Monday, June 10th, 2019


Kim Hin Joo inks underwriting deal for ACE listing

PETALING JAYA: Kim Hin Joo (Malaysia) Bhd has engaged UOB Kay Hian Securities (M) Sdn Bhd as principal adviser, sponsor, underwriter and placement agent for its initial public offering (IPO) on the ACE Market of Bursa Malaysia.

An underwriting agreement was signed between the two parties.

The listing will see a public issue of 76 million new shares in Kim Hin Joo and an offer for sale of 57 million existing shares.

Pursuant to the underwriting agreement, UOB Kay Hian will underwrite a total of 29 million shares comprising 19 million new shares available for the Malaysian public; 10 million new shares reserved for application by the eligible directors and employees.

Kim Hin Joo is a retailer of baby, children and maternity products and is a franchisee of the Mothercare and Early Learning Centre brand in Malaysia.

As part of its growth plans, the company is also in the midst of finalising a development agreement with The Entertainer UK, a UK-based toy retailer, which will enable the company to open and operate The Entertainer toy outlets in Malaysia and sell a broad range of toys.

Mestron’s IPO oversubscribed by 17.53 times

PETALING JAYA: Mestron Holdings Bhd’s initial public offering (IPO) for the public portion has been oversubscribed by 17.53 times.

The steel pole maker is set to be listed on the ACE Market of Bursa Malaysia on June 18.

A total of 5,720 applications for 731.97 million new shares, valued at RM117.12 million were received from the Malaysian public for 39.5 million new shares made available for public subscription.

In addition, the 8.75 million new shares allocated to the eligible directors and employees of the company have been fully subscribed. Meanwhile, the 188.75 million shares allocated for private placement have also been fully placed out.

Mestron expects to raise a total of RM25.28 million from the public issue of 158 million new shares a price of 16 sen per share.

Of the IPO proceeds, some RM13 million (51.4%) will be used to expand its main manufacturing facility and acquire more manufacturing machineries and equipment for future business growth.

Some RM5.18 million (20.5%) has been earmarked working capital to acquire raw material supporting its capacity expansion; RM4 million (15.8%) will be used to repay bank borrowings and the remaining RM3.10 million to defray listing expenses for the IPO.

Ringgit slips versus US dollar

KUALA LUMPUR, June 10 — The ringgit, along with other emerging currencies, fell against the US dollar today, a dealer said. At 6pm, the local note finished at 4.1620/1650 against the greenback from last Friday’s 4.1570/1620. The dealer said the…

XOX to raise up to RM66.28m to fund expansion plans

PETALING JAYA: XOX Bhd is looking to raise up to RM66.28 million from a proposed renounceable rights issue of irredeemable convertible preference shares (ICPS) with free detachable warrants (Warrants B).

In a filing with Bursa Malaysia, the company said it plans to undertake a rights issue of up to 2.65 billion new ICPS together with up to 662.81 million Warrants B on the basis of four ICPS with one free Warrant B for every two existing ordinary shares in XOX.

XOX intends to raise up to RM66.28 million from the proposed rights issue of ICPS with warrants which entails a minimum subscription level of 400 million ICPS together with 100 million Warrants B, based on illustrative issue price of 2.5 sen per ICPS and illustrative exercise price of 6 sen per warrant.

The minimum subscription level will be met via a written undertaking from Key Alliance Group Bhd, a substantial shareholder of the company, to apply and subscribe in full for its entitlement under the proposed rights issue of ICPS with warrants.

Under minimum scenario, the RM10 million gross proceeds raised will be used to fund its eSIM expansion plan and estimated expenses for the proposals. The eSIM expansion plan includes upgrading of hardware, software costs and marketing expenses.

Under the maximum scenario, the RM66.28 million gross proceeds raised will be used to fund the eSIM expansion plan, expansion of XOX’s e-wallet function, working capital and estimated expenses for the proposals.

XOX’s working capital includes maintenance cost of mobile and digital network infrastructure as well as operating and administrative expenses such as staff cost, utilities, rental, transportation and upkeep of office.

The ICPS will have a tenure of 10 years commencing from and inclusive of the issue date of the ICPS while the tenure of the Warrants B is three years from the date of issuance.

Approved investments rise to RM53.9b in Q1, up 3.1% year on year

PETALING JAYA: Malaysia registered a total of RM53.9 billion approved investments in the manufacturing, services and primary sectors for the first quarter of 2019 (Q1 2019), 3.1% higher than the RM52.3 billion recorded in the same period last year.

