Monday, April 8th, 2019


Exco plans to turn Selangor into agro-product processing hub

SHAH ALAM, April 8 — The Selangor Infrastructure and Public Amenities, Agricultural Modernisation and Agro-based Industry Committee plans to make the state a hub for the processing of agro-based products and help agricultural entrepreneurs in the…

European data supervisor investigates Microsoft software used by EU

BRUSSELS, April 8 — The European Union’s data protection supervisor said today it is investigating whether products provided by software giant Microsoft to EU institutions comply with its new data protection rules. In November the Dutch…

Qatar sues Gulf foes over alleged currency manipulation

DOHA, April 8 — Qatar said today it has filed three lawsuits in London and New York against Saudi and UAE banks for allegedly plotting to undermine its currency and bonds. Doha, which has faced an economic and diplomatic boycott by Gulf rivals…

US stocks drop as Boeing falls on lower 737 production

NEW YORK, April 8 — Wall Street stocks retreated early today, with Boeing especially weak at the start of a week that includes key Brexit negotiations and the start of earnings season. About 15 minutes into trading, the Dow Jones Industrial…

Pinterest sets IPO to raise up to US$1.5b

WASHINGTON, April 8 — Pinterest said today it would raise up to US$1.5 billion (RM6.15 billion) in its stock offering, setting a price range that trims the value of the online visual discovery startup. San Francisco-based Pinterest’s price range…

Trade mission to US attracts RM6.6b in investments

PETALING JAYA: Malaysia has attracted a total of RM6.6 billion worth of potential investments from the US, following its trade mission to the country from April 1 to 6, according to the Ministry of International Trade and Industry (Miti).

International Trade and Industry Minister Datuk Darell Leiking (pix) led the trade and investment mission, organised by Malaysian Investment Development Authority, Malaysia External Trade Development Corp and InvestKL.

“The mission was able to generate potential investments worth RM6.6 billion, mainly in key projects within the electrical and electronics, and chemical industries,” Miti said in a statement yesterday.

Covering the cities of Washington, New York, Seattle and San Jose, Darell also held several bilateral discussions with senior US government officials to strengthen trade and economic relationships between the two countries.

A series of high-level meetings were also held with potential US investors in the manufacturing and services sectors such as chemical, electrical, and electronics and aerospace, while the services sector includes tourism, support services for business aviation and centre of excellence for financial services.

There were also specific discussions on potential investments in data centres, while Microsoft Corp and Mimos Bhd – an agency under Miti – had agreed to establish a Centre of Artificial Intelligence for Future Industry in Malaysia.

In conjunction with the mission, a seminar, “Forging Stronger Economic Relationships between Malaysia and the US”, was also organised in San Jose, California which attracted over 150 participants representing the manufacturing and services sectors.

The seminar provided an update on the economic situation and highlighted investment opportunities and potential business cooperation available in Malaysia.

Miti added that Darell had the opportunity to network with successful Malaysian professionals based in Silicon Valley as well as witnessing an exchange of memorandum of understanding on collaboration and development of professional programmes in the areas of artificial intelligence, Internet of Things, robotics, blockchain and fintech.

Bank Pembangunan appoints new president, group CEO

PETALING JAYA: Bank Pembangunan Malaysia Bhd (BPMB) has appointed Arshad Mohamed Ismail (pix) as its president/group CEO, effective April 8, 2019.

Prior to his appointment, Arshad was head of global banking business at Maybank Islamic Bhd, in which capacity he oversaw the bank’s corporate banking, trade finance and investment banking business lines, BPMB said in a statement yesterday.

Arshad has had a varied career path since commencing his career in 1995 as a lawyer in Kuala Lumpur with Messrs Mohamed Ismail & Co. He specialised in corporate law, banking and finance law, and also Islamic banking and finance law.

In early 2003, he joined CIMB Islamic as one of its pioneer members where he focused on sukuk origination and execution before relocating to the UAE in late 2004 to join HSBC Amanah as the head of Islamic capital markets.

Arshad returned to Malaysia in 2011 to join the International Islamic Liquidity Management Corp (IILM) as executive director, origination and structuring.

Ancom, Nylex ink settlement agreements with Utusan Melayu

PETALING JAYA: Ancom Bhd’s unit Redberry Sdn Bhd and Nylex (Malaysia) Bhd have entered into settlement agreements with Utusan Melayu (Malaysia) Bhd regarding a disputes between the parties over unreturned deposits.

This comes after the High Court ruled in favour of Redberry in a lawsuit against Utusan Melayu as Redberry claimed that Utusan had failed to refund the amount for the “advertising, branding & communication exercise” totalling RM8.5 million.

Pursuant to the settlement agreement, Redberry will not execute the summary judgment against Utusan and Utusan shall withdraw its counterclaim for damages and exemplary damages of RM48.32 million appeal against the summary judgment, Ancom said in Bursa Malaysia filing yesterday.

It said RM482,194.44 shall be set off against the judgment sum, being the settlement of the amount owing by Redberry to Utusan.

Utusan shall also procure Utusan Airtime Sdn Bhd, its wholly owned subsidiary, to transfer all its shares in Titanium Compass Sdn Bhd (TCSB) representing 20% of the issued and paid up capital of TCSB free from encumbrances, valued at RM6 million, which shall be set off against the judgment sum.

Meanwhile, Redberry shall bear the agreed portion of the loss suffered by Utusan of RM2.02 million in connection with the previous supply agreement by setting off that amount against the judgment sum.

In a separate filing, Nylex said the group and Utusan have entered into a settlement agreement for the claim of RM10 million by Nylex.

Utusan shall procure its wholly owned subsidiary Juasa Holdings Sdn Bhd to enter into a sale and purchase agreement with Nylex to transfer to Nylex all of its rights, title and interest in and to a parcel of land in Kuala Lumpur for a value of RM6.7 million to be set off against the Nylex’s claim.

