Wednesday, October 9th, 2019


Philippines AirAsia delays IPO to focus on reorganisation

MANILA: The Philippine unit of AirAsia Bhd is postponing its initial public offering (IPO) to next year or 2021 as it focuses on corporate reorganisation and seeking funds from existing shareholders, its chairman said today.

The low-cost airline has been looking to go public and raise around US$200 million (RM839 million) since 2015, but has shelved its plan several times because of weak markets and volatile oil prices.

“According to our estimated timeline, we are looking at the third quarter next year to first quarter of 2021,“ Philippines AirAsia chairman Joseph Omar Castillo told reporters.

Another major consideration would be a good performance of the stock market, Castillo added.

The company is being restructured after Filipino lawmaker Michael Romero bought out some investors in June to become the airline’s single largest stockholder. The budget carrier plans to raise cash through common and preferred shares.

Philippines AirAsia was looking at a US$600 million valuation and had planned to raise US$200 million this year to buy aircraft acquisition and expand its routes.

It aims to grow revenues by 39% to a record 29 billion pesos (RM2.3 billion) by carrying 10 million passengers this year, said Philippines AirAsia vice-chairman Shiela Romero.

The airline, which started its Philippine operations in 2012, has a fleet of 23 Airbus aircraft catering to Philippine and foreign routes. – Reuters

Palm oil seen leading plantation sector rebound

PETALING JAYA: The plantation sector is expected to make a comeback after two years of a downcycle, as crude palm oil (CPO) prices rebound gradually in anticipation of falling global palm oil inventories, according to PublicInvest Research (PIVB Research).

The research house is upgrading its sector call to “overweight” from “neutral” in anti-cipation of an upward trending CPO prices.

“We raise our average CPO price assumption from RM2,200/mt to RM2,400/mt in 2020, which is a 15% increase from prevailing market prices. We expect CPO prices to start rising towards end-2019 after the peak production season is over,” it said in its note today.

PIVB Research noted that a decline in global palm oil inventories is expected in 2020 on the back of slower palm oil production growth, higher biodiesel consumption and stronger demand from China and India.

“We project Malaysia’s palm oil inventories to fall to two million metric tonnes by mid-2020. Meanwhile, inventories in Indonesia are likely expected to inch down to about three million metric tonnes,” it said.

Palm oil production is expected to be weak due to a number of factors.

“We suspect smallholder plantation, which makes up 17% of Malaysia’s and 40% of Indonesia’s planted area, have cut down the fertiliser application over the last one year due to lacklustre CPO prices. The impact could pose a threat to the national production as it could cause a significant reduction in bunch weight and fruit abortion over the near-term.

“Ripening of fruit bunches should also slow down, making a longer period needed for harvesting. In addition, the prolonged dry weather period during May-Sept could affect the nutrient uptake and cause moisture stress in palms. Depending on the severity, the lagged effect on the production will be seen two years later,” PIVB said.

However, a higher demand from China and India is also expected, due to the favourable import duty policy in India while China has been hard-hit by African swine flu, resulting in weaker demand for soy meal, which is the main feed for their farming industry.

“Consequently, it makes it less appealing to buy soybean for crushing purpose and palm oil would be the most suitable replacement for soybean oil,” the note said.

Meanwhile, Indonesia’s push to increase its domestic consumption of palm oil with a higher biodiesel mandate can generate additional 2.5 million palm oil demand.

“The imposition of anti subsidy duties on Indonesian biodiesel exports by the EU allows Malaysia to take away some market share from its counterpart. Malaysian biodiesel exports registered an impressive 33% year-on-year growth.

“Domestic consumption under the B10 mandate will be extended to heavy vehicles next year, bringing the total biodiesel demand to 1.6 million mt from 1.3 million mt,” it said.

PIVB’s top picks for the sector are Kuala Lumpur Kepong Bhd, Genting Plantations Bhd, TSH Resources Bhd and Ta Ann Holdings Bhd.

Handal Energy makes maiden foray into renewable energy segment

PETALING JAYA: Handal Energy Bhd’s wholly owned subsidiary Handal Energy Solutions Sdn Bhd has signed a memorandum of agreement to develop a hydrogen powered electric racecar in Malaysia.

Handal will be the system integrator and responsible for the chassis engineering and machining works for the project’s prototype car called Hydrogen-Paired Electric Racecar (HyPER) which is the brainchild of NanoMalaysia’s CEO Rezal Khairi Ahmad.

In a statement, Handal’s chairman YAM Tengku Baderul Zaman Ibni Sultan Mahmud said the venture into the renewable energy segment was part of the group’s strategic goals to build a sustainable business.

“The electric vehicle market is valued at over US$560,000 million by 2025. Handal intends to play a part in this industry as technologies and infrastructure advances. The technologies developed for HyPER will be able to solve certain issues relating to the electric vehicle industry. With that said, we have completed our R&D processes and is currently in plans to build the first prototype,” he said.

HyPER will be powered by NanoMalaysia’s Hydrogen and Hybrid Energy Storage System (H2SS) which pairs on-board hydrogen generation technology with graphene-based ultracapacitor and is being co-developed with Pulsar and MNA Energy.

Similar to the New National Car Project (NNCP), HyPER’s key value is human capital development using the latest technologies related not only to the automotive sector but also to renewable energy, the statement said.

