November 27, 2008 Daily Highlights
Bursa Malaysia ended lower yesterday, led by the fall in the finance and property indices, dealers said.They said the fall was, however, capped by mild gains in the plantation stocks.A dealer said the lacklustre market was also dampened by the overnight mixed performance on Wall Street.The benchmark Kuala Lumpur Composite Index (KLCI) fell 3.81 points to close at 856.37. It had opened 2.29 points lower at 857.89.During the session, the KLCI had touched a low of 848.03, down 12.15 points, or 1.41 per cent.Bank Negara Malaysia is scheduled to announce the third quarter gross domestic product growth, which could give some direction to the market.
Most Asian stocks advanced yesterday, led by South Korean banks as regulators said risks are being controlled. Japanese and Australian shares declined after Toyota Motor Corp.’s debt rating was cut and BHP Billiton Ltd. dropped a bid for Rio Tinto Group. Most benchmark indexes in Asia gained, led by South Korea’s Kospi, which climbed 4.7 percent to 1,029.78. Japan’s Nikkei 225 Stock Average dropped 1.3 percent to 8,213.22 on the lightest trading day of the year in terms of value. Australia’s S&P/ASX 200 Index slid 2.3 percent.
U.S. stocks gained yesterday, driving the Standard & Poor’s 500 Index to the steepest four-day surge since 1933, as a rally in oil prices lifted energy shares and investors speculated President-elect Barack Obama’s economic team will bolster growth. Exxon Mobil Corp. and Chevron Corp., the biggest U.S. oil companies, were among the largest contributors to the advance as crude jumped 7.2 percent to trade above $50 a barrel for a third day. General Motors Corp., which will make its case for federal bailout funds after tomorrow’s Thanksgiving holiday, rallied 35 percent. The market overcame an early tumble spurred by government reports depicting a deepening recession. The S&P 500 climbed 3.5 percent to 887.68 after falling as much as 1.9 percent. The index has now surged 18 percent since dropping to an 11-year low on Nov. 20. The Dow Jones Industrial Average increased 247.14 points, or 2.9 percent, to 8,726.61.
Germany’s Borsig drives Q3 of KNM
KNM bought the Berlin-based firm for RM1.7 billion earlier this year.The company’s third-quarter net profit rose to RM103.4 million, while its nine-month net profit surged 86 per cent to RM253.8 million, due mainly to contribution from Borsig.KNM’s third-quarter revenue was up by 93 per cent to RM746.2 million,
pushing up its nine-month figure by 84 per cent to RM1.68 billion, helped by better manufacturing capacity and job orders.”Demand for process equipment remains strong in the Middle East, and the group is well-positioned to tap this market. Our balance sheet remains healthy with the net gearing of 0.47 times.
“We will continue to grow organically and be on the lookout for potential joint ventures or strategic alliances to move up the value chain,” said managing director Lee Swee Eng in a statement yesterday.
Public Bank on track to strong growth
Managing director Tan Sri Tay Ah Lek also said that the 25 basis points cut in the Overnight Policy Rate (OPR) this week would only have a marginal impact on its net interest margins.”Our profit is on track this year. Earnings in the first nine months already grew 25 per cent. It will be around there for the full year. It will be in line with analysts’ expectations,” he said after an award ceremony in Kuala Lumpur.Its net profit reached RM1.93 billion in the three quarters ended September 30 2008, buoyed by healthy growth in interest income.This brings the earnings per share to 57.4 sen in the nine-month period, from 46 sen last year.Public Bank yesterday moved to pass on the full benefit of a rate cut to its borrowers, slashing the base lending rate and base financing rate by 25 basis points from 6.75 per cent to 6.5 per cent effective December 1.
Ambank’s no-frills credit card timely: MD
AMBANK (M) Bhd expects to issue 50,000 of its latest “no frills” credit card within the next 12 months, the bank’s retail banking managing director Datuk Mohamed Azmi Mahmood said yesterday.He said the credit card, called AmBank True Visa card, should be appealing to those looking for a value-for-money product, especially during the current difficult economic climate.”The card is free for life, has an annual interest of 12 per cent per year, which is one of the lowest in the country, and offers a monthly cash rebate of 0.5 per cent. “Customers who use the cards for the first time will enjoy interest-free rate for all retail purchases for three months,” Mohamed Azmi said at the card’s launch in Kuala Lumpur.He said the new card is very timely
as more and more customers are looking for financial products that do not burden them.”We are confident that our card will be a pioneer in the ‘no frills’ segment,” he said.AmBank True Visa card will be offered both in the conventional and syariahcompliant forms. There will be no physical monthly statements, rewards or bonus points for retail purchases.”We will issue the statement electronically.
