Breakfast Briefing: Friday, june 26


  • Business
  • Friday, 26 Jun 2015

Market wrap: US stocks ended a quiet session with modest losses on Thursday, but healthcare stocks rallied after the US Supreme Court upheld tax subsidies key to President Barack Obama's signature healthcare reform law. - Reuters

The DJIA fell 75.71 points, or 0.42%, to 17,890.36, the S&P lost 6.27 points, or 0.3%, to 2,102.31 and the Nasdaq dropped 10.22 points, or 0.2%, to 5,112.19.

Forex summary

The ringgit ended easier against the US dollar yesterday after the US posted strong economic data, dealers said. - Bernama

*The local currency was down 0.04% to 3.7590 per US$

*It fell 0.19% to 4.2116 per euro

*Down 0.42% to 5.9218 to the pound sterling

*Down 0.06% 2.7997 per Singapore dollar

*0.09% lower to 2.9082 per Aussie

*Down 0.15% to 3.0440 per 100 yen

Energy

Crude oil fell for a second straight day on Thursday, weighed by weaker US refined fuels markets and potential negative impact from Greece's debt crisis on European energy demand. Brent crude settled down 29 cents, or 0.5%, at US$63.20 a barrel.

Top foreign stories

No deal for Greece, creditors; top-level talks resume Saturday: Greece failed again to clinch a deal with its international creditors on Thursday, setting up a last-ditch effort on Saturday to either avert a default next week or start preparing to protect the euro zone from financial market turmoil. Eurozone finance ministers ended their third meeting in a week without agreement after the three creditor institutions put a final cash-for-reform proposal on the table in a showdown with Athens's leftist government. - Reuters

IMF to Fed: Drop the dots: Now that International Monetary Fund head Christine Lagarde has told the Fed to wait to raise interest rates, the IMF staff has followed up with suggestions that the US central bank remake its communications policy and, in a phrase, ditch the dots. The dot plot of interest rate projections issued by Fed officials every three months is confusing, an IMF staff paper has concluded, and should be replaced with a staff forecast of the interest rates needed to achieve the Fed's goals of full employment and stable inflation. A more transparent forecast, prepared by staff and perhaps presented at least as the majority view of the Fed's policy committee, would make the central bank more effective and is "the main next step for modifying the existing framework at the Fed," the IMF researchers wrote. - Reuters

Goodyear to shut down UK manufacturing plant, cut jobs: Goodyear Tire & Rubber Co, the largest tyre maker in the United States, said it would shut down its Wolverhampton, England manufacturing plant and transfer production to Europe, the Middle East and Africa to cut costs. Goodyear also said it would transfer consumer tyre production from its plant in Wittlich, Germany to the Middle East and African region. - Reuters

Top local stories

Rajawali to maintain 2.55% stake in FGV: The Rajawali Group has no immediate plans to seek a bigger stake in Felda Global Ventures Holdings Bhd (FGV), even as the two companies plan to complete a deal by August, Earlier this month, FGV had proposed to buy a 37% stake in Rajawali’s PT Eagle High Plantations Tbk for cash and shares in a deal worth US$680mil (RM2.5bil). FGV is also buying sugar cane plantations from the Rajawali Group for US$67mil. The deal will see Rajawali taking up a 2.55% stake in the company. - StarBiz

July gas price hike: Tenaga Nasional Bhd (TNB) will have to pay more for the supply of gas from Petroliam Nasional Bhd (Petronas) from July 1. But the electricity tariff will remain unchanged until end-December because TNB is able to absorb the higher cost of gas from savings amounting to RM1.1bil between January and June this year from the lower energy cost and benefits from the restructuring of the power purchase agreements amounting to RM300mil. - StarBiz

YINSON plans placement: Yinson Holdings Bhd, an oil and gas services company, is proposing to place out RM300mil worth of shares to pare down bank borrowings. However, it cautioned that depending on prevailing market condition and investor interest, the proposed private placement may be implemented in tranches. - StarBiz

