Tuesday, March 12th, 2019


US warns of WTO action over 'discriminatory' new digital taxes

PARIS, March 12 —The US is weighing a complaint at the World Trade Organization against "discriminatory" new taxes on digital giants such as a Facebook and Google which are being planned by France and other EU nations, a top US trade official said…

UK budget plans clouded by Brexit

LONDON, March 12 — British finance minister Philip Hammond today updates the government's spending and tax plans that depend heavily on the nature of Brexit. The Spring Statement, an update on the main annual budget announcement last October,…

Brexit deal legal advice sends pound tumbling

LONDON, March 12 — The pound tumbled today after the UK government's top legal advisor cast doubt on Prime Minister Theresa May's last-gasp changes to her Brexit deal, hours before a vital vote. Sterling, which had been rising after May secured…

Malaysian palm pares back early gains

JAKARTA, March 12 — Malaysian palm oil futures dipped again today, losing earlier gains made on rising crude oil prices. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended down 0.14 per cent at…

Ringgit ends higher as dollar dips

KUALA LUMPUR, March 12 — The ringgit closed higher as the US dollar dipped against a basket of currencies. At 6pm, the local currency stood at 4.0820/0860 against the greenback compared to Monday’s close of 4.0870/0920….

Green shoots of recovery for CPO

PETALING JAYA: The worst is over for the plantation sector as palm oil exports are expected to make a strong recovery this month, after a dismal fourth quarter last year (Q4 18) and a surprise spike in inventory last month.

Last month, palm oil inventories unexpectedly rose to 3.05 million tonnes (MT) as exports declined by 21.2% month-on-month, dragged by weaker demand from China while crude palm oil (CPO) price performance was under pressure due to concerns about oversupply.

“The palm oil industry has less than three months to pare down its inventory to an optimal level before the high production season kicks in. Nevertheless, we think demand will likely pick up this month after a long holiday break in China,” PublicInvest Research said in a report today.

It expects inventory to drop below 3 million MT this month, on the back of a strong recovery in exports. According to Intertek, Malaysian palm oil exports rose 10.7% year-on-year to 435,464 MT in the first 10 days of March.

In Q4 18, the sector experienced weaker CPO product prices amid record high inventory levels in the country and higher inventory levels carried over by plantation companies as selling prices were unattractive.

During the quarter, inefficient and small plantation companies were in the red as CPO prices fell below their break-even level. In addition, the sector saw higher cost of production due to a decline in palm kernel credit and higher fertiliser cost, caused by the weaker ringgit.

“Under our coverage universe, Q4 18 realised CPO average price was down to RM1,878 per MT versus MPOB’s RM1,920 per MT, pressured by the current high inventory levels and strengthening of the ringgit. FGV Holdings achieved the highest average CPO price for the quarter at RM2,053 per MT followed by IOI Corp’s RM1,932 per MT while TSH Resources’ RM1,780 per MT was the lowest,” said PublicInvest Research.

It maintained its “neutral” call on the plantation sector with a full-year average CPO price forecast of RM2,200 per MT. Ta Ann Holdings remains its top pick based on strong turnaround in the plywood segment and expected improvement in plantation, driven by a double-digit growth in fresh fruit bunches (FFB) production.

“CPO price futures have staged a strong rebound since hitting a two-year low of RM1,966 per MT last November, rising more than 9% to RM2,120 per MT. In general, most plantation companies foresee higher CPO price this year with a range of RM2,200 to RM2,500 per MT,” it added.

Meanwhile, Hong Leong Investment Bank (HLIB) Research cautioned that higher palm output may offset the improvement in exports, which may limit CPO price upside in the near-term.

“While exports will likely improve from March 2019 onwards (as palm oil exports typically improve when winter season nears end), this would likely be offset by seasonally higher palm output, resulting in gradual drawdown in palm inventory, hence capping near-term CPO price upside,” it said in its report.

It maintained its average CPO price assumptions of RM2,300 per MT for 2019 and RM2,400 per MT for 2020, and kept its “underweight” rating on the sector.

“We believe pricey valuations (following recent share price appreciation of most plantation companies) will cap near-medium term share price performances of plantation players,” it said.

