The Sun

HSI-C7F grabs limelight with 30% jump on-week

THE Malaysian warrants market was sloppy last week, only clocking in a turnover of RM347.3 million, 10.7% lower compared to the prior week.

Fears over the escalating trade war dampened last week as US President Donald Trump decided to delay the tariffs hike on US$250 billion worth of Chinese goods as a “gesture of good will” ahead of the trade talks in October. The Hang Seng Index (HSI) futures sustained the strong momentum from the prior week to record two consecutive weeks of gains. The HSI futures traded below the 27,000 mark last Tuesday but then saw huge buying throughout the day on Wednesday to finish at 27,109 points. On the same day, the Hong Kong Stock Exchange announced that they are going to make a US$36.6 billion bid for the London Stock Exchange. The HSI futures were flirting around the 27,000 level on Thursday before breaking out to close at 27,309 points on Friday, advancing 2.7% week on week.

A less volatile week also contributed to a 19.7% on-week plunge in terms of turnover for the HSI warrants to RM261.8 million last week. It was a pleasant week for the HSI call warrants holders, especially call warrant HSI-C7F, which saw a 30% gain for the week. The call warrant topped the top traded warrants list with RM44.4 million traded. Investors were net sellers for this call warrant as they sold back a total of 2.9 million units last week. Meanwhile, investors also traded RM41.9 million worth of put warrant HSI-H8E, which placed this warrant second on the list. Bearish investors saw the surge in the HSI futures as a buying opportunity for this warrant as it declined 27.3% for the week.

On the local front, warrants over Axiata Group were the most popular last week as merger talks between Axiata Group and Telenor Asia (DiGi.com’s major shareholder) were called off due to the complexities involved, according to a filing to Bursa Malaysia. Axiata Group’s share price dipped 15.8% last Tuesday following the news, but found some ground and rebounded a total 3.9% from Wednesday to Friday. Investors who were looking for a rebound in Axiata Group’s shares took home 2.5 million units of call warrant AXIATA-C39, which has an exercise price of RM4.88.

To view the full list of structured warrants available on Bursa Malaysia, visit malaysiawarrants.com.my.

Provided for Malaysian residents’ information only. It is not an offer or recommendation to trade and is not research material. Past performance is not indicative of future performance. You should make your own assessment and seek professional advice.

15/09/2019

International brands a boost for meta_city

KUALA LUMPUR: Villamas’ meta_city status in Seri Kembangan is set to soar with international brands coming onboard the integrated development.

For the hotel component, Villamas has roped in international hotel franchise Aloft Hotels for the third Aloft hotel in Malaysia, after KL Sentral and Langkawi. The 276-room Aloft Hotel Seri Kembangan (meta_loft) by Marriott International is slated to open in 2024.

“Getting Aloft into meta_city says a lot, that even an international renowned brand has the confidence in our location and development. It’s a good morale and confidence boost for us. The Aloft DNA suits our development, which is aimed at the young and energetic,” explained Gan.

For the residence component, meta_residence will be built within three towers identified as Lux Soho (Tower A), Lux serviced residence (Tower A), Bliz (Tower B) and branded suite (Tower C).

For the branded suites, Gan plans to bring in an international brand to operate the 320 units of serviced suites at its upcoming 32-storey Tower C.

“We’re still in negotiation with a few parties. We keep the best for last. Having all these international brands really increase the exposure and visibility of the development. We have the best connectivity of the MRT and we believe all these blend well together. We have the vibrancy and energy,” said Gan.

The 38-storey Tower A will offer 396 units of 450 sq ft Soho and 594 units of 659 sq ft & 864 sq ft serviced apartments, from RM280,000 onwards. Tower A has sold about 60%.

Meanwhile, the 38-storey Tower B of 462 units of serviced apartment (Bliz) consists of Type D (231 units of 757sq ft), Type E (165 units of 960 sq ft) and Type F (66 units of 1,230 sq ft), from RM480,000 onwards with dual-key options. It plans to launch Tower B by year-end or early next year.

For its retail component, Villamas will be operating its first mall meta_mall in six year’s time. The mall is set to be a lifestyle concept mall with a variety of retailers, including anchor tenant Farm In The City.

For the office component, meta_tower will comprise a 13-storey office tower housing spacious and flexible office suites.

