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KLCI pares gains as sellers outpace buyers

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KUALA LUMPUR (Oct 16): The FBM KLCI pared some of its gains at midday break today, as sellers outpaced buyers at the local bourse, against the backdrop of modest gains at regional markets. At 12.30pm, the FBM KLCI was up 0.99 points to 1,729.73. The index had earlier risen to a high of 1,732.14. Losers led gainers by 359 tp 269, while 1,270 counters traded unchanged. Volume was 796.54 million shares, valued at RM634.77 million. Gainers included Top Glove Corp Bhd, Petronas Dagangan Bhd, United Plantations Bhd, UMW Holdings Bhd,Read More


Cloudy outlook for local stocks in short term

PETALING JAYA: The local stock market saw heavy selling pressure again today, tumbling as much as 52.2 points or 3% to a low of 1,682.98 points at one point amid a regional sell-off following the rout on Wall Street overnight, before closing 26.69 points weaker at 1,708.49.

Coupled with the loss of 38.97 points on Wednesday, the FBM KLCI has nosedived 65.66 points or 3.7% in the past two days, wiping off RM62.06 billion in market capitalisation.

Today's trading volume stood at 3.1 billion shares valued at RM3.7 billion. Market breadth was negative with only 233 gainers against 805 losers.

Among the biggest decliners were United Plantations Bhd, Nestle (Malaysia) Bhd, Heineken Malaysia Bhd and Carlsberg Brewery Malaysia Bhd, which dropped RM1.08, RM1.00, 94 sen and 64 sen to RM26.58, RM145.00, RM18.96 and RM18.80, respectively.

The construction index, however bucked the trend with a rise of 2.14%. Gamuda Bhd was among the top gainers, closing 23 sen or 11.1% higher at RM2.30.

On the currency front, the ringgit weakened 0.14% to 4.1590 against US dollar as at 5pm today.

Meanwhile, Asian stock markets fell sharply on fears over US interest rate increases and heightened trade war, with China's Shenzhen and Shanghai stock exchanges slumping 6.45% and 5.22%, respectively, to their the lowest levels in four years.

The Taiwan market sank 6.31%, its largest one-day loss in history. Elsewhere, the Korean, Japanese and Hong Kong markets skidded 4.44%, 3.89% and 3.54%.

The outlook for the local bourse is expected to be gloomy in the short term as foreign selling could intensify on the pullback of global liquidity, say analysts.

JF Apex Securities head of research Lee Chung Cheng told SunBiz that Bursa Malaysia will see challenging times in the short term. Apart from external headwinds, the retendering of underground works for the MRT2 project and the possible introduction of new taxes such as inheritance tax, soda tax and capital gains tax are negative to the market.

Due to the uncertainties, he said foreign selling is expected to persist, albeit at a slower pace.

Lee said the immediate support for the FBM KLCI is 1,700 points, while the next would be 1,660 points.

Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew said the downward trend in the Malaysian market began in April, where the peak of 1,895 points was recorded ahead of the May 9 general election.

“Concurrently, global liquidity also peaked around the same time. We can't say it is the end of the US bull market, but it is getting possible as it failed to reclaim the recent highs.”

MIDF head of equity strategy Syed Muhammed Kifni Syed Kamaruddin concurred, saying that the US stock market is only at the beginning of a cyclic pullback and there could be further downside in prices.

“We believe there is a heightened likelihood of an impending short-term cyclic pullback in the US equity (during the coming months, as early as in October) which empirically would drag down other world's bourses alongside,” he said in a research note today.

Pong is cautious on the market outlook as local funds may join hands in selling equities if foreign buying does not pick up.
“The KLCI is still unable to make new highs, It is now about 200 points lower than the peak of 1,895 points in April 2018.”

Syed Muhammed Kifni expects Budget 2019 and the 11th Malaysia Plan mid-term review could help buoy market sentiment and equity valuation with fresh orientation and interesting new or altered measures.

“Furthermore, another possible upside impetus for the local bourse in the final quarter may emanate from the prospect of a technical rebound in the recently battered emerging market equities.”

He reiterated the FBM KLCI year-end target at 1,800 points which equates to a price-to-earnings ratio of 16.6 times. For end 2019, the target is 1,900 points.


KLCI tumbles 2.63%, falls below 1,700-level

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KUALA LUMPUR (Oct 11): The FBM KLCI tumbled 2.63% in early trade this morning and slipped below the crucial 1,700-point threshold , tracking widespread losses at most regional markets. At 9.05am, the FBM KLCI lost 44.51 points to 1,690.67. The top losers included Nestle (M) Bhd, Kuala Lumpur Kepong Bhd, British American Tobacco (M) Bhd, Panasonic Manufacturing Malaysia Bhd, United Plantations Bhd, Petron Malaysia Refining & Marketing Bhd, Tenaga Nasional Bhd, Hong Leong Bank Bhd, Malaysian Pacific Industries Bhd and Dutch Milk Industries Bhd. Asian share markets sank on ThursdayRead More


Analysts neutral on Nestle’s proposed disposal of CDB

KUCHING: Nestle (Malaysia) Bhd’s (Nestle) proposed disposal of the group’s chilled dairy business (CDB) has generated neutral views, with some projecting the outlook for the segment to remain challenging. Lactalis, the world’s largest dairy firm, said it had agreed to buy the chilled dairy business of Nestle in Malaysia in a deal worth around US$40 […]


Nestle to sell chilled dairy business, PJ factory to finance world’s largest Milo plant

PETALING JAYA: Nestle (Malaysia) Bhd is selling its chilled dairy business – which retails the Bliss brand of yogurt drinks, in Malaysia, Singapore and Brunei – and its Petaling Jaya factory, to Lactalis Manufacturing Malaysia Sdn Bhd for RM155.3 million, as part of plans to set up the largest Milo factory in the world in Chembong, Negri Sembilan.

