Wednesday, March 13th, 2019
PETALING JAYA: Alliance Bank Malaysia Bhd’s wholly owned subsidiary Alliance Islamic Bank Bhd is establishing sukuk programmes of up to RM2.8 billion.
In a filing with Bursa Malaysia, the bank said it has lodged with Securities Commission Malaysia a perpetual sukuk programme of up to a global limit of RM2.5 billion and an Islamic commercial papers programme (ICP programme).
The sukuk programme comprises the issuance of a senior sukuk murabahah of up to RM1.2 billion (senior sukuk), Islamic Tier 2 sukuk murabahah of up to RM800 million (T2 sukuk) and Islamic additional Tier 1 sukuk wakalah of up to RM500 million (AT1 sukuk).
Meanwhile, the ICP programme comprises the issuance of sukuk murabahah of up to RM300 million.
Proceeds of the sukuk programmes will be used for Alliance Islamic’s syariah-compliant general banking, working capital and other corporate purposes, including the refinancing of any financing incurred and/or any financing instruments issued by Alliance Islamic.
In addition, the AT1 sukuk and T2 sukuk are intended to qualify as Basel III-compliant Additional Tier 1 regulatory capital and Tier 2 regulatory capital respectively of Alliance Islamic in accordance with the Capital Adequacy Framework for Islamic Banks (Capital Components) issued by Bank Negara Malaysia (BNM) on Feb 2, 2018.
Alliance Bank said approval from BNM for the establishment of the sukuk programme was received on Dec 6, 2018.
Alliance Investment Bank is the principal adviser, lead arranger, lead manager and facility agent for the sukuk programmes. Alliance Islamic is the syariah adviser for the sukuk programmes.
SINGAPORE: Malaysian palm oil futures slid for a sixth consecutive session today to their lowest in three months on pressure from expectations of lower demand in top importer India and rising domestic production.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange was down 1% at RM2,094 a tonne at the midday break.
Earlier in the session, the market dropped to its weakest since mid-December at RM2,091 a tonne.
World palm oil demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies in top buyer India and slowing demand in Europe and China, industry participants told Reuters.
“There is talk among traders that palm oil is being sold in India at below the market price from old stocks,“ said one Kuala Lumpur-based trader.
“This might have an impact on demand.”
However, top analysts painted a bullish picture at last week’s key conference in Kuala Lumpur.
Malaysian palm oil futures are set to rise to trade between RM2,350 and RM2,450 a tonne in four to six months, leading industry analyst Thomas Mielke said.
On the technical front, palm oil may test a support at RM2,094 per tonne, as indicated by its wave pattern and retracement analysis, according to Wang Tao, a Reuters market analyst for commodities and energy.
PETALING JAYA: Bermaz Auto Bhd’s (BAuto) net profit for the third quarter ended Jan 31 more than doubled to RM81.01 million from RM40.47 million a year ago, underpinned higher revenue from domestic operations and higher share of profit from its associate company.
In a filing with Bursa Malaysia, BAuto said the higher share of profit contribution from Mazda Malaysia Sdn Bhd was due to an increase in production volume for the new CX-5 model to cater for both the domestic and export markets.
However, profit contribution from the Philippines operation was lower as a result of weaker sales and compressed profit margin. The group also accounted for the expenses of its employees’ share scheme (ESS) amounting to RM1.5 million during the quarter.
BAuto’s revenue for the quarter rose 39.1% to an all-time quarterly high of RM778.13 million from RM559.4 million a year ago due to higher vehicle sales volume driven by strong domestic demand for Mazda vehicles, particularly the SUV models.
During the quarter, the group was still fulfilling back orders on some of the more popular models as many customers took advantage of the offer to absorb the sales and service tax (SST) for bookings received prior to Sept 1, 2018 but vehicle delivery made after the reintroduction of the SST.
In the Philippines, operations continued to be affected by the Tax Reform for Acceleration and Inclusion (Train) law that was implemented in January 2018, resulting in an increase in excise tax and consequently causing car prices to increase. This dampened the demand for motor vehicles in the country.
For the nine months ended Jan 31, BAuto’s net profit jumped 147.60% to RM205.21 million from RM82.88 million a year ago while revenue rose 37.37% to RM1.95 billion from RM1.42 billion a year ago.
BAuto declared a third interim dividend of 4.5 sen per share in respect of the financial period ended Jan 31, payable on April 25.
Despite the possibility of a dampened consumer sentiment in Malaysia and contraction of demand in the Philippines, BAuto expects its performance for the remaining quarter to remain satisfactory.
