Wednesday, October 16th, 2019


US stocks dip following weak retail sales data

NEW YORK, Oct 16 — Wall Street stocks retreated early today following a disappointing US retail sales report and amid uncertainty on whether Brexit talks will yield a successful agreement. American consumers tightened their purse strings…

UAE to launch new low-cost airline

SHARJAH, Oct 16 — Abu Dhabi’s giant Etihad Airways and Sharjah’s low-cost carrier Air Arabia announced today an agreement to launch a new low-cost airline based in the United Arab Emirates capital. Etihad Airways posted a loss in 2018 for the…

US consumers hit the brakes in September

WASHINGTON, Oct 16 — American consumers tightened their purse strings unexpectedly last month, breaking a seven-month winning streak, government data showed today. Shoppers took home fewer autos and spent less on gasoline, groceries and building…

Chubb: 84% of SMEs in survey were victims of cyber incidents in past year

PETALING JAYA: Some 84% of Malaysian small and medium enterprises (SMEs) which responded to a survey by Chubb were victims of “cyber incidents” in the past year.

The survey also found that there was a significant perception gap between the threat of cyber risks and how prepared SMEs are to deal with them.

According to the property and casualty insurance company’s SME Cyber Preparedness Report 2019, 67% of the respondents believed that large corporations are more at risk than SMEs.

The survey drew a total of 300 Malaysian respondents.

Chubb Asia Pacific cyber underwriting manager Andrew Taylor highlighted that it is a worrying misconception, particularly with the recent implementation of the National Cyber Crisis Management Plan by Malaysia’s National Cyber Security Agency to combat cyber threats.

“Complacency leaves the door wide open for malicious attacks, future breaches and inadequate incident response. In fact, smaller companies face a larger degree of exposure to cyber risk owing to their size and resources, as well as the lack of capital to invest in cyber risk management tools,” he said in a press statement.

With 48% of cyber incidents attributed to human and administrative error, 37% of SME leaders in Malaysia say their employees’ poor understanding of potential cyber threats is challenging their ability to protect their business.

Critically, 20% of SMEs believe employees are the weakest link in their cyber defence.

“While leaders recognise the importance of cyber training, 41% believe that employees are neglecting their responsibilities around data protection,” the report cited.

In the event of a major cyber incident, businesses indicated that customers (60%) followed by company profits and reputation (58%) would be most affected.

Among the Malaysian respondents, customer records are the most commonly breached data – with 40% of businesses facing a breach of customer files in the past 12 months, followed by R&D data, IP data and financial performance data, all at 31%.

The survey found that 61% of Malaysia’s SMEs have a data breach response plan.

However, there is a clear difference in cyber preparedness among SMEs of different sizes. The report said 77% of SMEs with 100-249 employees have a data breach contingency plan compared with 53% in smaller SMEs with fewer than 50 employees.

Malaysian SMEs, though, were faster to respond to cyber incidents than other markets surveyed, with 67% resuming operations within 12 hours of a cyber incident.

Meanwhile, 70% of the SMEs in the survey believe the insurance industry has an important role to play in helping businesses protect themselves against cyber risk.

However, 60% also believe the industry is not moving fast enough to keep up with the rapidly evolving nature of cyber risk.

“In Malaysia it is concerning to see a high number of small businesses falling victim to cyber incidents coupled with a general lack of understanding and preparedness around the risks,” said Chubb Malaysia country president Steve Crouch.

“Worryingly, it appears many Malaysian SMEs falsely believe that their general insurance policies cover cyber risk, when in fact it most likely does not. Given the large proportion of the economy that SMEs make up in the country, I believe this is a critical issue to address.”

Local digital economy’s growth slows in 2018

PETALING JAYA: Malaysia’s digital economy expanded to RM267.7 billion in 2018, contributing 18.5% to the country’s gross domestic product, according to the Department of Statistics.

However, the growth pace moderated to 6.9% year-on-year compared with the 9.8% recorded in the previous year.