15/09/2019

Villamas’ big first

KUALA LUMPUR: There’s a first time for everything, just like how boutique developer Villamas Sdn Bhd (Villamas Group of Companies) is experiencing many firsts in its biggest development to date, the RM1.8 billion integrated development meta_city in Seri Kembangan.

The project is its first venture beyond its usual residential development into an integrated lifestyle-driven mixed development, marking its foray into a mall, hotel and office development, as well as being a first-time mall manager.

Villamas CEO Gan Teck Seong said meta_city is set to transform the landscape of Seri Kembangan as a transit-oriented development. With the connectivity of the MRT, meta_city will comprise serviced apartments and branded suites (meta_residence), office tower (meta_tower), shopping mall (meta_mall) and an international hotel (meta_loft) over the next decade.

“Just in one development there are many firsts. Although we’ve been in residential (development), we’re always in touch with all these development. We’re very confident we can manage it but at the same time, it’s our first time, so it’s exciting,” Gan told SunBiz in an interview recently.

meta_city is a breakthrough for Villamas, which realised five years ago that it needed to do things differently and have a development that is more holistic, catering to more lifestyle needs due to the intense competition among developers.

“We can’t be building just an apartment. One step ahead is to create a mini township with retail, offices, different mixed activities, all within the same development. We’re also trying to get away from the competition,” said Gan.

Villamas is a family business, started by Gan’s father. From its humble beginnings in 2000, the company has experienced organic growth. Gan’s sister is also a director in the company.

“We started our first apartment project Villamas Apartment in Puchong Jaya, our first break into slightly bigger scale development and we never looked back since.”

Some of Villamas’ projects include The Andes @ Bukit Jalil, Verde @ Ara Damansara, Serin Residency and Zefer Hill Residence.

Being a boutique developer implies that it has lesser projects compared with other developers, but Gan said this means that it is focused on what it does and sees this as its uniqueness against others.

“When we ventured into meta_city, we see that we can do things differently. We can JV (joint venture), take up old buildings, do investments,” explained Gan, adding that going forward, it may go into investment holding and property management, in addition to build-and-sell, just like in meta_city, or even venturing into fields out of property like a retailer or restaurant operator.

“Here we can influence the performance of the assets and in return it will be a win-win situation for our purchasers and us. Hopefully we’ll have stable income from the rental and property yield and at the same time we carry on with our developments.”

13/09/2019

Taliworks to start Sungai Selangor water treatment plant ops

PETALING JAYA: Taliworks Corp Bhd’s wholly owned-subsidiary Sungai Harmoni Sdn Bhd has received the Individual License pursuant to Section 9 of the Water Services Industry Act 2006 from the Minister of Water, Land and Natural Resources.

The group said the agreement entered on matters relating to the operations and maintenance of the Sungai Selangor Water Treatment Plant Works Phase 1 (SSP1) have become unconditional and been completed.

With the completion of the agreement, Sungai Harmoni will commence operating and maintaining the SSP1 under the Bulk Water Supply Agreement (BWSA) from Sept 13, 2019 onwards.

Under the termination and settlement agreement (TSA), Taliworks will receive an upfront sum equal to 10% of the settlement sum within 14 days from Sept 12, 2019, while the balance settlement sum with interest of 5.25% per annum will be payable in nine annual instalments.

Taliworks executive director Datuk Ronnie Lim said the group is delighted to be able to finally draw down the curtains to this long-standing water restructuring exercise.

“The repayment of the outstanding receivables under the TSA and the stable recurring income under the BWSA will further strengthen our cash flow position, allowing us to continue to grow our strong business foundation and deliver good long-term growth prospects,” he said in a statement.

He said the group remains strong in its commitment to reward shareholders, in line with its dividend policy.

13/09/2019

Oil declines on global demand worries despite hopes on trade talks

TOKYO: Oil futures fell on Friday as concerns about global growth and slowing demand lingered despite hints of progress on U.S.-China trade talks, setting up prices for weekly losses after days of swinging back and forth.

Brent crude was down 18 cents, or 0.3%, at $60.20 a barrel by 0442 GMT, while U.S. West Texas Intermediate (WTI) was off by 14 cents, or 0.3%, at $54.95.

