Thursday, August 2nd, 2018


Apple hits US$1t stock market valuation

SAN FRANCISCO, Aug 2 — Apple Inc became the first US$1 trillion publicly listed US company today, crowning a decade-long rise fuelled by its ubiquitous iPhone that transformed it from a niche player in personal computers into a global powerhouse…

Ryanair Irish pilots to join widening strike on Aug. 10

DUBLIN, Aug 2 — Ryanair’s directly-employed pilots in Ireland will join colleagues in Sweden and Belgium on strike in an escalating day of action on Aug. 10, the fifth one-day walkout in the airline’s home market. Ryanair has suffered strikes…

Possible new US tariffs on Chinese goods not ‘cataclysmic’, says Commerce Secretary

WASHINGTON, Aug 2 — New tariffs that the United States is threatening to impose on nearly half the goods imported from China would have a small impact on the Asian nation’s economy and not lead to disaster, Commerce Secretary Wilbur Ross said…

Perodua chalks up record first-half sales, engaging with govt on SST

PETALING JAYA: Perusahaan Otomobil Kedua Sdn Bhd (Perodua), which has achieved record first-half sales, is still unclear on the full mechanism of the impending Sales and Services Tax (SST) and is engaging with the government on the matter.

Perodua achieved a half-year record where it sold 117,100 vehicles for the first six months of 2018, 17.5% higher than 99,700 units sold in the same period last year. It holds a 40.4% market share of the 1H18 total industry volume. Its sales peaked in May at almost 22,000 units, achieving its record monthly market share of 51%.

It attributed the sales record to continued strong demand for the new Myvi as well as for other models in the first quarter, while towards the end of the second quarter it saw a surge in sales due to the zero-rated GST.

Perodua president and CEO Datuk Aminar Rashid Salleh said the engagement with the government is important as the government is its stakeholder.

He said it is premature to say that the reintroduction of the SST come Sept 1 will result in a 10% increase in Perodua's car prices, but noted that SST may dampen car sales.

Aminar told reporters after announcing Perodua's 1H18 performance review here today, that the carmaker wants to have an opportunity to discuss with the respective ministries or departments for the improvement or change of policies.

On the assumption that there will be an increase in vehicle prices from September, Perodua foresees that the public will go through a period of adjustment, thus resulting in less demand for a certain duration.

Aminar said perhaps the impact would last up until December when, typically, most players would give good offers to reduce their carry-over stock into the following year.

Perodua is maintaining its sales target of 209,000 units for 2018 in light of the challenges expected in the second half of the year (2H18), including the reintroduction of the SST. It is also maintaining its production target of slightly over 215,300 vehicles this year, a 7.5% increase from last year.

On bookings, Perodua received over 185,000 orders in 1H18, 24% higher than 1H17. In June alone, orders surpassed 40,000 and the carmaker is working overtime to meet the demand. Apart from a few units of the Alza, it expects all orders made this month to be fulfilled only from Sept 1 onwards.

On the suggestion of a third national car and the government's plan to limit the access of foreign cars to the local market, Aminar said it is premature to comment but noted that Perodua will focus on its current strategy and will continue to compete and improve on its ecosystem, vendors, supply chain and capabilities.

“As a national car company, especially during our infancy stage, we got a lot of help from the government and the government continues to support us. Because of the improvement we have done over the years, we've improved a number of areas.

“As a result, any help or incentive that is given by the government over the last few years is actually on the reducing trend. Although we're protected, we still need to compete and that's what we've been doing with this transformation, which is to prepare for market liberalisation. We will continue to compete and improve,” he explained.

Azman defends Khazanah investments in parting missive

PETALING JAYA: Tan Sri Azman Mokhtar, who clocked out as Khazanah Nasional managing director on Tuesday, in his parting message to employees of the sovereign wealth fund, denied wrongdoing in losses incurred in its investments in Swiss bank UBS and Indian e-commerce lingerie company Zivame.

In a five-page missive, he explained that the RM1.7 billion losses in UBS led to an internal review by independent board members with inputs from KPMG, which ultimately cleared the case of any wrongdoing and ascertained that investment processes and board approvals were complied with.

Khazanah invested RM3.6 billion in UBS through fund manager Olivant, and some RM1.9 billion was recovered.

“A significant factor in the losses resulted from the negligence and breach of the shareholders agreement by Olivant; a charge that they, through a legal process ultimately admitted to, apologised and assumed responsibility for”, Azman said, adding that legally binding confidentiality clauses restricted public disclosure.

While acknowledging that the losses were indeed large, he maintained that it was incurred as part and parcel of investment operations which are always subject to investment risks.

“This has also to be viewed and evaluated in the context of the overall portfolio performance where more than RM82 billion of net gains have been achieved over the nine-year period from 2008 to 2017,” Azman said in the text, which was peppered with Quranic verses, posted by a local English daily.

On Zivame, he explained that the company, which looks to serve over 500 million women in a male-dominated physical retail sector online, is a going concern that just had its best ever quarter.

