Thursday, October 17th, 2019


Brexit deal will minimise short-term economy hit, says Irish finance minister

WASHINGTON, Oct 17 — The Brexit deal struck by Britain and the rest of the European Union will minimise much of Brexit’s short-term impact on the economies of Ireland and Northern Ireland, Irish Finance Minister Paschal Donohoe said today….

IMF chief hopes ‘the will holds’ for a Brexit deal

WASHINGTON, Oct 17 — IMF chief Kristalina Georgieva welcomed news that Britain has reached a deal to leave the European Union but cautioned today the details remain to be seen. “This, of course, is welcome,” she said of the Brexit deal…

Stocks, sterling rise on long-awaited Brexit deal

LONDON, Oct 17 — A deal on Britain’s departure agreed with the European Union sent sterling to a five-month high today and hoisted European stocks to a year-and-a-half peak before doubts about UK parliamentary support hauled them back. Wall…

Europe’s Brexit deal cheers dampened by familiar snags

LONDON, Oct 17 — Confirmation of a new Brexit deal sent sterling to a five-month high on Thursday and hoisted European stocks to a year-and-a-half peak, before familiar doubts about British parliamentary support for the agreement hauled them back….

Dollar slips as euro bounces on Brexit deal; sterling volatile

NEW YORK, Oct 17 — The US dollar fell against the euro today as the common currency got a lift from the European Union and Britain striking a long-awaited Brexit deal. Britain clinched an eleventh-hour deal on its exit from the EU today, more than…

Wall Street opens higher on Brexit deal, earnings cheer

NEW YORK, Oct 17 — US stocks opened higher today, as worries over geopolitics eased after Britain struck a preliminary last-minute deal with the European Union, with sentiment also boosted by upbeat earnings from Netflix and Morgan Stanley. The…

Local stock market expected to gain traction in Q4

PETALING JAYA: The local equity market is expected to pick up momentum moving forward with the return of slight optimism following a “mini trade deal” between the US and China, coupled with the less austerity-sounding Budget 2020.

“We believe the less austerity-sounding Budget 2020 versus its 2019 predecessor, which had a slew of taxes, could provide some optimism to local businesses, resulting in a recovery trend in the local markets moving forward,” HLIB Research said in a report today.

Year-to-date, the FBM KLCI has declined 116.08 points or 6.9%. Today, the key index closed 0.4 points or 0.03% lower at 1,574.50 points.

The research house views Budget 2020 as the main trading catalyst for the fourth quarter (Q4).

“On the back of improving optimism on trade war (amid the phase-one deal between the US and China), coupled with less austerity sounding Budget 2020 which market participants felt the change of tone versus Budget 2019, we opine traders to look out for sectors such as technology, renewable energy, telecommunication, construction and tourism,” it added.

In Q4, it opined that the slightly positive-sounding Budget 2020 as well as window dressing in December (average 10-year December return: 1.98%) would be able to lift the broader market sentiment, although some earnings disappointment may surface in November. In addition, the catalysts would bode well for stock selection in Q4.

“We believe the broad technology sector will be benefiting under the E&E and automation incentives, which could result in higher demand for automation equipment moving forward; under this section we like I-Stone Group Bhd and KESM Industries Bhd.”

With rising demand for rural electrification in Malaysia, HLIB said, Pestech International Bhd would be the favoured pick amid its power transmission infrastructure expertise. For renewable energy stimulus, it likes Pestech International Bhd.

“Given the increase in development expenditure and potentially improving construction sector, we see precast concrete manufacturers such as OKA Corp Bhd and Kimlun Corp Bhd to benefit from the initial stage of construction jobs.”

For tourism, it likes Tune Protect Group Bhd for the travel insurance play, which is a proxy towards tourism industry.

US-China trade war offers upside to Malaysian medical device makers: Fitch Solutions

PETALING JAYA: The US-China trade war offers an opportunity for Malaysian medical device manufacturers to continue to position themselves as alternative producers and suppliers to China, Fitch Solutions Macro Research said in a report.

According to the report, recent moves by the US government to further ramp up tariffs on Chinese-made products will increase pressure on Chinese companies to relocate manufacturing operations; therefore, Malaysia’s access to the US and other major world markets would increase its attractiveness as an alternative manufacturing base.

In the short term, local rubber glove manufacturers stand to benefit from the recent US tariffs imposed on Chinese medical gloves.

