Thursday, June 13th, 2019


Pound near five-month lows vs euro as UK leadership race begins

LONDON, June 13 — The pound held near a five-month low against the euro today after Boris Johnson won by far the most support from Conservative lawmakers in the first round of the contest to replace Prime Minister Theresa May. Johnson, the face of…

EU steps up pressure over Italy debt, flags stability concerns

LUXEMBOURG, June 13 — The European Union’s push to bring Italy into line with the bloc’s fiscal rules intensified today as top officials called for new measures to address budget shortfalls and raised concerns for the euro zone’s stability…

US weekly jobless claims rise; imported inflation weak

WASHINGTON, June 13 — The number of Americans filing applications for unemployment benefits unexpectedly rose last week, which could add to concerns that the labour market was losing steam after job growth slowed sharply in May. Other data today…

Telcos howl, markets hail German 5G auction as newcomer joins fray

FRANKFURT, June 13 — Germany’s pricey 5G spectrum auction drew protests from existing mobile operators but cheered investors betting the entry of a new player will revive competition and help close a connectivity gap with the United States and…

YTL Corp proposes to take YTL Land private via share exchange

PETALING JAYA: YTL Corp Bhd proposes to privatise YTL Land & Development Bhd through a share exchange offer.

YTL Corp told Bursa Malaysia that the share exchange offer entails the proposed acquisition by YTL Corp of YTL Land shares at 36 sen per share and YTL Land irredeemable convertible unsecured loan stock (ICULS) at 32 sen per ICULS.

The proposed offer will be satisfied through the issuance of new shares in YTL Corp at an issue price of RM1.14 each. With that, it will translate to an exchange ratio of about 0.32 YTL Corp share for each YTL Land share and 0.28 YTL Corp share for each YTL Land ICULS.

The proposed offer is not conditional upon any minimum level of acceptances of the offer shares as YTL already holds more than 50% of the voting shares of YTL Land.

As at June 7, 2019, YTL Corp owns a 65.26% stake in YTL Land (excluding treasury shares) as well as 78.95% of the total outstanding YTL Land ICULS.

Based on the exchange ratios, the shares offer price and ICULS offer price represent discounts of 5.4% and 9.1% over one-month volume weighted average prices of YTL Land shares and ICULS.

YTL Land’s share price closed 1 sen or 2.7% lower at 36 sen today, while YTL Corp gained 1 sen or 0.9% to RM1.14.

Based on the 288.05 million offer shares and 208.78 million offer ICULS, YTL Corp may issue up to 149.57 million consideration shares assuming all the holders accept the offer.

YTL Corp said YTL Land shareholders who exchange their offer securities for YTL Corp shares are expected to benefit from YTL Corp’s position as one of the top 50 largest stocks listed on Bursa Securities.

“The proposed offer provides an opportunity for the holders to reduce their exposure to a single industry business (i.e. property development) that has plateaued in terms of growth and development opportunities in recent years, and the outlook for which is soft for the near to medium term, in exchange for an investment in the more diversified range of businesses and earnings profile of the YTL Corp.”

Currently, both YTL Corp and YTL Land are required to comply with the regulatory requirements as well as listing obligations prescribed by Bursa Securities for listed issuers, representing an overlap of administrative efforts and costs.

However, YTL Corp said the delisting of YTL Land will eliminate such overlap, dispense with expenses to maintain the listing status of YTL Land and allow YTL Land to rechannel its resources towards its core business instead.

YTL Land was listed on Oct 7, 1973.

The offer will remain open for acceptances for at least 21 days from the posting date.

UBS global chief economist grilled in China for comment on pigs

BEIJING, June 13 — A flippant reference to pigs in an inflation analysis by UBS Group AG’s global chief economist has caused a furore in China, with some in the financial community rejecting UBS’s apology and calling for a boycott. Paul…

HSBC: No further cuts in OPR this year

KUALA LUMPUR: There will be no more reductions in Bank Negara Malaysia’s Overnight Policy Rate (OPR) this year and it is expected that the next cut will only happen next year given the resilient Malaysian economy, according to HSBC Private Banking.

Its chief market strategist for Southeast Asia James Cheo described the OPR reduction last month as a “pre-emptive cut”.

