Breakfast briefing: Tuesday, November 3


Market wrap: US stocks added to their recent run with gains across all sectors on Monday, led by increases in the beaten-down energy group and the acquisition-driven healthcare industry. The gains on the first trading day of the month followed the best monthly performance of the major indexes in four years in October. The Nasdaq 100 on Monday closed at its highest level in more than 15 years. - Reuters

The DJIA rose 165.22 points, or 0.94%, to 17,828.76, the S&P 500 gained 24.69 points, or 1.19%, to 2,104.05 and the Nasdaq added 73.40 points, or 1.45%, to 5,127.15.

Forex summary

*The ringgit rises 0.34% to 4.2855 per US$

*It is up 0.37% to 4.7195 per euro

*Up 0.42% to 6.6105 to the pound sterling

*0.05% higher  to 3.0664 per Singapore dollar

*0.06% lower to 3.0723 per Aussie

*Up 0.34% to 3.5492 per 100 yen

Energy

Oil prices fell on Monday after soft Chinese factory data raised worries about energy demand in the No. 2 economy, while record high Russian crude output suggested little easing in the global supply glut. Brent, the global crude benchmark, settled down 77 cents, or 1.6%, at US$48.79 a barrel. - Reuters

Top foreign stories

Visa to buy Visa Europe in deal worth as much as US$23b: Visa Inc said on Monday it would buy former subsidiary Visa Europe Ltd for up to US$23.3 billion in a deal that will give the world's largest payments network a chance to cut costs over the long term and raise fees in the second-biggest card market. The price for the long-anticipated deal was higher than many had expected, but ended a period of strategic uncertainty that had dogged Visa in recent months. - Reuters

US on track to grow 1.9% in fourth quarter, says Atlanta Fed: The US economy is on track to grow 1.9% in the fourth quarter with expected weaker consumer spending and equipment investment growth following a private report on US manufacturing in October, the Atlanta Federal Reserve's GDPNow forecast model showed on Monday. This was slower than the regional Fed's prior estimate of 2.5 percent rate on Friday, the Atlanta Fed said on its website. - Reuters

Fed survey shows banks easing mortgage lending standards: Banks lowered lending standards for US mortgages in the third quarter and a modest share of them made it easier for households to get credit card and auto loans, according to a survey of loan officers released on Monday by the Federal Reserve. - Reuters

US manufacturing weakness persists: US manufacturing activity in October hit a 2-1/2-year low, but a rise in new orders offered hope for a sector buffeted by a strong dollar and relentless spending cuts by energy companies. Given that manufacturing accounts for only 12% of the economy, analysts said it was unlikely to influence the US Federal Reserve's decision whether to raise interest rates this year. - Reuters

Top local stories

CIMB Niaga bad loans go to SPV to hasten recovery: The primary objective of transferring some bad loans from Indonesia’s PT Bank CIMB Niaga Tbk to a special-purpose vehicle (SPV) owned by its parent company, CIMB Group Holdings Bhd, is to facilitate the recovery process of the loans that would result in write backs. Last week, some 2.7 trillion rupiah (US$197.6mil) worth of loans were transferred out of CIMB Niaga to the SPV. - StarBiz

PetDag earnings up 36% in Q3: Petronas Dagangan Bhd (PetDag) reported an increase of 36.5% in net profit to RM218.9mil for the third quarter due to lower operating expenditure by RM15.9mil and higher other income by RM20.9mil. Its revenue fell 20.6% to RM6.53bil. - StarBiz

Icon appoints new MD: Icon Offshore Bhd has appointed Amir Hamzah Azizan to take over the post as managing director effective March 1, 2016. This is following current chief executive officer Dr Jamal Yusof’s decision not to renew his contract. Amir is currently the CEO of Petronas Lubricants International. - StarBiz

Sona to buy oilfield: Sona Petroleum Bhd has proposed to use 40% or US$50mil (RM215.2mil) of its trust money to buy 100% equity in the Stag Oilfield off Western Australia. The proposed acquisition is intended to be Sona’s qualifying asset. - StarBiz

Chip test equipment players see strong start: Semiconductor test equipment manufacturers are projecting a strong start next year, despite worries that some major chipmakers are cutting back on capital spending. Companies such as Pentamaster Corp Bhd, MMS Venture Bhd, and Elsoft Research Bhd are already seeing “higher-than-usual” orders from clients. - StarBiz

Boardroom changes at iDimension?: New board changes could be in the offing at IT and online games company, iDimension Consolidated Bhd, whose shares have been heavily traded. Sources said that some of the company’s relatively new substantial shareholders are seeking the appointment of new directors, as they want to see the company “chart a more aggressive course”. - StarBiz

Destini Q3 net profit rises 66%: Destini Bhd’s net profit for its third quarter rose 66% to RM7.1mil due to the increase in demand for the group’s maintenance, repair and overhaul services and marine manufacturing services. Its revenue for the period more than doubled to RM90.3mil from RM39.1mil a year ago, while earnings per share increased to 0.88 sen from 0.54 sen. - StarBiz

PT Eagle pricing holds key to FGV target price: CIMB Research will assign a higher target price to Felda Global Ventures (FGV) Holdings Bhd if the group manages to secure a significant discount for its proposed purchase of Indonesia-based PT Eagle High Plantations Tbk. The research house said there was an upside to its target price if the purchase consideration was reduced or the deal was scrapped. - StarBiz

Public bank buys balance 60% of PB Trustee: The Public Bank group, through three wholly-owned subsidiaries, has acquired the remaining 60% equity interest in PB Trustee Services Bhd for RM13.86mil in cash. - StarBiz

First 9-month manufacturing investments equal to whole of 2014, says Miti: Approved investments in the manufacturing sector for the first nine months of the year is about equivalent to the RM71.9 billion for the entire sector that was achieved for the whole of 2014, says International Trade and Industry Minister Datuk Seri Mustapa Mohamad. - Edge FD

PIE Industrial poised for yet another record year: PIE Industrial Bhd, a Penang-based electronic manufacturing services provider, is on course for a new growth record in its current financial year ending Dec 31, 2015, buoyed by its vertically integrated business model. - Edge FD

Scan Associates files suit against former principle officers: Scan Associates Bhd fired the latest salvo in the shareholder tussle at the ICT solution provider with its statement of claim against former chief executive officer Datuk Dr Norbik Bashah Idris and former chief financial officer Nurul Huda Zaharol Natrar. In a filing with the exchange on Monday, the company claimed that Norbik Bashah and Nurul Huda had breached their duties and responsibilities as principal officers of the company, causing the company to incur losses. - Edge FD

Bursa: Exercise caution when trading in XOX shares: Following the sharp rise in the share price of XOX Bhd, Bursa Malaysia has advised investors to exercise caution when trading in the shares of the local mobile operator, which has received two unusual market activity queries within a month. - Edge FD


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