Breakfast briefing: Wednesday, June 17


Market wrap: US stocks rose on Tuesday following back-to-back daily declines, with merger activity more than offsetting market concerns as Greece struggles to avoid a default on its debt. Traders also kept an eye on interest rates as a two-day policy-setting meeting at the Federal Reserve got under way. - Reuters

DJIA rose 113.31 points, or 0.64%, to 17,904.48, the S&P 500 gained 11.86 points, or 0.57% to 2,096.29 and the Nasdaq added 25.58 points, or 0.51%, to 5,055.55.

Forex summary

The ringgit closed higher against the US dollar and some selected major currencies Tuesday on renewed demand for the domestic unit. - Bernama

*The local currency was up 0.21% to 3.7510 per US$

*It rose 0.06% to 4.2235 per euro

*Up 0.08% to 5.8309 to the pound sterling

*0.11% up to 2.7864 per Singapore dollar

*0.08% higher to 2.8986 per Aussie

*Up 0.03% to 3.0392 per 100 yen

Energy

US crude prices rose on Tuesday as a tropical storm moved ashore in the oil-producing state of Texas, but global oversupply limited gains and pressured Brent futures. Expectations that US crude inventories fell again last week and strong RBOB gasoline futures also lent support. Brent front-month August crude fell 25 cents to settle at US$63.70, off its US$64.41 intraday peak and below Brent's 50-day moving average of US$64.01. - Reuters

Top foreign stories

Greek PM tears into lenders as eurozone prepares for 'Grexit': Prime Minister Alexis Tsipras accused Greece's creditors on Tuesday of trying to "humiliate" Greeks with more cuts as he defied a growing drumbeat of warnings that Europe was preparing for his country to leave the euro. - Reuters

Blackstone, Carlyle in US$10bil-plus bid for NCR: Blackstone Group LP and Carlyle Group LP are making a joint bid for NCR Corp in a leveraged buyout that would be the year's biggest at more than US$10bil, including debt, people familiar with the matter said. Blackstone and Carlyle, the world's two largest private equity firms, have joined forces to outbid other buyout firms and acquire NCR, which manufactures cash registers and ATMs. - Reuters

Fed talks with insurers proceed on new capital rules: The US Federal Reserve is considering a proposal for new nationwide insurance capital standards that would rely heavily on the current system of state-based regulations, according to a copy of the plan seen by Reuters and people familiar with the deliberations. The plan would avoid a fundamental overhaul of how state-based insurance firms are regulated, and be based on accounting methods already in use. At the same time, it would give the Fed a single benchmark to measure the risk in larger firms that consist of several such state-based units, enabling it to compare them to other US or foreign financial firms for the first time. - Reuters

Shell-BG US$70bil deal crosses key milestone with US clearance: US regulators have given the green light for Royal Dutch Shell's proposed US$70bil acquisition of British rival BG Group, the first clearance for the biggest deal in the energy sector in over a decade. The two companies said the United States Federal Trade Commission (FTC) had cleared the deal. It will require further regulatory clearances from all the countries BG operates in, including the European Union, China, Australia and Brazil. - Reuters

Billionaire financier Kirk Kerkorian dies: Legendary tycoon Kirk Kerkorian, 98, who built iconic Las Vegas resorts and was a major investor in automakers and film studios, died late Monday, MGM Resorts International spokesman Clark Dumont said. No cause of death was given. - AFP

Low oil price hits US$200bil in mega-projects: Deepwater oil projects and complex gas facilities worth around US$200bil (RM750bil) have been cancelled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year, consultancy Ernst and Young said. Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut. - Reuters

Top local stories

SapKen stays cautious: SapuraKecana Petroleum CEO Tan Sri Shahril Shamsuddin says many players fighting for a shrinking oil and gas pie. - StarBiz

Mudajaya plans to sell power assets: Mudajaya Group Bhd , which is involved in construction, engineering and running power plants, is looking to dispose of its power generation assets – power plants in India and Malaysia. According to sources, Mudajaya intends to focus on its construction and property development segments. - StarBiz

IJM unit wins 30-year Kuantan Port concession: Kuantan Port Consortium Sdn Bhd, a unit of IJM Corp Bhd , has secured a 30-year concession from the Government to develop and operate the existing Kuantan Port in Pahang. The concession, effective since June 1, can be extended by 30 more years upon the completion of an RM3bil new deep-water terminal at the port. - StarBiz

FGV board grilled for six hours: The board of Felda Global Ventures Holdings Bhd (FGV), which is under fire from investors over its acquisition spree and falling earnings, came under a gruelling six-hour scrutiny from shareholders at its annual meeting. The questions were tough, but in the end, only one resolution - the re-appointment of Felda director-general Datuk Faizoull Ahmad - was not passed. - StarBiz

