Bursa Malaysia ends marginally lower in cautious trade

KUALA LUMPUR, Oct 17 — Bursa Malaysia ended marginally lower on cautious and range bound trade, in tandem with regional peers, following a lack of market catalysts, said a dealer. At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased…

US-China trade mini-deal being ‘papered’: Trump

WASHINGTON: The partial trade bargain struck last week with China is now being formally put down in writing, US President Donald Trump (pix) said Wednesday.

“It hasn’t been papered yet but it is being papered,“ Trump told reporters at the White House.

He insisted that China had already bought $40 to $50 million worth of American agriculture products last week.

He reiterated that China committed to greater purchases of US farm exports, and made concessions because of economic pressure by Washington.

“They want to make a deal. They have to make a deal. Their economy has been hurt very badly by what we’ve done and the tariffs,“ Trump said.

Markets rallied Friday as the deal was struck, in relief after the steady escalation in the trade conflict with China.

Last week, Trump hailed a breakthrough on a “phase one” deal that he said was substantial and included a surge in purchases of American farm products and also covers intellectual property, financial services and currencies.

However, comments from officials in Beijing raised skepticism about the significance of the agreement.

While the deal meant tariffs increases planned for this week would not go forward, it did not roll back any of the stinging import duties imposed up to now on hundreds of billions of dollars in trade between the economic powers, nor did it address another round of import taxes planned for December.

Scant specifics are available but Trump says he hopes to sign the agreement with Chinese President Xi Jinping at the APEC summit in Chile next month.

Treasury Secretary Steven Mnuchin said Wednesday that he plans to meet with Chinese Vice President Liu He in Chile ahead of any meeting between Trump and Xi.

He did not rule out traveling to China with US trade ambassador Robert Lighthizer.

Mnuchin added that discussions about technology transfers would largely be part of a “phase two” of the agreement. -AFP

Bursa Malaysia ends at day’s high amid gains on Wall Street

KUALA LUMPUR: Bursa Malaysia ended firmly at the day’s high as regional markets were lifted by upbeat US corporate earnings and on hopes of a Brexit deal breakthrough, said a dealer.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 8.67 points to 1,574.90 from Tuesday’s close of 1,566.23.

The index, which opened 1.87 points better at 1,568.10, moved between 1,567.87 and 1,574.90 throughout the day.

Market breadth was positive as gainers led losers 458 to 426 with 378 counters unchanged, 714 untraded and 14 others suspended.

Turnover surged to 3.06 billion shares worth RM2.23 billion from 2.62 billion shares worth RM1.73 billion on Tuesday.

Regionally, Japan’s Nikkei rose 1.20% to 22,472.92, Hong Kong’s Hang Seng Index improved 0.61% to 26,664.28, South Korea’s Kospi gained 0.71% to 2,082.83, and Singapore’s Straits Times Index added 0.66% to 3,136.42.

Philip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said the FBM KLCI was higher following the bullish performance on Wall Street and in response to the optimism post-2020 Budget.

He said global markets were also optimistic on a smooth UK Brexit, reduced Middle East political tensions and a small breakthrough in the US-China trade deal.

“With 2020 Budget done and dusted, we expect it to drive the domestic market higher as there are more positive surprises than negatives. We deem the key winners from the budget are the technology sectors and property sectors,” he told Bernama.

Overall, improving internal and external sentiment would be crucial to aid further upside traction on the domestic market, he said.

The local market was also expected to have a stronger trading momentum ahead as the government outlined special incentive packages to attract Fortune 500 companies with the intent of supporting and boosting the capabilities of local small and medium enterprises, he added.

Among the heavyweights, Maybank edged up one sen to RM8.52, Tenaga gained six sen to RM13.76, Petronas Chemicals bagged two sen to RM7.31 and IHH Healthcare rose seven sen to RM5.70.

Public Bank was flat at RM19.26.

Of the most actives, I-Stone added two sen to 24.5 sen, MTAG Group climbed 3.5 sen to 47.5 sen and KNM Group eased half-a-sen to 44 sen while Sapura Energy and NetX Holdings were flat at 27 sen and two sen, respectively.

The FBM Emas Index increased 60.61 points to 11,216.85, the FBMT 100 Index added 63.98 points to 11,032.80 and the FBM 70 surged 95.32 points to 14,164.66.

The FBM Emas Shariah Index was 67.05 points higher at 11,836.38 while the FBM Ace rose 73.86 points to 4,714.43.

Sector-wise, the Financial Services Index advanced 61.98 points to 15,207.91, the Plantation Index bagged 38.68 points to 6,673.82, and the Industrial Products & Services Index was 0.69 of-a-point better at 152.12.

