Breakfast briefing: Wednesday, February 3

Brent for April delivery dropped 46 cents to $33.78 a barrel as of 0146 GMT (8.46 p.m. ET) after settling down $1.75, or 4.9 percent, in the previous session. The front month contract for West Texas Intermediate (WTI) was down 49 cents at $31.13 as after falling $2.00, or 5.9 percent, in the previous session.

Market wrap: US stocks dropped on Tuesday after another steep fall in oil prices and a disappointing spending forecast from Exxon Mobil. The S&P energy index slid 3.3%, the biggest drag on the S&P 500. The S&P utility index rose 0.4%, the only sector to end in positive territory. - Reuters

The DJIA closed down 295.64 points, or 1.8%, to 16,153.54, the S&P 500 lost 36.35 points, or 1.87%, to 1,903.03 and the Nasdaq dropped 103.42 points, or 2.24%, to 4,516.95.

Forex summary

*The ringgit declines 0.66% to 4.2362 per US$

*It falls 0.66% to 4.6273 per euro

*Down 0.86% to 6.0972 to the pound sterling

*0.28% lower to 2.9612 per Singapore dollar

*0.06% higher to 2.9660 per Aussie

*Down 0.88% to 3.5390 per 100 yen

Energy

Oil slumped for the second straight day, with US crude ending 5.5% lower on Tuesday, as hopes of a deal to curb one of the worst supply gluts in history continued to fade amid concerns that mild winter weather in the US will dampen demand. - Reuters

Top foreign stories

Yahoo to look at job cuts, alongside spin off: Yahoo Inc, under growing pressure from impatient investors, said on Tuesday it would consider "strategic alternatives" for its core Internet business and cut about 15% of its workforce, even as it continues with its plan to revamp the business and spin it off. The announcement is the strongest sign yet that chief executive Marissa Mayer may be willing to sell the struggling Internet business of Yahoo. - Reuters

US stock market reforms suggested to prevent market chaos: A US Securities and Exchange Commission committee said on Tuesday that limiting the types of stock orders available to retail investors and moving away from halting trading in individual stocks could help prevent a repeat of the market chaos seen last August. - Reuters

Japan's savers won't play ball as BoJ turns negative: The Bank of Japan (BoJ) hopes that cutting interest rates below zero will boost spending and investment, but fear, inertia and years of paltry returns mean the nation's army of savers is unlikely to march to the central bank's tune. - Reuters

Exxon slashes spending after smallest profit in years: Exxon Mobil Corp on Tuesday reported its smallest quarterly profit in more than a decade and said it will cut 2016 spending by one-quarter and suspend share repurchases as it copes with a prolonged downturn in crude prices. Exxon reported that fourth-quarter profit tumbled to US$2.78 billion from US$6.57 billion in the same period a year earlier. Exxon forecast capital spending at around US$23.2 billion this year, a 25% drop from 2015. - Reuters

Top local stories

Palm oil firms tumble on higher foreign worker levy: The 154% rise in the levy for foreign workers in the plantation sector has taken a toll on oil palm players whose landbank is concentrated in Malaysia. Due to the labour-intensive nature of the industry, the rise in the levy from RM590 to RM1,500 per month will see planters forking out an additional RM910 per worker. Industry players generally are expecting a potential cut in their earnings of between 3% and 8% this year owing to the new levy which takes effect this month. - StarBiz

* The new foreign worker levy structure is expected to cause an average of 11% to 15% rise in cost for contractors.

* Top Glove Corp Bhd intends to cut its foreign labour workforce by 5% this year to manage cost efficiently, in view of the new foreign worker levy rate system.

Cordlife fails to get 90% of StemLife: Singapore-listed Cordlife Group Ltd, which twice extended the closing date of its takeover offer of Malaysia’s StemLife Bhd, did not manage to hit the 90% shareholding threshold to compulsorily acquire the remaining shares as at the final deadline. StemLife said it had been informed by Maybank Investment Bank Bhd that Cordlife had received valid acceptances for an 89.88% equity interest in StemLife as at 5pm Tuesday. - StarBiz

MBSB-Bank Muamalat merger talks aborted: Malaysia Building Society Bhd (MBSB) has failed to strike a merger with Bank Muamalat Malaysia Bhd, its second botched merger attempt in recent times. MBSB told Bursa Malaysia it and the parties involved - DRB-Hicom Bhd and Khazanah Nasional Bhd - have decided to end negotiations for the proposed merger to form the country’s biggest standalone Islamic bank after failing to agree on the terms. - StarBiz

Melewar Industrial Group bags RM83mil job for Tg Bin power plant: Melewar Integrated Engineering Sdn Bhd, subsidiary of Melewar Industrial Group Bhd, has clinched an RM83mil contract for upgrading and modification works at Malakoff Corp Bhd’s Tanjung Bin power plant in Johor. - StarBiz

Sumatec makes progress in RM1.2bil oilfield buy: Sumatec Resources Bhd has entered into a third supplemental agreement with its vendors for its proposed US$290mil (RM1.22bil) acquisition of an oilfield in Kazakhstan to alleviate its upfront financial commitment.

MCMC’s move to allocate spectrum surprising: The move by the Malaysian Communications and Multimedia Commission (MCMC) to allocate the 900MHz and 1,800MHz spectrum bands instead of auctioning them is surprising as an auction would bring in more funds for the Government. 

MRCB gets option for longer time to complete stadium project: Malaysian Resources Corp Bhd’s (MRCB) indirect subsidiary Rukun Juang Sdn Bhd has signed a supplemental agreement to the RM1.63bil Kuala Lumpur Sports City contract which allows for the extension of Project 1’s completion period beyond 17 months. - StarBiz

F&N first-quarter profit jumps to RM151.6m: Fraser & Neave Holdings Bhd’s (F&N) net profit jumped 116.86% to RM151.66 million for the first quarter on among others a favourable product mix, favourable milk-based global commoity prices, lower advertising cost and insurance claim recoveries and favourable Thai baht currency conversion. Revenue grew marginally to RM1.05bil. - StarBiz

Bursa sees challenging outlook this year: Bursa Malaysia Bhd expects this year’s market outlook to remain challenging due to the impact of policy statements, overall financial results of listed com- panies and the strength of the ringgit. Bursa Malaysia saw its full-year earnings for the financial year ended Dec 31, 2015 increase marginally to RM198.61 million compared with RM198.23 milionl in the previous year. Revenue was 2.9% higher to RM518.5 million. It declared a final dividend of 18 sen per share for the fourth quarter, bringing the full year dividends to 34.5 sen per share. - StarBiz

Lay Hong proposes bonus issue and share split: Lay Hong has proposed a 1-for1 bonus issue followed by one-to-five share split and issue of up to 332.06 million free warrants on the basis of one warrant for every two Lay Hong shares held. - StarBiz