Thursday, September 13th, 2018


Wall St rises as Apple leads tech rebound, trade worries soften

NEW YORK, Sept 13 — A rise in Apple led a rebound in technology shares and boosted all three major stock indexes today, while trade worries eased after China said it was open to fresh talks with the United States. The bluechip Dow Jones Industrial…

Two Malaysian startups make their pitch at Asean Korea startup week

SEOUL, Sept 13 — Two Malaysian companies are among the 16 Asean startups that made their pitch at the Asean-Korea Startup week launched at the Pangyo Technovalley here, today. ‪Held in South Korea’s Silicon Valley, the event provides both…

Trump denies pressure for trade deal as China welcomes US talks invite

WASHINGTON, Sept 13 — US President Donald Trump said today that the United States was under no pressure to make a trade deal with China, even as Chinese officials welcomed an invitation from Washington for a new round of talks with more US tariffs…

Bermaz Auto’s Q1 net profit more than doubles to RM50.28m

PETALING JAYA: Bermaz Auto Bhd's net profit for the first quarter ended July 31, 2018 more than doubled to RM50.28 million from RM20.21 million a year ago, largely due to higher revenue and improvement in gross profit margin from domestic operations, and higher share of profits from its associate company Mazda Malaysia Sdn Bhd.

Its revenue jumped 24.1% to RM485.40 million from RM391.23 million a year ago mainly due to improvement in sales volume from the domestic operations as the change in goods and services tax (GST) from the standard rate of 6% to 0% in June this year has boosted customer demand, especially for the new CX-5 model.

The board has recommended a first interim dividend of 2.50 sen single-tier dividend per share in respect of the financial year ending April 30, 2019 to be payable on Oct 26, 2018. The entitlement date has been fixed on Oct 10, 2018.
With the implementation of sales and service tax (SST) on Sept 1, 2018, the group is absorbing SST for customers who have placed their bookings for Mazda cars prior to Sept 1, 2018, but are only to receive delivery after that.

The move which is to build customer loyalty, is expected to increase costs and reduce the group's profitability in the coming quarter, but can be mitigated through lower sales volatility after August this year, potentially higher sales volume, reduced marketing and advertising expenses and dealer incentives.

In the Philippines, the group said although the economy is forecasted to remain vibrant with expected GDP growth of 6.7% for 2018 and 6.8% for 2019, the implementation of the Tax Reform for Acceleration and Inclusion law effective January 2018 has resulted in the contraction of demand for most, if not all, auto brands.

Bermaz Auto Philippines seeks to preserve its sales volume through growth in the number of dealerships from 18 at the beginning of the financial year 2018 to 21 dealerships expected at the end of the financial year 2019, as well as new model introductions which are expected to contribute to a reasonable growth rate.

FGV suspends president/CEO Zakaria, notifies him of inquiry

PETALING JAYA: FGV Holdings Bhd's board of directors has suspended group president and CEO Datuk Zakaria Arshad from his duties for the second time, following a notice of inquiry issued to him, with the conclusion of internal investigations into 10 critical issues.

Each of these issues resulted in financial loss for FGV and its shareholders.

The suspension is in effect until further notice from the board.
SunBiz understands that Zakaria received the notice of inquiry from a board member at around 3pm today. He has until Sept 19 to respond.

This is the second time Zakaria is being investigated in his two-year tenure as group president and CEO.

In June last year, then FGV chairman Tan Sri Mohd Isa Abdul Samad was reported by the media to have asked for the resignation of Zakaria for going against corporate practices by allowing Safitex Trading LLC to make a purchase without a letter of credit.

Zakaria was suspended on June 6, 2017 along with FGV's group CFO, Ahmad Tifli Mohd Talha, to pave the way for a domestic inquiry into the long-outstanding debt of Safitex Trading LLC owed to a subsidiary of FGV, Delima Oil Products Sdn Bhd.

Datuk Seri Idris Jala was appointed a day later by the Prime Minister's Office to conduct the investigations, which also involved the Malaysian Anti-Corruption Commission. A few days later Isa, who was on the board of FGV for six years, resigned his posts, citing personal reasons.

Zakaria resumed his duties on Oct 16 after MoF Inc, having reviewed the findings of the domestic inquiry, took into consideration the ongoing FGV transformation programme and Zakaria's commitment and assurance to resolve the long-outstanding debt of Safitex.

In a filing with Bursa Malaysia today, FGV said it will continue its business as usual in Zakaria's absence.

