Local

Ringgit rebounds against US dollar as weak sentiment eases

KUALA LUMPUR: The ringgit snapped its three-day losing streak against the US dollar to close higher today, thanks to improving market sentiment as worries over capital outflow ease amid rising crude oil prices, dealers said.

At 6pm, the ringgit fell to 4.1300/1350 against the US dollar from 4.1400/1450 at Thursday’s close.

Recent news that Malaysia may be dropped from the FTSE World Government Bond Index and Norway sovereign wealth fund’s holdings had caused a sell-off in the foreign exchange market, sending the ringgit to a nearly three-month low on Wednesday.

“The ringgit has been depreciating much and now bargain-hunting emerges to take advantage (of this). Investors’ focus are now more towards fundamentals,” a dealer told Bernama.

In parallel, FXTM Market Analyst Han Tan also said the ringgit’s recent depreciation against the US dollar was transitory, as evidenced by today’s rebound, supported by Malaysia’s robust economic fundamentals.

He said Malaysia’s March inflation data, which is due next week, would show whether prices had rebounded from the deflation recorded in the first two months of the year, where a meaningful return to inflationary territory could offset the ringgit’s weakness against the US dollar.

“Overall, we expect Malaysia’s price pressures to remain manageable throughout 2019, allowing domestic consumption to continue driving growth,” he said in a commentary.

Meanwhile, the ringgit was also traded higher against other major currencies.

It rose against the Singapore dollar to 3.0473/0514 from 3.0535/0584 on Thursday and strengthened versus the Japanese yen to 3.6898/6949 from 3.6991/6039.

The local currency appreciated vis-a-vis the British pound to 5.3707/3792 from yesterday’s 5.3853/3935 and advanced against the euro to 4.6446/6506 from 4.6579/6640 previously. — Bernama

19/04/2019

Seacera sues Tan for unlawful EGM

PETALING JAYA: Seacera Group Bhd is taking legal action against its largest shareholder Datuk Tan Wei Lian (pix) and three others, who are seeking to remove eight of its directors.

In a filing with Bursa Malaysia, the company said it had on April 15 received a notice of EGM to be held on May 15 to consider resolutions to appoint six new directors and to remove eight existing directors.

The EGM was called by four members of the company namely Tan, Datin Sek Chian Nee, Jeannie Ooi Chin Nee and Liu Zhen who, in a notice of intention, claimed to hold a combined stake of at least 10% in the company.

According to the company, the four individuals only held a combined stake of 7.98% and not 10% as claimed, based on the record of depositors as of April 15.

“Therefore, the notice of EGM is in contravention of the Act (Companies Act 2016). It is unlawful, null and void. The company has engaged Messrs Lim, Chong, Phang & Amy to take necessary action(s) against Tan and the others,” it said.

However, Seacera’s filings with Bursa Malaysia showed that Tan held a direct 13.96% stake in the company prior to April 15, before subsequently raising his direct stake to 16.36% on April 17.

Meanwhile, Tan has pledged to invest RM30 million or more into Seacera to resolve the company’s cash flow and credit liability, labeling Seacera’s voluntary announcement on Thursday a “scare tactic”.

“This is obviously a scare tactic which is uncalled for. The company has, as of Dec 31, 2018, net assets amounting to approximately RM838 million and 501 acres of land free from encumbrances with a book value of approximately RM784 million,” he said in a statement in response to Seacera’s announcement.

He said Seacera’s receivables amount to about RM90 million and noted that the company had raised some RM15 million from the issuance of the employee share option scheme in February and March this year.

“Any business owner will know the company has stable financials to grow and sustain itself without being declared insolvent,” he added.

Tan said the company’s stock exchange filing shows that the current management has failed the shareholders and are incompetent in managing the company, and suggested that they voluntarily step down to pave the way for new directors to take over.

He also urged shareholders to attend the EGM on May 15 to remove eight out of Seacera’s current 10 directors and appoint six new directors namely Shirley Tan Lee Chin, Rizvi Abdul Halim, Datin Ida Suzaini Abdullah, Clarence Yeow, Chua Eng Chin and Marzuki Hussain.

Yesterday, Seacera issued a voluntary announcement saying that the company is potentially headed towards a default on its payment obligations in view of the highly likely event that it will not be able to proceed with its settlement proposals in time.

It also said that it would not be able to declare that it is solvent as the board will not be able to form an opinion that the company will be able to pay all its debts as and when they fall due.

The group had earlier announced the issuance of new shares and a private placement as part of its settlement proposals, which require shareholders’ approval by May 6, and had called an EGM on April 16 to obtain approval.

Seacera’s plans hit a bump when Tan initiated legal action to stop the company from proceeding with the proposed resolutions. A writ and application for injunction was served on the company, causing the EGM to be adjourned to a later date.

However, Tan said the EGM had taken place on April 16, where 45 shareholders representing more than 50% of Seacera’s shares out of a paid up capital of RM474 million unanimously voted against and rejected the resolutions.

He told a press conference on Wednesday that he plans to go to court to seek declaration on the EGM’s validity.

Trading in Seacera’s securities were halted for an hour this morning. The stock fell 4.48% to close at 32 sen with 43.55 million shares done.

19/04/2019

FXTM: Ringgit’s weakness against US dollar is transitory

PETALING JAYA: The ringgit’s recent decline against the US dollar is expected to be transitory, despite the currency’s exposure to external factors, said FXTM market analyst Han Tan.

“The Malaysian currency remains exposed to broader risk sentiment driven by external factors such as trade tensions between major economies and slowing global economy. However, the ringgit’s recent decline against the US dollar is expected to be transitory, as Malaysia’s robust fundamentals continue supporting the ringgit,” he said in a commentary today.

He said Malaysia’s March inflation data, which is due on Wednesday, will show whether prices have rebounded from the deflation recorded in the first two months of the year, where a meaningful return to inflationary territory could offset the ringgit’s weakness against the US dollar.

“Overall, we expect Malaysia’s price pressures to remain manageable throughout 2019, allowing domestic consumption to continue driving growth,” he added.

He said the selling momentum on the ringgit of late is likely to subside in the week ahead while major economic releases out of the US and China, as well as potential headline risks, could also lead to short-term movements for USD/MYR within the 4.10-4.15 range.

Next week, global investors will turn their attentions towards the first quarter US gross domestic product (GDP) due on Friday, April 26.

Tan noted that growth forecasts have been revised upwards following February’s trade deficit which surprised markets when it fell to an eight-month low.

“A GDP print that exceeds market expectations above the 2% mark could give the Greenback an immediate leg up, while potentially offering further relief over the broader global outlook,” he said.