Breakfast briefing: Wednesday, December 16


  • Business
  • Wednesday, 16 Dec 2015

Market wrap: US stocks rallied broadly on Tuesday, led by energy and financial shares ahead of Wednesday's interest rate decision from the Federal Reserve. - Reuters

The DJIA rose 156.67 points, or 0.9%, to 17,525.17, the S&P 500 gained 21.45 points, or 1.06%, to 2,043.39 and the Nasdaq added 43.13 points, or 0.87%, to 4,995.36.

Forex summary

*The ringgit lost 0.28% to 4.3133 per US$

*It rose 0.51% to 4.7186 per euro

*Up 0.37% to 6.4899 to the pound sterling

*0.21% down to 3.0633 per Singapore dollar

*0.17% higher to 3.1076 per Aussie

*Down 0.29% to 3.5447 per 100 yen

Energy

Oil prices rose for a second straight day on Tuesday as short-covering and technical support halted a slide to 11-year lows, but the market remained fundamentally weak from oversupply, traders and analysts said. Government data on US crude inventories and an expected Federal Reserve interest rate increase would dictate Wednesday's direction, they said. Brent LCOc1 settled up 53 cents at US$38.45 a barrel, after reaching a session high at US$39.41. - Reuters

Top foreign stories

Mobius: Emerging markets set to gain in 2016: Despite current headwinds, strong economic trends and improved fundamentals will drive growth in emerging markets next year, said Templeton Emerging Markets Group executive chairman Mark Mobius. In the company’s outlook piece for 2016, Templeton considers many of the factors driving recent market volatility to be temporary. - StarBiz

Opec sees end to low oil prices: Global crude oil prices at seven-year lows will not continue and could swing upwards in as little as a year, the Organisation of the Petroleum Exporting Countries (Opec) secretary-general Abdullah al-Badri said on Tuesday, as the low-price cycle leads to cuts in output from some producers. - Reuters

Billionaire women on the rise: The number of women billionaires in the world is rising fast, with a growing number of them from Asia and are self-made, Swiss bank UBS Group AG said in a study. There are nearly seven times more women billionaires than 20 years ago and their average wealth has nearly doubled to US$4.3 billion (RM18.53 billion) — topping the average US$4 billion net worth of male billionaires, the bank said. - Reuters

Steadily firming US inflation supports Fed rate hike: Underlying US inflation pressures rose in November, which could give the Federal Reserve more confidence to raise interest rates on Wednesday, even as renewed weakness in petroleum prices kept overall consumer prices in check. The Labour Department said on Tuesday its so-called core Consumer Price Index, which excludes food and energy, gained 0.2% last month. - Reuters

Rising credit risk threatens US financial stability: Federal monitor: Businesses around the world have been ravenously borrowing in recent years and elevating credit risk to a level that could be hazardous to the health of the US financial system, according to a report released on Tuesday by the federal office monitoring the country's financial stability. Overall, the Office of Financial Research found "threats to U.S. financial stability remain moderate — that is, in a medium range." - Reuters

Qualcomm decides against breakup, says current structure best: Qualcomm Inc has decided not to split into separate chipmaking and technology licensing businesses, concluding a six-month strategic review instigated by hedge fund Jana Partners. San Diego-based Qualcomm, the biggest maker of chips used in mobile phones, said on Tuesday its current structure offered unique strategic benefits that cannot be replicated. - Reuters

Top local stories

All eyes on US interest rate liftoff: All indications are the  Federal Open Market Committee will increase interest rates, which has remained between zero and 0.25% since the global financial crisis in 2008. The increase is likely to be 25 basis points and this has caused equity markets around the world to trend downwards. - StarBiz

Axiata’s Indonesia arm said to weigh US$500mil fundraising: PT XL Axiata, the most indebted of Indonesia’s listed wireless carriers, is considering raising as much as US$500mil next year, people with knowledge of the matter said. The company, a unit of Malaysia’s Axiata Group Bhd., is weighing several fundraising options including selling stock to existing investors through a rights offering, according to the people. - Bloomberg

United Malacca ventures into Indonesia: Cash-rich UNITED MALACCA BHD intends to acquire 83% stake in PT Lifere Agro Kapuas, which has 24,585ha of oil palm plantation land in central Kalimantan, Indonesia, for RM285.02mil. - StarBiz

