LONDON, Feb 22 — World stock markets advanced today as investors awaited what they hoped will be encouraging news from US-China trade talks in Washington, dealers said. Europe’s key equity markets were up to around 0.5 per cent higher, building…
Indonesia led losses as most Southeast Asian stock markets fell on Friday, as worries of a global growth slowdown continued to hamper investor sentiment, while Vietnam continued to rise for the fifth straight session.
Investors are also exercising caution amid trade talks between the U.S. and China with the tit-for-tat tariffs between the world’s two largest economic powers having already disrupted international trade and slowed the global economy since the trade war started several months ago.
“Slowing global growth is underway, evidenced by falling exports growth in trade-sensitive countries… An improved US-China relation may not provide an immediate boost to demand against the backdrop of peaking trade growth,” said Zhu Huani, an economist at Mizuho Bank said in a note.
The Indonesian benchmark dropped 0.7 percent, leading losses in the region, following the central bank’s decision to hold key rate on Thursday. But for the week, the index is set to snap two straight weeks of losses.
Indonesia’s central bank kept interest rates on hold on Thursday and said it was looking at ways to boost loan growth.
Financial and consumer stocks dragged the index with Telekom Indonesia and Bank Negara Indonesia falling 1 percent and 2 percent respectively.
Malaysian stocks fell 0.6 percent, ahead of the country’s January inflation data to be released later today. The index is, however, set to post its third consecutive weekly gain.
Malaysia’s consumer prices are expected to fall in January, the first decline in nearly a decade, amid a drop in domestic fuel prices, a Reuters poll showed on Wednesday.
The central bank however, said last week that the country was not at risk of deflationary pressure. The index was dragged by losses in healthcare and telecom stocks, with IHH Healthcare Bhd and Maxis Bhd shedding as much as 1.7 percent and 3.4 percent, respectively.
Singapore’s index shed 0.5 percent after the country’s second-biggest listed lender Oversea-Chinese Banking Corp Ltd posted disappointing quarterly financial earnings.
OCBC missed market estimates with a 10 percent drop in quarterly profit, due to a weak performance in its insurance business.
Shares of OCBC dropped as much as 2.2 percent, while those of its peer United Overseas Bank Ltd dipped as much 2.2 percent.
The Vietnam index continued to surge for the fifth straight day and rose 0.4 percent, with gains concentrated in financial stocks. Joint Stock Commercial Bank for Foreign Trade of Vietnam rose 2.8 percent.
Meanwhile, Philippine stocks edged marginally higher.
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KUALA LUMPUR: Corporate earnings delivery will not significantly influence the Malaysian capital market this year as catalysts are expected to come from the external front, according to Affin Hwang Asset Management Bhd (Affin Hwang AM).
Its managing director, Teng Chee Wai, said for 2019, the company expects a single-digit upside in the FBM KLCI at around 8% to 10%, partly buoyed by recovery in global growth as the economic cycle matures.
“2019 is a year that the markets are going to respond more towards macro policies rather than earnings. And I do not see price-earnings expansion to be one big factor this year for the market because there is a very little growth,” he told a press conference after presenting Affin Hwang AM market outlook and company briefing here today.
“With 5% in (consensus) earnings (estimates) growth, I don’t expect this year to be a double-digit year (for the FBM KLCI),” he said, noting downward revisions in earnings are likely if there is slowdown in global economic activities.
Asked whether 2019 is a good year to invest in stocks, Teng warned of risks and uncertainties in the market such as the ongoing trade dispute between the United States and China.
“There is no such thing as the best time to invest … you must be mindful of the risks, and asset allocation is the way forward,” he added.
Nevertheless, Teng said given the positive development in the US-China trade talks, coupled with changes in policy by the Federal Reserve, he is fairly confident that the market will improve at some point in the second half of the year.
On Affin Hwang AM’s outlook, Teng said the fund manager is confident that it will surpass the RM50 billion mark in assets under administration (AUA) this year and reach the RM52 billion level.
He said the firm’s AUA grew 0.84% or RM400 million to RM47.8 billion as at end of 2018 from RM47.4 billion in late 2017.
Earlier at the press conference, Affin Hwang AM’s Islamic entity, Aiiman Asset Management Sdn Bhd, launched its maiden fund called Aiiman Asia Pacific (ex-Japan) Dividend Fund, which marks its foray into the retail market.
Aiiman managing director Akmal Hassan said the fund is suitable for retail investors who want regular income distribution and capital gains, and have a medium- to long-term investment horizon and moderate risk tolerance.
The fund will invest a minimum of 70% of the fund’s net asset value (NAV) in syariah-compliant equities and a maximum of 30% of its NAV in sukuk, syariah-compliant money market instruments and/or deposits.
The base currency of the fund is in ringgit with a minimum investment amount of RM1,000.
