Sunday, February 24th, 2019


China, US sprint to seal trade deal ahead of Trump deadline

WASHINGTON: US and Chinese negotiators met for over seven hours on Saturday to resolve their trade dispute and avoid an escalation of the tit-for-tat tariffs that have already disrupted global commerce, slowed the world economy and roiled financial markets.

The two sides were to meet again today as they race to seal an agreement before a March 1 deadline imposed by US President Donald Trump, who has threatened to dramatically increase tariffs on Chinese goods unless there is a deal.

Saturday marked the fifth straight day of the negotiations between the world’s two biggest economies. Talks were extended through the weekend after both sides reported progress in narrowing their differences.

The Chinese delegation is scheduled to leave for Beijing tomorrow, according to a person familiar with their itinerary.

This is the fourth round of negotiations since Washington and Beijing agreed to a ceasefire in their trade war.

Trump, who has embraced an “America First” policy aimed at rebalancing global trade in favour of the United States, said on Friday there was “a very good chance” a deal would be struck, and that a trade summit with Chinese leader Xi Jinping was likely next month, and hailed two days of “very good talks” by negotiators.

The negotiations were extended through today as officials race to reach a deal ahead of a deadline this week when US tariff rates are due to rise sharply.

But Trump again said he was considering pushing back the deadline for raising tariffs to 25% from 10% on more than US$200 billion (RM816 billion) in Chinese exports to the US.

“We expect to have a meeting sometime in a not too distant future,” he said of the meeting with Xi. “Probably fairly soon in the month of March.”

Xi also sounded a positive note in a letter delivered to Trump by China’s lead negotiator Liu He.

The Chinese president expressed hope that the talks maintain “a mutually respectful, cooperative and win-win attitude” and lead to a “mutually beneficial” agreement.

Details remained scant about any concrete progress in the seven-month-old trade war, which has rattled global markets and prompted stark warnings about the risks to the world economy.

Trump said an agreement on currency manipulation will be included in the trade pact. Officials from Beijing also expressed optimism about a positive outcome.

“From China, we believe that it is very likely that it will happen,” Liu said, speaking through an interpreter. – AFP, Reuters

Short-selling activities gaining traction on Bursa

PETALING JAYA: Almost a year after Bursa Malaysia opened up regulated short-selling (RSS), the market has seen a pick-up in short-selling activities among retail investors and the momentum is expected to continue to grow, according to analysts.

Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew said the market is “quite serious” with short-selling activities today, as retail investors are allowed to participate. However, he said it also introduces an element of uncertainty to the market.

“Retail investors are more active in short-selling today, which is good for Bursa, but it can be difficult for investors. For retail investors, it is a difficult decision to short-sell. I would say the short-selling feature is more for institutional investors than for retail investors. However, despite the volatility, retail investors are more keen to participate today,” he told SunBiz recently.

Previously, analysts were concerned about Bursa’s level of maturity, as open short-selling requires a deep and broad market with sufficient liquidity.

“Liquidity in the market is sufficient for short-selling. When short-selling, there is always the worry; if the stock is illiquid, the investor will face a short squeeze – that is, when they want to buy back but cannot get a seller,” said Pong.

“At the moment, there is selectively good volume in a number of stocks. Moving forward, we will definitely see more short-selling activities. It has grown and will continue to grow because the market is in sideways mode,” he added.

Rakuten Trade Sdn Bhd vice-president for research Vincent Lau said the market has matured enough to accommodate open short-selling and short-selling is a growing business.

“RSS is already being conducted and it is a growing business. We can see certain amount of IDSS,” he said.

“The market has matured to a certain extent and we have safeguards in place … the system is very transparent and retail investors are aware of the risks involved,” he added.

He noted the market controls for IDSS put in place by Bursa Malaysia, which include a suspension of short-selling if a stock’s price falls by more than 15% from the previous day’s closing price or if the gross short-selling volume exceeds the daily maximum limit of 3% of outstanding shares per security.

Lau said with short-selling, the market takes two-way views, which adds more vibrancy to the market. With awareness growing, he expects participation in short-selling activities to continue to grow.

To recap, RSS and securities borrowing and lending (SBL) were first introduced in 1996, but suspended less than a year later following a meltdown in stock prices during the 1997 Asian financial crisis.

The trading instrument was reintroduced in January 2007, with a list of 100 eligible stocks and limited only to licensed proprietary traders.

In April last year, Bursa Malaysia opened up RSS to a wider group of investors when it officially introduced IDSS with 280 securities available for short-selling.

As of Nov 29, 2018, there was a total of 239 eligible stocks. The list is reviewed every six months and updated in May and November.

BLand earmarks RM1.05b property launches this year

KUALA LUMPUR: Berjaya Land Bhd (BLand) plans to launch some RM1.05 billion worth of properties in 2019, mainly The Tropika in Bukit Jalil and Timur Bayu in Shah Alam, after a two-year hiatus.

The group, via its subsidiary Berjaya Golf Resort Bhd, launched The Tropika over the weekend, a mixed development project with a gross development value (GDV) of RM720 million, comprising 868 residential units across four towers.

BLand senior general manager of property marketing Tan Tee Ming expects The Tropika in Bukit Jalil to be the main revenue contributor for the group’s property segment this year.

The Tropika is located on 6.5 acres of freehold land in Bukit Jalil. There are four different types of units, namely Type A, Type B, Type C and Type D measuring 732 sq ft, 974 sq ft, 1,318 sq ft and 1,251 sq ft respectively.