Malaysian Investment Development Authority (Mida) said in a statement that the growth was mainly driven by the robust performance of the manufacturing sector, which jumped 126.8% with an investment of RM25.4 billion in the sector compared with Q1 2018.

The government agency pointed out that there is a trend towards more capital-intensive, high value-added and high technology projects that are well reflected in the capital investment per employee (CIPE) ratio.

“The CIPE ratio of manufacturing projects approved in Q1 2019 was RM1.11 million compared with RM805,531 in Q1 2018. A total of six manufacturing projects with investments of at least RM1 billion, with total investments of RM16.5 billion, were approved in Q1 2019,” said Mida.

In addition, there were 20 approved projects with investments of at least RM100 million. Together, the 26 projects account for 87.8% of the total investment approved for the sector with a value of RM22.3 billion.

Foreign investments in approved manufacturing projects surged 127% to RM20.2 billion in Q1 2019 from RM8.9 billion in the corresponding period last year.

Mida explained that the increase reflects the country’s continuous competitiveness as a location of choice for investments.

“These approved projects are expected to generate strong multiplier effects, which include the growth of domestic companies or engineering supporting industries, cluster development, local sourcing, strengthening of R&D activities and human capital development.”

It disclosed that the US (RM11.5 billion), China (RM4.4 billion), Singapore (RM2.2 billion), Japan (RM600 million), and the British Virgin Islands (RM500 million) accounted for 95% of total approved foreign investments in the manufacturing sector.

However, the services sector accounted for the lion’s share of approved investments for the quarter with 1,445 approved projects worth RM26.1 billion.

“The bulk of the investments came from domestic sources, which contributed RM18.0 billion or 69% of the total approved investments while the foreign sources contributed RM8.1 billion or 31%,” said Mida.

The five main sub-sectors that led the services sector with the highest total investment were real estate (RM11 billion or 42.3%), followed by the distributive trade (RM8.2 billion or 31.6%), utility (RM4 billion or 15.4%), hotel and tourism (RM1.8 billion or 7.0%) and support services (RM550.9 million or 2.1%).

Meanwhile, the primary sector contributed RM2.4 billion or 4.5% to the total approved investments in the first quarter of this year, with a majority of investments were contributed by domestic sources (RM1.4 billion or 58.3%), while foreign investment amounted to RM1.0 billion or 41.7%.

Oil and gas exploration activities dominated the mining sub-sector with approved investments of RM2.2 billion or 91.7%, followed by plantation and commodities with RM140 million and agriculture sub-sector with RM43.5 million.

According to the investment authority, the manufacturing sector accounted for the largest share of total potential employment in the economy with 22,970 job opportunities or 55.7%, followed by the services sector with 18,000 job opportunities (43.7%) and primary sector with 240 employment opportunities (0.6%).

MB: Selangor has ecosystem for aerospace

SEPANG: Selangor has the complete ecosystem to help develop the aerospace industry, said its Mentri Besar Amirudin Shari.

He said to help develop the aerospace industry the state has a council that meets yearly to do the required planning for the industry.

“This was one of the reasons the state chose the aerospace industry as part of its cluster for its investment strategy,“ he told the media after launching the country’s first “smart” workshop for the repair of aircraft nose radomes at the Sepang Aircraft Engineering (SAE) hangar.

Amirudin said the workshop which uses smart solutions meets the Smart Selangor 2025 vision and forms part of Industry 4.0.

He pointed out that the workshop was part of the 11th Malaysia Plan and it was fully supported by the government.

He said Airbus who owns SAE has invested heavily not only in Sepang but also in Subang.

“The SAE maintainence, overhaul and repair (MRO) centre here has attracted airlines from countries such as Japan, India, Thailand, Singapore and also leasing companies.”

Airbus is the largest international partner for the Malaysian aerospace sector, with its sourcing and services businesses in the country worth US$400 million (RM1.67 billion) per year for the local economy.

SAE CEO Raymond Lim said it is aiming to service up to 200 radomes this year, from 170-180 radomes last year with the smart radome workshop.

“We have a marginal increase but with the increase in smart radome processes that we put in place, the gaps will go up to about 200 and we will move higher in the years to come.”

