Wednesday, August 14th, 2019


Argentina announces economic relief plan, peso keeps dropping

BUENOS AIRES, Aug 14 — Argentine President Mauricio Macri today unveiled a package of welfare subsidies and lower taxes for workers to lessen the impact of an economic crisis just months before a re-election bid, but his announcement did not…

US stocks tumble on recession fears

NEW YORK, Aug 14 — Wall Street stocks were back in sell-off mode early today as weak economic data from China and Germany and a key US Treasury benchmark exacerbated global recession fears. About 20 minutes into trading, the Dow Jones Industrial…

Macy’s sinks as poor spring season hits profit

NEW YORK, Aug 14 — Macy’s Inc slashed its full-year earnings forecast today after missing estimates for quarterly profit for the first time in at least two years, as it discounted merchandise heavily to clear spring inventory, sending its shares…

FTSE 100 braces for worst month in four years on recession fears

LONDON, Aug 14 — London’s FTSE 100 tumbled to its lowest in more than two months today after the yield curve on US and UK government bonds inverted for the first time since the global financial crisis, fuelling fears of a possible recession…

Tencent Q2 earnings beat estimates on gaming growth

SHANGHAI, Aug 14 — Chinese internet giant Tencent said today its net profit jumped 35 per cent in the second quarter, as the company continued to wriggle out of Beijing’s crackdown on online gaming and build mobile game growth. Shenzhen-based…

Malaysia’s July CPI rises 1.4% year-on-year

PETALING JAYA: Malaysia’s Consumer Price Index (CPI) rose 1.4% in July 2019 to 121.5 from 119.8 in the same month of the preceding year.

The increase in the overall index was driven by the index of furnishings, household equipment & routine household maintenance (3.3%), food & non-alcoholic beverages (2.4%), recreation services & culture (2.4%), alcoholic beverages & tobacco (2.3%) and communication (2.1%).

“Out of 552 items covered in CPI, 394 items showed an increase in July 2019 as against July 2018. On the contrary, 120 items declined while 38 items were unchanged,” chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said in a statement today.

On a monthly basis, the CPI rose 0.1% as compared to June 2019, mainly supported by the index of food & non-alcoholic beverages (0.3%), furnishings, household equipment & routine household maintenance (0.2%) and transport (0.2%).

Meanwhile, the CPI for the period of January to July 2019 increased 0.3% compared with the same period last year.

Four states/territories – Kuala Lumpur (2.2%), Penang (2.1%), Selangor & Putrajaya (1.7%) and Johor (1.5%) – surpassed the national CPI rate of 1.4% in July 2019 compared with July 2018. The indices for Negri Sembilan and Perak showed the same rate of increase as the national CPI.

All states registered increases in the index of food & non-alcoholic beverages. The highest increases were recorded by Kuala Lumpur (4.4%), Penang (3.0%), Johor (2.7%) and Selangor & Putrajaya (2.6%) and the increase surpassed the national index of food & non-alcoholic beverages in July 2019.

UOB Research expects inflation to inch up gradually towards year-end as the favourable low base effects should fully fade by September.

The research house said the government will soon announce its targeted fuel subsidy scheme that may see the price cap on RON95 petrol and diesel lifted once the scheme comes into effect. “Based on current Brent oil prices of around US$58-60 per barrel, we estimate a petrol subsidy of around 20 sen/litre by the government.”

Meanwhile, it opined that the departure levy on all air travellers leaving Malaysia, which is expected to take effect in September, is unlikely to have a significant impact on transport price inflation or overall headline inflation as air transport services carry a small weightage of 0.4% in the CPI basket.

UOB Research is maintaining its 2019 full-year inflation forecast at 0.8%.

On the monetary policy front, it said Bank Negara Malaysia is less likely to pursue another rate cut in the upcoming Monetary Policy Committe meeting on Sep 12 despite the synchronised rate reductions by four central banks last week.

Singapore cuts growth outlook as trade war bites

SINGAPORE, Aug 14 — Singapore further cut its annual growth forecast yesterday as the escalating US-China trade war hammers exports, in another ominous sign for Asia’s trade-reliant economies. The government said it expected growth of 0.0-1.0…

Maybulk’s net loss narrows in Q2

PETALING JAYA: Malaysian Bulk Carriers Bhd’s (Maybulk) net loss for the second quarter ended June 30, 2019 narrowed to RM6.94 million from RM151.27 million a year ago, mainly due to the non-recurrence of loss from associate and impairment loss on associate.

