Breakfast briefing: Friday, July 28 (Update)

Both US and Chinese e-commerce firms are grappling with the challenge of increasing their margins on fast moving consumer goods (FMCG).

MarketWatch: A swoon in technology and transportation shares led the S&P 500 slightly lower on Thursday on a day full of corporate earnings reports, but the Dow industrials set a record closing high, helped by a jump in Verizon. The DJIA rose 85.54 points, or 0.39%, to 21,796.55, the S&P 500 lost 2.41 points, or 0.10%, to 2,475.42 and the Nasdaq dropped 40.56 points, or 0.63%, to 6,382.19. - Reuters

 

Energy

 

Oil prices traded close to eight-week highs on Thursday, boosted by a steeper-than-expected slide in US crude inventories last week. Brent crude futures LCOc1 dipped by 2 cents to US$50.95 a barrel at 1346 GMT, after rising about 1.5% in the previous session. - Reuters

 

Forex summary

*The ringgit lost 0.07% to 4.2795 versus the US$

*It was up 0.29% to 5.0015 versus euro

*Up 0.37% to 5.5991 per pound sterling

*Up 0.12% to 3.1526 per Singapore dollar

*Up 0.56% to 3.4114 per Aussie

*Down 0.21% to 3.8521 per 100 yen

 

Top foreign stories

 

Delta, Air France-KLM, Virgin rejig Atlantic alliances: Delta Air Lines, Air France-KLM and Virgin Atlantic unveiled plans on Thursday to combine two overlapping transatlantic joint-ventures, supported by equity deals worth US$1 billion, as airlines brace for more competition. The shake-up is designed to strengthen carriers on the lucrative North Atlantic, where low-cost entrants have shaken up the market. - Reuters

 

Starbucks puts spotlight on China as US growth cools: Starbucks Corp's new chief executive Kevin Johnson said the world's biggest coffee chain is making a long-term investment in China, amid worries that growth from its dominant US market is cooling. The urgency of Johnson's mandate was underscored on Thursday after the company’s net income fell 8.3% to US$691.6 million for the third quarter. - Reuters

 

Japan June jobless rate falls to 2.8%: Japan's jobless rate fell in June and the availability of jobs improved for the fourth straight month to reach the highest since 1974, government data showed on Friday. The seasonally adjusted unemployment rate fell to 2.8% from 3.1% in May, versus economists' median forecast of 3.0%. - Reuters

 

Toshiba reaches US$2.2b deal over SCANA's South Carolina nuclear project: Toshiba Corp has agreed to pay US$2.168 billion to walk away from two unfinished nuclear reactors in South Carolina being built by its Westinghouse subsidiary. SCANA Corp and its partner, state-owned utility Santee Cooper, said Toshiba will make the payments in installments beginning in October and ending in September 2022. - Reuters

 

Amazon plows ahead with high sales and spending; profit plunges: Amazon.com Inc on Thursday reported a jump in retail sales along with a profit slump, as its rapid, costly expansion into new shopping categories and countries showed no sign of slowing. The world's largest online retailer posted second-quarter revenue of US$38 billion, up 25% from a year earlier. Yet Amazon posted a 77% drop in quarterly income, and even said it could lose up to US$400 million in operating profit during the current quarter. - Reuters

 

Intel lifts forecasts as driverless tech, AI add to PC gains: Chipmaker Intel Corp raised its full-year revenue and profit forecasts on higher expectations for its mainstay personal computer business and growth in newer areas such as artificial intelligence and autonomous driving. - Reuters

 

Top local stories

 

Taxes bite into Tenaga Nasional 's bottomline: Tenaga Nasional Bhd’s (TNB) tax bill for the third quarter jumped to RM400mil, up18 times from a year ago, causing the company’s earnings to slip by some 15% to RM1.96bil. TNB said the reduced profit was due to an increase in a deferred taxation expense that was recognised in the third quarter. - StarBiz

 

Maybank Indonesia posts higher earnings for first half: Malayan Banking Bhd’s Indonesia unit PT Bank Maybank Indonesia posted a 16.3% rise in net profit after tax and minority interests (Patami) to 998.5 billion rupiah (RM320mil) in the first half ended June 30. The bank said the better performance was supported by an overall improvement in its core banking business. - StarBiz

 

Five Malaysian firms on Forbes ‘Best Under a Billion’ list: Five Malaysian companies are among the top-200 publicly-traded com- panies in the Asia-Pacific region which are on Forbes 2017 “Best Under a Billion” list. They are Elsoft Research Bhd, Kerjaya Prospek Group Bhd, My E.G. Services Bhd, Pentamaster Corp Bhd and Vitrox Corp Bhd. - StarBiz

 

Petronas sells 10% stake in Bintulu LNG train for RM2.14b: Petroliam Nasional Bhd (Petronas) has disposed of a 10% stake in Petronas LNG 9 Sdn Bhd for US$500mil (RM2.14bil) to a joint venture of Thailand’s PTT Exploration and Production Public Company Ltd. - StarBiz

 

MAB to identify potential partners for haj and umrah charter service: Malaysia Airlines Bhd (MAB) will announce its potential business partners for its planned haj and umrah charter service by the first quarter of 2018, said  group CEO Peter Bellew. MAB has held talks with several potential strategic partners on the project, and received positive feedback during a visit to Saudi Arabia last week, he said. - StarBiz

 

China firm issues RM400m sukuk: BEWG (M) Sdn Bhd, a wholly-owned indirect subsidiary of Beijing Enterprises Water Group Ltd, issued RM400mil worth of Islamic medium-term notes on July 19 to finance its water treatment project in Kemaman, Terengganu. Proceeds from the sukuk issuance are expected to partly finance the refurbishment and upgrading of the Bukit Sah water treatment plant. The sukuk marks the first ringgit-denominated issue by a China state-owned company for water infrastructure funding in Malaysia. - StarBiz

 

Government to stick to GDP forecast of 4%-5% for this year: The Government is sticking to its growth forecast of between 4% and 5% this year, despite surging exports in recent months that have prompted economists to up their projections, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

 

Pavilion REIT buys Elite Pavilion Mall and assets for RM580m: Pavilion Real Estate Investment Trust (Pavilion REIT) has acquired Elite Pavilion Mall and its related assets from Urusharta Cemerlang (KL) Sdn Bhd and Urusharta Cemerlang Sdn Bhd for RM580mil. - StarBiz