Breakfast briefing: Friday, December 11


Market wrap: US stocks closed higher on Thursday after a three-day decline but sharply pared gains late in the session as oil dropped to near seven-year lows and the strong dollar weighed on sentiment. Major US indexes have had a bruising week as a rout in oil prices made investors worry about economic growth. - Reuters

The DJIA rose 82.45 points, or 0.47%, to 17,574.75, the S&P 500 gained 4.61 points, or 0.23%, to 2,052.23 and the Nasdaq added 22.31 points, or 0.44%, to 5,045.17.

Forex summary

*The ringgit gained 0.04% to 4.2613 per US$

*It rose 0.43% to4.6617 per euro

*Up 0.18% to 6.4585 to the pound sterling

*Flat at 3.0381 per Singapore dollar

*0.38% higher to 3.0970 per Aussie

*Up 0.31% to 3.4946 per 100 yen

Energy

Crude oil prices fell 1% on Thursday to new lows since 2009 as traders looked beyond a drop in US crude stockpiles to focus on a global supply glut, while a stronger dollar weighed on commodities. Brent settled down 38 cents at US$39.73 a barrel. It extended its fall in post-settlement trade, striking a new February 2009 low of US$39.46 by 2100 GMT. - Reuters

Top foreign stories

IATA revises 2015 industry outlook upwards: The International Air Transport Association (IATA) revised its airline industry outlook for 2015 upwards to a net profit of US$33 billion (RM140.58 billion), with a 4.6% net profit margin, from its earlier forecast of US$29.3 billion announced in June. - Edge FD

US jobless claims at five-month high: The number of Americans filing for unemployment benefits rose to a five-month high last week, but this likely does not signal a deterioration in the labour market as the underlying trend remained consistent with tightening conditions. Other data on Thursday showed cheaper crude oil and a strong dollar keeping imported inflation pressures subdued in November. The reports did not change views the Federal Reserve will raise interest rates next Wednesday. - Reuters

Fed to guide on rate hike path: Federal Reserve chair Janet Yellen next week has to decide not only whether to raise interest rates for the first time in a decade, but also how to assure markets on the likely path of future rate hikes. - Reuters

Yum to return US$6.2b to shareholders: Yum Brands Inc said it would return up to US$6.2 billion to shareholders before separating its China business and listing it on the New York Stock Exchange, and possibly in Hong Kong. The KFC and Pizza Hut owner, which expects to spin off Yum China by the end of 2016, said the capital return could take various forms, including a share repurchase, tender offer or special dividend. - Reuters

Ford to invest US$4.5b more in electric car plan by 2020: Ford Motor Co plans to invest an additional US$4.5 billion by 2020 in programmes to broaden its offerings of hybrids and electric vehicles, chief executive officer Mark Fields said on Thursday. - Reuters

Top local stories

Eco World International plans RM2bil IPO: Property developer Eco World International Bhd, which focuses on projects outside Malaysia, targets to raise RM2bil in its initial public offering (IPO) next year. President and CEO Datuk Teow Leong Seng said the company was in the process of submitting its IPO application to the Securities Commission, which it hopes can be finalised in the first half of next year. - StarBiz

Eco World beats RM3bil sales target: Eco World Development Group Bhd has exceeded its sales target of RM3bil with RM3.016bil secured for the financial year ended Oct 31, 2015 despite a sluggish economy. Chairman Tan Sri Liew Kee Sin said the company “is confident of achieving RM4bil in 2016”.

Surin's MWE takeover bid falls through: Tan Sri Surin Upatkoon’s investment vehicle Pinjaya Sdn Bhd’s plan to privatise its 31.14%-owned MWE Holdings Bhd has lapsed, annulling the RM391.4mil offer. The non-interested directors of MWE had on Wednesday requested for a further one month to deliberate on the takeover offer but the request was declined by Pinjaya on Thursday. - StarBiz

DRB-Hicom to park assets under Pos Malaysia: DRB-Hicom Bhd, whose businesses range from Islamic banking to automobile distributorship, is proposing to park KL Airport Services Sdn Bhd and a freehold parcel of land in Shah Alam under Pos Malaysia Bhd. Pos Malaysia will issue 250.8 million new shares at RM3.33 each, or a total RM835.16mil, for the deal. DRB-Hicom has a 32.21% stake in Pos Malaysia. - StarBiz

