit from strong external demand (Top Glove, V.S. Industry and Inari Amertron). Against a backdrop of firm oil prices, we pick certain defensive oil & gas names (Yinson and Dialog).”

According to Rakuten Trade Sdn Bhd head of research Kenny Yee, the local bourse is expected to trend between 1,750 and 1,800 points in the short term.

The FBM KLCI closed 21.56 points or 1.2% lower to 1,775.84 points on Monday on continued selling pressure.

Yee told SunBiz that the KLCI will trade below 1,800 points for the time being before improving later this year.

“Fundamentals remain solid as depicted from the ongoing results for first quarter which have been rather decent so far. For us, we remain positive with our 2018 KLCI target still at 1,960 barring any nasty surprises from Malaysian corporates despite the uncertainties overshadowing the construction and toll concessionaires at the moment,” Yee explained.

Meanwhile, Nomura Securities Malaysia Sdn Bhd head of equity research Tushar Mohata said he is neutral on the local stock market as the new government should be given the benefit of the doubt to come out with their economic policies and direction to address some of the fiscal concerns which appears to worry investors.