Thursday, March 7th, 2019

 

EU trade chief eyes narrow path for US trade talks

WASHINGTON, March 7 — The European Union is focused on a narrower trade negotiation with the United States focused on industrial goods, including automobiles, European Trade Commissioner Cecilia Malmstrom said today, one day after talks with US…


Bank Pembangunan to undergo ‘clean-up’ soon: Chairman

KUALA LUMPUR: Bank Pembangunan Malaysia Bhd (BPMB), which has been in the spotlight due to allegations of lax lending practices, is expected to undergo a “clean-up process” soon.

The bank is expected to be more meticulous in its credit standards and processes.

Newly appointed chairman Datuk Zaiton Mohd Hassan said the bank would not sacrifice its credentials as a development bank and would balance its roles going forward.

“We will clean up as soon as this year and we will have an incoming chief executive officer (CEO) and we will finalise the strategy once the CEO, the board and the management sit together to formulate the plan going forward,” she said TOday.

She was met by the media after jointly launched the Industry Digitalisation Transformation Fund with Finance Minister Lim Guan Eng.

Meanwhile, Lim had expressed his confidence in Zaiton’s leadership and her ability to turnaround the bank.

“We believe that BPMB will soon get a clean bill of health,” he said.

The bank had been alleged of giving out loans to politically connected parties as well as being lenient in its lending procedures.


US stocks fall as ECB cuts growth outlook

NEW YORK, March 7 — Wall Street stocks fell in early trading today, extending a negative streak as the European Central Bank slashed its growth forecast. The Dow Jones Industrial Average, which has fallen the last three days, dropped 0.7 per cent…


Foreign investors back as net buyers of Malaysian bonds

PETALING JAYA: Foreign investors returned as net buyers of Malaysian debt securities after selling a cumulative RM9.8 billion between November 2018 and January 2019, according to UOB Bank.

The net buying in February stood at RM4.5 billion.

“Inflows in February helped to offset January’s outflows, bringing cumulative flows to RM2.2 billion in January and February,” it said in a research note today.

Net inflows were concentrated in Malaysian Government Securities (MGS) and Government Investment Issues (GII) in February, which drew in RM4.9 billion and RM800 million, respectively.

Foreign holdings of government bonds (MGS & GII) edged up to RM167 billion or 22.7% of total outstanding against RM161 billion or 22.2% in January.

However, foreigners sold more treasury bills (-RM800 million) and private debt securities (-RM400 million).

UOB said the re-entry of foreign funds into Malaysian bonds is in line with the stronger ringgit and abating sovereign risks.

“International rating agencies have reaffirmed Malaysia’s sovereign ratings with a stable outlook. Malaysia’s 5-year credit default swaps (CDS) has fallen to a year’s low of 61.”

On the currency front, UOB maintains its view that the ringgit will trade between 4.05 and 4.10 against the greenback before a subsequent move towards 4.15 and 4.18 by mid- and end-2019 respectively, premised on a resumption of Federal Reserve interest rate increases in June and December, lingering risks to growth as well as extended US-China trade negotiations.

“US dollar/ringgit edged up to 4.08/4.09 following the release of Bank Negara Malaysia’s monetary policy statement that sounded more cautious on growth with a dovish tilt. Other regional central banks also turned more dovish in February.”

Meanwhile, UOB said foreign funds pared down their holdings of Malaysian equities by RM800 million after a net buying of RM1 billion in January. This brought year-to-date equity inflows lower to RM200 million on a net basis. Foreign ownership of Malaysian equities held steady at 23.5%.


ECB pushes out rate hike, offers cheap cash to banks

FRANKFURT, March 7 — The European Central Bank changed tack on its tightening plan today, pushed out the timing of its first post-crisis rate hike until 2020 at the earliest and offering banks a new round of cheap loans to help revive the euro…


Vodafone says complete UK ban on Huawei would cost it millions of pounds

LONDON, March 7 — Vodafone said any move by Britain to bar equipment made by China’s Huawei from all parts of new 5G networks would cost it hundreds of millions of pounds and “very significantly” slow down the deployment of the new…


Singtel to buy US$525m of Bharti Airtel stock in Indian telco’s fundraising

SINGAPORE/BANGALORE: Singapore Telecommunications Ltd (Singtel) said it will buy roughly US$525 million (RM2.14 billion) worth of Bharti Airtel stock as part of the Indian telecoms operator’s plan to raise US$4.6 billion (RM18.8 billion) through shares and bonds.

Airtel hopes to use the money to cut debt and shore up its balance sheet at a time when the broader Indian telecom industry is grappling with a price war triggered by the entry of Reliance Jio Infocomm Ltd.

Under the fundraising plan, announced last month, Airtel plans to sell new shares worth 250 billion rupees (RM14.6 billion) for 220 rupees apiece, or a nearly 30% discount to its current stock price. It will raise another 70 billion rupees via foreign-currency bonds.

Airtel’s net debt stood at more than US$15 billion as of Dec 31, while its current market value is around US$17.5 billion. Singtel had a net debt S$9.75 billion (RM29.3 billion) at the time.

