The Sun

Ringgit to rise next week on Bandar Malaysia revival, positive CPI data

KUALA LUMPUR: The ringgit is likely to trade higher next week, ranging from 4.10-4.15 against the US dollar, spurred by improved risk appetite for the local currency amid growing optimism over the recovery in global economic growth, dealers said.

The resumption of Bandar Malaysia project coupled with the anticipation of favourable March inflation data, which would give less pressure to Bank Negara Malaysia to make an adjustment to the interest rate, would lift sentiment for the ringgit, a dealer said.

“This will definitely boost appetite for the ringgit next week especially among foreign fund managers. Plus, given the currency’s recent depreciation, I think a buying spree might take place,” he told Bernama.

On Friday, Prime Minister Tun Dr Mahathir Mohamad announced that the government would reinstate the Bandar Malaysia project, which was abruptly terminated in May 2017. The proposed development in Sungai Besi, Kuala Lumpur, is expected to have a gross development value of RM140 billion.

He said Bandar Malaysia would have a significant impact on Malaysia’s economy and would serve as a global hub to further attract high impact global finance, technology and entrepreneurial firms.

“It will draw major international financial institutions, multinational corporations and Fortune 500 companies to locate their regional headquarters in Bandar Malaysia.

“In addition, tech giants such as Alibaba and Huawei have also manifested interest to establish their ICT (information and communications technology) centres,” he told a news conference on Friday.

Meanwhile, FXTM market analyst Han Tan said the March inflation data, due on Wednesday, would show whether prices had rebounded from the “deflation” recorded in the first two months of the year, whereby 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.

Tan said the country’s robust fundamentals would continue supporting the ringgit.

For the week just ended, the ringgit traded mostly lower against the US dollar and hit a near three-month low of 4.1330/1360 against the US dollar on Wednesday following concerns over news that Malaysia might be dropped from the FTSE World Government Bond Index and the Norwegian sovereign wealth fund’s holdings.

The sell-off in the foreign exchange market lasted for two days but the market recovered on Friday as concerns eased.

On a Friday-to-Friday basis, the ringgit fell to 4.1300/1350 against the US dollar from 4.1120/1170 previously.

It also contracted against the Singapore dollar to 3.0473/0514 from 3.0367/0406 previously and versus the Japanese yen to 3.6898/6949 from 3.6744/6798.

However, the ringgit climbed against the British pound to 5.3707/3792 from 5.3760/3842 and strengthened vis-a-vis the euro to 4.6446/6506 from 4.6519/6596 previously. — Bernama

19/04/2019

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.

19/04/2019

Malaysia’s return to inflation could offset the Ringgit’s weakness against US dollar

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.

19/04/2019

Uber wins $1bn investment from Toyota, SoftBank fund

TOKYO: Japanese car giant Toyota and investment fund SoftBank Vision Fund on Friday unveiled an investment of $1 billion in US company Uber to drive forward the development of driverless ridesharing services.

The latest cash injection, expected to close in the third quarter this year, came amid fevered anticipation of Uber’s public share offering which is expected to be the largest in the tech sector for years.

Toyota has already invested $500 million in Uber as the firm races Google-owned Waymo and a host of other companies, including major automakers, to develop self-driving vehicles.

The latest investment, which also involves Japanese parts maker DENSO, will go to Uber’s Advanced Technologies Group in a bid to “accelerate the development and commercialisation of automated ridesharing,” the firms said in a statement.

Toyota and DENSO are stumping up $667 million and SoftBank Vision Fund, the investment arm of Japanese tycoon Masayoshi Son’s SoftBank, will pour $333 million into the venture. It is already the top shareholder in Uber, holding 16 percent.

The Japanese car firm said it would also contribute “an additional $300 million over the next three years to help cover the costs related to these activities.”

Uber chief executive Dara Khosrowshahi said driverless cars would “transform transportation as we know it, making our streets safer and our cities more liveable.”

His firm is aiming to go beyond car rides to becoming the “Amazon of transportation” in a future where people share, instead of own, vehicles.

