KUALA LUMPUR, Oct 16 — The government is likely to narrowly miss its deficit targets for this year and next year, amid dampening effects of slower nominal revenue growth combined with the difficulty in limiting spending when demand is weak,…
KUALA LUMPUR, Oct 12 ― Although the government remains committed to fiscal prudence over the next few years with a more gradual pace of fiscal consolidation for 2020, it still appears challenging given the lack of revenue space, Standard…
NEW YORK, Oct — Investors are preparing for more cautious capital investment outlooks from US companies as worries mount heading into earnings season about the possibility of an economic recession. Capital expenditure increases have been weaker…
KUALA LUMPUR, Oct 2 — A leading regional E-commerce firm has expressed optimism about the government’s continued plan to encourage small and medium enterprises (SMEs) to grow and raise their competitiveness in Budget 2020. Loyalty and payments…
GEORGE TOWN: Mini–Circuits Technologies (Malaysia) Sdn Bhd, the local arm of US multinational electronics giant Mini-Circuits, has registered impressive profit margins despite fears over a global slowdown due to the fallout from the US–China trade war.
In fact, the consolidation of Mini–Circuits can be cited as an example of how some manufacturers here are benefiting from the impasse in the US–China trade ties, said the group chairman and president Datuk Seri Dr Kelvin Kiew (pix).
Kiew spoke to theSun on how the company managed to adjust its business model to cope with the adversities from rising trade tariffs from both US and China.
“Initially we were worried, but it has turned out to be good because we have a worldwide network of production lines so we are not reliant on China alone.
“Others may not have the leverages that Mini–Circuits enjoys so it may be difficult for them; but for this company, it has turned out positive.”
For Mini-Circuits, the trade war meant high tariffs on products shipping from China to US and vice versa as well that no US firms could have business dealings with China’s telecommunications conglomerate – Huawei.
After reviewing its client list, Mini-Circuits found that it had only supplied 1% of its products to Huawei and to avoid paying the additional tariffs, it relocated some of its production lines from China to Penang and India.
The group has 16 factories in Europe, India, Indonesia, the US, Taiwan and China, while Penang is considered as its main hub in Asia, according to Kiew. It has a customer base of 20,000 and global workforce of close to 700 employees.
“So we are well positioned to address the trade war although we hope that it can be resolved so global trade can resume at a robust pace.”
The trade war has seen the financial clout of its Penang operations growing where last year it recorded its highest ever revenue growth of over 100%, while there is a 50% growth projection for its global operations this year.
As Mini–Circuits is privately held, Kiew said that he was not at liberty to disclose the financial figures but stressed that the company was in a strong position.
The revenue gained has allowed the group to consider expanding its Penang operations in the future to complement its present one which is already one of the biggest in the Bayan Lepas Free Industrial Zone.
In the future, Kiew expects the products of Mini–Circuits to be applied in robotics, artificial intelligence and automation.
CHICAGO: Delta Air Lines said on Thursday it would buy a 20% stake in LATAM Airlines Group for $1.9 billion, creating a major new airline partnership and ending the Chilean carrier’s ties with American Airlines.
The surprise deal with Latin America’s largest carrier will give Delta a much bigger footprint in the region, a key growth market in which LATAM flies to dozens of destinations including cities in Argentina, Peru and Brazil.
The LATAM deal is Delta’s largest since it merged with Northwest Airlines a decade ago.
American Airlines Group Inc, which has long been the leading U.S. carrier in the region and was pursuing a deeper route alliance with LATAM, said the loss of its Chilean partner would not have a significant impact on its financial results.
American added that its LATAM partnership had limited upside after the Chilean Supreme Court struck down the two carriers’ plans for further route cooperation that would have also involved oneworld alliance members British Airways and Iberia.
“This is a body blow for American, but not a lethal body blow. It means that Delta will have more access to Latin America than it did before, but American already has much of that in its back pocket,” independent aviation analyst Mike Boyd said.
Following its tie-up with Delta, LATAM will exit oneworld and pursue route options with Delta and its partner Grupo Aeromexico, which belong to the rival SkyTeam alliance. It has not, however, decided whether to officially join SkyTeam.
Oneworld said LATAM had advised it would leave the alliance in “due course” in line with contractual requirements, without naming a specific date.
Airlines increasingly have bilateral codeshare arrangements outside major alliances. Qantas Airways Ltd, a oneworld member, said it would retain its codeshare partnership with LATAM despite the Chilean carrier’s departure from the alliance.
As a result of the deal, Delta will sell its stake in Brazil’s largest airline Gol, a LATAM rival.
Delta does not expect regulatory obstacles for its tie-up with LATAM, where it will gain representation on the board of directors. The plan envisions growth for both carriers, which currently overlap on only one route, Chief Executive Ed Bastian told Reuters.
“I think it’s a great fit,” he said.
Atlanta-based Delta expects the LATAM deal to be accretive to earnings per share over the next two years and add $1 billion in revenue growth over five years, Bastian said.
Delta is using newly issued debt and available cash for the deal. It will also provide LATAM with an additional $350 million to help it transition out of oneworld and plug into Delta’s network.
