Monday, May 20th, 2019


No more ‘white collar theft’: Mexico orders end to corporate tax breaks

MEXICO CITY, May 20 — Mexican President Andres Manuel Lopez Obrador said today his government will order an end to tax forgiveness for the country’s largest companies, saying US$20 billion (RM83.6 billion) in exemptions given by his predecessors…

Wall Street set for weak opening on Huawei crackdown fallout fears

NEW YORK, May 20 — US stocks were set to open sharply lower today, as fears over the impact on major technology companies from the United States’ crackdown on China’s Huawei Technologies added to concerns about the trade war between the two…

WTO quarterly trade growth indicator remains at nine-year low

GENEVA, May 20 — The World Trade Organisation’s quarterly outlook indicator showed today that global goods trade growth was likely to remain weak, with a reading of 96.3, unchanged from February, the lowest since 2010. “The outlook for trade…

Pineapple identified as alternative crop for Felda settlements, says minister

ISKANDAR PUTERI, May 20 — The Agriculture Ministry has identified pineapple as an cash crop for oil palm and rubber as part of the government’s efforts to increase the income of the growers. Agriculture and Agro-Based Industry Minister Datuk…

Tata Motors profits fall 47pc amid Jaguar Land Rover China slowdown

MUMBAI, May 20 — Indian carmaker Tata Motors today reported a 47 per cent fall in quarterly profits after being hit by new struggles to sell its luxury Jaguar Land Rover cars in China and other key markets. Only increased sales in Britain and the…

Stock markets slide as worries about Huawei fallout mount

LONDON, May 20 — Stock markets weakened today as concerns mounted about an escalating fallout from a US crackdown on China’s Huawei Technologies. Investors already on edge about an escalating US-China trade dispute were further rattled after…

Trump rejects NYT report on Deutsche Bank transactions

WASHINGTON, May 20 — US President Donald Trump today rejected a New York Times report that raised questions about multiple Deutsche Bank transactions involving entities controlled by him and his son-in-law Jared Kushner.   Trump denied the…

Volcano plans ACE Market listing

PETALING JAYA: Volcano Bhd is looking to list on the ACE Market of Bursa Malaysia.

According to its draft prospectus exposure filed with the Securities Commission Malaysia, its initial public offering (IPO) exercise involves a public issue of 125 million new shares and an offer for sale of 175 million existing shares.

Of the 125 million new shares, some 41.25 million shares are made available for the Malaysia public; 41.25 million shares for eligible directors, key senior management personnel, employees and business associates; and 42.5 million shares by way of private placement to identified investors.

Volcano is involved in the manufacturing of parts and components used in the electrical and electronics (E&E) and automotive industries, namely nameplates and plastic injection moulded parts.

It carries out the manufacturing of nameplates at its head office and factory in Perai, Penang, as well as at its factory in Rayong, Thailand. The manufacturing of plastic injection moulded parts, meanwhile, is carried out at the Rayong plant.

Going forward, the company intends to expand its plastic manufacturing business with the purchase of additional plastic injection moulding machines.

It also plans to expand its factory in Rayong, Thailand in anticipation of growth in its business.

For the financial year ended Dec 31, 2018, Volcano reported a net profit of RM6.95 million. Excluding the IPO expenses, its net profit would have been higher at RM7.79 million, which translates into a net profit margin of 13.28%.

Property crowdfunding may not give huge fillip to home ownership

PETALING JAYA: National House Buyers Association secretary-general Datuk Chang Kim Loong (pix) opined that property crowdfunding will not be able to significantly contribute towards increasing home ownership for first-time homebuyers.

“The property crowdfunding scheme will be structured as an investment product and will not be suitable for the majority of first-time homebuyers. The scheme will only be suitable for a niche segment of first-time homebuyers who are unable to get access to traditional financing,” he said.

