Companies like CIMB Group Holdings Bhd, Hong Leong Financial Group Bhd (HLFG) and AmBank Group Bhd may have to beef up their capital structures by 2019.
MarketWrap: Wall Street treaded water on Thursday following two days of strong gains as advancing utilities offset declines in materials, banks and other cyclical industries. Investors this week have grown more comfortable with expectations the Federal Reserve could raise interest rates as soon as June, with many taking the view that such a hike would reflect improvement in the country's economy.
DJIA dipped 23.22 points, or 0.13%, to end at 17,828.29 points, the S&P 500 edged down 0.44 points, or 0.02%, to 2,090.1 and the Nasdaq added 6.88 points, or 0.14%, to 4,901.77.
Forex summary
*The ringgit gained 0.20% to 4.0682 per US$
*It rose 0.08% to 4.5550 per euro
*Up 0.29% to 5.9726 to the pound sterling
*0.10% lower to 2.9650 per Singapore dollar
*0.14% lower to 2.9442 per Aussie
*Up 0.04% to 3.7124 per 100 yen
Energy
Oil prices hit US$50 a barrel on Thursday for the first time in seven months, then bounced below that level and settled lower on the day as investors worried robust price gains could encourage more output and add to the global glut. Brent LCOc1 surged as high as US$50.51, its highest since early November, then retreated and settled down 15 cents at US$49.59 a barrel. - Reuters
Top foreign stories
Google beats Oracle in US$9b Android trial: A US jury handed Google a major victory on Thursday in a long-running copyright battle with Oracle Corp over Android software used to run most of the world's smartphones. The jury unanimously upheld claims by Google that its use of Oracle's Java development platform to create Android was protected under the fair-use provision of copyright law, bringing trial to a close without Oracle winning any of the US$9 billion in damages it requested.
Oracle said it saw many grounds to appeal and would do so. - Reuters
US rates may rise 'fairly soon,' Brexit a concern: Fed's Powell: The US Federal Reserve on Thursday continued to lay the groundwork for an interest rate increase in the next two months, with Federal Reserve governor saying the economy will likely be ready for such a move "fairly soon.” But he added that the uncertainty surrounding Britain's June 23 referendum on whether to leave the European Union was an argument in favour of the Fed exercising "caution" as it ponders whether to raise rates at its June 14-15 policy meeting. - Reuters
Japan consumer prices fall for 2nd month, add to pressure on BoJ: Japan's core consumer prices fell 0.3% in April from a year earlier, the second straight month of declines, keeping the central bank under pressure to deploy additional stimulus to achieve its ambitious 2% inflation target. - Reuters
Top local stories
Ringgit gains the most: The ringgit was the biggest gainer among regional currencies on Thursday, as investor sentiment towards Malaysia improved after crude oil prices breached US$50 per barrel for the first time since November 2015. Analysts noted that the dissipation of fear over a potential interest rate hike in the United States next month also helped buoy the ringgit. - StarBiz
Azman does not rule out buying ANZ’s AMMB stake: After months of speculation, AMMB Holdings Bhd
’s second largest shareholder Tan Sri Azman Hashim has come out to say that he does not discount the possibility of buying Australia and New Zealand Banking Group Ltd’s (ANZ) stake in AMMB. “I guess so if ANZ is selling, then one of the options will be that (about him buying the stake),” he said. Azman, who is the chairman of AMMB, however, said he could not comment on ANZ’s intentions to sell its 23.8% stake in the banking group. - StarBiz
CIMB first-quarter profit jumps 40%: CIMB Group Holdings Bhd, which saw its net profit surge 40.3% to RM813.8mil in the first quarter ended March 31, will continue to be cautious on its overall balance sheet growth. The focus is on cost management, asset quality, capital management and governance, given the slower regional economies and persistent market volatility. - StarBiz
AirAsia Q1 income soars six-fold: AirAsia Bhd posted an almost six-fold increase in its earnings for the first quarter to RM877.8mil. The low-cost airline said the surge in its net profit was attributed to a 31% increase in revenue to RM1.7bil, as well as a 29% drop in the average fuel price to US$56 from US$79 per barrel a year ago. - StarBiz
Petronas eyes China expansion: Petroliam Nasional Bhd (Petronas) intends to expand its presence in China by increasing its liquefied natural gas (LNG) supply to existing buyers and expanding its customer base. The oil major said it has signed a contract with Jovo Group Co Ltd to extend the LNG supply until 2023. - StarBiz
Star Media Group is syariah-compliant: Star Media Group Bhd is among the 20 newly classified syariah-compliant securities, the Securities Commission (SC) said. The updated list, which takes effect on May 27, features a total of 669 syariah-compliant securities, it said. - StarBiz
IJM posts higher net profit of RM793.6mil: IJM Corp Bhd saw a 65% increase in net profit to RM793.6mil for the financial-year ended March 31, although revenue fell 5.9% to RM5.13bil.