The smart radome workshop uses digital and smart technologies, harnessing the data produced by aircraft and maximising automation. It can increase efficiency at SAE and provide more value for customers by reducing aircraft downtime. This is part of several ongoing efforts that Airbus has undertaken in Malaysia that have the potential to transform the MRO sector.

“In terms of Industry 4.0, the human portion of it is still important. We’re not doing away with the human part, but the human is doing higher level activities as far as the maintenance process is concerned,” explained Lim.

SAE specialises in the MRO of com-mercial aircraft, engines and components. It provides support for the growing Airbus A320 family fleets in the Asia Pacific, as well as the region’s ATR turboprop aircraft.

“This is the first step for us to move into smart technologies. Based on the lessons that we’ve learned from the implement-ation of the smart radome, we will then move into other parts of MRO,” said Lim.

Employees sour on Tesla amid cost-cutting, layoffs

SAN FRANCISCO, June 10 — Tesla Inc’s rankings at two high-profile job websites have declined, suggesting that job dissatisfaction at the electric car company is intensifying amid layoffs, strategy shifts and executive turnover. Tesla placed 16th…

Hanoi to curb fake ‘Made-in-Vietnam’ goods aimed at dodging US tariffs

HANOI, June 10 — Hanoi has vowed to crack down on manufacturers illegally using “Made in Vietnam” labels on items destined for America to dodge punishing tariffs as the US-China trade spat drags on. Exporters have started shifting production…

Ringgit slips versus the US dollar

KUALA LUMPUR: The ringgit, along with other emerging currencies, fell against the US dollar today, a dealer said.

At 6pm, the local note finished at 4.1620/1650 against the greenback from last Friday’s 4.1570/1620.

The dealer said the ringgit, being pegged to the yuan, tracked the decline in the Chinese currency’s performance after China’s central bank governor indicated that the authorities may tolerate a weaker currency.

At the close, the ringgit also traded mostly lower against a basket of major currencies.

It depreciated against the Singapore dollar to 3.0451/0477 from 3.0396/0444 at last Friday’s close, eased versus the yen to 3.8331/8366 from 3.8275/8331 and was easier vis-a-vis the euro at 4.7047/7098 compared with 4.6787/6860 previously.

The local currency, however, was traded higher at 5.2812/2866 from 5.2844/2924 against the pound. — Bernama

China’s May exports rise despite higher US tariffs but imports plunge most in 3 years

BEIJING: China’s exports unexpectedly returned to growth in May despite higher US tariffs, but imports fell the most in nearly three years in a further sign of weak domestic demand that could prompt Beijing to step up stimulus measures.

Some analysts suspected Chinese exporters may have rushed out shipments to the United States to avoid new tariffs on US$300 billion (RM1.25 trillion) of goods that US President Donald Trump is threatening to impose in a rapidly escalating trade dispute.

But today’s better-than-expected export data is unlikely to ease fears that a longer and costlier US-China trade war may no longer be avoidable, pushing the global economy towards recession.

China’s May exports rose 1.1% from a year earlier, compared with market expectations for a modest decline, customs data showed.

“We expect export growth to remain positive in June, likely supported by continued front-loading of US-bound exports, but it should then tumble in the third quarter, when we expect the threatened tariffs to be imposed,” economists at Nomura said in a note to clients.

“Therefore, we believe Beijing will likely step up its stimulus measures to stabilise financial markets and growth.”

Business distortions related to April’s cut in the value-added tax may also have eased, helping export readings, Nomura added.

Analysts polled by Reuters had expected May shipments from the world’s largest exporter to have fallen 3.8% from a year earlier, after a contraction of 2.7% in April.

While China is not as dependent on exports as in the past, they still account for nearly a fifth of its gross domestic product.

Meanwhile, rare earth exports by China fell 16% in May from a month earlier amid an increased focus on the raw materials due to the Sino-US trade war, although the drop was in line with usual trading.

Exports by China, the key supplier of a group of 17 chemical elements used in everything from high-technology consumer electronics to military equipment, swing sharply from month to month, often by 20% or more.

May’s exports fell to 3,640 tonnes from 4,329 tonnes in April, but were not far off the 4,264-tonne monthly average since January 2018, according to data published yesterday by the General Administration of Customs.

China is home to at least 85% of the world’s capacity to process rare earth ores into material that manufacturers can use, according to research firm Adamas Intelligence. It supplied 80% of the rare earths imported by the US from 2014 to 2017.