Tuesday, August 20th, 2019

 

Safe-havens rise as recession concerns boost hopes for easing

NEW YORK, Aug 20 — Traditional safe-havens including the Japanese yen and US Treasuries were sought out on Tuesday even as there were signs that more economic stimulus was on its way, as traders focused on concerns over a global deceleration. The…


US stocks retreat after three positive sessions

NEW YORK, Aug 20 — Wall Street stocks opened lower today, retreating after three straight positive sessions amid lingering unease over the US-China trade war and low US bond yields. About 15 minutes into trading the Dow Jones Industrial Average…


Pound recovers briefly vs euro on Brexit backstop hopes

LONDON, Aug 20 — Sterling briefly rebounded from near three-year lows versus the euro today after German Chancellor Angela Merkel said the European Union would think about practical solutions regarding the post-Brexit Irish border. Though the…


Malaysia welcomes MAFTA review but priority given to RCEP conclusion

CANBERRA, Aug 20 – Malaysia welcomes the review of the Malaysia-Australia Free Trade Agreement (MAFTA) but any effort to do so will only be considered after the negotiations on the Regional Comprehensive Economic Partnership (RCEP) have been…


Proton expected to zoom past Honda in year-to-date market share

PETALING JAYA: Proton is expected to overtake Honda in the year-to-date (YTD) market share, helped by volume-oriented models like the Persona and Iriz, according to AmInvestment Bank.

It said that based on a media report recently, Proton registered a total sales volume of 8,600 units in July, translating into a market share of 16.5% for the month and 15% on a YTD basis.

The total sales for Proton for the first seven months of 2019 (7M19) stood at 52,200 units, recording a growth of 48% year-on-year.

“While we have yet to receive the official MAA (Malaysian Automotive Association) numbers for the other brands and the total TIV (total industry volume) breakdown, it is highly likely that Proton has ousted Honda and claimed its position as the runner-up in YTD market share.

With the sustained momentum and deliveries from volume-oriented models like the Persona and Iriz, we strongly believe that Proton will finish second by the end of 2019, behind the national titan Perodua,“ it said in a report today.

Perodua, meanwhile, posted a total sales volume of 19,100 units in July. It is maintaining its sales target of 235,000 units for 2019.

“We strongly believe that the national marques’ sales volume will continue to be the key driver of the local automotive space.

“With the recent launch of the Saga (latest version), we believe that Proton will be able to maintain its sales volume momentum through the remaining months of the year. We also look forward to the upcoming X70 CKD in November, where DRB-Hicom’s management has guided that there will be a price reduction for the popular SUV,” said AmInvestment Bank.

July 2019 TIV rose 20% mom but dipped 26% yoy to 50,900 units. The year-on-year decrease in July this year was due to a high base from 2018’s tax holidays. Cumulatively, 7M19 TIV was down 3% to 347,200 units from 358,100 units in 7M18.

“YTD TIV was within our forecast of 603,000 units for 2019, accounting for 58% of our full-year estimates,” it added.

AmInvestment Bank has ‘buy’ calls on Bermaz Auto Bhd, DRB-Hicom Bhd, MBM Resources Bhd, Pecca Group Bhd, Sime Darby Bhd and Tan Chong Motor Holdings Bhd while it is underweight on APM Automotive Holdings Bhd.

“We are now upgrading the automobile sector to overweight based on our recent upgrade on Sime Darby to buy. We believe that the stock’s valuation is undemanding at current levels and we are now recommending a buy on weakness of the share price. We now have six buys out of the eight stocks under our automobile sector coverage,” AmInvestment Bank said.


Property prices in Q2 tick up from previous quarter: PropertyGuru index

PETALING JAYA: Despite a drop on a year-on-year basis, the PropertyGuru Market Index saw a 0.8% increase to 86.2 in the second quarter (Q2) of 2019 from 85.4 in Q1 2019.

PropertyGuru Malaysia country manager Sheldon Fernandez said improved purchasing sentiment was due to initiatives such as the Home Ownership Campaign, stamp duty exemptions and Bank Negara Malaysia’s downward revision of its Overnight Policy Rate to 3%.

“These factors also contributed to upward ticks in asking prices for Kuala Lumpur, Penang and Selangor. However, they were not enough to overcome downward pressures in Johor, including a proposed ban on property sales to foreigners for selected projects in Q3 2018,” he said in a statement today.

