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KLCI gets off to sluggish start, extends loss in line with region

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KUALA LUMPUR (April 25): The FBM KLCI got off to sluggish start this morning in line with the fall at most regional markets. At 9.05am, the…


Stocks In Focus (25-04-2018)

KUALA LUMPUR (April 24): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (April 25) may include the following:…


Bond Pricing Agency eyes Philippines entry

KUALA LUMPUR: Bond Pricing Agency Malaysia (BPAM), which today launched the new Asean3 Government Bond Indices (A3GBI) in partnership with Indonesia Bond Pricing Agency and the Thai Bond Market Association, hopes to include the Philippines in the Asean index this year and invite more member countries to participate.

The A3GBI is designed to track the performance of local currency-denominated government bonds in ringgit, rupiah and baht. Setting up an investable and replicable index, which consists of the largest market-makers and liquid bonds from the government segment, is expected to provide greater visibility of Asean market behaviour.

Local currency bond markets in Asean have grown significantly and as at the end of 2017, the combined market size in dollar terms reached US$1.23 trillion (RM4.8 trillion). With this, the need for reliable and sophisticated data sets to measure and track market performance is becoming important. This environment formed a perfect setting for cooperation between the bond pricing providers in Asean. The A3GBI marks the first of such collaboration in Asean.

BPAM CEO Meor Amri Meor Ayob said the experience of building the A3GBI was a valuable learning opportunity for all three countries to develop their bond data and analytical capabilities.

The A3GBI also marks the first step in its ambition to build more cross-border products with its Asean neighbours.

A3GBI tracks daily movement to observe the direction of the market. A3GBI and sub-indices serve as a benchmark to measure performance. Over time, A3GBI reveals peaks and troughs to illustrate significance of market events.

The data may be used as a comparison with other data sets, and is useful for formulating trading strategies. Its constituents may allow for portfolio emulation for index funds of exchange traded funds.

BPAM chief business officer Shah Zain said it also plans to have more joint product development later, such as an Asean Corporate Bond Index and Asean Sukuk Index. He said the bond market has always been strong and is much stronger than the stock market.

“The bond market is fundamental to any economy, simply because the government issues bonds. It doesn’t issue shares. We chose government bonds because it is the way countries raises money. The prospects in the future is always there,” Shah told reporters after the A3GBI launch.

He said the biggest bond market in Asia is China, followed by Japan and Korea. Malaysia is ranked fourth in terms of percentage of gross domestic product.

“Index is a powerful fundamental tool to investors. Indexation is still under-developed in the region but advanced in the rest of the world,” he added.


Bursa Malaysia closes at intra-day low

KUALA LUMPUR: Bursa Malaysia ended at an intra-day low today on selling pressure across-the-board in tandem with most Southeast Asian bourses, taking the cue from the weaker overnight performance on Wall Street, dealers said.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) ended at 1,865.34, down 15.02 points from Monday's close of 1,880.36.

It opened 3.39 points higher at 1,883.75 and moved between 1,865.34 and 1,885.32 throughout the day.

Market breadth was negative with losers outpacing gainers by 573 to 291 while 387 counters remained unchanged, 663 untraded and 28 others suspended.

Volume fell to 1.93 billion units worth RM2.32 billion from 1.94 billion units worth RM1.66 billion yesterday.

A dealer said Bursa Malaysia extended profit-taking consolidation today due to an overbought technical momentum after hitting an all-time high of 1,895.18, up 15.86 points, on Thursday last week.

“Concerns over the rising yields in US government bonds and the downturn among technology companies sapped optimism in most Southeast Asian equities markets which prompted a sell-off,” he said

Bursa Malaysia opened higher but succumbed to profit-taking after 15 minutes of trading with selling in blue-chips led by Press Metal Aluminium and telecommunication stocks.

Regionally, Japan's Nikkei gained 0.86% to 22,278.12, Hong Kong's Hang Seng rose 1.26% to 30,636.24, South Korea's Kospi declined 0.40% to 2,464.14, the Singapore's Straits Times Index was 0.08% better at 3,582.54 and Indonesia's Jakarta Composite index slipped 1.19% to 6,232.88.

