Breakfast briefing: Tuesday, July 12

INTERNET FOR ALL: Big technology firms want to expand Internet access around the world and Boeing could be instrumental in making this happen.

MarketWrap: The US benchmark S&P 500 stock index set record intraday and closing highs on Monday as last week's strong monthly US jobs report worked its way into financial markets, and European shares rose as a single candidate emerged to succeed David Cameron as British prime minister. - Reuters

The DJIA closed up 80.19 points, or 0.44%, at 18,226.93, the S&P 500 ended up 7.26 points, or 0.34%, at 2,137.16 and the Nasdaq closed up 31.88 points, or 0.64%, at 4,988.64. - Reuters

Forex summary

*The ringgit lost 0.14% to 3.9995 per US$

*It was 0.33% lower at 4.4219 per euro

*Down 1.29% to 5.2003 to the pound sterling

*0.06% higher to 2.9599 per Singapore dollar

*0.09% down to 3.0158 per Aussie

*Down 0.23% to 3.8939 per 100 yen

Energy

Oil prices fell more than 1% on Monday, hitting two-month lows on extended selling after the market's break below a key technical support level last week due to oversupply fears. Brent crude futures settled down 51 cents, or 1.1%, at US$46.25 per barrel. The session low was US$45.90, the lowest since May 11. - Reuters

Top foreign stories

Boeing sees US$5.9 trillion airplane market: Airlines will order new planes valued at US$5.9 trillion (RM23.54 trillion) over the next two decades to keep pace with rising air travel as more people take to the skies in emerging nations such as China, according to a Boeing Co forecast. - Bloomberg

Merkel urges Britain to quickly clarify relationship with EU: German Chancellor Angela Merkel said on Monday access to the European Union's single market meant accepting the bloc's basic freedoms and rejected suggestions from London that Britain could retain full EU market access while curbing immigration. Merkel said Britain should clarify quickly how it wants to shape its future relationship with the EU, adding she wanted London to remain an important partner. - Reuters

Low aluminium prices hurt Alcoa second-quarter profit: Alcoa Inc on Monday reported a lower quarterly net profit, with falling aluminium and alumina prices pressuring revenue while plant operations have been scaled back ahead of a spinoff of its traditional smelting business later this year. The company said second-quarter net income fell to US$135 million from US$140 million a year earlier. - Reuters

Abe orders new stimulus package after election win: Japanese Prime Minister Shinzo Abe has ordered a new round of fiscal stimulus spending after a crushing election victory over the weekend as evidence mounted the corporate sector is floundering due to weak demand. Abe did not give details on the size of the package. - Reuters

Top local stories

End of the road for RSCs: Malaysia’s first risk-service contract (RSC) awarded by Petroliam Nasional Bhd (Petronas) for the development of the Berantai marginal oil field has come to an end due to the low oil price environment that has made the venture uneconomical. SapuraKencana Petroleum Bhd said on Monday the company, its partner Petrofac Energy Developments Sdn Bhd and Petronas had reached a mutual agreement with Petronas for the cessation of the Berantai RSC. It is the second RSC to be discontinued after Dialog Group Bhd ceased operations in its Balai marginal oilfield in February.- StarBiz

Nirvana gets buyout offer from CVC Capital: Nineteen months after its listing on the Hong Kong stock exchange, Malaysia-based Nirvana Asia Ltd has received an offer from private equity firm, CVC Capital Partners, to buy it out for HK$8.1bil (RM4.16bil) or HK$3 a share. The offer price is a premium of 22.4% over Nirvana’s last traded price. - StarBiz

Getting Hong Kong investing a further RM440m: Leading global leisure and hospitality company Genting Hong Kong Ltd, which paid 230.6 million euros (RM1.01bil) for the acquisition of three shipyards in Germany, renamed MV Werften, is further investing more than 100 million euros (RM440mil) to make it the most modern shipbuilding group with an output of two Neo-Panamax and one Panamax cruise ships a year. - StarBiz

