Monday, September 30th, 2019
NEW YORK, Sept 30 — Gains in technology stocks led by Apple lifted Wall Street’s main indexes today, as investors looked past last week’s reports that Washington was considering delisting Chinese companies from US stock exchanges. Apple Inc…
MANCHESTER, England, — Finance minister Sajid Javid pledged today to prepare Britain for a no-deal Brexit, saying the “full armoury of economic policy” would be on hand if needed. Speaking at his party’s annual conference in Manchester a…
HONG KONG, Sept 30 — US digital money transfer platform PayPal Holdings Inc has obtained Beijing’s approval to buy a controlling stake in a domestic payments firm, which would make PayPal the first foreign firm to enter China’s payment…
NEW YORK, Sept 30 — WeWork’s parent The We Company said today it will file to withdraw its initial public offering, a week after the SoftBank-backed office-sharing startup removed founder Adam Neumann as its chief executive officer. WeWork’s…
KUALA LUMPUR, Sept 30 — Five Malaysian small and medium enterprises (SMEs) have secured RM219.2 million in potential investments in the aerospace sector during a working mission to the Aeromart-Nagoya 2019 led by Entrepreneur Development Minister…
BRUNSWICK, Sept 30 — Volkswagen today rejected a German judge’s call to settle a customer class action lawsuit over its rigging of diesel emissions tests, saying there was no case to answer. VW admitted using illegal software to cheat US diesel…
KUALA LUMPUR: The slew of financial irregularities revealed in the Armed Forces Fund Board (LTAT) are deemed “mismanagement” rather than criminal intent, said LTAT chairman Gen (R) Tan Sri Dr Mohd Zahidi Zainuddin.
“In our deliberations, it’s a mismanagement, and this mismanagement has come out with numbers that were not properly accounted for. When we commissioned Messrs Ernst & Young to do the audit, these are discrepancies that we found, which are not criminal, but mismanagement that has taken place and we are here to correct that,” he told a press conference after announcing LTAT’s dividend for the financial year ended Dec 31, 2018 (FY18) today.
He said if further investigations reveal any criminal element or misconduct that requires action to be taken, LTAT will refer it to the appropriate authorities.
Last week, LTAT’s independent accounting firm Ernst & Young unearthed several instances of “financial irregularities and weaknesses” for FY17 and FY18.
LTAT chief executive Nik Amlizan Mohamed cited an example of mismanagement in which the income from land sales was used to pay dividends.
“No entity should pay dividends without the funds to do so. In 2016, RM238 million was taken when it should not have because the sale was not completed then. It was a substantial amount,” she explained.
Nik Amlizan said she came on board LTAT on Oct 1, 2018 and, since then, there have been many discoveries followed by measures that it has had to undertake to ensure that LTAT moves forward on the right footing sustainably.
LTAT has embarked on a transformation plan which consists of six main pillars encompassing LTAT’s new vision and mission, strengthening corporate governance, enhancing strategic stake-holder management, enhancing sustainable investment returns, improving infrastructure and building talent management.
“We want to move forward. It’s challenging to get returns for the soldiers. If possible, we don’t want to take too much time to look into the past. The assessment (by Ernst & Young) is to help the new management to restore the organisation,” said Nik Amlizan.
Under the corporate governance pillar, it has established a risk board and set up a legal and secretarial department, human resources department and introduced compliance unit as part of risk management department, as well as reintroduced the enterprise risk management framework.
In terms of investment portfolio, she said, LTAT’s new chief investment officer is reviewing the asset allocation strategy and such implementation can only be ready next year.
“We need to introduce fixed income. We never have an investment in MGS (Malaysian Government Securities). It’s a natural asset allocation in any government pension fund. ESG (environmental, social and governance) is something we strongly believe in.”
Nik Amlizan opined that it is premature to discuss asset disposals at this point as all assets under LTAT are considered investments and it has no intention of selling any of its assets now.
Meanwhile, Nik Amlizan admitted that LTAT’s exposure to Boustead Holdings Bhd is high and is not reflective of best practices from investment policies and structure as it cannot be reliant on one or two investments to make its returns.
