Breakfast briefing: Thursday, February 18


  • Business
  • Thursday, 18 Feb 2016

Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015. Gold was on the brink of five year lows on Tuesday, with more losses expected in the coming months following Monday's "bear raid" when sellers dumped an estimated 33 tonnes in just two minutes. REUTERS/Neil Hall

Market wrap: US stocks tallied their third straight session of gains on Wednesday, led by energy shares as oil prices jumped, while better-than-expected economic data helped allay growth fears. Nine of the 10 major S&P sectors closed higher, with energy rising 2.9%.

The DJIA rose 257.42 points, or 1.59%, to 16,453.83, the S&P 500 gained 31.24 points, or 1.65%, to 1,926.82 and the Nasdaq added 98.11 points, or 2.21%, to 4,534.07.

Forex summary

*The ringgit rises 1.19% to 4.1728 per US$

*It jumps 1.45% to 4.6444 per euro

*Up 1.02% to 5.9591 to the pound sterling

*0.30% higher to 2.9897 per Singapore dollar

*0.57% up to 2.9806 per Aussie

*Up 1.15% to 3.6589 per 100 yen

Energy

Oil prices rose 7% on Wednesday after Iran voiced support for a Russia-Saudi-led move to freeze production to deal with the market glut that had pressured crude prices to their lowest in a dozen years. Brent settled up US$2.32, or 7.2%, at US$34.50 a barrel. - Reuters

Top foreign stories

Iran offers guarded support for oil output freeze: Iran voiced support for a Russia-Saudi-led move to freeze production to deal with the market glut that had pressured crude prices to their lowest in a dozen years. Iranian Oil Minister Bijan Zanganeh said on Wednesday the proposed production "ceiling" should be the first step toward stabilising the market.  But Zanganeh, quoted by Tehran's Shana news agency, did not say explicitly say Iran will keep its own output at January's levels, in line with the proposal that major producers including Russia and Saudi Arabia restrict output. - Reuters

Qatar, China in US$6.4b battle for Australian freight giant: Canada's Brookfield Asset Management is planning a fresh US$6.4 billion bid for Australian port and rail firm Asciano with Qatar's sovereign fund, two sources said, widening the global battle for the haulage heavyweight. Asciano, which had a market capitalisation of US$4.3 billion a year ago, had on Tuesday said it was dumping Brookfield's initial offer of A$8.9 billion (US$6.3 billion) in favour of a A$9 billion bid from Australian freight rival Qube Holdings Ltd in concert with China Investment Corp. - Reuters

Strong US industrial output bolsters growth picture: US industrial production in January rose by the most in 14 months as manufacturing and utilities output increased, the latest sign the economy regained some ground early in the year. Industrial production jumped 0.9% last month, the largest gain since November 2014, the Fed said. The increase followed a 0.7% decline in December and was boosted by a 0.5% advance in manufacturing output. - Reuters

Gold investment demand in China to grow if price rally hold: Gold investment demand in China has started 2016 quite strongly, outperforming interest in jewellery, but for the momentum to continue bullion would have to maintain its price rally, a World Gold Council official said. With a 14% gain, gold is the best performing asset so far this year after falling for three straight years to 2015. The metal hit a one-year high last week as turmoil in global stock markets triggered safe-haven demand. - Reuters

Apple Pay takes on China's internet kings in mobile payments: Apple Inc launched its mobile payment system in China on Thursday in a bid to convince the hundreds of millions of users of the country's entrenched, dominant services to switch. In an early boost, China's biggest lender, Industrial and Commercial Bank of China Ltd, was among the banks that said earlier this week that customers would be able to use Apple Pay from Thursday. - Reuters

Top local stories

Oil and gas stocks retreat: Worries that Iran and Iraq could scuttle the oil output freeze at January levels agreed to by Saudi Arabia and Russia dampened oil and gas counters on Bursa Malaysia on Wednesday, a reversal of gains the stocks made on Tuesday. - StarBiz

KLK Q1 net profit jumps 3-fold to RM795mil: Kuala Lumpur Kepong Bhd (KLK)'s first-quarter net profit tripled to RM795.21mil, from RM214.2mil a year earlier largely due to the exceptional gains from the sale of plantation land to an associate. Revenue came in at  RM4.34bil against RM3.11bil a year ago. - StarBiz

Axiata gets nod to buy 80% of Nepal's Ncell: Axiata Group Bhd won the approval of shareholders for the purchase of an 80% stake in Nepal’s number one mobile operator, Ncell Pte Ltd, for US$1.365bil (RM5.67bil). The deal is expected to close by the first half of 2016. Separately, the company reported its highest ever revenue of nearly RM20bil for the financial year ended Dec 31, 2015. - StarBiz