UDA Holdings gets new chief

KUALA LUMPUR, March 12 — The Ministry of Entrepreneur Development (MED) has appointed Datuk Hisham Hamdan as the new chairman of UDA Holdings Berhad (UDA). Along with Hamdan, three other new board members — Datuk Mohd Rafee Mohamed, Datuk Rosli…

SAE targets 700th aircraft scheduled maintenance this year

SEPANG: Aircraft maintenance, repair and overhaul (MRO) service provider, Sepang Aircraft Engineering Sdn Bhd (SAE), aims to reach its 700th scheduled maintenance by year-end, driven by a strong demand for the MRO service in the Asia-Pacific region.

As at end-2018, the company had performed 570 scheduled maintenance since its inception in 2007.

CEO Raymond Lim said the company was leveraging on its close affiliation with its parent company, Airbus, to adopt digitalisation or better known as smart hangar technology to enhance its efficiency.

“We have two state-of-the-art hangars, including one that opened only two years ago to meet the strong demand for MRO services from across the Asia-Pacific region,“ he told reporters during a tour of the company’s facility today.

He said the smart hangar integrated digital, analytic, predictive and preventive maintenance to improve efficiency.

“We used the smart hangar for the components workshop about a year ago and we are looking at the opportunity to introduce it to scheduled maintenance workshops in the future,“ he said, adding that the smart hangar was a very advanced technology that used drones and scanners for inspection and collaborative robot to perform tasks.

Lim also said the company had stepped up hiring to support its growth, targeting to employ 720 high-skilled employees by year-end from 600 at present and was also looking at improving the working shift structure to maximise the capacity of its facilities.

“The two hangars can perform up to 120 scheduled maintenance, annually, but as of last year, we were few aircraft short of 100 scheduled maintenance,“ he said.

He said the improvement in working shift structure would expand the company’s capacity which was currently reaching 90% under the single shift structure.

Lim said currently, the average turnaround time for light scheduled maintenance was eight days and heavy maintenance was between 18 and 25 days while paintwork was between seven and 12 days.

He added that scheduled maintenance contributed about 70% of SAE’s revenue followed by parts and components (10-15%) and paintwork (10%).

As a wholly owned subsidiary of Airbus, the company also benefited from the European aircraft manufacturer’s huge presence in Malaysia.

“Airbus is the largest international partner for the Malaysian aerospace sector, with its sourcing and services business worth approximately RM2.04 billion per year,“ he said, adding that Airbus’ activities currently employed over 4,000 Malaysians in the aviation industry.

Meanwhile, he said Airbus has forecast demand for aircraft in the Asia-Pacific region to grow 5.5%, annually, compared with a global growth of 4.4%, annually.

He said the fleet of aircraft in the Asia Pacific region was expected to almost triple to 20,000 in 20 years from 7,000 to date.

“Airbus predicts that the in-service fleet of 20,000 aircraft in 20 years time will include 4,000 of the aircraft currently in-service and almost 16,000 new aircraft to meet replacement needs and growth,“ Lim added.

Mida eyes more advanced tech investments from South Korea

KUALA LUMPUR: The Malaysian Investment Development Authority (Mida) is hoping to attract more investments from South Korea, especially in the advanced technology industry.

CEO Datuk Azman Mahmud said the target would likely be realised with the signing of a Memorandum of Understanding (MoU) between Mida and the Korea Trade-Investment Promotion Agency (Kotra) today.

“Malaysia is attracting foreign direct investments that fulfils the country’s aspirations of becoming a developed nation. The country is going full speed into the knowledge and digital economy.

“As South Korea is well known for its advanced technologies, particularly robotics, we hope to get more of such investments in these areas (moving forward),” he told reporters after the MoU signing ceremony today.

As at September 2018, South Korea’s investments in Malaysia in the manufacturing sector stood at US$9.7 billion (RM39.6 billion), involving 557 companies.

Azman said with the partnership, Mida would be able to leverage Kotra’s establishments, which comprised 10 regional headquarters and 124 overseas centres in 86 countries, thus providing more rewarding connections for business communities in both countries.

“This partnership includes information exchange on investment environments, opportunities and promotional activities, as well as best practices of investment promotion,” he added.

Japan firms wary of wage hike as economy wobbles amid trade war, global slowdown

TOKYO, March 12 — Big Japanese firms are set to offer smaller pay increases this year at annual wage talks tomorrow as the economy sputters, tempering hopes that domestic consumption will offset external risks to growth. Over the past five years,…