Breakfast briefing: Tuesday, September 22


Market wrap: US stocks ended higher on Monday, rebounding from losses late last week with help from Apple and financial shares, but a drop in biotech shares limited the advance. Shares of biotech companies fell after US Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for specialty drugs. - Reuters

The DJIA rose 125.61 points, or 0.77%, to 16,510.19, the S&P 500 gained 8.94 points, or 0.46%, to 1,966.97 and the Nasdaq added 1.73 points, or 0.04%, to 4,828.96.

Forex summary

*The ringgit lost 0.05% to 4.2743 per US$

*It rose 0.93% to 4.7821 per euro

*Up 0.01% to 6.6310 to the pound sterling

*0.01% higher to 3.0284 per Singapore dollar

*0.32% higher to 3.0508 per Aussie

*Down 0.17% to 3.5501 per 100 yen

Energy

Oil prices rallied on Monday, with US crude surging more than 4% on signs of declining stockpiles, less drilling that could reduce future output and a jump in gasoline futures that boosted the overall petroleum complex. The front-month in Brent LCOc1 finished up US$1.45, or 3.1%, at US$48.92. - Reuters

Top foreign news

Yellen faces questions over Fed message on rate hike: As the US Federal Reserve's chief communicator, chair Janet Yellen is under building pressure among her colleagues and global investors to clarify where the world's biggest central bank is heading and how it is making its decisions. The calls have come from both her policy opponents like St Louis Fed president James Bullard and more centrist sympathisers like Atlanta Fed president Dennis Lockhart, as well as market analysts and investors who say they have been confused about the Fed's direction. - Reuters

US existing home sales fall more than expected: US home resales fell more than expected in August, a cautionary sign for the US housing market which has recently looked on stronger footing. The National Association of Realtors said on Monday existing home sales dropped 4.8% to an annual rate of 5.31 million units. Economists polled by Reuters had forecast a 5.51 million-unit pace of home sales last month. Sales were up 6.2% from a year ago. - Reuters

Volkswagen shares plunge on emissions scandal: Volkswagen shares plunged by nearly 20% on Monday after the German carmaker admitted it had rigged emissions tests of diesel-powered vehicles in the United States, and US authorities said they would widen the probe to other automakers. German officials said it would investigate whether emissions data had also been falsified in Europe. The US Environmental Protection Agency said on Friday that Volkswagen, the world's biggest carmaker by sales, used software that deceived regulators measuring toxic emissions and could face penalties of up to US$18 billion. - Reuters

Time Warner Cable shareholders approve deal with Charter: Time Warner Cable Inc's shareholders approved the company's US$56 billion takeover by Charter Communications Inc, according to preliminary votes at a special shareholder meeting. Later on Monday, Charter also said more than 99% of the votes cast at its special shareholder meeting were in favour of the deal. - Reuters

SEC settles with two ex-Fannie Mae execs, but not ex-CEO: The US Securities and Exchange Commission has reached a settlement with two former Fannie Mae executives in one of its biggest lawsuits tied to the financial crisis, but has yet to settle with former chief executive Daniel Mudd. Former chief risk officer Enrico Dallavecchia and former executive vice-president Thomas Lund will pay US$25,000 and US$10,000 respectively to settle charges that they helped conceal Fannie Mae's exposure to more than US$100 billion of subprime and US$341 billion of low-documentation "Alt-A" home loans. - Reuters

Top local stories

Malaysia faces structural issues: Malaysia is facing several long-term structural issues in its economy that need to quickly adjust in accordance with the new realities of the global economy. This was the conclusion of a panel discussion by representatives of three leading rating agencies – Standard & Poor’s Ratings Services (S&P), Moody’s Investors Service and Fitch Ratings – during Malaysia’s Economic Update 2015 forum on “Outside-In Perspective: Economic Outlook for Malaysia”. - StarBiz

Alliance to raise RM4bil: Alliance Bank Malaysia Bhd is planning to raise RM4bil via bonds, joining the ranks of banks which have also announced their intention to raise funds. In a filing with Bursa Malaysia, its parent company, ALLIANCE FINANCIAL GROUP BHD, said the bank planned to undertake a three-tranche bond issue programme comprising a RM1.5bil senior medium-term notes (MTN) programme, a RM2bil subordi-nated MTN programme and a RM500mil commercial paper. - StarBiz

