Breakfast briefing: Tuesday, July 7

Market wrap: US stocks fell in a volatile Monday session as Greeks resoundingly backed their government in rejecting the austerity terms of a bailout and China implemented emergency measures to stop a selloff in Shanghai's market. - Reuters

The DJIA fell 46.53 points, or 0.26%, to 17,683.58, the S&P 500 lost 8.02 points, or 0.39%t, to 2,068.76 and the Nasdaq dropped 17.27 points, or 0.34%, to 4,991.94.

Forex summary

The ringgit fell to a 16-year low against the US dollar on the heightened risk that Greece may exit the Eurozone, dealers said. - Bernama

*The local currency lost 0.79% to 3.8092 per US$

*It fell 0.42% to 4.2149 per euro

*Down 0.38% to 5.9289 to the pound sterling

*0.74% down to 2.8233 per Singapore dollar

*0.29% lower to 2.8578 per Aussie

*Up 0.08% to 3.1055 per 100 yen

Energy

Oil prices suffered their biggest selloff in five months on Monday, falling as much as 8% as Greece's rejection of debt bailout terms and China's stock market woes set off a deepening spiral of losses. Adding to the pressure on oil, Iran and global powers were trying to meet a July 7 deadline on a nuclear deal, which could bring more supply to the market if sanctions on Tehran are eased. The self-imposed deadline could be extended again, officials at the negotiations said. A slump that began last week gathered pace through the session, taking four-day losses to more than 10%, the largest rout since early January, as weeks of range-bound trading abruptly ended. Brent crude settled down US$3.78, or 6.3%, at US$56.54. - Reuters

Top foreign stories

Germany, France press Greece to make fast, credible proposals: France and Germany told Greece on Monday to come up with serious proposals in order to restart financial aid talks, a day after Greeks voted overwhelmingly to reject more austerity. German Chancellor Angela Merkel and French President Francois Hollande, the eurozone's most powerful leaders, said Athens must move quickly if it wants to secure a cash-for-reform deal with creditors and avoid crashing out of the single currency. - Reuters

US banks post detailed crisis plans to avoid breakup threat: A dozen of the largest Wall Street banks on Monday published detailed plans to show how they would shut down their business during a crisis without the help of taxpayer money, a crucial step to prevent being broken up by regulators. Banks say the refiled plans, the third time they've been revised, show they have massively improved their resilience to withstand shocks, bulking up on shareholder capital to shield creditors, and earmarking certain bonds as susceptible to losses in return for a higher yield.- Reuters

ProSieben, Springer in early merger talks: German broadcaster ProSiebenSat.1 and German publishing house Axel Springer have reignited talks for a merger, seeking to consolidate their push into digital media, two sources familiar with the matter said on Monday. Axel Springer, the publisher of Europe's best-selling tabloid Bild, and ProSieben, broadcaster of mass-market hits like Germany's Next Topmodel, are both racing to adapt to rapidly changing markets. - Reuters

Services sector activity growth slows in June: US services sector expansion eased for a third straight month in June, pressured by a slowdown in employment and output growth, an industry report showed on Monday. Financial firm Markit said its final reading of its Purchasing Managers Index for the services sector slipped to 54.8 in June, matching the preliminary reading. - Reuters

Top local stories

Fitch boost short-lived: The simmering economic crisis in Greece and weakness in China continued to roil financial markets across the region, with the right being the hardest hit among Asian currencies. Sentiment on the ringgit was further compounded by rising domestic political risk, lingering concerns about 1Malaysia Development Bhd’s massive debt problems and lower oil revenue. The local unit fell to a 16-year low at 3.809 against the US dollar - a level last seen before the exchange April. It was down 8.1% year-to-date and is currently the worst performing currency in Asia. - StarBiz

Market down on poor sentiment: The local stock market reacted negatively on the back of heightened political risk and the weakening ringgit, falling by nearly 1%. The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) closed 17.19 points lower at 1,717.05. “Malaysia is first and foremost a political market, so not surprisingly, politics are always the biggest risk for Malaysia. Markets do not like uncertainties. This is why the market is reacting this way. However, once the issue is resolved, the market will go up again,” said a fund manager who wasn’t particularly perturbed by yesterday’s plunge. - StarBiz