Among heavyweights, Public Bank and CIMB shed two sen each to RM24.10 and RM7.22 respectively, Petronas Chemicals bagged three sen to RM8.49 while Maybank and Tenaga were flat at RM10.62 and RM15.88 respectively.

For actives, Sapura Energy and PUC eased 1.5 sen each to 70.5 sen and 22 sen, Hibiscus shed 3.5 sen to 82.5 sen and Nexgram eased half-a-sen to 39.5 sen.

The FBM Emas Index fell 105.25 points to 12,974.41, FBM Emas Shariah Index dropped 114.34 points to 13,131.70, FBMT 100 Index eased 106.52 points to 12,790.59 and the FBM 70 dipped 139.57 points to 15,286.24.

The FBM Ace bagged 23.83 points to 5,322.46.

Sector-wise, the Finance Index declined 104.94 points to 18,305.04, Industrial Index slipped 41.44 points to 3,211.79 and the Plantation Index shed 11.64 points to 7,991.96.

Main Market volume fell to 1.18 billion shares worth RM2.19 billion from 1.21 billion shares worth RM1.51 billion on Monday.

Warrants volume widened to 458.49 million units valued at RM78.38 million from 430.75 million units valued at RM96.66 million yesterday.

Volume on the ACE Market shrank to 284.65 million shares worth RM51.80 million from 299.25 million shares worth RM50.37 million on Monday.

Consumer products accounted for 33.13 million shares traded on the Main Market, industrial products (306.97 million), construction (66.09 million), trade and services (555.33 million), technology (72.09 million), infrastructure (14.69 million), SPAC (6.68 million), finance (46.20 million), hotels (3.46 million), properties (47.87 million), plantations (17.10 million), mining (8,000), REITs (11.19 million) and closed/fund (nil). — Bernama


EPF invests RM4.86b in small- and medium-cap stocks

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KUALA LUMPUR (April 24): The Employees Provident Fund (EPF) said today it has invested RM4.86 billion in small- and medium-cap stocks on Bursa Malaysia through both its internal and external fund managers. It noted that the equities portfolio remains the largest contributor to the pension fund’s income at RM334.23 billion as at end December 2017, up 8% from RM309.48 billion in 2016. “As at end-2017, we have invested in 192 small- and medium-cap companies and we are committed to find more good companies to add to our existing portfolio,” EPFRead More


Shareholders positive after Lotte’s bumpy start

KUALA LUMPUR: Lotte Chemical Titan Holdings Bhd shareholders remain buoyant on the prospects of the petrochemical firm after a series of unfortunate events – share price slump, stop-work order and fire at its plant – in the first six months of listing marred the fanfare of being one of the largest listings the stock exchange has seen in the last five years.

Shareholders met by SunBiz at the group’s AGM today said they are more relieved now after all the distractions, as the business operations are back on the right track.

They acknowledged that while the share price movement is something beyond the group’s control, its rebound to above RM6 is seen as a good sign for the group which hit a low of RM4.14 just a month into its listing at RM6.50.

“I managed a handsome paper gain after I bought into the stock when it fell to below RM5 last year,” a minority shareholder said.

At today’s market close, the stock gained 2 sen or 0.3% to RM6.23, just 4.2% shy from its initial public offering (IPO) price which was slashed from the RM8 set initially, due to weak market sentiment.

Its share price dipped to a low of RM4.14 last August after announcing a 72% plunge in second-quarter net earnings ended June 30, 2017 on the back of high inventory cost carried forward from turnaround activities as well as higher production cost due to water supply interruption.

Giving truth to the adage of trouble coming in threes, in September, Lotte’s Pasir Gudang factory caught fire due to contact between residual vapour from the quench water drain pit and the steam line, causing an estimated loss of less than RM50,000.

The same plant was also issued a stop-work order by the Department of Environment in October after being identified as the source of a stench, which reached Singapore’s shores.

Looking ahead, Lotte’s executive vice-president of corporate planning Philip Kong believes the group will continue to see a reasonable profit margin given strong demand for petrochemical products with limited market supply capacity.

