Monday, October 22nd, 2018

 

Wall St drops as China support fades, earnings disappoint

NEW YORK, Oct 22 — US stocks edged down today as early support from a rally in China faded, with lower oil prices and disappointing earnings signals from firms including Halliburton and Hasbro helping pull the market lower. The energy sector fell…


Aston Martin considers flying in components, changing ports to handle Brexit delays

LONDON, Oct 22 — British carmaker Aston Martin is considering flying in components and moving more parts through ports other than Dover if there is any border friction after Britain leaves the EU, its boss told Reuters. London and Brussels hope to…


Ryanair hopes to land deals with major unions by Christmas

DUBLIN, Oct 22 — Ryanair hopes to reach deals with all of its major unions by Christmas, its chief executive said today, in a sign an end may be in sight to disruptions which have hit its profit and shares. The Irish low-cost carrier, Europe’s…


Property prices continue to fall, down 2.5% year on year in Q3: PropertyGuru

KUALA LUMPUR: Asking prices of homes in Malaysia continue to drop nationwide, according to the PropertyGuru Market Index (PMI), which revealed that asking prices by real estate developers and individual owners nationwide declined 2.5% year on year in the third quarter of 2018 (Q3 2018), or a 1.8% decline from the preceding quarter.

The PMI report is derived from PropertyGuru's proprietary data, which includes the asking prices of over 250,000 residential property listings on PropertyGuru.com.my. The PMI is a comprehensive, quarterly overview of home pricing trends at national level, as well as the key property markets of Kuala Lumpur, Selangor, Johor and Penang. The index also considers supply volume of properties from both primary and resale markets.

The downward trend is reflected in both quarterly and annual price movements despite improved consumer sentiment of 42% and 53% of Malaysians respectively, wishing to buy a home by the end of 2018, it said.

Notably, amid oversupply of properties and new market supply, properties in certain market segments and certain locations are coming under increased pressure with sellers continuing to discount prices to secure buyers.

“Others may be opting to sell as rental rates also come under pressure due to the ample choice available in key areas. With more supply, one can drop rental rates but if that is not feasible, the usual option is to sell to unlock the gains,” PropertyGuru Malaysia country manager Sheldon Fernandez said in a statement.

Additionally, the present downward price trend may not be due to sellers reducing prices, but also in overall value provided to reduce ownership cost.

“Beyond absolute pricing, there are other factors also such as developers throwing in freebies such as furnishing and décor, carparks, or even rebates. Cumulatively, these incentives, reduce the overall cost of ownership which will have a knockdown effect on prices,” added Fernandez.

Similar to the national trend, all key property epicentres in Q3 2018, recorded a quarterly decrease.

Kuala Lumpur saw the largest drop of 3.2% from the previous quarter, followed by Johor at 3.3%, Selangor at 1.8% and Penang at 1.3%. Johor has been on an upward trend experiencing an upward capital appreciation in the market from Q4 2016 till Q2 2018 until a slight year-on-year dip of 2.3% was recorded in Q3 2018.

On an annual basis, Selangor recorded the highest yearly decrement with 2.4%, followed by Johor at 2.3%, Penang at 0.7% and Kuala Lumpur at 0.5%. With the exception of Johor, all regional markets continue to show a discount to their 2015 base prices. Johor continues to maintain an upwards trend-line, but it remains to be seen if the trend will persist going into Q4 2018 and 2019.

While Fernandez cited that 2018 remains largely a buyer's market for property, he also cautioned against thinking that this applies to all properties being sold in all areas. He mentioned that even locations that may presently experience a price drop, may rebound after completion of the MRT2 or the LRT3 rail lines or other infrastructure projects.

“While the sentiments of Malaysians towards the property market have improved considerably, it appears that asking prices have yet to catch up with this improving sentiment. But the market usually corrects itself going forward. For now, the continued price correction is good for the market in the long-term. Moving forward, we will monitor how property prices perform due to the impact of SST exemption on properties. We can all look forward to our next PMI report release for Q4 2018,” he said.


Siemens CEO Kaeser says he will not attend Saudi investment conference

BERLIN, Oct 22 — Siemens Chief Executive Joe Kaeser said today that he would not attend the Future Investment Initiative conference in Saudi Arabia, following the killing of journalist Jamal Khashoggi. The German engineering giant is one of the…


Bonia’s subsidiary CRG Inc to be listed on LEAP Market by end of November

PETALING JAYA: Bonia Corp Bhd's wholly owned subsidiary CRG Incorporated Bhd, which is the design, marketing and distribution company for Carlo Rino and CR2 brands, is expected to be listed on the LEAP Market of Bursa Malaysia Securities by end of November.

