Monday, April 29th, 2019

 

Boeing gathering to take shareholder temperature amid 737 MAX crisis

CHICAGO, April 29 — Boeing management faces a potential rebuke by shareholders today when investors gather at an annual meeting six weeks after a top-selling plane was grounded globally following two deadly crashes. Proposals that Boeing opposes…


Spotify reaches 100 million paying subscribers

STOCKHOLM, April 29 — Swedish music streaming giant Spotify said today it had amassed 100 million paying subscribers, but the company also fell back into the red and reported a first quarter operating loss. “Premium subscribers grew to 100…


Pompeo ‘confident’ China trade talks will not be hurt over Iran oil sanctions

WASHINGTON, April 29 — US Secretary of State Mike Pompeo today expressed confidence that trade talks between the United States and China will not be affected by the end of Iran oil waivers this week. Pompeo warned countries and companies that it…


US consumer spending posts biggest increase since 2009

WASHINGTON, April 29 — US consumer spending increased by the most in more than 9-1/2 years in March, but price pressures remained muted, with a key inflation measure posting its smallest annual gain in 14 months. The surge in consumer spending…


Swiss group files criminal complaint against Credit Suisse over Mozambique loans

JOHANNESBURG, April 29 — A Swiss anti-corruption lobby group has filed a criminal complaint against Credit Suisse over alleged fraud in the arrangement of US$2 billion (RM8.27 billion) of loans to Mozambique, the group said today. Mozambique, one…


Scandinavia’s SAS looking at ways to end pilot strike

STOCKHOLM, April 29 — The CEO of Scandinavian airline SAS has told negotiators to thrash out what concessions the company could make to end a pilots strike that has disrupted travel plans for hundreds of thousands of passengers. Well into the…


Safaricom CEO to leave as row erupts over successor, say sources

NAIROBI, April 29 — The head of Kenya’s biggest telecoms firm Safaricom plans to step down in August for health reasons, but the government’s insistence he should be succeeded by a Kenyan has delayed announcing a replacement, two company…


Anadarko to resume talks with Occidental on 'superior' bid

NEW YORK, April 29 — Anadarko Petroleum Corp said today it planned to resume talks with Occidental Petroleum Corp over its US$38 billion (RM157.1 billion) bid, putting pressure on Chevron Corp to raise its US$33 billion offer for the oil and gas…


S&P 500 hits record high on upbeat consumer spending, earnings optimism

NEW YORK, April 29 — The S&P 500 hit an all-time high for the first time since late September today, buoyed by upbeat consumer spending data and a largely positive earnings that helped restore investors’ faith in the decade-long bull run….


China infrastructure initiative to spur return of foreign funds to Malaysia

PETALING JAYA: Foreign fund inflows are expected to return in the third quarter of the year, driven by China’s Belt and Road Initiative, according to Rakuten Trade.

Its head of research Kenny Yee said that the boost will come from China’s infrastructure initiative in Malaysia and the Asean region, which includes the East Coast Rail Link (ECRL).

“We envisage China to be the saviour for drawing in foreign funds into the region,” he told reporters at a media briefing today.

According to him, the inflow will hinge on the spillover effect from the proposal to cut reserve ratio requirement (RRR) for China’s banking sector, which currently stands at 14.5% for large banks and 12.5% for smaller institutions. For every 1% cut in China’s RRR, US$120 billion (RM496 billion) is expected to flow into the system.

In addition, the gradual increase of foreign investors to China’s Morgan Stanley Capital International (MSCI) index from a current weighting of 5% to 20% starting in May 2019 will have a positive impact to Malaysia and the region.

Yee anticipates that this would draw US$80 billion foreign funds into China’s market and this would have a spillover effect on Malaysia and the region on the back of China’s Belt and Road Initiative.

“China is in for a positive ride ahead of its MSCI realignment and prospect of a RRR reduction, and the Asean region will benefit from the spillover effect,” he said.

In the near term, he does not expect much foreign inflows within the current quarter as there have not been any major market catalysts for Malaysia, although he views the government’s willingness to do business with China as a good indicator of what to expect over the next few months.

Meanwhile, Yee said there is no need for Bank Negara Malaysia to cut the Overnight Policy Rate (OPR) just yet, despite market talk that the central bank will reduce it by 25bps to 3% at the upcoming Monetary Policy Committee meeting next week.

“There are those who think that there will be a cut next month, others think that a reduction is due in July. We expect a later date,” he said.

Yee said if there is a reduction in the benchmark interest rate, the impact on banks will be minimal and could be offset by higher loan growth, especially with the revival of mega projects, particularly the ECRL and Bandar Malaysia, with a combined value of RM200 billion.