Monday, September 17th, 2018

 

edotco calls off US$940m deal for 13,000 towers in Pakistan

PETALING JAYA: edotco Group Sdn Bhd, a subsidiary of Axiata Group Bhd, today announced that it will not go ahead with the acquisition of 13,000 towers from Pakistan Mobile Communications Ltd (PMCL), a deal in the works for more than a year.

Completed, the US$940 million (RM3.9 billion) deal would have made edotco the eighth largest independent tower company globally, according to its press release when announcing the deal in August last year.

In its statement today, edotco said the transaction was terminated due to the non-fulfilment of a number of conditions within the timeframe stipulated under the sale and purchase agreement, in particular regulatory approval for change of control. Initially, edotco had expected the deal to be completed by the fourth quarter of 2017.

edotco said it remains committed to Pakistan and will continue to grow its existing business under edotco Pakistan, comprising towers acquired by Tanzanite Towers earlier this year.

“We do not foresee this affecting our business goals and aspirations. We are confident in the potential of the growing market in Pakistan and are committed to the existing operations there.

“We continue to develop our pipeline of opportunities into Pakistan as well as into other markets in South and Southeast Asia and are confident we will be able to meet our goals for business growth,” edotco group CEO Suresh Sidhu said.

edotco Pakistan country managing director Arif Hussain said they have seen strong progress in Pakistan since its first acquisition there and business continues to grow with new orders for sites as well as high demand for adjacent opportunities such as energy solutions.

Edotco operates and manages a regional portfolio of over 28,000 towers across core markets of Malaysia, Myanmar, Bangladesh, Cambodia, Sri Lanka and Pakistan with 17,000 towers directly operated by edotco and a further 11,000 towers managed through a range of services provided.


US stocks dip on report of more tariffs on China

NEW YORK, Sept 17 — Wall Street stocks dipped early today, joining other equity markets in moving lower following a report the United States plans more tariffs on China.  About 10 minutes into trading, the Dow Jones Industrial Average was…


ECB unveils higher security €100, €200 notes

FRANKFURT, Sept 17 — The European Central Bank today unveiled new versions of the €100 and €200 banknotes, saying new security features would make them harder to counterfeit. Like other second-generation notes in the “Europa” series…


Zakaria’s suspension not expected to affect FGV operations

PETALING JAYA: MIDF Research which maintained a neutral rating on FGV Holdings Bhd after the suspension of its president and CEO Datuk Zakaria Arshad, said the group’s operations will not be impacted by the news.

The research house in a note on Friday said, it was not surprised by the development, as FGV had announced previously that it was investigating several of its business practices due to adverse findings from an earlier probe into its investments.

MIDF maintains FGV ’s earnings estimates for FY18, forecasting a core net loss forecast of RM72.7 million.

According to MIDF the next key event to watch will be the 3QFY18 earnings which will be released by the end of November.

On Thursday, the group’s board of directors announced through a bourse filing that group president and CEO Datuk Zakaria Arshad has been suspended 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.

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


Emerging markets grapple with currency crisis, steep interest rate hikes

LONDON: Emerging market investors are trying to gauge whether a currency crisis and the steep interest rate increases being used to fight it could turn into a broader slowdown and even recession.

Last Thursday, Turkey’s central bank attempted to draw a line under a lira collapse of almost 40% this year by raising interest rates more than 6 percentage points to 24%.

Argentina is struggling to shore up its peso, which has more than halved in value despite punitive interest rate rises to 60%.

Other currencies have been caught in the slipstream, with India’s rupee plumbing record lows and South Africa’s rand, Russia’s rouble and Brazil’s real losing 15-20% this year so far.

Signs are appearing that months of market turmoil are starting to take the toll on real economies. South Africa unexpectedly entered recession in the second quarter of this year, Argentina is predicted to follow suit and Turkey is now widely forecast to experience a hard landing over the next year.

So what is growth like in these countries right now, what signs are there of a shock to business and consumer confidence and has the near sudden stop in investment flows seen 2019 economic forecasts deteriorate markedly?

Purchasing manager indexes have suffered sharp drops across many developing nations, according to data earlier in the month.

“When you have an environment where (the) US dollar is strengthening and US front-end rates are going up that tightens external financial conditions for emerging markets, especially for the deficit economies,” said Murat Ulgen, global head of emerging markets research at HSBC.

Meanwhile faced with capital outflows, many emerging market policy makers have opted to hike rates, thereby also tightening domestic financial conditions, Ulgen added.

“Given that markets have been volatile, generally speaking, and rates have been higher and equity markets have been lower in summer months … it is highly likely that financial conditions are still staying in the negative territory,” he said.