Shamsul named MMC chairman: Former Petroliam Nasional Bhd (Petronas) president and CEO Tan Sri Shamsul Azhar Abbas has been appointed chairman of MMC Corp Bhd. In a filing with Bursa Malaysia yesterday, it said Shamsul had joined the board of MMC as non-executive independent chairman. - StarBiz

Govt retains AP policy for used cars: The Government still retains the approved permit (AP) policy for the import of used cars, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. He said the abolishment of the policy was still being studied as it was a rather complex exercise. - Bernama

AlloyMtd gets nod to redevelop London property site: Malaysian developer AlloyMtd Group has received unanimous approval from the London Borough of Hackney’s planning committee on its plans to redevelop One Crown Place London EC2. AlloyMtd, via unit, AlloyMtd (Jersey) Ltd acquired the strategic and landmark property development site in London two years ago from Sun Properties Ltd, a unit of UBS. In a statement yesterday, AlloyMtd group president/chief executive officer, Datuk Dr Azmil Khalid, said with the approval, the property project was expected to start by this November. - StarBiz

JAKS in JV to build RM7bil power plant: Pipe-maker JAKS Resources Bhd will partner China Power Engineering Consulting Group Co Ltd in a 50:50 joint venture (JV) to build a power plant in Hai Duong province in Vietnam for US$1.87bil (RM7.05bil). The project, via JAKS unit JAKS Power Holding Ltd will see the JV company called JAKS Hai Duong Power Company Ltd constructing two 600MW power-generation units that will begin construction in the first half of next year, with completion planned for 2020. The concession will be for over 25 years. - StarBiz

FGV to strengthen investments, drive growth: Plantation conglomerate Felda Global Ventures Holdings Bhd (FGV) said it would not be looking at any new acquisitions but would focus on strengthening its invest- ments. “FGV will not be pursuing more acquisitions we will consolidate all our investments and drive growth,” the group said. “FGV will also focus on integrating and extracting efficiencies of recent acquisitions. Our goal is to empower management teams, guided by a unifying vision and culture of performance and sustainability." - StarBiz

OSK Holdings gets nod for merger: Shareholders of OSK Holdings Bhd have given the green light for the merger with OSK Property Holdings Bhd and PJ Development Bhd, valued at RM1.71bil. The move will see OSK Holdings emerging as a first-tier property company in Malaysia. As a combined entity, OSK Holdings would have a total gross development value of RM13.3bil. - StarBiz

Retail sales outlook hazy post-GST: The retail sales outlook appears to be uncertain in the third quarter or even next year, as people are careful with spending and are making informed choices due to the goods and services tax (GSt), and oil price volatility, say retail players. KK Group that manages a chain of over 64 convenience stores under the brand name KK Super Mart said that sales growth was higher in the first quarter of 2015 driven by the Chinese New Year festive season and pre-GST buying of essential goods. - StarBiz

Moody’s says 1MDB does not pose systemic risk: Malaysia’s economy, its banking system and government finances are not under systemic risk from developments at state fund 1Ma- laysia Development Bhd (1MDB), rating agency Moody’s said. - Edge FD

‘Time too short to comply with law’: Low-cost carrier AirAsia Bhd may not have enough time to turn its 49%-owned associate Indonesia AirAsia's (IAA) negative equity positive by the end of this month under Indonesian law, said analysts. This is to avoid having its operating permit suspended by the Indonesian Transportation Ministry. “The time is too short for them (AirAsia), and it is hard for them to do a cash call at a time like this,” TA Securities analyst Tan Kam Meng said. - Edge FD

AET to buy new tankers?: Singapore-headquartered AET Inc, the tanker subsidiary of shipping gi- ant MISC Bhd — the shipping arm of Petroliam Nasional Bhd — is said to be looking at expanding its fleet with up to eight newbuildings costing close to US$500 million (RM1.91 billion), according to a report. - Edge FD

Events calendar

Reserve Bank of Australia will announce interest rate decision. The consensus view is the central bank hold rates steady  (0430 GMT).

The Industrial Production released by the UK's National Statistics (0830 GMT).