bond

 
 

Malaysia’s bond market to remain resilient despite FTSE Rusell pullout risk

KUALA LUMPUR, April 25 — Credit rating agency RAM Rating Services Bhd expects the Malaysian bond market to remain resilient despite the risk of being removed from global index provider FTSE Russell’s World Government Bond Index (WGBI) due to…


Asian shares dip, euro weighed by sagging German business morale

TOKYO, April 25 — Asian shares slipped today as a surprise deterioration in German business morale rekindled fears of slowing global growth, while oil prices pulled back slightly after a sharp run-up earlier in the week. The euro slumped to a…


Tesla promises return to profit in Q3 after first-half losses

NEW YORK, April 25 — Tesla Inc lost US$700 million (RM2.89 billion) in the first quarter but predicted it would return to profit in the third quarter as it cuts costs and improves delivery after facing issues ramping up shipments outside the…


Ringgit will stabilise after recent sell-off, says FXTM analyst

KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the sell-off pressure eases, barring any major catalyst, according to FXTM market analyst Han Tan (pix).

The ringgit weakened 0.06% to 4.1305 against the greenback today from 4.1280 on Tuesday.

The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was aggravated by the speculation that Malaysian bonds would be dropped from the FTSE World Government Bond Index.

Tan said the market is currently focused more on external factors, letting external risk to dictate the performance of currencies and paying less attention to internal economic data.

According to the International Monetary Fund’s Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.

Tan expects the Malaysian currency to remain supported by the country’s resilient economic fundamentals, whereby the projected gross domestic product growth of 4.3-4.8% this year is better than many other economies.

“Malaysia’s export mix is very well diversified and with this very diversified nature, is not just limited to export, it has multiple legs to stand on.”

To illustrate the influence of external factors, Tan pointed out that Malaysia has been able to buck the Asean trend in regard to exports, delivering a growth while the neighbouring countries are experiencing a contraction in the fourth quarter of 2018 up till February 2019.

“In other words, the currency markets are primarily focused outwards and paying less attention to what is happening onshore,” he said.

While oil prices have reached the US$70 (RM289) per barrel mark this month, the increase has yet to be reflected in the ringgit’s performance.

However, Tan said as Malaysia’s budget is based on the assumption of crude oil at US$70 a barrel, stronger prices will contribute to the ringgit’s strength.

“Barring any major catalyst, I expect oil prices to head towards US$80 per barrel within the first half,” he added.


Ringgit will stabilise after recent sell-off, says FTXM analyst

KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the sell-off pressure eases, barring any major catalyst, according to FXTM market analyst Han Tan (pix).

The ringgit weakened 0.06% to 4.1305 against the greenback today from 4.1280 on Tuesday.

The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was aggravated by the speculation that Malaysian bonds would be dropped from the FTSE World Government Bond Index.

Tan said the market is currently focused more on external factors, letting external risk to dictate the performance of currencies and paying less attention to internal economic data.

According to the International Monetary Fund’s Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.

Tan expects the Malaysian currency to remain supported by the country’s resilient economic fundamentals, whereby the projected gross domestic product growth of 4.3-4.8% this year is better than many other economies.

“Malaysia’s export mix is very well diversified and with this very diversified nature, is not just limited to export, it has multiple legs to stand on.”

To illustrate the influence of external factors, Tan pointed out that Malaysia has been able to buck the Asean trend in regard to exports, delivering a growth while the neighbouring countries are experiencing a contraction in the fourth quarter of 2018 up till February 2019.

“In other words, the currency markets are primarily focused outwards and paying less attention to what is happening onshore,” he said.

While oil prices have reached the US$70 (RM289) per barrel mark this month, the increase has yet to be reflected in the ringgit’s performance.

However, Tan said as Malaysia’s budget is based on the assumption of crude oil at US$70 a barrel, stronger prices will contribute to the ringgit’s strength.

“Barring any major catalyst, I expect oil prices to head towards US$80 per barrel within the first half,” he added.


RHB to be ‘pragmatic’ in facing challenging investment banking scene overseas

KUALA LUMPUR: RHB Bank Bhd sees a challenging investment banking business scenario overseas, which is lacking in scale compared with the business in Malaysia, and it will adopt a “pragmatic” approach to address the challenges.

“That’s why we believe that, based on our FIT22 strategy, we focus on our niche and strength. Take for example in Singapore, we will do equities business, we will do investment banking business but we will not do debt market business because we don’t have the capability for distribution there and particularly in foreign currencies. And of course the bonds mainly in Singapore are not rated. But we will do the others,” said group managing director Datuk Khairussaleh Ramli (pix).

“In Thailand for example, we believe the equities business is very active, the retail broking there is among the most active in Asean, so that’s an area that we will focus on, including maybe some debt market as well,” he told reporters at its AGM today.