The two can start code-sharing before they receive government, regulatory and anti-trust approval for the larger tie-up, a process Bastian said he expects to take between 12 and 24 months.
Delta will also acquire four A350 aircraft from LATAM and assume LATAM’s commitment to purchase another 10 A350s to be delivered between 2020 and 2025 for an undisclosed sum.
Apart from its stake in Grupo Aeromexico, Delta also has holdings in Air France KLM, China Eastern, Virgin Atlantic and Korean Air Lines Co’s parent company.
It has also been negotiating a 10% stake in Alitalia as part of its strategy to boost its international presence through equity investments. That plan has not changed with the LATAM deal, which Delta started studying about three months ago after an approach by a third party, Bastian said.
Delta has seen its shares and earnings outpace U.S. rivals this year. Its stock closed 0.8% higher before the announcement. – Reuters
PETALING JAYA: Premium and established shopping malls are expected to continue to enjoy a strong competitive advantage compared with their suburban and less-established peers, said Affing Hwang Capital.
“The solid six-month 2019 (6M19) results (in spite of ongoing refurbishments) have further solidified our conviction in their earnings resilience, even in a slowing economy,” it said in a research note today.
It said for prime and established shopping malls, stable occupancy rates, positive rental reversions and higher turnover rents have translated into consistent revenue growth.
“Commendably, several prime retail malls (ie, Suria KLCC and Pavilion KL) delivered higher revenue in 6M19 despite ongoing refurbishment/ reconfiguration exercises that are affecting their occupancy rates. Conversely, the less-established/suburban shopping malls do not fare as well.”
The research house attributes the divergence in the revenue trend between the prime shopping malls and their less-established peers to their strategic locations, good tenant mixes and established shopper bases with resilient spending habits.
Furthermore, managements remain positive on the prime retail malls’ business outlooks, citing higher tenant sales, especially with the food & beverage and speciality shops.
Affin Hwang noted that all five Malaysian REITs (MREITs) – real estate investment trusts – under its coverage reported higher 6M19 realised earnings per unit (EPU) with a year-on-year growth of 1.3% to 19.6%, attributed to positive rental rever-sion, contributions from newly acquired assets and higher other income.
Under its coverage, Axis REIT saw the highest EPU growth of 19.6% for the period driven by contributions from new assets, followed by IGB REIT’s 4.9%.
Overall, Affin Hwang expects all five REITs under its coverage to achieve higher realised earnings per unit in 2019, driven by contributions from new assets, positive rental reversions, higher turnover rents, and lower finance costs.
It has also raised target prices for IGB REIT, Pavilion REIT and KLCCP Stapled Group to RM2.02, RM1.97 and RM8.90, respectively.
The research house is maintaining its “overweight” rating on the sector.
“We believe the defensive earnings of high-quality MREITs make them an ideal investment proposition during periods of economic uncertainty,” it explained.
Apart from that, Affin Hwang noted that the dovish stance from major central banks should lead to further rate cuts, thereby boosting the appeal of MREITs as an alternative yield play.
However, it cautioned that the MREITs are not created equal and it prefers the high-quality REITs with sustainable yields to their higher-yielding small-cap peers.
For the sector, Affin Hwang’s top picks are KLCCP for its sustainable yield and Axis REIT for its high yield and strong acquisition pipeline.
MANESAR (India), Sept 5 — The narrow lanes in Aliyar and Kasan villages in Manesar, an automotive manufacturing hub on New Delhi’s southern outskirts, would usually be packed on Sundays with migrant workers employed at the nearby plants enjoying…
PETALING JAYA: Kejuruteraan Asastera Bhd (KAB) has entered a memorandum of understanding (MoU) with Resource Data Management Asia Sdn Bhd (RDMA) to develop new technology solutions.
The electrical and mechanical engineering firm told the stock exchange that both parties will work together to maximise benefits from its mutual interests, including expanding market shares as well as identifying strategic business developments and revenue generations.
RDMA is involved in the general distributing of electronic control system that provides temperature management assurance and flexible building automation for a wide variety of industries along with energy monitoring and control systems, as well as auditing and consulting for energy efficiency projects
KAB said among the benefits of the MoU for the group is to identify synergies between RDMA and KAB in funded research, business development, engineering technology and training activities related to the companies’ business strategies.
“Create opportunities for future joint or allied business activities and projects which translates into revenue growth, innovative technologies or solutions for use by KAB and RDMA.”
KAB said the agreement will run for a period of 36 months from the date of the signing and it could be terminated by any party following a consultation period of 30 days, followed by another 30 days termination notice to the other party.
Trading in KAB shares was halted at 9.57am and resumed at 10.57 am pending the announcement. At the noon break, the stock was unchanged at 29 sen on 2.21 million shares done.
KUALA LUMPUR, Aug 30 — Malaysia Airports Holdings Bhd’s (MAHB) net profit for the second quarter (Q2) ended June 30, 2019, surged to RM160.08 million from RM86.12 million posted in the same period last year. Revenue improved to RM1.26 billion…