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Asian shares dip, euro weighed by sagging German business morale

TOKYO, April 25 — Asian shares slipped today as a surprise deterioration in German business morale rekindled fears of slowing global growth, while oil prices pulled back slightly after a sharp run-up earlier in the week. The euro slumped to a…


North America driving global oil and gas pipeline 'boom'

PARIS, April 25 — The global pace of new oil and gas pipeline construction has tripled in less than two decades, a multi-billion-dollar boom in infrastructure that experts warned today could torpedo hopes for limiting global warming. In the first…


S. Korea economy unexpectedly contracts in Q1, worst since global financial crisis

SEOUL, April 25 — South Korea's economy unexpectedly shrank in the first quarter, marking its worst performance since the global financial crisis, as government spending failed to keep up the previous quarter's strong pace and as companies slashed…


Ringgit will stabilise after recent sell-off, says FXTM analyst

KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the sell-off pressure eases, barring any major catalyst, according to FXTM market analyst Han Tan (pix).

The ringgit weakened 0.06% to 4.1305 against the greenback today from 4.1280 on Tuesday.

The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was aggravated by the speculation that Malaysian bonds would be dropped from the FTSE World Government Bond Index.

Tan said the market is currently focused more on external factors, letting external risk to dictate the performance of currencies and paying less attention to internal economic data.

According to the International Monetary Fund’s Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.

Tan expects the Malaysian currency to remain supported by the country’s resilient economic fundamentals, whereby the projected gross domestic product growth of 4.3-4.8% this year is better than many other economies.

“Malaysia’s export mix is very well diversified and with this very diversified nature, is not just limited to export, it has multiple legs to stand on.”

To illustrate the influence of external factors, Tan pointed out that Malaysia has been able to buck the Asean trend in regard to exports, delivering a growth while the neighbouring countries are experiencing a contraction in the fourth quarter of 2018 up till February 2019.

“In other words, the currency markets are primarily focused outwards and paying less attention to what is happening onshore,” he said.

While oil prices have reached the US$70 (RM289) per barrel mark this month, the increase has yet to be reflected in the ringgit’s performance.

However, Tan said as Malaysia’s budget is based on the assumption of crude oil at US$70 a barrel, stronger prices will contribute to the ringgit’s strength.

“Barring any major catalyst, I expect oil prices to head towards US$80 per barrel within the first half,” he added.


Wall Street opens down after record-breaking session

LONDON, April 24 — Wall Street opened slightly down today after a record-breaking session the day before failed to spark a major global rally. Bullish earnings and economic data catapulted New York’s S&P 500 and tech-heavy Nasdaq indices to…


Ringgit will stabilise after recent sell-off, says FTXM analyst

KUALA LUMPUR: The ringgit is expected to trade within the 4.10-4.15 range against the US dollar in the second quarter as the sell-off pressure eases, barring any major catalyst, according to FXTM market analyst Han Tan (pix).

The ringgit weakened 0.06% to 4.1305 against the greenback today from 4.1280 on Tuesday.

The recent selling pressure in the ringgit was triggered by news of the Norwegian sovereign wealth fund cutting its exposure in the emerging markets, including Malaysia. This was aggravated by the speculation that Malaysian bonds would be dropped from the FTSE World Government Bond Index.

Tan said the market is currently focused more on external factors, letting external risk to dictate the performance of currencies and paying less attention to internal economic data.

According to the International Monetary Fund’s Purchasing Power Parity metrics, the ringgit is undervalued by 65% to the greenback.

Tan expects the Malaysian currency to remain supported by the country’s resilient economic fundamentals, whereby the projected gross domestic product growth of 4.3-4.8% this year is better than many other economies.

“Malaysia’s export mix is very well diversified and with this very diversified nature, is not just limited to export, it has multiple legs to stand on.”

To illustrate the influence of external factors, Tan pointed out that Malaysia has been able to buck the Asean trend in regard to exports, delivering a growth while the neighbouring countries are experiencing a contraction in the fourth quarter of 2018 up till February 2019.

“In other words, the currency markets are primarily focused outwards and paying less attention to what is happening onshore,” he said.

While oil prices have reached the US$70 (RM289) per barrel mark this month, the increase has yet to be reflected in the ringgit’s performance.

However, Tan said as Malaysia’s budget is based on the assumption of crude oil at US$70 a barrel, stronger prices will contribute to the ringgit’s strength.

“Barring any major catalyst, I expect oil prices to head towards US$80 per barrel within the first half,” he added.


Gadang posts RM13.3m net profit for Q3

PETALING JAYA: Gadang Holdings Bhd reported a net profit of RM13.3 million for the third quarter ended Feb 28, a 47.1% decline compared with RM25.14 million recorded for the corresponding quarter in 2018.

The construction firm attributed the reduction in earnings to recognition of some variation orders for completed construction projects in the previous year along with lower profit recorded for the Capital City project in the current year.

For the quarter under review, its revenue rose 34.5% to RM205.33 million compared with RM152.68 million in the corresponding quarter of the preceding year.

