Wednesday, August 7th, 2019
LONDON, Aug 7 — Sterling was stuck today around its weakest levels since 2017, having matched a two-year low against the euro, as investors further priced in the probability of Britain leaving the European Union without a deal in place. Boris…
NEW YORK, Aug 7 — Boeing’s chief executive reaffirmed today he expects the 737 MAX will be cleared to return to the skies this year, but reiterated the company could further cut production in case of regulatory delays. Dennis Muilenburg said…
WASHINGTON, Aug 7 — FedEx said today it would stop ground deliveries for Amazon in the latest sign of competition between the two firms. The move comes two months after the package delivery giant announced it was ending express service with Amazon…
NEW YORK, Aug 7 — US stocks plunged today, with the Dow Jones Industrial Average falling more than 450 points, as investors were spooked by the latest signals from the bond market that pointed to heightened risk of a recession. US Treasury yields…
WASHINGTON, Aug 7 — US President Donald Trump said today the US Federal Reserve must cut rates “bigger and faster” for the United States to be competitive against other countries. “Our problem is a Federal Reserve that is too proud to admit…
PARIS, Aug 7 — The social network Twitter said overnight that user’s personal data had been used for advertising purposes, without their consent and despite dedicated settings to counteract such events. A Twitter statement said the fault was…
BENGALURU: Foreign investors dumped Asian equities in the first six days of August after two months of buying, as the United States ramped up pressure on China with a US$300 billion (RM1.26 trillion) trade barrage last week.
Overseas investors sold about US$4.5 billion of regional equities during the period, data from stock exchanges in South Korea, Taiwan, India, Thailand, Philippines, Indonesia, and Vietnam showed.
Sharp outflows from Asian markets point to increased worries that trade tensions between the world’s two top economies could escalate, and regional economies and corporate earnings might deteriorate further.
US President Donald Trump said last Thursday he would slap a 10% tariff on the re-maining US$300 billion of Chinese imports starting Sept 1, marking an end to a truce in the year-long trade war that was struck in June.
In response, China let its currency weaken 1.4% on Monday, sending it past the key 7-per-dollar level for the first time in more than a decade, and then the United States labelled Beijing a currency manipulator.
MSCI Asia-ex-Japan index had fallen 6.4% this month as of Tuesday’s close, after shedding 1.7% in July.
“Recent foreign outflows from Asian equities clearly suggest that investors are getting nervous on markets given escalating trade tensions,” said Chetan Seth, a strategist for Nomura Securities in Singapore.
It might get harder for the US and China to ease or soften these tensions given how events have unfolded over the last few days, he said.
Goldman Sachs said markets were pricing in a less than 15% chance of a trade deal being agreed. It estimated 13% and 8% cumulative earnings downside for MSCI China and MSCI Asia-ex-Japan in 2019-2020 under a “no deal” scenario.
Taiwan and India saw the biggest outflows in Asia, with net selling of US$1.8 billion and US$1.1 billion respectively. South Korea also witnessed out-flows, of US$919 million.
Taiwan and South Korean companies are more exposed to the Sino-US trade tussle as they have extensive ties with tech firms in China and are part of their supply chains.
Indian shares were undermined last month after the federal budget raised import tariffs on many items, increased taxes on the rich and proposed changes in shareholding norms.
A slew of disappointing earnings by Asian firms for the second quarter also increased investor caution on regional markets.
“So far 1H earnings in Asia-ex-Japan markets have been below estimates – although it’s still early days. The question investors need to answer is what happens to 2020 earnings as markets in 2H will start discounting next year’s earnings,” said Seth. “If trade tensions persist, there may be more downside to current con-sensus earnings estimates.”
In July, foreigners invested US$234 million in Asia, much less than US$4.2 billion inflows in June.
PETALING JAYA: The value of Eita Resources Bhd’s work package for the Light Rail Transit 3 (LRT3) has been reduced by 65.4% to RM67.45 million from RM195.07 million previously.
This comes after its wholly owed subsidiary EITA Elevator (Malaysia) Sdn Bhd (EEMSB) received four notices of termination dated Aug 6 and a new letter of appointment dated Aug 6 from MRCB George Kent Sdn Bhd.
EEMSB has been appointed as the works package contractor to undertake the supply, delivery, installation, testing and commissioning of lifts and escalators for LRT3 from Bandar Utama to Johan Setia.
A total number of 130 units of escalator and 66 units of lift will be supplied and installed.
Eita said the contract is expected to contribute positively to the group’s earnings over the duration of the contract.
PETALING JAYA: Acme Holdings Bhd proposes a slew of corporate exercises including a bonus issue of free warrants, private placement and the acquisition of two companies for RM22 million.
The plastic parts manufacturer and property developer told Bursa Malaysia that it is acquiring the entire stake in Medan Tropika Sdn Bhd and Focal Products Sdn Bhd for RM20 million and RM2 million, respectively.
Medan Tropika is the registered owner of two parcels of freehold development land in Penang, with an aggregate market value of RM36.6 million.
On the bonus issue, it entails the issuance of up to 59.68 million free warrants on the basis of one warrant for every four existing shares held.
The exercise price for the warrants is 25 sen. If the warrants are fully exercised, Acme could potentially raise up to RM14.92 million which will be used as working capital.
Meanwhile, the private placement entails the issuance of up to 89.53 million shares, representing up to 30% of the enlarged number of its issued shares.
Based on an indicative price of 24.26 sen per share, the group expects to raise between RM16.74 million and RM21.72, will be used for the acquisition of Medan Tropika.