Thursday, January 17th, 2019


Stocks falter on trade tensions, Brexit, US shutdown

LONDON, Jan 17 — Stock markets retreated today, with US-China tensions, Brexit worries and a lingering US government shutdown taking their toll to a greater or lesser degree across the world’s trading platforms. The pound recovered against both…

CGC confident of approving RM4.6b guarantees and lending this year

PETALING JAYA: Credit Guarantee Corporation Malaysia Bhd (CGC) is confident of approving RM4.6 billion worth of guarantees and financing benefiting 9,800 small- and medium-sized enterprises (SMEs) in 2019 as it leverages on technology, despite missing its previous year’s target due to the review of infrastructure projects in the country.

President and CEO Datuk Mohd Zamree Mohd Ishak (pix) said CGC is targeting 20% growth in its business income to RM280 million in 2019, from its 2018 target of RM236 million, driven by guarantees, direct financing and asset securitisation deals.

“I’m fairly confident of achieving that (RM4.6 billion target for 2019). We want to reach out more via our iSME (SME online financing and loan) platform. That is one of the many ways we can achieve those numbers,” he told SunBiz in an interview recently, adding that CGC will also strengthen its alliance with banks, of which some deals are in the pipeline.

CGC missed its revised RM4.7 billion approved guarantee and financing target in 2018, but met 78% of it at RM3.68 billion.

The guarantee provider had in last year revised its target from RM4.9 billion previously, taking into consideration the latest economic landscape after several infrastructure projects were being reviewed.

Zamree admitted he was disappointed for not being able to achieve its 2018 target. “I know that we’ve tried our best. I understand there are factors beyond control and globally everyone is affected. Taking that into account, we did fairly well,” he said.

He said the broad strategy for CGC this year will be harnessing technology for it to be more effective in its outreach to SMEs, operational excellence, elevating brand awareness and optimising human capital.

Despite the change in government, Zamree said, the way CGC conducts its business remains the same, as SMEs will continue to be the backbone of Malaysia’s economy and, in relation to this, CGC’s role does not change.

“Our vision has not changed for us to be an effective financial institution (FI) dedicated towards promoting the growth and development of competitive and dynamic SMEs. That vision has been there for many years. When CGC was launched in July 1972, we aimed to reach a situation in which poverty or the lack of capital is no barrier to business. That is still relevant today.

“What changes is how we adjust ourselves with emerging trends, with disruptions within the economy as a result of technology,” explained Zamree.

He highlighted that CGC is on track in its five-year plan (2016-2020) and added digitisation in the plan in 2017 during a review.

CGC is working to enhance imSME, Malaysia’s first SME online financing and loan platform this year.

“We’re talking to FIs whereby we want to have straight-through processing from imSME to disbursements done by banks to reduce turnaround time. Currently it’s just a referral platform.”

imSME was launched on Feb 9, 2018 and serves as an online one-stop centre for SME loan/financing by providing an array of financing products and services that are offered by participating banks and agencies.

“To date, we have over 400 SMEs that have obtained financing from imSME totalling over RM45 million. It is encouraging,” said Zamree.

He disclosed that in the first quarter of this year, CGC will embark on partnerships with three FIs to provide assistance to those in the car industry, to help women entrepreneurs and to use big data in its lending activities.

Since its establishment, CGC has availed over 460,000 guarantees and financing to SMEs valued at more than RM70 billion.

US weekly jobless claims fall; mid-Atlantic factory activity rebounds

WASHINGTON, Jan 17 — The number of Americans filing applications for jobless benefits unexpectedly fell last week, pointing to sustained labor market strength that should continue to underpin the economy. Other data today showed…

UAE hyperloop to finish initial construction in 2020, says chairman

ABU DHABI (United Arab Emirates), Jan 17 — The company building the world’s first superfast hyperloop train system in the United Arab Emirates will complete a first phase of its construction next year, a top executive said today. Elon Musk’s…

French foie gras makers fed up by toughened California ban

MONTAUT (France), Jan 17 — French producers of foie gras, the rich liver delicacy made from force-feeding grain to ducks or geese, have denounced a ban on the product in California, saying they make the creamy paté humanely, following all the…

SC warns digital asset platform operators not to accept new investors until March 1

KUALA LUMPUR: Operators of digital asset platforms are not permitted to accept new investors during the transitional period until March 1. In addition, no person can conduct any initial coin offering (ICO) activity without prior authorisation.

The Securities Commission’s (SC) warning comes after it was tasked with regulating digital assets effective Jan 15.

In a statement released today, the SC said it has received numerous queries since the coming into force of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019.

Following the engagement with the existing digital asset platform operators, arrangements have been put in place to facilitate the operations of these platforms for a transitional period until March 1, subject to them fulfilling the conditions specified by the SC.

“During this period, these platform operators will not be permitted to accept new investors and will only be allowed to facilitate the withdrawal or transfer of client assets with the written instruction of the investor,” it noted.

