global economic


Asian shares tread water as investors watch trade talks

SHANGHAI, Feb 22 — Shares in Asia were flat in early trade today following a fall on Wall Street, with a deteriorating global economic outlook outweighing more signs of progress in trade talks between China and the United States. Early in the…

US, China sketch outlines of deal to end trade war, say sources

WASHINGTON, Feb 22 — The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources…

APEC Secretariat wants deeper engagement in Chile meeting

KUALA LUMPUR: Asia-Pacific Economic Cooperation (APEC) Secretariat executive director Tan Sri Dr Rebecca Fatima Sta Maria has called for its members to be more deeply engaged in the upcoming First APEC Senior Officials’ Meeting in Chile next week. She said the members may find difficulty achieving immediate solutions amid a very tense environment and global […]

US stocks dip on weak data from Europe, Japan

NEW YORK, Feb 21 — Wall Street stocks fell early today following lacklustre economic data from Japan and Europe while high-stakes trade talks between the United States and China resumed. About 20 minutes into trading, the Dow Jones Industrial…

Corporate earnings unlikely to excite stock market: Affin Hwang AM

KUALA LUMPUR: Corporate earnings delivery will not significantly influence the Malaysian capital market this year as catalysts are expected to come from the external front, according to Affin Hwang Asset Management Bhd (Affin Hwang AM).

Its managing director, Teng Chee Wai, said for 2019, the company expects a single-digit upside in the FBM KLCI at around 8% to 10%, partly buoyed by recovery in global growth as the economic cycle matures.

“2019 is a year that the markets are going to respond more towards macro policies rather than earnings. And I do not see price-earnings expansion to be one big factor this year for the market because there is a very little growth,” he told a press conference after presenting Affin Hwang AM market outlook and company briefing here today.

“With 5% in (consensus) earnings (estimates) growth, I don’t expect this year to be a double-digit year (for the FBM KLCI),” he said, noting downward revisions in earnings are likely if there is slowdown in global economic activities.

Asked whether 2019 is a good year to invest in stocks, Teng warned of risks and uncertainties in the market such as the ongoing trade dispute between the United States and China.

“There is no such thing as the best time to invest … you must be mindful of the risks, and asset allocation is the way forward,” he added.

Nevertheless, Teng said given the positive development in the US-China trade talks, coupled with changes in policy by the Federal Reserve, he is fairly confident that the market will improve at some point in the second half of the year.

On Affin Hwang AM’s outlook, Teng said the fund manager is confident that it will surpass the RM50 billion mark in assets under administration (AUA) this year and reach the RM52 billion level.

He said the firm’s AUA grew 0.84% or RM400 million to RM47.8 billion as at end of 2018 from RM47.4 billion in late 2017.

Earlier at the press conference, Affin Hwang AM’s Islamic entity, Aiiman Asset Management Sdn Bhd, launched its maiden fund called Aiiman Asia Pacific (ex-Japan) Dividend Fund, which marks its foray into the retail market.

Aiiman managing director Akmal Hassan said the fund is suitable for retail investors who want regular income distribution and capital gains, and have a medium- to long-term investment horizon and moderate risk tolerance.

The fund will invest a minimum of 70% of the fund’s net asset value (NAV) in syariah-compliant equities and a maximum of 30% of its NAV in sukuk, syariah-compliant money market instruments and/or deposits.

The base currency of the fund is in ringgit with a minimum investment amount of RM1,000.

Fed says US growth easing as global risks rise

WASHINGTON, Feb 21 — The Federal Reserve believes US growth will “step down” this year from last year’s rapid pace amid rising global risks, including from tense trade relations, according to minutes released today. And given the greater…

Japan trade deficit expands in January as China-bound exports fall

TOKYO, Feb 20 — Japan's trade deficit for January grew from a year earlier with exports to China tumbling in their worst decline in three years, government data showed today. Japan logged a trade deficit for the month of 1.41 trillion yen (RM38.39…

Office sector to remain flat this year: Rahim & Co

KUALA LUMPUR: The office sector, which saw a 20% decline in asking rents last year, is expected to remain flat for more than a year due to pressure from incoming supply, said Rahim & Co International Sdn Bhd.

Director of research Sulaiman Akhmady Mohd Saheh said asking rents fell 20% last year while effective rents fell 8-10%, resulting in yield compression whereby some office buildings are now getting yields of less than 5%.

“There was a big gap in terms of landlords’ expectations compared with what tenants are willing to pay. It is that asking price that has seen the huge drop. But actual market transactions especially for KLCC and established areas, did also see some drop because of vacancy rates – that’s one pressure – and the prolonged rent-free period,” he told reporters at a briefing on the Malaysian property market yesterday.

However, he said the decline will plateau off as tenants weigh the costs of relocating although they will still negotiate for lower rents.

“In terms of market movement, the rental drop is seen more in Grade B1 and Grade A, newer office buildings. But the older, established, better-than-average buildings, rentals for those buildings are actually holding up. It’s an economics of alternative,” he added.

Sulaiman said the office market will take more than a year to pick up due to incoming supply and the global economic situation. At present, there are 18 million sq ft of incoming office space of which 12 million sq ft are being constructed.

Based on historical average take-up rate of office space of 3 million sq ft per year, it would take about three to four years for the market to absorb the 12 million sq ft of incoming supply.

Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said the overall property market is expected to remain flat this year as the government continues to implement changes to the property market.

“2019 will also continue to be a buyer’s market as not only is there an abundance of readily available properties but also a wider range of financial aid and schemes that are geared for housing ownership. Though it seems to be getting further out of reach, the dream to own a home is still attainable but a smarter strategy and planning is required in this day and age,” he said.

Sulaiman said the residential market will remain slow for another one to two years due to affordability issues, which means transactions would depend on effective income growth.

However, Abdul Rahim believes it will start to pick up in one year, as the downtrend has already slowed and trade tensions should be resolved by then. “The trade war between the US and China is being negotiated. I’m sure both China and the US want it to be settled and I think it will be settled … I think both China and the US are responsible countries,” he said.

“On the national side, the government has to be given time to settle down and I think by that time, they should settle down. In fact, government has introduced policies and so on, including property policies that are logical. They have just formed the National Housing Policy and if everybody cooperates including developers, GLCs and so on, there’s no reason that these policies shouldn’t work. I think 12 months is a logical period for us to expect the new government to function,” he added.

Germany, with bumper current account surplus, frets about car tariffs

BERLIN, Feb 19 — Germany recorded the world’s largest current account surplus for the third year running in 2018 due to strong exports that are vexing US President Donald Trump and raising the risk of US tariffs on German cars. Germany’s…

Singapore can make its way in the world, says minister in Budget 2019 speech

SINGAPORE, Dec 19 — Delivering his first Budget speech since he was earmarked to succeed Prime Minister Lee Hsien Loong, Finance Minister Heng Swee Keat yesterday reflected on Singapore’s 700-year history and, at the same time, sought to provide…