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WASHINGTON, Feb 21 — With eight days left in their trade truce, top US and Chinese officials were due today to return to the daunting task of bridging a chasm between the world’s two largest economies. US President Donald Trump has repeatedly…
HONG KONG: Banking giant HSBC said on Tuesday that pre-tax profit rose 16% to US$19.9 billion last year with growth across its global businesses despite a “challenging external environment in the fourth quarter”.
The results capped the first full year at the helm of the Asia-focused bank for chief executive officer John Flint, who has vowed growth while keeping a lid on costs as trade tensions between the United States and China rumble.
However, earnings in the last three months of 2018 came in below expectations as Washington’s trade war began to bite globally and hammered the stock markets, especially in Hong Kong and China.
Adjusted pretax profit fell one percent to US$3.39 billion in October-December, missing the US$4.4 billion consensus average by Bloomberg News derived from estimates compiled by the bank.
Global markets adjusted revenue was down US$202 million to US$1.1 billion over the same period, while wealth management dropped 18%, also to US$1.1 billion.
Overall the year saw strong growth for HSBC with net profit ballooning 30%to US$12.6 billion while adjusted pre-tax profit rose three percent to US$21.7 billion.
The bank had to lay off tens of thousands of staff as part of a wide-ranging overhaul that also saw it sell its Brazil operations in 2015.
But it showed a healthy doubling of profits by 2017, a year that also saw it nominate Mark Tucker as chairman, breaking a longstanding tradition of appointing insiders to the post.
In a statement attached to Tuesday’s earnings, Tucker and Flint said the bank was prepared to weather fallout from both a possible deterioration in the trade talks between Washington and Beijing and Britain’s impending departure from the EU.
“The fundamentals for growth in Asia remain strong in spite of a softer regional economic outlook,“ Tucker said in a statement attached to the annual report.
“The system of global trade remains subject to political pressure, and differences between China and the US will likely continue to inform sentiment in 2019,“ he added.
With Brexit looming, HSBC followed the other major British financial giants in ring-fencing its UK bank.
“We continue to prepare for the UK’s departure from the EU” Flint said, adding its operations in France “gives us a major advantage in this regard”. — AFP
KUALA LUMPUR: The intensifying airport tax dispute between AirAsia Group Bhd and Malaysia Airports Holdings Bhd (MAHB) could affect the Employees Provident Fund’s (EPF) investment income if it causes a negative reaction in the stock market, EPF CEO Tunku Alizakri Alias (pix) warned.
EPF, a substantial shareholder of both AirAsia and MAHB, owns about 10% and 5% shareholdings in the two groups, respectively.
“Our dividend payments are always derived from our investment income, (which is) driven from the market performance. So if the spat has impacted the market, then of course it will have an impact (on us) in terms of income,” Alizakri said at a media briefing on the EPF’s 2018 financial performance today.
“We are not directly impacted (from the spat) but we are impacted by the market performance of the stock counters,” he said.
Meanwhile, Alizakri confirmed that EPF has written to both parties expressing its concern over the dispute, saying that it is acting “just like a typical concerned investor”.
He disclosed that AirAsia has responded to EPF’s letter, without ela-borating on the details of the airline’s reply. However, EPF has yet to receive a response from MAHB.
“One of the parties will be meeting with us very soon. We are very happy with that … to explain the situation. We are looking forward to meeting with them,” he added.
Alizakri stressed that the retirement savings fund is concerned about the spat being brought up to the public, saying that it is not only bad for the two organisations but also bad for Malaysia as a whole.
“Because when you think about it, these are (two of) the biggest counters (in the local stock market), and also the face of Malaysia. AirAsia is an airline, the company that brings in tourists and business people. And MAHB, which is KLIA (operator), the first point of contact for foreigners that come into Malaysia.
“So we are naturally concerned that this disagreement has been brought into the public,” he said, adding that the letters were just to voice EPF’s concern.
“We are not in the position to go and arbitrate between these two. We are acting just like a typical concerned investor and we are hoping that they will be able to resolve this soon,” Alizakri said.
Last December, MAHB sued both AirAsia and AirAsia X for a total of RM36.1 million for refusing to collect the additional RM23 passenger service charges per passenger at klia2.
While MAHB stayed firm on its stance that the same rates should apply to both klia2 and Kuala Lumpur International Airport (KLIA), AirAsia argued that klia2 is a low-cost terminal and the charges levied should commensurate with the level of services provided.
The spat between the two seems to be far from over after MAHB turned down AirAsia’s offer of mediation, an attempt to resolve the airport tax dispute.
LONDON, Feb 18 — Europe's major stock markets mostly slid today, as investors set aside a bright performance in Asia and paused following last week's bumper gains, dealers said. "European stocks have had a stuttering start to the week, with strong…