The Sun


Tesla chief Musk calls on workers to help deliver cars

SAN FRANCISCO: Tesla chief Elon Musk on Thursday urged workers to make helping with the “biggest wave” of deliveries in the electric car maker’s history their top priority, Business Insider reported.

The news website posted a copy of an internal email from Musk rallying Tesla troops to pitch in with “a massive wave of deliveries” throughout Europe, China and North America.

“This is the biggest wave in Tesla’s history,“ the email read. “For the last ten days of the quarter, please consider your primary priority to be helping with vehicle deliveries. This applies to everyone.”

The firm is experiencing the kind of tremendous increase in delivery demand seen in North America last year in Europe and China, according to the email, which added the situation was exacerbated by component supplier shortages in Europe.

Musk was reportedly seeking volunteers to drive Tesla cars to destinations such as shipping points, but said he did not expect the delivery crunch to recur in future quarters.

Tesla did not respond to a request for comment.

Meanwhile, a message from Tesla’s official Twitter account on Tuesday said that due to trouble processing an unusually high volume of online orders, a planned slight increase in prices of some models was postponed a day.

Tesla currently makes all its cars at a plant in the Northern California city of Fremont and aimed to deliver 400,000 cars this year.

The firm recently introduced a new electric sports utility vehicle slightly bigger and more expensive than its Model 3, pitched as an electric car for the masses.

Tesla last week showed the all-electric Model Y with a starting price of US$39,000 (RM158,000) for a version with a 370-kilometer range.

Deliveries were expected to begin late next year that model, with the standard-range version likely to get to buyers by spring 2021, according to the company.

Musk, 47, is a visionary and inventive boss but also highly unpredictable, especially on social network Twitter, where he has often communicated in defiance of rules imposed on executives of publicly-traded companies. — AFP


Bursa Malaysia dragged down by heavyweight banking stocks

PETALING JAYA: The local bourse bucked the regional trend and skidded 20.55 points or 1.22% today as the market was bogged down by heavy selling in banking stocks amid the US Federal Reserve’s dovish outlook.

The FBM KLCI closed at an intraday low of 1,663.66 points against Wednesday’s closing of 1,684.21.

Market breadth was negative with losers beating gainers 547 to 302. A total of 2.96 billion shares valued at RM2.15 billion were traded.

The Financial Services Index tumbled 225.12 points or 1.29% to 17,219.51 points.

Among the top losers on Bursa Malaysia were Public Bank Bhd, Hong Leong Bank Bhd and AMMB Holdings Bhd, which fell 60 sen, 46 sen and 14 sen to RM23.86, RM20.34 and RM4.47, respectively.

Malayan Banking Bhd and CIMB were down 7 sen and 6 sen to RM9.40 and RM5.33, respectively.

Inter Pacific Research Sdn Bhd head of research Pong Teng Siew told SunBiz that the Fed’s dovish stance on the benchmark rates is causing some consternation among the investors about banking stocks as Bank Negara Malaysia (BNM) is likely to lower the Overnight Policy Rate.

“This is because if the lending rate drops, the banks’ lending margins could possibly become slightly weaker,” he said.

Rakuten Trade Sdn Bhd head of research Kenny Yee Shen Pin concurred, saying that the Fed’s dovish stance on the benchmark rates provides room for BNM to look into the possibility of a rate cut to support Malaysia’s economic growth and in turn the stock market may see a boost from easing monetary policies.

“This would provide further impetus to sustain economic growth and also the equity markets. However, global growth remains a concern,” he said in a research note.

Pong opined that any rate cut will depend on the country’s economic performance, such as gross domestic product growth.

“At this moment, I think the interest rates are quite adequate to maintain economic growth. I don’t think it has reached the point where BNM feels pressure to lower interest rate yet,” he added.

Additionally, Pong said Finance Minister Lim Guan Eng’s recent remarks on the possible imposition of windfall taxes on banks if they continue on being conservative in lending also contributed to the sell-off in banking stocks.

Lim, however, has clarified that the government has no intention to impose such taxes on banks.

