Friday, March 1st, 2019


Alliance Bank’s Q3 net profit jumps 21.5%

PETALING JAYA: Alliance Bank Malaysia Bhd recorded net profit growth of 21.5% for the third quarter ended Dec 31, 2018 (Q3) at RM148.93 million, from RM122.55 million in the previous corresponding quarter.

Revenue for the quarter increased 7.8% to RM418.40 million, compared with RM388 million in the same period a year ago.

The group recorded a net profit of RM425.82 million for the nine months period ended Dec 31, 2018 (9MFY19), an increase of RM45.5 million or 12% compared to the corresponding period last year, while revenue grew 4.3% year-on-year (y-o-y) to RM1.22 billion.

Net interest income (including Islamic net financing income) grew 9% y-o-y, driven by stronger volume growth, improved loan mix from better risk adjusted return loans, and higher rate from asset re-pricing post overnight policy rate (OPR) hike.

Gross loans and advances grew 6% y-o-y to RM41.4 billion. Small and medium enterprise (SME) and commercial loans expanded 10.9% y-o-y, while consumer unsecured loans grew 21.1% y-o-y.

Year-to-date net interest margin (NIM) improved by 8 basis points (bps) to 2.48%, while gross interest margin improved 23 bps driven by better risk adjusted return loans.

The operating expenses for 9MFY19 declined 1.8% y-o-y, while cost-to-income ratio was at 46.9%, better than the industry average of 47.4%.

“Throughout the FY19 period our focus is to strengthen our key strategic pillars. They have been, and will continue to be, our catalyst to grow and achieve our mid-term growth plan, which is to strengthen our position in the SME and consumer space,” the group’s CEO Joel Kornreich said in a statement.

“We are also building up our capabilities, reorganising ourselves, and investing in technology to deliver improved service and experiences to our customers by ensuring that the innovative solutions are fast, simple, and responsive.

“As a local and SME-focused bank, we believe our strength is in owning a deep insight to the specific needs and challenges of our customers,” he added.

Private sector creates 24,000 jobs in Q4

KUALA LUMPUR, March 1 — The country’s private sector created 24,000 jobs in the fourth quarter (Q4) of 2018 compared with 30,000 in the previous year’s corresponding period. However, the number of positions…

Yinson, Sumitomo to jointly supply FPSO for Marlim oil field

PETALING JAYA: Yinson Holdings Bhd is teaming up with Sumitomo Corp to jointly provide floating, production, storage and offloading unit (FPSO) for the Marlim field in Brazil.

The group said in a statement today that it has entered into a letter of agreement (LOA) with Sumitomo, with the intention to participate in a potential joint venture. Sumitomo intends to participate in the project with an effective interest of at least 20% in the event of a successful bid by Yinson.

The LOA follows the signing of a long term and binding memorandum of understanding between the two parties on April 20, 2018 to jointly pursue and collaborate in the leasing and operation of FPSO and FSO projects worldwide.

Under this collaboration, Yinson commits to overseeing and conducting the overall project implementation, while Sumitomo commits to seeking competitive logistics and financing on top of enhancing the project execution.

Group chairman of Yinson Group Lim Han Weng said that the collaboration has been positive so far and the cordial working relationship is a strong indication of the confidence that its partners have in Yinson’s ability to execute projects and manage risks.

“We are confident that the collaboration with Sumitomo across different working levels will improve our strength in terms of bidding strategy, financing and project execution, thereby enhancing our competitiveness for prospective projects across the globe,” he said.

Tokyo stocks close higher on cheaper yen, China data

TOKYO: Tokyo stocks closed higher on Friday, helped by a cheaper yen as the dollar strengthened on stronger-than-expected US economic growth data and with the market also supported by positive Chinese data.

The benchmark Nikkei 225 index gained 1.02%, or 217.53 points, to 21,602.69. Over the week, it was up 0.83%.

The broader Topix index rose 0.50%, or 8.06 points, at 1,615.72. Over the week, it was up 0.39%.

“Shares grew steadily as the dollar changed hands at the 111.70-yen level. High-tech firms, precision machine makers and real estate-related companies are being purchased,“ Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.

The dollar fetched 111.74 yen in Asian trade, up from 111.39 yen in New York and 110.91 yen in Tokyo on Thursday.

The “better-than-expected fourth quarter US GDP outcome… is almost wholly responsible for the re-strengthening in the US dollar after an earlier fall”, Ray Attrill, currency strategist at National Australia Bank, said in a commentary.

