Thursday, May 30th, 2019

 

Trump says China suffering from trade conflict

WASHINGTON, May 30 — President Donald Trump repeated his claim today that China is suffering most in the trade conflict with the United States, saying the punitive tariffs are having a “devastating effect.” And after talks broke down earlier…


IMF suspended work with Venezuela on economic data after political upheaval

WASHINGTON, May 30 — The International Monetary Fund suspended work with Venezuela on its economic data in January because of questions about the country’s recognised government, the IMF said on Thursday, days after the Venezuelan central bank…


US economic growth slightly slower at the start of 2019

WASHINGTON, May 30 — US economic growth at the start of 2019 was slightly slower than originally reported but remained robust despite President Donald Trump’s extended government shutdown, according to new data released today. The new estimate…


Wall Street rises after trade-driven selloff

NEW YORK, May 30 — US stocks rose for the first time this week today, as President Donald Trump said trade talks with China are doing well, offering a glimmer of hope to markets roiled by trade tensions. A senior Chinese diplomat said that…


Maybank makes RM1.81b net profit for Q1

PETALING JAYA: Malayan Banking Bhd (Maybank) reported a 3.3% decline in net profit to RM1.81 billion for the first quarter (Q1) ended March 31, 2019 against RM1.87 billion in the previous corresponding period, as the group took a conservative stance in setting aside additional provisioning for clients impacted by the challenging operating environment.

Maybank’s allowances for impairment losses on loans, advances, financing and other debts increased RM94.7 million or 18.6% to RM604 million.

Revenue for the quarter under review, however, rose 12.7% to RM12.98 billion from RM11.52 billion, underpinned by a 1.6% rise in fund based income to RM4.31 billion, partly offset by a marginal dip in net fee-based income to RM1.55 billion owing mainly to lower commission, service charges and fees as well as mark-to-market losses in financial liabilities.

The group’s net interest income and Islamic banking income grew 1.9% to RM4.45 billion in the first quarter.

Maybank’s overall loans grew 4.8%, while gross deposits also increased at similar pace of 4.8% despite intense competition, leading to an improvement in the loan-to-deposit ratio of 92.4% from 92.7% in December 2018.

However, the stiff competition resulted in a compression of the group’s net interest margin to 2.30% in March 2019 compared with 2.38% in December 2018.

Its gross impaired loans ratio as at March 2019 rose to 2.48% compared with 2.41% in December 2018. Impairments for the period were higher at RM637.3 million compared with RM500.8 million a year earlier mainly due to top-up of provisioning for existing impairments and some provisioning made for new impairments.

Nonetheless, Maybank expects to maintain its full-year net credit charge off guidance of 40 basis points for FY19.

On capital strength, the group’s common equity tier 1 ratio strengthened to 14.55% from 13.37% a year ago while total capital ratio stood at 19% (after proposed final dividend and assuming an 85% dividend reinvestment rate) – both significantly higher than the regulatory requirements of 7.0% and 10.5% respectively.

Liquidity coverage ratio came in at 134.2%, well above the regulatory requirement of 100%.

The group’s net earned insurance premiums from the insurance and takaful subsidiaries increased 7.6% to RM1.63 billion.

Barring any unforeseen circumstances, Maybank expects its financial performance for 2019 to be satisfactory in line with the expected growth prospects of its key home markets. It has set a headline key performance indicator for return on equity of about 11%.

Against the backdrop of moderating global growth and uncertainty from trade tensions, the group will maintain its balance sheet expansion in line with the respective gross domestic product growth in its three home markets and in tandem with the group’s risk posture.

“Maybank group will continue building on its diversified franchise and footprint to expand income streams through cross business collaborations and from focusing on diligent pricing of its assets and liabilities,” it said.


TM’s first-quarter earnings nearly double, thanks to lower operating costs

PETALING JAYA: Telekom Malaysia Bhd’s (TM) net profit almost doubled to RM308.28 million for the first quarter ended March 31, 2019 compared with RM157.16 million in the same quarter a year ago, due mainly to a reduction in operating costs.

However, its revenue was down 2.4% to RM2.78 billion from RM2.85 billion, dragged lower by a decline in voice, internet and multimedia services and non-telecommunication-related services revenue.

Following the surge in earnings, TM’s share price soared 74 sen or 27.2% to RM3.46 today, the highest in the past eight months.

The group’s earnings before interest and tax (ebit) came in at RM504.8 million, doubled from RM195.6 million. Stripping off some non-operational items, such as unrealised foreign exchange loss on international trade settlement, its normalised ebit also more than doubled to RM513.0 million from RM206.6 million.

