KUALA LUMPUR: Malaysia is well on its way to cross the threshold into high-income and developed country status in the coming years, said the World Bank. In a statement, vice president for East Asia and Pacific Victoria Kwakwa said Malaysia’s economy was well-diversified and stood on solid foundations, which are primed to take the country […]
KUALA LUMPUR: The Malaysian Rubber Glove Manufacturers Association (Margma) has come to the defence of its members in light of recent media reports on the issue of foreign workers’ rights in Malaysia. Margma in a statement yesterday also provided explanation on the issues raised in the media, among others, worker’s passports, agent fees, overtime work […]
KUALA LUMPUR: The Construction Industry Development Board (CIDB) has published a list of certified local construction materials and products for 2017. CIDB in a statement said the 359-page publication contains a list of manufacturers who have obtained the certificate of standard compliance (PPS) from CIDB since 2016. A total of 120 products in 13 categories […]
SEPANG: AirAsia has received two prestigious awards at The Edge Billion Ringgit Club 2018 for its strong profit growth over the past three years. The awards were for ‘Highest Growth in Profit After Tax Over Three Years for Big Cap Companies’ with RM10 billion to RM40 billion market capitalisation and for the ‘Highest Growth in […]
KUALA LUMPUR: The participants have more than doubled for AIA Bhd (AIA) Malaysia’s Healthiest Workplace Summit 2018, indicating that Corporate Malaysia is growing more aware about improving their workplaces for their employees. At the summit held recently, 15 companies were named winners of the second Malaysia’s Healthiest Workplace awards by AIA. The companies were recognised […]
KUALA LUMPUR: The Open Vault, OCBC Bank (Malaysia) Bhd’s (OCBC) new FinTech and Innovation unit, is expected to drive OCBC Bank’s progression into the digital era. Unveiled by Malaysia Digital Economy Corporation (MDEC) vice president of Growth Ecosystem Development Norhizam Kadir, he said: “We are pleased to see OCBC Bank committing itself to an initiative […]
KUALA LUMPUR: The ringgit is expected to gradually appreciate against the US dollar towards end of the year and strengthen below the RM4 level by early 2019, according to Rakuten Trade Sdn Bhd’s head of research Kenny Yee.
The local unit weakened 0.1% to 4.1865 against the greenback as at 5pm yesterday. Year-to-date, it has depreciated 3.4%.
“By end of this year, I expect it to improve to the RM4.05-RM4.10 level and should dip below RM4 early next year. Hopefully the foreign funds have started to flow back into Malaysia by that time,” Yee told the media during the fully online broker’s market outlook briefing here today.
“Initially, early this year we expect the ringgit to hover around RM3.80-RM3.90 level, but looking at what had happened in the US (rate hikes) and the recent (weakening of) Chinese renminbi, I think the ringgit has performed worse than expected,” he added.
Hence, Yee said the foreign funds are likely to return in the near term to take advantage of the lower ringgit.
Year-to-date, he said the foreign net selling stood at almost RM11 billion.
Moreover, Yee said Malaysia, which has a lower average market volatility compared with Singapore, Indonesia, Vietnam, Thailand and the Philippines, is known as the region’s safe haven for foreign funds and is likely to attract foreign investors’ interest.
“Malaysia is usually known as the region’s more defensive market, and it is a preferred destination for foreign funds,” he added.
The firm however substantially reduced its corporate earnings growth forecast for 2018 and 2019 to 4.1% and 4.2% respectively, from 6.8% and 8.3% previously on the back of the sharp earnings downgrade in the gaming, telecommuni-cation and plantation sectors.
“Going forward, we expect banking sector will continue to be the main catalysts for earnings growth,” he said.
However, for 2020, the firm expects a better performance for Malaysian com-panies with an estimated 7.6% growth.
Rakuten Trade’s top picks among the FBM KLCI component stocks are Malayan Banking Bhd (Maybank), Genting Bhd, CIMB Group Holdings Bhd, Axiata Group Bhd and Gamuda Bhd.
Yee noted that the index-linked blue chips are ripe for the picking following some of the heaviest sell-off seen in May and June.
In the small and mid cap space, Rakuten Trade favours Kelington Group Bhd, HSS Engineers Bhd, Malaysia Building Society Bhd, Perak Transit Bhd and Vizione Hold-ings Bhd.
According to Yee, the FBM KLCI is anticipated to grow over 7% or 100 points from the current 1,660 points to touch 1,780 points by year-end and reach 1,840 points in 2019 based on 16 times the market’s forecast earnings.
PETALING JAYA: The RM26.7 million claim by Malaysia Airports Holdings Bhd (MAHB) from AirAsia X Bhd (AAX) for uncollected passenger service charges (PSC) will not have any material impact on the airline’s operations.
“In the event that AAX would have to reimburse the RM26.7 million worth of uncollected PSC to MAHB, the impact would not be material to AAX’s day-to-day operations as the company has generated a net operating cash flow of RM47.3 million on average for the past three quarters. Moreover, AAX has a net gearing which is still manageable, remaining below 0.7 times after considering such payments to MAHB,” MIDF Research said in its report.
On Tuesday, AAX told Bursa Malaysia that it was served with a writ of summons by MAHB worth RM26.7 million for uncollected PSC since July 1, 2018, which is in relation to the RM23 additional charge per passenger for international passengers since AAX has only been collecting RM50 instead of RM73 per passenger.
MAHB stated that same rates should apply to both klia2 and Kuala Lumpur International Airport (KLIA). However, AAX reiterated its stance that klia2 is a low-cost airport and the charges levied should commensurate with the level of services provided.
