Breakfast briefing: Friday, July 10

Market wrap: US stocks closed higher on Thursday after Wall Street found relief in Beijing's efforts to halt a rout in Chinese stocks, which lifted markets around the world. Wall Street had fallen sharply in the previous session as market turmoil in China, a rout in commodity prices, the Greek debt crisis and a major outage on the New York Stock Exchange spooked investors. - Reuters

The DJIA rose 33.2 points, or 0.19%, to end at 17,548.62. The S&P 500 gained 4.63 points, or 0.23%, to 2,051.31 and the Nasdaq added 12.64 points, or 0.26%, to 4,922.40.

Forex summary

*The local currency rose 0.33% to 3.7825 per US$

*It rose 0.09% to 4.1866 per euro

*Up 0.32% to 5.8195 to the pound sterling

*0.14% up to 2.8049 per Singapore dollar

*0.22% higher to 2.8229 per Aussie

*Up 0.56% to 3.1102 per 100 yen

Energy

Brent crude up US$1.60 to US$58.65 per barrel ahead of White house remarks on Iran. - Reuters

Top foreign news

Greece sends reform plan to EU: The Greek government sent a package of reform proposals to its eurozone creditors on Thursday in a race to win new funds to avert bankruptcy and will seek a parliamentary vote today to endorse immediate actions. The chairman of Eurogroup finance ministers, Jeroen Dijsselbloem, confirmed receiving the documents and said through a spokesman that he would not comment until they had been assessed by experts from the European Commission, European Central Bank and International Monetary Fund. - Reuters

US jobless claims rise to highest level since February: New applications for US unemployment insurance benefits rose last week to their highest level since February, suggesting some slowdown in the labour market recovery. Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 297,000 for the week that ended July 4, the US Department of Labor said. - Reuter

Fed's Evans wants no U.S. interest-rate hikes until mid-2016: A top Federal Reserve policymaker known for his dovish policy views made the case on Thursday for waiting until the middle of next year to raise U.S. interest rates, citing global risks and a domestic economy that still needs plenty of support. "Mid-2016 is where I envision the first liftoff," Chicago Fed President Charles Evans told a handful of reporters at his bank's headquarters in Chicago. - Reuters

IMF lowers global growth forecasts, cites US weakness: The International Monetary Fund trimmed its forecast for global economic growth for this year to take into account the impact of recent weakness in the United States. But it said growth prospects for next year remain undimmed, despite Greece's debt crisis and recent volatility in Chinese financial markets. In an update to its World Economic Outlook report, the IMF said the global economy should expand 3.3% this year, 0.2 percentage point below what it predicted in April. Growth should speed up to 3.8% next year, it said, unchanged from earlier forecasts. - Reuters

Top local stories

GuocoLand’s options open: Guocoland (Malaysia) Bhd is keeping its options open on how to monetise its Damansara City mall in Damansara Heights. The mall is located strategically at the massive development that is taking shape and which is seen as a viable alternative to Bangsar with two MRT stations being built at its vicinity. Known as Damansara City Mall, or DC Mall, it is in its last lap of completion and is scheduled to be operational by the second quarter of next year. It has attracted tenancy of about 60%. It is learned that the mall had attracted buyers, including Tan Sri Desmond Lim Siew Choon, who owns Pusat Bandar Damansara which is currently being redevel- oped. “Talks between GuocoLand and Lim have fallen through but there are other possibilities,” said sources. - StarBiz

TNB: Jimah may get new shareholder: Jimah East Power Sdn Bhd (JEP), the operator of the 2,000-MW coal-fired power plant known as Project 3B, may see the entry of a new shareholder after it completes its financial close.At present, Tenaga Nasional Bhd (TNB) holds a 70% stake in JEP, while Mitsui & Co Ltd owns the remaining 30% through 3B Power Sdn Bhd. TNB said The Chugoku Electric Power Co Inc, one of Japan’s biggest regional power utilities, may take up half of the interest in 3B Power. - StarBiz

Daya signs vessel deal with Siem Offshore: Daya Materials Bhd has entered into a novation agreement with Siem Offshore Rederi AS (SORA) via its subsidiary Daya Global Pte Ltd on the dynamic positioning class 2 offshore subsea construction vessel. - StarBiz

