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Bursa Malaysia opens lower as financial counters slide

KUALA LUMPUR: Bursa Malaysia slipped lower at the opening as heavyweight financial counters led the sell-off ahead of the widely anticipated speech by the US Federal Reserve Chair Jerome Powell today and the G7 summit in France over the weekend.

On the local front, weak data on business activities in the domestic manufacturing sector had kept investors at bay for the time being, amid global uncertainties.

At 9.07am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) shed 6.59 points to 1,595.88.

The market barometer opened 6.7 points lower at 1,595.77 compared with yesterday’s close of 1,602.47.

On the broader market, losers surpassed gainers 134 to 98, while 153 counters unchanged, 1,573 untraded and 13 others suspended.

Turnover stood at 76.65 million units worth RM51.21 million.

Malacca Securities Sdn Bhd said the key index managed to mount an overdue recovery yesterday, but the broad market conditions were still looking insipid with the broader market becoming mixed.

“Going into the final trading day of the week, we see further near term recovery for the index-linked stocks as they continue to adjust from its bout of oversold,” it said.

The equity report also noted that market players are keeping a keen eye on interest rate announcements and trade developments.

Powell is expected to indicate whether the US central bank will continue to slash its interest rates talk as well as touch on the US-China trade dispute at the Jackson Hole symposium at Wyoming, later today.

The G7 leaders are also meeting over the weekend where discussions on international economic issues such as technology, trade, and the International Monetary Fund, are high on the agenda.

Financial heavyweight counters; Public Bank was down 32 sen to RM20.48, AMMB shed six sen to RM4.08, CIMB Group decline one sen to RM5.05, Hong Leong Bank decreased four sen to RM16.96 while Hong Leong Financial weakened 10 sen to RM16.54.

As for actives, Istone and Ekovest was flat at 16 sen and 80.5 sen, Sumatec and Jadi Imaging depletes half-a-sen to 2.5 sen and 5.5 sen respectively while AirAsiaX fell one sen to 18.5 sen.

The FBM Ace dropped 24.27 points to 4,623.37, the FBM 70 slipped 24.90 points to 14,111.05, the FBM Emas Index shed 38.80 points to 11,299.99, the FBM Emas Syariah Index depreciated 29.83 points to 11,840.12 and the FBMT 100 Index was 39.78 points lower at 11,124.71.

Sector-wise, the Financial Services Index weakened 69.27 points to 15,518.84, the Plantation Index contracted 22.67 points to 6,749.98, and the Industrial Products and Services Index was 0.28 of-a-point higher at 150.11.

The physical price of gold as at 9.30am stood at RM194.71 per gramme, down 25 sen from RM194.96 at 5pm yesterday. — Bernama

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Bursa Malaysia returns to red at the opening

KUALA LUMPUR: Intensifying global uncertainties and slowdown in major economies dragged Bursa Malaysia into the red at the opening today.

At 9.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) dropped 16.14 points to 1,584.17, below the psychological support level of 1,590 from yesterday’s close of 1,600.31.

The index was opened 15.40 points lower at 1,584.91.

Medium-sized capital saw the sharpest decline with a 1.8% drop followed by the technology sector with 1.74% and small-sized capitals 1.6%.

On the broader market, losers overwhelmed gainers 429 to 23, while 97 counters were unchanged, 1,384 untraded and 17 others suspended.

Turnover stood at 140.63 million units worth RM83.65 million.

Malacca Securities Sdn Bhd said following a stable session yesterday, Bursa was expected to come under selling pressure after overnight rout on global equities with bond yields remained inverted – heightening recession fears and dampening sentiments on equities.

“Even with the US delaying further tariffs on China-made goods, market conditions will remain guarded as the trade squabble shows no signs of easing and the issue could remain long-drawn,“ it said.

At the technical forefront, it said that the key index is now below the 1,600 support level, and has been revised to 1,590 and 1,580 levels, while the resistances are at the 1,610 and 1,620, respectively.

“The local bourse is unlikely to find much solace as the broad market sentiments are staying cautious, due in part to the ongoing threats to the global economic environment and the still unresolved trade spat between the US and China that is likely to keep sentiments in check for longer,“ it said.

Among the top losers was Nestle which shed 60 sen to RM146.00, Genting Plantation declined 33 sen to RM24.02, Public Bank shed 32 sen to 20.48, Kuala Lumpur Kepong lost 26 sen to RM23.36 and Hong Leong Financial was down 20 sen to RM17.06.

