Market wrap: US stocks closed lower on Tuesday as results from IBM and United Technologies dampened early optimism over earnings season and after-the-bell declines in major tech shares suggested losses would continue on Wednesday. - Reuters
The DJIA fell 181.12 points, or 1%, to 17,919.29, the S&P 500 lost 9.07 points, or 0.43%, to 2,119.21 and the Nasdaq dropped 10.74 points, or 0.21%, to 5,208.12.
Forex summary
*The local currency rose 0.24% to 3.7922 per US$
*It declined 0.63% to 4.1524 per euro
*It rose 0.28% to 5.9038 to the pound sterling
*0.06% down to 2.7801 per Singapore dollar
*0.47% lower to 2.8147 per Aussie
*Up 0.09% to 3.0649 per 100 yen
Energy
Crude oil futures held on to gains after a volatile session that saw the US front-month August contract expire and go off the board above US$50 a barrel, with a weaker dollar providing support. Brent September LCOc1 crude rose 39 cents to settle at US$57.04, having swung from US$56.33 to US$57.44. - Reuters
Top foreign news
BlackRock steps up China drive with new licence: US fund giant BlackRock Inc has won a special new licence that will allow it to raise funds in China directly for the first time, a senior executive told Reuters, paving the way for the world’s largest money manager to expand in the mainland. BlackRock vice-chairman Philipp Hildebrand said BlackRock, with about US$4.5 trillion in assets, is committed to China and would “do whatever that entails” to provide asset management services there. - Reuters
Apple gives weak forecast: Apple Inc shares slumped nearly 7% in after-hours trading as its fourth-quarter revenue forecast fell short of estimates and it missed some targets for iPhone sales. The shares dropped to US$121 after the company released its results on Tuesday, from US$130.75 at the close. The forecast overshadowed Apple's strong sales in China, which more than doubled to $13.23 billion from a year earlier. - Reuters
Citi ordered to pay US$770mil over credit card practices: Citigroup Inc's consumer bank has been ordered to pay US$700mil in relief to borrowers for illegal credit card practices, the US Consumer Financial Protection Bureau said. Citi will also pay civil penalties of US$35 million each to the consumer finance watchdog and the Office of the Comptroller of the Currency. - Reuters
AT&T nears approval of DirecTV merger: AT&T Inc is close to wrapping up its deal to buy DirecTV as US telecom and antitrust regulators signalled a green light for the US$48.5bil merger that would create the country's largest pay-TV company. The Federal Communications Commission chairman Tom Wheeler on Tuesday recommended that the five-member commission vote to approve the merger, and the Justice Department said the deal did not pose a significant risk to competition. - Reuters
Microsoft posts record loss: Microsoft Corp reported a US$3.2bil quarterly net loss, its biggest ever, as the company wrote down its Nokia phone business and demand fell for its Windows operating system. The company took a charge of US$7.5bil in the fourth quarter related to the restructuring of its Nokia handset business, which it bought last year. - Reuters
Top local stories
Abu Sahid breaks his silence: Two months ago, the entry of a steel company from China as a white knight to rescue beleaguered Perwaja Holdings Bhd was uncertain because of Tan Sri Abu Sahid Mohamed. The man, tasked by the Government to manage Perwaja in the late 1990s, did not give a definite go-ahead nor was he averse to the entry of China’s Tianjin Zhiyuan Investment Group Co Ltd into the loss-making Perwaja. But now, Abu Sahid is agreeable to Tianjin Zhiyuan’s proposed RM1.8bil plan to revitalise Perwaja. - StarBiz
PetChem-BASF plant to start ops in Q4 2017: Petronas Chemicals Group Bhd
(PetChem) and BASF’s plant for the pro- duction of the highly-reactive polyisobutene (HR-PIB) will start operations in the fourth quarter of 2017. The plant, which will be the first of its kind in South-East Asia, would have a total annual capacity of 50,000 tonnes of HR-PIB, the companies said in a statement. - StarBiz
BCorp buys 50% stake in BLand’s Japan project: Berjaya Corp Bhd (BCorp) is buying a 50% stake in Berjaya Kyoto Development (S) Pte Ltd (BKyoto) for RM97.3mil. The seller of the stake is its 58%-owned Berjaya Land Bhd (BLand). After selling half of BKyoto to its parent, BLand will own the remaining 50%. - StarBiz