A lower yen is positive for Japanese exporters as it makes their products more competitive outside Japan and also inflates profits when repatriated.

Japan’s unemployment rate remained at a low 2.5% in January, the internal affairs ministry said before the opening bell.

In Tokyo share trading, exporters were among gainers, with Olympus rising 1.42% to 4,995 yen and Sharp up 0.61% to 1,310 yen.

China-related firms also climbed following the release of forecast-beating data indicating an improvement in Chinese manufacturing activity.

Tokyo Electron jumped 1.55% to 15,385 yen, while industrial robot maker Fanuc 1.92% to 18,795 yen.

Market heavyweight Fast Retailing, the Uniqlo casual wear operator, gained 2.12% to 53,270 yen, while Sony fell 0.48% to 5,315 yen. — AFP

Ewein posts record net profit of RM42m in FY18

KUALA LUMPUR: Ewein Bhd posted a net profit of RM6.05 million for the fourth quarter ended Dec 31, 2018 compared with a net loss of RM6.54 million a year ago mainly contributed from property development segment for higher percentage of completion and property units sold.

Its revenue more than doubled to RM44.18 million from RM17.49 million in the previous year’s corresponding quarter.

For the full year period, Ewein’s net profit jumped 10 folds to RM42.01 million compared with RM3.85 million in the previous year contributed

from property development segment in which higher percentage of completion and properties units sold.

Revenue also doubled to RM204.24 million from RM98.99 million in the previous year.

Ewein president and group managing director Datuk Ewe Swee Kheng (pix) said it is pleased to announce a record year for Ewein amidst such challenging times in the property market.

“Our maiden property project City of Dreams received overwhelming response from market, and the units were taken up by a majority of local buyers as well as international buyers from Singapore, China, Indonesia, Europe, Hong Kong and Taiwan. The take-up rate for that project currently stands at above 80%.”

He said this is Ewein’s best financial performance since its listing in 2008, and it attributed its success to the uniqueness and location of its product offerings.

“We have also been consistently making genuine efforts to get closer to our buyers as well as understand the needs and desire of our valued customers. Ewein places importance in listening to and monitoring the market’s demands, and we will continue to do so to implement our findings in upcoming projects.”

Currently, through its subsidiary Ewein Zenith Sdn Bhd, the group is constructing its maiden property development project in Penang, a luxury sea-front development known as “City of Dreams” in Bandar Tanjong Pinang, overlooking Gurney Drive. City of Dreams has a gross development value of RM800 million and is situated on a 3.67-acre land. The 40-storey freehold property development features 572 sea-view units ranging from 1,097 sq ft to 1,335 sq ft in size. The construction is expected to be completed by the end of 2019.

Malaysia Aviation Group announces departure of chairman

PETALING JAYA: Malaysia Aviation Group (MAG) today announced the departure of the group’s chairman Tan Sri Md Nor Yusof after eight years of exemplary service.

Md Nor joined Malaysian Airlines System (MAS) in February 2001 as managing director, following a distinguished career in banking. He left the airline in March 2004 and was appointed chairman in 2011, it said in a statement.

Md Nor combined a valuable understanding of business management, finance and airline operations, which he brought to the Board. The Board of MAG expressed its deepest appreciation and gratitude for his leadership and invaluable contributions to the airline.

He has been heavily involved from the start in providing strong guidance and support to senior management, and gave his full commitment in fulfilling the group’s objectives, it added.

“On behalf of the Board, management and employees across the group, I would like to express our heartfelt appreciation and gratitude to Tan Sri Md Nor for his enormous contributions to MAS and MAG,” MAG CEO Captain Izham Ismail said.

“Tan Sri Md Nor has been an important advisor to all of us at MAG and an essential part of our transformation. On a personal level, he has been a great mentor and taught me so much of what I know today.

“His dedication and loyalty to the national airline has been exemplary. He will always be a part of the MH family and we wish him much success in his next role,” he added.

MAG will be announcing Md Nor’s replacement in due course.

China says it ‘regrets’ WTO ruling in favour of US on subsidies

BEIJING: China said on Friday it “regrets” a World Trade Organization ruling in Washington’s favour over a dispute on Chinese subsidies to wheat and rice producers.

The decision comes as the world’s top two economies try to hammer out an agreement to settle a long-running trade row that has rattled global markets.

The US in 2016 alleged that China doled out US$100 billion in “market price support” for wheat and rice as well as corn production, above levels agreed to at the Geneva-based WTO.