TM said the total capital expenditure (capex) for the first quarter was in line with guidance at RM151 million, or 5.4% of revenue. By asset type, access comprised 67.0% of total spending, followed by network at 18% and 15% for support systems.

Its operating expenditure/revenue improved 11.4 percentage points.

TM said in a filing with the stock exchange that while unifi broadband services continued to see an increase in customer base, the decrease in revenue was from Streamyx as well as unifi mobile.

Unifi’s revenue decreased 9.3% to RM1.23 billion, mainly due to lower revenue from voice services on the back of lower usage, in line with decrease in customer base.

TM ONE recorded a 1.3% drop in revenue to RM1 billion, mainly due to voice and data services.

However, TM Global’s revenue increased 11.5% to RM578.1 million, mainly contributed by both voice and data services.

TM acting group CEO and COO Imri Mokhtar (pix) opined that the market is increasingly competitive, with players exploring opportunities to sustain and grow their business.

“We saw the Performance Improvement Programme 2019–2021 (PIP 2019-2021) yield improve profitability for the group in Q1 2019. In the coming months, we will continue to focus on our strategic pillars of ‘Converged Services’, ‘Simple and Digital’ and ‘Lean and Lower Cost’ in our daily operations to drive our performance and generate more value,” he said in a statement.


Big clothes brands found to fall short of own fair wage promises

LONDON, May 30 — The world’s top clothing brands are failing to fulfil their own promises to pay workers a fair living wage that covers basic family needs, academics and activists said today. Most major garment companies lack plans for…


IHH reports 56% jump in Q1 earnings

PETALING JAYA: IHH Healthcare Bhd reported a 56.4% jump in net profit to RM89.51 million for the first quarter ended March 31, 2019 against RM57.23 million in the previous year’s corresponding period, attributed to growth from its existing operations and contribution from Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital, as well as the acquisition of Amanjaya Specialist Centre and Fortis Healthcare.

Its revenue also grew 27.6% to RM3.64 billion from RM2.85 billion.

IHH managing director and CEO Tan See Leng said in India, the group is already working with Fortis’ new leadership to execute its turnaround and is beginning to see some operational improvements to the business.”

He pointed out that in most recent quarterly results, Fortis reported an operational profit before tax for the first time while achieving cost savings and increased revenue.

As for its operations in Turkey, he said the group’s decisive actions to pare down US$250 million (RM1.04 billion) of non-Lira debt last month will reduce forex volatility on earnings from the second quarter onwards.

“In Greater China, we ramped up operations in Gleneagles Hong Kong with new service offerings catering to demand, while the development of Gleneagles Chengdu and Gleneagles Shanghai continues on track.”


UK car output crashes on Brexit-induced shutdowns

LONDON, May 30 — British car output almost halved in April as factories imposed shutdowns in the face of Brexit uncertainty and other sector-wide headwinds, industry data showed today. The nation’s car production nosedived 44.5 per cent from the…


Boustead in the red for first quarter

PETALING JAYA: Boustead Holdings Bhd suffered a net loss of RM22.4 million in the first quarter ended March 31, 2019 compared with a net profit of RM6.10 million a year ago due to deficits recorded by the heavy industries, property and plantation divisions.

In a filing with Bursa Malaysia, the group said the heavy industries division posted a deficit of RM32.4 million on the back of weaker results from its operating units while the property division recorded a deficit of RM19 million due to weaker contributions from its various segments.

The plantation division reported a deficit of RM14 million as its bottom line was affected by the significantly lower palm product prices while operating cost fell by RM10 million to RM135.8 million, leading to a loss from operations of RM900,000.

Revenue for the quarter rose 8.97% to RM2.51 billion from RM2.3 billion a year ago as the trading and industrial division reported a slightly higher revenue of RM1.22 billion driven by the increase in oil price.

The pharmaceutical division’s revenue also improved, to RM786.1 million due to higher demand from government and private hospitals in Malaysia and Indonesia while revenue from heavy industries division rose to RM207.6 million on the back of progress achieved for both shipbuilding and ship repair activities.

However, the plantation division recorded a lower revenue of RM134.9 million due to the decline in palm product prices.

The group remains cautiously optimistic on its long-term prospects despite the challenges that persist including the unresolved trade war and global political uncertainties that will weigh on trade and investment activities.

“The diversified nature of the group in six core areas of the Malaysia economy certainly augurs well for the group. This fundamental strength will make the group more resilient to economic shocks,” it said.