Tan said units of the first tower is priced at RM725 psf and every subsequent tower will increase RM50 psf.

“There are two market segments that we want to cater for in The Tropika. We thought of the buyers in mind and the first segment is young families. We also want to focus on investors. We know that there will be a rental market for the apartments that we build here,” Tan told the media.

The Tropika is within close proximity to SJKC Lai Meng, International Medical University and Asia Pacific University, as well as the Bukit Jalil Complex, the Bukit Jalil Recreational Park and the Bukit Jalil Gold & Country Resort.

Surrounding the four residential towers of The Tropika is a 2.9-acre deck equipped with 68 types of facilities.

The commercial space of the project features a 23,695 sq ft grocer along with a two-storey dual frontage office lots ranging from 3,316 sq ft to 3,814 sq ft and retail space ranging from 752 sq ft to 1,677 sq ft.

Completion of the commercial component will take two years while the residential towers will take four years.

Tan said BLand is also planning to develop the 12-acre land next to The Tropika, where the Berjaya Property Gallery sits on, into a 1,500-unit residential project with managed healthcare.

Meanwhile, he said the Timur Bayu development in Shah Alam has a GDV of RM330 million, consisting of high-rise and low-rise residential units. It is expected to launch the project in the third quarter this year.

Analysts project inflation rate this year at 2.0-2.2%

PETALING JAYA: Analysts foresee the inflation rate for 2019 to be in the range of 2.0% to 2.2% despite the 0.7% drop in the consumer price index (CPI) for January.

“We think the fall in CPI is temporary and prices should revert back up amid higher global oil prices which have been edging up since mid-February, stable demand and potential weather disruptions,” UOB Research said note last Friday.

The research house noted that the changes in consumption tax in June 2018 will also deflate CPI in the first half of 2019 before normalising in the second half of the year.

It said the targeted petrol and diesel subsidies will be introduced in April to manage cost of living for the lower income group while broadband prices will not see further reduction this year as the target of doubling the speed and halving the price was achieved in the second half of 2018.

“Potential weather disruptions and resilient domestic demand should keep inflation trends positive. Hence, we expect headline inflation to rise to 2% this year from 1% in 2018,” it said.

Last Friday, the Statistics Department reported a 0.7% decrease in CPI in January to 120.5 from 121.3 a year ago. On a monthly basis, CPI fell 0.5% from December last year.

It was the first decline in CPI since November 2009 amid a steeper drop in the transport component as petrol prices are 8-12% lower compared to the same period last year.

The lower average price of RON 95 in January this year which stood at RM1.98 per litre compared with RM2.28 in January last year, contributed to the decrease of the index of transport and overall index.

UOB expects headline inflation to revert back up once the high base effect in the transport component recedes and oil price continue to rise.

“The government has indicated that despite floating petrol prices, levels will be capped in order to manage cost pressures,” it added.

Meanwhile, MIDF Research projected 2.2% inflation for 2019 amid low base effects.

“We anticipate inflationary pressure mainly from fuel-related items to increase, consistent with our expectation on crude oil price to average at US$75 per barrel for 2019 (2018: US$72 per barrel) and given that RON95 subsidy will be targeted to only B40 group.“

UOB expects Bank Negara Malaysia to keep the Overnight Policy Rate unchanged at 3.25% for now with lingering risks tilting the growth outlook on the downside.

It said major central banks have erred on the cautious side and some are taking a pause in rate actions.

On currency, it expects US dollar/ringgit to trade between 4.05 and 4.10 in the near term, with the ringgit supported by steady domestic rates, oil prices and potential funds repatriated by Petronas and Khazanah.

Home grown Tealive to open 10 stores in China

SHANGHAI, Feb 24 — Malaysia’s home grown bubble tea brand, Tealive, is stepping up its presence in China this year with the proposed establishment of 10 corporate stores in the world’s largest tea consumer market. Loob Holding Sdn Bhd chief…

Foreign outflow reduces to RM18.8m

KUALA LUMPUR, Feb 24 — Foreign investors were net sellers in the Malaysian equity market, withdrawing RM18.8 million between Monday and Thursday, compared with RM263.5 million recorded during the previous week. This is the second consecutive week…

Kraft Heinz faces painful downside of austerity approach

NEW YORK, Feb 24 — The American food giant known for its iconic ketchup and hotdog brands is facing the downside of austerity as a strategy for boosting profits. Kraft Heinz, born of the US$49 billion (RM200 billion) merger of Kraft Foods and…

As trade deadline looms, US and China sprint to seal a deal

WASHINGTON, Feb 24 — US and Chinese negotiators met for a fifth straight day yesterday as the two sides race against a March 1 deadline to reach agreement and prevent a further escalation in their trade war. The fourth round of negotiations…

Sustaining the future for palm oil

As a plant turned edible oil to meet the needs of consumers, palm oil today joins the ranks of commodities dividing nations worldwide for its enviromental and political implications. An undeniable fact is palm oil’s contribution to Malaysia’s economy. Having roots in our history since 1917, exports of palm oil and palm-oil based products continue […]

Bullish sentiments gaining traction

After weeks of a directionless market, the FBM KLCI finally broke above the immediate resistance level of the sideways trend at 1,702 points and closed 1.9 per cent higher in a week at 1,721.42 points last Friday. Trading volume has increased as the Chinese New Year holiday season ends. Last Thursday, the index closed at […]