Wednesday, April 3rd, 2019


Malaysia still lacks licensed financial planners

KUALA LUMPUR: Malaysia still lacks licensed financial planners who can help members of the public make the right financial decisions.

Financial Planning Association of Malaysia (FPAM) president Ismitz Matthew de Alwis said there are lots of opportunities for licensed financial planners in Malaysia.

“We have been meeting with the regulators to promote financial planning and literacy among the public, and financial institutions are also moving towards educating the public on financial planning,” he told reporters at the Financial Planning Symposium 2019 today.

Financial adviser representatives are regulated and approved by Bank Negara Malaysia and their role is to advise on and bundle suitable financial products based on clients’ needs to achieve objectives like life, health and asset protection.

CEO Linnet Lee said a licensed financial planner can provide direction for the personal financial management, investment, personal taxes, retirement and estate planning.

“This enables better control of your money, while growing and protecting assets. They can also help you make the right choices and avoid costly mistakes,“ she said.

Meanwhile, the one-day symposium is to discuss relevant and important topics on compliance, leadership, integrity and investment alternatives.

In conjunction with the symposium, FPAM also launched its upgraded website to serve its 4,000- strong members and stakeholders.

Data: UK services sector shrinks for first time since July 2016

LONDON, April 3 — Britain’s vital services sector shrank in March for the first time in almost three years, with activity slammed by Brexit turmoil and flat economic growth, a key survey showed today. The purchasing managers’ index (PMI) for…

Payments made overseas for work done in Malaysia are taxable

KUALA LUMPUR: Payments made overseas for work done or services rendered in Malaysia are taxable, said a tax expert.

“The fact that you paid it in Singapore (example) makes no difference to the taxability. People assume that the moment it is foreign, it’s (tax) exempt. Income earned overseas is exempt, but income earned in Malaysia is taxable even though it’s paid overseas,“ Axcelasia Inc group chairman Dr Veerinderjeet Singh told reporters at the Malaysian Tax Conference 2019 here this morning.

Earlier, Inland Revenue Board (IRB) CEO Datuk Seri Sabin Samitah said foreign donations are subjected to tax on a “case by case” basis.

Sabin declined to comment on the additional tax bill of around RM1.5 billion that IRB has slapped on former prime minister Datuk Seri Najib Razak.

“We’re bound by the secrecy provision and we’re not allowed to discuss individual tax matters with the public,“ said Sabin.

Business sentiments decline for third consecutive quarter: Study

PETALING JAYA: Business sentiments among Malaysian companies have slipped for three consecutive quarters as of the second quarter (Q2) of 2019, said Dun & Bradstreet Malaysia Sdn Bhd.

A study by Dun & Bradstreet Malaysia revealed that the business optimism index (BOI) has dropped further from 8.92 percentage points (ppt) in Q1 2019 to 5.61ppt in Q2 2019. On a year-on-year basis, the BOI moderated visibly from 12.58ppt in Q2 2018 to 5.61ppt in Q2 2019.

Dun & Bradstreet Malaysia CEO Audrey Chia said the overall outlook has dampened for Q2 2019 due to weakening external demand, lower public investments and slower pace of growth in China.

“The outlook among the manufacturing, construction and wholesale sectors have been relatively downbeat. However, sentiments within the services and financial sectors will remain resilient on the back of strong consumer spending,” she said in a statement.

Among the six business indicators included in the BOI study, only one indicator climbed upwards on a quarter-on-quarter (qoq) basis for Q2 2019 namely, selling price, which rose from 2.94ppt in Q1 2019 to 6.83ppt in Q2 2019.

The other five business indicators – volume of sales, net profits, new orders, inventory levels and employment levels – fell on a qoq basis.

On a year-on-year basis, only inventory levels showed improvement, from 3.50ppt in Q2 2018 to 4.39ppt in Q2 2019, while all other indicators declined.

The services sector was the most optimistic with all six indicators in the positive zone. Volume of sales jumped from 2.38ppt in Q1 2019 to 24.72ppt in Q2 2019 and net profits rose from 10.71ppt to 21.35ppt during the same period.

This is followed by the transport sector which had five indicators in the expansionary zone, with three indicators rising in Q2 2019 namely net profits, selling price and inventory levels.

The financial sector had four indicators in the expansionary zone. Volume of sales, new orders, inventory levels and net profits fell while employment levels rose.