Bombardier bags MAHB contract
CANADA’S Bombardier Transportation Inc and its local partner Hartasuma Sdn Bhd have secured a RM209 million contract from Malaysia Airports Holdings Bhd (MAHB) to expand the existing Bombardier-supplied automated people mover system at the KL International Airport (KLIA) in Sepang.Bombardier’s share of the
contract is valued at RM126 million.The job involves a spur line extension to the new operations, maintenance and storage facility (OMSF) and three Bombardier CX-100 vehicles. The new spur line is slated for completion in 2011.In a statement issued yesterday, Bombardier said it will be responsible for the design and supply of the three driverless vehicles and modifications to the existing six-vehicle fleet; automatic train control, power distribution and communications systems; and supply and integration of a central control centre in the new operations and maintenance storage facility.Hartasuma, meanwhile, will be responsible for the civil works.
China’s Rate Cut to Squeeze Bank Margins Further, Analysts Say
Chinese banks’ net interest margins will be hurt after the central bank slashed its key lending rate by the most in 11 years as the economic outlook deteriorates, analysts said. The People’s Bank of China yesterday lowered benchmark one- year lending and deposit rates by 108 basis points as it tries to prevent a slump less than three weeks after unveiling a 4 trillion yuan ($586 billion) stimulus plan. A basis point is 0.01
percentage point. The aggregate impact of yesterday’s move on bank margins is the “most negative” out of the four rate cuts since September, according to Deutsche Bank AG. It expects a 20 basis points contraction in lending profitability for Chinese banks.
Bankers Face Zero Bonuses, Limits on Cash Payments, Report Says
About a quarter of bankers in Europe will get no bonus this year as governments that have bailed out the industry clamp down on pay, a survey said. Financial services companies may also cap cash payments to workers and pay a bigger proportion of bonuses in stock, according to a survey of bankers at 30 firms by London-based recruitment firm Armstrong International. Those bankers that do get a bonus face an average 60 percent cut, the report said. “This year there is across-the-board disappointment and acknowledgement that bonuses will be bad,” Matthew Osborne, managing partner at Armstrong, said in an interview. “There will be a lot of zero bonuses that will be shared around divisions.”
China Foreign-Exchange Reserves Top $2 Trillion, Official Says
China’s foreign-exchange reserves, the world’s biggest, have topped $2 trillion, a government official said at a forum in Beijing today.National Bureau of Statistics chief economist Yao Jingyuan didn’t give an exact number or cite a source. China’s currency reserves were $1.9 trillion at the end of September, helping to strengthen the nation’s finances in the face of the global financial crisis.
HSBC Said in Talks to Buy London Headquarters From Metrovacesa
HSBC Holdings Plc is in talks to buy back its London headquarters from Metrovacesa SA as the Spanish developer’s 800 million pound ($1.2 billion) loan on the property comes due today, three people with knowledge of the matter said. HSBC sold the 45-story tower in London’s Canary Wharf financial district to Metrovacesa in April 2007 for 1.09 billion pounds. Madrid-based Metrovacesa hasn’t refinanced, according to the people, who declined to be named because they aren’t authorized to speak publicly. Negotiations on the price remain open, two of the people said.
U.S. Economy: Goods Orders, Consumer Spending Tumble
U.S. business investment weakened last month and consumers are retrenching worldwide, reports today showed, heightening pressure on policy makers to take stronger steps to combat the credit squeeze. Americans cut spending by 1 percent in October, the biggest drop since the last recession in 2001, while British households slashed expenditures last quarter by the most in 13 years, government agencies said
today. A U.S. Commerce Department report showed orders for durable goods slumped twice as much as forecast as domestic and foreign demand dried up. The intensifying global economic downturn spurred China’s central bank to cut its benchmark interest rate by the most in 11 years today, while the European Union proposed $259 billion in stimulus measures. In the U.S., President-elect Barack Obama held his third press conference in as many days to name former Federal Reserve Chairman Paul Volcker as an economic adviser.
Entry filed under: Business, Finance, Stock Market. Tags: 2008, Bank Negara Malaysia, BHP Billiton Ltd, Daily Highlights, General Motors Corp, KLCI Update, Kospi, Kuala Lumpur Composite Index, MARKET REVIEW, nikkei, November, Rio Tinto Group, Standard & Poor, Toyota Motor Corp..