Indonesia led losses as most Southeast Asian stock markets fell on Friday, as worries of a global growth slowdown continued to hamper investor sentiment, while Vietnam continued to rise for the fifth straight session.
Investors are also exercising caution amid trade talks between the U.S. and China with the tit-for-tat tariffs between the world’s two largest economic powers having already disrupted international trade and slowed the global economy since the trade war started several months ago.
“Slowing global growth is underway, evidenced by falling exports growth in trade-sensitive countries… An improved US-China relation may not provide an immediate boost to demand against the backdrop of peaking trade growth,” said Zhu Huani, an economist at Mizuho Bank said in a note.
The Indonesian benchmark dropped 0.7 percent, leading losses in the region, following the central bank’s decision to hold key rate on Thursday. But for the week, the index is set to snap two straight weeks of losses.
Indonesia’s central bank kept interest rates on hold on Thursday and said it was looking at ways to boost loan growth.
Financial and consumer stocks dragged the index with Telekom Indonesia and Bank Negara Indonesia falling 1 percent and 2 percent respectively.
Malaysian stocks fell 0.6 percent, ahead of the country’s January inflation data to be released later today. The index is, however, set to post its third consecutive weekly gain.
Malaysia’s consumer prices are expected to fall in January, the first decline in nearly a decade, amid a drop in domestic fuel prices, a Reuters poll showed on Wednesday.
The central bank however, said last week that the country was not at risk of deflationary pressure. The index was dragged by losses in healthcare and telecom stocks, with IHH Healthcare Bhd and Maxis Bhd shedding as much as 1.7 percent and 3.4 percent, respectively.
Singapore’s index shed 0.5 percent after the country’s second-biggest listed lender Oversea-Chinese Banking Corp Ltd posted disappointing quarterly financial earnings.
OCBC missed market estimates with a 10 percent drop in quarterly profit, due to a weak performance in its insurance business.
Shares of OCBC dropped as much as 2.2 percent, while those of its peer United Overseas Bank Ltd dipped as much 2.2 percent.
The Vietnam index continued to surge for the fifth straight day and rose 0.4 percent, with gains concentrated in financial stocks. Joint Stock Commercial Bank for Foreign Trade of Vietnam rose 2.8 percent.
Meanwhile, Philippine stocks edged marginally higher.
SYDNEY, Feb 22 — As property prices rocketed toward the heady peak of Sydney's real-estate boom in 2017, the bulldozers came to Epping. Eucalypt-lined streets of red-brick bungalows in the middle-class suburb were snapped up at hefty premiums by…
KUALA LUMPUR: The offer by a Chinese bank to issue Panda bonds in China for Malaysia is a positive sign that foreign countries and foreign investors are confident with the new government under the leadership of Prime Minister Tun Dr Mahathir Mohamad. Finance Minister Lim Guan Eng said the level of interest and confidence shown […]
BEIJING: China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters. But the People’s Bank of China (PBOC) is likely to cut market-based rates and further lower banks’ […]
KUALA LUMPUR: Finance Minister Lim Guan Eng today confirmed that Malaysia has received an offer for the issuance of Panda bonds from China and said the relevant parties are currently in discussions.
Speaking to reporters at the 12th Malaysian Property Summit, Lim said the offer from China Construction Bank has been communicated to the Prime Minister and the Cabinet.
“But we are still at the discussion stage. Unlike the Samurai bond for which the working paper has been presented to and approved by the Cabinet, and both countries have agreed on it. This one is still at the discussion stage,” he said.
Earlier this week, China’s ambassador to Malaysia, Bai Tian, said China Construction Bank is proposing to issue Panda bonds in China to Malaysia to help alleviate financial stress.
“I see this as a positive sign from other countries and foreign investors, who are confident about the administration of the new government led by Prime Minister Tun Dr Mahathir Mohamad. Because they are confident, they are willing to extend a loan, just like Japan with their Samurai bond. This is something that is being done for the first time since the 80s,” said Lim.