Existing platform operators who failed to or did not attend the engagement with the SC today are advised to contact the SC immediately and not later than Jan 25, failing which they will be deemed to be operating a market in breach of securities laws.

“Once the relevant guidelines have been issued, existing platform operators will be required to apply to the SC for authorisation if they intend to operate beyond the transitional period.

“Prospective operators can also apply to the SC for authorisation once the guidelines are issued. The SC will evaluate all applications and will only authorise market operators that fulfil the relevant requirements,” it said.

On ICO, the SC said the related guidelines will be issued by the end of Q1 2019. “In the meantime, ongoing ICOs should cease all activities and return all monies or digital assets collected from investors.”

CPO price to top RM2,500 a tonne this year: Board

PUTRAJAYA: The Malaysian Palm Oil Board (MPOB) expects the average price of crude palm oil (CPO) to rise above RM2,500 per tonne this year against RM2,250 per tonne in 2018.

Chairman Tan Sri Mohd Bakke Salleh said the performance of the Malaysian palm oil industry is also expected to improve this year with CPO production projected at more than 20 million tonnes compared with 19.5 million tonnes in 2018.

“The country’s palm oil industry experienced a bleak situation in 2018 following the decline in production and CPO prices,” he said in his welcoming speech at the Palm Oil Economic Review and Outlook Seminar 2019 today.

Themed, “Palm Oil Driving Economic Sustenance”, the seminar is an annual forum organised by the MPOB for industry players to interact and share the latest developments.

Eight papers will be presented on the performance and prospects of the Malaysian palm oil industry.

According to Mohd Bakke, palm oil products had garnered a positive reputation as a trans fat-free alternative for the food industry in the US.

“The share of Malaysian palm oil imported into Pakistan has improved from 20% to 25% as more palm olein is being used as frying oil.

“Commercial oil palm cultivation started over 100 years ago and the subsequent growth of the whole supply chain has played a significant role and contributed to the socioeconomic development of the country, while fullfiling global demand for vegetable oils,” he said.

He also said palm oil was in fact the most consumed vegetable oil in the world at 70.21 million tonnes last year and constituted 30.9% of the total global oils and fat consumption.

Goldman Sachs CEO says sorry over 1MDB scandal

NEW YORK: Goldman Sachs Group Inc CEO David Solomon (pix) on Wednesday apologised to the Malaysian people for former banker Tim Leissner’s role in the sovereign wealth fund 1MDB scandal, but said the bank had conducted due diligence before every transaction.

Goldman is being investigated by Malaysian authorities and the US Department of Justice (DoJ) for its role as underwriter and arranger of three bond sales that raised US$6.5 billion (RM26.7 billion) for 1MDB.

US prosecutors last year charged two former Goldman bankers for the theft of billions of dollars from 1MDB. Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty to conspiracy to launder money and violate the Foreign Corrupt Practices Act.

“It’s very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government,” Solomon said on conference call discussing the bank’s fourth-quarter results.

Solomon said that Leissner denied the involvement of any of Goldman’s intermediaries in transactions with 1MDB.

An attorney representing Leissner did not immediately respond to a request for comment.

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia at the request of US authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.

The DoJ has said that US$4.5 billion were misappropriated by high-level officials of the fund and their associates between 2009 and 2014.

As part of Goldman’s due diligence efforts, Solomon said the bank sought and received written assurances from 1MDB and International Petroleum Investment Co (IPIC) that no third-parties were involved in the first two bond sales.

Abu Dhabi’s IPIC had co-guaranteed the 1MDB bonds when they were issued in 2012.

In the final offering, the Malaysian government itself, along with 1MDB, represented that no intermediaries were involved, he said.

“All these representations to Goldman Sachs have proven to be false,” Solomon said.

Goldman Sachs did not disclose any other information about its involvement with 1MDB, but said the impact on its client franchise had been “de minimis”.

Shares of the bank, which reported strong fourth-quarter results earlier in the day, have fallen over 25% in the last three months, after headlines about its involvement with the sovereign wealth fund emerged.

The Malaysian government said in December it was seeking up to US$7.5 billion in reparations from Goldman over its dealings with 1MDB.

Morgan Stanley profit misses estimates on lower bond trading

NEW YORK, Jan 17 — Morgan Stanley reported lower-than-expected quarterly profit today as fixed income trading fell, hurt by increased volatility at the end of the fourth quarter. The bank’s bond trading results were in line with other…

Bintulu Port Authority terminates Muhibbah unit’s contract

PETALING JAYA: Muhibbah Engineering (M) Bhd’s RM584.84 million contract for works at Bintulu Port in Sarawak has been terminated by Bintulu Port Authority.

In a filing with Bursa Malaysia, the group said it received a notice of termination yesterday and is currently in negotiation and discussion with Bintulu Port Authority.

The company said it reserves all of its rights and remedies, and anticipates a fair compensation.

To recap, the contract was awarded in April 2017 to Muhibbah Viccana JV, an entity in which Muhibbah has a 51% equity interest.

The contract is for the design and build for the development of supply base wharf and associated works in the second harbour basin at Bintulu Port.