The construction sector had five indicators in the negative zone, with four out of the six indicators having moderated downwards while the manufacturing sector had three indicators in the negative zone.

The wholesale sector was the most pessimistic with all six indicators in the negative zone.

RAM: February export growth to moderate to 1.4%

PETALING JAYA: RAM Ratings expects export growth to moderate to 1.4% in February against 3.1% in January, while imports are expected to contract 3.3% in February from a 1% growth in January.

“This would result in an overall trade surplus of RM12.1 billion for the month, largely on the back of more subdued industrial activity during the lunar new year festivities and compounded by an already short working month,” the research house said in a statement today.

RAM Ratings noted that slower industrial activity in key regional markets is also expected to continue impinging on trade growth.

Looking ahead, it said trade momentum is likely to moderate amid greater uncertainty and softening global demand which will likely hit Malaysia’s electrical and electronics (E&E) sector the hardest given that output is heavily dependent on foreign consumption.

“Some 88.8% of total value-added (VA) generated by the sector is exported, making it especially susceptible to weak global demand.”

RAM said while the E&E sector is the most export-oriented, the highest amount of value-added export (VAE) is attributable to oil and gas (O&G) mining activities.

“Although 57.5% of this subsector’s generated VA is exported, it constitutes 15.6% of total VAE from all sectors. In comparison, E&E constitutes 14.2% of total VAE. This indicates that a demand shock for the O&G sector will deal the biggest blow to overall exports.”

The rating agency said the exposure of Malaysia’s overall industrial output is also notable as 43.4% of the nation’s generated VA is to meet foreign consumption.

“Moreover, a significant proportion of our total VAE goes to the world’s three largest economies, ie China (20.1%), the US (12.8%) and Japan (8.8%); this is calculated on the basis of final consumption destination.

“The number differs from those calculated on the basis of direct export destination, as VAE also includes exports that have passed through some intermediate processing en route to the final demand destination.

Therefore, it said Malaysia’s exports and, in turn, GDP momentum would be particularly vulnerable if there were to be a synchronised global downturn.

European shares scale eight-month high on trade optimism, strong data

BERLIN, April 3 — European shares touched a near eight-month high today as investors took heart from possible progress towards a trade deal between Beijing and Washington and encouraging economic data out of China and Europe. The pan-European…

Brighter prospects for gaming sector

PETALING JAYA: AllianceDBS Research sees brighter prospects and attractive yields for the gaming sector, with potential amendments of existing legislation providing further earnings upside.

In his report today, analyst Cheah King Yoong said there are overlaps between the existing laws that govern the number forecast operator (NFO) sector in Malaysia, which could lead to differing interpretations among legal professionals.

At present, these legislations are the Pool Betting Act 1967, Lotteries Act 1952 and Common Gaming Houses Act 1953.

“Besides that, we observe that penalties imposed by these acts vary and some of them may not be sufficiently punitive to deter illegal NFO activities.

“In view of the overlaps and complications of these acts, we believe that the authorities could streamline and standardise these acts with the imposition of more punitive penalties to further curb illegal NFO operations,” he said.

Given that the illegal NFO market size is estimated to be about two to three times of the legalised NFO market, Cheah said there is plenty of room for the NFOs to grow their earnings if the authorities intensify efforts to curb illegal NFO activities.

Cheah noted that Magnum Bhd and Berjaya Sports Toto Bhd (BToto), being two of the only three legal NFO players in Malaysia, have been the prime beneficiaries of the authorities’ more stringent enforcement efforts to curb illegal NFO activities, which has resulted in punters shifting from illegal NFOs to legal operators.

In terms of financial performance, both Magnum and BToto reported decent financial results in their latest quarterly reporting.

Magnum reported a core net profit of RM72 million in Q4 FY18, driven by higher gaming revenue and lower prize payout ratio while BToto’s core net profit amounted to RM60 million in Q3 FY19, driven by better contributions from H.R. Owen Plc which mitigated the lower gaming profit.

Cheah said both NFOs reported improvements in their gaming revenue per outlet per draw in their latest quarterly results, which he believes is due to stricter enforcement by authorities to clamp down on illegal NFOs.

“Furthermore, we observe that both listed NFOs offer attractive sustainable yields of about 6% or more. As such, investors could enjoy the attractive yields offered by these players while riding on this investment theme,” he said.