Having tumbled some 22% from their January peaks, emerging equity markets are in territory commonly regarded as a bear market, is often considered to be self-sustaining decline.

“Tighter financial conditions are going to weigh on economic activity going forward,” predicted Ulgen.

Emerging markets are familiar with such crises.

The Institute of International Finance found nine episodes since 1980 where when real exchange rates fell 30% or more, the devaluation was sustained for at least three years and the decline did not reverse a previous overvaluation.

Mexico suffered such a fate in 1995, Indonesia and Russia in 1998 and Brazil a year later. Meanwhile Argentina and Uruguay recorded such declines in 2002, Egypt in 2003 and 2016 and Ukraine in 2014.

A weaker currency helps close balance of payments gaps by boosting export competitiveness but also by pinching domestic purchasing power while tighter credit saps demand and growth.

What’s more, analysts are also closely assessing the impact of a growing number of trade conflicts and tariffs on emerging economies, which have seen trade become an increasingly important factors in generating economic activity.

Meanwhile capital flows will play a key role in how the most vulnerable economies will weather the latest crisis.

Last year saw healthy flows into emerging markets, according to HSBC, which estimates that in 2017 bond markets saw inflows of US$70 billion while equity flows were US$65 billion.

Following a healthy start to 2018, emerging bond markets have suffered a full reversal of flows; equity markets have seen just under half of the US$55 billion that had come in until the end of May leave again, HSBC found.

Luis Organes at JPMorgan warned that a “sudden stop” or abrupt reduction in capital flows into emerging markets and associated negative feedback loops should bring an extended period of adjustment for countries running a large current account deficit. – Reuters


Recession on the horizon?

LONDON: Emerging market investors are trying to gauge whether a currency crisis and the steep interest rate increases being used to fight it could turn into a broader slowdown and even recession.

Last Thursday, Turkey’s central bank attempted to draw a line under a lira collapse of almost 40% this year by raising interest rates more than 6 percentage points to 24%.

Argentina is struggling to shore up its peso, which has more than halved in value despite punitive interest rate rises to 60%.

Other currencies have been caught in the slipstream, with India’s rupee plumbing record lows and South Africa’s rand, Russia’s rouble and Brazil’s real losing 15-20% this year so far.

Signs are appearing that months of market turmoil are starting to take the toll on real economies. South Africa unexpectedly entered recession in the second quarter of this year, Argentina is predicted to follow suit and Turkey is now widely forecast to experience a hard landing over the next year.

So what is growth like in these countries right now, what signs are there of a shock to business and consumer confidence and has the near sudden stop in investment flows seen 2019 economic forecasts deteriorate markedly?

Purchasing manager indexes have suffered sharp drops across many developing nations, according to data earlier in the month.

“When you have an environment where (the) US dollar is strengthening and US front-end rates are going up that tightens external financial conditions for emerging markets, especially for the deficit economies,” said Murat Ulgen, global head of emerging markets research at HSBC.

Meanwhile faced with capital outflows, many emerging market policy makers have opted to hike rates, thereby also tightening domestic financial conditions, Ulgen added.

“Given that markets have been volatile, generally speaking, and rates have been higher and equity markets have been lower in summer months … it is highly likely that financial conditions are still staying in the negative territory,” he said.

Having tumbled some 22% from their January peaks, emerging equity markets are in territory commonly regarded as a bear market, is often considered to be self-sustaining decline.

“Tighter financial conditions are going to weigh on economic activity going forward,” predicted Ulgen.

Emerging markets are familiar with such crises.

The Institute of International Finance found nine episodes since 1980 where when real exchange rates fell 30% or more, the devaluation was sustained for at least three years and the decline did not reverse a previous overvaluation.

Mexico suffered such a fate in 1995, Indonesia and Russia in 1998 and Brazil a year later. Meanwhile Argentina and Uruguay recorded such declines in 2002, Egypt in 2003 and 2016 and Ukraine in 2014.

A weaker currency helps close balance of payments gaps by boosting export competitiveness but also by pinching domestic purchasing power while tighter credit saps demand and growth.

What’s more, analysts are also closely assessing the impact of a growing number of trade conflicts and tariffs on emerging economies, which have seen trade become an increasingly important factors in generating economic activity.

Meanwhile capital flows will play a key role in how the most vulnerable economies will weather the latest crisis.

Last year saw healthy flows into emerging markets, according to HSBC, which estimates that in 2017 bond markets saw inflows of US$70 billion while equity flows were US$65 billion.

Following a healthy start to 2018, emerging bond markets have suffered a full reversal of flows; equity markets have seen just under half of the US$55 billion that had come in until the end of May leave again, HSBC found.

