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Trade war rejuvenates ‘Silicon Valley’ firms in Malaysia

GEORGE TOWN, Oct 14 — Years after resisting pressure to move to China, Datuk Lee Hung Lung says his bet has paid off. Sales at his Malaysia-based Hotayi Electronic are surging, it’s hiring more workers, considering an expansion, and picking and…


MISC bags RM2.98b jobs from Exxon Mobil

PETALING JAYA: MISC Bhd has secured two contracts from Exxon Mobil Corp with an estimated combined contract value of US$711 million (RM2.98 billion).

The group said in a filing with the stock exchange that its vessel-owning entities Polaris LNG One Pte Ltd and Polaris LNG Two Pte Ltd had signed two time charter parties (TCPs) with Exxon Mobil’s wholly-owned subsidiary SeaRiver Maritime LLC for the time charter of two newbuild liquefied natural gas carriers for operations in international waters.

Pursuant to the TCPs, the vessels will be chartered by SeaRiver for a firm period of 15 years.

MISC said the charters for the vessels are expected to commence in the first quarter of 2023. The vessels will be constructed by Samsung Heavy Industries of Korea.

SeaRiver, a limited liability company formed in Delaware, US, provides a wide range of technical and commercial marine services to ExxonMobil affiliates throughout the world.

At the midday break, MISC’s share price gained 10 sen or 1.25% to RM8.08 on 3.29 million shares done.


China joins Asian shares in cautious advance ahead of trade talks

TOKYO, Oct 8 ― Asian shares inched up today, with Chinese shares making decent gains after a week-long holiday, though investors remained cautious over US-China trade talks after President Donald Trump said a quick deal was unlikely. European…


Samsung Electronics flags 56% fall in Q3 operating profit

SEOUL: Samsung Electronics said Tuesday it expected operating profits to drop more than 50 percent in the third quarter amid a continued slump in the global chip market.

Operating profit for July to September was forecast to reach 7.7 trillion won ($6.4 billion), down 56.2 percent from a year earlier, the world’s largest maker of smartphones and memory chips said in a statement.

It marks the fourth consecutive quarter in which the South Korean tech company has recorded a profit drop in the face of falling semiconductor prices and weakened demand for its mobile devices.

Sales for the third quarter were expected to reach around 62 trillion won, down 5.3 percent from the same period last year.

Samsung withholds net profit and sector-by-sector business performance until it releases its final earnings report, which is expected later this month.

Samsung shares edged up by one percent at morning trading in Seoul.

The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world’s 11th-largest economy, and crucial to South Korea’s economic health.

Analysts voiced optimism for the coming months, noting that falling inventory levels for semiconductors — which account for more than half of Samsung’s profit — will help stabilise chip prices after double-digit drops this year.

‘Competitor in crisis’

The estimates for the third quarter showed a slight rise from the April to June period, which analysts attributed mainly to improvements in the mobile business.

The firm rolled out its flagship Note 10 devices that connect to superfast 5G network in August, which analysts say have sold far better than its previous models to give Samsung a much-needed boost.

“The Note device is usually released in August or September and sells well until December, so I expect the demand to continue until the fourth quarter,” said Tom Kang, research director at Counterpoint Research.

Samsung appealed to high-end users with the launch of its first foldable smartphone last month after faulty screens forced an embarrassing delay in April.

The premium smartphone market has grown fiercely competitive and overall sales have cooled as a lack of major innovation has caused people to wait longer before upgrading to new models.

The South Korean tech titan leads the global smartphone market with a 23-percent share of the sector, trailed by Chinese competitors Huawei and Oppo, with Apple in fourth place, according to sales tracker IHS Markit.

Samsung also took advantage of the US trade ban against Huawei, “replacing a strong competitor in crisis” with its mid-to-low tier Galaxy A handsets, said Sujeong Lim, an analyst at Counterpoint Research.

Increased demand for Samsung’s OLED display panels used in handsets by competitors — including Apple’s new iPhone 11 — is also expected to help improve the company’s quarterly profit.

Samsung has been caught up in a trade war between Japan and South Korea stemming from World War II disputes.

The row saw Tokyo impose tough restrictions on exports crucial to South Korean tech giants in July, and Samsung vice-chairman Lee Jae-yong — who called the situation a “crisis” — has visited Tokyo to secure materials.

Adding to Samsung’s woes, Lee is currently facing retrial over his role in a massive corruption scandal that brought down former president Park Geun-hye.

He was initially jailed for five years in 2017 on multiple convictions including bribery, which was reduced to a suspended sentence on appeal, only for the Supreme Court in August to order a retrial.

The first hearings in the case are expected later this month. – AFP


Samsung Electronics flags 56pc fall in Q3 operating profit

SEOUL, Oct 8 ― Samsung Electronics said today it expected operating profits to drop more than 50 per cent in the third quarter amid a continued slump in the global chip market. Operating profit for July to September was expected to reach 7.7…


Mining industry seeks to polish tarnished reputation

LONDON, Sept 22 — The global mining industry is increasingly showing a commitment towards greater respect for human rights and the environment, but is accused of wanting to improve its reputation without seeking real progress. Wildcat miners,…


KNM awarded another contract in Thailand

PETALING JAYA: KNM Group Bhd’s indirect wholly-owned subsidiary FBM-KNM FZCO has bagged another contract worth US$5.35 million (RM22.36 million) from PSS Netherlands BV Sharjah Branch.

