Wednesday, August 29th, 2018


Sources: Mexico-US deal includes Mexican auto export cap

WASHINGTON, Aug 29 — The proposed US-Mexico trade deal would allow President Donald Trump to impose punitive “national security” tariffs of up to 25 per cent on imports of Mexican-made cars, sport utility vehicles and auto parts above certain…

Ryanair’s Laudamotion to double fleet next year

VIENNA, Aug 29 — Ryanair’s Laudamotion will double its Airbus fleet to 18 aircraft in the summer next year, the Austrian budget airline announced today. Irish low-cost carrier Ryanair took control of Laudamotion from Formula One race driving…

CIMB expects FY18 to be a record year

KUALA LUMPUR: CIMB Group Holdings Bhd, which posted a record net profit of RM3.29 billion for the first six months ended June 30, 2018 (1H18), expects a record net profit to ensue for the full year on a stronger performance in 2H18 partly driven by improvement in loan growth.

Group CEO Tengku Datuk Seri Zafrul Aziz said CIMB is on track to meet its loan growth target of 6% for this year, compared with a weaker-than-expected 0.2% last year hit by its Indonesian business. 

It saw a loan growth of 3.4% for 1H18, dragged down by the weakening of rupiah in Indonesia. Excluding foreign exchange fluctuations, its 1H18 loan growth would have been 7%.

“We're still keeping our loan growth target. 1H18 was slower and we're optimistic that in 2H18 we will catch up,” Zafrul told a press conference after announcing its 1H18 financial results here today.

“For 2H18, we hope to sustain (performance). It's been a strong two months (July-August), we've seen a pickup in capital markets (from slower capital market activities in 1H18), but also in the region in Thailand and Singapore. We're optimistic. Judging from the pipeline that we have, we should see the same, if not better performance in 2H18,” he added.

Zafrul said CIMB is focused on achieving its T18 targets, subject to recovery of capital markets, and continued improvement in asset quality across Indonesia, Thailand and Singapore.

Saying the worst is over for its Indonesian business, he said a rate increase is expected in Indonesia to stabilise the rupiah. On the macro side, it is wary of the currency impact and is also mindful of the election in Indonesia. However he said CIMB Niaga has done well in term of its bottom line, adding that it was the best performing bank in 1H18 in Indonesia.

“If you look at the numbers on Indonesia, the asset quality is better. The problem is the loan growth and this is something that we need to push further and at the same time we're tracking the industry.”

For the second quarter ended June 30, 2018, CIMB's net profit jumped 80% to RM1.98 billion from RM1.10 billion a year ago bolstered by a RM928 million gain from the sale of 20% of CIMB-Principal Asset Management and 10% of CIMB-Principal Islamic Asset Management. Revenue rose 12% to RM4.86 billion from RM4.33 billion in the previous corresponding quarter.

CIMB posted a record net profit of RM3.29 billion for the first half of 2018, up 44% from RM2.28 billion a year ago, bolstered by the disposal gain. Excluding the gain, CIMB's 1H18 earnings was RM2.36 billion, translating to a 3.3% year-on-year growth. Revenue rose 5.5% to RM9.17 billion from RM8.69 billion in the previous year.

Zafrul said CIMB is finalising its next mid-term growth plan post-T18, which will be premised on customers, people and sustainability, among others. He added that any changes to its management are based on performance and will be decided by the board and not one shareholder.

Vida-linked cryptocurrency ventures on Bank Negara alert list

PETALING JAYA: A business linked to cosmetics tycoon Datuk Seri Dr Hasmiza Othman, better known as Datuk Seri Vida, has been put on Bank Negara Malaysia's (BNM) Financial Consumer Alert list.

The list consists of companies and websites that are neither authorised nor approved under the relevant laws and regulations administered by the central bank.

The business known as VI Profit Galaxy (DSV Cryptoclub & LUX Galaxies) was added to the list of 423 companies.

The list links the company to websites of LaVida Coin and LUX Galaxies. The website of LaVida Coin bears an address in Westminister, London, United Kingdom. LUX Galaxies claims to be present in 11 countries including Estonia, the US, Canada and Finland.

Checks at the Companies Commission of Malaysia (SSM) records by SunBiz revealed that VI Profit Galaxy, formed on a partnership basis, is co-owned by Hasmiza with a registered address in Ipoh.

Cross checks on the company records of her main business, Vida Beauty Sdn Bhd, confirmed both businesses as having the same owner. Vida Beauty is the producer of Vida's hit products such as the Qu Puteh range and Pamoga.

VI Profit Galaxy's SSM records named one Shuhada Ab Aziz with a registered address in Machang, Kelantan, as being a co-owner. The business, which was incorporated on June 4, sells and produces health and beauty products.

The BNM alert comes on the heels of the Securities Commission of Malaysia (SC) saying that it is reviewing a white paper published on the LaVida Coin cryptocurrency.

In a short statement earlier this week, the SC said it is reviewing all information on a white paper for the LaVida Coin to determine if any laws were broken.

According to the white paper, the issuance of LaVida Coin is expected to raise US$1.5 billion (RM6.15 billion) which will be used to finance three projects, including a new payment gateway named LaVida Pay.

Besides LaVida Pay (US$100 million), there are plans for a new online entertainment channel with an entrepreneurial focus (US$1 billion) and a non-profit-making project to build a Muslim community hub, centred on a new mosque (US$400 million).