Brent has traded in a range of nearly $5 this week and is heading for its first weekly loss in five. U.S. crude has traded similarly and is heading for its first loss in three weeks.

Gloom over the economic impact of the trade dispute between Washington and Beijing has left investors shrugging off a strong commitment from Organization of the Petroleum Exporting Countries (OPEC) producers to trim output.

“Again it is a battle between the forces of OPEC and those of slowing global growth and thus demand,” said Greg McKenna, strategist at McKenna Macro.

The weak confidence in the markets was reflected by economists in a Reuters poll who predicted the U.S.-China trade spat will worsen or at best stay the same over the coming year.

Nearly 80% of more than 60 economists said U.S.-China trade relations would either worsen or stay the same by the end of next year. The median probability of a U.S. recession in the next two years held at a high of 45%, and the chance of one in the next 12 months held at 30%.

Still, President Donald Trump said on Thursday he would not rule out an interim deal with China on trade, though he prefers a comprehensive agreement.

Asian stocks advanced on Friday on the signs of progress in U.S.-China trade talks, while aggressive stimulus from the European Central Bank also helped counter worries about a global economic slowdown.

In oil markets, however, concern over whether Trump can achieve progress on the trade dispute has overshadowed OPEC’s Thursday agreement to trim output by asking members Iraq and Nigeria to bring their production back in line with targets.

OPEC is striving to prevent a glut amid soaring U.S. production and a slowing global economy.

OPEC+ has over-complied on average with its agreed cut of 1.2 million barrels per day (bpd) as Iranian and Venezuelan exports collapsed due to sanctions.

“With OPEC’s production curbs and ongoing constraints on sanctioned countries, we see the market tightening in Q4 2019. This should help stabilise prices,” ANZ Research said in a note.

“However, trade tensions and reduced risk of tougher sanctions on Iran and Venezuela will limit the upside,” it said.

Those trade tensions are hitting the shipping sector as the flow of goods and commodities slows, the International Energy Agency said on Thursday.

That will lead to weaker growth than previously expected in oil demand from the shipping sector next year despite a shift to cleaner fuel, the agency said. – Reuters

13/09/2019

If markets stay calm, BOJ may hold fire despite ECB’s loosening

TOKYO: Stable markets and resilient domestic demand could help the Bank of Japan withstand pressure to expand an already massive stimulus programme when policymakers meet next week in the wake of the European Central Bank’s monetary loosening.

Increasing signs of slowing global demand have made Japanese central bankers less confident about an early pickup in global growth, making them more open to debate over easing policy.

Running short of ammunition to ease further, BOJ policymakers, however, want to keep their powder dry for as long as possible in case Japan’s economy runs into greater trouble.

With markets calm for now, the BOJ is leaning towards keeping interest rates unchanged at the Sept. 18-19 meeting unless the U.S. Federal Reserve’s decision – to be announced hours before the BOJ’s – jolt markets and trigger an unwelcome yen spike.

“The yen is weakening and stock prices are rising. Market conditions aren’t worsening enough for the BOJ to ease now,” said Mari Iwashita, chief market economist at Daiwa Securities.

But with global uncertainties heightening and the fallout from the bitter trade war broadening, it may be only a matter of time before the BOJ ramps up stimulus, analysts say.

An increasing number of economists polled by Reuters expect the BOJ to loosen policy further this year, with well over a third of them betting it could act next week.

“When there’s so much uncertainty, additional easing could be required any time,” a source familiar with the BOJ’s thinking said, a view echoed by two other sources.

Under the policy, dubbed yield curve control (YCC), the BOJ guides short-term rates towards -0.1% and the 10-year government bond yield to around 0%. It also buys government bonds and risky assets in a bid to achieve its elusive 2% inflation target.

Deepening negative rates will be the key option if the BOJ were to ease, although the central bank may accompany that with measures to mitigate the pain on financial institutions, sources have told Reuters.

Even if the BOJ decides to hold fire next week, Governor Haruhiko Kuroda will likely stress the bank’s readiness to ease swiftly to fend off shocks to the economy, analysts said.

“The ECB and the Fed are in deep easing mode. To prevent the yen from rising, the BOJ needs to keep alive market expectations that it, too, will ramp up stimulus fairly soon,” said Masaaki Kanno, chief economist at Sony Financial Holdings.