The group said it would be using RM100 million, or the bulk of the proceeds from the sale, by end of 2019, for the Milo manufacturing centre of excellence in Chembong.

Nestle Malaysia plans to move all existing Milo manufacturing assets in the Petaling Jaya factory to the Chembong factory.

The disposal is on a going-concern basis, with Lactalis offering continuous employment to a majority of the affected employees based on the purchasers' evaluation of their business and operational requirements. For roles that will no longer be available, termination benefits will be accorded to those who qualify.

The group expects a one-time gain of RM27 million from the disposal, split over 2018 and 2019.

The deal comes with a “no compete” clause for five years, from Jan 1, 2019, forbidding Nestle Malaysia from going into the chilled dairy business.
Trading in Nestle Malaysia's shares was suspended today, and will resume tomorrow.


Nestle Malaysia to sell chilled dairy biz for RM155.3m

PETALING JAYA: Nestle (Malaysia) Bhd is selling its chilled dairy business in Malaysia, Singapore and Brunei and its Petaling Jaya factory, to Lactalis Manufacturing Malaysia Sdn Bhd for RM155.3 million, as part of plans to establish the largest Milo factory in the world in Chembong, Negeri Sembilan.

The disposal is on a going concern basis, with Lactalis offering continuous employment to a majority of the affected employees based on the purchasers’ evaluation of their business and operational
requirements.

For roles that will no longer be available, termination benefits will be accorded to those who qualify (the quantum of which cannot be ascertained at this point in time).

The group said it would be using the bulk of the proceeds from the sale, of RM100 million, by end of 2019 to establish the Milo manufacturing centre of excellence in the Chembong factory. The remainder proceeds will be used to pay off bank borrowings and intercompany debts

Nestle Malaysia plans to move all existing Milo manufacturing assets in the PJ factory to the Chembong factory.

The group expects a one-time gain of RM27 million from the disposal, split over the years 2018 and 2019.

Nestle Malaysia will not compete in the business of manufacturing, distributing and sale of chilled dairy products in Malaysia, Singapore and Brunei for a period of five years, from Jan 1, 2019.

Nestle Malaysia's shares are suspended from trading today. It will resume on Wednesday.


Nestle to build world’s largest Milo plant in Malaysia

KUALA LUMPUR, Oct 9 — Nestlé (Malaysia) Bhd will invest over RM100 million to expand its Milo factory in Chembong, Negeri Sembilan, subsequently establishing the factory as the world’s largest Milo manufacturing centre of excellence. In a…


Construction stocks hit, Gamuda falls the most

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KUALA LUMPUR: Construction stocks took a hit on Monday with Gamuda taking the brunt of the selling pressure as the government revised the Mass Rapid Transit (MRT) 2 project. At 5pm, the KLCI was down 1.4 points or 0.08% to 1,775.75. Turnover was 2.37 billion shares valued at RM1.82bil. Decliners beat advancers nearly four to one with 745 losers to 195 gainers and 323 counters unchanged. Adding to the doom and gloom was the selloff of the China markets, which resumed trading after a week-long break. Shanghai’s main index resumedRead More


Wall Street worries weigh on KLCI, broader market cautious

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KUALA LUMPUR:  The overnight decline on Wall Street pushed the FBM KLCI deeper into the red early Friday with the broader market turning more cautious but the firmer crude oil prices could support oil and gas stocks. At 9.10am, the FBM KLCI was down 8.42 points or 0.47% to 1,781.69. Turnover was 146.23 million valued at RM68.61mil. Decliners beat advancers 258 to 70 while 162 counters were unchanged. Kenanga Research said chart-wise, the KLCI had broken below the 50-day SMA on Thursday which “we believe there might be more short-termRead More


Nestle Malaysia CEO Alois Hofbauer to step down on Nov 30, succeeded by Juan Aranols

PETALING JAYA: Alois Hofbauer will be stepping down as Nestle (Malaysia) Bhd CEO effective November 30.

Nestle said in a statement that Hofbauer's departure is to pursue other interests outside the group.

Hofbauer will be succeeded by Juan Aranols, currently CFO for the Nestle Group’s Zone Asia, Oceania and Sub-Saharan Africa (Zone AOA).

Aranols joined the Nestle Group in 1990 as an auditor for Nestle Spain. In his 28 years with the company, he has held roles of increasing responsibility across a number of different markets in Europe and Latin America.

He has worked for the last six years at Nestle Global Headquarters, first as global group controller and since 2015 in his current role as CFO and member of the senior management team for Zone AOA.

“Nestle Malaysia is a company with a long history and great future prospects. I am both humbled and excited to be given the opportunity to take this organisation forward, building on the strong foundations laid by my predecessor and his team,” said Aranols of his new appointment.

Meanwhile, Hofbauer has been Nestle Malaysia CEO for the last five-and-a-half years.

“I am proud that my team and I have established Nestle Malaysia as one of the top performing companies on the Bursa Malaysia. We reignited growth and achieved solid results year after year. I am confident that this success will continue, and I wish Juan all the best in his new role,” said Hofbauer.