Its nine-month net profit increased 34.8% to RM46.87 million from RM71.85 million, while revenue grew 22% to RM502.99 million from RM412.29 million.

According to Gadang’s filing with Bursa Malaysia, its construction division outstanding order book currently stands at RM1.3 billion that will provide the company with a stable income visibility going forward.

However, the overall weakness in the property market has affected its sales and impacted the performance of its property division.

“The division has introduced more aggressive marketing efforts to promote sales of its existing on-going and completed projects. With unbilled sales of RM93.1 million and planned new launches, the property division is expected to deliver positive performance in this financial year.”

Looking ahead, Gadang foresees a challenging period for the group, taking into account the competitive market landscape and has initiated active tender participation for domestic infrastructure projects.

“Barring unforeseen circumstances, the group expects to remain profitable in the current financial year.”


World Bank keeps M’sia 2019 growth forecast at 4.7%

KUALA LUMPUR: The World Bank Group has maintained Malaysia’s 2019 gross domestic product (GDP) growth forecast at 4.7%, driven by private consumption.

Lead economist for Malaysia Richard Record said private consumption would continue to be the main driver of growth, albeit expanding at a more measured pace.

“Household spending will be buoyed by stable labour market conditions and income support measures such as the Cost of Living Aid (Bantuan Sara Hidup),“ he told reporters at the East Asia and Pacific (EAP) Economic Update briefing today.

He said gross fixed capital formation was expected to increase slightly, driven by the private sector, while public investment was expected to remain subdued in the near term.

“The external sector may be negatively affected by heightened uncertainty surrounding the global environment, particularly the possible escalation of US-China trade tensions,“ he said.

Record said monetary poverty was expected to continue its downward trend in 2019, with a projected decline to 1.4% based on the upper middle-income countries (UMIC) poverty line of US$5.50 (RM22.70) per person per day in 2011.

“Several initiatives for low-income households, including the national B40 Health Protection Fund, an insurance scheme for the B40 group, and affordable housing initiatives are in the pipeline to improve both monetary and non-monetary wellbeing,“ he said.

Going into 2020, he said Malaysia’s economy was projected to expand at 4.6%, and the country was expected to achieve high-income country status by 2024.

He said the country’s fiscal deficit was expected to narrow to 3.4% of GDP in 2019 and subsequently to 3% in 2020.

“Near-term fiscal consolidation efforts are expected to be achieved primarily through rigorous expenditure rationalisation, with broad-based declines (in percentage of GDP) projected across major components of operating and economic development outlays.

In terms of risks and challenges, Record said the ongoing uncertainties surrounding the US-China trade tensions and shifts in global financial market sentiment would pose downside risks to Malaysia’s economy in the near term, due to the country’s high degree of trade and financial integration.

“On the domestic front, the relatively high levels of government liabilities and increased dependency on oil-related proceeds could potentially constrain the flexibility of fiscal adjustment against future macroeconomic shocks,“ he said.

He said in the private sector, the relatively high level of household debt remained a source of macro-financial stability risk and would act as a constraint on household spending.

Record said the principal challenge to more rapid and inclusive economic growth lies in increasing labour productivity, which in turn depends on stronger human capital development.

“Malaysia’s score on the Human Capital Index (HCI) is 0.62, which is about as expected compared to other UMICs but well below that of its aspirational comparators,“ he said.

He said Malaysia performed well on the child survival and years of schooling components of the HCI but did poorly relative to its economic peers in child nutrition and the quality of education.

“Key priorities are thus enhancing learning outcomes, reducing child under-nutrition and strengthening social protection systems to enable households to both invest in and protect human capital,“ he said.


CPI returns to positive territory

PETALING JAYA: Malaysia’s Consumer Price Index (CPI) returned to the positive territory, registering a 0.2% growth to 121.1 in March after experiencing deflation in the first two months of the year.

Headline inflation contracted 0.7% and 0.4% in January and February, respectively, which sparked deflationary fears amid slowing economy.

The CPI expansion in March was driven by the index of housing, water, electricity, gas & other fuels (+2%), education (+1.3%), food & non-alcoholic beverages (+1.1%), alcoholic beverages & tobacco (+1.1%) and restaurants & hotels (+1%) according to the Department of Statistics.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said on a monthly basis, CPI also increased 0.2% as compared with February 2019, mainly supported by the index of transport (+2.6%), miscellaneous goods & services (+0.4%) and furnishings, household equipment & routine household maintenance (+0.3%).

However, CPI in the first quarter of 2019 declined 0.3% to 120.8 compared with 121.2 in the same quarter of the preceding year, contributed by transport (-5.9%), clothing & footwear (-3.1%), miscellaneous goods & services (-2.2%) and communication (-1.2%).

On a quarterly basis, the CPI decreased 0.1% against the fourth quarter of 2018.

In terms of overall CPI, four states namely Kuala Lumpur (+0.9%), Penang (+0.6%), Selangor and Putrajaya (+0.3%) and Negri Sembilan (+0.3%) surpassed the national CPI rate of 0.2% in March 2019 as compared with March 2018. Meanwhile, Johor showed the same rate of increase as the national CPI.

