Tuesday, December 11th, 2018


US stocks rise on report of China trade talks progress

NEW YORK, Dec 11 — Wall Street stocks opened higher today, joining several overseas equity markets following a report that the United States and China resumed trade talks. About 15 minutes into trading, the Dow Jones Industrial Average stood at…

India appoints Modi ally as new central bank head

MUMBAI, Dec 11 — India’s government named an ally of Prime Minister Narendra Modi as the country’s new central bank chief today, a day after his predecessor quit following a dispute about government interference. Shaktikanta Das has been…

Petronas: Oil price volatility to persist in 2019

KUALA LUMPUR: This year has seen great volatility in oil prices, which is expected to persist in 2019, according to Petroliam Nasional Bhd (Petronas).

In its edition of Petronas Activity Outlook (PAO) 2019-2021 report, the Malaysian government-owned oil major maintains its prudent view on the industry outlook and will respond with cautious optimism, particularly on new capital projects.

Petronas said since the last update of PAO 2018-2020, oil prices have exhibited greater volatility despite improvement in price level. In 2018, Brent has averaged US$72 per barrel (as at Dec 7, 2018), compared to average 2017 price of US$54 per barrel, representing a 33% annual increase.

The annual PAO report for the period 2019-2021 shares the group’s perspective on industry trends, demand outlook and activities in the upstream and downstream sectors, and to assist the industry to strategise and better manage its resources and investment decisions.

Petronas vice-president of group procurement Samsudin Miskon said it is pleased with the positive response from the oil and gas industry towards PAO 2018-2020 – considering that Petronas taken a bold move in pushing for transparency in information in the hope that the industry is able to respond, especially with strategic collaborations, to seize opportunities and find long-term solutions.

”The three-year outlook portrays growth in brownfield activities particularly in rigs category and its supporting services, for example, marine vessels. Base activities in maintenance is projected to increase for both onshore and offshore in tandem with this outlook. Integrated groupwide onshore plant & facilities turnaround will build local players’ capability that yields value optimisation” he said in the report.

In the report, Petronas also shared its aspirations and key opportunity areas for industry players to participate in decommissioning activities. Decommissioning is an activity to restore a previously producing site to a safe and environmentally stable condition.

It acknowledged that decommissioning is much talked-about among industry players as a rapidly developing market segment and the report noted that most of the required services are readily available.

The report also emphasised that local players need to reconsider a more cost effective and efficient business model to support upcoming requirements.

Macron’s concessions set to blow out French deficit

PARIS, Dec 11 — France is on course to overshoot the European Union’s budget deficit ceiling next year without new spending cuts after President Emmanuel Macron caved in to anti-government street protests. Macron announced…

Malaysia Airports sues AirAsia, AirAsia X over PSC collection

PETALING JAYA: The spat between Malaysia Airports Holdings Bhd (MAHB) and AirAsia Group Bhd seems to be far from over as the low-cost carrier is now being sued for refusing to collect the additional RM23 passenger service charges (PSC) per passenger at klia2.

In a filing with Bursa Malaysia, AirAsia Group said its wholly owned subsidiary AirAsia Bhd (AAB) was served with an unsealed copy of a writ of summons in the sum of RM9.4 million by MAHB’s wholly owned subsidiary Malaysia Airports (Sepang) Sdn Bhd (MASSB) pertaining to PSC that AAB has not collected and refuses to collect from traveling passengers.

In a separate filing, AirAsia X Bhd (AAX) also said it has been served with an unsealed copy of a writ of summons in the sum of RM26.7 million for alleged PSC arrears.

The group said it will defend these proceedings vigorously as it believes that the claims are made without justification and are unreasonable.

Both AAB and AAX said they have collected RM50 per non-Asean international passenger, which has been paid to MASSB.

“However, MASSB wants us to collect another RM23 per passenger effective July 2018 which we have not and will not collect. MASSB insists that klia2 should charge the same rates as Kuala Lumpur International Airport (KLIA).”

“We strongly believe, as does the Malaysian public, and have so represented to MASSB numerous times, that klia2 is a low-cost airport and the charges levied should reflect the level of services provided,” they added.

The RM26.7 million summons slapped on AAX includes the uncollected additional RM23 per passenger and alleged arrears in PSC actually collected.

The group maintains that it is not obliged to collect the same PSC for passengers departing from klia2 and will not do so “for the sake of all the stakeholders” in the aviation and tourism industries.

The airline also intends to pursue cross claims against MASSB in relation to the infrastructure and state of the airports and its operations, which include major apron defects, random closure of runways, damage to aircraft and rupture of fuel pipelines.