FLAT CURVE DILEMMA

Market expectations of imminent easing grew after the BOJ pledged in July to act pre-emptively “without hesitation” against risks that could knock the economy off the path toward achieving its 2% inflation target.

Waiting until the subsequent meeting on Oct. 30-31 will allow BOJ policymakers time to scrutinise the bank’s “tankan” business sentiment survey for clues on how much the pain Japan is suffering from the U.S.-China trade war. Policymakers can also see the initial consumer reaction to a sales tax hike that kicks off in October.

The BoJ is under no political pressure for imminent action.

Japanese Finance Minister Taro Aso said on Friday it was up to the BOJ to make monetary policy decisions, adding that Japan’s economic fundamentals remained solid.

Another problem the BOJ board could discuss next week is the persistent decline in long-term rates that threaten the bank’s policy aimed at controlling the yield curve.

The YCC policy was introduced partly to prevent the yield curve from flattening too much, as excessive declines in long- and super long yields will erode profit margins of financial institutions.

But downward pressure on global long-term rates pushed Japan’s 10-year yield to -0.295% last month, well below the -0.2% level seen by markets as the BOJ’s line in the sand. The 20-year yield briefly hit to 0.015%, barely staying above zero.

Sources have told Reuters the BOJ likely won’t tolerate the 10-year yield from sliding below -0.3%, as that could push the 20-year yield below zero and flatten the yield curve.

The BOJ may eventually need to coordinate with the Ministry of Finance, which issues public debt, to control the supply of bonds to steepen the yield curve, Daiwa’s Iwashita said.

“The BOJ may keep trying to prevent super-long yields from falling by reducing bond buying. But there’s a limit to what it can do alone,” she said. – Reuters

13/09/2019

Bursa Malaysia opens higher, ECB stimulus lift

KUALA LUMPUR: Bursa Malaysia opened higher in early trade Friday, tracking closely the positive overnight performance of the US equities markets, as investors lauded European Central Bank (ECB) move to launch fresh stimulus.

At 9.10am, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 1.69 points to 1,602.69 compared to Thursday’s close of 1,601.0.

At the opening, the market barometer was 0.31 of-a-point lower at 1,600.69.

The ECB yesterday cut its main deposit rate by 10 basis points to -0.5% and introduced a new bond-buying program, which will entail 20 billion euros per month of asset purchases for as long as it deems necessary.

At home, Malacca Securities Sdn Bhd said stronger impetuses are required to ensure a sustainable uptrend as the recent gains have seen little support, resulting in the key index lingering within a tight band of between the 1,590 and 1,610 levels.

“Although we think that the key index could regain some of its lost ground to end the week, we still think the market’s undercurrent remains indifferent and this could also mean that any near term upsides will be limited,“ it said in a note.

In addition, most market players are still unsure of the market’s direction, keeping many players on the sidelines and the overall market participation on the thin side.

Topping the heavyweights’ list, Maybank rose three sen to RM8.93, Petronas Chemicals bagged five sen to RM7.56, Tenaga was four sen higher at RM13.48 and CIMB added two sen to RM5.02.

Of the actives, Green Packet and Bumi Armada were both flat at 25.5 sen and 27.5 sen respectively.

Vsolar advanced by half-a-sen to 11 sen and I-Stone gained one sen to 18.5 sen.

The FBM Emas Index recovered 12.99 points to 11,296.06, the FBMT100 Index increased 13.00 points to 11,130.88 and the FBM Emas Shariah Index appreciated 5.16 points to 11,811.57.

The FBM Ace expanded 2.69 points to 4,531.48 and the FBM 70 inched up 21.63 points to 13,894.75.

Sector-wise, the Financial Services Index up 38.37 points to 15,588.76, the Plantation Index improved 4.05 points to 6,806.36 and the Industrial Products and Services Index was 0.44 of-a-point up at 153.33.

There are 116 gainers, 75 losers on Bursa Malaysia, while 177 counters remained unchanged, 1,611 untraded and 23 others suspended.

Turnover stood at 152.89 million units worth RM48.19 million.

The physical price of gold as at 5pm stood at RM193.87 per gramme, down 98 sen from RM194.85 at 5pm yesterday. — Bernama