The infrastructure-property company said the higher earnings were mainly due to one- off gains from the disposal of equity interests in subsidiaries, and fair value gains on remeasurements of its equity interests in Jaipur-Mahua Tollway Pte Ltd and Swarna Tollway Pte Ltd totalling RM301.9mil. - StarBiz
SP Setia wins 7th international FIABCI award: SP Setia Bhd’s corporate headquarters in Setia Alam, Shah Alam, has set a high benchmark for sustainability in Malaysia as it clinched the group’s seventh international FIABCI Prix d’ Excellence award when it was announced the gold winner of the sustainable development category at the prestigious award ceremony in Panama City. - StarBiz
IHH rides on strong earnings of Singapore ops: IHH Healthcare Bhd posted earnings of RM235.48mil for the first quarter, up 37.3% from a year earlier, thanks largely to the strong earnings growth of Parkway Pantai’s Singapore operations. Its revenue also grew strongly at 23.6% to RM2.48bil, attributed to both organic growth and new or newly-acquired operations. - StarBiz
MAS expects Q2 to be weaker on soft demand: Malaysia Airlines Bhd (MAS), which started the year positively with the company making good progress on its turnaround plan, expects the second quarter to be weaker due to the soft demand during Ramadan. It said overall, the airline and the group were expected to record a loss for the whole fiscal year of 2016, but significantly smaller than initially budgeted. - StarBiz
MRCB picked as Kwasa Damansara infrastructure PDP: Malaysian Resources Corp Bhd (MRCB) has been appointed the project delivery partner (PDP) to develop the main infrastructure for the new Kwasa Damansara township, for a provisional fee of RM112.28mil. - StarBiz
SME loans boost AFG quarterly earnings: Alliance Financial Group Bhd (AFG)’s earnings in the fourth quarter jumped to RM129.85mil, from RM93.27mil a year ago, boosted by loans to small and medium enterprises. Its revenue was up 14% to RM492.81mil from RM432.02mil a year ago. It declared a dividend per share of 6.5 sen. - StarBiz
Regulatory framework for fintech by July: Bank Negara will reveal the financial technology (fintech) regulatory framework by July. The timeframe would allow banks to go through it and give their comments, said Bank Negara governor Datuk Muhammad Ibrahim. - StarBiz
No change in EPF dividend target: The Employees Provident Fund (EPF) is not changing its target of achieving a real dividend of 2% above inflation over a rolling three-year period in spite of the weak equity market. - Bernama
Shell’s refining margin to remain under pressure: Shell Re ning Co (Federation of Malaya) Bhd (SRC), which returned to pro t in the last nancial year ended Dec 31, 2015, may not be out of the woods yet, as the refining margin is expected to remain under pressure, no thanks to the weak recovery in crude oil demand. Edge FD
Fertiliser asset disposal key to CCM’s return to profitability: Chemical Company of Malaysia Bhd (CCM), which has endured two consecutive fiscal year of losses, said it could turn profitable after disposing of its two fertiliser facilities in Bintulu, Sarawak, and Lahad Datu, Sabah. The company said it has begun negotiations with several bidders to take over the said assets. - Edge FD
Mah Sing’s Q1 comes in at RM95m: Premier lifestyle developer Mah Sing Group Bhd posted a net profit of RM95.03 million in its first quarter, a slight decline from the RM98.89 million a year earlier. Its revenue fell to RM709.17 million compared with RM784.14 million previously. - Edge FD
Outgoing Lysaght CEO raises slew of questions at heated AGM: Lysaght Galva- nized Steel Bhd’s outgoing chief executive officer Liew Hoi Foo Thursday raised many questions at the heated shareholders’ meeting on whether the recent change in Lysaght’s ultimate holding company, Lysaght (M) Sdn Bhd, would trigger a mandatory general offer. - Edge FD
Engtex bags RM25 million contract from Syabas: Pipe manufacturer Engtex Group Bhd has bagged a RM25 million contract from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to supply ductile iron pipes as part of Selangor’s water pipe replacement programme. - Edge FD
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