Outlining its plans in the information memorandum released today, CRG said it aims to increase its geographical footprint in Southeast Asia and the Middle East. This includes developing a strong online presence for its Carlo Rino brand in Southeast Asia over the next five years, to tap into the e-commerce market in the region which is expected to grow to US$29.4 billion (RM122.2 billion) in sales by 2020.

It has also granted Kafak the exclusive rights to use the Carlo Rino brand, as well as operate and manage boutiques carrying the Carlo Rino range in the Middle East for five years, with a five-year renewable period.

“Through this distributorship arrangement, we intend to expand our retail presence to other countries in the Middle East, including the UAE, Qatar and Bahrain,” it said.

In terms of expanding its product range, CRG said it is in the midst of undertaking research on the market for accessories and fashion-related collections, with the aim of launching various accessory product ranges over the next five years.

Its products are generally targeted at young working adults between 18 and 35 years old.

CRG's principal markets are Malaysia, Indonesia and Vietnam. In Malaysia, it has 39 boutiques and outlets, and 120 department store counters. It also has authorised distributors/dealers in Vietnam, Indonesia, Saudi Arabia and Brunei.

According to an information memorandum by the approved adviser and continuing adviser, TA Securities Holdings Bhd, the distribution of CRG shares to entitled shareholders and cash payout, to entitled shareholders who hold less than 100 Bonia shares, is expected to take place in mid-November.

The demerger of CRG involves a series of transactions namely capitalisation, subdivision, conversion and dividend-in-specie. The capitalisation, subdivision and conversion have been completed as of Aug 13.

Bonia will distribute via a dividend-in-specie, its entire shareholding in CRG and rights to CRG shares, to the entitled shareholders on the basis of one CRG share for every one Bonia share, upon receipt of approval-in-principle from Bursa Malaysia Securities for the listing.

The completion of the dividend-in-specie will result in the demerger of CRG from Bonia, and the entitled shareholders will directly hold shares in the same proportion as their shareholdings in Bonia, except for those who hold less than one board lot of Bonia shares, who will be paid cash in lieu of the number of shares they are entitled to.


Uber to appeal against Singapore regulator’s decision on deal with rival Grab

SINGAPORE: Uber Technologies Inc has decided to appeal against a decision by the Singapore competition regulator that its merger with regional rival Grab violated the city-state's competition laws, the firm said today.

Last month, Singapore slapped ride-hailing firms Grab and Uber with fines and imposed restrictions on their businesses to open up the market to competitors, after concluding that their merger had driven up prices. It fined Grab S$6.42 million (RM19.35 million) million) and Uber S$6.58 million (RM19.84 million).

Uber said it was making the appeal independently of Grab, as a matter of principle. Separately, Grab said it would not appeal against the regulator's decision.

The Competition and Consumer Commission of Singapore's ruling that the transaction led to a substantial lessening of competition, and that Uber had intentionally breached the law, was “unsupported and incorrect”, Uber said in a statement.

Uber asked the CCCS to annul its fine, and said the regulator had used a very narrow definition of the ride-hailing market. It also pointed to Go-Jek's impending entry into the city-state, saying the Indonesian ride-hailing company would make for a formidable competitor.

Uber disputed the CCCS' allegation that Uber knew that the transaction infringed the law but nevertheless moved ahead.

“To the contrary, our view has always been that in a properly defined market – including at the very least
ride-sharing, street-hail taxis and new entrants – the
transaction respects the law and does not raise significant concerns,” it said.

Uber sold its Southeast Asian business to bigger regional
rival Grab in March in exchange for a 27.5% stake in the Singapore-based firm. But the deal invited regulatory scrutiny.

Last week, the Philippines' competition watchdog also fined the two firms, saying they consummated their merger too soon and that the quality of service had suffered.

“I do not expect that this decision or definition of the market used in Singapore by CCCS would significantly affect Uber elsewhere,” said Walter Theseira, an economics professor at the Singapore University of Social Sciences.

He said, however, that Uber may have an interest in conducting an economic analysis of the definition of the market to inform and contest similar cases elsewhere. – Reuters


FMM hopes govt move to boost coffers won’t add to burden

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) in congratulating the government on tabling a comprehensive and pragmatic mid-term review plan last week, hopes that proposals to increase government revenue as part of fiscal consolidation would not lead to additional and unnecessary regulatory burden to the manufacturing sector.

“The priority should be to support and promote expansion of the economic pie to enable the reaping of higher returns to enhance business sustainability, and more importantly, medium and long-term growth,” it said in a statement today.

FMM cited existing tax incentives, such as the reinvestment allowance, accelerated capital allowance, double deduction incentives for research and development, export growth, enhancements to facilitate and spur the manufacturing sector to quickly undertake upgrading, expansion and diversification activities, including investing in Industry 4.0 technologies and innovation to achieve higher productivity and value-add.

The organisation also looks forward to close consultation with the government on its progressive and comprehensive multi-tiered levy system mechanisms to empower human capital development.