The contract is for the supply of Shell and Tube Heat Exchangers-Lot-1 as per requirements of the purchase order for the clean fuel project at the existing major oil refinery in Sriracha, Chonburi, on the east coast of Thailand as operated by Thai Oil Public Company Limited.

The supply and delivery duration of the transaction is for a period not exceeding 10 months commencing from the date of the PO.

If combined with the earlier contract award received by KNM Process Systems Sdn Bhd this week, another wholly-owned subsidiary company of KNM, the combined contract awards received by KNM amount to a total of RM75.63 million.

FZCO is principally involved in the design and manufacture of air-cooled heat exchangers, specialty shell and tube heat exchangers and process gas waste heat boilers for the oil, gas, petrochemical and desalination industries.

PSS Netherlands BV Sharjah Branch is a consortium comprising of Saipem SpA, Samsung Engineering Co. Ltd. and Petrofac Limited.

The transaction is expected to contribute positively to KNM Group’s earnings for the financial year ending Dec 31, 2019 and 2020.


KNM awarded another contract in Thailand

PETALING JAYA: KNM Group Bhd’s indirect wholly-owned subsidiary FBM-KNM FZCO has bagged another contract worth US$5.35 million (RM22.36 million) from PSS Netherlands BV Sharjah Branch.

The contract is for the supply of Shell and Tube Heat Exchangers-Lot-1 as per requirements of the purchase order for the clean fuel project at the existing major oil refinery in Sriracha, Chonburi, on the east coast of Thailand as operated by Thai Oil Public Company Limited.

The supply and delivery duration of the transaction is for a period not exceeding 10 months commencing from the date of the PO.

If combined with the earlier contract award received by KNM Process Systems Sdn Bhd this week, another wholly-owned subsidiary company of KNM, the combined contract awards received by KNM amount to a total of RM75.63 million.

FZCO is principally involved in the design and manufacture of air-cooled heat exchangers, specialty shell and tube heat exchangers and process gas waste heat boilers for the oil, gas, petrochemical and desalination industries.

PSS Netherlands BV Sharjah Branch is a consortium comprising of Saipem SpA, Samsung Engineering Co. Ltd. and Petrofac Limited.

The transaction is expected to contribute positively to KNM Group’s earnings for the financial year ending Dec 31, 2019 and 2020.


Survey: Asian companies’ confidence ticks up but recession fears grow

SINGAPORE: Confidence among companies in Asia lifted slightly in the September quarter from 10-year lows, but most firms do not plan on hiring or expect business to pick up as they see a risk of a global recession looming, a Thomson Reuters/INSEAD survey found.

The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking firms’ six-month outlook rose five points to 58 in the survey. A reading above 50 means optimistic respondents outnumbered pessimists.

The latest showing, though, means the index has not risen above the mid-60s for a year and is one of the seven weakest readings since the 2008-2009 global financial crisis.

“We are in a state of almost permanent uncertainty, which is not leading yet to a crisis but I think at some point we are going to see the cost of it,” said Antonio Fatas, a Singapore-based economics professor at global business school INSEAD.

“Some investments are going to be postponed, some investments are going to be stopped and little by little the engine of growth is going to slow down.”

Respondents rated a global recession as the top risk, overhauling trade-war fears which had topped the table for the previous six quarters.

A total of 102 companies from a range of sectors responded to the survey, conducted in 11 Asia-Pacific countries where 45% of the world’s population lives and almost a third of global gross domestic product is generated.

Participants included firms from automaking to technology such as Canon Inc, SoftBank Group Corp and Hero MotoCorp Ltd. Companies surveyed can change from quarter to quarter.

The survey was conducted from Aug 30 to Sept 13, as global markets rallied on signs of a thaw in US-China trade tensions.

The trade war has also proven a boon for some, as businesses relocate from China to Southeast Asia and elsewhere to avoid tariffs.

However, cool responses on hiring plans and the sales outlook suggest that any optimism is muted, and unlikely to be solid enough to drive investment and spending.

More than two-thirds of respondents plan on cutting staff or at best holding numbers steady in the next six months. Only 39% expect their sales volumes to rise.

“It’s about not over-committing on expansion plans … it’s about being prudent,” said Suresh Sidhu, chief executive officer of edotco Group, a telecoms infrastructure firm headquartered in Kuala Lumpur, with business across South and Southeast Asia.

“I don’t see people stopping, I just see people thinking about stopping. We definitely have not scaled up very aggressive plans … in times of great complexity and unpredictability, people generally don’t spend.”

Economic indicators also suggest a gloomy outlook.

Rising global protectionism could shave 0.8% from the world’s economic output next year, the International Monetary Fund said last week.