Southern Steel terminates RM427m contract: Southern Steel Bhd has terminated a contract worth RM427mil with Danieli & C Officine Meccaniche SpA. The company said that the termination did not affect its core businesses on the back of better selling prices in the fourth quarter of the financial year ended June 30, 2016. - StarBiz

MClean to streamline precision cleaning business: MClean Technologies Bhd (MClean) is streamlining its precision cleaning and related businesses via an internal restructuring. The company said its unit MClean Advance Carrier Pte Ltd will sell its entire stake in MClean Technologies (Wuxi) Co Ltd to MClean Technologies Pte Ltd of Singapore. The transfer consideration is US$370,370 (RM1.48mil). - StarBiz

LPI Capital Q2 earnings surge 148%: Insurer LPI Capital Bhd’s earnings jumped 148% to RM212.62mil in the second quarter, boosted by its stronger underwriting profit and equity invest- ment. Its revenue rose 11.3% to RM339.25mil. LPI declared a higher interim dividend of 25 sen compared with 20 sen a year ago. - StarBiz

Digi posts Q2 earnings of RM421mil: Digi.com Bhd posted earnings of RM420.61mil in the second quarter, down 9.4% versus a year earlier. Its revenue declined 3.7% to RM1.655bil, while earnings per share was 5.41 sen compared with 5.97 sen previously. Digi declared a second interim dividend of 5.4 sen per share, equivalent to RM420mil or a 100% payout ratio. - StarBiz

Was Seong wins new contract, shares jump: Wah Seong Corp Bhd shares rose as high as 4% in intraday trading on Monday on news the company had secured a pipe-coating and storing contract from Switzerland-based Nord Stream 2 AG. The new 2,400km pipeline, the contract for which is in final stages of negotiation, will deliver gas from North Russia to the German coast near Greifswald. - StarBiz

StanChart: Rate cut could come in September: Malaysia’s key interest rate will be maintained at 3.25% when policymakers meet on July 13 but a rate cut could come in September, says Standard Chartered Global Research (StanChart). - StarBiz

Fintech impact on banking seen limited: The banking business will not be as affected by financial technology as has been predicted. CIMB Research said in a report the financial services sector’s highly regulated and capital intensive nature would shelter it from the fintech revolution. - StarBiz

AirAsia eyes HK listing as it expands in North Asia: AirAsia is studying a dual listing in Hong Kong, part of plans to become a pan-Asian low-cost airline player as it also moves towards setting up a joint venture in China, sources said. The group is simultaneously looking for more aircraft to meet strong demand in North Asia and elsewhere, they said. - Reuters

AirAsia X to restart London flights ‘soon’: AirAsia X Bhd, the long-haul, low-cost affiliate of AirAsia Bhd, is going to fly to London “soon”, said AirAsia co-founder and group chief executive officer Tan Sri Tony Fernandes in a Facebook post on Monday. The airline suspended all flights to Europe, including London and Paris, in March 2012, due to high operating costs. - Edge FD

1MDB agrees to request for arbitration led by IPIC: 1Malaysia Development Bhd (1MDB) has agreed to the request for arbitration (RFA) filed by International Petroleum Investment Co (IPIC) and Aabar Investments PJS. 1MDB is confident of its legal position and has submitted a formal and robust response to the RFA through its legal counsel, Weil Gotshal and Manges, a specialist in international litigation, it said. - Bernama

GHL Systems partners Philippine bank to offer e-payment services to merchants: Payment service provider GHL Systems Bhd has teamed up with Rizal Commercial Banking Corp, a leading bank in the Philippines, to provide e-payment services to merchants in the Philippines for credit-card transactions. - Edge FD

Press Metal plans share split, bonus issue: Press Metal Bhd has proposed a share split and bo- nus issue as part of an internal reorganisation that will see a new entity assume its listed status.
The company said the share split involves the subdivision of its 50 sen shares into two shares of 25 sen each. This is will be followed by a bonus issue of up to 1.154 million new subdivided shares on the basis of two bonus shares for every five subdivided shares. - Edge FD