Tuesday, June 19th, 2018


Merkel, Macron agree euro zone budget in ‘new chapter’ for bloc

BERLIN, June 19 — German Chancellor Angela Merkel and French President Emmanuel Macron agreed today to create a euro zone budget charged with boosting investment in the bloc and promoting economic convergence between its 19 states. The leaders met…

Malaysian stock market skids in tandem with regional bourses

PETALING JAYA: Malaysian stocks fell for the second day this week as the trade spat between the US and China intensified, pushing the FBM KLCI down by 28.07 points or 1.61% to close at an intraday low of 1,715.36 points today.

Losers outnumbered gainers 673 to 226, with 2.31 billion shares changing hands valued at RM2.66 billion.

Over the past two days, the key index has contracted 46.42 points or 2.6%, wiping off RM37 billion in market capitalisation.

Among the top losers today were banking stocks such as Public Bank, Hong Leong Financial Group and Malayan Banking, which declined 64 sen, 56 sen and 27 sen to RM23.36, RM18.26 and RM9.28, respectively.

Elsewhere in the region, the Chinese stock markets plummeted, with the Shenzhen Composite Index and the Shanghai Composite Index tumbling 5.77% and 3.78% respectively, while in Hong Kong, the Hang Seng Index skidded 2.78%.

On the currency front, the ringgit weakened 0.2% to 4.0010 against the greenback as at 5pm today.

The US dropped another bombshell on Monday, saying it will be pushing ahead with hefty tariffs on China's goods beginning July 6.

US President Donald Trump said he has asked the US trade representative to identify US$200 billion (RM800 billion) worth of Chinese products that will be subject to additional import tariffs of 10%.

China warned that it would retaliate by imposing duties of the same value on several US commodities, including crude oil.

PublicInvest Research expects the trade tensions between the US and China to continue and to be negative on emerging economies, given the significance of trade to them.

“The spat between these two global giants may ultimately freeze trade momentum and steal some growth away as a result, just when the world's trade is about to normalise this year after years of sub-par growth, no thanks to anaemic growth in advanced economies,” it said in a research note today.

With no truce in sight, the research house expects emerging economies to take the biggest hit, in particular their currencies, which may experience heightened volatility.

PublicInvest Research said what is more worrying is that the US may use the same tactic with the rest of the countries it has trade imbalances with.

“Hot on the list are Germany, Canada and emerging economies like India and Malaysia. This may lead to a freezing up of global trade, resulting in stalling growth just when the world is about to grow within its potential after so long.”

On the currency front, it expects the ringgit to see some selling pressure in line with bearish sentiment on emerging economy currencies, but selling pressure on the ringgit could be less intense supported by strong fundamentals, namely positive current account surplus and strong economic growth.

“The ringgit will also benefit from much reduced political risks following a smooth transition of power at the Federal level recently.”

PublicInvest Research is maintaining its full-year average of RM4.00 for the ringgit against the US dollar.

Trump ratchets up trade spat with China

WASHINGTON/BEIJING: US President Donald Trump threatened to impose a 10% tariff on US$200 billion (RM800 billion) of Chinese goods, prompting a swift warning from Beijing of retaliation, as the trade conflict between the world's two biggest economies quickly escalated.

Trump's latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.

It was retaliation, he said, for China's decision to raise tariffs on US$50 billion in US goods, which came after Trump announced similar tariffs on Chinese goods on Friday.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in a statement on Monday.

The news sent global stock markets skidding and weakened both the dollar and the Chinese yuan in Asian trade today.

China's commerce ministry said Beijing will fight back firmly with “qualitative” and “quantitative” measures if the United States publishes an additional list of tariffs on Chinese goods, accusing Washington of launching a trade war.

“Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions,” the ministry said in a statement.

“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world,” it said.

Washington and Beijing appeared increasingly headed towards open trade conflict after several rounds of talks failed to resolve US complaints over Chinese industrial policies, lack of market access in China and a US$375 billion US trade deficit.

US Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions. He did not say when the new target list would be unveiled.