BAT net profit up despite lower revenue: BRITISH AMERICAN TOBACCO (M) BHD (BAT) posted an increase of 5.7% in net profit to RM196.12mil in the fourth quarter mainly attributable to lower operating expenses. Its revenue decline 12.2% year- on-year to RM1.06bil from RM1.21bil, while earnings per share rose to 68.1 sen from 65.6 sen previously. The group declared a fourth interim dividend of 78 sen per share, bringing total dividends for the full 2015 financial year to RM3.12 per share. - StarBiz

MAHB hurt by ‘huge charges’: MALAYSIA AIRPORTS HOLDINGS BHD (MAHB) incurred a net loss of RM42.9mil in its fourth quarter due to “huge charges” for depreciation and finance costs in its Turkey operations. The airport operator posted earnings of RM577.73mil a year earlier. - StarBiz

Malaysia may sell Islamic dollar debt as inflows quicken: Malaysia plans to tap the global Islamic bond market for a second consecutive year. Banks have been asked to submit proposals by next week for a bench- mark US dollar-denominated offer, sources said. Malaysia sold US$1.5bil of US currency sukuk in April 2015, its first international bond issuance. - Bloomberg

Shell: Potential local buyer failed to meet requirements: Shell Overseas Holdings Ltd says it sold its stake in Shell Refining Co (Federation of Malaya) Bhd (SRC) to Hengyuan International Ltd as a potential Malaysian buyer was unable to meet the requirements in respect of funding the acquisition and the refinancing of SRC’s debt. - StarBiz

Chin Hin upbeat on growth this year: CHIN HIN GROUP, which issued its prospectus for its Main Board listing on Wednesday, is targeting to substantially expand its manufacturing division this year. The integrated building materials firm has allocated RM15mil of the expected IPO proceeds of RM41mil for the purpose. - StarBiz

Perdana Petroleum plans RM650mil sukuk: Perdana Petroleum Bhd has proposed an Islamic bond, or sukuk, issue to raise up to RM650mil for its operations. The five-year sukuk murabahah programme has been assigned a preliminary rating of AAA(fg)/stable by RAM Rating Services Bhd. - StarBiz

Auditor questions the authenticity of Maxwell’s cash deposits: While the extended audit of Maxwell International Holdings Bhd’s extraordinary large advertising expenditure is ongoing, the China-based sportswear manufacturer announced that its auditor had expressed concern about the authenticity of its cash deposits. Maxwell told Bursa Malaysia that its auditor Baker Tilly Monteiro Heng did not obtain any documentary evidence for the placement of RM103.7 million, or 40% of the company’s cash pile, in asset management company Jinjiang Jin Chuang Private Capital Management Co Ltd. - Edge FD

Sime Darby intends to sell properties worth RM2.1b: Sime Darby Bhd intends to sell US$500 million (RM2.1 billion) worth of property assets in Australia and Singapore to pare down its ballooning debts, The Wall Street Journal reported, citing unnamed sources. When contacted, the conglomerate did not deny such divestment plan. Sime also noted that it is currently exploring options, including real estate investment trust, to monetise its assets. - Edge FD

Mega First fixes rights issue price at RM1.59 per share: Mega First Corp Bhd has fixed the issue price for its renounceable 7-for-10 rights issue at RM1.59 per share to raise up to RM250 million to partly finance construction of a hydropower plant in Laos. - Edge FD

Zelan unit to build Gombak integrated terminal for RM307m: ZELAN BHD’s wholly-owned subsidiary Zelan Construction Sdn Bhd has bagged a RM307.37 million contract from Zelan’s 95%-owned unit Terminal Bersepadu Gombak Sdn Bhd to be the main contractor for the development of the Gombak Integrated Transport Terminal in Selangor. - Edge FD

Sona Petroleum’s future hinges on EGM in March: Sona Petroleum Bhd, a special purpose acquisition company (SPAC), said the group's future prospects hinge on the outcome of its EGM next month. At the meeting shareholders will vote on the proposed acquisition of Stag oilfield offshore western Australia for US$50 million (RM210.93 million). The SPAC has until July 29 to complete its qualifying acquisition (QA). Failure to do so will see its liquidated and custodian account monies distributed to the respective shareholders. - Edge FD

AGMs/EGMs

Sasbadi Holdings Bhd

Time: 10am

Venue: The Greens 3 Function Room, Tropicana Golf & Country Resort, Petaling Jaya, Selangor

Events calendar

* Bank Negara releases GDP data for fourth quarter 2015. Consensus is for GDP growth rate of 4.1% from 4.7%. For the whole of 2015 growth is seen coming in at 4.9% from 6% previously.

* Announcement on data for Malaysia's foreign reserves up to Feb 15 and year-on-year consumer price index for January.

* Conference call on Axiata's fourth-quarter results

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