Hiap Teck to grow downstream ops: Steel company Hiap Teck Venture Bhd hopes to grow its profitable downstream business. It’s targeting 10% higher volume in the downstream segment for the upcoming financial year. - StarBiz

Promising outlook for equity market next year: The outlook for Malaysia’s equity market next year seems promising, with two local brokerages expecting the benchmark FBM KL Composite Index to hit at least 1,800 points by the end of 2016. - StarBiz

Datasonic unit wins passport chips contract: Datasonic Group Bhd unit has been awarded a RM318.75mil contract by the Home Ministry to supply 12.5 million Malaysian passport chips. The contract is for five years from Dec 1, 2016 until Nov 30, 2021. - StarBiz

WCT clinches new Petronas Rapid job: WCT Holdings Bhd has bagged a contract worth RM322.6mil from Petroliam Nasional Bhd (Petronas) for works at the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor. - StarBiz

V.S. Industry posts higher Q1 net profit: V.S. Industry Bhd recorded a 71% increase in net profit to RM60.18mil for the first quarter on higher sales to key export customers and foreign exchange gain of RM14.6mil. Revenue was 12.5% higher at RM612.47mil. - StarBiz

Top Glove net profit soars: Top Glove Corp Bhd reported a 164% jump in its net profit to RM128.34mil in the first quarter on the back of a strong US dollar and lower raw material prices. The glove maker’s revenue rose to a record high of RM800.3mil, up 41% growth from a year earlier.

Malakoff’s power plant gets extension: Malakoff Corp Bhd’s 436.4-MW Port Dickson power plant has received an extension of three years from the Energy Commission. - StarBiz

FGV to produce biodegradable plastics from palm oil waste: Felda Global Ventures Holdings Bhd (FGV) is teaming up with US-based Newlight Technologies LLC and Innogas Technologies Sdn Bhd to produce biodegradable plastics from palm oil biomass waste in Malaysia. - StarBiz

CPO to gain from weak ringgit: Crude palm oil (CPO) prices are expected to benefit from the weak ringgit and surge above RM2,500 per tonne in the first quarter of 2016, says MIDF Research. The benchmark CPO futures for third-month delivery is down RM9 from Monday’s close to RM2,465 per tonne as at 11.30am on Tuesday. It hit RM2,500 per tonne last Friday. - StarBiz

UEM Edgenta buys 80% stake in KFM: UEM Edgenta Bhd is acquiring an 80% stake in integrated facilities management services company KFM Holdings Bhd for RM128mil, a deal that will expand its presence in Malaysia as well as reach into the United Arab Emirates. - StarBiz

Japan eyes Sinpore-KL bullet train project: Japan, fresh from a US$15bil rail win in India over China, aims to sell its bullet trains to a high-speed line being planned between Singapore and Kuala Lumpur, opening a new market for companies from Hitachi Ltd to Mitsubishi Heavy Industries Ltd. - Bloomberg

Megasteel says Misif ‘short-sighted’: Five days after the Malaysian Iron and Steel Industry Federation (Misif ) issued a statement against a proposal by Megasteel Sdn Bhd to set up a special purpose vehicle solely to import hot-rolled coils and downstream products into Malaysia, Megasteel has hit back, saying that the federation is “very short-sighted in objecting to well-meaning petitions to safeguard the Malaysian steel industry”. - Edge FD

Cosco-CSCL merger to hurt Westports’ volumes: Westports Holdings Bhd expects the impending merger between state-owned Chinese shipping giants China Ocean Shipping Co (Cosco) and China Shipping Container Lines Co (CSCL) to impact the number of containers shipped in and out of its port in Port Klang. - Edge FD

Globaltec expects to return to profit in FY16: Globaltec Formation Bhd, which has been loss-making since June 30, 2013, expects to return to profitability in FY16 as it streamlines its integrated semiconductor and automotive manufacturing operations, said its group executive chairman Datuk Seri Goh Tian Chuan. - Edge FD

AGMs/EGMs

Malaysia Pacific Corporation Bhd

Time: 8am

Venue: Crystal Crown Hotel Harbour View, 217 Persiaran Raja Muda Musa, Port Klang

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