KUB exploring development options for KUB Tower: KUB Malaysia Bhd says it may take a partner to jointly develop the planned RM250mil KUB Tower project in Petaling Jaya, even as it considers other options. The KUB Tower will be located at the old A&W outlet near AmCorp Mall. - StarBiz

Malaysia seen needing another transport agency: Malaysia needs another agency to focus on all aspects related to urban public transport to further support economic growth of the country, according to the World Bank transport and logistics specialist Luis C. Blancas. This is because cities contribute a signifi- cant portion of a country’s gross domestic product.- StarBiz

Cautious sentiment: The falling ringgit and growing pessimism towards the local stock market are driving Malaysian investors to look at foreign currencies, especially the US dollar and overseas markets for better returns. A recent survey by Franklin Templeton Investments found that 53% of Malaysian investors would invest in foreign currency-based funds within the next three years, up from 45% last year. - StarBiz

Astro profit up on higher efficiencies: Astro Malaysia Holdings Bhd’s net profit was up 31.15% to RM168.3mil for the first quarter on the back of higher efficiencies, lower depreciation and finance cost. Earnings per share increased to 3.23 sen from 2.47 sen. And revenue increased by 6.08% to RM1.33bil mainly attributed to an increase in subscription revenue and average revenue per user. - StarBiz

IRCB posts significant jump in profit: Integrated Rubber Corp Bhd (IRCB), the Practice Note 17 (PN17) rubber glove maker that saw new shareholders emerging previously, reported a net profit of RM4.09mil in its first quarter ended April 30, which is an almost 14-fold improvement from the RM286,000 achieved a year earlier. Its earnings per share improved to 0.94 sen from 0.05 sen previously. Revenue increased 44.76% to RM52.58mil. - StarBiz

Rozali threatens to sue: A frustrated Puncak Niaga Holdings Bhd executive chairman Tan Sri Rozali Ismail has threatened to sue the Federal and Selangor governments if the long drawn water restructuring exercise in Selangor cannot be completed by its new July deadline. - StarBiz

S P Setia expects better H2: Property developer S P Setia Bhd is expected to see another lumpy gain in the second half of this year when it hands over the second block of its Australian project. - StarBiz

A380 leasing deal between MAS and Turkish carrier fails to materialise: Turkish Airlines has confirmed a StarBiz article last month that it did not enter into any agreement to lease two A380s from Malaysia Airlines (MAS). In fact, it was not even keen on it. - StarBiz

Moody’s lowers currency deposit ratings of largest M’sian banks: Moody’s Investors Service has downgraded the local currency deposit ratings of the country’s top three banks from A1 to A3 in line with the agency’s new bank rating methodology. The credit ratings provider said in a statement that this was in particular due to its revised view that the capacity for government support was best reflected by the government’s bond rating, which is A3 in the case of Malaysia. - StarBiz

AirAsia says not rushed into issuing bonds: AirAsia Bhd group chief executive officer Tan Sri Tony Fernandes has denied that the budget airline was rushed into issuing bonds, after a report by Hong Kong-based firm GMT Research spooked investors and sentAirAsia shares to five-year lows. - Edge FD

PAAB expects water impasse to end this month: Pengurusan Aset Air Bhd (PAAB), a wholly-owned company of the Minister of Finance Inc, is confident that it will settle its negotiations with the Selangor government over the state’s water asset consolidation and restructuring by the end of this month. - Edge FD

Property market to remain flat on weak sentiment in 2015: The property market is expected to remain flat this year due to weak buying sentiment, says Malaysian Institute of Estate Agents president, Siva Shanker. - Bernama

Events calendar

Malaysia’s Statistics Department releases Consumer Price Index for May at noon.

China’s Commerce Ministry releases foreign direct investment figures for May.

Bank of England publishes minutes of the Monetary Policy Committee meeting (0830).

The US Federal Reserve announces its decision on interest rates. The consensus view is for rates to remain unchanged. The Fed will also release the report on the FOMC’s projection for inflation and economic growth over the next two years. (1800 GMT).

AGMs/EGMs

Astro Malaysia Holdings Bhd

Time: 9.30am  

Venue: Connexion@Nexus, Nexus Bangsar South City, Kerinchi, Kuala Lumpur

Pelikan International Corporation Bhd

Time: 3pm  

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

Points of interest be raised: With consolidation exercise completed, what tangible benefits including savings can accrue from it and when is the group expected to turn profitable? What is the outlook going forward?

Mudajaya Group Bhd

Time: 10am

Venue: Menara Mudajaya, Mutiara Damansara, Petaling Jaya

Points of interest to be raised: How has the group been able to address the increase in construction-related costs and was there any hedging done? What was the amount (of the cation order) and when is it expected to be recognised?


Breakfast Briefing