Malaysia recorded a property overhang of 53,078 units as of Q1 2019 including 32,936 residential units worth RM19.9 billion.

Jones Lang Wootton executive director Prem Kumar said the key economic drivers of the market, such as supply and demand, do not appear to have achieved a clear-cut equilibrium. There are still gaps which are obvious and need to be plugged before a more definitive direction of the market can be achieved.

“Property developers have taken heed, especially in terms of the profile of market demand, and this recognition of the change in market dynamics will ultimately be the main thrust towards effective stabilisation of the real estate residential market,” he added.

The Kuala Lumpur (KL) market index registered a 0.8% quarter-on-quarter increase in asking prices in Q2 2019. However, it has been trending downward from the long-term perspective.

According to PropertyGuru, the wider downturn is attributed to the ongoing mismatch between property supply and demand, with affordable properties in demand but luxury projects being launched and in the pipeline.

In general, home seekers are looking for properties below RM500,000 in Klang Valley.

Meanwhile, sentiment is more positive moving out from the city centre, as Q2 2019 marked Selangor’s third consecutive quarter in which asking prices have risen.

“A year-on-year increase in supply from Q2 2018 to Q2 2019 of 42% was seen this term, reflecting that sellers are more confident in the market as demand picks up from previous terms,” said Fernandez.

Asking prices have been more volatile in Penang, with its index showing a steady decline from Q1 2016 to Q4 2017.

However, the Penang market has remained resilient since Q4 2018, as its index grew 0.2% from 92.8 in Q1 2019 to 93.0 in the second quarter. Oversupply is less of a concern than in metropolitan areas further south, with a 28% increase in supply registered during the term.

“The appetite for affordable-ranged properties continues, with units below RM250,000 continuously in demand. The state government is increasing its efforts to meet these calls,” said Fernandez.

Johor is the only state with an upward growth trajectory since 2015, ending with a 0.5% quarter-on-quarter downturn in Q2 2019.

Its long-term expansion can be attributed to consistent and heavy investment in the Iskandar Malaysia economic corridor, which is reflected in the state’s 118% increase in supply volume in the second quarter.

Residential properties in Kuala Lumpur, Penang, Selangor and Johor accounted for 75% of new applications for housing loans.


KLK’s Q3 profit slides 65% on CPO price drops

PETALING JAYA: Kuala Lumpur Kepong Bhd (KLK) posted a 65.2% decline in net profit to RM48.62 million for the third quarter ended June 30, 2019 against RM139.87 million in the previous corresponding period, due to decline in its plantation and corporate segment.

Its revenue also saw a drop of 14.5% to RM3.7 billion from RM4.33 billion.

According to KLK’s filing with the stock exchange, its plantation profit for the quarter slumped 67.9% to RM39.8 million from RM124 million in the same quarter of the previous year, due to the decline in crude palm oil (CPO) price and palm kernel (PK) price despite improvements in production, processing and trading operations.

For the quarter, average CPO price contracted 14.3% to RM1,973 per metric tonne (mt), while average PK price stood at RM1,085/mt with a 36% decline.

On the other hand, its corporate loss widened to RM123.1 million from RM20 million, arising from a RM145.3 million impairment for an estate in Liberia.

Conversely, KLK’s manufacturing segment profit improved 16.2% to RM99 million during the quarter, attributed to better margins and sales volume in the oleochemical division.

In addition, the group’s property segment reported a 33.4% jump in profit to RM11 million.

KLK’s nine-month net profit went down 8.1% to RM442.49 million from RM481.38 million in the same period a year ago, while revenue slipped 17.3% to RM11.73 billion from RM14.19 billion.

Moving forward, the group estimates the profit from its plantation segment to be lower due to the lower prevailing CPO and PK prices compared to the previous year.

“However, oleochemical division’s profit for this financial year is expected to be satisfactory due to better margins from lower raw material prices,” it said.

Overall, it anticipates a reduced profit for the financial year 2019.


Heineken takes portfolio approach to drive earnings

PETALING JAYA: Heineken Malaysia Bhd, which posted a 14.32% jump in its earnings for six months ended June 30, 2019 (1H19), will bank on its strong portfolio of brands to drive earnings momentum for the second half of the year (2H19).