Main Market volume rose to 1.87 billion units worth RM1.99 billion from Tuesday’s 1.73 billion units worth RM1.56 billion.

Warrants turnover widened to 411.22 million units worth RM75.22 million from 276.02 million units worth RM48.19 million yesterday.

Volume on the ACE Market grew to 784.66 million shares worth RM167.69 million from 610.07 million shares worth RM128.67 million on Tuesday.

Consumer products and services accounted for 220.32 million shares traded on the Main Market, industrial products and services (249.20 million), construction (122.31 million), technology (157.69 million), SPAC (nil), financial services (41.33 million), property (100.19 million), plantations (35.44 million), REITs (18.73 million), closed/fund (96,500), energy (741.41 million), healthcare (17.17 million), telecommunications and media (82.70 million), transportation and logistics (57.58 million), and utilities (23.13 million).

The physical price of gold as at 5pm stood at RM193.49 per gramme, down RM1.32 from RM194.81 at 5pm yesterday. — Bernama

Trade pressure seen denting China’s 2019 growth to 29-year low at 6.2%, 5.9% in 2020

BEIJING: China’s economic growth is expected to slow to a near 30-year low of 6.2% this year and cool further to 5.9% in 2020, a Reuters poll showed, underlining the stiff challenge faced by Beijing even as it steps up stimulus amid a bruising Sino-U.S. trade war.

The median forecast for 2019 growth is near the lower end of the government’s target range of 6-6.5%, and would be the weakest expansion for the world’s second-biggest economy since 1990.

The poll of 83 analysts also forecast third-quarter growth at 6.1% year-on-year, lower from 6.2% in the last survey done in July and a touch below the 6.2% pace in the second quarter.

On the whole, it would mark a further slowdown from growth of 6.6% in 2018 and 6.8% in 2017, highlighting the intensifying global and domestic pressures on the Asian powerhouse.

China will release its third-quarter gross domestic product (GDP) data on Oct 18.

Growth in 2020 will likely cool further to 5.9%, the poll showed, below the 6.0% forecast in the previous survey.

A raft of downbeat data in recent months has highlighted weaker demand at home and abroad, fanning market expectations that Beijing will need to unveil more stimulus steps to ward off a sharper slowdown and prevent more job losses.

“Should labor market deteriorate sharply in late 2019 and early 2020, policy support may intensify in March next year,” Tao Wang, China economist at UBS, said in a note.

“As policy measures strengthen and take effect, and as the shock of higher tariffs peaks in Q1 2020, we see China’s GDP growth rebounding from Q2 2020 onwards.”

Beijing has been relying on a combination of fiscal stimulus and monetary easing to weather the current slowdown, but analysts say the room for aggressive policy action has been limited by worries over debt and housing risks.

Chinese central bank governor Yi Gang said late in September there was no urgent need to implement large interest rate cuts following Beijing’s reiteration that it would not use “flood-like” stimulus measures.


The outlook is unlikely to change for the better anytime soon even as tensions in the protracted trade war between Beijing and Washington have eased somewhat. U.S. President Donald Trump said on Friday the two sides had reached agreement on the first phase of a deal and suspended a tariff hike, but officials said much work still needed to be done.

Analysts in the latest Reuters poll expect the People’s Bank of China (PBOC) would ease policy further by cutting banks’ reserve retirement ratios (RRR) and the one-year loan prime rate (LPR), its new benchmark lending rate.

The PBOC has already cut RRR seven times since early 2018, in addition to two modest reductions in the one-year LPR since August.

Analysts expect the PBOC to deliver another 50 basis-point RRR cut in the fourth quarter, and two more RRR reductions in the first half of 2020, according to the poll.

The central bank is also forecast to slash the one-year LPR to 4.00% by the end of 2019, down by 20 basis point from its current level.

However, they do not expect it to cut its previous benchmark lending rate, which remains in place but will be replaced by the new benchmark lending rate over time.

Economists expect the central bank to keep its benchmark rate unchanged at 4.35 percent through at least the end of 2020.

The poll also predicted annual consumer inflation will pick up to 2.5% in 2019, quickening from 2.3% estimate in the July survey, but below the government target of around 3%.

Data earlier in the day showed China’s factory gate prices declined at their fastest pace in more than three years in September.

Consumer inflation accelerated to 3% in September – the highest since October 2013, but analysts attributed this to the supply-side impact of rising food costs, driven by surging pork prices as African swine fever diminishes hog supplies.

