Wednesday, November 21st, 2018


Ikea to cut 7,500 jobs in e-commerce push

STOCKHOLM, Nov 21 ― Swedish furniture giant Ikea said today it plans to cut 7,500 jobs worldwide by 2020, mainly office jobs, as it reorganises to focus its business on e-commerce and smaller shops in city centres. The job cuts affect almost five…

US stocks bounce back after two-day rout

NEW YORK, Nov 21 ― Wall Street stocks bounced early today, recovering a fraction of the losses after routs the last two sessions. About 20 minutes into trading, the Dow Jones Industrial Average was up 0.6 per cent to 24,602.48. The broad-based…

Electric vehicles, new tech focus of NAP 2019

KUALA LUMPUR: The National Automotive Policy (NAP) 2019 will be unveiled in the first quarter of next year, and will place emphasis on electric vehicles and new technologies, according to Deputy International Trade and Industry Minister Dr Ong Kian Ming.

“The main focus then (NAP 2014) was on energy efficient vehicles (EEVs) and now we are moving much more towards electric vehicles and new technologies,” he told reporters after delivering his keynote address at Kuala Lumpur International Automotive Conference 2018 today.

“But we have to discuss with the relevant stakeholders first and make sure that we fine-tune the details, so that the needs of the whole industry are taken care of,” he added.

Ong said his ministry together with some key companies in the automotive sector, are currently reviewing the policy, which was first introduced in 2006 to transform the domestic automotive industry.

Furthermore, he said the revised policy, which will also include the development of the third national car project, will overlook the entire automotive ecosystem, encompassing four key pillars of connected mobility, Industrial Revolution 4.0, new generation vehicles and artificial intelligence.

“When we talk about the third national car, we need to look at it at a holistic perspective. So let’s not just focus on the third national car project, which is an important component of the NAP review, but also look at the entire ecosystem. This ecosystem needs to be further enhanced and developed to take into consideration of new trends, such as the newly launched Industry 4.0.

“With the new technologies coming in, including the possibility of self-driving cars, more rapid advancement in electric vehicles and necessary ecosystems such as batteries and charging stations, it is timely to review this particular sector,” he noted.

To date, Ong said, the ministry has received over 20 proposals on the third national car project, from various sub-sectors, comprising small to large companies in the automotive sector, which include some “big players”.

He noted that the ministry has developed a matrix to analyse and evaluate these proposals, in order to make a fair, transparent and comprehensive choice.

“One of the deciding factors would be the financial sustainability of the project as the government will not be funding this third national car project as noted in Budget 2019,” Ong added.

Meanwhile, the Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad told a press conference in conjunction with the event that the association is hopeful that the government would continue to focus on the components emphasised in NAP 2014, including the EEV initiative.

“Future technology is good, but we would also like them to continue to emphasis on EEV that has helped the industry. We would also like to see long-term policies rather than short-term (policies) and more consultations with the industry,” she added.

Themed “Beyond Mobility: Moving Sustainably”, the two-day conference, which is organised by the Asian Strategy and Leadership Institute (Asli) and MAA, aims to bring together industry experts and leading players to share views concerning the automotive industry and ecosystem roadmap beyond 2025.

Foreign flows into Asian bonds turn positive, Malaysia leads

TOKYO: Foreign flows into Asian bonds turned positive in October, in stark contrast to the sharp outflows faced by equity markets due to slowing earnings and concerns over trade.

Data from central banks and bond market associations showed overseas investors bought a net US$2.24 billion (RM9.4 billion) in Malaysian, Thai, Indonesian, South Korean and Indian bonds in the last month. That compared with net outflows of US$2.46 billion in September.

Malaysia’s bond market led the region with inflows of US$1.8 billion in October, the highest in 2018. At the end of last month, foreign ownership of Malaysian government securities rose to 40.7% from 39.5% in September, the data showed.

Thailand and Indonesian bond markets also attracted foreign money of US$1.07 billion and US$886 million, respectively.

