Breakfast briefing Tuesday June 16

Top foreign and local stories Tuesday June 16

Market wrap: Stocks fell on Wall Street on Monday as investors fretted over the consequences of a possible debt default by Greece, but talk of multi-billion dollar healthcare deals buoyed shares in the sector, cutting into the market's loss. - Reuters

DJIA fell 107.67 points, or 0.6%, to 17,791.17, the S&P 500 lost 9.68 points, or 0.46%, to 2,084.43 and the Nasdaq dropped 21.13 points, or 0.42%, to 5,029.97.

Forex summary

The ringgit closed slightly against the US dollar. - Bernama

*The local currency rose 0.05% to 3.7590 per US$

 * It fell 0.6% to 4.2262 per euro

 *Down 0.24% to 5.8353 to the pound sterling

 * 0.02% down to 2.7895 per Singapore dollar

 * 0.37% lower to 2.9009 per Aussie

 * Up 0.01% to 3.0460 per 100 yen


Oil prices extended declines on Monday after two straight days of losses late last week as high production offset strong refinery runs, but a storm that could impact Gulf of Mexico operations supported US crude. Brent futures were down 44 cents at US$63.43 a barrel. - Reuters

Top foreign stories

Judge rules for ex-AIG CEO over 2008 bailout, but no damages: A US judge on Monday awarded no damages to American International Group Inc shareholders led by former CEO Maurice "Hank" Greenberg in their lawsuit against the US government, despite finding that the Federal Reserve exceeded its authority in the insurer's 2008 bailout. - Reuters

Airbus, Boeing announce US$20bil in orders:  Airbus and Boeing got their sales war off to a flying start at the world’s premier air show near Paris yesterday with nearly US$20bil (RM75bil) in orders. Airbus got the competition going with two big deals: an US$8bil order for 50 planes from Saudi Arabian Airlines, and a US$6.4bil order for 60 of the upcoming A320neos by GE Capital Aviation. Boeing followed up with the announcement that Qatar Airways had ordered 14 777s worth US$4.8bil. - AFP

GAP to close 175 stores, cut jobs at HQ: Apparel retailer GAP Inc said it would close a quarter of Gap specialty stores in North America over the next few years, including 140 this year, potentially affecting thousands of jobs as the company struggles with a slump in sales at its namesake brand. Gap also said it would cut 250 jobs at its headquarters.

US industrial output hurt by weakness in manufacturing, mining: US industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth. The softness in the production side of the economy contrasts starkly with recent upbeat data on retail sales, employment, consumer and small business confidence, which have pointed to a growth pickup after a sluggish start to the second quarter. - Reuters

Top local stories:

Overhang on FGV shares: Analysts have generally given the thumbs down to Felda Global Ventures Holdings Bhd’s (FGV) proposed acquisition of a substantial stake in PT Eagle High Plantations Tbk, with one firm stating that the deal would pose an overhang to the share price that has been battered down to its lowest level since its listing on June 28, 2012. FGV shares plunged 21 sen or 11.29% to a record low of RM1.65. - StarBiz

SapKen Q1 profit halved: SapuraKencana Petroleum Bhd’s profit for the first quarter almost halved compared with a year earlier mainly due to lower production from its oil fields and lower oil prices. The oil and gas heavyweight’s latest earnings fell to RM260.69mil despite a one-off gain from the acquisition of subsidiaries amounting to RM177.84mil. Excluding the one-off gain, its operating profit fell 27.1% or RM124.9mil to RM336.3mil from RM461.2mil last year. - StarBiz

Benalec to start Johor reclamation in August: Benalec Holdings Bhd plans to start reclamation works in Tanjung Piai, Johor, in August this year. The marine construction and civil engineering group said it would proceed with the 1,000-acre reclamation off the coast of Tanjung Piai despite the expiry of an agreement between the company’s subsidiary Spektrum Kukuh Sdn Bhd with the State Secretary, Johor (Inc) and 1MY Strategic Oil Terminal Sdn Bhd. - StarBiz

MMHE unit wins RM324mil contracts: Malaysia Marine and Heavy Engineering Holdings Bhd(M MHE) unit Malaysia Marine and Heavy Engineering Sdn Bhd has secured RM324mil worth of contracts from Petronas Carigali Sdn Bhd, Hyundai Heavy Industries Co Ltd, MISC Bhd and EA Technique (M) Bhd. The contracts are for offshore structural component fabrication work, hook up and commissioning and related topside construction work for facilities improvement project as well as for marine repair and conversion works. - Bernama

Maybank upbeat about Thailand: Despite falling government spending and weaker consumer sentiment, Maybank Investment Bank Bhd chief executive officer John Chong believes that opportunities still abound in Thailand. Although South-East Asia’s second-largest economy, faces headwinds such as political uncertainties and high household debt, the country’s location, especially as a gateway to the Greater Mekong sub- region, makes it a compelling investment destination. - StarBiz