The increase in the index of food & non-alcoholic beverages was reflected in most states in Malaysia, with Kuala Lumpur recording higher increases of 4.2% for food & non-alcoholic beverages index above the national index level in March 2019.

MIDF Research expects Malaysia’s inflation to stay low following the lower capped prices of Ron95 and Diesel at RM2.08 and RM2.18 per litre respectively.

“Nevertheless, demand-push factor remains firm amid stable job market and steady wage growth.“

It noted that food component will be the key driver of overall inflation in 2019 driven by low-base effects on top of continued spill over effects from the sales and service tax.

“In addition, being a net importer of food, Malaysia is also exposed to imported inflation due to ringgit depreciation hence initiating food inflation to stay at the high-side.”

Overall, the research house lowered its inflation forecast to 1.1% for 2019.

“We foresee headline inflation rate to average at 1.1% this year from 2.2% we initially forecasted due to lower cap of domestic Ron95 fuel prices at RM2.08. Furthermore, we believe the government is unlikely to remove the cap in the nearest time as the proper subsidy mechanism limiting it to the recipients of the Bantuan Sara Hidup have yet comes to effect.”


Bursa Malaysia ends higher on improved sentiment

KUALA LUMPUR: Bursa Malaysia ended higher today on continued buying momentum led by heavyweight MISC as investors sentiment improved, sparked by better-than-expected corporate earnings in the US, dealers said.

At the close, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 0.64% or 10.57 points to 1,638.01 from Tuesday’s close of 1,627.44.

The index opened 6.26 points higher at 1,633.70 and moved between 1,633.70 and 1,640.96 throughout the trading session.

Market breadth was positive as gainers trounced losers 598 to 328, while 422 counters were unchanged, 568 untraded and 31 others suspended.

Volume swelled to 4.38 billion units worth RM2.84 billion against Tuesday’s 3.73 billion units valued at RM2.47 billion.

MISC improved 2.58% or 17 sen to RM6.76 with 1.57 million shares changing hands.

MISC president and CEO Yee Yang Chien today said the company was expected to secure more projects this year, given its capability to take up to US$2 billion-US$3 billion worth of new jobs, compared with US$1 billion projects clinched in 2018.

As of the first quarter of 2019, the shipping company had reportedly bid for jobs worth US$6 billion versus the similar value of bids for the whole of last year.

Meanwhile, Phillip Capital Management senior vice president (Investment) Datuk Dr Nazri Khan Adam Khan said movement of the FBM KLCI was consistent with the overall improvement of the global economy.

He said US stocks were back at a record high this week as investors excelled in the four months-long recovery despite continuous uncertainty on the outlook of the global economy.

“On the domestic front, despite the recent correction, we see that the financial market continued its resilience along with the domestic liquidity brought about by the revival of the infrastructure projects,” he told Bernama.

From the technical perspective, Nazri Khan said the improvement in the local bourse implied that a potential revival after the recent correction could provide a strong bullish-bias to follow through.

“We set the immediate support at around 1,600 points. Conversely, immediate resistances loom at around 1,658 points and 1,700 points,” he added.

Among heavyweights, Maybank fell two sen to RM9.14 but Public Bank improved four sen to RM22.64, Petronas Chemicals and CIMB each bagged eight sen to RM9.03 and CIMB was flat at RM5.25.

Tenaga increased six sen to RM12.34.

Most active counters, Bumi Armada perked seven sen to 27 sen, Ekovest added 6.5 sen to 93.5 sen, and Sapura rose half-a-sen to 33.5 sen.

Top gainers, Nestle soared RM1.60 to RM147.00, Tasek expanded 50 sen to RM6.45 and Takaful gained 24 sen to RM5.53.

The FBM Emas Index was 79.57 points firmer at 11,665.11, the FBMT100 increased 76.56 points to 11,475.52 and the FBM 70 put on 108.57 points to 14,732.77.

The FBM Emas Shariah Index was 98.32 points better at 11,877.84 and the FBM Ace Index added 37.05 points to 4,789.31.

Sector-wise, the Financial Services Index went up 65.92 points to 16,883.68, the Plantation Index jumped 73.22 points to 7,265.36 and the Industrial Products and Services Index gained 1.27 points to 171.42.

Main Market volume advanced to 3.50 million shares worth RM2.68 billion against 2.93 million shares valued at RM2.30 billion on Tuesday.

Warrants turnover expanded to 459.17 million units valued at RM81.02 million from 340.60 million units worth RM41.06 million.

Volume on the ACE Market slid to 419.85 million shares valued at RM78.06 million versus 455.00 million shares valued at RM96.08 million yesterday.

Consumer products and services accounted for 419.44 million shares traded on the Main Market, industrial products and services (377.53 million), construction (484.33 million), technology (137.98 million), SPAC (nil), financial services (66.95 million), property (208.35 million), plantation (114.90 million), REITs (6.86 million), closed/fund (4,900), energy (1.50 billion), healthcare (54.13 million), telecommunications and media (36.09 million), transportation and logistics (39.39 million) and utilities (60.00 million). — Bernama