Separate data, also released on Tuesday, showed China’s banks extended more new yuan loans than expected in September, highlighting policymakers’ ongoing efforts to boost credit growth in the face of cooling demand and U.S. trade pressures. – Reuters

GDP growth target for 2020 realistic: Guan Eng

KUALA LUMPUR: The estimated gross domestic product (GDP) growth forecast of 4.8% for 2020 can be realised, according to Finance Minister Lim Guan Eng, despite some quarters saying that the projection looks to be high amid global headwinds and weak demand.

Speaking during a moderated panel session at the Budget 2020 Forum today, Lim said that while the figure was contingent on the country’s economic performance this year, the projection was made based on available data.

“If there is any necessity to revise the figures, then we will do so. We want to be transparent and open,” he said.

According to the 2020 Economic Report, GDP growth is projected to improve marginally to 4.8% in 2020 from 4.7% in 2019.

Lim also defended the government’s fiscal deficit target of 3.2% and tabling an expansionary budget.

“These figures are in line with what other institutions like Bank Negara Malaysia (BNM) have projected for next year. The fact that we have widened the deficit estimate from 3% will allow us fiscal room to make the necessary adjustments (if there is a slowdown in global trade).

“Malaysia is a trading nation, and the WTO (World Trade Organization) has lowered their trade projections to 1.2% from 2.6%, so we must offer ourselves that fiscal space. This is a necessary pre-emptive measure in case the worst happens,” he said.

As for the collection expected from the new 30% income tax band, Lim said that about RM100 million in revenue is expected to be raised.

“This proposal was actually made by the World Bank. The World Bank feels that our top marginal tax rate for the wealthy is too low compared to neighbouring countries. Even by increasing the income tax to 30%, we are still among the lowest.”

He said the wealthy should be able to afford the increase in tax, adding that this will contribute to economic growth, which will in turn grow the income of the wealthy and hence cover the marginal rise in tax.

Addressing concerns that the budget did not have many measures included to increase overall revenue collection, Lim said the government’s expectations for the coming year still stood.

“The projections we made are based on stress-tested figures. We have kept within the projections for the last two years, and we will maintain that for next year. If there are any contingencies, then we will make the necessary revisions, but at the moment, no,” he told the media on the sidelines of the forum.

According to the 2020 Economic Report, revenue for next year is expected at RM244.53 billion, down 13.1% from RM263.3 billion this year.

On the second issuance of yen-denominated bonds (also known as samurai bonds), Lim said the low rate was a sign of the Japanese government’s confidence in Malaysia.

“I was informed that the Japanese government has not offered such a low rate to other countries. The offer given is at 0.5% and we are still continuing discussions on how we can get a better deal. Of course, the size of the bond issuance is dependent upon these discussions,” he said.

Commenting on the proposed merger of Bank Pembangunan Malaysia, Danajamin Nasional, SME Bank, and the Export-Import Bank of Malaysia, Lim was tight-lipped on who would be leading the merger, but said the proposal was made by BNM.

“The central bank is independent, so when they make a proposal they want to study it and we have to give due consideration to them. Depending on the outcome of this study, only then the government will consider it,” he said.

On the privatisation of highways owned by Gamuda Bhd and PLUS Malaysia Bhd, Lim reiterated that the government will consider acquisition proposals that do not add to its debt burden.

Technology, property sectors clear winners in Budget 2020

PETALING JAYA: The clear sector winners for Budget 2020 are technology and property, according to most analysts.

Kenanga Research said Budget 2020 turned out to be mostly positive for corporate Malaysia as most measures announced were business and people friendly.

It said technology gains because of generous grant incentives for digitalisation of small and medium enterprises (SMEs) operations coupled with the 10-year tax exemptions for selected electrical and electronics (E&E) companies, incentive for adoption of e-wallet and extended period of capital allowances for automation initiatives; while property gains because of the introduction of rent-to-own financing scheme and lowering of the threshold on unsold stocks of high-rise property for foreign ownership from RM1 million to RM600,000.

“We see banks benefiting too from measures to support SMEs and the property sector. We make no changes to earnings forecasts and but raised our sector call on property from neutral to overweight as prices of many stocks in the sector have fallen well below their respective target prices,“ said Kenanga in a note today.

CGS-CIMB deemed Budget 2020 to be mildly positive for market as there are more positive surprises than negatives, against its expectation.

“We project the Budget measures to be neutral to KLCI earnings but mildly positive for future corporate earnings.”

It said the technology sector is a key winner due to special tax allowances and views that this will encourage semiconductor companies to reinvest profits and allow Malaysian players to better compete globally.

“Technology companies in our coverage recorded higher effective tax rates in recent years as they have exhausted the reinvestment allowance. As such, the proposed tax incentives are positive for technology players, though partly offset by the higher minimum wage in cities. Key winners we have identified are Malaysian Pacific Industries Bhd, Pentamaster Corp Bhd and GHL Systems Bhd.”