Meanwhile, Pong pointed out that Malaysia stands to benefit from the Fed’s dovish stance it provides room for the ringgit to strengthen further given the weakening of the US dollar, and thus help to lower the inflation rate.

“The fact that the US Fed has left the outlook for interest rates to be unchanged for the rest of the year makes it more likely that BNM may actually lower interest rates. Therefore, US dollar might weaken and with that, the pressure on ringgit will be less as the dollar weakens,” he explained.

The ringgit climbed to an eight-month high of 4.0545 against the US dollar. As at 5pm today, the Malaysian currency was trading 0.22% higher at 4.0625 against the greenback..


Trump says tariffs on Chinese goods may remain for ‘substantial period’

WASHINGTON: President Donald Trump warned on Wednesday that the United States may leave tariffs on Chinese goods for a “substantial period” to ensure that Beijing complies with any trade agreement.

The stance could complicate US-China trade talks set to resume next week, as Chinese officials have been pressing for a full lifting of US tariffs as part of any deal, people familiar with the talks have said.

Trump said his top negotiators, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, would leave for Beijing this weekend, confirming plans for talks next week disclosed on Tuesday by an administration official.

The face-to-face talks will be the first since Trump delayed a March 1 deadline to avert a rise in tariffs on US$200 billion (RM812 billion) worth of Chinese imports to 25% from the current 10%.

“The deal is coming along nicely,” Trump said to reporters at the White House, adding that the China trip was intended “to further the deal.”

But when asked about lifting US tariffs on Chinese goods, Trump said: “We’re not talking about removing them. We’re talking about leaving them for a substantial period of time because we have to make sure that if we do the deal, China lives by it.”

Trump did not elaborate on his plans for the tariffs. His negotiators have demanded that China agree to an enforcement mechanism to ensure that Beijing follows through on any reform pledges in any deal.

Washington is demanding that China end practices it says force the transfer of American technology to Chinese companies, improve access for American companies to China’s markets and curb industrial subsidies.

Since July 2018, the United States has imposed duties on US$250 billion worth of Chinese imports, including US$50 billion in technology and industrial goods at 25% and US$200 billion in other products including furniture and construction materials, at 10%. China has hit back with tariffs on about US$110 billion worth of US goods, including soybeans and other commodities.

The eight-month trade war between the world’s two largest economies has raised costs, roiled financial markets, shrunk US farm exports and disrupted manufacturing supply chains.


MFL sues TM for RM428.49 million

PETALING JAYA: Telekom Malaysia Bhd (TM) yesterday received a writ of summons and statement of claim from Malaysian Football League LLP (MFL) seeking RM428.49 million in payment and other reliefs from TM in relation to sponsorship and broadcast disputes.

This comes after TM said it is no longer a sponsor of the MFL from 2019 onwards as both parties could not agree on the terms of the agreement.

MFL claimed that TM had breached the term sheet and MFL had lawfully terminated it by way of its notice of termination dated March 16, 2019.

MFL alleged that TM is liable to pay MFL RM186,844 being the amount due for Season 2018; RM25.85 million being Payment 1 for the sponsorship and broadcast consideration for 2019; RM25.85 million being Payment 2 for the sponsorship and broadcast consideration for 2019 on or before June 2, 2019; and RM376.6 million being the remaining sponsorship and broadcast consideration for years 2020 until 2025.

MFL is also seeking an order compelling TM to remove, take down and delete all references of TM as a sponsor or official telecommunication and broadcast partner of MFL in all TM’s materials pub-lished or issued by TM or TM’s directors, partners, officers, employees, rep-resentatives or agents within 48 hours from the date of this Judgment.

TM said the claim is not expected to have any operational impact on the group.

“The financial impact, if any, cannot be ascertained at this juncture as it will depend on the outcome of the legal proceedings of the claim.”

TM said it has instructed its solicitors to take the necessary steps to defend the claim.


‘Local demand to cushion impact of pressure on exports’

KUALA LUMPUR: Malaysia’s domestic demand is expected to be able to cushion against challenges of moderate export growth, with an expected 4.4% gross domestic product (GDP) growth for 2019, according to the Institute of Chartered Accountants in England and Wales (ICAEW).