LaVida Coin is currently in the “pre-mine stage” which runs for six months from August 2018 to February 2019. Once completed, the LaVida Coin blockchain will be open to cryptocurrency miners.

Grab to invest US$250m in Indonesian startups over next three years

JAKARTA: Grab will invest US$250 million (RM1.025 billion) in Indonesian startups over the next three years through its newly launched innovation arm, as the ride-hailing firm aggressively pushes to cement its position in the Southeast Asia's largest economy.

The Singapore-based firm has raised US$2 billion in funding in recent months and also launched the Grab Ventures arm to develop technology start-ups in sectors beyond ride-hailing as it locks horns with Indonesia's Go-Jek for regional dominance.

“We are looking at startups in both series A and B, which we could integrate into our ecosystem,” Ridzki Kramadibrata, managing director for Indonesia, told Reuters.

The company, which counts Chinese ride-hailing firm Didi Chuxing and Japan's SoftBank Group Corp among its backers, has already starting looking at startups and will start funding rounds later this year, he added.

Grab is interested in healthcare and food-and-grocery delivery startups as well as those that facilitate digital payments and automated processes, he added.

Grab's rival Go-Jek has already evolved from a ride-hailing service to a one-stop app allowing Indonesian clients to make online payments and order everything from food, groceries to massages. It is now looking to expand in Southeast Asia, to Vietnam, Thailand, the Philippines and Singapore.

Kramadibrata said Grab is currently the top ride-hailing player in Indonesia and that he was confident the firm would be able to maintain the lead. The firm is valued at around US$11 billion, according to sources.

“We hold 65% of (Indonesia's) ride-hailing market, as based on total rides and transactions,” said Kramadibrata. “And it won't stop there, our market share is increasing.”

He reckons Grab holds majority market share in 137 cities in Indonesia, compared with Go-Jek's roughly 50. Kramadibrata said he based his estimates on internal and third-party data that he declined to reveal.

Go-Jek did not respond to Reuters' requests for comment.

Its CEO, Nadiem Makarim, told Reuters this month that the company's app was a market leader in Indonesia, processing more than 100 million transactions for 20-25 million monthly users.

He did not specify how many of those transactions were only for ride hailing.

Ride hailing services in Southeast Asia are expected to
surge to US$20.1 billion in gross merchandise value by 2025 from US$5.1 billion in 2017, according to a Google-Temasek report.

KWAP acquires UK properties for £39.75 million

PETALING JAYA: Kumpulan Wang Persaraan (Diperbadankan) (KWAP) has acquired two purpose-built student accommodation properties in the UK from IP Investment Management (HK) Ltd and Maven Capital Partners for a total of £39.75 million (RM280 million).

The properties are 800 Bristol Road in Birmingham and The Mill House in Edinburgh, which were acquired for £14.62 million and £25.13 million respectively. The estimated average net yield of the properties is at 5.08%.

“We are very pleased to add the two properties to our growing portfolio in the UK market as the acquisition aligns with KWAP's aspirations to increase its international property exposure. We will continue to grow our presence in foreign markets without compromising on our risk appetite, in line with our mission to serve the pensioners of Malaysia,” KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad said in a statement today.

Completed in 2016, 800 Bristol Road in Birmingham is situated in Selly Oak and is within walking distance from the University of Birmingham. Surrounding universities include Birmingham City University, Aston University and University College of Birmingham.

The four-storey freehold building offers 103 studio-type accommodation for students, in addition to a cinema room, function room, gym, study rooms, laundrette, secure bicycle storage and 11 car parks.

The Mill House in Edinburgh is situated within Edinburgh Education Corridor. There are four universities within the corridor, namely University of Edinburgh, Heriot-Watt University, Edinburgh Napier University and Queen Margaret University.

Completed in 2017, the six-storey freehold building offers 23 studios and 234 en-suite units, in addition to a gym, common room, games room, laundrette, secure bicycle storage and 12 car parks.

The acquisition of both properties brings the number of international properties owned and co-owned by KWAP to 14. Its other international properties are in Australia, London and Germany.

KWAP's acquisition of properties is directed by its strategic asset allocation, which currently stands at 40% fixed income, 45% equity and 15% alternative investments.

Property investments comprise 9% of the allocation for alternative investments, followed by private equity at 4% and infrastructure at 2%. As at Dec 31, 2017, 75% of KWAP's property investments were foreign while the remaining 25% were in the local market.

Jack Daniel’s maker cuts profit forecast on trade war impact

BOSTON, Aug 29 — The trade war is having a tangible impact on the maker of Jack Daniel’s. Brown-Forman Corp lowered its profit forecast for the fiscal year, saying it assumes that the European Union’s tariffs, put in place in June, will remain…

Oil climbs as US crude stock draw exceeds expectations

ROME, Aug 29 — Oil touched the highest level in three weeks after a government report showed a bigger US crude stockpile decline than expected. Futures in New York advanced as much as 1.5 per cent today. The Energy Information Administration…

Wall Street up slightly as tech stocks gain

NEW YORK, Aug 29 — US stocks rose slightly today, lifted by technology stocks, though gains were limited as investors awaited progress on US-Canada trade talks and eyed a deadline for consultations on the next round of China-US tariffs. Helping…

Pound climbs to three-week high as Barnier pledges unique deal

LONDON, Aug 29 — The pound rallied after the European Union revived hopes of a Brexit deal before the UK exits the common area in March. The currency climbed to the strongest level in three weeks and gilts tumbled as Michel Barnier, the EU’s…