“The expert group did not support the Chinese position on the calculation of the subsidy level for our minimum purchase price policy on wheat and rice. The Chinese side regrets this,“ the commerce ministry said in a statement.

China is the world’s largest producer of wheat and rice, holding significant sway over world markets.

WTO experts said they had found that each year from 2012 to 2015, China’s market price support for wheat, Indica rice and Japonica rice “exceeded its 8.5% de minimis level of support for each of these products”.

“Government support for domestic agriculture, guaranteeing farmers’ income, and maintaining food security are common practices in all countries and permitted by WTO rules,“ the ministry said in the statement attributed to the head of its treaty and law department.

“China has always respected WTO rules and will carefully evaluate the expert group’s report, and properly handle it according to the WTO dispute settlement procedures,“ it said.

Both sides have up to 60 days to appeal Thursday’s ruling.

US Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue earlier hailed the ruling as a “significant victory for US agriculture” saying they hoped China would quickly come into compliance. — AFP

Oil rises on OPEC’s cuts, but soaring US exports and economic slowdown weigh

SINGAPORE: Oil prices rose on Friday as markets tightened amid output cuts by producer club OPEC, but surging U.S. supply and a global economic slowdown prevented crude from climbing further.

U.S. West Texas Intermediate (WTI) crude oil futures were at $57.41 per barrel at 0350 GMT, up 19 cents, or 0.3 percent, from their last settlement.

International Brent crude futures were at $66.59 per barrel, up 28 cents, or 0.4 percent.

Traders said oil markets were currently tightening.

In Venezuela, oil exports have plunged by 40 percent to around 920,000 barrels per day (bpd) since the U.S. government slapped sanctions against its petroleum industry on Jan. 28.

This drop comes as the Organization of the Petroleum Exporting Countries (OPEC), of which Venezuela is a founding member, has led efforts since the start of the year to withhold around 1.2 million bpd of supply to prop up prices.

“Global (oil) markets appear tighter than many anticipated for this time of year, but scores of unsold barrels can pile up quickly and saturate regions,“ Canada’s RBC Capital Markets said in a research note on oil markets.

Despite this, there are signs that point to a more amply supplied market heading further into 2019.

The U.S. Energy Department said on Thursday it was offering up to 6 million barrels of crude from national emergency reserves to raise funds to modernize the U.S. strategic oil reserves.

Additionally, U.S. crude output has hit a record of more than 12 million bpd , pushing exports to an unprecedented 3.6 million bpd in February.

Investment bank RBC estimated that oil from the U.S. Gulf of Mexico port of Houston “can economically move anywhere globally when priced at a discount of $1.70 per barrel relative to the waterborne Brent benchmark”.

Crude loading from Houston last traded at $6.60 a barrel over WTI, which still put it at a discount of more than $2.15 per barrel to Brent.

On the demand side, a Reuters poll showed analysts expect global fuel demand to slow this year amid a broad economic slowdown.

China’s February factory activity fell for a third month as the world’s second-largest economy continued to struggle with weak export orders, a private survey showed on Friday.

The weakness is being felt across the region. South Korea’s exports contracted at their steepest pace in nearly three years in February as demand from its major market China cooled further in yet another sign of faltering momentum in Asia’s fourth-largest economy.

Despite this, fuel consumption especially in Asia’s developing economies, which are key drivers of global oil demand, is so far holding up.

India’s diesel consumption, for instance, is expected to rise to a record this year amid a strong expansion of its heavy duty vehicles amid economic growth of around 7 percent.

Malaysia’s manufacturing sector downturn continues in February

PETALING JAYA: The headline Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI), which is a composite single-figure indicator of manufacturing performance, recorded 47.6 in February, down from 47.9 in January, pointing to a sharper deterioration in manufacturing sector business conditions.

IHS Markit, which compiles the survey, said the health of Malaysia’s goods-producing economy deteriorated for a fifth successive month in February, with continued declines seen in both output and new orders.

“Employment levels stagnated, while output charges stopped rising for the first time in eight months amid a fractional fall in operating costs. Sustained downturns in production in sales led companies to reduce purchasing activity and inventories,” it added.

Nevertheless, expectations towards output over the coming 12 months remained positive despite dipping since January.

Intakes of new work fell during February, with firms attributing this to a general market slowdown causing existing client demand to decline. The decrease was marked overall and among the strongest seen across the near seven-year survey history.

