Wednesday, April 17th, 2019


US handbags, shovels on US$20b EU tariff list over Boeing

BRUSSELS, April 17 — Handbags, tractors, shovels and fish are part of an 11-page list of US imports worth US$20 billion (RM82.8 billion) that the European Union today said it could hit with tariffs in a transatlantic aircraft subsidy dispute. The…

Back on trend? H&M makes AI, loyalty drive to ride fashion cycle

BERLIN, April 17 — When H&M boosted its shares last month by reporting a rise in the sale of full-price garments, it wasn’t just a tribute to the fashion sense of its designers. It was a sign that backroom improvements are at last paying…

China data lift US stocks but IBM weighs on Dow

NEW YORK, April 15 — Wall Street stocks were mostly higher as trading opened today following better-than-expected Chinese economic data, although weak IBM results weighed on the Dow. About 15 minutes into trading, the Dow Jones Industrial Average…

India’s Jet Airways to suspend operations after banks reject funding request

MUMBAI, April 17 — India’s embattled Jet Airways Ltd is set to temporarily halt operations from today onward after its lenders rejected the airline’s plea for emergency funds, three sources from inside the company said on Wednesday. The…

Axiata’s Ncell told to pay RM1.44b gains tax by Monday

PETALING JAYA: Axiata Group Bhd’s subsidiary Ncell Private Ltd has been ordered to pay capital gains tax of NPR39.06 billion (RM1.44 billion) by April 22.

Axiata said a letter was issued by he Large Taxpayers Office and is in relation to the tax to be collected from Ncell in relation to the indirect transfer to Axiata Investments UK of an 80% stake in Ncell through the sale of Reynolds Holdings Ltd by the previous foreign investor, TeliaSonera Norway Nepal Holdings AS.

“The letter stated that the assessment order issued against the seller (TeliaSonera) in relation to the transaction, has been transferred to Ncell and further states that the balance amount of the capital gains tax arising from the transaction due is NPR39.06 billion. Ncell has been ordered to deposit the said amount within seven days, or by April 22.”

Axiata and Ncell are currently reviewing the letter and are considering appropriate course in relation to the letter.

“To date, Axiata and Ncell have dutifully and responsibly complied with all relevant regulatory and legal requirements in relation to the transaction and acknowledge the order without prejudice to their remedial rights,” said Axiata.

Ncell contributed US$1.17 billion in taxes since 2014/2015. In 2018 alone, Ncell paid US$257 million which accounted for 4.2% of total tax revenue of Nepal’s government that year.

Over the last two fiscal years, Ncell’s total accumulated capital investment reached US$164 million, with US$66 million recorded in the last fiscal year.

Car sales up 9.6% in March: MAA

PETALING JAYA: Malaysia’s vehicle sales rose 9.58% to 54,776 units in March 2019 compared with 49,987 units in the same month a year ago, according to the Malaysian Automotive Association (MAA).

It said in a statement today that on a month-on-month basis, car sales surged 37% or 14,938 units, driven by longer working month and rush for deliveries by companies with financial year ending March 31.

MAA expects sales volume for April to maintain at March 2019 level, thanks to continuation of promotional campaigns by car companies. For the first three months of the year, a total of 143,064 units were sold, 5.89% higher than the 135,110 units recorded in the same period last year.

GDB ventures into piling business via stake in geotechnical specialist

PETALING JAYA: GDB Holdings Bhd is venturing into the piling business via the proposed acquisition of a 70% stake in construction contractor Eco Geotechnics Sdn Bhd.

In a filing with Bursa Malaysia, GDB said it, and its wholly owned subsidiary Grand Dynamics Builders Sdn Bhd have entered into a binding term sheet with Goh Eng Ngai, Wong Choo Keong and Tan Loo Loo in relation to the proposed acquisition.

“The proposed acquisition will enable GDB to venture into the piling business, to expand its customer base and to create opportunities with an added scope of jobs the group can tender for,” it said.

“The proposed acquisition will also enhance the group’s prospects when tendering for jobs which involve sub-structure works as well as to create opportunities in securing superstructure works where contract owners call for separate sub-structure and superstructure tenders for a project,” it added.

Eco Geotechnics is principally involved in providing services as a construction contractor specialising in geotechnical and foundation engineering works.

Zhulian Q1 profit up, declares 2 sen dividend

PETALING JAYA: Zhulian Corp Bhd reported a net profit of RM10.79 million for the first quarter ended Feb 28, a 19.7% increase from RM9.02 million reported in the corresponding quarter last year, underpinned by tighter control on operating costs as well as increase in share of profit from the associate.

Its revenue, however, declined 9% to RM39.45 million from RM43.34 million, due to incentive paid to customers amounting to RM3.6 million. This was treated as a reduction in transaction price, in compliance with Malaysian Financial Reporting Standards 15 (MRSF 15).

Zhulian reported an increase in sales in the Malaysian and Thai markets, while sales in Myanmar have dropped since the government there prohibited multi-level marketing (MLM) in September last year.

Zhulian has declared an interim dividend of 2 sen per share for the quarter under review.