“Thailand’s large current account surplus and growth recovery have boosted the perception of Thai debt as a relative safe haven in the region,” said Khoon Goh, Singapore-based head of Asia research for ANZ Banking Group in a note.

Bursa slips on Wall Street, oil price slump

PETALING JAYA: Bursa Malaysia was not spared the fallout from this week’s rout on Wall Street and the slump in crude oil prices, with the FBM KLCI sliding 15.34 points to close at 1,695.37 points today.

Most sectoral indices on the local bourse ended in the red today, save those for construction, healthcare, utilities and the ACE Market, and the FBM Fledgling Index.

The selloff on Wall Street has been led by technology stocks, and the New York stock market’s gains for 2018 have been wiped out with the latest plunge on Tuesday.

The Dow Jones Industrial Average and the S&P 500 ended at their weakest since late October on Tuesday, diving 553 points or 2.2 % and 49 points or 1.8 % respectively. The technology-heavy Nasdaq declined 117 points or 1.7 %, the lowest it has hit in seven months.

Energy stocks also took a beating after crude oil prices slumped 6.6%.

Rakuten Trade Sdn Bhd head of research Kenny Yee told SunBiz that the performance of the local bourse is attributable to developments on Wall Street and the decline in crude oil prices – which will be used as the “relevant excuse” by investors to take profits given the recent climb in stock prices.

Asked if the selling will persist, he said this will depend on Wall Street’s performance.

Yee projects the FBM KLCI to trade around the 1,680 level, which he said is a well-supported position.

He noted that selling could also be induced by the expected dip in third quarter corporate earnings, in which further downgrades on corporate earnings growth are expected.

“We were deep into the tech bubble and now it is bursting. The bubble is not totally without fundamentals but prices rose too much over a long period of time. For the US, it is only starting and for Malaysia the oil price drop marked our peak. We were just trying to recover before the bursting of this bubble hit us,” explained Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew.

“There is no cover currently. All asset classes are being hit. Bonds, stocks, commodities, properties, cryptocurrencies … all are being hit. Even gold is going nowhere,” he said.

Asked if this will continue, Pong noted that the market does look like continuing its bearish streak in all asset classes as the tide of liquidity is flowing out at the moment.

Sapura Energy was the most active counter on Bursa Malaysia today, surging 4.17% to 37.5 sen with 87.49 million shares traded.

Malaysian Pacific Industries was the top loser, falling 4.08% to RM11.74 on volume of 480,600 shares.

AAX net loss widens on higher average fuel price, impairment charges

PETALING JAYA: AirAsia X Bhd (AAX) saw its net loss for the third quarter ended Sept 30 widen to RM197.47 million from a net loss of RM43.3 million a year ago mainly contributed by the 28% increase in average fuel price in the quarter under review compared with the corresponding quarter in 2017 and an impairment of RM138.2 million from a joint venture.

Average fuel price was US$65 per barrel in Q317 from US$91 per barrel in Q318.

The group recorded revenue of RM1.08 billion for the quarter, 4% lower than RM1.12 billion for the quarter ended Sept 30, 2017.

For the nine months period, it posted a net loss of RM213.43 million compared with a net profit of RM14.47 million, while revenue was flat at RM3.4 billion compared with RM3.34 billion in the previous year’s corresponding period.

The company recognises the challenges posed by the recent rise in fuel prices, and efforts are being made to mitigate this by boosting ancillary revenue and capacity.

“A new fares structure has been implemented and the company is actively driving up ancillary revenue, which will ultimately improve yields, while management also remains focused on monitoring operating expenses to achieve better cost efficiencies to offset uncertainty in fuel price,” AAX said.

The company expects operational cost ex-fuel to be lower in the coming quarters as it starts to see the fruits from its cost saving initiatives mainly driven by lower aircraft lease rates, cheaper ground handling at foreign stations and from unlocking operational network synergies with short-haul affiliates.