China’s Hikvision sees only limited impact from US blacklisting

SHANGHAI, Oct 9 — Chinese video surveillance company Hikvision will only suffer a limited, short-term hit after being blacklisted by the US government and will strive to get the ban lifted, its general manager said today. Hikvision was one of…

Singapore surpasses US to become most competitive economy

HANOI, Oct 9 — Singapore has surpassed the United States (US) to become the most competitive economy in the World Economic Forum (WEF)’s latest Global Competitiveness Report, released today, Vietnam News Agency (VNA) reported. The global league…

OECD suggests ‘unified approach’ to break deadlock on digital tax

PARIS, Oct 9 — The OECD published today its suggestions for a “unified approach” on fairly taxing digital giants to break a deadlock in a dispute that has raised tensions between the United States and some EU allies. The issue of how to tax…

Exxon names BAML to run Malaysia asset sales -sources

LONDON: Exxon Mobil has appointed Bank of America Merrill Lynch to run the sale of its Malaysian oil and gas assets as the US firm accelerates a vast disposal programme, banking and industry sources said.

The Malaysian assets, which include stakes in two large fields, are expected to fetch over $2 billion, the sources said.

Exxon did not respond to a request for comment. Bank of America declined to comment.

Irving, Texas-based Exxon has ramped up sales of assets around the world in recent months with the goal of raising $15 billion from disposals by 2021. Those include production in Norway, Australia, Nigeria, Azerbaijan and Britain.

Exxon operates in Malaysia 35 oil and gas platforms in 12 offshore fields and has working interests in another 10 platforms in five fields in the South China Sea, according to its website.

The operations produce 15% of Malaysia’s oil output of 600,000 barrels per day and half of its natural gas output of over 2 billion cubic feet per day.

The fields are operated under a 50% and 78% stake in two large production sharing contracts (PSC), consultancy WoodMackenzie said in a note.

“The Malaysian assets are both operated and generally highly mature, with a significant amount of ageing infrastructure. A buyer will need to have strong operating credentials, and be recognised by (Malaysian national oil company) Petronas to be a suitably qualified and reputable operator,“ one banker said. -Reuters

BT seeks to repair customer ties with new services and products

LONDON, Oct 9 — The boss of Britain’s biggest telecoms provider BT today set out plans to improve the company’s relationship with customers with new superfast services, more technical support and a return of its brand to the high street. In…

Bursa malaysia ends weaker, near four-year low

KUALA LUMPUR: Bursa Malaysia ended the day weaker, having sank to a new four-year low in the afternoon, as the US-China trade dispute worsened and created a ripple effect across markets around the globe, said a dealer.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) trimmed 7.56 points to 1,551.23 compared with Tuesday’s close of 1,558.79.

The index, which opened 4.06 points weaker at 1,554.73, moved between 1,548.62 and 1,555.42 throughout the day.

The FBM KLCI hit a four-year low of 1,551.96 at noon today — a lower level recorded previously was on Aug 24, 2015, at 1,532.00 — and fell further at mid-afternoon to 1,548.62.

Market breadth was negative as losers trumped gainers 509 to 293, with 701 counters unchanged, 508 untraded and 29 others suspended.

Turnover narrowed to 1.95 billion shares worth RM1.68 billion from 2.44 billion shares worth RM1.72 billion yesterday.

Malacca Securities Sdn Bhd analyst Kenneth Leong told Bernama the new four-year low was ignited by the US-China trade dispute which had no signs of halting anytime soon.

“There was also no fresh catalyst on the local front and this, coupled with the depreciating ringgit against the US dollar, made the local bourse unattractive,” he said.

“Meanwhile, the FBM Small Cap Index looks to continue its near-term ascent amid increased rotational play activities, but with market uncertainties picking up, we think that further gains may be tempered by bouts of profit-taking activities.

“Hence, we see increased volatility among the lower liners over the near term that could also spread to the broader market,” he said.

Among the heavyweights, Maybank declined seven sen to RM8.38 and Tenaga and Nestle trimmed 10 sen each to RM13.60 and RM144.10, respectively.

Meanwhile, Public Bank was 18 sen lower at RM19.12 while PChem improved three sen to RM7.20.

As for the actives, Bumi Armada and KNM Group improved 1.5 sen each to 36.5 sen and 38.5 sen, respectively.

Meanwhile, Ekovest and Sapura Energy were flat at 79.5 sen and 26 sen, respectively.

The FBM Emas Index declined 63.3 points to 11,010.95, the FBMT 100 Index decreased 64.42 points to 10,832.23 and the FBM Emas Shariah Index was 52.34 points weaker at 11,619.2.

The FBM 70 fell 129.85 points to 13,764.69 and the FBM ACE trimmed 25.95 points to 4,588.98.

Sector-wise, the Financial Services Index fell 98.98 points to 14,933.65, the Plantation Index shed 30.42 points to 6,539.16 and the Industrial Products & Services Index was 0.14 of-a-point easier at 149.97.

Main Market volume decreased to 1.24 billion units worth RM1.53 billion from Tuesday’s 1.58 billion units worth RM1.55 billion.

Warrants turnover narrowed to 383.78 million units worth RM74.47 million from 417.7 million units worth RM74.27 million previously.

Volume on the ACE Market sank to 317.54 million shares worth RM73.43 million from 437.09 million shares worth RM87.54 million on Tuesday.

Consumer products and services accounted for 149.5 million shares traded on the Main Market, industrial products and services (168.49 million), construction (189.28 million), technology (113.5 million), SPAC (nil), financial services (32.49 million), property (105.07 million), plantations (34.4 million), REITs (12.03 million), closed/fund (34,800), energy (305.4 million), healthcare (22.16 million), telecommunications and media (70.24 million), transportation and logistics (33.88 million), and utilities (13.13 million). — Bernama

Britain preparing to ‘take back control’ at WTO, says minister

GENEVA, Oct 9 — Britain is looking forward to “taking back control” of its trade policy after it exits the European Union later this month, a government minister told the World Trade Organisation today. Speaking at a WTO conference,…