Posts tagged ‘Telekom Malaysia’
23 January 2009 Newz Bits
HIGHLIGHTS
On Malaysia
· Cabinet to study plans to build LCCT at Labu again
· Windfall tax threshold on CPO likely to be raised
On The Global Front
· China’s economy expanded at the slowest pace in 7 years
· Singapore cuts corporate taxes and taps reserves for S$20.5bn stimulus
REPORTS
· Telekom Malaysia – To manage national emergency lines
(Hold; RM3.18; TP: RM2.74)
The cabinet in its meeting on Wednesday decided to study again the plan by AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) and Sime Darby Bhd (SIME MK, Buy, TP: RM6.40) to build a low cost carrier terminal (LCCT) in Labu, Negeri Sembilan, sources said. They said that the cabinet had asked AirAsia to make a presentation to the Ministry of Finance and Economic Planning Unit next Friday on the proposed KLIA East @ Labu, with the view that the project of similar scale and specifications can be carried out within the Kuala Lumpur International Airport (KLIA) grounds in Sepang. According to one of the sources, the cabinet was leaning towards the airport now being constructed within KLIA. It is learnt that if the airport is to be built within KLIA, the cost can be kept to RM1.3bn, lower than the estimated RM1.6bn for the Labu LCCT. It is understood that the government would ask Malaysia Airports Holdings Bhd (MAHB) and AirAsia to work together towards a win-win solution. (Financial Daily)
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Malaysia Airports Holdings Bhd (MAHB) said aeronautical charges imposed on airlines using its airports in the country are not determined by the cost of building the terminal or airport. Rather, they are determined and approved by the government and applied on a standard basis across all 39 airports it manages and operates. Aeronautical charges include parking, landing, aerobridge and check-in counters. (BT)
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The Ministry of Finance (MoF) could significantly raise the threshold on the imposition of windfall tax on crude palm oil (CPO) though it does not favour the scrapping of the provision to collect tax, sources said. A source said MoF had taken a holistic approach on the windfall tax on CPO and was expected to raise the threshold for the collection to around RM2,600 – RM2,800 per tonne level from the current RM2,000 per tonne threshold. On whether possible changes to windfall tax might be included under the second stimulus package, the source said it was possible and stressed that MoF could finalise its decision on the tax imposed on CPO some time next month. (Financial Daily)
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The Asian Strategy and Leadership Institute (ASLI) is projecting a 4% gross domestic product (GDP) growth for Malaysia this year. ASLI’s senior research fellow in economics Datuk Gan Khuan Poh said the domestic economy would accelerate if there was proper policy responses, more lending from banks and a quicker rollout of projects, especially under the Ninth Malaysia Plan. “With the global economic slowdown, Malaysian economic growth will slow down in 2009 but not into recession in the light of strong economic resilience and the policy measures, Gan told a media conference yesterday. (Bernama)
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Deputy Prime Minister Datuk Seri Najib Tun Razak said yesterday RM5bn of the RM7bn allocated for the first stimulus package had been transferred to the various operating ministries and agencies. Najib, who is also Finance Minister, said the remaining RM2bn would be transferred by next week. “The entire RM7bn will thus be in the hands of the ministries and agencies and they have to take immediate action…At this stage, we want to ensure the RM7bn is expended quickly. We have instructed all operating ministries to take immediate action,” he said. (Bernama)
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FlyFirely Sdn Bhd, the operator of the regional budget carrier Firefly is targeting the lucrative Singapore market as part of its route expansion drive this year. Its managing director Eddie Leong said the proposed takeoff points to Singapore would not be confined to Subang, but would include other secondary airports such as Penang, Ipoh, Melaka, Kuantan and Terengganu. “We have submitted the application to the transport ministry to fly these routes about two weeks ago and hope to fly to the republic by April this year,” Leong said. However, he added that the plan was subject to approval and landing rights by the relevant authorities, and it had yet to determine neither the frequency nor the Singapore airport it will fly to. Firefly is also eyeing a number of other routes and expects to fly to 36 destinations by the end of the year, an increase of 19 routes from its existing 17 destinations. The carrier is currently operating five ATR planes and will receive five more this year. (Financial Daily)
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The international reserves of Bank Negara Malaysia grew marginally to RM317.2bn as at January 15. It stood at RM316.8bn as at December 31 2008. The current reserves position is sufficient to finance 7.3 months of retained imports and is 3.3 times the short-term external debt, the central bank said in a statement. (BT)
