Monday, June 18th, 2018
NEW YORK, June 18 — WestJet Airlines Ltd and JetBlue Airways Corp founder David Neeleman is planning to launch a new budget airline in the United States, with US$100 million (RM399.6 million) in startup capital, according to a report from the…
PETALING JAYA: The ringgit, which fell below 4.00 to the US dollar Monday, is expected to see more losses, currency observers opine, as appetite for the greenback grows unabated and fears of a trade war between China and the US persist.
The ringgit hit an intraday low of 4.0015, before closing at 3.9985 to the dollar Monday.
ForexTime (FXTM) global head of currency strategy and market research Jameel Ahmad expects more losses for the ringgit with no signs of a slowdown in demand for the US dollar.
“The performance of the ringgit over the near future will be dependent on how the markets react to the latest instalment of concerns over China and the US entering a potential trade war. The concerns have increased since the end of last week, and resulted in risk aversion being seen in the markets,” he told SunBiz.
He said a number of different emerging market currencies across Asia began the new trading week on the back foot from the trade tensions between the US and China, including the yuan, with current losses close to 0.6%.
“The Indonesian rupiah, Malaysian ringgit, Philippine peso and Thai baht are just a few of the many Asian currencies to have followed the same lead. If the ringgit does fall below 4.00 against the dollar, then it's possible the new range for the ringgit will be between 4.00 and 4.50,” he said, adding that it will be no surprise if investors choose to invest in safe-haven assets such as the yen and gold again.
Jameel said the persistent nature of external factors manipulating the movements in a wide range of emerging market currencies makes it impossible to provide an outlook for where the ringgit could conclude at year-end.
“However it does appear that investors are determined to remain attracted towards the US dollar, which increases the probability that the ringgit could be set for a prolonged return below 4.00 against the dollar,” he said.
“One of the main reasons why the US dollar is being so heavily backed by investors is because of how far ahead the US is in terms of both economic progress and monetary policy, in comparison with its developed peers,” he added.
Jameel said the US economy and the Federal Reserve are offering investors consistency, something that other developed economies and central banks, such as the Bank of England, European Central Bank (ECB) and Bank of Japan, are ultimately unable to offer.
DBS Group Research FX strategist Philip Wee and rates strategist Eugene Leow said Asian currencies are facing depreciation pressures on two major fronts, the first being monetary policy divergences that have returned to support the US dollar globally.
“The Fed has affirmed that it will be moving to deliver a total of four, not three, rate hikes this year. The ECB has confirmed that asset purchases will end in December which forced markets to reverse earlier bets for the central bank to bring forward its rate hike into 2019,” they said in a research note Monday.
Secondly, US-China trade tensions have returned despite a better-than-expected outcome at the Kim-Trump summit and for the first time in half a year, Asia's export-dependent currencies have depreciated.
“The Singapore dollar and the Korean won depreciated past 1.35 and 1100 respectively. As for the region's three strongest currencies this year, the Thai baht has begun to depreciate for the year last week, with the Chinese yuan and Malaysian ringgit set to follow next,” they said.
Sunway University Business School economics professor Dr Yeah Kim Leng, however, believes the weakening of the ringgit is a short-term reaction due to the US rate hike and expects the local note to retrace its losses and end the year between 3.80 and 3.90 against the dollar, supported by long-term fundamentals such as current account surplus, high oil prices and positive growth.
DUBAI, June 18 — Opec is discussing a relatively modest production increase before its meeting in Vienna this week, an attempt to bridge the gap between Russia’s push for a big rise and Iran’s insistence that no change is needed. While a…
SINGAPORE, June 18 — China’s planned levies on US crude as part of an escalating trade dispute threatens to dim the attractiveness of American supplies in the world’s biggest oil-importing nation. Crude pumped from the shale fields of Texas…
DUBLIN, June 18 — Amazon will add more than 1,000 new jobs in Ireland over the next two years, the US online retail giant said today, taking its workforce to more than 3,500 in a country that continues to be a magnet for major technology firms….
NEW YORK, June 18 — The Dow Jones Industrial Average fell more than 200 points today and the other major indexes were lower, as China’s retaliatory action against tariffs imposed by the United States reignited fears of a possible trade war…
SHAH ALAM: ACE Market-listed Mikro MSC Bhd aims to transfer to the Main Market of Bursa Malaysia Securities Bhd in five years, when it doubles its profit to RM15-RM20 million a year driven by business growth, from RM10.89 million in the last financial year ended June 30, 2017 (FY17).
Managing director Yim Yuen Wah said although it has met the profit requirement for the Main Market three years ago, it still wants to strengthen its financial muscle before making the leap.
“At this size, if we move to the Main Market, it is still small. We want to make it bigger first, doubling our current profit to at least RM15-RM20 million a year, then maybe we’ll consider the move,” he told SunBiz in an interview.
Yim has been adamant on the company remaining on the ACE Market but is now slightly more receptive to the idea of moving to the Main Market given the better prospects and investors’ interest there.
He said the group’s financials have been steady and it will be more aggressive to drive its business going forward. The company posted a net profit of RM5.48 million for the nine months ended March 31, 2018, down a third from the RM8.25 million it posted for the nine month ended March 31, 2017. This was on revenue falling marginally by 3.35% for the nine month period ended March 31, 2018 at RM35.92 million, compared with RM37.17 million for the same period in 2017.
