Malaysia captivates Japanese consumers through Aeon taste of Malaysia
TOKYO, Oct 21 — Shoppers to the Aeon Makuhari Shintosin Mall, the largest shopping mall in Japan, were treated to a spectacular taste, sight and sound of Malaysia at the Aeon Taste of Malaysia Fair, held here, today. The three-day fair which…
China economy on track to hit 2017 growth target, state planner says
BEIJING, Oct 21 — China’s economy is on track to meet the official growth target for 2017, the head of the state planning agency said today. “We expect to achieve the full-year growth target of about 6.5 per cent,” He Lifeng, chairman of…
P&G shares tumble after lackluster earnings
NEW YORK: Wall Street frowned on earnings Friday from Procter & Gamble that showed continued sluggishness in overall sales and another drop in grooming due to anemic US demand for shaving products.
The earnings, the first since the consumer products giant claimed a narrow win over activist Nelson Peltz in a shareholder vote earlier this month, are “unlikely to silence dissenters,” said Morningstar analyst Erin Lash.
Net income for the fiscal first quarter of 2018 came in at US$2.9 billion (RM12.24 billion), up 5.1% from the year-ago period.
Sales edged up 0.8% to US$16.7 billion (RM70.51 billion).
Results were pressured by a string of hurricanes in the US and Puerto Rico and an earthquake in Mexico, which dented sales in those regions and lifted prices of some commodities used in P&G products.
Leading P&G brands include Crest toothpaste, Bounty paper towels and Oil of Olay soap.
Strong categories included beauty — which was boosted by strong growth in Chinese premium skin products and healthcare — where the sale of electric toothbrushes was again a bright spot.
But P&G saw no relief from the continued slump in shaving, where competition from newer US e-commerce brands has bruised the performance of Procter's Gillette brand. Sales in grooming sank five percent from the year-ago period.
P&G has slashed prices on Gillette products by an average of 12% in an effort to coax more sales. Chief financial officer Jon Moeller told analysts it was too soon to see results from the investment but that shaving in the US is “operating as we expected it would.”
The weakness in Gillette was among the trouble spots highlighted in a campaign by activist shareholder Peltz of Trian Fund Management in which Procter has claimed a narrow victory after a hard-fought and costly campaign.
Peltz still considers the vote too close to call and said he will wait until final results are certified by an independent inspector.
Goldman Sachs characterized the results as disappointing overall, pointing to a weaker-than-expected gross profit margin and downcast commentary from chief executive David Taylor on “decelerating” market conditions.
“All-in, we expect results to be met with disappointment and would be surprised if the stock does not trade-off,” Goldman said.
P&G shares tumbled 4.0% in afternoon trading to US$87.98 (RM371.45). — AFP
New GE chief vows turnaround after ‘unacceptable’ results
NEW YORK: General Electric's newly-installed chief executive vowed Friday to do whatever it takes to turn around the industrial giant after weak quarterly results initially sent shares plunging.
“It's clear we need to make some major changes,” John Flannery said. “Our results are unacceptable to say the least.”
Flannery, who replaced Jeff Immelt over the summer, faced tough questions from analysts after GE reported lower third-quarter earnings and cut its full-year forecast due to continued weakness in the power and oil and gas businesses.
Flannery has vowed a comprehensive plan at a Nov 13 investor day for rousing growth at the 125-year-old company. He described 2018 as a “reset year.”
The market's reaction Friday suggested investors were open to Flannery.
After falling by more than seven percent in pre-market trading after the report's release, GE finished up 1.1% at US$23.83 (RM100.61).
Slump in oil, power
Net profit for the quarter ending Sept 30 was US$1.8 billion (RM7.60 billion), down 9.7% from the year-ago period.
Revenues were US$33.5 billion (RM141.44 billion), up 14.4%, reflecting the effects of the Baker Hughes oil services acquisition.
The company slashed its full-year operating profit forecast to US$1.05 to US$1.10 per share from US$1.60 to US$1.70 in a July forecast.
Revenues and profits tumbled in the power division, where the market for gas turbines remained weak and the company wrote down US$1.2 billion (RM5.07 billion) of assets.
Chief financial officer Jeff Bornstein, who will step down at the end of the month, said GE had misread the power market, overinvesting in capacity that didn't sell and not moving quickly enough to cut costs.
“We have a tough 2018 in front of us but feel optimistic about the business beyond that,” Bornstein said of power.
Oil and gas was another burden, as GE booked US$267 million in one-time restructuring expenses amid sluggish investment from exploration and production companies.
Better-performing divisions included aviation, healthcare and renewable energy.
“Operationally, this result was much worse than we expected,” said a note from Goldman Sachs.
Under Immelt, GE sought to reposition the company as more of a pure-play industrial conglomerate, selling off the NBC media division and radically cutting back GE Finance.
But critics say GE is now currently too exposed to cyclical industries and that there is little prospect for near-term growth in many of its most important businesses.
Analysts at JPMorgan Chase have been among the harshest, alluding to deep-seated structural problems.
“Anyone who thinks this story is about high level platitudes and a simple slide deck with pictures and inaccurate numbers simply is not doing any work,” JPMorgan said.
The company has come under fire for profligate spending under Immelt. The Wall Street Journal reported Thursday that Immelt regularly took two corporate jets for travel in case one broke down.
GE said last month that it plans to sell its corporate jet fleet.
The company plans to pare back its global research efforts and may shut down research centers in Shanghai, Munich and Rio de Janeiro, The Wall Street Journal said.
Other cost-cutting is expected to figure heavily at the November presentation, but analysts are also expected to press Flannery on divesting assets, a move taken by other conglomerates. GE said Friday would divest US$20 billion in assets in the next two years.
Flannery has already announced a number of executive appointments and said he will pursue “sweeping” change in the period ahead.