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Stocks slumped Thursday, as a management shakeup at Bank of America and Microsoft’s earnings disappointment weighed on investor sentiment. The Dow Jones industrial average fell 1.3% (-105.30 pts, close 8,122.8). The Standard & Poor’s 500 index lost 1.5% (-12.7 pts, close 827.5) and the Nasdaq composite slid 2.8% (-41.6 pts, close 1,465.5). In currency trading, the dollar gained against the euro and fell against the yen. U.S. light crude oil for March delivery rose US$0.12 to settle at US$43.67 a barrel on the New York Mercantile Exchange. (Bloomberg)
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Home prices in the U.S. dropped the most in at least 18 years and builders broke ground on the fewest houses since record-keeping began as the recession deepened, government reports said yesterday. Prices in November declined 8.7% y-oy, the biggest drop in records going back to 1991, the Federal Housing Finance Agency said yesterday. Housing starts fell 16% last month to an annual rate of 550,000, the lowest since the government started compiling statistics in 1959, the Commerce Department said. Record foreclosures and the highest jobless claims in 26 years are dragging down home prices as the economy enters the second year of a recession. (Bloomberg)
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The number of Americans filing first-time claims for unemployment benefits matched the highest level in 26 years as firings forced more workers to seek government assistance in a deepening recession. Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, from a revised 527,000 the prior week, a Labor Department report showed yesterday. Employers who cut 2.6m U.S. jobs last year may continue to shed workers, weighing on spending and prolonging the slump. President Barack Obama is pushing for quick passage of a stimulus plan that aims to revive the economy and save or create as many as 4m jobs. (Bloomberg)
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European industrial orders fell by the most on record in November as the recession curtailed manufacturers’ demand for new machines and equipment. Industrial orders in the euro zone declined 26% y-o-y, the European Union statistics office said yesterday. That was the biggest drop since the euro was introduced a decade ago and exceeded economists’ median estimate for a drop of 20% in a Bloomberg News survey. Europe is being dragged into its deepest recession since World War II as the credit shortage derails purchases of homes, cars and factory machinery. (Bloomberg)
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French consumer spending on manufactured goods dropped more than economists expected in December as the slump worsened in Europe’s third-largest economy, sending unemployment higher. Such spending, which accounts for about 15% of the economy, declined 0.9% m-o-m, Insee, the national statistics office said yesterday. Economists expected a 0.2% decline, the median of 20 estimates in a Bloomberg survey showed. From a year earlier, spending fell 1.7%, after a 1.1% gain in November. (Bloomberg)
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China’s economy expanded at the slowest pace in seven years as the global recession dragged down exports, increasing pressure for more government spending and lower interest rates to buoy growth. Gross domestic product grew 6.8% y-o-y in 4Q08, after a 9% gain in 3Q08, the statistics bureau said yesterday. The figure matched the median estimate of 12 economists surveyed by Bloomberg News. Plummeting Chinese demand for parts and materials for exports is reverberating across Asia and the Pacific, driving Taiwan, South Korea and Australia closer to recessions and worsening Japan’s slump. (Bloomberg)
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Singapore cut corporate taxes for the second time in three years and said it will tap its reserves to fund record spending amid efforts to drag the island’s economy out of its deepest recession since independence. The government will reduce the maximum tax rate payable by companies to 17% from 18% this year, Finance Minister Tharman Shanmugaratnam said in a budget address yesterday. It will spend S$20.5bn (US$13.7bn) on property and personal tax rebates and cash handouts to help businesses and workers, using S$4.9bn of its national reserves. The tax cut will narrow Singapore’s gap with Hong Kong as Prime Minister Lee Hsien Loong’s government aims to attract investment in services and manufacturing industries. (Bloomberg)
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December 22, 2008 Daily Highlights
MARKET REVIEW
KLCI Update
The KL Composite Index had previously gained more than 28 points for the week-todate. Positively, the selling pressure appears well absorbed. The benchmark index was in negative territory for the better part of the day but losses were fairly limited. The KLCI ended the day down by just about four points at 876.4. In all, it had a pretty good week, gaining some 2.8%. Market breadth was also in the red throughout the day, improving somewhat towards the end. At the close, the number of losing stocks was just marginally ahead of gaining ones. Some of the big losers were Shell, Sime Darby, Tenaga Nasional and Telekom Malaysia. Market volume contracted from the previous day’s level to about 387 million shares. KNM was the most actively traded stock for the day. Other actives include Resorts World, MRCB and Lion Industries. Lafarge Malayan Cement, Tanjong plc and MISC were among the top gainers on Friday.