“Exports are expected to remain under pressure, with the increase in trade protectionism over the past year unlikely to change any time soon,” it said in its latest Economic Insight: Southeast Asia report.

Although domestic demand will likely provide some relief, ICAEW noted that there are pockets of concern with regard to investment growth.

“Private capital expenditure especially in machinery and equipment investment, has been on a downward trend in Malaysia in light of notably slower export growth.”

Going forward, ICAEW economic adviser and Oxford Economics lead Asia economist Sian Fenner said it expects the risks to the economic outlook of Malaysia to be primarily to the downside.

“A sharper slowdown in Chinese economic growth, triggered by worsening confidence or a renewed escalation in US-China trade tensions, both affect global trade and growth across the region. That said, we do not expect the external environment to be as worrisome as it was in 2015/16, as China’s growth is also expected to stabilise in Q2,” Fenner said in a statement.

For the Southeast Asian region, ICAEW said it started the year on a soft note as a result of the weakness in global economic activity late 2018, with Malaysia being the only country to record positive annual growth for exports in December 2018.

“Data indicates further weakness ahead in the manufacturing and export sectors as Malaysia’s aggregate Purchasing Managers’ Index slipped into contractionary territory.”

It also said domestic demand will likely provide some relief to the Southeast Asian markets, together with accommodative macro policies.

“Most central banks are likely to keep policy rates unchanged well into the second half of 2019 amid muted inflationary pressures. Expansionary fiscal policy will also help, with fiscal spending expected to be strong in Indonesia, Thailand and the Philippines ahead of upcoming elections in the first half of 2019.”

ICAEW regional director of Southeast Asia Mark Billington said although it expects domestic demand to remain resilient, the impact of increased trade tensions in the past year and slower Chinese import demand is likely to act as a drag on the region’s growth as a whole.

“The outlook for Asia trade may continue to face a challenging export environment,” said Billington.


Fed ditches plans for rate hikes this year

WASHINGTON: The US Federal Reserve on Wednesday brought its three-year drive to tighten monetary policy to an abrupt end, abandoning projections for any interest rate increases this year amid signs of an economic slowdown, and saying it would halt the steady decline of its balance sheet in September.

The measures, announced following the end of a two-day policy meeting, mean the Fed’s gradual and sometimes fitful efforts to return monetary policy to a more normal footing will stop well short of what was foreseen in late 2015 when the central bank first moved rates from the near-zero level adopted in response to the 2007-2009 financial crisis and recession.

Having downgraded their US growth, unemployment and inflation forecasts, policymakers said the Fed’s benchmark overnight interest rate, or fed funds rate, was likely to remain at the current level of between 2.25% and 2.50% at least through this year, a wholesale shift of their outlook.

Rates are now seen peaking at 2.6%, sometime in 2020, roughly a percentage point lower than the historic average for the fed funds rate and a sign that the US economy has entered a more sluggish era.

In contrast to projections through much of last year, Fed policymakers no longer see the need to move rates to a “restrictive” level as a guard against inflation, which remains lodged below the central bank’s 2% target.

They also said that as of May they would slow their monthly reduction of as much as US$50 billion (RM230 billion) in asset holdings, and halt them altogether in September, ending what amounted to a second lever of monetary tightening that had run in the background since late 2017.

When completed the Fed would still likely have at least US$3.5 trillion in bonds, more than four times the roughly US$800 billion it had heading into the crisis more than a decade ago. The Fed currently holds about US$3.8 trillion in bonds.

In terms of interest rates, the new Fed projections knocked the number of increases expected this year to zero from the two forecast in December, completing a pivot to a less aggressive policy in the face of an apparent jump in economic risks. At least nine of the Fed’s 17 policymakers reduced their outlook for the fed funds rate, a comparatively large number.

“It may be some time before the outlook for jobs and inflation calls clearly for a change in policy ,” Fed chairman Jerome Powell (pix) said in a press conference following the policy meeting, at which policymakers reaffirmed they will be “patient” before moving rates again.

“Patient means that we see no need to rush to judgment,” Powell said.