Muhibbah JV in RM580mil suit Down Under: A payment dispute has led Muhibbah Engineering (M) Bhd’s unit to file a counterclaim in excess of A$200mil (RM581mil) against Australia’s Wiggins Island Coal Export Terminal Pty Ltd (WICET). Muhibbah Engineering said Monadelphous Muhibbah Marine JV - a 50:50 joint venture between its wholly-owned subsidiary Muhibbah Construction Pty Ltd and Monadelphous Engineering Pty Ltd – took the legal action following the claim lodged by WICET. - StarBiz

JAG to start ops at new plant in Shah Alam by Q3: JAG Bhd is targeting to start the operation of its new processing facility, which is located next to its current factory here, by the third quarter of this year. Executive director Datuk Nigel Ng said the new facility was targeted to process an additional 2,000 to 3,000 tonnes per month from 5,200 tonnes now. - StarBiz

Prestariang expects better results this year: Prestariang Bhd is confident of achieving better financial results this year due to new contracts secured. “It will be better than last year. The dip in last year’s performance was due to the timing or delay in the signing of contracts. These are secured now, and ongoing,” said chief executive officer Abu Hasan Ismail. - StarBiz

Ibraco plans project in KL: Property developer Ibraco Bhd is spreading its wings to Peninsular Malaysia with a planned maiden mixed commercial cum residential project in Kuala Lumpur. Managing director Chew Chiaw Han said the development would be on a piece of vacant land which Ibraco was expected to acquire in two weeks. - StarBiz

AirAsia meets investors to allay fears: Top executives at AirAsia Bhd are rolling up their sleeves to explain to its institutional investors as they seek to allay fears raised by research firm GMT Research about the budget airline’s accounting and cash flow in a June 10 report. “We have talked to our investors. It (the GMT report) is garbage and so, we will not comment [further],” AirAsia group chief executive officer Tan Sri Tony Fernandes. - Edge FD

Proton to make rebadged cars: Proton Holdings Bhd, a wholly-owned unit of DRB-Hicom Bhd, aims to produce rebadged small and compact cars in the next 16 months by leveraging the technology of Japan’s Suzuki Motor Corp, which is part of its “long-term plan” to widen its product portfolio. - Edge FD

S P Setia Q2 net profit triples:  S P Setia Bhd’s net profit for the second quarter jumped 206% to RM227.2mil or 8.94 sen a share, on increased revenue and profit recognition from the handover of the group’s first residential tower in Fulton Lane, Melbourne. Revenue came in at RM1.63bil, up 71.16%. - Edge FD

Scanwolf to hog the limelight: Scanwolf Corp Bhd may step into the limelight, as its boardroom tussle could intensify in its EGM tomorrow, while a full report by advisory firm PKF Covenant Sdn Bhd on the investigative review of its property developments is expected to be ready soon. - Edge FD

Net foreign outflow surpasses whole of 2014: The heavy foreign selling on Bursa Malaysia does not seem to be abating. Foreign investors have now been net sellers for seven consecutive weeks, according to MIDF Research. In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said the cumulative net foreign outflow year-to-date in 2015 grew to RM7.5bil, surpassing the RM6.9bil outflow for the whole of 2014. - Edge FD

 Events calendar

The Reserve Bank of Australia publishes minutes of meeting (0130 GMT).

 UK's National Statistics releases the Consumer Price Index (0830 GMT).


Petron M'sia Refining & Marketing Bhd

Time: 2pm

Venue: Grand Dorsett Subang Hotel, Jalan SS12/1, Subang Jaya

Puncak Niaga Holdings Bhd

Time: 10am

Venue: Concorde Hotel Shah Alam

Points of interest to be raised: Update shareholders on the latest development and time of settlement with Air Selangor.

Supermax Corporation Bhd

Time: 10am

Venue: Eastin Hotel, 13,  Pusat Dagangan Seksyen 16 Petaling Jaya

SapuraKencana Petroleum Bhd

Time: 10am

Venue: Sapura @ Mines ,Jalan Tasik,The mines Resort City,Seri Kembangan

Points of interest to be raised: What will be the expected utilisation level for the Thai operations for FY16? Is the group participating in any tender exercises for SKD Teknik Berkat?A

 KUB Malaysia Bhd

Time: 10am

Venue: MATRADE Exhibition & Convention centre ,Menara MATRADE ,KL

MBM Resources Bhd

Time: 10.30am

Venue: The Saujana Hotel KL, Saujana Resort, Jalan Lapangan Terbang SAAS, Subang

Felda Global Ventures Holdings Bhd

Time: 11am

Venue: Menara Felda Platinum Park, Persiaran KLCC, Kuala Lumpur


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