He added that potential/ongoing monetary easing policies by major global central banks and Bank Negara Malaysia could also promote a yield-seeking investing strategy, which favours companies like Magnum and BToto.

The research house maintained its “buy” recommendations on both listed NFOs, with an unchanged target price of RM2.65 for Magnum and a higher target price of RM2.65 for BToto.

Ekuinas sells stakes in healthcare sector to Sumitomo Corp

KUALA LUMPUR, April 3 — Ekuinas Nasional Berhad has divested its entire 60 per cent equity in two third-party administrators (TPA) to global trading and business investment company, Sumitomo Corporation (Sumitomo Corp). The government-linked…

Investors push Bursa higher at midweek

KUALA LUMPUR: Bursa Malaysia closed higher at midweek, as investors consistently gaining confidence, supported by recovery in the global economy.

This include the positive progress of the US-China trade deal, a dealer said.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) ended 10.38 points higher at 1,643.21 from yesterday’s close of 1,632.83.

The index opened 5.44 points better at 1,638.27 and moved between 1,635.80 and 1,645.54 throughout the day.

Market breadth was positive with gainers outnumbering decliners 490 to 329, while 414 counters remained unchanged, 623 were untraded and 29 others suspended.

Volume was slightly lower at 2.67 billion units worth RM1.97 billion from 2.76 billion units worth RM1.97 billion yesterday.

A dealer said Chinese stocks were lifted at the highest level since March last year following updates of the trade deal.

Hong Kong’s Hang Seng rose 1.18% to 29,975.31, while the Shanghai Stock Exchange gained 1.24% to 3,216.30.

“Coupled with the recovery in its services sector, Chinese investors are pumping in fund in their market and elsewhere, including Bursa Malaysia.

“Overall, investors (globally) are happy with the Sino-US trade talks,” he added.

The US Chamber of Commerce executive vice-president for international affairs Myron Brilliant was reported as saying that the both US and China are moving towards the “end-game” stage with the deal.

“Ninety per cent of the deal is done, but the last 10% is the hardest part, it’s the trickiest part and requires trade-offs on both sides,” he said.

Back home, among the heavyweights, Maybank fell one sen to RM9.24, PetChem down two sen to RM9.08, Tenaga shed four sen to RM12.54, while Public Bank rose 30 sen to RM23.

Among actives, My EG slipped four sen to RM1.42, KNM gained 2.5 sen to 15 sen, Priceworth inched up half-a-sen to 6.5 sen, while Sapura Energy was flat at 35.5 sen.

The FBM Emas Index rose 74 points to 11,585.04, the FBM Emas Syariah Index added 63.44 points to 11,742.30 and the FBMT 100 increased 68.71 points to 11,426.69.

The FBM 70 was 72.20 points higher at 14,326.95 but the FBM Ace Index narrowed 2.77 points to 4,834.34.

Sector-wise, the Industrial Products and Services Index was 0.52 point stronger at 169.13, the Plantation Index was 36.06 points higher at 7,218.10 and the Financial Services Index advanced 77.23 points to 16,898.86.

Main Market volume decreased to 1.89 billion shares worth RM1.76 billion from 2.0 billion shares worth RM1.80 billion.

Warrants appreciated to 483.31 million units valued at RM103.48 million from 407.85 million units valued at RM88.01 million.

Volume on the ACE Market narrowed to 299.42 million shares worth RM73.25 million versus 354.18 million shares worth RM82.89 million.

Consumer products and services accounted for 246.07 million shares traded on the Main Market, industrial products and services (334.96 million), construction (137.95 million), technology (240.89 million), SPAC (nil), financial services (41.26 million), property (128.54 million), plantation (75.72 million), REITs (10.04 million), closed/fund (25,500), energy (561.28 million), healthcare (39.16 million), telecommunications and media (23.39 million), transportation and logistics (32.25 million), and utilities (14.28 million).

The physical price of gold as at 5pm stood at RM163.94 per gramme, up 58 sen from RM163.36 at 5pm yesterday. — Bernama

Investors push Bursa Malaysia higher at midweek

KUALA LUMPUR, April 3 — Bursa Malaysia closed higher at midweek, as investors consistently gaining confidence, supported by recovery in the global economy. This includes the positive progress of the US-China trade deal, a dealer said. The…