Singtel said it will buy 170 million new shares in Airtel, India’s No. 2 telco in terms of subscribers. This will dilute its effective interest in Airtel to 35.2% from 39.5%.

Airtel’s two other major shareholders – Bharti Group and Bharti Telecom – intend to subscribe to their full entitlement in the rights issue, while Singapore’s state-backed GIC will commit about 50 billion rupees, Airtel and Singtel said.


PPB allocates RM831m to fund expansion over next four years

KUALA LUMPUR: PPB Group Bhd, a Malaysian diversified conglomerate, is allocating a sum of RM831 million for capital expenditure for the next four years for its expansion plans locally and internationally across all segments.

Managing director Lim Soon Huat said expansion plans include the addition of nine new cinemas locally and one in Cambodia for the period, as well as upgrading existing cinemas under the film exhibition and distribution segment for RM373 million.

“The group will also allocate RM401 million for the grains and agribusiness segment, which will be used for investment in China flour mills and the construction of a 500 tonnes per day flour mill in Vietnam as well as RM3 million for the property segment to continue upgrading our existing malls.

“For the consumer products segment, we are allocating RM16 million for the construction of a new production facility and purchase of plant, machinery and intangible assets, RM5 million for environmental engineering and utilities to purchase equipment and office renovation, as well as RM33 million for other segments to purchase plant and machinery,“ he told a media briefing today on the company’s outlook for this year.

Under the environmental engineering and utilities segment, he said the group has secured two water projects in Sarawak worth a total of RM88 million, and is tendering for projects in Peninsular Malaysia and Sarawak with a total value of RM350 million.

Lim said that all the tenders will be announced in stages with the latest expected to be announced in May this year.

“Going forward, the grains and agribusiness segment is expected to remain competitive on the back of a volatile commodity market and it will continue to focus on volume growth and maintaining the good quality standard of our products.

“The performance of the consumer product segment is expected to remain stable, supported by a widening product range and the introduction of new products into new markets,” he added.

The property division, he said, will focus on completing the Megah Rise project in Petaling Jaya while striving to maintain and improve the operational excellence of its existing mall and property management business.

For the financial year ended Dec 31, 2018, its grains and agribusiness segment’s revenue increased by 5% to RM3.15 billion on the back of higher sales from all flour mills.

Revenue from the film exhibition and distribution segment rose by 12% to RM538 million, due to the strong performance of Malay titles and contribution from cinemas opened in 2017.

The environmental engineering and utilities segment also recorded higher revenue of RM205 million for the year, up by 57% as compared to a year before, while the property segment’s revenue went up 11% to RM53 million.


AirAsia Indonesia’s proposal to acquire Garuda’s low-cost carrier Citilink rejected

PETALING JAYA: AirAsia Indonesia’s proposal to acquire Garuda Indonesia’s low-cost carrier (LCC) subsidiary Citilink Indonesia has been rejected, said Garuda Indonesia president director Ari Askhara.

According to a report by The Jakarta Post, which quoted tempo.co.id, Ari said that Citilink is doing better than AirAsia, even under Garuda’s new management.

The report said that there had been no internal talks within Garuda and no orders from shareholders to sell Citilink Indonesia.

The airline also did not receive any official proposal from AirAsia Indonesia.

Ari also conceded that talks had taken place between Garuda and AirAsia since Pahala N. Mansury joined Garuda but assured that the talks were about possible cooperation, not an acquisition.

The Jakarta Post said Citilink Indonesia transported a total of 15 million passengers in 2018, a 22% increase from the previous year at 12.3 million. This year, it is targeting to attract 18 million passengers.

On Monday, PT AirAsia Indonesia president director Dendy Kurniawan reportedly said that the company was interested in acquiring Citilink because of the similarities between the two carriers.

“Both are LCCs. We are strong in international routes, while they (Citilink) are strong domestically. Both operate the Airbus. We have also a similar rating of pilots and cabin crew members,” said Dendy, as quoted by the daily.

Headquartered in Jakarta, Citilink was established in 2001. Last year, it was named the named the most punctual airline in Southeast Asia.


Prestariang says unaware of potential revival of SKIN as share price soars

PETALING JAYA: Prestariang Bhd’s share price rose as much as 35.23% to a high of 59.5 sen today from its closing price of 44 sen on Wednesday, on news of the potential revival of the National Immigration Control System (SKIN) project.

However, Prestariang told Bursa Malaysia today that it is not aware of the potential revival or reinstatement of the SKIN project and will make the necessary announcements once there is any material development in relation to the project.

The stock traded between 47.5 sen and 59.5 sen before closing 22.73% higher at 54 sen torday with a total of 62.12 million shares traded. It was the fourth most active stock and among the top gainers on the bourse.

On Wednesday, Bloomberg reported that Kumpulan Wang Persaraan (Diperbadankan) (KWAP) is seeking to revive the RM3.5 billion SKIN project by offering to lower the cost to the government.

Quoting sources, Bloomberg said that KWAP has proposed to cut the cost of the project by 17% to RM2.89 billion and to increase its stake in Prestariang if the project is revived.

The cancellation of the SKIN project was announced in December last year and took effect on Jan 19, 2019. With a 70% stake in the project, Prestariang had expressed its intention to claim compensation from the termination.