Bursa Malaysia ends at intra-day low, the 2nd time in a week

KUALA LUMPUR: Bursa Malaysia bucked the positive trend in most of its Asian peers to end at its intra-day low today, the second time for this week, no thanks to the persistent profit-taking and risk-off mood ahead of the release of February’s Consumer Price Index (CPI) data tomorrow.

A dealer said some investors had turned cautious ahead of the CPI data release, as recent news that predicted Malaysia was likely to see another low reading of 0.4% year-on-year (y-o-y) in February had made them feel uneasy.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) lost 20.55 points, or 1.22%, to 1,663.66 from Wednesday’s close of 1,684.21.

After opening 3.43 points firmer at 1,687.64, the market bellwether moved between 1,663.66 and 1,689.61 throughout the day.

The dealer said investors were anxious about the CPI data as the country had just seen its January CPI data fall 0.7% y-o-y, the first deflation since 2009.

“We see profit-taking activities still prevailed as market players unwound their recent positions, but unlike most of the Asian markets, news of the dovish tone of the US Federal Reserve over the interest rate hikes failed to support Bursa Malaysia’s performance until the end of the day,“ he added.

Regionally, Singapore’s Straits Times Index advanced 0.19% to 3,213.65, China’s Shanghai Composite Index gained 0.35% to 3,101.46 and South Korea’s Kospi Composite Index increased 0.36% to 2,184.88.

Japan’s market is closed for holiday today while Hong Kong’s Hang Seng Index fell 0.85% to 29,071.56.

On the scoreboard, market breadth was negative with losers overtaking gainers 547 to 302, while 409 counters remained unchanged, 634 were untraded and 20 others were suspended.

Volume advanced to 2.96 billion units valued at RM2.15 billion compared with 2.58 billion units worth RM1.82 billion on Wednesday.

Of the heavyweights, Maybank lost seven sen to RM9.40, Tenaga retreated 14 sen to RM12.88, Petronas Chemicals was 10 sen lower at RM9.04, while CIMB and IHH shed six sen each to RM5.33 and RM5.79 respectively.

Nestle continued to lead the losers list by sinking RM2.20 to RM145.50, followed by four other KLCI-linked counters — Public Bank shrank 60 sen to RM23.86, PPB and KLK erased 50 sen each to RM17.82 and RM24.48, and Hong Leong Bank declined 46 sen to RM20.34.

Among the most active, Sapura Engergy and its warrant added one sen each to 35 sen and 14.5 sen respectively, Dynaciate ticked up half-a-sen to 10 sen, Perdana Petroleum trimmed one sen to 42 sen while Sino Hua-An was flat at 25.5 sen.

The FBM Emas Index dipped 105.75 points to 11,654.51, the FBMT 100 declined 105.92 points to 11,508.12, the FBM Emas Syariah Index was 78.48 points weaker at 11,709.81, the FBM Ace Index declined 21.57 points to 4,779.33 while the FBM 70 advanced 17.29 points to 14,182.84.

Sector-wise, the Financial Services Index tanked 225.12 points to 17,219.51, while the Plantation Index retreated 95.40 points to 7,208.74 and the Industrial Products and Services Index edged down 1.23 points to 168.72.

Main Market volume widened to 2.11 billion shares worth RM1.95 billion versus 1.74 billion shares worth RM1.64 billion on Wednesday.

Warrants advanced to 584.81 million units valued at RM127.72 million compared with 475.70 million units valued at RM106.15 million.

Volume on the ACE Market narrowed to 267.35 million shares worth RM64.37 million versus 363.57 million shares worth RM72.72 million.

Consumer products and services accounted for 214.80 million shares traded on the Main Market, industrial products and services (641.28 million), construction (128.77 million), technology (102.70 million), SPAC (nil), financial services (65.87 million), property (112.93 million), plantation (43.47 million), REITs (14.78 million), closed/fund (600), energy (647.10 million), healthcare (30.90 million), telecommunications and media (37.96 million), transportation and logistics (51.60 million), and utilities (19.67 million).

The physical price of gold as at 5pm stood at RM166.46 per gramme, up RM1.59 from RM164.87 at 5pm yesterday. — Bernama