New orders from international sources were also down in February. Asian markets were cited as a drag on export sales. As a result, production volumes were cut for a fifth successive month. The rate of decrease was only moderate, but accelerated amid some reports of factory shutdowns.

The strong decline in new business led capacity pressures to ease further during the latest survey period. Backlogs of work fell at a faster pace and for the sixth time in as many months. Employment remained flat, with staffing levels unchanged from January.

Although headcounts were raised in some instances as part of company expansions, this was offset by job cutting at other firms due to reduced demand.

With lower production requirements, input purchasing was decreased at the second-fastest rate since June 2017 and at a marked rate overall. This filtered through to inventories, with stocks of purchases declining at one of the strongest rates seen since data collection started in mid-2012.

Malaysian manufacturers also scaled back their holdings of finished items. Despite softer demand for inputs, vendor performances deteriorated at a faster pace.

Delivery delays were blamed on material shortages at suppliers and logistic troubles. The extent to which lead times lengthened was mild, but the strongest since last October.

Against the current downbeat manufacturing picture, Malaysian goods producers remained upbeat on the output prospects over the coming 12 months.

Forecasts of improved demand and planned new product launches supported optimism. Nevertheless, the degree of optimism was the weakest for three months.

Lastly, input prices fell marginally amid reports of favourable exchange rate movements, enabling firms to leave output prices broadly unchanged.

Commenting on the survey data, IHS Markit economist Joe Hayes said that the February data pointed to a sustained contraction of Malaysia’s manufacturing economy, reflecting further falls in production and sales.

“New orders decreased at one of the strongest rates across the survey history, as panellists reported unfavourable underlying demand. Near-term manufacturing prospects appear downbeat, as firms opted to leave workforce numbers unchanged, scaled back input buying sharply and reduced inventories, suggesting that firms are bracing themselves for continued production cutbacks.”

Asian markets rise as broadly positive week draws to a close

HONG KONG: Markets rose in Asia on Friday though investors remain cautious as they await developments after the failure of the Trump-Kim summit while also keeping an eye on the stand-off between India and Pakistan.

A better-than-expected reading on US economic growth lifted sentiment, while optimistic comments from a top White House economic advisor on the China-US trade talks also provided support.

The gains put the region on course for another strong week despite disappointment over the North Korea talks in Hanoi and renewed tensions in Kashmir.

Tokyo led gains Friday, jumping 0.9% by the break thanks to a weaker yen, while Hong Kong climbed 0.4%.

Shanghai put on 0.6 percent, extending a rally that has seen it climb by about a fifth since the start of the year thanks to expectations over the trade talks.

Adding to the interest in mainland equities was news that index compiler MSCI will increase the weighting of Chinese-listed stocks in its benchmark indices and nearly double the number of companies included.

With those indices used by global funds for their investments, the move is expected to attract tens of billions of dollars more to the country’s markets.

Sydney climbed 0.6%, Singapore edged up 0.2% and Wellington added 0.4% with Jakarta. Taipei and Seoul were closed for public holidays.

Traders brushed off a negative lead from Wall Street that came after data showed the US economy grew in the fourth quarter at a much slower pace than the previous three months but was much better than forecasts.

‘Historic deal’

US President Donald Trump’s chief economic adviser Larry Kudlow cheered markets after he told CNBC “progress has been terrific” and while he said there was still work to be done he thought the two sides were “headed toward a remarkable historic deal”.

The news soothed worries on trading floors after the US Trade Representative appeared to temper expectations for an agreement.

National Australia Bank’s Ray Attrill said the latest remarks had “gone some way to reversing the creeping pessimism about the likelihood of a comprehensive Sino-US trade deal being ready to sign by the two countries’ Presidents later this month”.

In forex markets, the dollar held gains against most of its peers after the growth figures were released, though the pound remains supported by easing concerns about a possible no-deal Brexit.

“The market is now moving on the premise that the US-China talks are making progress, and that ‘a no-deal Brexit’ would be avoided,“ Resona Bank said in a commentary.

However, it warned, “It should be noted that there are risks that ultimately there may be no deals”.

Investors are now awaiting the next moves in the Pakistan-India crisis, which has fuelled worries of a confrontation between the nuclear-armed neighbours.

While they have each looked to play down the threat of war, observers say the limited communication between them widens the scope for misunderstanding.

The breakdown of talks between Trump and Kim Jong Un also surprised, with both sides giving conflicting reasons for the failure, though Pyongyang said they agreed to continue “productive” discussions on denuclearisation. — AFP