“There are fears in the market that they (Bank Negara) will keep cutting (OPR) but the economy is still sound and there is no real need to make further cuts,” he told a press conference on the HSBC Private Banking 2019 2H Investment Outlook in Asia today.

“From now to the end of the year, BNM will be on hold in terms of policy rates and depending on the situation next year, they will assess the situation,” he added.

HSBC Private Banking has forecast Malaysia’s gross domestic product growth to stay firm at 4.5% in 2019 and 4.3% in 2020, as private consumption is going to remain robust despite a more uncertain global trade environment.

Cheo said Malaysia’s economy is expected to stay resilient, driven by strong consumer spending and a diversified export base. The resilience of consumer spending is a reflection of a relatively tight labour market and steady wage growth.

“Malaysia is more resilient than what most people think. To sum it up, the Malaysia economy still ‘boleh’ (can),“ he said.

It expects private consumption to remain one of the key drivers of growth for the remainder of the year, driven by a stable labour market and supportive fiscal and monetary policy.

“It (consumption) can hold up at about 6% this year because the labour market is strong, wages are rising with a young working population. This will be the engine to power Malaysia’s economy and we don’t see that waning.”

He said investments are soft so far but there is a good chance of thempicking up in the year-end or next year as public infrastructure projects start to come in.

Malaysia’s economy is expected to stay resilient, driven by strong consumer spending, says HSBC Private Banking’s James Cheo. – REUTERSPIX

Wall St opens higher on energy gains, rate cut hopes

NEW YORK, June 13 — US stocks opened higher today, led by gains in energy shares, with hopes of an interest rate cut adding to the upbeat mood. The Dow Jones Industrial Average rose 32.11 points, or 0.12 per cent, at the open to 26,036.94. The…

Affordable housing – remove the regulatory obstacles, says Ideas

PETALING JAYA: A better way to generate affordable projects would be to remove regulatory obstacles, starting with reducing the direct involvement of government agencies in building low-cost homes, according to Institute for Democracy and Economic Affairs (Ideas) senior fellow Dr Carmelo Ferlito.

“In contrast with what is suggested by the National Housing Policy, too-strict requirements for low-cost developments (i.e. minimum size) should be avoided in order to facilitate the interaction between supply and demand, taking into account the location and size factors, and therefore allowing lower income people to move toward the economic heart of the country, supporting thus not only their housing issues but also promoting their possibilities for a higher degree of social mobility” he said in a new policy paper titled “The Property Market, Affordability and the Malaysian National Housing Policy”.

He pointed out that the low-end market segment is not disregarded by the private developers because it is naturally unprofitable, but because it is artificially made unprofitable by a series of regulatory obstacles that become supply-side bottlenecks.

Ferlito also said disruptive entrepreneurship will play a key role in developing new technologies for making housing developments cheaper from the cost side.

“However, in order to emerge such kind of entrepreneurship requires the freedom to react to market signals and cannot be centrally designed by the government.”

Citing the property market is suffering a downturn that might lead to a wider economic crisis, Ferlito noted that the current discussion is strongly unbalanced toward the issue of affordability, while the property market’s cyclical dynamic is disregarded – such a tendency could lead to a situation in which the country will not be equipped to face the consequences of the downturn that has already started.

As the affordability issue is complex, he is of the view that imply looking at the ratio between median house price and median income is simplistic and misleading.

“To decide what is individually considered as affordable means making a choice involving a trade-off between three elements: price, floor area and location.”

Moving forward, Ferlito said the rental market will play a growing role because of generational cultural changes.

Noor Kamarul takes over as TM’s MD/CEO

PETALING JAYA: Telekom Malaysia Bhd (TM) has appointed Datuk Noor Kamarul Anuar Nuruddin (pix) as its new managing director and CEO effective today.

He is a nominee of special shareholder Minister of Finance.

Noor Kamarul, 60, has vast experience of 34 years in managing telecommunication networks and services in Malaysia and Indonesia focusing on fixed network, mobile network and mobile broadband services.

He has led the strategy, planning and implementation of projects ranging from greenfield network, 3G, 4G to merger of cellular networks.

Noor Kamarul was a member of Celcom Axiata Bhd’s senior management team in driving the turnaround of Celcom’s performance from 2003 to March 2018.