Tuesday, October 23rd, 2018

 

Global stocks tumble as investors flee for safety

LONDON: Global stocks tumbled today as investors fled for safety while they worried about US earnings, Italy's finances and trade tensions, and as pressure mounted on Saudi Arabia over the death of journalist Jamal Khashoggi.

US stocks joined the global selloff, falling sharply in early trading. The Dow Jones Industrial Average was down 1.7% at around 1445 GMT, after earlier sinking more than 2%. The broad-based S&P 500 fell 2.0%.

Earlier, European stocks picked up where Asia left off. At about 1330 GMT, London's FTSE 100 was down 1.1%, Frankfurt's DAX 30 was 2.3% weaker and Paris' CAC 40 lost 1.5%.

Frankfurt was dragged down by a plunge in the share price of chemicals and pharmaceuticals giant Bayer after a US court confirmed a previous cancer damages ruling against subsidiary Monsanto over its herbicide Roundup.

On the geopolitical front, pressure is growing on Saudi Arabia after it admitted that Khashoggi had been killed at its Istanbul consulate.

Turkish President Recep Tayyip Erdogan said today the “savage murder” of Khashoggi at the Saudi consulate in Istanbul was meticulously planned, demanding that all those linked to the killing face punishment.

Earlier, on Asian stock markets, Shanghai sank 2.3%, having jumped more than 6% since Thursday's close, while Hong Kong fell 3.1%. Tokyo plunged 2.7%, Sydney lost over 1% and Singapore fell 1.3%. Seoul dived 2.6% and Taipei was 2% off.

There were also steep losses in Manila, Mumbai and Jakarta.

“Global financial markets continue to struggle to rally as various geopolitical concerns weigh on investor confidence,” said Nick Twidale, chief operating officer at Rakuten Securities Australia.

In the currency market, the US dollar fell after Wall Street opened lower, spurring a risk-off move that benefited the safe-haven Japanese yen and Swiss franc against the greenback.

At mid-morning in New York, the dollar was down against the yen by 0.71%, last trading at ¥111.99. Against the Swiss franc the dollar was down 8 basis points, last at 0.995 francs. The dollar index, a gauge of its value against six major currencies, fell 5 basis points to 95.976.

Oil prices dived after Saudi Arabia said it could supply more crude quickly if needed, reassuring investors. In New York trading, Brent crude futures dropped 2.8%, or US$2.27, to US$77.56 a barrel by 1521 GMT after plunging to US$77.50, the lowest since Sept 18. US crude fell US$1.98, or 2.9%, to US$67.38 a barrel, after hitting a session low of US$67.26, the lowest level since Sept 7. – Agencies


Saudi crown prince attends investment forum amid ‘crisis’

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Securemetric eyes RM17 million from IPO

KUALA LUMPUR: Digital security solutions provider Securemetric Bhd, which is en route to a listing on the ACE Market on Nov 13, is looking to raise RM17 million from its initial public offering (IPO).

Securemetric offers digital security products and solutions, including software licensing protection, two-factor authentication solution (2FA), public key infrastructure (PKI) and authentication management systems.

Speaking at a press conference in conjunction with its prospectus launch today, Securemetric CEO Edward Law said of the total proceeds, RM5.7 million will be used for development of new digital security solutions, RM5.2 million for working capital and RM1.7 million for business expansion.

He said the remaining proceeds of RM4.44 million will be used to repay borrowings and defray IPO expenses.

The offering involves a public issue of 68 million new shares, of which 17 million shares will be made available for the Malaysian public, 48 million for application by way of private placement to identified investors, while the remaining three million shares will be made available for eligible employees.

At the IPO price of 25 sen per share, Securemetric will list with a market capitalisation of RM60.9 million.

Asked whether the group is looking to enter new regional markets, Law said that it will keep its focus on existing markets for the next two years.

Securemetric has presence in five Southeast Asian countries, namely Malaysia, Vietnam, the Philippines, Indonesia and Singapore. Its clients include government organisations, financial institutions, public certification authorities, software development companies and IT service providers.

For the financial year ended Dec 31, 2017, more than 85% of the group's revenue was derived overseas.

On its outlook, Law said Securemetric is confident of the growth potential of digital security solutions in Southeast Asia, especially within the financial and government sectors.

He said the group is well positioned to benefit from growing emphasis by corporates and governments on having robust digital security solutions to safeguard data, information, and assets.

“The potential market size for 2FA, PKI, authentication management systems and software licensing protection dongles in Southeast Asia is expected to exceed RM8 billion by 2020,” he added.


Bank Negara to extend observation period for net stable funding ratio by a year to 2020

PETALING JAYA: Bank Negara Malaysia (BNM) is looking to extend the observation period for the net stable funding ratio (NSFR) in Malaysia for a year to 2020.

NSFR is a liquidity standard which comes under the Basel III international regulatory reforms. It refers to requirements for banks to have in place a certain percentage of stable sources of funding, such as commercial papers that have more than a year's maturity and retail deposits, to support their asset portfolios in the longer term.

The initial deadline proposed by the Basel committee for the NSFR standard of above 100% was Jan 1, 2018. It was then deferred to Jan 1, 2019.

Speaking at BNM's Financial Stability Conference, governor Datuk Nor Shamsiah Mohd Yunus said the extension takes into account the intention to conduct further on-site assessments to validate the maturity and robustness of the liquidity and funding practices of banks, and uneven progress in implementation at the global level.

“The bank remains committed to implementing the NSFR requirements as part of overall liquidity standards applicable to licensed banks in Malaysia.”

She added that currently all banks maintain adequate liquidity buffers against short-term liquidity stress, and the vast majority of banks already report NSFR levels above the minimum 100% based on observation data.

On another note, Nor Shamsiah said the challenge now is when a crisis is going to strike and how it will spread.

In navigating an uncertain future, she suggested four strategic priorities for financial stability authorities.

First, authorities need to remain vigilant as emerging economies face mounting pressures that continue to see more volatile capital flows. Second, authorities must continue to develop and deepen their understanding of risk transmission. 

Third, authorities must have a broad policy toolkit for responding to financial stability risks. Fourth, authorities need to increase policy agility as every crisis or financial stability issue is different, and each requires a different policy response.