Flagging demand has already flayed Asian firms such as Samsung Electronics Co Ltd, whose profit halved for the June quarter, and automakers from Japan’s Mazda Motor Corp to India’s Tata Motors Ltd.

And data released this month showed China’s economic woes deepened in August, with growth in industrial production at its weakest in more than 17 years, while US manufacturing also shrank.

Alvin Liew, senior economist at Singapore’s United Overseas Bank, said the trade war is the biggest driver of the slowdown that will probably deepen unless a breakthrough in negotiations can recharge business confidence and investment.

“I don’t think anybody has the kind of delusion that both countries will come to a full-scale agreement and the world will turn into a better place after that,” he said.

“But there’s still some hope holding out and some optimism that they could do an interim trade deal … something to put some certainty back,” Liew said. “At the end of the day both sides know that this is not good overall.” – Reuters


Chile taps China, Japan in lithium-for-tech push, faces tough sell

SANTIAGO: Chile is making a renewed push for battery technology investment in return for access to its lithium deposits, piquing interest from China, Japan and Europe as global firms look to tie up supply of the metal vital for the shift to electric vehicles.

The South American country, the world’s No. 2 lithium producer, has held global road shows ahead of a second lithium-for-investment tender, according to officials and Chilean government documents seen by Reuters.

These have attracted dozens of firms in China, Japanese battery makers like Toshiba Corp and Russia’s state nuclear agency Rosatom, the documents show, lured by potential access to Chile’s huge deposits of the “white gold” under the arid salt flats in the Atacama desert.

An auction – slated for early 2020 – offers a guaranteed supply of discounted Chilean lithium in exchange for a commitment to build battery parts plants in Chile as the government looks to move up the value chain.

Oversupply and plummeting lithium prices, however, have made the deal a tough sell. In a previous tender in 2018, all three winners, including electronics giant Samsung SDI and Korean steelmaker Posco, subsequently dropped out.

“I don’t see this ending any better than the previous auction,” said Jaime Alee, a Chilean lithium consultant who has advised foreign investors in the country. He noted that the global trend was for supply chains closer to home.

“Given this, I just don’t see the logic in installing (a plant) in Chile.”

Nonetheless, Chile’s huge deposits are a lure amid a sharpening race to lock in supplies, which will be key to a future of electrified transport and smart devices.

Chile’s investment and development agencies InvestChile and CORFO held events in China, France, Japan and South Korea this year to drum up interest. They say issues from the first auction have since been resolved.

The road shows attracted interest in China from dozens of firms, including China Development Bank, energy firm TBEA, chemicals giant Sinochem and aluminum producer Chinalco, the document dated Aug. 29 showed.

Japanese banks and miners, South Korea’s overseas infrastructure body, Belgium’s Umicore and French transportation conglomerate Bollore attended other global shows, an official for InvestChile confirmed.

A statement from Rosatom Group confirmed its companies were weighing their options in Chile.

“Rosatom´s organizations are still considering Chile as a potential partner for implementation of lithium projects and supporting local government´s initiatives aimed to attract foreign companies to participate in joint projects in this area,” it said.

Bollore declined to comment, as did Japan’s Toshiba, with spokesman Ryoji Shinohara adding: “We are not disclosing business-related information, including participation in such road shows, unless an official decision is made.”

Sinochem said in an emailed response it does “not have a plan to build a plant in Chile in the near future”.

A Chinalco spokesman said he was unaware of the matter, while China Development Bank, TBEA and Umicore did not respond to requests for comment.

LITTLE BY LITTLE

Chinese interest in Chilean lithium in particular has grown as the Asian giant ramps up production of electric vehicles. Last year, China’s Tianqi clinched a $4 billion deal to purchase a quarter stake in top Chilean lithium miner SQM .

Chile is home to half of the world’s lithium reserves, with both SQM and U.S-based Albemarle, the world’s top producer, extracting the coveted metal from bright blue brine pools on the desert’s vast white salt flats.

However, a Reuters investigation in July found Chile has struggled to capitalize fully on the tenders, failing to make clear both how much lithium it could provide, as well as how deeply it would be discounted.

Chilean producers currently export mostly unrefined lithium, not the higher-value battery parts Chile hopes will someday generate added earnings for its export-oriented economy.

Despite the renewed interest, the administration of center-right President Sebastian Pinera has tempered expectations for this second round.

Falling lithium prices and Chile’s distance from consumer markets increase costs and make it difficult to entice foreign manufacturers.

Pablo Terrazas, head of the Corfo development agency, which oversees the auction, told lawmakers this month that the offered deal was perhaps not as sweet as anticipated.

“If the battery-making companies are not interested… we can’t obligate them to set up in Chile,” he told lawmakers. “This can still succeed or fail.”

Terrazas said he hoped to entice companies that make parts for batteries used in tools, electric scooters and storage devices.

“We started out wanting to sell the most sophisticated batteries to the likes of BMW or Volkswagen. But I think we need to go little by little… and work our way up,” he said. – Reuters