Luis Organes at JPMorgan warned that a “sudden stop” or abrupt reduction in capital flows into emerging markets and associated negative feedback loops should bring an extended period of adjustment for countries running a large current account deficit. – Reuters


Indonesian trade deficit narrows in August

JAKARTA: Indonesia’s trade deficit narrowed in August, but the gap was larger than expected as exports growth slowed, government data showed on Monday, adding to pressure on the rupiah and local stocks.

Southeast Asia’s largest economy reported a trade deficit of US$1.02 billion (RM4.22 billion) for last month, much bigger than the US$680 million gap expected in a Reuters poll.

The country had a revised US$2.01 billion trade deficit in July, the largest in five years.

August imports were worth US$16.84 billion, up 24.65% from a year earlier, data released by the statistics bureau showed. This compared with expectations of a 26.53% t rise in the poll. Meanwhile, exports growth slowed to 4.15% from a year earlier to US$15.82 billion in August, compared with the poll forecast of a 10.03% increase.

Imports of consumer goods posted the biggest annual growth last month, while exports of agriculture products fell nearly 21% from a year earlier, the data showed, contributing to the slowdown in exports. Higher oil and gas imports also contributed to the deficit, according to the statistics bureau.

The rupiah slipped further after the data came in to trade at 14,885 per dollar, 0.57% below Friday’s close. The Indonesian currency traded at 14,880 per dollar before the data.

The rupiah has been trading at 20-year lows after being sucked into an emerging market rout, with selling exacerbated by concern over the country’s ability to plug a yawning current account deficit.

Jakarta’s benchmark stock index also extended falls to trade 1.8% lower, while the 10-year bond yield rose to 8.428% from 8.382% at yesterday’s opening.

The tariffs were not applied in August, but analysts have said importers may have frontloaded overseas purchases ahead of the increases. – Reuters


Largest ever power industry conference in Malaysia starts tomorrow

PETALING JAYA: Nearly 2,000 delegates are expected to attend CEPSI 2018 or the Conference of Electric Power Supply Industry 2018, the largest energy and electricity supply industry conference ever to be organised in Malaysia, at the KL Convention Centre from tomorrow until Thursday.

In addition, an estimated 4,500 visitors are expected to throng various booths put up by more than 100 exhibitors at an exhibition.

Themed “Reimagining Utility of the Future“, this year’s conference is hosted by Tenaga Nasional Bhd on behalf of the Association of the Electricity Supply Industry of East Asia and the Western Pacific (AESIEAP).

Highlights of the first day include a special address from Prime Minister Tun Dr Mahathir Mohamad in the afternoon. Minister of Energy, Science, Technology, Environment and Climate Change Yeo Bee Yin will deliver the welcome address.

The conference and exhibition is held concurrently with the 44th council meeting of AESIEAP and its executive committee general assembly.

For the conference proper, 17 thought leaders have been invited to share their thoughts and wealth of knowledge on energy issues as well as discuss best practices.

CEPSI has been held once every two years for energy players in East Asia and the Western Pacific to discuss energy issues since 1976.


Electric power conference, expo start tomorrow

PETALING JAYA: Nearly 2,000 delegates are expected to attend CEPSI 2018 or the Conference of Electric Power Supply Industry 2018, the largest energy and electricity supply industry conference ever to be organised in Malaysia, at the KL Convention Centre from tomorrow until Thursday.

In addition, an estimated 4,500 visitors are expected to throng various booths put up by more than 100 exhibitors at an exhibition.

Themed “Reimagining Utility of the Future“, this year’s conference is hosted by Tenaga Nasional Bhd on behalf of the Association of the Electricity Supply Industry of East Asia and the Western Pacific (AESIEAP).

Highlights of the first day include a special address from Prime Minister Tun Dr Mahathir Mohamad in the afternoon. Minister of Energy, Science, Technology, Environment and Climate Change Yeo Bee Yin will deliver the welcome address.

The conference and exhibition is held concurrently with the 44th council meeting of AESIEAP and its executive committee general assembly.

For the conference proper, 17 thought leaders have been invited to share their thoughts and wealth of knowledge on energy issues as well as discuss best practices.

CEPSI has been held once every two years for energy players in East Asia and the Western Pacific to discuss energy issues since 1976.


New Air France-KLM chief vows to invest half of salary in airline

PARIS, Sept 17 — Air France-KLM’s new boss said today that he would invest half of his fixed salary into the company’s stock as a gauge of his “confidence” in returning the strike-prone airline to a more solid footing. Benjamin Smith made…