This is despite the rising oil prices, which could put pressure on petrochemical players. As at 7pm today, Brent crude oil stood at US$74.95 a barrel.

“Our business is a margin game. As long as there is strong demand with limited supply, the margin will be maintained. If oil prices go up, the polymer prices will pick up as well,” he told reporters after the group’s first AGM since its listing.

Lotte produces olefins and polyolefins, which are raw materials for plastic product manufacturing.

For the financial year ended Dec 31, 2017, its net profit declined 19.1% from RM1.32 billion to RM1.06 billion, due to lower sales volume resulting from two routine statutory turnaround exercise at the Malaysian site and water disruption in Johor.

For 2018, its utilisation rate is expected to increase to 90% from 75% currently in the absence of plant shut down and water disruption.

Speaking on the integrated petrochemical facility in Indonesia, Kong said Lotte will make a final decision on its planned integrated petrochemical facility in Indonesia within the year or early next year. The estimated cost of the project is between US$3 billion (RM11.7 billion) and US$4 billion (RM15.6 billion) and is scheduled to be completed by 2023.

He added that Malaysia and Indonesia, which make up 70% of the overall business, remain the two important markets for Lotte on the back of huge population and a slight premium against the international prices.


EPF invests RM4.86b in small and medium-cap companies

PETALING JAYA: The Employees Provident Fund (EPF) has invested a total of RM4.86 billion in small and medium capitalised stocks in Malaysia through both its internal and external fund managers.

The equities portfolio remains the largest contributor to the retirement fund's income, which recorded an 8% increase from RM309.48 billion in 2016 to RM334.23 billion as at end December 2017, it said in a statement.

EPF said this affirms reports of the country's positive growth, and as indicated by the performance of the stock market index, FTSE Bursa Malaysia KLCI (FBM KLCI) last Thursday, which reached an all-time high in the country's economic history.

“As our funds continue to grow, we are constantly open to new investment opportunities that can provide income that are sustainable and long term,” its CEO Datuk Shahril Ridza Ridzuan said.

“Our strong investment performance was largely driven by our investments in equities. We have been investing in stocks across various sectors, which include small and medium-cap companies,” he added.

As at end 2017, Shahril said EPF has invested in 192 small and medium-cap companies and it is committed to find more good companies to add to its existing portfolio.

Shahril added that EPF would constantly monitor and assess the performance of the country's small and medium-cap companies to see if they are suitable for investment and fit the retirement fund's risk return profile.

He said among the qualities that the EPF would look for in such companies include good governance, cost structure and sound business performance.

“The EPF has been doing co-investments with the small and medium-cap companies to help their growth as we see future potential in them, which should also help to spur economic growth and boost EPF's investment income,” he added.

In the recently tabled Annual Report 2017, EPF's total gross investment income as at Dec 31, 2017 was RM53.14 billion and total investment asset RM791.48 billion with return on investment (ROI) of 7.3%.


Heat is on emerging-market currencies with Indonesia stepping in

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JAKARTA (April 24): From Indonesia to India, central banks in emerging markets face rising pressure to prop currencies battling a surging US dollar. Indonesia’s central bank has intervened in the currency and bond markets by a “sizable” amount, Governor Agus Martowardojo said in a statement overnight. He pledged to take more action to support the rupiah after it slid to a two-year low on Monday. “To maintain the stability of the rupiah exchange rate according to its fundamentals, Bank Indonesia has intervened in both the foreign exchange market” and theRead More


Bursa slides at mid-afternoon

KUALA LUMPUR, April 24 — Bursa Malaysia remained in negative territory at mid-afternoon today, pressured by selling across-the-board led by industrial products and the trade and services sector, dealers said. At 3pm, the FTSE Bursa Malaysia KLCI…


Most Asian currencies pressured as US bond yields rise

SINGAPORE, April 24 — Most emerging Asian currencies weakened today as rising US bond yields boosted the dollar, dampening interest in riskier assets. The US dollar set a three-month high against a basket of currencies, supported by the US 10-year…