“As China hawks, like Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable,” said Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.

On Friday, Trump said he was pushing ahead with a 25% tariff on US$50 billion worth of Chinese products, prompting Beijing to respond in kind.

Some of those tariffs will be applied from July 6, while the White House is expected to announce restrictions on investments by Chinese companies in the US by June 30.

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong,” Trump said.

Trump said if China increases its tariffs again in response to the latest US move, “we will meet that action by pursuing additional tariffs on another US$200 billion of goods”.
Trump said he has “an excellent relationship” with Chinese President Xi Jinping and they “will continue working together on many issues”.

But, he said, “the United States will no longer be taken advantage of on trade by China and other countries in the world”. – Reuters

Iskandar Waterfront City settles RM32.23m tax bill

PETALING JAYA: Iskandar Waterfront City Bhd (IWCity) has fully settled the RM32.23 million tax bill imposed by the Inland Revenue Board (IRB).

IWCity told Bursa Malaysia that its wholly owned subsidiary Tebrau Bay Constructions Sdn Bhd (TBCSB), following the full settlement of the taxes claimed, today received the sealed court order dated May 20, 2018 that the writ and the Malaysian government's statement of claim dated March 15, 2018 had been withdrawn without any order as to costs.

The suit came about after IRB raised additional income taxes assessment and tax penalties amounting to RM36.98 million to TBCSB for years of assessment 2010, 2012 and 2014.

TBCSB claims it did not receive the notices of assessment dated Aug 16, 2017 but was only notified of the notices via email on Jan 24, 2018.

Notwithstanding the settlement, IWCity said TBCSB will continue to make the necessary appeals to IRB against the additional assessments.

IWCity shares slipped 2.7% to close at 53.5 sen on 531,900 shares traded today.

PRG Holdings in talks to extend deadline for purchase of Roopi Medical Centre

PETALING JAYA: PRG Holdings Bhd is in talks for an extension of time for the proposed acquisition of Roopi Medical Centre Sdn Bhd and its properties, after conditions under the agreements were not fulfilled within the stipulated time frame.

PRG's subsidiary PRG Healthcare Sdn Bhd (PHSB) entered into a share sale agreement (SSA) for the entire stake acquisition in Roopi Medical Centre Sdn Bhd (RMC) and its properties for RM18.3 million in January this year.

The group said in a stock exchange filing today that the agreements signed with RMC and Linecom Corp Sdn Bhd, for the two properties currently used by RMC, have not been fulfilled within the stipulated deadline of June 19.

Linecom and RMC share the same shareholders, Datuk Dr Roopi and Charanjeet.

In the event the parties to the SSA and properties SPA are not able to agree on the proposed extension, they will be entitled to terminate the agreements, said the group's board of directors.

US stocks tumble on latest Trump-China trade threats

NEW YORK, June 19 — Wall Street stocks tumbled in opening trading today as fresh tariff threats by the United States and China against each other exacerbated trade war fears. About 10 minutes into trading, the Dow Jones Industrial Average was down…

Jiankun confident of turnaround this year

KUALA LUMPUR: Jiankun International Bhd is confident of returning to the black in this financial year ending Dec 31, 2018 (FY18) after missing its target last year, as most of its expenses will be significantly reduced this year, and revenue supplemented by by its two property projects.

The projects are Bayu Heights 2 at Seri Kembangan and Amani Residences at Bandar Puteri Puchong.

Managing director Datuk Lee Kian Seng explained that it should be able to turn around in FY18 as it charged out major costs on marketing and selling commission last year.

Jiankun has been in the red since FY14. Last year the management expected the group to be profitable in FY17 but it still posted a RM3.55 million net loss mainly due to the new launches that were at preliminary stages of construction and had yet to contribute significantly to the group’s performance, while marketing expenses, in terms of commissions to sales staff, were high at RM9.68 million.

Lee, who was speaking after the group’s AGM today, explained that the previous management thought they would be able to amortise commission based on progress of work, however auditors disagreed, and a big chunk of expenses were charged out last year when the project was completed.