Censof buys controlling stake in partner ABSS: Software and solutions provider Censof Holdings Bhd is buying a controlling stake in its partner Asian Business Software Solutions Pte Ltd (ABSS) for S$10mil (RM28.06mil). Censof deputy group managing director Tamil Selvan Durairaj said the deal would take about two months to be completed. - StarBiz

Bank Negara maintains rates: Bank Negara has kept its overnight policy rate unchanged at 3.25% amid expectations of growth moderating. The central bank said there were heightened risks to global growth and financial conditions, which were being monitored to assess their implications on the Malaysian economy. - StarBiz

Masteel resumes trading after submitting accounts: Malaysia Steel Works (KL) Bhd has submitted its outstanding annual audited accounts and securities will resume trading today. The trading suspension was imposed on May 12. - StarBiz

Another shareholder sues TNB over integrax takeover: Another dissenting shareholder has taken legal action against Tenaga Nasional Bhd (TNB) , saying the utility giant’s offer document in January on the takeover offer of Integrax Bhd shares is erroneous and void.
TNB said it had been served an originating summons from Yau Wai Leong in relation to its conditional takeover offer of the remaining shares in the Lumut port operator. - StarBiz

Indonesia changes stance: The Indonesian transport authorities have taken a change of stance on their earlier ruling requiring airlines such as AirAsia Bhd to improve finances or ship out of their country by now saying that they would “help and support” these firms. The change of stance saw AirAsia’s shares rebounding by one sen to close at RM1.31, after having lost more than 12% of its value in the last few trading days following statements from Indonesian ministry officials that 13 airlines, including AirAsia’s 49% Indonesian affiliate, would need to get to a positive equity position by July 31 or be shut down. - StarBiz

Foreigners reallocating to short-dated MGS: Overseas investors are reallocating their holdings to short-dated Malaysian Government Securities (MGS), as supply and liquidity has been significantly reduced in Bank Negara Notes, according to HSBC Global Research. It said the two-year MGS has seen a sharp and consistent decline in bond yields since mid-May 2015, indicating a “relatively” high demand in this segment. - StarBiz

Sunway on track to achieve its goal: Property and construction group Sunway Bhd that has unbilled sales of RM2.5bil as of March, will adopt a wait-and-see approach and plan its property launches accordingly amid the soft property market. Its property division managing director Sarena Cheah said due to the uncertain market sentiments and the revisions made to the Strata Title Act 1985, the group expected the upcoming property launches to be delayed. But the group would keep its total sales target of RM1.7bil for 2015. - StarBiz

Windfall for WCT shareholders?: Builder-cum-property developer WCT Holdings Bhd could reward its shareholders and pare down borrowings with the nearly RM1.2bil claims it was awarded by a Dubai tribunal over a long-standing contract dispute with Meydan Group LLC. “Although its management has yet to decide what to do with the claims award, we believe WCT could utilise the money to pare down some borrowings, declare a special dividend and fund landbanking capital expenditure (capex),” said Kenanga Research in a report. “We reckon that a 10% payout assumption of the net amount of RM870mil as special dividends is reasonable, while the remaining 90% might be kept for capex and paring down borrowings.”

Proton celebrates 30th anniversary with special deals: Proton is providing special deals, including a RM3,000 rebate for buyers born in 1985, to celebrate its 30th anniversary. The rebate is for all Proton models and offered until Sept 30. - StarBiz

Toyo Ink proposes appointment of consultant: Printing ink maker Toyo Ink Group Bhd is seeking shareholders’ approval to hire a consultant that would cost the company US$35 million (RM132.7 million) for its power plant project. The amount is much larger than its market capitalisation of RM79.7 million. - Edge FD

Sunsuria City township phase 1 goes ahead: Sunsuria Bhd, unfazed by the slump in the local property sector, is going ahead with the launch of Phase 1 of its Sunsuria City township that borders the Xiamen University Malaysia campus here. The phase has an estimated gross development value (GDV) of RM1 billion and comprises residential, retail and commercial spaces, Sunsuria executive chairman Datuk Ter Leong Yap said. - Edge FD

JPMorgan: Malaysia at risk of China slowdown: Malaysia is at particular risk of a slowdown in China trade, and is among emerging markets that are expected to drag down global trade growth this year, said JPMorgan. In its Asia-Pacific Economic Re- search report, JPMorgan warned that a slowdown in Chinese trade could affect commodity exporters to China, like Malaysia, Indonesia and Thailand. - Edge FD