BLand net profit down despite higher revenue: Despite registering higher revenue, BERJAYA LAND BHD’s (BLand) net profit fell 74% to RM9.91mil for the first quarter. The drop in profit was attributed to higher finance costs and lower contribution from its gaming arm and hotels and resorts businesses. The group’s revenue rose 7% to RM1.51bil, while its earnings per share dropped to 0.20 sen from 0.76 sen previously. - Reuters

Tecnic inks MoU on reverse takeover of Rrohas-Euco: Tecnic Group Bhd has signed a non-binding memorandum of understanding (MoU) with Rohas-Euco Holdings Sdn Bhd, which is proposing a reverse takeover of Tecnic. Tecnic said the reverse takeover will entail Rohas-Euco acquiring all the equity interest in Rohas-Euco Industries Bhd for RM200mil. - StarBiz

Cradle to use 70% of fund for start-up firms: Cradle Fund Sdn Bhd, which had raised RM107mil in seed capital funding, plans to use 70% of the money it manages to take up equity stakes in promising start-up firms. Only 30% of the funds will be allocated as direct grants. - StarBiz

1MDB starts sale tender for Pulau Indah land: 1Malaysia Development Bhd (1MDB) has started the land sale tender for its 128.7ha land on Pulau Indah, Selangor. 1MDB said it has appointed Savills (M) as adviser and has prepared a detailed information memorandum for distribution on the exercise. - StarBiz

Nomura sees share prices recovering: The market may have overreacted ahead of a possible interest rate hike in the United States and anticipation of slower economic growth in China that resulted in a sharp drop in asset prices across the Asean region, says Nomura Global Markets Research. Prices are likely to recover towards the end of the year, Nomura said, as overpricing of the rate hike by the US Federal Reserve and risks in China dissipated. - StarBiz

Banks adopt more disciplined strategy: The increasingly challenging and competitive environment has pushed global banks to adopt a more disciplined strategy to drive business growth, a new research by Bain & Co found. The international management consulting firm said banks globally would now need to define a strategic path by making deliberate choices, as they approach what is seen as the “last call” to create a robust compet- itive advantage for long-term survival. - StarBiz

Celcom plans at least two new products: Celcom Axiata Bhd is planning at least two new product launches by the end of the year, as the telecommunications company (telco) steps up its marketing campaign to boost subscriber base and revenue growth. - StarBiz

Maybank shines at CEPI awards: MALAYAN BANKING BHD (Maybank) scooped the biggest award and stormed to victory at the Cards & Electronic Payments International (CEPI) Asia Awards 2015. Maybank won the coveted “overall winner award” in the Asia Leadership Award for an Institution. Altogether, the bank bagged nine awards. - StarBiz

CME calls off deal to develop Aussie property: CME Group Bhd has terminated its joint venture agreement with Ruark No 11 Pty Ltd ATF the Oasis Unit Trust and Central Park (Qld) Pty Ltd to develop a mixed project on two parcels of contiguous land in Mandurah, Australia. The termination is expected to have “an immediate impact on the earnings of the group for the financial year ending Dec 31, 2015”, said CME. - Edge FD

Asian Pac forges ahead with three launches: ASIAN PAC HOLDINGS BHD is moving ahead with three property launches next year — two in the Klang Valley and one in Johor which has been held back since 2014 — despite the softer real estate market. The company is banking on the three to pull it out of the losses it recorded in the first quarter ended June 30, 2015. - Edge FD

Flight school APFT sees losses shrinking: Aviation academy APFT Bhd (APFT), which diversified into the oil and gas industry in 2013 after acquiring a new subsidiary PT Tecnic (M) Sdn Bhd, saw the sector contributing about 70% of its revenue in the last financial year ended March 31, 2015. The group is confident of shrinking its losses next year. - Edge FD

AGMs/EGMs

FIMA CORPORATION BHD

Time: 10.30am

Venue:  Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Kuala Lumpur

KUMPULAN FIMA BHD

Time: 3pm

Venue: Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Kuala Lumpur



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