Commenting on prospects, the group said its business is closely linked to the sentiments of general consumer market and the fluctuating currency.

“Strengthening or weakening of ringgit against US dollar will have an impact on the group’s performance as all the export revenue are transacted in US dollar,” it said

Zhulian said the group is committed to taking advantage of the positive market sentiments so as to be more competitive in the MLM market both locally and abroad.

Malaysia’s possible exclusion from global bond index spooks ringgit, stocks

PETALING JAYA: The ringgit weakened as much as 0.36% today to 4.1455 against the US dollar on fears over the possibility that Malaysia may be dropped from the FTSE World Government Bond Index (WGBI).


As at 5pm, the local unit was trading 0.15% lower at 4.1365 against the greenback. Over the past two trading days, it has depreciated 0.66%.

Meanwhile, on Bursa Malaysia, the FBM KLCI fell 8.56 points or 0.53% to 1,620.90 points against Tuesday’s close of 1,629.46. Market breadth was negative with 661 losers and 208 gainers.

Top losers were led by heavyweights such as Tenaga Nasional, Malayan Banking and Petronas Dagangan, which slipped 24 sen, 21 sen and 16 sen to RM12.06, RM9 and RM24.94, respectively.

On Monday, FTSE Russell said it may drop Malaysian debt from the WGBI due to concern about market liquidity.

Malaysia is currently assigned a ‘2’ on the WGBI and is being considered for a potential downgrade to ‘1’ which will render Malaysia ineligible for inclusion in the WGBI.

The review is due in September, which includes potentially adding Chinese bonds into the index. It was reported that the review started in January to increase transparency in managing country inclusion to FTSE Russell global fixed-income indices. Malaysia’s weight in the WGBI is less than 0.4%.

FXTM’s newly appointed market analyst Tan Chung Han expects the weakness in the ringgit to be transitory, as Malaysia’s resilient economy is still awaiting the next chance to make its case before the markets.

“The projected 4.3-4.8% GDP growth for 2019 remains higher compared to what many other major economies are expecting this year. However, sentiment surrounding the Malaysian currency is currently swayed by other factors which have led to the ringgit’s recent weakness against the US dollar, including external risks such as US-China trade tensions and slowing global growth,” he told SunBiz.

He said headlines about Malaysia’s possible removal from the index may have lent itself to fund outflows, contributing to the ringgit’s recent weakness.

“Even if it actually transpires (Malaysia’s removal from WGBI), active funds may still focus on Malaysia’s accommodative monetary policy stance and robust domestic economic fundamentals when making their investment decisions,” Tan added.

However, Tan pointed out that according to central bank data, foreign holdings of Malaysian bonds rose during the first quarter of 2019, pointing to an increasing appetite for Malaysian notes.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit’s weakness is a valid concern considering that Malaysia Government Securities (MGS) yields have come down quite considerably when the US Federal Reserve is expected to keep interest rates unchanged in 2019.

“If exclusion materialises, theoretically we could expect some impact on bond yields, especially by managers who track the FTSE index as their benchmark,” he said.

Reuters quoted Morgan Stanley as saying that Malaysia could see outflows of almost US$8 billion (RM33 billion) if its bonds are downgraded by global index provider FTSE Russell.

Foreign investors have been reducing their Malaysian government bond holdings since late 2016 and, as of late March 2019, held US$37 billion, Morgan Stanley said.

Macquarie said as foreigners are already underweight on MGS in Malaysia, the outflows may be less.

“However, the implication would be larger for other index providers such as the JP GBI-EM and Bloomberg Barclays Aggregate. Just these two indexes alone could represent US$15 billion of outflows if Malaysia is excluded,” it said in its sales commentary.

AirAsia drops Vietnam joint venture, to seek other opportunities

PETALING JAYA: AirAsia Group Bhd has scrapped its joint venture (JV) plan to set up a low-cost carrier (LCC) n Vietnam with local partners.

The group told Bursa Malaysia that its wholly owned subsidiary AirAsia Investment Ltd, together with Gumin Company Ltd and Hai Au Aviation Joint Stock Company had amicably agreed to terminate and release each other from all obligations under the transaction agreements in relation to the proposed joint venture in Vietnam, effective April 17, 2019.

Despite the termination, AirAsia stressed that it remains interested in operating a low-cost airline in Vietnam due to its favourable geographical location, expanding aviation market and overall growth potential.

“The termination of the joint venture is not subject to the approval of the company’s shareholders and is not expected to have any financial impact on the net assets or gearing of the company.”

AirAsia first announced its intention to establish an LCC in March 2017 and a memorandum of cooperation was signed in December 2018.

AirAsia Group CEO Tan Sri Tony Fernandes had said Vietnam is one of the last remaining countries with a large population within the region that AirAsia is not in.

AirAsia is already the largest foreign airline group in Vietnam by capacity, currently operating to five destinations in the country, including its latest addition of Phu Quoc.

Its shares gained 1 sen or 0.4% to close at RM2.48 today with 8.08 million shares changing hands.