Regional Update
China’s stocks fell for the first time in six days, led by financial companies, on concern investors will flood the market with previously untraded shares as lock-up periods expire. China Pacific Insurance (Group) Co., the country’s third- largest insurer, sank 5.1 percent after saying the amount of shares available for trade will more than double on Dec. 25. Investors will be allowed to sell shares in Chinese listed companies worth about 3.46 trillion yuan ($506 billion) next year, Beijing Youth Daily reported today. That’s about a quarter of the nation’s current market capitalization. China Oilfield Services Ltd. retreated 5.8 percent after the price of crude lost 27 percent last week.
US Stocks
U.S. stocks posted the first back-to- back weekly gains in three months as the Federal Reserve reduced interest rates to a record low and President George W. Bush granted emergency loans to General Motors Corp. XL Capital Ltd. and Macy’s Inc. surged more than 24 percent as the central bank cut the main U.S. rate to as low as zero and pledged to “employ all available tools” to end the yearlong recession. GM jumped 23 percent yesterday as Bush gave the automaker and Chrysler LLC up to $17.4 billion and said the companies must restructure. The Standard & Poor’s 500 Index rose 0.9 percent to 887.88. The measure, which has increased 18 percent since its 11-year low on Nov. 20, is still down 40 percent in 2008. The Dow Jones Industrial Average slipped 0.6 percent to 8,579.11 this week.
MEDIA HIGHLIGHTS
Positive outlook for bond market, says BPA Malaysia
Malaysia will see a sustained pace of bond issuances next year with a possible increase in Malaysian Government Securities (MGS) issuances if the government persist with large development projects, said Bond Pricing Agency Malaysia Sdn Bhd’s (BPA Malaysia) head of market development Mohd Shaharul Zain. “A lot of bond issuances for major infrastructure arose out of government policy-making with regards to privatisation and national infrastructure. “If the government is going to pump prime with big projects, they will have to come to the market for funding,” Shaharul said, adding that government-backed projects typically have higher ratings. Credit quality was a key concern for investors looking to buy issuances with good ratings including MGS, corporate and government bonds, Shaharul told reporters at the launch of BPA Malaysia’s Bond Index Series, Fiix, on Friday.
BOJ cuts key interest rate to 0.1% from 0.3%
Bank of Japan cut its key policy rate to 0.1% on Friday and took other steps to ease corporate credit strains, as sharp yen rises and crumbling global demand hit an economy already in recession. The decision, which follows Tuesday’s dramatic rate cut by the Federal Reserve, was made by a vote of 7-1. Board member Tadao Noda voted against the rate decision, which takes effect immediately. BOJ Governor Masaaki Shirakawa will hold an embargoed news conference later in the day, with his comments expected to come some time after 4.15pm (0715 GMT). Japan, like the United States, is already in recession as companies such as carmakers Toyota and Honda slash output as customers close their wallets worldwide. The Fed’s rate cut, which brought down US rates to 0%-0.25%, and the yen’s rise to a 13-year high against the dollar have heightened calls from within the government and markets for the BOJ to further ease credit to help the economy.
Drop in building material prices benefits contractors and Govt
THE slump in building material prices will not only benefit contractors but also save the Government a significant amount of money. In the middle of this year, the Government agreed to include the variation of price (VOP) clause into design-andbuild projects on a 50:50 basis instead of limiting it to conventional contracts. The list of claimable items was expanded to 11 from five previously due to the escalating prices of building materials. Since then, these prices have declined significantly. Master Builders Association Malaysia president Ng Kee Leen said the VOP clause allowed either party to claim back any cost savings or shared any cost increases.
“The Government can claim back from contractors if the building material prices had fallen below the base price as at Jan 1, 2008,” he told StarBiz. “It is only fair that the Government gets compensated when prices come down (below base) and vice versa for the contractors.” Profit margins were little impacted as these were accounted for in the project bids and contracts, he added.