GE added Ed Garden from activist hedge fund Trian to its board. Flannery said further board changes could be in store, noting it is big at 18 people.
“I'd put it in the bucket of all things being examined right now,” he said.
Flannery has signaled a strong commitment to maintaining GE's dividend, a priority for investors. — AFP
US stocks surge to fresh records on tax cut progress
NEW YORK: Wall Street stocks surged to fresh records Friday and boosted other equity markets after US lawmakers took a key step toward enacting the tax reform plan sought by President Donald Trump.
Investors were cheered by a party-line 51-49 vote in the Senate for a federal budget plan that permits the legislative body to pass the tax cut plan with a simple majority vote instead of a 60-person supermajority.
That lifted all three major US indices to records, with the Dow Jones Industrial Average rising 0.7% to 23,328.63.
“Optimism over some form of tax reform in the US has waxed and waned constantly since the beginning of the year, and while there still remains some way to go before a plan passes the house, the fact that some progress on a blueprint has taken place, can be seen as progress,” said Michael Hewson, chief market analyst at CMC Markets UK.
The news also boosted the dollar against other currencies, as the Senate vote “brought the Trump administration a step closer to advancing tax reform, a core tenet of the president's agenda aimed at helping the economy shift into a higher gear that has long proven elusive,” said Western Union Business Solutions analyst Joseph Manimbo.
While the controversial proposals still have a long way to go before being passed, the news spurred Asian markets to life Friday after a plodding start to the day.
The Nikkei 225 inched up 0.04% to end at 21,457.64 points, rising for the 14th day straight to match a record set in 1961.
In Europe, EU leaders agreed to start preparations for the next stage of negotiations with Britain over Brexit.
As expected, the other 27 leaders agreed there had been insufficient progress on the divorce talks to officially move on to the future relationship with Britain, but still approved the start of internal preparations for post-Brexit trade and a transition deal.
“We also saw a slightly more positive tone out of Brussels with respect to the Brexit talks after German Chancellor Angela Merkel acknowledged that the EU side also needed to move on its negotiating position in the Brexit talks,” said Hewson.
“What also appeared to be significant was an admission by Donald Tusk that the separate internal EU27 talks on trade would take UK proposals into account,” he added.
Bourses in London, Paris and Frankfurt ended little changed.
Meanwhile, Spain's IBEX 35 index added 0.3%, although tensions over Catalonia still ran high as Madrid prepared to seize powers from the regional government.
Key figures around 2100 GMT
New York – DOW: UP 0.7% at 23,328.63 (close)
New York – S&P 500: UP 0.5% at 2,575.21 (close)
New York – Nasdaq: UP 0.4% at 6,629.05 (close)
London – FTSE 100: FLAT at 7,523.23 points (close)
Frankfurt – DAX 30: FLAT at 12,991.28 (close)
Paris – CAC 40: UP 0.1% at 5,372.38 (close)
Madrid – IBEX 35: UP 0.3 at 10,222.7 (close)
EURO STOXX 50: UP 0.1% at 3,604.27
Tokyo – Nikkei 225: FLAT at 21,457.64 (close)
Hong Kong – Hang Seng: UP 1.2% at 28,487.24 (close)
Shanghai – Composite: UP 0.3% at 3,378.65 (close)
Euro/dollar: DOWN at $1.1781 from $1.1854 at 2100 GMT
Pound/dollar: UP at $1.3189 from $1.3153
Dollar/yen: UP at 113.51 yen from 112.56 yen
Oil – Brent North Sea: UP 52 cents at $57.75 per barrel
Oil – West Texas Intermediate: UP 18 cents at $51.47 per barrel
Budget 2018 to fuel ringgit trading next week
KUALA LUMPUR, Oct 21 — The anticipation of a positive 2018 Budget, which will be tabled in Parliament on Oct 27, is likely to support the demand for the ringgit next week, dealers said. They, however, said the newly-passed United States budget…
GE vows US$20b asset sales, ‘sweeping change’ as profit falls
NEW YORK, Oct 21 — General Electric Co’s new chief executive vowed yesterday to shed more than US$20 billion (RM84.4 billion) worth of assets and hold executives accountable for failing to deliver profits after what he called “horrible”…
2018 budget to fuel ringgit trading next week
KUALA LUMPUR: The anticipation of a positive 2018 Budget, which will be tabled in Parliament on Oct 27, is likely to support the demand for the ringgit next week, dealers said.
They, however, said the newly-passed United States budget blueprint for the 2018 fiscal year would curb and limit the upside for the ringgit against the US dollar.
The Republican dominated US Senate passed the budget blueprint on Thursday, sending the greenback broadly higher against a basket of major currencies as the approval indirectly paved the way for tax cuts and legislation without the Democratic party's support.
“This raises hope of a fiscal boost to the US economy and positively affirming the safe-haven currency,” a dealer told Bernama.
Back home, Prime Minister Datuk Seri Najib Razak is set to announce the 2018 Budget on Friday, which many economists and analysts expect would address the needs of targeted group of the Bottom 40% household income group (B40).
On a Friday-to-Friday basis, the ringgit was traded marginally lower at 4.2240/2260 against the greenback from 4.2200/2240.
Against other major currencies, the ringgit was traded firmer.
It appreciated against the Singapore dollar to 3.1057/1085 from 3.1146/1187 last Friday, strengthened versus the Japanese yen to 3.7252/7279 from 3.7638/7677 and improved against the British pound to 5.5512/5555 from 5.5995/5065.
The ringgit was firmer vis-a-vis the euro at 4.9885/9922 from 4.9918/9970 as demand for the currency weakened due to the Catalonia crisis in Spain.
The local market was closed on Wednesday for Deepavali. — Bernama