He said the investment banking businesses in Indonesia and Thailand have room to expand via organic growth while in Singapore, the group intends to synergise its investment banking and banking businesses in order to offer multiple services to clients.

In terms of its asset management business in Indonesia, Khairussaleh said the business is small and the main challenge there is distribution due to the country’s size.

“We have tied up with some banks but we also want to look at digital ways of distributing our products, because it is such a big country with many islands. If we can’t have physical presence, we need to look at digital capabilities,” he said.

“For our overseas business we take a pragmatic approach of focusing on our niche but in Malaysia, we pretty much are a universal investment bank, we pretty much do everything. Generally in Malaysia, the investment banking business is good,” he added.

RHB expects to take on several initial public offerings (IPOs) this year in the consumer product and trading services segments, including Leong Hup International Bhd and two sizeable IPOs of about RM750 million each in the second half of the year.

The group is one of the joint global coordinators for the IPO of poultry player Leong Hup, which is en route to list on the Main Market of Bursa Malaysia. The prospectus will be launched today.

Meanwhile, RHB aims to grant RM31 billion in new and additional financing for small and medium enterprises (SMEs) by 2021, which will benefit 18,000 SMEs. Last year, it approved RM7.2 billion worth of loans to over 4,000 SMEs in Malaysia.

The bank is currently ranked fourth in the SME segment with a market share of 9.06% as at January. Its market share was about 7% three to four years ago. It aims to connect to 15,000 new SMEs this year through its SME Ecosystem.

RHB aims to grow its mortgage business by 12% this year and 33% or RM17.5 billion over the next three years. Its mortgage market share stood at 9.64% as at February.

Khairussaleh said mortgage applications have reduced but its approval rate has been consistently high at 75%. He said there are no changes to its overall loans growth target of 5% for this year, driven by growth in the mortgage and SME segments.

In terms of provisions, he said it will be decided on a case-by-case basis and while some clients may be going through a difficult patch, there are no systemic issues at the moment.

“We believe that our oil and gas portfolio is under control. But again, potentially there could be case-by-case basis where customers may go through some difficulty. That’s where we should help. In fact, our oil and gas loan loss coverage is more than 100% so we are comfortable with our coverage for the current portfolio,” he said.

RHB’s exposure to the oil and gas sector is 2.8% of its total loan book, with 6% exposure to the property sector.


Italy expects EU to reject broader saver compensation scheme, says source

ROME, April 24 — Italy expects European authorities to block an extension to a plan to compensate thousands of people who lost savings when their banks collapsed, a government source said today. A rejection would be a harsh blow for the 5-Star…


Ringgit to trade at 4.10-4.15 to the greenback in Q2

KUALA LUMPUR, April 24 — The ringgit is expected to trade range-bound within the 4.10 and 4.15 band against the US dollar in the second quarter of 2019 (Q2 2019), barring any major catalyst. FXTM market analyst Han Tan said the outlook was on the…


FXTM expects ringgit to rebound to 4.10 in Q2

KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the selloff pressure eases barring any major catalyst, according to FXTM market analyst Han Tan.

As at 12pm, the ringgit was trading lower at 4.1325 against the greenback compared with yesterday’s close of 4.1280.

The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was further aggravated by the speculation that Malaysian bonds will be dropped from the FTSE World Government Bond Index.

Tan said the market is currently focused more on the external factors, letting the external risk to dictate the performance of currencies and paying less attention to the internal economic data.

According to the International Monetary Fund’s (IMF) Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.


Higher US bond yields weigh on ringgit in early trading

KUALA LUMPUR: The ringgit was lower against the US dollar in early trade today as higher US bond yields hampered demand for the local note.

At 9.06am, the local unit traded at 4.1270/1300 against the greenback from 4.1250/1300 at the close yesterday.

A dealer said investors were in favour of the US dollar following the 20 basis points rise in the 10-year US Treasury yields over the past four weeks.

“Furthermore, the weaker global oil price also affected market sentiment towards the ringgit as this will have an impact towards the country’s oil and gas revenue,” he added.

Brent crude futures and US West Texas Intermediate (WTI) crude futures were both down 0.4% to US$74.24 (RM307) per barrel and US$66.02 (RM273) per barrel respectively.

Meanwhile, the ringgit traded mixed against a basket of major currencies.

It declined against the Singapore dollar to 3.0406/0446 from 3.0400/0446 recorded at yesterday’s close and depreciated against the Japanese yen to 3.6881/6911 from 3.6876/6924.

The ringgit rose against the British pound to 5.3395/3450 from 5.3666/3748 and improved against the euro to 4.6293/6330 from 4.6431/6491. — Bernama