Thursday, June 27th, 2019


India beats US in WTO renewables case

GENEVA, June 27 — World Trade Organisation judges sided with India today in a dispute against the United States over subsidies provided to American renewable energy companies.  In a complaint filed at the WTO’s Dispute Settlement Body in…

Japan PM Abe, China’s Xi agree on need for ‘free, fair’ trade

OSAKA, June 27 — Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping agreed to work together to promote “free and fair trade” in talks today that included a “complicated” global economic landscape, a Japanese official said….

Boeing shares slip as grounded 737 MAX faces new hurdle

NEW YORK, June 27 — Shares of Boeing Co fell 3% today after the US aviation regulator found a new flaw in the 737 MAX jet, potentially delaying the aircraft’s return to service and piling more pressure on the planemaker’s suppliers. Boeing was…

Rebound in sentiment of Malaysian-export oriented businesses: RAM survey

KUALA LUMPUR: The latest RAM Business Confidence Index (BCI) for the third and the fourth quarter of 2019 indicates a rebound in the sentiment of export-oriented corporates in Malaysia on the back of trade diversion arising from the US-China tariffs dispute.

The overall index for export-oriented corporates jumped 2.1 points – the first uptick in the last three quarters and the biggest increase to date – to 57.9 points, mainly attributable to a steep spike in corporates’ turnover and profitability subindices (+7.2 points to 61.6 and +7.5 points to 61.6, respectively).

This, coupled with an improved reading for the corporate manufacturing sector in particular, may have stemmed from positive trade diversion effects, said RAM Ratings.

“Malaysia is one of the key beneficiaries of the ongoing US-China trade war, which has prompted the realignment of global supply chains away from China. A sample of our export-oriented survey respondents reported more orders, mostly from other Asian economies such as Thailand and South Korea,” the rating agency said in a statement today.

Anticipating a recovery in their order books after the sluggish performance this year to date, the proportion of export-oriented firms that expect to operate above normal capacity (>95% capacity utilisation rate) also swelled 25.9%, compared with 14.3% in the last survey.

The rise in net foreign direct investment inflow and foreign investment approvals in first-quarter 2019 is also consistent with the greater need for more capacity by export-oriented firms and supporting businesses along the supply chain.

Despite more positive readings for export-oriented corporates, the overall RAM BCI still indicates a subdued level of optimism through the next six months. The overall indices for both corporates and small and medium enterprises (SMEs) are little changed from the last survey, standing at a respective 53.6 (+0.1 points) and 51.8 (-0.3 points).

“The cautiously optimistic sentiment is not surprising given the challenging operating environment, particularly amid the disruptions caused by the US-China trade tensions, Brexit complications and uncertainties amid a scenario of moderating global growth. Firms mostly still believe that the next six months will remain challenging, despite signs of trade diversion benefits,“ said RAM.

It said the heightened concern is reflected in the higher number of firms citing “weak economic conditions” as their main challenge in the next six months.

“This proportion has risen to record highs of 43.1% for corporates and 44.8% for SMEs. As such, the improvement in performance-based indicators may be shortlived given the lingering economic ambiguity.”

The RAM BCI also suggests that the economic headwinds in the second half of 2019 have a more pronounced impact on smaller SMEs rather than bigger corporates. While larger manufacturing and export-oriented firms have expressed more positive sentiment despite the tougher operating conditions, smaller SMEs do not appear to share the same bullishness.

The turnover and profitability sentiment of export-oriented SMEs weakened 0.6 and 0.7 points respectively, while that of manufacturing SMEs declined 0.7 and 0.2 points. This could be due to their relatively small stature and less diversified supply chains as well as client bases, which render them prone to fluctuating business volumes.

The RAM BCI is a survey jointly conducted by RAM Holdings Bhd and RAM Credit Information Sdn Bhd, on business sentiment in Malaysia. Released quarterly, the index is based on data from a survey of close to 3,500 SMEs and corporates across five main industry segments respectively.

Ford to cut 12,000 jobs in Europe by end 2020

FRANKFURT, June 27 — Ford said it will cut 12,000 jobs in Europe by the end of next year to try to return the business to profit, part of a wave of cost reductions in an auto industry facing stagnant demand and huge investments to build low…

Gamuda accepts MoF offer for four toll highways

PETALING JAYA: Gamuda Bhd has decided to approve the takeover offer by the government to acquire its stake in four toll highways.