“The US government has imposed a 15% tariff on medical gloves made in China effective from Sept 1, 2019, as a result of which US importers are seeking alternative sources of supply from other manufacturers in Asia.

“As the world’s largest producer of rubber gloves, Malaysia stands to benefit from this shift in supply chain. The US imported medical gloves valued at US$2 billion in 2018, of which around three-quarters came from Malaysia and 11% from China,” the report said.

The Fitch report also said higher US demand for Malaysian gloves will boost industry profit margins which have been hit by increases in raw material costs and surplus capacity due to over-expansion by Hartalega Holdings Bhd, Kossan Rubber Industries Bhd, Supermax Corp Bhd and Top Glove Corporation Bhd.

“On the downside, the market environment for medical gloves in Europe is likely to become more competitive as Chinese producers shift their focus away from the US market.”

Over the longer term however, Fitch said, additional tariffs on a broad range of medical devices could help drive direct foreign investment into Malaysia’s medical device industry, boosting its international competitiveness.

“We highlight that the Malaysian government is actively encouraging more investment from China, particularly in high-tech industries.

“Finance Minister Lim Guan Eng stated that Malaysia is keen to learn from Chinese expertise in artificial intelligence, advanced materials, robotics and cloud computing. This would allow Malaysia to build on current initiatives to boost high-tech manufacturing,” Fitch said.

To date, US tariffs on Chinese-made medical devices have mainly targeted diagnostic imaging and electro-medical apparatus with most consumables remaining exempt.

Conversely, Chinese tariffs on US products have targeted a much broader range of devices and this could encourage more investment into Malaysia’s manufacturing sector from the US.

US medical devices companies with manufacturing operations in Malaysia include Abbott, Becton Dickinson, Boston Scientific, Cardinal Health, Medtronic and Teleflex.

Selangor Dredging aborts Damansara Heights land disposal

PETALING JAYA: Selangor Dredging Bhd’s (SDB) wholly owned subsidiary SDB Damansara Sdn Bhd has terminated its RM71 million land disposal to Bukit Selesa Development Sdn Bhd (BSDSB).

This comes after BSDSB failed to obtain the approval from the relevant authorities for an amended development order (DO) that was stipulated in the agreement, according to SDB’s filing with Bursa Malaysia.

“The extended CP period to obtain the amended DO has expired on Oct 17, 2019, 5pm and pursuant to clause 4.3 of the agreement, BSDSB has exercised its rights to terminate the agreement.”

The sales and purchase agreement for the 16 parcels of land was signed in October 2016.

Prior to the proposed disposal to BSDSB, SDB had planned to develop 21 luxury bungalows with a gross development value of RM210 million.

However, in 2008, the development was fined and a stop work-order was issued by Kuala Lumpur City Hall for flouting certain building rules.

Subsequently, the government imposed a freeze on hillslope developments.

Perak Corp unit defaults on RM25.7m loan

PETALING JAYA: Perak Corp Bhd’s indirect 51%-owned subsidiary Animation Theme Park Sdn Bhd (ATP) has defaulted on payment to Affin Hwang Investment Bank Bhd amounting to RM25.7 million.

This is part of the repayment of principal in respect of its syndicated term loan facility of up to RM280 million granted by Affin Hwang, Affin Bank Bhd, Bank Pembangunan Malaysia Bhd and Malaysia Debt Ventures Bhd.

ATP is the developer, owner and operator of Movie Animation Park Studios (MAPS) located in Ipoh, Perak.

According to Perak Corp’s Bursa disclosure, its wholly owned subsidiary PCB Development Sdn Bhd is actively seeking to dispose of its 51% stake in ATP and its immediate holding corporation Perbadanan Kemajuan Negeri Perak (PKNP) has shown interest to takeover.

Perak Corp revealed that PKNP had written a letter to the group on February 21, 2019 to confirm its intent to take of MAPS.

Perak Corp said ATP had on Sept 24, 2019 requested indulgence of time of up to three months for PKNP to arrange funding for the instalment repayment of principal as part of its purchase price to takeover the theme park.

Subsequently, Affin Hwang had on Oct 3 rejected the request and declared a default on Oct 16 with a 14-day notice from the date of letter to effect the payment of RM25.7 million, failing which all the secured obligation due from ATP will become immediately due and payable.

Perak Corp said it is continuously in discussions with Affin Hwang to regularise the outstanding payment of the syndicated term loan.