Utusan shall also pay Nylex a sum of RM2.89 million via 14 monthly instalments with the first instalment to be paid by Jan 31, 2020.

Nylex said it will withdraw its claim against Utusan and Utusan shall withdraw its counterclaim with no liberty to file afresh within five days of execution of the settlement agreement.

Malaysia sees robust demand for govt papers in March

PETALING JAYA: Malaysia’s capital market registered two consecutive months of net inflow of foreign funds with a net gain of RM3.8 billion in the first quarter of 2019, driven by foreign debt holdings in March.

“March’s improvement was primarily attributable to a net increase of Malaysian Government Securities (MGS) (RM1.4 billion increase) and Malaysian Government Investment Issues (GII) (RM1.3 billion increase), reflecting a robust demand and appetite on government papers,” said Kenanga Research.

The foreign holdings share of total MGS and GII rose to 38.7% and 5.8% respectively in March while foreign holdings of private debt securities (PDS) declined marginally by 0.1% month-on-month (m-o-m) to RM13.5 billion while its share of total PDS stood unchanged at 2%.

Last month, foreign investors remained net buyers of Malaysia’s debt securities with total foreign holdings rising by RM2.9 billion or 1.6% m-o-m to RM190 billion. The share of total foreign holdings of Malaysia’s debt expanded to 13.3%.

Meanwhile, foreign funds were net sellers on the equity market with a net outflow of RM1.6 billion. Collectively, this resulted in the RM3.8 billion net gain from net inflow of foreign funds in the first quarter, which supported the ringgit despite concerns of growth slowdown.

Kenanga Research expects the risk of capital outflow to persist on heightened uncertainty surrounding the ongoing US-China trade talks, US Fed dovish signal, Brexit and the growth moderation in major economies particularly the Eurozone.

“However, an expected maturity of RM70 billion in the federal government debt, out of which 25% will be redeemed in the first half of the year, would pose a lesser risk on the bond market compared with last year,” it noted.

“This is because the market is supported by the robust demand for government bond especially the 10-year MGS yield which is trending below 4% level. Against these developments, the average yield spread of the US 10-year Treasury note and the 10-year MGS narrowed in March to 127 basis points (bps) from February’s 130bps,” it added.

Kenanga Research said there is a risk of further outflow of capital going forward, with the market already factoring in that Bank Negara Malaysia (BNM) is leaning on a rate cut.

However, it believes that BNM will hold rates steady as long as it can as risks to the downside are still manageable; with a 50% chance of BNM raising the overnight policy rate (OPR) at its next meeting in May.

BIMB Securities Research said an eventual OPR cut may not add much momentum to the current rally, unless BNM cuts the rate and maintains its dovish-biased tone.

“We believe that the current MGS yields, after a 30-50bps decline since December 2018, are becoming unattractive to local investors as many are absolute yield seekers. However, there is still strong domestic demand for local bonds,” it said.

It noted that auction results have shown higher cover ratios in the auctions conducted year-to-date. In terms of supply, the total issuance of ringgit bonds saw little change from 2018.

“Meanwhile, the Fed’s recent dovish pivot and similar rhetoric across other central banks in developed markets could continue to support risk-on sentiment and portfolio flows to emerging market debt even though there have been signs of weaknesses in regional currencies against the US dollar,” it added.

Ringgit lowest in more than 2 months, touches 4.1030

PETALING JAYA: The ringgit depreciated as much as 0.38% to a low of 4.1030 today, the lowest since the end of January.

This was in line with the downward pressure on the regional currencies, driven by higher risk appetite for the US dollar.

The local unit ended the day at RM4.0995, 0.29% lower than last Friday’s 4.0875.

According to Reuters, Asian currencies sank today as a rebound in US payrolls data supported the greenback, offsetting optimism of a Sino-US trade deal and further China policy stimulus.

“Risk appetite for the dollar increased after figures on Friday showed US nonfarm payrolls rose by a solid 196,000 in March, topping expectations and putting to rest fears of a sharper slowdown in the world’s largest economy,” Reuters reported.

The South Korean won fell to a more than five-month low and the Chinese yuan was largely flat while the Taiwan dollar softened ahead of a projected slump in March exports, said Reuters.

It said that currencies of oil-import reliant countries such as the Indian rupee, Indonesian rupiah and Philippine peso also took a hit after oil prices touched a five-month high.

UOB senior economist Julia Goh maintained her view of 4.06 for the ringgit by mid-year and 4.11 by year-end amid sustained risk aversion.

“USD/MYR is holding in a tight range of 4.06-4.08 as growth risks take centre stage. The Asia Development Bank predicted that growth in Asia’s developing economies will fall to its slowest pace in nearly two decades and the World Trade Organisation cut its global trade projection for 2019 to the lowest level in three years,” she said in a macro note today.

Although there are some positive catalysts for emerging markets – such as the dovish shift from the Fed and more constructive talks between China and the US – she noted that Asia currencies continue to drift sideways against the US dollar amid the bearish global outlook.

In his commentary last Friday, FXTM research analyst Lukman Otunuga said the ringgit’s performance this week remains primarily driven by global factors.

“US March inflation data and Fed chair Jerome Powell’s speeches in the week ahead could offer more clues on the direction of US interest rates and potentially spark more dollar moves. Global risk sentiment may also lean on the EU’s emergency Brexit summit tomorrow – a key event risk for Pound traders – to ascertain the likelihood of an orderly Brexit,” he said.

“China’s March trade data later in the week will also be stacked against rising hopes of a US-China trade deal, and should both unveil positive surprises, that could raise risk-on sentiment and prove positive for Asian currencies, including the ringgit,” he added.