It believes the lower minimum threshold for foreign property purchase will help to address some of the existing property overhang, though the impact may not be significant.

“The lower threshold price for foreign buyers could potentially benefit mass market developers focusing on the affordable product range such as LBS Bina Group Bhd and Mah Sing Group Bhd,” said CGS-CIMB.

Other sector winners compiled from various research houses also include consumer (due to measures to boost employment, VMY2020, Bantuan Sara Hidup goodies), automotive (fuel targeted subsidy programme and plans to reduce tolls), plantations (B20 biodiesel for transport measures) , construction and VMY2020 plays like aviation, healthcare and REITs.

Possible losers are number forecast operators (due to less draw days), banks (digital banking framework heightens competition for loans), manufacturing or services sectors (exposed to higher minimum wage in major cities).

Bursa Malaysia ends on firm note across the board

KUALA LUMPUR: Bursa Malaysia ended on a firm note across the board, tracking the gains on regional bourses, amid optimism on the latest round of the US-China trade negotiation, said a dealer.

At 5pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 10.75 points to 1,567.59 from last Friday’s 1,556.84.

The index, which opened 5.81 points higher at 1,562.65, moved between 1,562.65 and 1,568.96 throughout the day.

Market breadth was positive as gainers led losers 487 to 367, with 407 counters unchanged, 737 untraded and 42 others suspended.

Turnover widened to 2.99 billion shares worth RM1.84 billion from 2.33 billion shares worth RM1.6 billion last Friday.

Regionally, Japan’s Nikkei improved 1.15% to 21,798.87, Hong Kong’s Hang Seng Index increased 0.81% to 26,578.41, while Singapore’s Straits Times Index rose 0.37% to 3,125.16.

A dealer said Bursa Malaysia’s equity stayed firm for the whole trading session tracking the gains on regional markets, lifted by positive market sentiment.

Equity markets worldwide were in the black since last Friday with much of the positive vibes stoked by the latest high-level trade talks between the US and China, while foreign investors took a breather from selling activities.

“The latest negotiations between the world’s two largest economies were ‘constructive’ with a truce in US-China year-long trade war last Friday with the US suspending a tariff escalation due this week on US$250 billion of Chinese exports set for US shores as part of a ‘phase one’ trade accord,” the dealer said.

Locally, the market saw active trading activities with the broader market shares and the lower liners firmed-up further, he said.

“The FBM Small Cap index has perked up which we see continuing over the near term. We also think that technology stocks will also make further headway as technology and construction stocks are seen as the major beneficiaries of the 2020 Budget,” he added.

Among heavyweights, Maybank rose nine sen to RM8.53, Public Bank gained eight sen to RM19.16, Petronas Chemicals increased five sen to RM7.28, IHH Healthcare rose 12 sen to RM5.77, while Tenaga slipped eight sen to RM13.82.

Of the most actives, NetX Holdings edged up half-a-sen to 2.5 sen, Green Packet’s warrant improved two sen to 31.5 sen, while Bumi Armada and I-Stone added three sen each to 41.5 sen and 22.5.

Debutant AME Elite rose 20 sen to RM1.50, but Sapura Energy eased half-a-sen to 26.5 sen.

The FBM Emas Index increased 73.20 points to 11,151.01, the FBMT 100 Index gained 72.55 points to 10,967.99 and the FBM Emas Shariah Index added 66.56 points to 11,782.93.

The FBM 70 rose 81.77 points to 14,025.74 and the FBM Ace advanced 30.07 points to 4,649.20.

Sector-wise, the Financial Services Index surged 143.59 points to 15,133.92, the Plantation Index was 59.34 points higher at 6,600.23, and the Industrial Products & Services Index was 0.45 of-a-point better at 150.88.

Main Market volume increased to 1.82 billion units worth RM1.61 billion from last Friday’s 1.44 billion units worth RM1.4 billion.

Warrants turnover narrowed to 359.01 million units worth RM61.99 million from 464.37 million units worth RM76.03 million previously.

Volume on the ACE Market widened to 816.07 million shares worth RM174.32 million from 427.27 million shares worth RM125.42 million last Friday.

Consumer products and services accounted for 188.14 million shares traded on the Main Market, industrial products and services (204.38 million), construction (205.39 million), technology (159.13 million), SPAC (nil), financial services (36.34 million), property (114.57 million), plantations (20.02 million), REITs (11.30 million), closed/fund (17,100), energy (595.76 million), healthcare (14.05 million), telecommunications and media (224.50 million), transportation and logistics (29.94 million), and utilities (13.36 million). — Bernama

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