Bayu Heights 2 is a three-storey terrace house project with all 84 units taken up. The group expects to deliver this project this year. Amani Residences is a high rise service apartment project, currently in construction stage (20% completed) and has garnered sales of over 70%. Its completion is expected in 2020.

Lee said it is in the midst of getting another landed property project in Selangor, with the completion of Bayu Heights 2.

“We’re still waiting for the proceeds from Bayu Heights 2 this year. Once money is in, we will look at a new project again. Jiankun’s size is small for us to get so many projects at the same time,” said Lee.

He added that Jiankun plans to look for land in the outskirts of Selangor and is also looking at opportunities in the industrial segment.

Meanwhile, he said it will retain Jiankun’s 14 units of shop lots in Huizhou, Huiyang, China, until it gets a good price for them.

Lay Hong allocates RM39 million as capex to boost broiler production

KUALA LUMPUR: Lay Hong Bhd has allocated RM39 million as capital expenditure (capex) for the financial year ending March 31, 2019 (FY19) and is to be utilised to increase broiler production.

Group executive director Yap Chor How said the integrated livestock farming company planned to increase broiler production capacity to two million birds monthly from the current 1.2 million.

He said the group’s focus in FY19 would include the production of liquid eggs and processed food, for which Lay Hong has two plants scheduled for operations this year.

“We will have an upcoming liquid egg processing plant and a new further processing plant.Both will be ready by the third quarter of this year, with a monthly production capacity of 400 metric tons and 2,000 metric tons respectively.

“These two plants will keep us busy in FY19 as we work towards achieving full utilisation capacity,” Yap told Bernama.

He said products for the further processing plant, located in Pulau Indah, were targeted for export (70%) and local consumption (30%).

Meanwhile, Yap said the group expects its chicken processing division to make a positive contribution as demand for fresh chicken is higher during the Hari Raya season, thus, fetching a higher selling price.

“However, for the egg division, we anticipate pressure on the selling price, with lower demand due to the fasting month.

“Nevertheless, for our retail division (G-mart), there will be a historically stronger performance during the Hari Raya season, as previously, this division managed to rake in a 30% increase in overall sales,” he added.

On the implementation of the zero rating for the Goods and Services Tax (GST), Yap said there would be no impact on the egg and raw chicken divisions, as these items were already zero rated.

“Pasteurised liquid egg and further processed products such as Nutriplus Nippon Premium would be six per cent cheaper, thus, giving potential to an upside in demand,” he added.

Tokio Marine to buy two Southeast Asian insurers

TOKYO: Tokio Marine Holdings said today it has agreed to acquire two insurance companies in Southeast Asia from Insurance Australia Group for ¥42.8 billion (RM1.5 billion) to bolster its operations in a fast-growing market.

The Japanese insurance company will take a 98.6% stake in Safety Insurance Public in Thailand and an 80% stake in PT Asuransi Parolamas in Indonesia by the end of this year. Safety Insurance and Asuransi Parolamas provide auto, property and marine coverage.

Tokio Marine has actively promoted mergers and acquisitions of companies abroad amid Japan’s ageing, shrinking market.

It purchased US company HCC Insurance Holdings for around US$7.5 billion in 2015. – dpa

Tokio Marine to buy two SE Asian insurers

TOKYO: Tokio Marine Holdings said today it has agreed to acquire two insurance companies in Southeast Asia from Insurance Australia Group for ¥42.8 billion (RM1.5 billion) to bolster its operations in a fast-growing market.

The Japanese insurance company will take a 98.6% stake in Safety Insurance Public in Thailand and an 80% stake in PT Asuransi Parolamas in Indonesia by the end of this year. Safety Insurance and Asuransi Parolamas provide auto, property and marine coverage.

Tokio Marine has actively promoted mergers and acquisitions of companies abroad amid Japan’s ageing, shrinking market.

It purchased US company HCC Insurance Holdings for around US$7.5 billion in 2015. – dpa