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European stocks waver at open

LONDON, June 18 — Europe’s main stock markets wavered at the start of trading today, the eve of an interest rate decision from the US Federal Reserve. Investors are also gearing up for next week’s high-stakes G20 summit, where US President…


Top Glove’s Q3 profit down 36.5% on rubber latex price spike, stiff competition

PETALING JAYA: Top Glove Corp Bhd’s net profit fell 36.5% to RM74.67 million for the third quarter ended May 31, 2019 compared with RM117.57 million in the previous corresponding period, due to a surge in natural rubber latex price and strong competition.

Its revenue, however, rose 8.1% to RM1.19 billion from RM1.1 billion underpinned by a 9% expansion in sales volume.

The group has proposed to declare an interim dividend of 3.5 sen per share, payable on July 16.

Top Glove’s nine-month net profit also declined 12.5% to RM290.51 million from RM332.03 million on the back of a 20.5% increase in revenue to RM3.61 billion from RM3 billion.

To offset the increase in natural rubber latex rice the group said it effected upward revisions in its average selling prices, the impact of which will only be reflected in the fourth quarter due to a time lag in the cost pass-through mechanism.

It also noted that raw material prices for Q3 remained mixed in comparison with the previous quarter.

“The average natural rubber latex price rose 22% to RM4.42/kg and reached a peak of RM5.105 on April , 019. Meanwhile, the average nitrile latex price decreased 3.1% to US$ 1.05/kg.”

Top Glove founder and executive chairman Tan Sri Lim Wee Chai (pix) said the group will continue to focus its resources on improving product quality, cost structures and process efficiency, through the adoption of AI, digitalisation, advanced technology and research & development, rather than external factors which are not within its control.

“As our product is closely linked with a commodity, short-term volatility is to be expected, which may affect our margins during certain financial quarters. However, this is only in the interim. In our business, we expect to perform better in the following quarter and over the longer term”, he explained.

He said Top Glove is well-positioned to cater to global glove demand, which is projected to grow by at least 10% annually and will continue expanding its operations.

At 2.35pm, Top Glove’s share price was trading 14 sen lower at RM4.86 on 2.61 million shares done.


French billionaire Drahi to acquire Sotheby’s in US$3.7b deal

PARIS, June 17 —French telecoms and media mogul Patrick Drahi is acquiring Sotheby’s auction house, one of the world’s biggest art brokers, in a US$3.7 billion deal, the British-founded company announced Monday. Drahi, the billionaire founder…


Challenging environment clouds EPF dividend outlook

PETALING JAYA: The 25% drop in the Employees Provident Fund’s (EPF) investment income in the first quarter (Q1) of the year is a surprise to many. As the EPF dividend payout is dependent on its financial performance, the pension fund’s commitment to declare dividends of at least 2% above the inflation rate is being closely monitored.

The fund declared a dividend of 6.15% last year. In the past 10 years, the highest dividends declared were 6.9% in 2017, 6.75% in 2014 and 6.4% in 2015 while the lowest dividend declared was 4.5% in 2008.

Given the lower contribution from equities, EPF’s total investment income came in at only RM9.66 billion in Q1 this year against the RM12.88 billion recorded in the same period a year ago.

During the quarter, equities continued to be the main revenue driver, contributing RM4.16 billion or 43% of total investment income. Equities made up 39% of EPF’s total investment assets.

Perhaps an analysis of EPF’s top 30 equity holdings could give some hints on how the pension fund would fare in Q2.

The analysis shows a mixed bag of performance in terms of share price movement from end of March to date, with 17 stocks recording growth and 12 stocks posting declines while one was unchanged.

Among the 30 stocks, Gamuda Bhd was the top performer with a 21.53% jump in its share price from RM2.88 as at end-May to RM3.50 at last Thursday’s close. EPF holds a 11.95% stake in Gamuda as at end-March.

Earlier in February, the stock took a hit when the government started talks on the proposed takeover of highway concessions but the revival of infrastructure projects such as the East Coast Rail Link (ECRL) has given a boost to the construction sector.

In March, the company clinched a contract worth NT$3.95 billion (RM521.75 million) from CPC Corp to construct a marine bridge and related works in Taiwan. CPC is Taiwan’s state-owned energy company

Following Gamuda is Telekom Malaysia Bhd (TM) which saw its share price rise 19.06% during the period. Axiata Group Bhd was the third best performer with a 13.25% rise in its share price. EPF holds 17.53% and 16.29% stakes in TM and Axiata respectively.

The telco sector, which struggled amid heightened competition last year, finally saw some excitement when Axiata began negotiations with Telenor ASA for a possible merger of its Asian assets. Telenor is Digi.Com Bhd’s largest shareholder with 49%.

Immediately after the announcement, shares of Axiata and Digi rallied as much as 18.3% and 11.5% respectively. Digi’s share price climbed 7.25% from RM4.55 at end-March to RM4.88 last Thursday. EPF has a 14.13% stake in Digi.

The worst performer was Media Prima Bhd, whose share price plunged 20.83%, followed by Sime Darby Plantation Bhd which fell 7.57% and Alliance Bank Malaysia Bhd which shed 7.82%.

Media Prima reported a net loss of RM40.41 million in the first quarter ended March 31, 2019, which worsened from the net loss of RM21.83 million a year ago..

EPF has the highest weightage in Malaysia Building Society Bhd (MBSB) with a 63.77% stake. MBSB’s share price increased slightly over the past two months.

Of the 30 stocks shown, 11 are constituents of the FBM KLCI.

Against the backdrop of the challenging economic environment, fund outflows from the emerging markets and ongoing US-China trade war, the local bourse is expected to remain lacklustre this year.