As for heavyweights, Maybank and CIMB lost three sen to RM8.56 and RM5.06 respectively, Tenaga Nasional reduced 12 sen to RM13.50, Petronas Chemical slid 17 sen to RM7.14, and IHH dropped two sen to RM5.64.

For the most active stocks, KNM reduced 1.5 sen to 36.5 sen, Ekovest weakened two sen to 80 sen, Berjaya Corp and Sapura Energy shed half-a-sen to 22.5 sen and 27 sen respectively.

The FBM Ace contracts 88.84 points to 4,553.02, the FBM 70 down 208.86 points to 13,970.35, the FBM Emas Index lost 129.04 points to 11,206.94, the FBM Emas Shariah Index depreciated 147.83 points to 11,693.99 and the FBMT 100 Index slid 124.87 points to 11,046.10.

Sector-wise, the Financial Services Index was 132.60 points lower at 15,547.69, the Plantation Index discounted 91.31 points to 6,630.69, and the Industrial Products and Services Index inched down 2.25 points to 148.90. – Bernama

Public Bank posts lower Q2 earnings on higher expenses

PETALING JAYA: Public Bank Bhd’s net profit for the second quarter ended June 30, 2019 fell 4.5% to RM1.33 billion from RM1.40 billion a year ago mainly due to higher interest and operating expenses.

Its revenue, however increased 3% to RM5.60 billion from RM5.44 billion previously.

The bank has declared a first interim dividend of 33 sen per share, translating into a total dividend payout of RM1.28 billion.

For the six-month period, its net profit was 2.1% lower at RM2.74 billion as compared with RM2.80 billion in the previous corresponding period due the negative effect of Overnight Policy Rate (OPR) reduction of 0.25% in May 2019 versus an OPR hike in January 2018 of the previous year corresponding period.

Its revenue however jumped 3.5% to RM11.17 billion from RM10.79 billion a year ago.

Public Bank founder and chairman emeritus Tan Sri Dr Teh Hong Piow said arising from the reduction of the OPR in May 2019, domestic banks were faced with a decline in net interest margins which affected the profit for the half year ended June 30, 2019.

“However, excluding the negative effect of the OPR reduction, Public Bank was able to sustain stable profitability underpinned by its healthy loans and deposits growth, stable asset quality and prudent cost management,” he said in a statement.

During the period, Public Bank’s total loans grew by an annualised rate of 4.0% to RM323.7 billion, mainly attributed to the healthy growth in its core financing business in residential and commercial properties. Its gross impaired loans ratio stood at 0.5% as at end-June, 2019, well below the banking industry’s gross impaired loan ratio of 1.6%.

On funding side, the group’s deposits saw an annualised growth rate of 5.9% to RM349.1 billion.

In the first half of 2019, the group achieved 8.1% growth in non-interest income, mainly arising from higher investment income and higher banking fee income.

“The group’s unit trust management business through its wholly-owned subsidiary, Public Mutual, continued to be the largest contributor, making up 35% of the group’s total non-interest income.”

Public Bank’s cost-to-income ratio came in at 34.2%, as compared with the banking industry’s 44.6%.

“The group’s effective management of cost efficiency has helped to cushion the impact of interest margin pressure. The group’s long term track record of prudent cost management will also continue to be its competitive advantage when rising cost pressure is expected to persist,” said Teh.

As at the end of June 2019, the group’s common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio were at 13.2%, 13.6% and 16.0% respectively.

Its loan loss coverage stood at 116.0%, well above the banking industry’s 91.1%. Including additional regulatory reserves set aside of RM1.9 billion, it would be higher at 226.5%.

Overseas operations contributed 10.5% to the group’s pre-tax profit, mainly contributed by Public Financial Holdings Limited Group in Hong Kong and Cambodia Public Bank Plc.

Going forward, Teh said Public Bank will remain on a cautious stance in growing its business and closely monitor the changes in the operating environment and undertake appropriate measure to fine-tune its operational strategies for continued business growth.

“In addition, as the group continues to sustain its fundamental strength, it will proactively seek to develop new initiatives, such as banking digitalisation as well as innovative and distinctive financial products for long term business growth.”

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KUALA LUMPUR, Aug 14 ― Bursa Malaysia maintained its upbeat momentum at midday, driven by strong recovery across almost all indices.  The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened 5.48 points higher at 1,598.36 with the technology…