Banks remain stringent despite cut in reserve requirement
Although the recent 50-basis-point cut in the statutory reserve requirement (SRR) is designed to lower the cost of funds, banks are still stringent and selective in their lending activities. RHB Research Institute head Lim Chee Sing said whether banks would lend more depended on the risk appetite and quality of potential borrowers. “The cut in SRR does not necessarily mean more lending. This is particularly the case when the banking system is still liquid with a loan-deposit ratio of 75.3% as at end-October,” he said in an email reply to StarBiz. “In terms of lending activities, we at RHB are still active but are more selective in terms of our risk taking. In other words, the additional amount released from this SRR cut can be used to lend out to industries that are still doing relatively well or to lower-risk consumer lending like mortgages.’’ OCBC Bank (M) Bhd head of treasury Gan Kok Kim said the cut in the SRR would mean more funds were now free to be used by banks for their business activities.
Aid to Homeowners May Double Under Bush-Backed Loan Initiative
The mortgage-industry effort to stem foreclosures aims to double the number of borrowers getting help next year, as Democrats call for using taxpayer money to address the crisis. The Hope Now Alliance, a group created at the behest of Treasury Secretary Henry Paulson last year, expects to modify about 2 million mortgages next year, according to a report to be released today in Washington.
Lowest Treasury Yields Lure FAF Advisors, Hoisington (Update1)
The world’s biggest bond investors can’t stop buying Treasuries even though yields are approaching zero and the government is preparing to sell a record amount of debt to pay for the swelling budget deficit. The worst economy since World War II, creditmarket losses exceeding $1 trillion and the biggest drop in the Standard & Poor’s 500 Index since 1931 mean yields may continue to decline as investors flee all but the safest securities. Investors were willing to lend money to the Treasury at zero percent interest this month to safeguard their principal from wider losses.
MEDIA HIGHLIGHTS
Yen Weakens as Carmaker Loans Revive Confidence in Carry Trades The yen weakened against the euro and the dollar as Japanese exports tumbled and U.S. government aid to General Motors Corp. and Chrysler LLC increased demand for so-called carry trades. The Japanese currency dropped to the lowest level versus the dollar in almost a week after Bank of Japan Governor Masaaki Shirakawa expressed concern over the yen’s gains as exports plunged by a record in November. The dollar weakened against the euro before data this week that may show U.S. consumer spending, home sales and durable goods orders declined.
DBS Plans S$4 Billion Rights Offering at 45% Discount (Update3)
DBS Group Holdings Ltd., Southeast Asia’s biggest bank, is seeking S$4 billion ($2.76 billion) in a rights offering to weather a credit crisis that’s forced it to cut jobs for the first time since 2001. DBS will issue one new share for every two held by existing investors at S$5.42 apiece, according to a statement today. That’s a 45 percent discount to Dec. 19’s closing price of S$9.85. DBS tumbled as much as 11 percent in Singapore trading to a 5 1/2-year low after a share suspension was lifted.
ECONOMY HIGHLIGHTS
German Import Prices Drop, Led by Decline in Oil Cost (Update1) German import prices fell in November by the most in almost five years on energy products, adding to evidence that cost pressures in the euro area’s largest economy are easing. Prices dropped 1.3 percent in November from a year earlier after rising 2.9 percent in October, the Federal Statistics Office in Wiesbaden said today. Economists expected a drop of 0.2 percent from last year, a Bloomberg News survey of 14 analysts showed. In the month, prices fell 3.4 percent, the second biggest drop on record after last month’s 3.6 percent decrease.
Holiday Shoppers in U.S. Focus on Bargains, Limit Gifts to Kids
Cash-strapped shoppers were searching for bargains in the final weekend before Christmas and some were limiting their gift-giving to children in what may have been a make-or-break two-day period for U.S. retailers. “We’re buying less stuff for each other and just overall,” Dennis Decker, a 47-year-old landscape architect, said Dec. 20 outside a Kohl’s in Douglasville, Georgia. “Usually I buy stuff for my sisters. This year I’m just going to make them some Christmas ornaments.” Sales figures for the weekend will be released later this week. Consumers who waited for deeper discounts probably were rewarded as retailers sought to clear inventory and salvage what may be the worst holiday season in 40 years, even though their fourth-quarter profits may suffer as a result.
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