Khazanah invested US$19 million (RM80 million) for a 22% stake. Last December, it decided to prudentially provide for the investment in full in its 2017 accounts, a move it does sometimes for its technology investments.

According to Azman, Khazanah's top gainers over the nine-year period of 2008-2017, made RM92 billion, while its top losses totalled RM19 billion.

Malaysia Airlines chalked up losses of RM8.4 billion, semiconductor wafer fabrication company Silterra RM5.5 billion, and Olivant RM1.7 billion, coming in third.

China says US disappoints the world by upping the ante in trade war

BEIJING: China warned the United States today that upping the ante in a tit-for-tat trade war will “only serve to disappoint” the world as Washington threatened to raise the tariff rate on the next US$200 billion (RM814 billion) of Chinese imports.

Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the international order.

“The US has no regard for the world … playing both soft and hard ball with China will not have any effect, and only serve to disappoint the countries and territories opposed to a trade war,” China's Ministry of Commerce said in a statement, adding that it still hopes to turn the situation around.

Foreign ministry spokesman Geng Shuang called Washington's actions “blackmail” and urged the US “to return to rationality and not act on impulse. It will only hurt themselves.”

President Donald Trump asked the US Trade Representative to consider increasing the proposed tariffs to 25% from the planned 10%, USTR Robert Lighthizer said on Wednesday.

“We have been very clear about the specific changes China should undertake. Regrettably, instead of changing its harmful behaviour, China has illegally retaliated against US workers, farmers, ranchers and businesses,” Lighthizer said in a statement.

Officials, however, downplayed suggestions the move was intended to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump's tariffs by making imports cheaper.

The US dollar has been strengthening since April as the central bank has been raising lending rates, which draws investors looking for higher returns.

“It's important that countries refrain from devaluing currencies for competitive purposes,” a senior administration official told reporters. “But I wouldn't draw the conclusion that the announcement we're making today is directly linked to any one practice.”

Washington and Beijing are locked in battle over American accusations that China's export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.

Trump has threatened to slap tariffs on virtually all of China's exports to the US.

Officials said they remained in regular contact with their Chinese counterparts but could announce no new meeting.

The US already imposed 25% tariffs on US$34 billion in Chinese goods, with another US$16 billion to be targeted in coming weeks.

On July 10, Washington unveiled a list of another US$200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10% import duties.

Increasing the rates to 25% could make them significantly more painful.

The comment period on the proposed penalties, which includes public hearings where business can ask for exemptions, due to take place later this month, would be extended into September, the officials said.

Much of American industry and many members of Trump's own Republican Party have expressed outrage but have so far been unable to thwart Trump's trade policies.

The US Senate last week passed legislation which if enacted would lower trade barriers on hundreds of Chinese imports.

Jake Colvin, vice-president of the National Foreign Trade Council, said the Trump administration could be boxing itself into a corner.

“It's hard to see how this action lends itself towards a resolution to what is increasingly a trade crisis,” he told AFP.

Trump and senior administration officials believe the volume of US imports and vigorous health of the American economy give Washington an advantage in the current confrontation.

But Fred Bergsten, founding director of the Peterson Institute for International Economics, told CNBC that China would be able to absorb blows more easily than Washington.

“They can expand their stimulus, fiscal spending, bank lending,” he said.

“They can compensate much better than we can. They come from a much higher base.”

And Bergsten warned that the US economy is likely to slow and a trade war only makes that expected decline worse. – AFP

Trade war fears weigh on US stocks; Tesla jumps

NEW YORK, Aug 2 — Wall Street stocks fell early today on revived trade war worries, but electric car maker Tesla surged higher on an upbeat profit outlook. About 10 minutes into trading, the Dow Jones Industrial Average stood at 25,169.87, a loss…

Toyo Ink plans to issue free warrants

PETALING JAYA: Toyo Ink Group Bhd (TIGB) proposes to issue 53.5 million free warrants on the basis of one warrant for every two existing shares to raise money for future working capital.

Assuming full exercise of the warrants at the exercise price of RM1.50 per warrant, the company could potentially raise a maximum gross proceeds of RM80.25 million.

The proceeds will be for payment for trade and other payables, staff costs and other operating expense such as utilities, logistics and packaging materials among others.

The exercise is to reward shareholders as well as provide them an opportunity to further increase their equity participation and benefit from any potential capital appreciation arising from the exercise of the warrants.

The exercise will also strengthen its financial position with enhanced shareholders’ funds and enlarged capital base, which is expected to enhance the liquidity of TIGB shares.

The application to Bursa Securities in relation to the exercise is expected to be submitted within one month, while the issue is expected to be completed by the third quarter of 2018.

Timber industry export worth RM23.2b last year, says MTIB

KUALA LUMPUR, Aug 2 — The Malaysian Timber Industry Board (MTIB) revealed that the nation’s timber industry contributed RM23.2 billion to export earnings last year, representing a 4.8 per cent increase compared to 2016. Director-general of MTIB…