Information and communications technology (ICT) contributed 18.5% to the country’s gross domestic product (GDP) comprising gross value-added of ICT industry (GVAICT) (12.6%) and e-commerce for non-ICT industries (5.9%).

“The growth was driven by the increased of GVAICT to RM182.4 billion registering a growth of 6.1%. ICT services dominated the GVAICT with a share of 43.2% followed by ICT manufacturing 34.1%,” said Chief Statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin in a statement.

He pointed out that the telecommunications services were the main impetus in ICT services, while ICT manufacturing was supported by electronic components & boards, communication equipment and consumer electronics.

Based on annual economic statistics 2018, ICT services recorded gross output value of RM144.8 billion with the annual growth rate value of 7.8% per annum.

The figure was in line with the rapid growth in gross output, as the value of intermediate input also increased RM8.4 billion thus resulting in a value added of RM74.3 billion.

The telecommunications services’ gross output saw the highest annual growth rate of 9.9%.

Mohd Uzir highlighted that income through e-commerce transactions recorded a value of RM447.8 billion in 2017 against RM398.2 billion in 2015 with an annual growth rate of 6%.

Expenditure on e-commerce transactions recorded a value of RM228.8 billion in 2017 compared with RM195.1 billion in 2015 with an annual growth rate of 8.3%.

The main contributor to e-commerce income and expenditure was the manufacturing sector at RM287.5 billion and RM179.5 billion respectively.

The usage of computers and internet by establishments in 2017 showed that 78.9% used computers and 76.3% the internet.

Selangor recorded the highest percentage usage of computer and internet with 94.9% and 92.1%, respectively.

The percentage of individuals using computer was 70.5% and the percentage of individuals using the internet was 81.2%.

Putrajaya recorded the highest percentage of computer & internet usage by individuals and computer & internet access by household with 97.8% and 99.6%, respectively in 2018.

Serba Dinamik bags jobs worth over RM680m

PETALING JAYA: Serba Dinamik Holdings Bhd has secured five contracts worth over RM680 million from the Middle East and Malaysia, via two of its subsidiaries Serba Dinamik International Ltd (SDIL) and Serba Dinamik Sdn Bhd (SDSB).

In a statement, the group said two of the contracts were from Turkmenistan and Oman for engineering, construction and commissioning services with a combined estimated contract value of RM682.81 million.

Group managing director Datuk Mohd Abdul Karim Abdullah said the contracts from the Middle East would help Serba Dinamik strengthen its foothold in the region.

“The duration of its contracts will last until 2022 with a total value of RM682.81 billion. Having said that, we foresee this will contribute positively to our financial year ending Dec 31, 2019 and the upcoming two years,” he said.

The other three contracts were for operations & maintenance services and were awarded by SEA Hibiscus Sdn Bhd, Petronas and Asean Bintulu Fertilizer Sdn Bhd, with no specific contract value.

The contracts are on a “call-out” basis whereby the work orders will be awarded at the discretion of the clients based on its activities schedules and rates throughout the duration of the contracts, the group explained in its statement.

FSBM required to submit regularisation plan within 12 months

PETALING JAYA: FSBM Holdings Bhd, an information technology service and systems provider, has now been classified as an affected listed issuer due to not having a significant business or operations.

FSBM is required to regularise its condition within 12 months, submit a regularisation plan to the Securities Commission Malaysia (SC) if the regularisation plan will result in a significant change in the business direction or policy; or submit a regularisation plan to Bursa if the plan will not result in a significant change in the business direction or policy.

“The company is looking into formulating a regularisation plan to address its affected listed issuer status and will make the necessary announcement on the regularisation plan in due course,” it said.

According to the filing, Bursa may suspend trading of FSBM shares and delist the company in the event the company fails to submit a regularisation plan to the authorities; fails to obtain the approval from any of the regulatory authorities; fails to implement its regularisation plan within the time frame or extended time frame stipulated.

On Oct 10, FSBM said its auditors Ernst & Young had resigned with effect from Sept 13. The resignation was voluntary as the company wished to appoint other auditors.