SC revokes Mercury Asset's services licence: The Securities Commission (SC) has revoked the capital markets services licence of Mercury Asset Management Sdn Bhd to conduct fund management from Nov 19, 2015. the commission said the revocation was due to Mercury Asset’s inability to comply with the resource requirements of key personnel stipulated in its conditions of licence. - StarBiz
 
Foreigners buy more debt: Foreigners bought RM3.9bil of Malaysian debt last month, bringing total foreign hold- ings of the country’s debt securities to RM213.6bil in November. In October, foreigners bought a net RM7.8bil. - StarBiz

SP Setia full-year earnings jump to RM710mil: SP Setia Bhd posted a net profit of RM119.68mil for the fourth quarter on the back of increased revenue and profit recognition. It posted a 14.68% rise in revenue of RM1.41bil. For the full year, the company's net profit jumped 75% to RM709.98mil while revenue rose 47.13% to RM5.60bil. - StarBiz

Red Sena makes weak market debut: Red Sena Bhd, Malaysia’s first food and beverage-based special-purpose acquisition company, saw its share price fall below its initial public offering price of 50 sen on its debut against the backdrop of market volatility. The counter opened at 39.5 sen for a discount of 10.5 sen, while its warrants were up 9.5 sen to 10 sen. - StarBiz

Berjaya Auto posts slight drop in net profit; Berjaya Auto Bhd posted a slight drop in net profit to RM53.06mil for the second quarter on sales of Mazda2 and Mazda3 locally assembled models. Revenue was 6.6% higher at RM542.41mil. - StarBiz

Japan entertainment content provider takes stake in ASG: Japan’s leading entertainment content provider Kadokawa Corp has taken a 80% stake in Malaysian Art Square Group (ASG) via its Hong Kong publishing company Kadokawa Holdings Asia Ltd. It also inked a memorandum of understanding with InvestKL to expand their businesses into South-East Asia and the Middle East. ASG, a publisher of comics and children’s books, ha s been renamedKadokawa Gempak Starz.- StarBiz

Manufacturing and electricity lift October factory output: The Industrial Production Index (IPI) grew by 4.2% in October from a year ago, the Statistics Department said. The department said the expansion in October was supported by positive growth in manufacturing index (6.2%) and electricity index (4.3%). - Bernama

Palm oil inventories in Malaysia jump to record: Palm oil inventories in Malaysia expanded to an all-time high in November after shipments from the world’s second-largest grower slumped to a seven-month low. Stockpiles rose for the fifth straight month to 2.91 million tonnes, 2.6% more than the 2.83 million tonnes in October, data from the Malaysian Palm Oil Board showed on Thursday. - Bloomberg

Megasteel proposes SPV for HRC imports: Megasteel Sdn Bhd, the country’s sole producer of hot rolled coils (HRC), is scheduled to meet with senior government officials early next week to propose the setting up of a special purpose vehicle (SPV), solely to import HRC and even downstream products into Malaysia, said industry sources. - Edge FD

MAS cuts hurt traffic at MAHB airports in November: Capacity cuts by Malaysia Airlines (MAS) contributed to a 2.7% drop in passenger traffic at the 39 airports Malaysia Airports Holdings Bhd (MAHB) manages in the country last month. MAHB said passenger numbers fell to 6.82 million in November from 7.01 million a year earlier. - Edge FD

CLIQ Energy’s Phystech II acquisition price lowered to US$110m: CLIQ Energy Bhd, a special purpose acquisition company (SPAC), said the purchase consideration of US$117.3 million (RM499.82 million) for a 51% stake in Phystech II Joint Stock Company has been revised downward to US$110 million. Phystech II is a special purpose vehicle that owns two active oilfields in Kazakhstan. - Edge FD

Malaysia’s electronics makers cautious: Malaysia’s key electronics sector has been winning more overseas orders, but there’s no sign of a sustained surge that would lift an economy growing at its slowest pace in more than two years. - Reuters

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