The Special Board Committee – comprising FGV chairman Datuk Wira Azhar Abdul Hamid, directors Datuk Dr Salmiah Ahmad and Dr Mohamed Nazeeb P Alithambi – and director Datin Ho Lai Ping will take over Zakaria's responsibilities.

At a press conference last week, Azhar said several members of the board and management, past and present, were being investigated as part of its probe into transaction and investment decisions and business practices.

Zakaria was absent at the briefing, which was chaired by Azhar and three independent directors.

On Aug 28, the board announced that it had in January 2018 officially appointed forensic investigators to look into six transactions and/or investment decisions, which included the acquisition of Asia Plantations Ltd, investment in FGV Cambridge Nanosystems Ltd and the acquisition of the Troika condominiums.

Additionally, the board undertook internal investigations into open credit lines, poor purchasing trading practices and poor palm oil sales that resulted in bad debts of about RM100 million; direct awards of procurement contracts in breach of best practices; and the critical shortage of workers between May 2016 and April 2018 that resulted in financial losses of more than RM170 million over the period.

Malaysia can sustain 5% annual economic growth, handle debts: Lim

HONG KONG: Finance Minister Lim Guan Eng said today that Malaysia can sustain 5% annual economic growth as its new administration reviews mega projects and copes with hefty debts left by the previous government.

In August, Malaysia cut its 2018 growth forecast to 5%, from 5.5-6.0% and reported much slower second quarter expansion of 4.5%, compared to the previous period's 5.4%.

Slower growth also signals the economic risks facing 93-year-old Tun Dr Mahathir Mohamad after his stunning election win in May that brought him back to the premiership in Southeast Asia's third-largest economy.

Lim told the CLSA Investors' Forum here that there is an urgent need to review expensive development projects because Malaysia does not have “enough money to pay for them”.

“We want to see reductions (in debt) over the course of three years and at the same time we are able to service these debts, we will not be in default,” Lim said. “When we are talking about belt-tightening, cost rationalisation, then we are doing it.”

Lim will oversee the new administration's first budget in November. He said today that Malaysia “will not be in operating deficit”.

After taking over, Mahathir repealed an unpopular goods and services tax. He has pushed to review major infrastructure projects launched by the past administration.

About the need for tough fiscal measures, Lim said “It's painful, but it's necessary … I'm willing to be the most unpopular finance minister in Malaysian history.”

The minister said Malaysia will not be a victim of the contagion effects from emerging markets due to its strong trade and current account surpluses and high foreign-exchange reserves.

“I think that would put Malaysia off the radar as far as being victim of the contagion effects from … so-called emerging markets currency risk. I'm still confident that we should be able to ride out the storm, if any.” – Reuters

1MDB asset recovery ‘going much slower than expected’

HONG KONG: Finance Minister Lim Guan Eng said today that asset recovery in the 1Malaysia Development Bhd (1MDB) multi-billion ringgit fraud investigation is going much slower than expected.

Lim said at CLSA Investors' Forum here that realistically “we will be lucky if we get 30% back”.

He added that Goldman Sachs is on the radar screen to get back some fees from 1MDB.

On Monday, a Singapore court ordered the return to Malaysia of about S$15.3 million (RM46 million), just a small portion of total seized in the city state as part of a probe into transactions linked to the development fund.

The funds will be transferred to a special 1MDB recovery account in Kuala Lumpur.

Singapore is among at least six countries investigating claims that about US$4.5 billion was siphoned off from 1MDB.

In 2016, Singapore authorities said they had seized S$240 million ($174 million) in cash and properties as a result of investigations into 1MDB-related fund flows through Singapore.

In May, Singapore and Malaysia agreed to cooperate on returning the funds to the Malaysian government, and the court order cleared the way for the first repatriation of funds from Singapore. – Reuters

Alibaba to take Taobao Maker Festival beyond China

HANGZHOU: Alibaba Group aims to expand its Taobao Maker Festival into other countries including Malaysia, said its chief marketing officer Chris Tung.

The third festival began today, featuring over 200 exhibitors comprising young Chinese entrepreneurs in several themes such as innovation, anime, intangible cultural legacy, vintage, pets and gourmet.

Held at the West Lake area, the four-day festival is Taobao's largest event to date. Besides the exhibition, there will be interactive activities such as merchant forums, product launches and interactive workshops.

“Taobao Maker Festival is gaining global attention year on year and is becoming another global platform that we are building,” Tung said.