Mikro MSC is in the research, development (R&D) and design of analogue, digital and computer controlled electronic systems or devices for use in electrical, electronic and other industries. It also provides technical consultancy and maintenance services.
Currently, Mikro MSC produces RM50-RM60 million worth of products a year. Some of its products include protective relays, digital power metres and power factor regulators.
It has estimated a capital expenditure of RM4-RM5 million in FY19 for its new factory and equipment. The new factory in Kota Kemuning is expected to be completed by year-end and will commence operations next year, which will provide the company more room for expansion with the increased demand expected from overseas.
Yim explained that its overseas market share in control products is still small, at about 20-30% in Vietnam and less than 1% in Indonesia and Thailand, which means that there is more room for growth, compared with about 50% in Malaysia.
While Malaysia currently contributes about 55% of its revenue, and the remaining 45% from overseas, Yim hopes that in FY19, this ratio will be reversed.
Yim noted that the company’s FY18 revenue is unlikely to be better than FY17’s revenue of RM50.4 million, because of the expiry of its pioneer status incentive and the slowdown in the Malaysian market this year.
He added however that Mikro MSC’s R&D is constant, especially those in redesigning its products to mitigate the material price increase and increase its profit margin.
PETALING JAYA: Berjaya Sports Toto Bhd’s (BToto) revenue slipped to RM1.4 billion for the fourth quarter (Q4) ended April 30 against RM1.48 billion in the previous corresponding period, due to lower revenue reported by H.R. Owen Plc and Philippine Gaming Corporation Management.
However, it was mitigated by higher contribution from principal subsidiary Sports Toto Malaysia Sdn Bhd. Sports Toto registered an increase in revenue, mainly attributable to the seasonally higher sales during the Chinese New Year festive season in February 2018. Its pre-tax profit decreased by 4.5% mainly due to higher prize payout in the current quarter under review.
BToto’s pre-tax profit for Q4 dropped 35.9% to RM65.53 million from RM102.17 million on the back of impairment in value for certain available-for-sale investments and goodwill relating to leasing of lottery equipment business in the Philippines.
The group has declared an interim dividend of 4 sen per share for the quarter under review, bringing the total dividend distribution to 16 sen per share, equivalent to 93.5% of the group’s attributable profit for the financial year ended April 30.
BToto’s full-year revenue was down by 1.2% to RM5.66 billion from RM5.73 billion, while pre-tax profit increased marginally by 0.5% to RM377.9 million as compared with RM376.1 million in the previous financial year.
Looking ahead, BToto’s directors anticipate that the number forecast operator (NFO) business performance of Sports Toto will be satisfactory and are confident that the group will continue to maintain its market share in the NFO business for the financial year ending April 30, 2019.
PETALING JAYA: Foreign investors sold RM1.21 billion net last week, breaching the RM1 billion level and extending the selling streak to 28 days, just one day shy of the 29-day selling spree in early January to mid-February 2014.
“Ahead of the Aidilfitri break, foreign investors sold stocks listed on Bursa at a stronger pace. This also marks the seventh week of foreign attrition, matching the longest uninterrupted period of selling seen in 2017 from the week ended Sept 22 to Nov 3, 2017,” MIDF Research said in its fund flow report today.
Monday’s attrition hovered above the RM200 million level at RM216.5 million before rising to RM359 million net on Tuesday.
According to MIDF Research, investors were nervous on Tuesday amid the historic summit between the US and North Korea, which also dragged the FBM KLCI down by 0.66% to 1,764 points.
On Wednesday, selling activity returned to Monday’s level as global investors only sold RM230.4 million net amid dampened risk-on mood as investors awaited the Fed’s decision on interest rates.
On Thursday, foreign selling peaked at RM402.2 million net before the local bourse was closed for the Aidilfitri break on Friday.
MIDF Research noted that other Asian counterparts such as Korea, Taiwan, the Philippines and Thailand also experienced huge outflows that day, spurred by the Fed’s rate hike.
“Malaysia had the second largest weekly outflow among the four Asean markets we monitor, after Thailand. Nonetheless, the year-to-date outflow from Malaysia of RM4.23 billion net or US$1.06 billion net is still the lowest among its Asean peers namely Thailand, the Philippines and Indonesia,” it said.
It said that foreign participation was strong as the foreign average daily trade value (ADTV) increased by 24% to RM2.03 billion, logging its 11th straight week above the RM1 billion mark.
Meanwhile, the retail market and local funds saw buying activity for its fifth and seventh straight week, respectively.
PETALING JAYA: Y&G Corp Bhd has terminated the acquisition of two pieces of land measuring 23.39ha in Pontian, Johor for RM30.96 million.
The property developer said in a filing with the stock exchange that its wholly owned indirect subsidiary Melia Aktif Sdn Bhd (MASB) decided not to proceed further with the sale and purchase agreement (SPA) dated Aug 26, 2015 as the conditions precedent as stated in clause 5.1 had not been fully complied with.
“Hence, MASB via its solicitors had, on June 14, 2018, served the vendors’ solicitors a notice of its decision to exercise its right to discontinue with the purchase hereof and in terminating the said SPA summarily in pursuant to clause 5.2 of the SPA.”
Following the termination notice, Y&G said the vendors will refund to MASB the deposit of RM3.1 million free from interest within 14 days from the notice.
Y&G had planned to embark on a mixed development project comprising commercial and residential on the land.