Concerns over Abu Dhabi’s IPIC bonds: The US$4.5bil (RM16.9bil) rescue of 1Malaysia Development Bhd (1MDB)  is good news for the Government but will load Abu Dhabi’s International Petroleum Investment Co with extra debt that may worry investors in its bonds. - Reuters

Sunway eyes RM1.5bil in new projects: Sunway Bhd is aiming to add at least RM1.5bil in new contruction projects by the end of the year, as the company drums up support ahead of Sunway Construction Bhd’s prospectus launch next Monday. - StarBiz

Meda buys land in KL from BCM for RM180mil: Property developer Meda Inc Bhd is buying two parcels of freehold land in Kuala Lumpur from BCM Holdings Sdn Bhd for RM180mil. The company is planning to build serviced apartments and commercial property with an estimated gross development value of RM881.9mil. - StarBiz

Thong Guan to expand production capacity: THONG GUAN INDUSTRIES BHD will spend about RM65mil in 2015 and 2016 to add new production lines for its plant in Sungai Petani to increase capacity and introduce a new range of packaging products. Group managing director Datuk Ang Poon Chuan told StarBiz after its AGM that about RM30mil would be spent this year to install new lines, while the remaining RM35mil
would be for 2016. - StarBiz

11 Malaysian firms on Forbes Asia’s ‘Best Under A Billion’ list: Eleven Malaysian companies, including ELSOFT RESEARCH BHD, UEM EDGENTA BHD and GD EXPRESS CARRIER BHD, made it to this year’s Forbes Asia’s ‘Best Under A Billion’ list. A total of 123 new companies in the region made their debut in this year’s list, with companies from China, Hong Kong and Taiwan again dominating the ranks. - StarBiz

Farm's Best revenue hit by lower sales, broiler volume: The 2014 revenue of Farm’s Best Bhd, one of the country's largest integrated poultry producers, was dampened by a decrease in average selling prices of live broilers and lower sales volumes of live broilers and table eggs. Group chairman Datuk Zainal Shamsudin said the company's revenue for the financial year ending Dec 31, 2014 slipped 8% to RM418.4mil from RM455.4mil recorded previously. He said a net profit of RM2.2mil was recorded for 2014 compared with a net profit of RM4.3mil in the financial year ended Dec 31, 2013. - Bernama

Gabungan AQRS eyes MRT Line 2: Property-and- construction outfit Gabungan AQRS Bhd is aiming to clinch a contract from the upcoming Klang Valley Mass Rapid Transit (MRT) Line 2. The company now is working on the viaduct guideway and other related works of the Sungai Buloh to Kota Damansara segment of MRT Line 1 worth RM391mil. - StarBiz

Tanjung Offshore reveals turnaround strategy: ?Tanjung Offshore Bhd, which has been in the limelight after a boardroom fight broke out early this year and more recently for making police reports over questionable deals, is introducing a four-pillar turnaround strategy, which will help the oil and gas (O&G) service provider return to profitability by the third quarter ending Sept 30, 2015. The four pillars involve focusing on the offshore support vessel market, the brownfield O&G segment, maintenance and its wholly-owned subsidiary Gas Generators (M) Sdn Bhd. - Edge FD

Selangor water impasse to prolong: It seems that the Selangor water impasse, which was expected to be resolved yesterday with the signing of a new supplementary agreement, is now set to prolong further as it is believed that both the Federal and Selangor governments need more time to clarify the details of the agreement before sealing the deal. - Edge FD

Events calendar

Speech by Bank of England governor Mark Carney (1415 GMT)

Speech by Federal Reserve Bank of Kansas City president Esther L. George (1645 GMT)

AGMs/EGMs

WTK HOLDINGS BHD

Time: 10am  

Venue: Tanahmas Hotel, Lot 277, Blk 5, Jln Kampong Nyabor, Sibu, Sarawak
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