“The board of directors of Gamuda (save for Tan Sri Ambrin Buang and Nazli Mohd Khir Johari had today deliberated on the proposed offers and has resolved to vote in favour of accepting the proposed offers at the respective concession holding companies,” the group said in a filing with the stock exchange today.

Gamuda said it will make the appropriate announcements in due course after going through the relevant due process with its respective associate companies and joint venture company.

Last week, the Ministry of Finance (MoF) offered to acquire four toll concessionaires with an enterprise value of RM6.2 billion.

The four toll highways are the Damansara-Puchong Highway (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (Smart), with offer prices of RM2.47 billion, RM1.98 billion, RM1.38 billion and RM369 million, respectively.

Gamuda owns 43.6% in Lingkaran Trans Kota Sdn Bhd (Litrak), Kesas (70%), Sprint (51.8%) and Smart (50%).

MoF will finance the takeover by way of bond issuance.

Gamuda accepts offer by MOF Inc

KUALA LUMPUR: Gamuda Bhd has accepted the proposed offer by the Minister of Finance (Incorporated) (MOF Inc) to purchase all of the group’s equity stake in four companies.

In a filing with Bursa Malaysia today, it said the companies were Kesas Sdn Bhd (Kesas), Sistem Penyuraian Trafik KL Barat Sdn Bhd (Sprint), Lingkaran Trans Kota Sdn Bhd (Litrak) and Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (Smart).

“The board of Gamuda will make the appropriate announcements in due course after the going through the relevant due process with its respective associated companies and joint venture company,“ it said.

Finance Minister Lim Guan Eng had recently announced that the government had made a RM6.2 billion bid to take over four concessions of toll highways, which could save taxpayers RM5.3 billion in compensation to the concessionaires.

Gamuda has a significant stake in all four highways.

Sapura Energy Q1 net loss narrows, bags RM1b contracts

PETALING JAYA: Sapura Energy Bhd’s net loss for the first quarter ended April 30 narrowed to RM109.1 million from RM135.73 million a year ago, mainly due to lower depreciation and amortisation and net forex gain.

The group revenue of RM1.63 billion was 93.2% higher than the RM845.17 million in the corresponding quarter of the preceding year, mainly attributable to the higher revenue from engineering & construction and drilling business segment.

Sapura Energy said the oil and gas industry is expected to continue to operate in a challenging environment arising from market uncertainties and geopolitical risks. However, tendering activities remained robust in many of its key markets with the group aggressively pursuing new opportunities in the Middle East, Africa, Asia Pacific, Europe, the Caspian and the Americas.

The group has been able to grow its orderbook of RM17.3 billion as demonstrated by its cumulative new contract wins to-date in FY2020 of RM2.3 billion.

The group said it will remain focused on growing the orderbook and maintaining strong operational performance.

Meanwhile, Sapura Energy has been awarded 10 new contracts for its engineering & construction and drilling segments, valued at RM1 billion.

The new contract wins, secured across Malaysia, Thailand, Taiwan and Australia, include its first offshore wind farm contract. In addition, the group has been selected for a frame agreement with Petronas for fixed offshore structure works.

US GDP first-quarter growth unrevised at 3.1pc

WASHINGTON, June 27 — US economic growth accelerated in the first quarter, the government confirmed today, but the export and inventory boost to activity masked weakness in domestic demand, some of which appears to have prevailed in the current…

Splash sale dilutes Gamuda’s Q3 earnings

PETALING JAYA: Gamuda Bhd posted a net profit of RM175.99 million in the third quarter ended April 30, 2019, 14.6% lower compared with RM206.1 million for the same quarter last year mainly due to the loss of earnings from Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) profits after the disposal last year.

Its revenue also dropped 16.1% to RM1.04 billion from RM1.24 billion previously. It has proposed to declare a second interim dividend of 6 sen per share.

Gamuda’s net profit declined 17.8% to RM521.17 million for the nine-month period compared with RM633.82 million for the same period last year, while revenue increased 2% to RM3.07 billion from RM3 billion previously.

The group anticipates this year’s performance to be driven by overseas property sales especially Vietnam, the swift progress of MRT Line 2 and steady earnings from the expressway division.