“We believe these claims far exceed the claims MASSB is seeking. We have attempted – without success – on numerous occasions to engage MASSB on these issues but regrettably MASSB has decided to bring these issues to the public arena by commencing legal action,” it said.

AAB and AAX have instructed their solicitors to represent both companies in the proceedings and any further updates in respect of any material development will be made from time to time.

AirAsia’s share price fell 1.62% or 5 sen to close at RM3.04 today with 14.37 million shares traded, making it one of the top active stocks on the bourse today while AAX’s share price fell 2.08% or half sen to close at 23.5 sen with 3.93 million shares done.

Manforce up 28% in LEAP Market debut

KUALA LUMPUR: Manforce Group Bhd, which debuted on the Leading Entrepreneur Accelerator Platform (LEAP) Market of Bursa Malaysia Securities Bhd today, closed its first day of trading with a 5 sen or 27.8% premium at 23 sen with 925,000 shares changing hands.

This gives the company a market capitalisation of RM73.6 million.

Manforce offers workforce solutions and services in Malaysia, with its business activities principally involved in the provision of foreign workers management services, manual labour services as well as foreign workers insurance products and services.

Manforce managing director Datuk Paul Wong Boon Ming said it has raised RM8.6 million through the private placement at an issue price of 18 sen per placement share.

About 87.3% or RM7.5 million of the proceeds raised from the initial public offering (IPO) will be utilised for working capital and the balance 12.7% or RM1.1 million will be used to defray the estimated listing expenses.

“Our board of directors and management team will provide our commitment in growing the company. The first step in doing so is by hiring and/or managing up to 1,800 additional foreign workers, and we hope to complete this within 24 months. The industry we are in is a volume game and there is always a mismatch between the supply and demand. We intend to grow our market share further by addressing the mismatch through our existing and upcoming business strategies,” Wong added.

Besides that, the company intends to diversify its customer market segments, by penetrating into construction, automotive and semiconductor segments, from the current focus on electrical and electronics and plastic manufacturing as well as the services sectors. There are also plans to enhance the company’s service offerings by improving workers’ service quality and through continuous development of the IT infrastructure as well as expansion of support team.

‘Foreign firm closures due to business reasons’

KUALA LUMPUR: Five manufacturing companies involving foreign investors closed down during the May-September period, with investments worth RM308.7 million, said Deputy Minister of Trade and Industry Ong Kian Ming.

Subsequently, 362 local workers were laid off following the closures which were due to business decisions and not because of the transition in the government, he said.

“Other factors which led to foreign investors withdrawing their investments from Malaysia include the contraction in the global economy and market volatility resulting from the decline in demand and sales,” he told the Dewan Rakyat today.

He was answering a question from Datuk Seri Ikmal Hisham Abdul Aziz (BN–Tanah Merah) on the number of foreign investors who had withdrawn their investments from the country and the value involved.

Ong said the reason for the closures also included rising operational costs and lack of demand for products, forcing the investors to restructure their companies and business strategies, with some deciding to withdraw their overseas investments, including the ones in Malaysia.

He said Malaysia’s increasing focus on quality and high technology investments, the technological shift towards digitalisation and Industry 4.0, as well as rising labour costs had left investors, especially those involved in labour-intensive projects, unable to adjust their operations.

As such, they faced difficulties in continuing their operations while maintaining their long term profits in the country.

Ong said local workers who were laid off were offered sufficient compensation packages by the companies, which also cooperated with the Federation of Malaysian Manufacturers and other companies to rehire those about to be terminated.

The companies also collaborated with the Human Resources Development Fund (HRDF) to help the workers to participate in the appropriate skills training programmes via the HRDF Outplacement Centre.

“Under the scheme, local workers who were laid off would be equipped with additional industrial skills or the necessary qualifications to enable them to be re-employed or to be self-employed,” Ong said.

Automakers rise on report of China moving to cut US car tariffs

DECEMBER 11 — Automakers’ shares rose today following a report that China could move to cut tariffs on American-made cars, a step which was forecast by US President Donald Trump after a meeting with China’s president in Argentina. China is…

EU will ‘follow closely’ French deficit after Macron measures

STRASBOURG, Dec 11 — EU economics affairs commissioner Pierre Moscovici today said Brussels will keep close watch over France’s new spending plans, a day after President Emmanuel Macron unveiled new measures to quell violent protests. “The…

As India looks for new central bank head, investors worry about independence

MUMBAI, Dec 11 — Reserve Bank of India (RBI) Governor Urjit Patel’s shock resignation following a policy tussle with the government sent tremors through financial markets today, and investors are keen to see the government quickly name a…