“We hope to see critical market-based levers namely, simple and transparent criteria; planned and pre-announced changes, especially in levy rates; removal of discretionary approvals, bureaucracy inconsistencies in policy implementation as well as rent seeking activities; and incentives to reward businesses which have reduced their dependence on foreign workers and unskilled labour. Levy collected should also be ploughed back to help finance industry’s investments in automation and productivity enhancements,” FMM said.

Overall, FMM looks forward to close and regular engagement with the government on the relevant programmes and initiatives under the 19 priority areas and 66 strategies of the six policy pillars. We are optimistic that these economic targets and aspirations would be executed and achievable through close collaboration and consultation between the government and the business sector, in particular the manufacturing sector for better fit of policies in meeting the challenging demands of competition and technological advancements.

Commenting on the government’s target of 4.5-5.5% gross domestic product growth over the 2018-2020 period, FMM said it was most reassured that the government is steadfast in pursuing growth targets despite the impact of fiscal and governance reforms on short-term economic growth.

FMM reiterated its commitment to working closely with the government in helping to meet the economic targets.


FMM to work closely with govt

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) in congratulating the government on tabling a comprehensive and pragmatic mid-term review plan last week, hopes that proposals to increase government revenue as part of fiscal consolidation would not lead to additional and unnecessary regulatory burden to the manufacturing sector.

“The priority should be to support and promote expansion of the economic pie to enable the reaping of higher returns to enhance business sustainability, and more importantly, medium and long-term growth,” it said in a statement today.

FMM cited existing tax incentives, such as the reinvestment allowance, accelerated capital allowance, double deduction incentives for research and development, export growth, enhancements to facilitate and spur the manufacturing sector to quickly undertake upgrading, expansion and diversification activities, including investing in Industry 4.0 technologies and innovation to achieve higher productivity and value-add.

The organisation also looks forward to close consultation with the government on its progressive and comprehensive multi-tiered levy system mechanisms to empower human capital development.

“We hope to see critical market-based levers namely, simple and transparent criteria; planned and pre-announced changes, especially in levy rates; removal of discretionary approvals, bureaucracy inconsistencies in policy implementation as well as rent seeking activities; and incentives to reward businesses which have reduced their dependence on foreign workers and unskilled labour. Levy collected should also be ploughed back to help finance industry’s investments in automation and productivity enhancements,” FMM said.

Overall, FMM looks forward to close and regular engagement with the government on the relevant programmes and initiatives under the 19 priority areas and 66 strategies of the six policy pillars. We are optimistic that these economic targets and aspirations would be executed and achievable through close collaboration and consultation between the government and the business sector, in particular the manufacturing sector for better fit of policies in meeting the challenging demands of competition and technological advancements.

Commenting on the government’s target of 4.5-5.5% gross domestic product growth over the 2018-2020 period, FMM said it was most reassured that the government is steadfast in pursuing growth targets despite the impact of fiscal and governance reforms on short-term economic growth.

FMM reiterated its commitment to working closely with the government in helping to meet the economic targets.


Foreign funds net sellers for third week

PETALING JAYA: International funds continued to sell Malaysian equities for the third week running albeit at a slower pace, disposing of RM128.7 million net of local equities last week.

“This was one eighth smaller than the amount withdrawn in the preceding week,” MIDF Research said in its weekly fund flow report today.

It said international investors were net sellers on four days. Offshore funds first sold RM77.9 million net on Monday, pulling the local bourse 0.12% lower to end at 1,729 points.

Risk-off tone was sparked by intensified US-Saudi tensions over the disappearance of Jamal Khashoggi, a Saudi columnist.

Foreign net selling then shrank to just RM17.3 million on Tuesday before spiking up to RM31.8 million on Wednesday while the FBM KLCI advanced 0.22% to 1,740 points, the highest closing during the week. Nonetheless, Bursa’s nine-day foreign selling streak came to an end on Thursday as offshore funds acquired RM33.3 million net.

“Amongst the four Asean markets we track, Malaysia was the only country experiencing inflows that day as sentiment was hampered by the Fed’s hawkish stance highlighted in its latest minutes of meeting. However, foreign investors were back in selling mode on Friday, withdrawing RM35 million net after technology stocks slumped gain on Thursday in addition to several industrial companies reporting weak quarterly earnings.”

So far, MIDF said Bursa has seen a net outflow of RM1.2 billion for the month of October, bringing the year-to-date outflow to RM9.8 billion.

“Nevertheless, Malaysia still remains as the country with the second lowest outflow amongst the four Asean markets we monitor,” it said.

Participation amongst foreign investors, local institutional funds and investors in the retail market took a slight breather last week as their weekly average daily traded value went lower by more than 10% compared to the preceding week.

Nonetheless, participation of each respective investor group remained at its healthy level.