“We have a portfolio of brands so we take a portfolio approach. I wouldn’t say I’m skewed to any of these (mainstream or premium) segments, it’s looking at the portfolio and putting our money behind those big bet brands that we have and (bringing) innovation into the market,” managing director Roland Bala told reporters after announcing its 1H19 financial results at a media and analyst briefing today.

Earlier, finance director Szilard Voros had revealed that most of its revenue growth were driven by its mainstream segment.

On its 2H19 outlook, Roland said given the intense competition and the continued threat from contraband beer, the group is cautiously optimistic in what remains a challenging external environment and it expects consumer sentiment to stay below the optimism threshold impacted by rising cost of living.

He said the group will continue to prioritise on strengthening its commercial execution across its route-to-market whilst sharpening the channel focus and accelerating growth of its innovation products.

“We continue to put in efforts to drive (the performance of the group). We’re also shareholders of the company,” he added.

Roland also stressed that it has no plans to increase the price of its products at the moment, following a selective price increase on some brands in April.

He said Malaysia has the third highest excise on beer in the world and any further increase will attract more illicit trade. Hence, the group does not expect excise to increase further.

Heineken’s net profit for the second quarter ended June 30, 2019 grew 19.67% to RM65.7 million compared to RM54.9 million in the same quarter last year, on the back of revenue growth that was up 21.59% to RM512.58 million as compared to RM421.57 million in the same quarter in 2018 mainly attributed to higher sales volume driven by all core brands. Excluding the sales and service tax impact, revenue grew by 15%.

For the half year period, its net profit grew 14.32% to RM118.5 million from RM103.66 million a year ago, while revenue increased 21.32% to RM1.04 billion from RM855.38 million.

The board has declared a single tier interim dividend of 42 sen per stock unit for FY19 to be paid on Oct 25, 2019. The entitlement date for the dividend payment is Sept 26, 2019.


IBVM, Masryef to build blockchain community in banking sector

KUALA LUMPUR: Infinity Blockchain Ventures Malaysia Sdn Bhd (IBVM), which provides advisory services on adopting blockchain technology, has formed a strategic partnership with Islamic finance advisory firm, Masryef Management House (MMH), to build a blockchain community in the banking and finance sector.

Both parties would cooperate in spreading awareness as well as doing training, research and events on blockchain and distributed ledger technology (DLT), said IBVM regional head and managing director (Malaysia) Cris D. Tran.

“There will also be a joint effort in providing consulting services to financial institutions in Southeast Asia and the Middle East region,“ he told reporters after the strategic partnership agreement signing ceremony today.

According to him, blockchain has the potential to change how industries work and allows businesses to be more transparent with their clients.

“Through the partnership with MMH, we are looking at expanding it to the Islamic finance sector which prides itself on transparency and trustworthiness.

“Sharing the same core beliefs, both the blockchain and Islamic finance sectors can potentially have great synergy which can bring a major change to the industry in the future,“ Tran added.

MMH principal Khairil Anuar Mohd Noor said blockchain and DLT would be able to assist in enhancing the operations in banking, particularly in areas of data security and operational risks mitigation. – Bernama


Berjaya Food reports RM2.29m pre-tax profit for May-June period

PETALING JAYA: Berjaya Food Bhd (BFood) reported a pre-tax profit of RM2.29 million for the two-month period ended June 30, 2019, which was affected by the Muslim fasting month.

The pre-tax profit in the current period under review also included fixed assets written off and expenses incurred arising from closure of non-performing stores.

Meanwhile, the group’s revenue came in at RM110.76 million for the period under review.

For the 14-month period, BFood’s revenue and pre-tax profit were RM789.19 million and RM47.88 million, respectively.

BFood told Bursa Malaysia that it expects Berjaya Starbucks Coffee Company Sdn Bhd to maintain its revenue growth momentum.

“The group will expand both its income streams from its new franchise business and its existing business to remain competitive,” it said.

Following the measures it has put in place, the group anticipates its results will remain satisfactory for the financial year ending June 30, 2020.

Meanwhile, BFood’s board does not recommend any dividend for the two-month period. Previously, it declared and paid a 4 sen dividend per share for the financial period ended June 30, 2019.