He said Taobao is already available in the global Chinese community living in Taiwan, Hong Kong, Singapore, Malaysia, Australia, New Zealand, Canada and the US. 

Commenting on the Malaysian market, Tung said it is a strategic market for the group and it has good relations with the Malaysian government as well as merchants.

“Alibaba held Malaysia Week less than two months ago in a very significant way and to showcase that we are working with Malaysia to import the best quality brands and products to Chinese consumers.”

He said Alibaba has two operations in Malaysia, namely Lazada and Taobao, with the latter being one of the key strategic pillars in the country. Taobao and Tmall are the group's two most important commerce platforms globally.

On Alibaba Group founder Jack Ma's retirement, Tung said the group's mission, value, culture as well as the long-term strategic thinking will last with or without Ma.

“Alibaba is a company with two unique characteristics. One is we think big and we think long term. That is why we are leading innovation, leading change, very active – we have so many initiatives. The other thing is a very strong culture,” he said.

“We think that anything is possible, if it is the right thing to do, if it is a fit into our mission about making it easy to do business anywhere in the world, we go do it. That mission, value, culture as well as the long term strategic thinking will last with or without Jack around because he as a teacher has taught us.”

Lotte Chemical Titan denies Indonesian petrochemical facility project suspended

PETALING JAYA: Lotte Chemical Titan Holding Bhd has denied that its integrated petrochemical facility in Indonesia (IPF project) has been suspended.

“There has not been any suspension on the IPF project and it is currently at the final stage of the Front End Engineering & Design study. In parallel, the company has been working on the environmental impact assessment and undertaking other activities in relation to the IPF project,” Lotte Chemical Titan said in a stock exchange filing today.

South Korean news portals reported that Lotte Chemical's four-trillion won IPF project in Indonesia was suspended due to the absence of group chairman Shin Dong-bin, who is now in prison. It was reported that the project made little progress during the past one and half years due to the group chairman's absence.

Lotte Chemical Titan, however, stressed that the IPF project is being managed and supervised by the company, and major changes to the IPF project, if any, would require prior approval from the board, 50% of which are independent directors, and would be duly announced by the company.

The South Korea-based Lotte Chemical group listed Lotte Chemical Titan on Bursa Malaysia in 2017, with plans to invest more than 80% of the funds raised through the initial public offering in the Indonesian project.

On Bursa Malaysia today, Lotte Chemical Titan closed unchanged at RM5.06 with some 249,600 shares changing hands.

MNRB shareholders approve rights issue

KUALA LUMPUR: Shareholders of MNRB Holdings Bhd approved the company’s proposed renounceable rights issue to raise about RM400 million today at an EGM which lasted for about two hours.

The proposed renounceable rights issue, on a basis to be determined later, is intended for the capitalisation of its two subsidiaries, namely Takaful Ikhlas Bhd and Malaysian Reinsurance Bhd (Malaysian Re).

“We need the (two) companies to be financially stronger. If we do not (raise the funds via rights issue) we won’t go anywhere as we need more capital for our plans,” MNRB president and group CEO Mohd Din Merican told reporters today.

Asked on the two-hour long EGM, held after its 45th AGM, he noted that shareholders had raised their concerns on the business prospects and plans of the company following its rights issue.

“As far as the business is concerned, we are looking at various (plans). For Malaysian Re, we are looking at strategic partnerships and new products and for (Takaful) Ikhlas, we’re looking at new products, talent development and enhancing its IT systems,” Din said.

On Wednesday, MNRB told the stock exchange that its largest shareholder AmanahRaya Trustees Bhd has committed to fully subscribe for its entitlement and those of undersubscribed excess rights shares under the proposed fundraising exercise.

Permodalan Nasional Bhd (PNB) has also given its undertaking that it will pick up its portion and the excess.

As of Aug 29, PNB and AmanahRaya held about 12.74% and 42.4% stakes in MNRB respectively.

On its financial performance outlook, Din said the company expects to achieve a satisfactory results for its current financial year ending March 31, 2019 with a “slight growth”, compared with the previous financial year.
“For us, we look at the correlation between the gross domestic product (GDP) and our business. If the GDP is good, (our) business (also) will be good,” he added.

For the first quarter ended June 30, 2018, MNRB raked in a smaller net profit because of lower premiums and contributions from the reinsurance and takaful subsidiaries.

Net profit fell 43.9% to RM28.3 million, while revenue eased 10.1% to RM544 million, both year on year.