FSBM has also yet to submit its annual report for its financial year ended June 30, as outstanding issues relating to the recoverability of certain trade and other receivables have not been resolved to-date.

“Management is actively undertaking measures to resolve the above outstanding issues to expedite the issuance of the Annual Report 2018 by Oct 30, 2019 pursuant to Bursa’s decision via its letter dated Aug 9, 2019 to defer the delisting of the securities of FSBM provided FSBM issues its Annual Report 2018 on or before Oct 30, 2019,” the company said in a separate filing on Sept 27.

Sumatec may lose RM761m from aborted Kazakh deal

PETALING JAYA: Sumatec Resources Bhd is expected to see an estimated loss of RM761.69 million arising from the suspension and termination of the joint investment agreement with CaspiOilGas LLP (COG) and Markmore Energy (Labuan) Ltd.

Sumatec said the abolition will directly cause the expiration of substantial investment and forfeiture of its deposit on the Rakushechnoye oil and gas field, including the value of working interest (RM272.326 million), exploration and development cost (RM201.263 million) and performance deposit (RM127.1 million).

Meanwhile, the total loss which includes remedied estimates arising from COG’s complaints are estimated to be RM161million.

“We remain in contact with COG and Markmore Energy to seek their indulgence to give us more time and we believe our appeal to lift the suspension and termination notices can be given a positive results if we manage to resolve our current issues mainly caused by the legacy shipping debts, which should not have existed anymore since the last regularisation exercise of May 2013,” Sumatec said in a Bursa filing.

In the meantime, the group said it has come up with a plan of action.

Firstly, it will undertake a fund raising exercise involving a rights issue to raise up to RM100 million. In addition, a settlement agreement had been reached with Sumatec’s creditors involving a settlement amount of 15 sen in respect of every RM1 owed to the creditors.

“[There is a] proposal by the company to participate in the Condensate Extraction Plant belonging to Markmore Energy. This is the positive part of the relationship and we are striving hard to remove the legal problem,” the group said.

To recap, on Oct 7, Sumatec Oil And Gas LLP (SOG), Sumatec’s wholly owned subsidiary, received a notice from COG terminating its joint investment agreement and novation agreement effective Oct 17.

In the termination notice, COG highlighted the constraints faced under Sumatec’s current financial and legal predicaments which impacted SOG’s ability to comply with its obligations to carry out appropriate investment/work programmes and to provide necessary funding for the petroleum operation under the joint investment agreement.

On March 8, 2012, Sumatec entered into the joint investment agreement with Markmore Energy and CaspiOil for the development and extraction of hydrocarbon in the Rakushechnoye oil and gas field.

SOG was meant to carry out all operations related to the production of petroleum production, for and on behalf of CaspiOil, to study, appraise, develop, and produce the relevant petroleum reservoirs of the oil field.

Putrajaya likely to narrowly miss deficit targets, predicts Moody’s

KUALA LUMPUR, Oct 16 — The government is likely to narrowly miss its deficit targets for this year and next year, amid dampening effects of slower nominal revenue growth combined with the difficulty in limiting spending when demand is weak,…

Sunway establishes residence trust in Singapore

PETALING JAYA: Sunway Bhd is setting up a private trust in Singapore known as Sunway Residence Trust with an initial asset under management of about £38 million (RM203 million).

Sunway told Bursa Malaysia that its subsidiary Sunway RE Capital Advisors (SG) Pte Ltd had executed a trust deed with RBC Investor Services Trust Singapore Ltd for the move.

The trust will acquire purpose-built student accommodation in the UK via a special purpose vehicle to be set up in Guernsey.

Upon acquisition, Sunway RE will establish a fund manager in the UK to provide fund management services and appoint an operator to manage the properties.

The purpose of the trust is to invest in high quality, well located student accommodation with potential for long term capital appreciation and sustainable income that will be yield accretive to the portfolio.

Sunway said the fund management platform over time will generate recurring management fees.