The total industry volume (TIV) for Malaysia last year was 598,714 units or 3.8% higher year-on-year while Mazda’s sales volume grew 67% year-on-year for the same period.
The group noted that the uncertainties over the ongoing trade war between the US and China, fall in prices of crude oil and commodities, review of mega projects by the new government, a persistently weak ringgit and a more stringent hire purchase guideline could further affect local consumer sentiment.
“However, the expected launch of the all new Mazda3 and CX-8 models in Malaysia may mitigate some of these challenges,” the group said.
In the Philippines, the new vehicle market continued to be low due to the implementation of the Train law.
“This has resulted in the contraction of demand for most, if not all, auto brands including Mazda. Bermaz Auto Philippines Inc. seeks to preserve its sales volume through the growth in its number of dealerships,” it said.
BINTULU: Cahya Mata Sarawak Bhd’s consortium PPES Works CCCC JV Sdn Bhd today received and accepted a RM466.68 million contract for the proposed construction and completion of the Bintulu – Jepak bridge crossing Kuala Kemena.
PPES Works CCCC is a joint venture between Cahya Mata’s 51%-owned subsidiary PPES Works (Sarawak) Sdn Bhd and China Communications Construction Company (M) Sdn Bhd (CCCC).
The remaining 49% equity interest in PPES Works is held by Sarawak Economic Development Corporation.
The tenure of the contract is for 48 months, commencing April 3, 2019, with completion targeted for April 2, 2023.
The agreement stipulates that the iconic bridge crossing Batang Kemena at Bintulu – Jepak be approximately 1,048m long with a four-lane double carriageway, with a cable-stayed bridge complete with a flyover over Jalan Tun Ahmad Zaidi, Jalan Tun Razak and the Jalan Abang Galau traffic junction, with an approximate 4km connecting road.
The contract is expected to contribute positively to Cahya Mata’s earnings during the tenure of the contract.
Its shares went up 7 sen or 2.1% to close at RM3.40 today on 1.68 million shares done.
Cahya Mata Sarawak is a leading corporation listed on the Main Market of the Malaysian stock exchange, Bursa Malaysia, and is a major private-sector player in Sarawak.
KUALA LUMPUR: The local stock market is expected to extend its consolidation phase until the end of second quarter (Q2) this year due to geopolitical and economic policy uncertainty, according to UOB Asset Management (Malaysia) Bhd (UOBAM).
Speaking at a media briefing today, UOBAM CEO Lim Suet Ling (pix) said the FBM KLCI is expected to consolidate between 1,650 to 1,700 points during the consolidation phase, before moving towards 1,750 points by end of the year.
“For it to be at the 1,800- or 1,900-point levels, something in Malaysia has to change drastically that the foreigners are willing to overweight our market, so that there is a price-earnings (PE) expansion,” she added.
The KLCI rose 6.96 points or 0.42% to close at 1,678.24 points today.
Looking ahead, Lim said the fund house favours consumer, automotive, technology and manufacturing sectors attributed to stronger ringgit, while it is underweight on the property, construction and plantation stocks given uncertainties on project procurement.
“When the government try to relook at our economy, there are certain sectors like toll road and construction that are being hit. It is unfortunate, but they (government) are just planning for the longer sustainable growth.
“But if we look at it, the challenge is not internal, but rather the external (challenges) that everybody is facing,” she said.
Lim noted that most of the external concerns were due to trade tensions between the US and China, developments in the Brexit process and fears over slowing global growth.
Speaking of the US economy, she said, a recession, if any, will likely happen by the late of 2020 and 2021. However, she noted that currently there has not been a negative inverse yet on US treasury yield curve.
Meanwhile, Lim said UOBAM is targeting RM100 million in subscription for its newly launched shariah-compliant global balanced fund, the United-i Global Balanced Fund, within two months from its launch.
The fund, which is its first shariah-compliant global balanced fund, will invest in a diversified, global portfolio of shariah-compliant asset classes.
“The fund aims to reduce investment volatility through shariah screening which filters out non-shariah sectors such as gambling, weapons and tobacco companies as well as those companies that are overleveraged or have unproductive cash piles.
“This ensures that only companies with low debt ratios and strong fundamentals are included for selection, providing investors with potentially lower investment risk and competitive returns,” she added.
The fund, which is managed by UOBAM and UOB Islamic Asset Management Sdn Bhd, has an initial minimum investment of RM1000, with minimum additional investment of RM100.
As at Jan 31, UOBAM had assets under management of RM6.86 billion.
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