However, she said it will not rush into making “irresponsible decisions” as there is still deep value in Boustead.
PETALING JAYA: Foreign funds remained as the net sellers on Bursa Malaysia last week, according to MIDF Research.
“Based on data from Bursa, foreign investors sold RM150.9 million net of local equities last week compared to RM249.3 million in the week before. So far in 2019, there has been 26 weeks of foreign net selling,” the research house said in a report today.
It noted that a sense of calm descended on Monday as foreign investors shrugged off China’s cancellation of a planned visit to farms in the US which was unrelated to the trade matters between the two nations.
“As such, international funds accumulated RM11.5m net of local equities on the same day.”
Foreign funds turned net sellers to a tune of RM62.2 million on Tuesday despite the new waivers granted to domestic state and private companies to buy US soybeans without being subjected to retaliatory tariffs.
The pace of foreign net selling activity was little changed at RM62.9 million on Wednesday as investors weighed the rising possibility of impeachment proceedings being brought against President Trump.
MIDF said positivity returned to the market on Thursday as foreign investors snapped up RM100.1 million net of local equities. This followed the draft rules in China of requiring banks to distribute excess provisions for bad loans to investors to curb accounting malpractice.
“Foreign net selling peaked during the week on Friday at RM137.3 million as Malaysia was retained on the watchlist for exclusion from the FTSE Russell World Government Bond Index.”
With one day trading left, MIDF said September has seen a foreign net outflow of RM486.7 million net, one of the lowest among the four Asean markets monitored.
On a year-to-date basis, international funds have taken out RM7.83 billion worth of local equities from Bursa.
PETALING JAYA: TSR Capital Bhd is claiming RM35 million from Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd (SPYTL) over the termination of the sub-contract work for the Electrified Double Track project from Gemas to Johor Baru.
TSR Bina said in a filing with Bursa Malaysia that its wholly owned subsidiary TSR Bina Sdn Bhd has commenced arbitration proceedings against SPYTL, citing the termination of the sub-contract by SPYTL is unlawful and wrongful.
In response to TSR’s notice of arbitration, SPYTL has also made a counterclaim with a claim sum of about RM22 million.
TSR believes the risks of losses and adverse impact on the company to be minimal and therefore not material.
“There is no material operational impact arising from the arbitration. The company does not expect any losses to arise by reason of the commencement of the said arbitration proceeding other than legal cost and time incurred in the claim.”
TSR also stressed that the arbitration proceedings are not expected to have a material impact on its earnings per share and net assets per share for the financial year ending June 30, 2020.
Early this year, TSR secured a RM307 million contract from SPYTL for sub-contract work, which includes site clearance and embankment earthwork.
The project was supposed to be completed by March 2020.
PETALING JAYA: Kinsteel Bhd has been granted an extension until Dec 31, 2019 by Bursa Malaysia to submit a regularisation plan in order to lift its Practice Note 17 (PN17) status.
According to the group’s Bursa disclosure, it might face a possible delisting from the stock exchange in the event of failure to submit a regularisation plan or obtain approval for the implementation of said plans from the authorities.
Last week, Kinsteel unveiled its revamp plan, including a 70% share capital reduction from RM83 million to RM24.9 million.
The credit from the proposed capital reduction of RM58.1 million will be used to offset its accumulated losses, which stood at RM865 million as at June 30, 2019.
Kinsteel is also seeking to raise up to RM46.6 million via a special issue of new shares with free warrants to selected placees; and a rights issue of new shares with free warrants to existing shareholders.
In addition, the group proposed a disposal of five parcels of industrial land for RM140 million.
Kinsteel also proposed a settlement of RM159.7 million inter-company debt owed by Perfect Channel Sdn Bhd, as well as a proposed scheme of arrangement and compromise with the creditors of Kinsteel involving total liabilities of RM1.68 billion as at June 30, 2017.
The group was first affected by the PN17 status in October 2016, after its auditor expressed a disclaimer of opinion in its audited financial statements for FY16, when its current liabilities exceeded current assets.