If all goes to plan, commuters could ride an e-scooter to a transit station, take a train, then grab an e-bike, share a ride or take an e-scooter at the arriving station to complete a journey — all using an Uber app on a smartphone.

Uber is also seeing growing success with an “Eats” service that lets drivers make money delivering meals ordered from restaurants.

‘Sharing economy’

Last week, Uber filed official documents for its much-anticipated public share offering.

The filing with the Securities and Exchange Commission said it operates on six continents with some 14 million trips per day and has totalled more than 10 billion rides since it was founded in 2010.

The filing contained a “placeholder” amount of $1 billion to be raised but that figure is expected to increase ahead of the initial public offering (IPO) expected in May.

The Wall Street Journal said earlier this month that Uber was seeking to raise $10 billion in what would be the largest stock offering of the year.

Media reports said the ride-hailing giant was likely to seek a market value of close to $100 billion.

Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street, and is one of the key companies in the “sharing economy” based on offering services to replace ownership of cars, homes and other commodities.

Its revenue grew 42 percent last year to $11.2 billion but it continued to lose money from its operations. A net profit was reported for the year from a large asset sale, but operational losses were more than $3 billion.

And some analysts have voiced caution over the forthcoming IPO given a relative lacklustre debut for Lyft, the main US rival.

Khosrowshahi has promised greater transparency as he seeks to restore confidence in the global ridesharing leader hit by a wave of misconduct scandals.

In October, Toyota and SoftBank announced the creation of a joint venture to create “new mobility service” including driverless vehicles for services such as meal deliveries.

The new company — called “Monet”, short for “mobility network” — is majority owned by SoftBank.

SoftBank started as a software firm but has increasingly been pushing into investments under tycoon Son, one of Japan’s richest men.

19/04/2019

FBM KLCI higher at early session

KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is slightly higher at the early session today amid mild buying interest in the heavyweights led by Petronas Chemicals and Maybank.

At 9.20am, the benchmark index inched up 0.66 of-a-point to 1,620.39, after opening 0.91 of-a-point to 1,620.64.

On the broader market, gainers outpaced decliners 176 to 82, while 212 counters remained unchanged, 1,438 untraded and 19 others suspended.

Turnover stood at 311.0 million shares worth RM179.04 million.

In a research note today, Maybank Investment Bank said bargain hunting would likely to continue today, particularly in recently beaten down stocks.

“Technically, we expect the FBM KLCI to continue to range between 1,610 and 1,640 today. Downside supports are at 1,615 and 1,600,” it added.

Of the heavyweights, Petronas Chemicals advanced six sen to RM8.99, Maybank gained three sen to RM9.03, CIMB added two sen to RM5.07 and PPB Group jumped 10 sen to RM18.90.

IHH Healthcare and Hong Leong Bank were flat at RM5.48 and RM19.94, respectively, while Public Bank eased six sen to RM22.52, TNB fell two sen to RM12.14 and Maxis went down one sen to RM5.40.

Of the actives, Iskandar Waterfront advanced 7.5 sen to 93.5 sen, Ekovest rose three sen to 62 sen, Sapura Energy and Vsolar Group were flat at 31.5 sen and 15 sen, respectively, while KNM shed one sen to15.5 sen and Seacera shed 1.5 sen to 32 sen.

The FBM Emas Index appreciated 8.72 points to 11,475.84, the FBMT 100 Index went up 7.08 points to 11,305.17 and the FBM Ace Index improved 7.22 points to 4,671.7.

The FBM Emas Syariah Index was 4.01 points higher at 11,685.88, and the FBM 70 expanded 19.24 points to 14,325.37.

Sector-wise, the Plantation Index gave up 2.41 points at 7,216.27, the Financial Services Index rose 25.22 points to 16,709.58, and the Industrial Products and Services Index added 0.33 of-a-point to 168.14.

The physical price of gold as at 9.30am stood at RM164.10 per gramme, down 42 sen from RM164.52 at 5pm yesterday. — Bernama