Chang, who concurs with CBRE-WTW managing director Foo Gee Jen, said homebuyers must be fully aware that he/she is not taking on traditional financing and be fully aware of all the terms and conditions before participating in property crowdfunding.

“It must be clearly stated that the property crowdfunding does not confer legal ownership or title to the buyer but only the right to stay in the said property for the next five years (if the tenor is five years). Legal ownership or title will only be conferred or transferred when the buyer pays the remainder of the property price,” Chang said.

Under a normal home ownership scheme, homebuyers know the price to be paid for the property but under property crowdfunding, homebuyers need to pay the balance of the properties’ market price which cannot be determined at the present moment.

“The homebuyer must be reasonably certain that he or she will be able to qualify for a mortgage for the remaining property price based on the expected market price in Year-5 or else, the homebuyer will be in the same position as he or she is in currently, which is unable to buy their first home,” Chang said.

He advised homebuyers to purchase properties that they can afford today instead of waiting for their salary to increase because when their salaries do increase over time, the price of their “dream home” would have also increased further and remain unaffordable.

Malaysia’s current account surplus to remain strong: RHB Research

PETALING JAYA: RHB Research has maintained its 2019 current account surplus forecast at RM38.8 billion, or 2.5% of GDP for 2019, from 2.3% of GDP in 2018, as the slowdown in trade may continue to cap import growth more than exports, as seen in Q1’19.

Malaysia’s Q1’19 current account surplus rose to the highest level in five years, as goods surplus rose amidst a fall in imports while the services and income deficits narrowed.

Affin Hwang Capital maintained its forecast for 2019 current account surplus at RM30 billion.

“Even with the trade tension between the US and China, we expect export growth to be supported by Malaysia’s diversified export structure, steady commodity prices and healthy demand for manufactured goods. This, in turn, will likely support the current account surplus. Besides that, we expect the current account surplus to also be supported by higher tourist receipts,“ it said.

For 2019, it said Tourism Malaysia projected tourist receipts to grow by 9.6% year-on-year to RM92.2 billion from RM84.1 billion in 2018. Tourist arrivals are also forecasted to increase to 28.1 million persons from 25.8 million persons in 2018.

“Therefore, we expect the trade surplus to remain healthy at around RM100 billion (RM120.3 billion in 2018) and the current account surplus to also remain healthy at around RM30 billion in 2019 (RM33.5 billion or 2.4% of GNI in 2018).”

The research house has revised its real GDP growth forecast to 4.5% from 4.7% previously for 2019 following slower-than-expected GDP growth thus far in 1H19.

“However, we believe growth in total investment, which has been dragged down by the continued cautious business sentiment as well as lower capital expenditures in 1Q19, will likely recover in the quarters ahead, supported by implementation of infrastructure development projects and capital spending in the manufacturing and services sectors.

“More importantly, we expect the possibility of an acceleration in the federal government’s development expenditure as well as improvement in public corporations’ capital spending to support domestic demand and provide some cushion to slowing exports due to the escalation in US-China trade tensions. Nevertheless, external risks remain elevated,“ said Affin Hwang.

Going forward, with the trade tensions escalating between the US and China, and Malaysia being an open economy that is highly dependent on exports and the manufacturing sector, it believes that Malaysian external demand could be dampened on possible global supply chain disruptions.

“We believe that growth in net real exports will contract by 0.5% for 2019, as gross exports are expected to register a slower growth of 1% (2.2% in 2018), but gross imports may increase by 1.2% in 2019 (1.3% in 2018).

Meanwhile, Fitch Solutions Macro Research said with the re-escalation in May of US-China trade tensions, which saw another round of tit-for-tat tariffs, as well as the possibility of additional US tariffs on another US$300 billion (RM1.3 trillion) worth of Chinese goods, the external environment has once again taken a negative turn.

“Malaysia’s export growth will likely see spill-over effects from slowing regional growth as a result and we expect export growth to remain subdued over the coming months.”