Thursday, March 21st, 2019


US government sued for access to auto tariff probe report

WASHINGTON, March 21 — A conservative group has sued the US government for access to a report on whether auto imports pose a big enough security risk to justify hefty tariffs on the sector, part of a growing chorus demanding a copy of the…

Wall St edges higher as tech boost counters losses in bank stocks

NEW YORK, March 21 — US stocks eked out gains today as declines in financial stocks after the Federal Reserve’s move to not raise interest rates this year were countered by gains in technology companies. Having downgraded their US growth,…

Biogen scraps Alzheimer drug trials, wiping US$17b off its market value

NEW YORK, March 21 — Biogen and partner Eisai Co Ltd are ending two late-stage trials for the experimental Alzheimer’s drug aducanumab, in a setback to efforts to find treatments for the disease and for Biogen’s stock, which lost more than…

Bursa Malaysia dragged down by heavyweight banking stocks

PETALING JAYA: The local bourse bucked the regional trend and skidded 20.55 points or 1.22% today as the market was bogged down by heavy selling in banking stocks amid the US Federal Reserve’s dovish outlook.

The FBM KLCI closed at an intraday low of 1,663.66 points against Wednesday’s closing of 1,684.21.

Market breadth was negative with losers beating gainers 547 to 302. A total of 2.96 billion shares valued at RM2.15 billion were traded.

The Financial Services Index tumbled 225.12 points or 1.29% to 17,219.51 points.

Among the top losers on Bursa Malaysia were Public Bank Bhd, Hong Leong Bank Bhd and AMMB Holdings Bhd, which fell 60 sen, 46 sen and 14 sen to RM23.86, RM20.34 and RM4.47, respectively.

Malayan Banking Bhd and CIMB were down 7 sen and 6 sen to RM9.40 and RM5.33, respectively.

Inter Pacific Research Sdn Bhd head of research Pong Teng Siew told SunBiz that the Fed’s dovish stance on the benchmark rates is causing some consternation among the investors about banking stocks as Bank Negara Malaysia (BNM) is likely to lower the Overnight Policy Rate.

“This is because if the lending rate drops, the banks’ lending margins could possibly become slightly weaker,” he said.

Rakuten Trade Sdn Bhd head of research Kenny Yee Shen Pin concurred, saying that the Fed’s dovish stance on the benchmark rates provides room for BNM to look into the possibility of a rate cut to support Malaysia’s economic growth and in turn the stock market may see a boost from easing monetary policies.

“This would provide further impetus to sustain economic growth and also the equity markets. However, global growth remains a concern,” he said in a research note.

Pong opined that any rate cut will depend on the country’s economic performance, such as gross domestic product growth.

“At this moment, I think the interest rates are quite adequate to maintain economic growth. I don’t think it has reached the point where BNM feels pressure to lower interest rate yet,” he added.

Additionally, Pong said Finance Minister Lim Guan Eng’s recent remarks on the possible imposition of windfall taxes on banks if they continue on being conservative in lending also contributed to the sell-off in banking stocks.

Lim, however, has clarified that the government has no intention to impose such taxes on banks.

Meanwhile, Pong pointed out that Malaysia stands to benefit from the Fed’s dovish stance it provides room for the ringgit to strengthen further given the weakening of the US dollar, and thus help to lower the inflation rate.

“The fact that the US Fed has left the outlook for interest rates to be unchanged for the rest of the year makes it more likely that BNM may actually lower interest rates. Therefore, US dollar might weaken and with that, the pressure on ringgit will be less as the dollar weakens,” he explained.

The ringgit climbed to an eight-month high of 4.0545 against the US dollar. As at 5pm today, the Malaysian currency was trading 0.22% higher at 4.0625 against the greenback..

US stocks tread water after Fed trims growth outlook

NEW YORK, March 21 — Wall Street was little changed early today, a day after the Federal Reserve cut its growth outlook and announced an unexpected pivot on monetary policy. Investors were also absorbing the latest Brexit developments as the odds…

Trump says tariffs on Chinese goods may remain for ‘substantial period’

WASHINGTON: President Donald Trump warned on Wednesday that the United States may leave tariffs on Chinese goods for a “substantial period” to ensure that Beijing complies with any trade agreement.

The stance could complicate US-China trade talks set to resume next week, as Chinese officials have been pressing for a full lifting of US tariffs as part of any deal, people familiar with the talks have said.