“In order to better serve the growing demand in the Asia Pacific region, AAX Malaysia plans to increase fleet size by two aircraft through operating leases in 2018. One of the two leased aircraft has been delivered in October 2018. AAX Thailand is expecting two additional aircraft by end of 2018.”

However, it said average base fare may be under pressure due to the expected increase in capacity on core established routes, in addition to new routes.

The board is also aware of the deceleration of growth in tourism sector, especially coming from the China market segment which currently contributes to 25% of total revenue. Efforts have been made to mitigate this risk by shifting some of future capacity into other core markets such as Japan, South Korea and India.

The company is also actively monitoring the progress of all associate and joint-venture airlines to ensure better performance. The company expects AAX Thailand to remain profitable for the rest of the year. AAX Thailand will focus on leveraging on the existing strength of the AirAsia Group network and strengthening North Asia markets in the last quarter of 2018.

The company foresees the operational environment to remain challenging in Indonesia and will cease schedule service flights in January 2019. AAX Indonesia will then operate non-schedule service flights moving forward.

“Based on the current forward booking trend, forward loads are ahead of the previous year. Bookings in the coming months are expected to be stronger year-on-year,” AAX said.

Trump thanks Saudi Arabia for lower oil prices

WASHINGTON, Nov 21 ― US President Donald Trump thanked Saudi Arabia today for lower oil prices ― a day after pledging the US would remain a “steadfast partner” of the kingdom despite the murder of a dissident journalist. “Oil prices…

Media Prima narrows loss in third quarter

PETALING JAYA: Media Prima Bhd’s net loss narrowed to RM30.7 million in the third quarter ended Sept 30, from RM101.09 million in the previous corresponding quarter.

The group told the stock exchange that the lower losses during the period was attributed to the one-off impairment of investment in an associate and payment of early retirement scheme in August last year.

Revenue for the quarter declined 5.8% to RM271.8 million, compared with RM288.5 million in the same period last year.

For the nine months period, its net loss shrunk to RM20.58 million, against RM272.5 million a year ago, while revenue slightly up by 0.6% to RM894.8 million, from RM889.5 million previously due to better contribution from digital advertising, content and commerce revenue.

On its prospects, the group said that it will continue with its transformation journey and increase efforts to accelerate revenue generating initiatives by maximising available assets and leveraging on extensive reach via its strong brands on digital and non-digital platforms.

It said the foundation for these efforts are placed on several key areas which include market leadership in broadcast, digital publishing and growing commerce revenue through integrated media.

“Concurrently, continuous cost management will still be priorities whilst exercising prudent financial and risk management,” it added.

Its share price tumbled half a sen or 1.21% to 41 sen today with 266,100 shares changing hands.

Socso for foreign workers from Jan 1

PETALING JAYA: The Cabinet has decided to place social security protection of foreign workers under Social Security Organisation (Socso) with effect from Jan 1, 2019, according to Human Resources Minister M. Kulasegaran.

He said in a statement that this was in line with the Equality of Treatment (Accident Compensation) Convention, 1925 (No.19) and Conference Committee on the Application of Standard under the International Labour Organization (ILO), which Malaysia has ratified.

Kulasegaran said that his ministry, together with Socso will conduct engagements with the stakeholders soon.

He noted that employers who hire foreign workers with valid documents including expatriates must register their employees with Socso and contribute to the Employment Injury Scheme under the Employees’ Social Security Act 1969 (Act 4).

The benefits under the scheme include medical benefit, temporary disablement benefit, permanent disablement benefit, constant-attendance allowance, dependants’ benefit and rehabilitation, as well as RM6,500 repatriation cost including funeral.

However, he said the foreign workers would not be covered by the Invalidity Pension Scheme under Act 4.

“Employers can go to any of Socso 54 offices in the country including Sabah and Sarawak to register their foreign workers,” he added.

Sumatec files police report against director over alleged breach of trust

PETALING JAYA, Nov 21 ― Sumatec Resources Berhad, a service provider in the downstream sector of the oil and gas industry, has lodged a police report against a former director for alleged breach of trust and offences under the Company Act 2016. It…