Wall Street rebounds as technology, industrial stocks rise

SHAH ALAM, July 12 — Technology and industrial stocks led Wall Street higher today as some big deals and optimism about the earnings season helped offset fears about a US-China trade war. CA Inc jumped 18.1 per cent, the most on the benchmark…

Bursa pushes ahead as cheap valuations buoy regional markets


KUALA LUMPUR: Bursa Malaysia continued its ascent in Thursday morning trade with a rally in Maybank shares leading the way even as regional markets staged a rebound. While sentiment over the US-China trade dispute remained negative, low valuations from the recent declines have led to bargain-hunting by investors, helping to firm up markets ahead of what may be more tariff announcements. At 12.30pm, the FBM KLCI was up 7.41 points to 1,696.18. Trading volume was 1.24 billion shares with a value of RM815.7mil. There were 365 advancers versus 291 declinersRead More

Asian forex hobbled by absence of catalysts

BENGALURU: Most Asian currencies struggled for traction today as the backdrop of an US-driven international trade war and the absence of positive catalysts kept investor sentiment largely in check.

The Philippine peso, which has been hovering around 12-year lows, came under more strain as the nation’s trade deficit widened further in May.

“Trade war risk is likely to linger in the background as countries start to introduce measures to prepare for tariffs staying for a potentially longer-than-expected period,” Mizuho said in a note.

The dollar’s index against a basket of six major currencies hovered around June’s lows, up just a touch on the day at 94.181, mainly capped by disappointing wages growth in an otherwise solid US payrolls report on Friday.

The Chinese yuan pushed higher for the second day, up 0.1% to 6.605 on the dollar, helped by the combination of a firmer official yuan fixing, a broadly softer greenback and some easing of Sino-US trade tensions.

While both China and the United States hit each other’s goods with tariffs on Friday, the focus now is on whether the dispute would ratchet up further or if officials in Beijing and Washington will find a way to ease off the tense trade relations.

Data earlier in the day showed China’s producer inflation, a gauge of industrial profitability, rose by a stronger-than-expected 4.7% in June. The worry is that an uptick in factory-gate prices could put more pressure on the country’s exporters as trade dispute with the US prolongs.

The Indian rupee eased 0.1% to 68.790.

A Reuters poll showed inflation is likely to rise to a near two-year high in June, a development that would strengthen calls for more monetary tightening by the central bank.

The Malaysian ringgit rose to 4.009 per dollar, a day ahead of Bank Negara Malaysia’s (BNM) policy meeting, where interest rates are expected to remain unchanged.

As a net oil exporter, rising prices “will benefit exports for Malaysia and hence that’s helped to provide an additional kick for the ringgit today,” said Khoon Goh, ANZ’s head of Asia research.

Analysts say that with the abolishment of the Goods and Services Tax, there’s little inflationary pressure to trouble BNM Governor Datuk Nor Shamsiah Mohd Yunus in her first policy meeting, even as other regional central banks hiked rates to bolster their respective currencies.

The ringgit has outperformed its Southeast Asian peers in the region, amid an exodus from emerging markets as rising trade tensions have turned investors risk-averse. – Reuters

Dollar sags after soft US wages data, Brexit woes weigh on pound

TOKYO, July 9 — The dollar struggled near 3-1/2-week lows against its peers today after US jobs data showed slower-than-expected wages growth, while the pound retreated as a key member of Britain’s cabinet resigned over Prime Minister Theresa…

Banks outlook in 2H18: Bright or bleak?

Investors are keen on gauging the overall health of the local financial sector, specifically assessing if the recent shares selloff presents investors with a good buying opportunity. It has been a steady quarter for banks in Malaysia – domestic loan growth in the first quarter of 2018 (1Q18) of most banks was above the industry […]

Gold prices touch one-week high on softer US dollar

LONDON, July 5 — Gold rose to a one-week high yesterday, extending the prior session’s rebound from a seven-month low, helped by a softer US dollar and smouldering trade policy tensions, though the prospect of the Federal Reserve raising…

Dollar holds gains vs yen, trade worries linger as China PMI looms

TOKYO, June 29 — The dollar held firm versus the yen today, supported by quarter-end buying as well as an absence of any fresh escalation in trade-related tensions between the United States and its major trading partners. Still, trade worries look…

KLCI ekes out mild gains as China equity resumes slide


KUALA LUMPUR: The local bourse struggled to hold on to early gains as it moved into midday with the becnhmark FBM KLCI ending the early session just 0.48 points higher at 1,676.34. While most Asian markets rebounded, China markets continued their slide with the Shanghai Composite Index down half a percent and the blue chip CSI sliding over 1%. Back home, investors continued to stay on the sidelines as they awaited any new developments on the brewing trade war between US and China, leading to a low trading volume ofRead More

Analyst cuts core earnings growth forecast for banking sector

PETALING JAYA: AmInvestment Bank has cut the banking sector’s core earnings growth forecast to 7.6% from 9.2% after lowering expectations for banks’ non-interest income.

The earnings growth will be contributed by an increase in revenue and improvement in operating expenses. Last year, banks’ core earnings grew 10.6%.

Non-interest income is now expected to be more challenging than earlier expected, due to softer capital market activities, with IPOs and capital raising in the equity market likely to remain slow.

AmInvestment Bank, which has reiterated its “overweight” call on the banking sector, is maintaining the loan growth expectation of 5% for the Malaysian banking industry supported by a gross domestic product growth of 5.5%. Domestic demand and improvement in external trade remain the drivers of economic growth.

Banks registered slower loan growth in Q1’18, dampened by the slower pace of overseas loans even though domestic loan growth was above the industry rate.

AmInvestment Bank expects loan growth of banks to improve in H2’18 underpinned by a pickup in consumer loans.

“A stronger consumer spending is anticipated in the short-term period between the implementation of zero-rated GST and reintroduction of SST. We expect business loan growth to also improve, supported by the absence of large corporate loan repayments and a non-repeat of the forex translation impact seen in Q1’18.”

The research house also noted that loans to the manufacturing, wholesale and retail sectors, benefiting from the improvement in consumer spending, are anticipated to be stronger compared with loans to the construction and construction-related sectors. This is in view of the fact that several major infrastructure projects have been terminated while some are under review.

Net interest margin-wise (NIM), AmInvestment Bank anticipates it to taper off in H1’18 from Q1’18, which was boosted by an Overnight Policy Rate (OPR) hike of 25 basis points last January. NIM is projected to only expand two basis points (bps) this year against a projection of a three bps increase previously.

“The lagged repricing of banks’ deposit rates adjusting to the increase in OPR coupled with keener competition for deposits compared to H1’18 as the sector moves closer towards the implementation of net stable funding ratio (NSFR) will be the contributing factors.”

“Also, the tapering of margin is also expected to be partly attributed to pressures on the asset yield of banks’ subsidiaries in Indonesia (Maybank Indonesia and CIMB Niaga).”

AmInvestment Bank believes the OPR will be maintained at 3.25% in H2’18, based on the headline inflation, which is still expected to be low, thus sustaining a positive real interest rate.

Dollar holds near one-week lows as trade war concerns rise

LONDON, June 26 — The dollar held near a one-week low against a basket of currencies on Tuesday as investors retreated to the sidelines while concerns grew about an intensifying conflict between the United States and its trade partners,…