Thursday, July 18th, 2019


South Africa cuts interest rates to shore up weak economy

JOHANNESBURG, July 18 — South Africa’s central bank today cut its key interest rate for the first time since March 2018 as it sought to boost the contracting economy. The South African Reserve Bank’s (SARB) monetary policy committee…

EU hits back at Boris Johnson’s Brexit fish tale

LONDON, July 18 — Brandishing a kipper at a packed campaign event, Boris Johnson railed against EU red tape he said was punishing the producer of the smoked fish — but Brussels insisted any such regulations are actually British. Johnson, the…

Sterling buoyed by retail sales, bid to prevent no-deal Brexit

LONDON, July 18 — The pound rebounded today after stronger-than-expected retail sales numbers, also finding support from a vote by lawmakers to make it harder for Britain’s next prime minister to try to force a no-deal Brexit. MPs approved the…

Sapura Energy confident E&C, drilling and E&P units will be profitable in next 12 months

KUALA LUMPUR: Sapura Energy Bhd sees good chances for its engineering and construction (E&C), drilling, as well as exploration and production (E&P) businesses to be profitable in the next 12 months due to opportunities that will drive the utilisation of its assets.

President and group CEO Tan Sri Shahril Shamsuddin (pix) said it is confident that at least two of the three businesses, including E&P, will be profitable this year.

“We’re still under-utilised so we need to push utilisation in the rigs (drilling) and E&C. We should be able to show progress this year and even more next year,” he told a press conference after the group’s AGM here today.

According to its financial statement for the financial year ended Jan 31, 2019 (FY19), the E&P segment recorded a pre-tax profit of RM88.6 million, including a gain on disposal.

The E&C segment recorded a pre-tax loss of RM120.5 million after impairments and excluding provisions, while the drilling segment recorded a pre-tax loss of RM213.2 million, after impairments and excluding a provision.

In the first quarter of FY20, E&P recorded a pre-tax loss of RM7.5 million, while E&C’s pre-tax profit stood at RM48.0 million and drilling saw a pre-tax loss of RM51.0 million.

“We’ll do it (turn around at group pre-tax level) when our utilisation crosses 70% both for drilling and E&C businesses.”

For E&P, Shahril said it is on track to producing its first gas in SK408 (Gorek, Larak and Bakong fields in offshore Sarawak) before year-end.

Shahril said this is the company’s focus in the short term and as production ramps up, this is where the value driver is the biggest. It also has exploration assets in New Zealand, Mexico and Australia.

In drilling, Shahril said its rigs are at 50% utilisation and he sees it moving to 70% quickly.

“In the next 12 months, we see more rigs being deployed and this is encouraging for our rig business. E&C in the next 12 months will continue to book in more contracts and start to implement the projects that they started beginning of the year which will also ramp up utilisation.”

Sapura Energy’s order book stands at RM17.3 billion, comprising Asia (RM9.6 billion), the US (RM6.6 billion), Europe, the Middle East & Africa (RM800 million) and Australia (RM300 million). Its tender book is worth US$6.8 billion (RM28 billion) of which over 50% is in Africa and the Middle East.

Shahril said margin is going to be similar and in the same range compared with its peers in the business.

“We’ve gone through three years of conditioning from our clients that have been pressing down the margin and price and they’re not going to let it go easily until assets are being soaked up, only then we will see the movement in margins move up.”

Shahril expects crude oil price to sustain at the US$60-65 a barrel level for the next two years on the back of global growth and strong shale which will provide opportunities for contracts.

“I believe we’re at where oil price is going to be for a while. US$60-65 is the window that is going to hover around for the next couple of years, but it is enough with the stability of oil for oil companies to approve their development programmes. We’re seeing that in the number of bids that we’ve been invited to go to,” explained Shahril.

He added should the oil price fall below the US$60 a barrel level for a long time, there will be less opportunities for contracts.

Meanwhile, Shahril said it will continue to develop its services in the renewable energy ssector and continue to form partnerships to build wind farms after securing its first offshore wind farm contract in Taiwan recently. It has submitted a tender in Europe worth €120 million (RM554 million) for the installation of wind farms and will tender for another job there.

He said the contribution from RE will be significant in the future and if successful, will make up around 10-15% of its revenue in two to three years.

“We can use existing assets which will drive utilisation. We will see more and more wind farms be deployed so this is going to be encouraging for us,” said Shahril.

Court orders AirAsia, AirAsia X to pay RM41m to MAHB

PETALING JAYA: AirAsia Bhd and AirAsia X Bhd have been ordered to pay RM41.52 million in total to Malaysia Airports (Sepang) Sdn Bhd (MA Sepang) after the Kuala Lumpur High Court granted summary judgment in favour of the latter.

In a filing with Bursa Malaysia, Malaysia Airports Holdings Bhd (MAHB) said the High Court granted summary judgment in favour of its wholly owned subsidiary MA Sepang in all three civil suits filed by MA Sepang against AirAsia and its long-haul affiliate AirAsia X.

The summary judgment order was for a combined amount of RM40.73 million in unpaid passenger service charges (PSC) and a combined amount of RM792,381 in unpaid late payment charges.

The summary judgment order further included a declaration for the low-cost airline group to pay MA Sepang the PSC rates that have been gazetted in law.

“The High Court also dismissed the applications filed by AirAsia to strike out or stay the three civil suits filed by MA Sepang,” said MAHB.