The FBM KLCI, which ended 2018 at 1,690.58 points, opened lower at 1,668.11 this year and climbed to 1,692.74 on Feb 18 before spiking up to a year-to-date high of 1,730.68 on Feb 21. The benchmark index, , however, gradually declined over the next few months to settle at 1,598.32 on May 24 before rebounding to 1,655.31 on June 3. It stood at 1,638.63 points at last Friday’s close.


Oil prices surge after suspected attacks on tankers

NEW YORK, June 14 — World oil prices rose yesterday following suspected attacks on two tankers in the Gulf of Oman, worsening frayed tensions in the crude-rich Middle East region. The rise in oil prices — jumping as much as 4.5 per cent before…


YTL Corp proposes to take YTL Land private via share exchange

PETALING JAYA: YTL Corp Bhd proposes to privatise YTL Land & Development Bhd through a share exchange offer.

YTL Corp told Bursa Malaysia that the share exchange offer entails the proposed acquisition by YTL Corp of YTL Land shares at 36 sen per share and YTL Land irredeemable convertible unsecured loan stock (ICULS) at 32 sen per ICULS.

The proposed offer will be satisfied through the issuance of new shares in YTL Corp at an issue price of RM1.14 each. With that, it will translate to an exchange ratio of about 0.32 YTL Corp share for each YTL Land share and 0.28 YTL Corp share for each YTL Land ICULS.

The proposed offer is not conditional upon any minimum level of acceptances of the offer shares as YTL already holds more than 50% of the voting shares of YTL Land.

As at June 7, 2019, YTL Corp owns a 65.26% stake in YTL Land (excluding treasury shares) as well as 78.95% of the total outstanding YTL Land ICULS.

Based on the exchange ratios, the shares offer price and ICULS offer price represent discounts of 5.4% and 9.1% over one-month volume weighted average prices of YTL Land shares and ICULS.

YTL Land’s share price closed 1 sen or 2.7% lower at 36 sen today, while YTL Corp gained 1 sen or 0.9% to RM1.14.

Based on the 288.05 million offer shares and 208.78 million offer ICULS, YTL Corp may issue up to 149.57 million consideration shares assuming all the holders accept the offer.

YTL Corp said YTL Land shareholders who exchange their offer securities for YTL Corp shares are expected to benefit from YTL Corp’s position as one of the top 50 largest stocks listed on Bursa Securities.

“The proposed offer provides an opportunity for the holders to reduce their exposure to a single industry business (i.e. property development) that has plateaued in terms of growth and development opportunities in recent years, and the outlook for which is soft for the near to medium term, in exchange for an investment in the more diversified range of businesses and earnings profile of the YTL Corp.”

Currently, both YTL Corp and YTL Land are required to comply with the regulatory requirements as well as listing obligations prescribed by Bursa Securities for listed issuers, representing an overlap of administrative efforts and costs.

However, YTL Corp said the delisting of YTL Land will eliminate such overlap, dispense with expenses to maintain the listing status of YTL Land and allow YTL Land to rechannel its resources towards its core business instead.

YTL Land was listed on Oct 7, 1973.

The offer will remain open for acceptances for at least 21 days from the posting date.


European stocks extend losses at open

LONDON, June 13 — European stock markets fell further at the start of trading today, with London’s benchmark FTSE 100 index down 0.1 per cent at 7,359.16 points. Frankfurt’s DAX 30 shed 0.2 per cent to 12,095.21 points and the Paris CAC 40…


British insurer Aviva’s cost-cutting exercise will not affect Singapore business, spokesman says

SINGAPORE, June 13 — As British insurer Aviva undergoes a global restructuring that will gradually cut some 1,800 workers over the next three years, its Singapore unit will likely be spared from the chopping block and its operations here will not…


Seacera seeking legal advice on voluntary declaration with RM22.18m overdue tax

PETALING JAYA: Seacera Group Bhd is seeking legal advice on the voluntary declaration made by a director of its subsidiary Duta Skyline Sdn Bhd without written approvals from the boards of Seacera and Duta Skyline.

The voluntary declaration is for the settlement of an overdue tax amounting to RM22.18 million for the years of assessment of 2009 and 2012. It is to be paid before July 1, 2019.

In a filing with the stock exchange, Seacera said a letter dated May 31 from Inland Revenue Board (IRB) was received on June 12 stating that IRB has accepted the voluntary declaration made by Duta Skyline.

“The voluntary declaration letter dated May 13 was signed by Datuk Ismail Othman (one of the vendors and directors of Duta Nilai Holdings Sdn Bhd and Duta Skyline) without written approvals from the board of directors of Duta Skyline Sdn Bhd and Seacera.”

Seacera also noted that the overdue tax occurred prior to Seacera’s acquisition of Duta Nilai on November 16, 2016, which in turn wholly owned Duta Skyline.

Accordingly, Seacera opined that the additional tax amount is personally payable in full by the vendors of Duta Nilai as the additional tax constitutes a clear breach of the vendors warranties under clause 9.2 and paragraph 6.1 and paragraph 6.2 of schedule 7 of the sale and purchase agreement dated November 16, 2016.

“The board of directors is seeking legal advice on the next course actions to be taken and further announcement will be made accordingly,” it added.

At the noon break, Seacera’ share price gained 4.7% to 22.5 sen on 3.74 million shares done.


European stocks mostly rise at open

LONDON, June 11 — European stock markets mostly rose at the start of trading today, with London’s benchmark FTSE 100 index up 0.3 per cent at 7,398.95 points. In the eurozone, Frankfort’s DAX 30 gained 0.7 per cent to 12,133.60 points, with…