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PETALING JAYA: Macquarie Malaysia expects the shift to index warrants to continue as volatility in the market increases.
This is especially for investors looking to profit from any short-term falls in prices, as put warrants are one of the few ways that Malaysian investors can profit from falls in the stock market, according to head of equity derivatives products for Macquarie in Asia Barnaby Matthews.
Index warrants were actively traded from March 2018 onwards, particularly the call and put warrants over the Hang Seng Index (HSI), which made up 43.9% of warrants turnover in the first five months of 2018.
Macquarie is the only structured warrants issuer to list structured warrants over the HSI on the Bursa.
Matthews also noted that the recent rise in trading activity reflects further growth potential in the Malaysian warrant market, with structured warrants turnover increasing to an average of RM97.5 million per day for the first five months of 2018 compared with an average of RM25 million per day in 2017.
This was contributed by increased volatility to the Malaysian and global equity markets.
“With rising global geopolitical tensions, trade tensions between China and the US, and Malaysia’s General Election all adding to investor uncertainty.”
Macquarie said the daily turnover hit a high of RM613.1 million on April 6, 2018, which represented a whopping 40.2% of the total turnover on the whole of the Bursa for that day.
“With the local market becoming increasingly uncertain, warrants over Malaysian single stocks took up a smaller piece of the warrants market, constituting 52.3% of warrants turnover in the first five months of 2018, compared to 79.2% in 2017.”
“Warrants over Sapura Energy, Supermax, Hengyuan Refining and My EG Services were actively traded during this period due to renewed volatility, especially around the GE period.”
Following the issuance of 12 new warrants today, Macquarie has issued a total of 1,000 structured warrants in Malaysia since its debut in October 2014.
Year-to-date, Macquarie has commanded the leading market share, with 60.1%1 of the Malaysian warrant market turnover.
KUALA LUMPUR: Macquarie Capital Securities (Malaysia) Bhd has issued a total of 1,000 structured warrants in Malaysia since its debut in October 2014, with the latest being the issuance of 12 new warrants on Thursday. The global financial services provider said on Thursday that over the past three years, Macquarie has been the leading warrant issuer in Malaysia, driving education, new technology and keeping investors informed via the structured warrants website malaysiawarrants.com.my. Macquarie is committed to providing the highest quality market making. Year to date, Macquarie has commanded the leadingRead More
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SHAH ALAM: ACE Market-listed Mikro MSC Bhd aims to transfer to the Main Market of Bursa Malaysia Securities Bhd in five years, when it doubles its profit to RM15-RM20 million a year driven by business growth, from RM10.89 million in the last financial year ended June 30, 2017 (FY17).
Managing director Yim Yuen Wah said although it has met the profit requirement for the Main Market three years ago, it still wants to strengthen its financial muscle before making the leap.
“At this size, if we move to the Main Market, it is still small. We want to make it bigger first, doubling our current profit to at least RM15-RM20 million a year, then maybe we’ll consider the move,” he told SunBiz in an interview.
Yim has been adamant on the company remaining on the ACE Market but is now slightly more receptive to the idea of moving to the Main Market given the better prospects and investors’ interest there.
He said the group’s financials have been steady and it will be more aggressive to drive its business going forward. The company posted a net profit of RM5.48 million for the nine months ended March 31, 2018, down a third from the RM8.25 million it posted for the nine month ended March 31, 2017. This was on revenue falling marginally by 3.35% for the nine month period ended March 31, 2018 at RM35.92 million, compared with RM37.17 million for the same period in 2017.
Mikro MSC is in the research, development (R&D) and design of analogue, digital and computer controlled electronic systems or devices for use in electrical, electronic and other industries. It also provides technical consultancy and maintenance services.
Currently, Mikro MSC produces RM50-RM60 million worth of products a year. Some of its products include protective relays, digital power metres and power factor regulators.
It has estimated a capital expenditure of RM4-RM5 million in FY19 for its new factory and equipment. The new factory in Kota Kemuning is expected to be completed by year-end and will commence operations next year, which will provide the company more room for expansion with the increased demand expected from overseas.
Yim explained that its overseas market share in control products is still small, at about 20-30% in Vietnam and less than 1% in Indonesia and Thailand, which means that there is more room for growth, compared with about 50% in Malaysia.
While Malaysia currently contributes about 55% of its revenue, and the remaining 45% from overseas, Yim hopes that in FY19, this ratio will be reversed.
Yim noted that the company’s FY18 revenue is unlikely to be better than FY17’s revenue of RM50.4 million, because of the expiry of its pioneer status incentive and the slowdown in the Malaysian market this year.
He added however that Mikro MSC’s R&D is constant, especially those in redesigning its products to mitigate the material price increase and increase its profit margin.
PETALING JAYA: Berjaya Sports Toto Bhd’s (BToto) revenue slipped to RM1.4 billion for the fourth quarter (Q4) ended April 30 against RM1.48 billion in the previous corresponding period, due to lower revenue reported by H.R. Owen Plc and Philippine Gaming Corporation Management.
However, it was mitigated by higher contribution from principal subsidiary Sports Toto Malaysia Sdn Bhd. Sports Toto registered an increase in revenue, mainly attributable to the seasonally higher sales during the Chinese New Year festive season in February 2018. Its pre-tax profit decreased by 4.5% mainly due to higher prize payout in the current quarter under review.
BToto’s pre-tax profit for Q4 dropped 35.9% to RM65.53 million from RM102.17 million on the back of impairment in value for certain available-for-sale investments and goodwill relating to leasing of lottery equipment business in the Philippines.
The group has declared an interim dividend of 4 sen per share for the quarter under review, bringing the total dividend distribution to 16 sen per share, equivalent to 93.5% of the group’s attributable profit for the financial year ended April 30.
BToto’s full-year revenue was down by 1.2% to RM5.66 billion from RM5.73 billion, while pre-tax profit increased marginally by 0.5% to RM377.9 million as compared with RM376.1 million in the previous financial year.
Looking ahead, BToto’s directors anticipate that the number forecast operator (NFO) business performance of Sports Toto will be satisfactory and are confident that the group will continue to maintain its market share in the NFO business for the financial year ending April 30, 2019.