Genting Hong Kong acquires Crystal Cruises: Genting Hong Kong (GHK), a cruise-line and resorts operator, has acquired luxury cruise line, Crystal Cruises. GHK, the major shareholder of Norwegian Cruise Line, said that it had planned for six new vessels over the next three years. - StarBiz
AFG expects lower loan growth: Alliance Financial Group Bhd (AFG) is looking to record a lower loan growth of between 8% and 9% for the financial year ending March 31, 2016. This is lower than the 14.9% growth in loans to RM36.6bil seen in its 2015 financial year, driven mainly by expansion in the consumer and business banking loan portfolio. - StarBiz
Minorities to decide: Minority shareholders of Tenaga Nasional Bhd (TNB) will decide if the purchase of Edra Global Energy Bhd goes through, as TNB’s major shareholder Khazanah Nasional Bhd will not vote on the acquisition. Khazanah will abstain from voting as the deal is deemed a related-party transaction. - StarBiz
Cocoaland product range doesn’t meet HK firm’s plan: Cocoaland Holdings Bhd said First Pacific Company Ltd withdrew its plan to buy all its business and undertaking as its product range did not meet the Hong Kong- listed company’s overall regional food expansion plans. The snacks and candy manufacturer said yesterday that First Pacific’s detailed review showed the strategic benefits to the latter’s overall regional food expansion plans “is significantly less than First Pacific had initially envisaged”. - StarBiz
Office space rental rates to remain flat: Rental rates for office space within the Klang Valley is expected to remain flat for the rest of 2015, as steady incoming supply will offset demand. Savills Malaysia executive chairman Chris Boyd, however, asserted that the situation was not all “doom and gloom” and merely temporary. - StarBiz
IJM sells its 70% stake in Indian company: IJM Corp Bhd is disposing of its 70% stake in Swarna Tollway Private Ltd, a toll road concessionaire in Andhra Pradesh, India, for RM407.76mil to MAIF Investments India 3 Pte Ltd. IJM said its subsidiary IJMII (Mauritius) Ltd had entered into a conditional share purchase agreement with MAIF and STPL on Monday. “The expected gain from the disposal is about RM92.62mil,” IJM said. - StarBiz
Highway needs cash injection: The West Coast Expressway is not expected to generate sufficient pre-f nancing cashflow to match its debt repayment obligations, according to RAM Ratings. The rating agency said it might require the injection of monetary support from developer West Coast Expressway Sdn Bhd’s shareholders in the early years of its pro- posed sukuk’s tenure. The expressway will be funded via the proposed sukuk, a syndicated term-loan facility, a government support loan and shareholders’ equity. - StarBiz
RM38bil sukuk planned this year: Malaysia has more than RM38bil of sukuk issuances in the pipeline dominated by the private sector. - StarBiz
More capital for MAB is ‘no surprise’ amid weak ringgit: It won't be a surprise that shareholder Khazanah Nasional Bhd would need to pump more money into the new Malaysia Airlines Bhd (MAB) given the weakness of the ringgit and the severity of the national airline's financial stand- ing, said an analyst. However, Endau Analytics aviation analyst Shukor Yusof is of the view that such a move would be counterproductive as MAB starts as a smaller airline. - Edge FD
ICT sector to see 14.2% growth in 2015: The National ICT Association of Malaysia (Pikom) has forecast a growth of 14.2% or RM70.9bil for the information, communications and technology (ICT) industry this year, together with a low double-digit growth fig- ure for 2016. This compares with the 12.5% growth seen in 2014, said Pikom chairman Cheah Kok Hoong. - Edge FD
Loss-making KYM to turn around in FY16: KYM Holdings Bhd, which is in the midst of reviving its loss-making corrugated carton business, expects to return to the black in the current financial year ending Jan 31, 2016 (FY16). KYM chairman Datuk Seri Isahak Yeop Mohamad Shar said the cost-efficiency measures taken would start to bear fruit and help revamp the company’s earnings performance. -Edge FD
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