“Future adherence to the full PSC could push average fares upwards to sustain margins but we believe this will be partly mitigated by AAX’s prudence in shifting some of the future capacity into other core markets namely, Japan, South Korea and India to factor in the slower growth from the China segment,” said MIDF Research.
It noted that a re-rating catalyst for AAX would be the possible equal downward revision of PSCs for klia2 and KLIA without any plans to reverse out any previous charges according to the Malay-sian Aviation Commission (Mavcom).
It maintained its “neutral” call on the stock with an adjusted target price of 22 sen per share.
Meanwhile, AirAsia Group Bhd’s (AAGB) deal with Castlelake LP indicates AAGB’s aspirations to invest in shifting from being asset-heavy to being more digitally focused.
“Operationally, AAGB has partnered with Airbus and Palantir to establish an integrated Big Data platform which includes forecast of predictive maintenance and efficient scheduling of parts with a potential saving of US$40,000 per aircraft per year,” said MIDF Research in a separate report.
On Tuesday, Reuters reported that Castle-lake, a US private investment firm, has signed a deal to acquire about 30 narrowbody planes from AAGB for about US$800 million (RM3.34 billion).
The deal entails the purchase of AAGB’s older aircraft, which are under lease to AAGB’s affiliated airlines and is expected to be concluded in a few weeks.
“Previously, management noted that there will be a net addition of 24 aircraft in FY19. Taking into consideration the sale of 30 aircraft to Castlelake, there would be a net reduction of AAGB’s fleet (including other AOCs) by six aircraft. As such, we expect aircraft utilisation across AAGB in FY19 to increase above the 2.2% recorded for 9MFY18,” MIDF Research said.
If the acquisition is satisfied via cash, AAGB’s cash pile would increase to about RM7.77 billion, translating into a net cash position of about RM4.57 billion. Meanwhile, the writ of summons by MAHB to AAGB worth RM9.4 million is only less than 1% of its cash pile and FY18F/FY19F earnings.
“Therefore, AAGB’s financial health will not be adversely impacted in the event that AAGB has to reimburse the monies owed to MAHB,” it added.
It maintained its “buy” call on AAGB with an unchanged target price of RM3.48 per share.
AAGB shares were down 10 sen or 3.8% to RM2.54 today, while AAX declined half a sen or 2.1% to 23 sen.
KUALA LUMPUR, Dec 12 — The ringgit was unchanged on Wednesday following renewed optimism for the trade talks between the two largest economies in the world, the United States and China. At 6pm, the local note was traded at 4.1830/1860 against the…
KUALA LUMPUR: Bursa Malaysia snapped a six-day losing streak by closing firmer today, with the benchmark index moving into positive territory spurred by buying support in index-linked counters such as CIMB and Public Bank, dealers said.
At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 10.64 points to finish at 1,663.27 after fluctuating between 1,656.47 and 1,667.7 throughout the day.
Contributing a total of 6.825 points to the key index, CIMB soared 24 sen to RM5.75 after 13.74 million shares changed hands while Public Bank surged 40 sen to RM24.90 with 2.96 million shares transacted.
Gainers led losers 394 to 371, while 390 counters were unchanged, 750 untraded and 38 others suspended.
Total volume increased to 2.07 billion units worth RM1.94 billion from 1.43 billion units valued at RM1.51 billion recorded yesterday.
Maybank IB Research, in a note today, projected CIMB to record a faster earnings growth of 11% in financial year (FY) 2019.
The higher growth was on the back of more stable net interest margins and credit costs, leading to a recovery in return on average equity to 10% from 9.4% (excluding one-offs) in FY18, it said.
Meanwhile, a dealer said the uptrend on Bursa was in tandem with its regional peers’ performance amid improved market sentiment as investors were upbeat over an easing in trade tensions between the US and China.
Among heavyweights, Maybank eased five sen to RM9.29, Tenaga lost four sen to RM13.50, and Petronas Chemicals slipped one sen to RM9.17, but IHH Healthcare added 11 sen to RM5.60.
Of actives, MyEG shed 17 sen to 84 sen, Bumi Armada gained 1.5 sen to 17.5 sen, while Priceworth was flat at 4.5 sen.
The FBM Emas Syariah Index was 7.08 points better at 11,406.61, the FBM Emas Index improved 51.19 points to 11,435.86 and the FBMT 100 Index edged up 53.59 points to 11,326.89.
However, the FBM Ace Index fell 13.47 points to 4,532.75, and the FBM 70 erased 11.4 points to 13,206.29.
Sector-wise, the Financial Services Index bolstered 151.12 points to 17,289.69 and the Plantation Index bagged 27.96 points to 6,660.48, but the Industrial Products and Services Index eased 0.24 of-a-point to 167.19.
Main Market volume increased to 1.41 billion shares worth RM1.81 billion from 980.18 million shares valued at RM1.41 billion on Tuesday.
Warrants turnover advanced to 390.18 million units worth RM84.56 million from 286.99 million units valued at RM68.08 million.
Volume on the ACE Market widened to 267.68 million shares worth RM38.93 million compared with 161.23 million shares worth RM27.08 million.
Consumer products and services accounted for 1.38 million shares traded on the Main Market, industrial products and services (248.84 billion), construction (75.7 million), technology (337.53 million), SPAC (581,000), financial services (39.03 million), property (88.19 million), plantations (24.69 million), REITs (8.09 million), closed/fund (42,400), energy (289.07 million), healthcare (48.76 million), telecommunication and media (36.05 million), transportation and logistics (50.25 million), and utilities (22.45 million).
The physical price of gold as at 5pm stood at RM161.98 per gramme, down 46 sen from RM162.44 at 5pm yesterday. — Bernama