Breakfast briefing: Wednesday, July 5 (Update)

Samsung Electronics Co Ltd and other memory chip companies are expected to enjoy record revenue and profits in 2017. — Reuters

MarketWatch: World shares pulled back and bonds and gold regained favour on Tuesday as a long-range ballistic missile test by North Korea and July 4 holidays for US markets dampened risk appetite. Asian shares were pushed lower while Europe saw a modest drop too. - Reuters

 

Energy

 

Oil prices flirted with both positive and negative territory on Tuesday, hovering around US$50 a barrel on tentative signs that a persistent rise in US crude production may be slowing. The international benchmark Brent LCOc1 settled down 7 cents at US$49.61 per barrel. - Reuters

 

Forex summary

*The ringgit gained 0.07% to 4.2952 versus the US$

*It was down 0.05% to 4.8819 versus euro

*Down 0.10% to 5.5604 per pound sterling

*Down 0.07% to 3.1120 per Singapore dollar

*Down 0.27% to 3.2743 per Aussie

*Down 0.29% to 3.8052 per 100 yen

 

Top foreign stories

 

Samsung on track to take Intel's chip crown with record second-quarter earnings: Samsung Electronics Co Ltd is expected to report its best-ever quarterly profit in the second quarter, with soaring memory chip sales pushing it past Intel Corp as the biggest semiconductor maker by revenue for the first time. Samsung's April-June operating profit is expected to leap 67%t from a year earlier to 13.1 trillion won (US$11.4 billion), a new high, a poll shows. - Reuters

 

German business group fears trade war with US: US President Donald Trump's protectionist approach to trade has the potential to ignite a trade war, the German DIHK Chambers of Commerce warned on Tuesday, adding that German companies were among the biggest job creators in America. - Reuters

 

EU clears Italy's US$6b state bailout for Monte dei Paschi: The European Union has approved a 5.4 billion euro (US$6.1 billion) state bailout of Italy's fourth-largest lender, Monte dei Paschi di Siena, taking the total amount of Italian taxpayer funds deployed to rescue banks over the past week to more than 20 billion euros. - Reuters

 

Brazil's Renova confirms receiving formal bid from Brookfield: Brazil's renewable energy company Renova Energia SA confirmed in a securities filing on Tuesday having received a formal bid from Canada's Brookfield Asset Management Inc. Reuters reported on Monday that Brookfield offered to inject 800 million reais (US$242 million) into Renova and buy a 16% stake in the firm owned by local power company Light SA for the equivalent of 9 reais a share. - Reuters

 

Indian utility bets US$10b on coal power despite surplus, green concerns: India's state-run power utility plans to invest US$10 billion in new coal-fired power stations over the next five years despite the electricity regulator's assessment that thermal plants now under construction will be able to meet demand until 2027. - Reuters

 

Top local stories

 

Lotte falls short of funding: The Lotte Chemical Titan Holding Bhd said its initial public offering (IPO) has raised approximately RM4bil, about RM2bil less than earlier expectations. This comes after the company repriced the offering to RM6.50 per share from RM8 and number of shares to be  issued by almost a quarter from the initially planned 740.5 million. - StarBiz

 

IGB to present revised takeover bid to shareholders: IGB Corp Bhd will present the revised terms of the takeover offer by Goldis Bhd to its shareholders, before making a decision to take it private. IGB Corp, the owner of Mid Valley Megamall, said the proposal by its biggest shareholder, Goldis, will be based on the preliminary opinion of independent adviser Kenanga Investment Bank Bhd. - StarBiz

 

Business optimism remains strong in Malaysia: Business optimism in Malaysia remains strong despite the decline in the June manufacturing purchasing managers’ index (PMI). The headline Nikkei Malaysia manufacturing PMI fell to its lowest reading in five years at 46.9 last month from 48.7 in May.  - StarBiz

 

UEM Edgenta wins RM75.5m hospital support project: UEM Edgenta Bhd has bagged a contract from the health ministry worth RM75.5mil for the provision of hospital support services at the National Cancer Institute in Putrajaya. The company said the contract is expected to contribute positively to future earnings. - StarBiz

 

Jetson’s contract joy short-lived: Just five days after announcing it had secured a construction contract worth almost RM1bil, Kumpulan Jetson Bhd said the job had been unilaterally terminated by MCC Overseas (M) Sdn Bhd due to an alleged misrepresentation or non-disclosure of a certain matter in relation to the project. - StarBiz

 

Bursa serves show-cause notice on delisting of MSports: Bursa Malaysia has served a show-cause notice on the delisting of Multi Sports Holdings Ltd (MSports) after regulator rejected the China-based shoe maker’s application for a further time extension to submit its quarterly reports for the periods ended June 30 and Sept 30, 2016, as well as the annual report for the financial year ended Dec 31, 2015. - StarBiz

 

McDonald’s bullish on outlook: McDonald’s Malaysia is confident of continuing its double-digit sales growth and is investing RM1.4bil to increase its outlets to 450 nationwide by 2025. The fast-food chain achieved year-on-year revenue growth of 16% last year. - Bernama

 

SC: Audit firms should strengthen quality controls: The Securities Commission (SC) Audit Oversight Board (AOB) is urging audit firms to strengthen their quality controls, following work deficiencies that have become a growing concern. The SC said there had been increased deficiencies relating to revenue recognition, inventory, group audits and related-party transactions. - StarBiz

 

Stake disposal to beef up Yinson’s cash position: Yinson Holdings Bhd’s move to dispose of the 26% stake in a Ghana-based floating production, storage and offloading (FPSO) unit will strengthen the company’s cash position which can be used for expansion, analysts said. The disposal of the stake to a consortium of Japanese companies is valued at between US$104mil and US$117mil. - StarBiz

 

Aeon Credit net profit rises 21% to RM76m: Aeon Credit Service (M) Bhd’s net profit increased 20.9% to RM75.81mil for the first quarter, while operating income amounting to RM31.16mil mainly due to bad debts recovered, commission income from sale of insurance products and Aeon Big loyalty programme processing fees. Revenue rose 15.5% to RM302.28mil. - StarBiz

 

Shahrir says Felda settlers confident of positive outcome for FGV: Most Felda settlers are optimistic there will be a positive outcome to the Felda Global Ventures Holdings Bhd (FGV) crisis, says Felda chairman Tan Sri Shahrir Samad. - StarBiz

 

Fernandes to reveal plans for Tune Care this weekend: AirAsia group’s Tan Sri Tony Fernandes is expected to reveal plans on his venture into the affordable healthcare business at this weekend’s Asean Sikh Economic and Entrepreneurship Summit. The health care venture, to be known as Tune Care, will be part of the privately held Tune group. - StarBiz

 

Access to cheap land is key to affordable housing, says World Bank: The World Bank said the challenges posed by affordable housing is an issue that is faced by both developing and developed countries. The Bank’s Urban and Disaster Risk Management (East Asia and Pacific) practice manager Abhas K. Jha said pockets of extreme wealth and poverty is the biggest problem. “Access to cheap land is key to affordable housing,” he said. - StarBiz

 

RHB Research maintains ‘buy’ call on Mah Sing: Mah Sing Group Bhd’s move to acquire two new plots of land and terminate two previous land deals will enable the developer to stay focused on the affordable housing segment as well as the Klang Valley property market. RHB Research said the acquisition of both new land parcels would be funded by the company’s RM650mil perpetual bond raised earlier. - StarBiz