Its revenue rose 19.6% to RM68.75 million compared with RM57.49 million previously.

For the six-month period, the group’s net loss also narrowed significantly to RM17.7 million from RM165.62 million, while revenue jumped 18.9% to RM132.83 million compared with RM111.75 million in the previous year.

On prospects, the group said having weathered a weak Q1 in 2019, the Baltic Dry Index regained some momentum and the freight market witnessed improvements across all segments in Q2.

The increase in seasonal soy bean shipments from Brazil to China which started since March 2019 and the resumption of Vale’s iron ore shipments in June 2019 have helped drive freight rates higher particularly for Capesize and Panamax vessels.

Maybulk said the world’s operating fleet is expected to reduce in the second half of 2019 (2H 2019) as more vessels are taken off for scrubber retrofitting in preparation for new emission regulations which will come into force from Jan 1, 2020.

It added that tonne miles from soya bean and iron ore shipments together with the reduced world operating fleet should help improve freight rates in 2H 2019.

Bursa revamps derivatives market rules, directives

PETALING JAYA: Bursa Malaysia Bhd has revamped rules and directives of Bursa Malaysia Derivatives Bhd (BMD) and Bursa Malaysia Derivatives Clearing Bhd (BMDC) to enhance business efficiency and flexibility of doing business in Malaysia’s derivatives market.

The revamped rules which will come into effect on August will allow trading and clearing participants to reduce their cost of doing business and provide better services to their clients whilst strengthening their governance framework and providing better investor protection.

Under the revamped rules for the derivatives market, Bursa has reduced regulatory burden and liberalised regulatory framework that accords greater flexibilities towards the participants’ dealings to manage and operate their business whilst ensuring adequate investor safeguards in place.

An example would be the liberalisation of client onboarding requirements by introducing various non face-to-face methods for participants to verify individual clients’ identity for account opening.

“This would allow participants the flexibility to adopt various methods of opening accounts for purposes of the clients’ convenience and for greater business efficiency,” said Bursa in a press statement today.

In addition, it has removed the requirement for trading participants to maintain a voice logger for client orders which will ease their operational and administrative burden.

The regulator has also removed the prohibition against a dual licensee from becoming a proprietary day trader, thus allowing greater flexibility for dual licensee holders dealing in both securities and derivatives to manage and operate their business based on their business model, activities and risks.

On the other hand, Bursa has also strengthened its governance framework to provide better investor protection.

To this end, it has introduced new requirements for the participants’ risk management and internal audit functions, including a requirement to have the relevant committees overseeing these functions.

It will also require the registration of a head of dealing for greater accountability in a trading participant’s front office.

The revamped rules and directives for the BMD and BMDC were issued on June 28, 2019.

GDP seen picking up in Q2, bucking regional trend

KUALA LUMPUR: Malaysia’s economic growth pace rose in the second quarter, helped by slightly stronger exports and manufacturing, a Reuters poll showed.

The median forecast from the poll of 13 economists was for annual growth of 4.8% in April-June, faster than the first quarter’s 4.5% pace.

Individual forecasts ranged from 4.3% to 5%.

If the pace tops 4.5%, Malaysia will be the first Southeast Asian country to report an acceleration in growth in the second quarter.

“Malaysia is a notable exception to the export-led GDP slowdown that most of the Asian and global economies have been suffering currently amid intensified global trade war and a technology downturn,“ said ING economist Prakash Sakpal.

ING’s forecast for the quarter is 4.8% growth.

In April and again in May, Malaysia’s industrial production rose 4% from a year earlier, the strongest since October, supported by gains in electricity generation and mining.

While Malaysia as a large exporter of intermediary goods to China remains vulnerable due to the Sino-US trade war, its exports for the second quarter were marginally higher than a year earlier, supported by demand for palm oil, oil and gas and manufactured goods.

Malaysia is Southeast Asia’s third-largest economy, and its major exports include palm oil and liquefied natural gas.

Julia Goh, Malaysia-based economist with UOB Bank, said in a note on Tuesday she expects private consumption remained “resilient” in the quarter, aided by demand for Islamic holidays, private sector bonus payouts and financial assistance to civil servants.

UOB predicts 5% second quarter data. But Goh said she doubts a growth rebound is sustainable given “intensifying global downside risks tied to trade tensions between major countries, slower Chinese economy, the possibility of a no-deal Brexit and a potential credit default in Argentina.”

To try to spur growth, Malaysia’s central bank in May made its first rate cut since 2016, to by 25 basis points to 3%. – Reuters