Trump said his top negotiators, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, would leave for Beijing this weekend, confirming plans for talks next week disclosed on Tuesday by an administration official.

The face-to-face talks will be the first since Trump delayed a March 1 deadline to avert a rise in tariffs on US$200 billion (RM812 billion) worth of Chinese imports to 25% from the current 10%.

“The deal is coming along nicely,” Trump said to reporters at the White House, adding that the China trip was intended “to further the deal.”

But when asked about lifting US tariffs on Chinese goods, Trump said: “We’re not talking about removing them. We’re talking about leaving them for a substantial period of time because we have to make sure that if we do the deal, China lives by it.”

Trump did not elaborate on his plans for the tariffs. His negotiators have demanded that China agree to an enforcement mechanism to ensure that Beijing follows through on any reform pledges in any deal.

Washington is demanding that China end practices it says force the transfer of American technology to Chinese companies, improve access for American companies to China’s markets and curb industrial subsidies.

Since July 2018, the United States has imposed duties on US$250 billion worth of Chinese imports, including US$50 billion in technology and industrial goods at 25% and US$200 billion in other products including furniture and construction materials, at 10%. China has hit back with tariffs on about US$110 billion worth of US goods, including soybeans and other commodities.

The eight-month trade war between the world’s two largest economies has raised costs, roiled financial markets, shrunk US farm exports and disrupted manufacturing supply chains.

Top bankers back London as financial hub whatever Brexit outcome

LONDON, March 21 — London will be central to global financial markets whatever shape Britain’s exit deal from the European Union (EU) takes, senior players in British banking said today. Barclays chairman John McFarlane said he was confident…

SunReit plans RM10 billion perpetual notes

PETALING JAYA: Sunway Real Estate Investment Trust (SunReit) is establishing a perpetual note programme of RM10 billion to finance its investment activities, refinance borrowings and as working capital requirements.

In a filing with Bursa Malaysia, SunReit said the investment activities include capital expenditure, asset enhancement and the related acquisitions and financing expenses.

The net proceeds will also be used for refinancing of existing and/or future borrowings of Sunreit for its investment activities as well as its working capital requirements.

The perpetual note programme will be established via SunReit Perpetual Bond Bhd, a special purpose company.

The first issuance of perpetual notes is expected by the second quarter of 2019. The perpetual notes will be issued with a perpetual tenure that does not have a fixed maturity date, and may be rated or unrated, which will be determined prior to each issuance.

HSBC Bank Malaysia Bhd and Kenanga Investment Bank Bhd are the joint principal advisers/lead arrangers/lead managers for the perpetual note programme.

BoE warns on further Brexit ‘cliff-edge uncertainties’

LONDON, March 21 — The Bank of England today expressed concerns that further “uncertainties” over a “cliff-edge” no-deal Brexit “could have a significant effect on spending” by businesses. The BoE decided to keep its main interest rate…

MFL sues TM for RM428.49 million

PETALING JAYA: Telekom Malaysia Bhd (TM) yesterday received a writ of summons and statement of claim from Malaysian Football League LLP (MFL) seeking RM428.49 million in payment and other reliefs from TM in relation to sponsorship and broadcast disputes.

This comes after TM said it is no longer a sponsor of the MFL from 2019 onwards as both parties could not agree on the terms of the agreement.

MFL claimed that TM had breached the term sheet and MFL had lawfully terminated it by way of its notice of termination dated March 16, 2019.

MFL alleged that TM is liable to pay MFL RM186,844 being the amount due for Season 2018; RM25.85 million being Payment 1 for the sponsorship and broadcast consideration for 2019; RM25.85 million being Payment 2 for the sponsorship and broadcast consideration for 2019 on or before June 2, 2019; and RM376.6 million being the remaining sponsorship and broadcast consideration for years 2020 until 2025.

MFL is also seeking an order compelling TM to remove, take down and delete all references of TM as a sponsor or official telecommunication and broadcast partner of MFL in all TM’s materials pub-lished or issued by TM or TM’s directors, partners, officers, employees, rep-resentatives or agents within 48 hours from the date of this Judgment.

TM said the claim is not expected to have any operational impact on the group.

“The financial impact, if any, cannot be ascertained at this juncture as it will depend on the outcome of the legal proceedings of the claim.”

TM said it has instructed its solicitors to take the necessary steps to defend the claim.