He said such offers from Japan and China reflect the interest of foreign investors in Malaysia and their confidence in the new government, which was not seen before.
He noted the Samurai bond’s coupon rate of 0.65% is below market rate compared with the coupon rate of a Goldman Sachs bond issuance under the previous government which was 100 basis points above the market rate.
The ¥200 billion (RM7.34 billion) 10-year Samurai bond, guaranteed by the Japanese government, will be issued next month, at a coupon rate not exceeding 0.65%. The Samurai bond was initiated by Mahathir, who requested his Japanese counterpart Shinzo Abe for yen-denominated credit in June last year.
The Samurai bond will be used to reduce debt accumulated by the previous government. The Samurai bond sale will be Malaysia’s first in three decades, having last raised such debt in 1989.
Meanwhile, Lim said the government hopes to conclude talks on the East Coast Rail Link (ECRL) but noted the challenge of ensuring that the cost is something that the country can afford while at the same time maintaining good relations with China.
“We still maintain the best of hopes that this matter can be resolved and that they can meet our request for the price reduction. Otherwise we would not be able to afford it,” he said.
Lim said the ECRL is one of the remaining projects to be concluded while most of the other projects that were being reviewed have been finalised.
As for the proposed Airport Real Estate Investment Trust (REIT), which was announced in Budget 2019, he said it is working towards appointing a REIT manager but it has not been finalised yet.
In his keynote address, Lim said the cost of living is still high although consumer price index (CPI) was at 1% in December, which is the lowest inflation rate in nine years.
He said the government is looking at how to ensure the low CPI can be filtered down and allow the public to benefit from the low inflation rate.
He said the CPI is sometimes used as a benchmark for wage increases, which is not so accurate thus the government is looking at another index that can better reflect the cost of living, so that wage rises reflect the actual situation.
KUALA LUMPUR: The Finance Ministry has received the offer for issuance of a Panda bond from China and the parties are currently in discussions.
Finance Minister Lim Guan Eng (pix) said discussions are ongoing and the offer from China Construction Bank is a positive sign from foreign investors.
Speaking to reporters at the 12th Malaysian Property Summit today, he said foreign investors’ willingness to extend loans to the government reflects their interest and confidence in the Malaysian government.
Earlier this week, China’s ambassador to Malaysia Bai Tian said that the China Construction Bank is proposing to issue Panda bonds in China to Malaysia to help alleviate financial stress.
PETALING JAYA: CIMB Group Holdings Bhd’s 92.5%-owned T Bank CIMB Niaga Tbk reported an audited consolidated net profit of 3.5 trillion rupiah (RM1 billion) for the financial year ended Dec 1, 2018 a 16.9% growth compared with a year ago.
The bank said the improved net profit came on the back of a 13.8% increase in on-interest income to 3.8 trillion rupiah and a 63 basis-point improvement in credit charges from 2.26% to 1.63% as provisions declined 25.7%.
CIMB Niaga’s loan loss coverage remains comfortable at 105.86%.
“We aim to maintain a targeted growth trajectory while keeping asset quality as a priority,” said CIMB Niaga president director Tigor M. Siahan.
Total loans grew by 1.8% to 188.5 trillion rupiah mainly from growth in mortgages of 11.2% to 30 trillion rupiah, small- and medium enterprise loans of 8.5% to 29.6 trillion rupiah and credit card of 5.5% to 8.6 trillion rupiah.
With total assets of 266.8 trillion rupiah as at Dec 31, 2018, CIMB Niaga maintained its position as Indonesia’s second largest private owned bank by assets.
Its capital adequacy ratio stood at 19.66% as at end-December 2018, representing a 106 basis-point increase from the previous year.
“Going forward, we will continue to focus on expanding our consumer and SME businesses, building our CASA (current account savings account) franchise and strengthening our Sharia business proposition and Sharia-compliant product offerings,” Tigor added.