To recap, the low-cost carrier group was sued by the airport operator for refusing to collect the additional RM23 PSC per passenger at klia2. The legal tussle intensified when AirAsia applied for MAHB’s lawsuit to be struck out.

AirAsia had also tried, but failed to obtain leave to challenge the Malaysian Aviation Commission’s refusal to mediate on the dispute.

Asian stock markets fall, Tokyo hits one-month low

HONG KONG: Asian markets fell today, hit by concerns about the uncertain global economic outlook, the China-US trade war and tepid corporate earnings reports.

With an expected Federal Reserve interest rate cut already priced in, having fuelled a healthy rally, and few other catalysts to drive buying, analysts said investors are also cashing out.

The losses in Asia followed a negative lead from Wall Street, where big-name firms including Caterpillar and United Technology sank on weak corporate reports.

“Stocks’ strong gains are finally succumbing to profit-taking,” Alec Young at FTSE Russell told Bloomberg News.

“Earnings and guidance so far have been mixed and, given the big run-up, it’s no surprise there’s little investor tolerance for even a hint of disappointment.”

Tokyo led losses, sinking 2% as it was hit by a stronger yen and data showing another drop in exports as Japan feels the impact of falling demand and global trade uncertainty. It was Japanese shares’ biggest one-day fall in nearly four months.

The Nikkei share average fell 1.97% to 21,046.24 points, hitting a one-month low and marking its second biggest slide so far this year only after a 3% plunge on March 25.

“The earnings of global manufacturers will be soft for now. Investors are on the sidelines and waiting to buy on dips only if the Nikkei falls below 21,000,” said Takashi Hiroki, chief strategist at Monex Securities.

Hong Kong ended down 0.5% and Shanghai shed 1%, while Sydney and Singapore each gave up 0.4%. Seoul fell 0.3%, with traders unmoved by the Bank of Korea’s first interest rate cut in three years. The won edged up.

Taipei was off 0.3% and Mumbai eased 0.4%. However, Wellington, Jakarta, Bang-kok and Manila eked out small gains.

The weakness spread to Europe, as the main stock markets slid at the start of trading today. London’s FTSE 100 index dropped 0.5%. In the eurozone, Frankfurt’s DAX 30 index shed 1.3% and the Paris CAC 40 lost 0.6%.

US stocks dip on mixed earnings, Netflix plunges

NEW YORK, July 18 — Wall Street stocks fell early today amid lingering uncertainty over trade talks following mixed earnings, including a lacklustre report from Netflix. Streaming video company Netflix was off around 10 percent after reporting…

Volvo Cars defies slowing market to hit record sales

STOCKHOLM, July 18 — Volvo Cars, the Swedish luxury brand owned by China’s Geely, defied a slowing global auto market to set a record for sales in the first half of the year, although US trade war tariffs and falling prices squeezed profits. The…

Supermax buys land, property for future expansion

KUALA LUMPUR: Supermax Corporation Bhd’s wholly owned unit, Maxter Glove Manufacturing Sdn Bhd, has entered into a deal to acquire Leader Cable Industry Bhd’s land for RM65 million.

In a statement, Supermax said the 6.55ha freehold land with industrial premises is located in Meru, Klang.

“The proposed acquisition is for the future expansion of the group’s manufacturing capacity, as it is strategically located near Maxter’s existing cluster of manufacturing plants, which will facilitate management control, operational synergies and efficiency,” it said.

The natural rubber and nitrile gloves manufacturer said it plans to construct three large nitrile glove manufacturing plants on the land at an approximate cost of RM550 million over the next five years, which will increase the company’s production capacity to 42.6 billion pieces per year.

“The new plants will generate revenue growth as a result of increased operational efficiency derived from the new production lines,” it said.

The acquisition will enable the company to expand its manufacturing capacity, grow its business and ultimately accrue long term benefits to the shareholders, and will be funded through internally generated funds and bank borrowings.

Supermax added that the proposed acquisition will not have any effect on the share capital and substantial shareholder’s stake in the company nor will it affect earnings per share and net assets per share.

Revenue partners Hong Leong Bank on NETS payments

PETALING JAYA: Revenue Group Bhd is collaborating with Hong Leong Bank Bhd to offer payment acceptance and services to Singapore’s NETS cardholders to shop in retail outlets under GCH Retail (Malaysia) Sdn Bhd and Guardian Health And Beauty Sdn Bhd.

Revenue managing director and group CEO Eddie Ng Chee Siong said that the NETS payment is currently accepted in eight Giant stores, one Cold Storage store, nine Guardian outlets in Johor and one Guardian outlet in Malacca.

Besides Giant, Cold Storage and Guardian, the two companies also operate Mercato, TMC, Jasons Food Hall, G Express and Shop Smart Retail.

“Moving forward, we will work closely together with our key customers to enable the NETS payment acceptance and enable NETS cardholders to enjoy the convenience of using NETS card to shop in Malaysia,” said Ng.

The NETS payment acceptance partnership will cater to the growing number of tourists from Singapore by offering them a convenient way to pay when they shop in Malaysia. It is estimated that roughly 10.6 million Singaporeans visited Malaysia last year.

“One of the compelling reasons for consumers and merchants to go cashless is convenience, thus it is important to ensure that the convenience enjoyed by NETS cardholders in Singapore is extended seamlessly when they shop in Malaysia,” said Hong Leong’s managing director of personal financial services Charles Sik.

Revenue expects the partnership to help drive its electronic transaction processing segment moving forward as it is set to gain from the electronic transaction processing fee.