Breakfast briefing: Thursday, March 24


Companies like CIMB Group Holdings Bhd, Hong Leong Financial Group Bhd (HLFG) and AmBank Group Bhd may have to beef up their capital structures by 2019.

MarketWrap: Wall Street closed lower on Wednesday as oil and materials share prices dropped while investors remained cautious a day after deadly bombing attacks in Belgium. 
The benchmark S&P 500 index fell back into negative territory for the year after closing positive on Friday for the first time in 2016. - Reuters

The DJIA closed down 79.98 points, or 0.45%, to 17,502.59, the S&P 500 lost 13.09 points, or 0.64%, to 2,036.71 and the Nasdaq Composite fell 52.80 points, or 1.1%, to 4,768.86.

Forex summary

*The ringgit was down 0.83% to 4.0260 per US$

*It fell 0.71% to 4.4979 per euro

*Down 0.36% to 5.6795 to the pound sterling

*0.58% lower to 2.9419 per Singapore dollar

*0.59% higher to 3.0206 per Aussie

*Down 0.53% to 3.5653 per 100 yen

Energy

Oil prices tumbled 4% on Wednesday, with US crude settling below the key US$40 per barrel mark after a sixth straight week of record highs in stockpiles that traders warned could cut short the market's two-month long rally. Brent crude futures finished down US$1.32, or 3.2%, at US$40.47 a barrel. - Reuters

Top foreign stories

New York banking regulator gives blessing to Goldman, GE bank deal: The New York Department of Financial Services on Wednesday approved Goldman Sachs Group Inc's acquisition of GE Capital Bank's US online deposits. The Federal Reserve earlier this week gave permission for the US$17 billion deal which gives Goldman control of around US$95 billion in deposits through its GS Bank unit. - Reuters

Rockefeller Family Fund hits Exxon, divests from fossil fuels: The Rockefeller Family Fund said on Wednesday it would divest from fossil fuels as quickly as possible and "eliminate holdings" of Exxon Mobil Corp, saying the oil company associated with the family fortune has misled the public about climate change risks. - Reuters

Top local stories

Bank Negara expects GDP to expand at 4% to 4.5% this year: Bank Negara said Malaysia's gross domestic product (GDP) is expected to expand at a more moderate pace of around 4% to 4.5% this year, compared with 5% in 2015, in the face of the challenging global economic and financial landscape. Domestic demand still being the principal driver of growth, it said. - StarBiz

Bank Negara also said:

* Household debt-to-gross domestic product increased to 89.1% last year but the ability to service debt remains sound.

* Households in the bottom 20% of the income group experienced inflation rates that were 0.12 to 1.10 percentage points higher than households in the top 20% of the income group.

* The services and manufacturing sectors will remain as key drivers of overall growth this year, while growth in the construction sector is expected to be sustained.

* The greater flexibility for the insurance industry in pricing motor and fire products under the new liberalisation initiative will promote competition. This in turn will drive improvements in under- writing and claims management.

* Private investment growth is projected to grow 5.5% this year vis-a-vis 6.4% last year.

* Trade surplus is expected to narrow to RM79.5bil this year from RM94.6bil in 2015, as import growth is expected to outpace export growth.

* It will continue to balance between the risk to growth and risk to inflation in making any changes to the country’s interest rates.

CIMB sells stake in Indonesian insurer: CIMB Group Holdings Bhd has entered into a conditional agreement to divest its 51% stake in Indonesian insurer PT CIMB Sun Life to Canada's Sun Life Assurance Co in a cash deal worth about 550 billion rupiah (RM169mil). - StarBiz

IOI: Suspension won’t hurt CSPO inventory: IOI Corp Bhd’s existing inventory of certified sustainable palm oil (CSPO) will not be impacted should there be a suspension of the group’s Roundtable on Sustainable Palm Oil (RSPO) membership. IOI said its inventory would continue to be sold as CSPO and that crude palm oil (CPO) sales would not be stirred, as CPO was a globally traded commodity. - Reuters

1MDB no longer possesses contingency or systematic risks: 1Malaysia Development Bhd (1MDB) no longer possesses contingency or systematic risks following its recent pro- gress in selling and developing its assets, says credit rating agency Moody’s Investors Service. - StarBiz

CAB Cakaran targets RM1bil revenue from Jakarta by 2019: CAB Cakaran Corp Bhd plans to generate a RM1bil in revenue in 2019 from its poultry business in Jakarta. Group managing director Chris Chuah said a joint-venture company was being set up in Jakarta to operate an integrated farm that produced halal poultry in Java. - StarBiz

Two big shareholders cut stakes in carimin: Two major shareholders of offshore oil and gas services provider Carimin Petroleum Bhd, managing director Mokhtar Hashim and executive director Shatar Abdul Hamid, have reduced their stakes in the company to 25.17% and 3.79% respectively. - StarBiz

Bank Rakyat to focus on online banking services: Bank Rakyat, which has no immediate plans to open more branches nationwide, will focus on developing its online banking services as more and more consumers are using the services, said managing director and president Datuk Mustafha Abd Razak. - StarBiz

Retailers pessimistic about consumption: Malaysian retailers are expecting a 0.4% contraction in sales in the first quarter of this year, after growing by a mere 1.4% in 2015 — their worst performance since 2010. The total retail sales turnover for 2015 was RM96.2 billion. - Edge FD

Glomac to roll out RM627m worth of properties in H2: Property developer Glomac Bhd said it plans to roll out RM627 million of new launches in the second half of the financial year ending April 30, 2016, where four out of the five planned projects are in the affordable landed residential segment. - Edge FD

Malaysia hires banks for sukuk following Indonesia’s strong sale: Malaysia hired four banks to arrange a sale of global Islamic bonds, just days after Indonesia’s US$2.5 billion (RM10.03 billion) offering was more than three times oversubscribed. JPMorgan Chase & Co, CIMB Group Holdings Bhd, Malayan Banking Bhd and HSBC Holdings plc were
selected to organise investor meetings for as early as the end of next week, sources said. - Bloomberg

AGMs/EGMs

Eco World Development Group Bhd

Time: 11.45am (AGM); 12.15am (EGM)

Venue: Function Room 1, Setia City Convention Centre, No. 1, Setia Alam, Seksyen U13, Shah Alam, Selangor

Eco World seeks at the EGM shareholder approval for the purchase of about 2,198.4 acres of leasehold land in Kuala Selangor by subsidiary Pinnacle Sdn Bhd for RM1,181,335,536.65.

Digistar Corporation Bhd

Time: 10.30am

Venue: De Palma Hotel Ampang, Palm Square Ampang Point, Jalan Ampang, Selangor

Selangor Properties Bhd

Time: 11.00am

Venue: Banquet Hall, 1st Floor Kuala Lumpur Golf & Country Club, Jalan 1/70D Off Jalan Bukit Kiara, Kuala Lumpur

Visdynamics Holdings Bhd

Time: 11.30am

Venue: The Conference Room, Lot 3844, Jalan TU 52, Kawasan Perindustrian Tasik Utama, Ayer Keroh, Malacca

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