Breakfast briefing: Tuesday, October 31 (Update)


MarketWatch: Wall Street pulled back from record-high territory on Monday, weighed down by a drop in Merck shares and a report that US lawmakers are discussing a gradual phase-in of much-anticipated corporate tax cuts. The DJIA fell 85.45 points, or 0.36%, to 23,348.74, the S&P 500 lost 8.24 points, or 0.32%, to 2,572.83 and the Nasdaq dropped 2.30 points, or 0.03%, to 6,698.96. - Reuters

 

Energy

 

Brent oil closed on Monday at its highest level since July 2015 and US crude closed at a peak not seen since February on expectations Opec-led production cuts would be extended beyond March, although such gains are likely to spur more US production. Brent crude futures LCOc1 settled at US$60.90 a barrel, up 46 cents. Brent has gained 9.5% in the last 16 trading days. - Reuters

 

Forex summary

*The ringgit gained 0.13% to 4.2323 versus the US$

*Up 0.12% to 4.9246 versus euro

*Down 0.18% to 5.5868 per pound sterling

*Down 0.05% to 3.1087 per Singapore dollar

*Up 0.19% to 3.2494 per Aussie

*Up 0.05% to 3.7423 per 100 yen

 

Top foreign stories

 

Samsung Electronics third-quarter profit nearly triples to new record: Samsung Electronics Co Ltd said income from memory chips helped it book record quarterly profit for the three months through September. Operating profit nearly tripled in the third quarter from a year earlier to 14.5 trillion won (US$12.91 billion), Samsung said. Revenue jumped 29.8% to 62 trillion won. - Reuters

 

SoftBank, Deutsche Telekom hit wall in Sprint, T-Mobile talks: SoftBank Group Corp and Deutsche Telekom AG have reached an impasse in their talks to merge Sprint Corp and T-Mobile US Inc over how many shares each would hold in the combined company, people familiar with the matter said. - Reuters

 

New Akzo Nobel boss pursues US$30b deal with Axalta: Dutch paints maker Akzo Nobel, seeking to recover after rejecting a takeover offer and issuing two profit warnings, is discussing a merger with smaller US rival Axalta Coating Systems Ltd to create a US$30 billion company. - Reuters

 

Oreo maker Mondelez's results beat on gains from Europe, Latin America: Mondelez International Inc beat Wall Street’s profit and revenue estimates in the third quarter as demand for its key brands such as Oreo cookies and Trident gum rose in Europe and Latin America and the company cut costs. Net income attributable to Mondelez rose 81% to US$992 million, or 65 cents per share, in the quarter, helped by one-time gains and taxes. Total organic net revenue rose 2.8% in the quarter ended Sept 30. - Reuters

 

Cancer-drug setback sends Merck shares down again: A setback for Merck & Co’s key cancer drug sent the drugmaker’s stock swooning on Monday for a second straight session, putting the shares on track for their biggest two-day decline in more than eight years. Late on Friday, Merck withdrew an application for European use of its flagship drug Keytruda as an initial, or first-line, treatment for advanced lung cancer in combination with chemotherapy, raising questions about future sales. - Reuters

 

Top local stories

 

La Nina can push CPO prices higher, says IOI’s Lee: The local plantation industry is expecting crude palm oil (CPO) prices to cruise comfortably above RM3,000 per tonne if La Nina sets in, says IOI Corp Bhd founder and executive chairman Tan Sri Lee Shin Cheng. The CPO price is currently hovering within the range of RM2,750 to RM2,800 per tonne.- StarBiz

 

EPF raises stake in Signature: The Employees Provident Fund (EPF) has emerged as a substantial shareholder in Signature International Bhd with a 5.07% stake or 11.61 million shares. The pension fund’s entry into Signature comes as the company seeks to expand its business outside Malaysia, especially in the UK.

 

Drones, clones and chocolate seen buoying United Malacca: United Malacca Bhd is looking to drones, clones and even other crops to overcome challenges from labour shortages and price volatility, said CEO Peter Benjamin. - Bloomberg

 

Boustead Plantations to invest RM250m in Sabah estates: Boustead Plantations Bhd will invest RM250mil over the next 10 years for replanting and building new infrastructure at estates in Sabah that it is buying from DutaLand Bhd . The company is buying a total of 11,579ha of plantation land in the districts of Labuk and Sugut for RM750mil. - StarBiz

 

Move to turn Ekovest into construction outfit: Tan Sri Lim Kang Hoo’s plan to rationalise the property assets of the companies under his control is expected to turn Ekovest Bhd into a pure construction and infrastructure outfit, while enlarging Iskandar Waterfront City Bhd ’s (IWC) land bank for immediate development. The exercise would likely involve Ekovest selling its entire land bank to IWC, which would likely be satisfied by the issuance of shares in IWC to Ekovest, sources said. - StarBiz

 

Maybank Indonesia earnings up on loan growth: PT Bank Maybank Indonesia Tbk posted a net profit after tax and minority interest of 1.4 trillion rupiah (RM436.76mil) for the first nine months of financial year 2017 to end-September, up 12% from 1.3 trillion rupiah from a year ago. The lender attributed the better results to loan growth, effective cost-management control and syariah banking. - StarBiz

 

AirAsia and SATS agree to form ground-handling tie-up: AirAsia Bhd and SATS Ltd have agreed to a ground-handling partnership in Malaysia and Singapore to expand their operations in South-East Asia. - StarBiz

 

Muhammad tells insurers to fix ‘broken’ business models: The insurance industry’s current business models are “broken” and need to be fixed so that more Malaysians can afford coverage, says Bank Negara governor Tan Sri Muhammad Ibrahim. - StarBiz

 

UEM Sunrise to buy more land in Klang Valley: UEM Sunrise Bhd intends to beef up its presence as a national developer by increasing its landbank in the Klang Valley. The potential purchases would be financed with proceeds from the sale of 163.9 acres in Johor to Country View Bhd for RM310mil. - StarBiz

 

Press Metal among Top 50 family-owned firms globally: Malaysia ranks seventh globally in terms of the number of family-owned businesses and 11th in Asia-Pacific ex-Japan in terms of average market capitalisation at US$3.8bil, Credit Suisse Research Institute said in a report. Press Metal is ranked 32nd under the Top 50 companies by revenue growth and 44th by share price returns. - StarBiz

 

Kelington unit clinches RM65.4m China contract: Kelington Group Bhd unit Kelington Engineering (Shanghai) Pte Ltd has secured a RM65.4mil contract tfrom Chengdu Construction Engineering Corp to supply and install a bulk gas system and distribution piping for Gexi (Chengdu) Integrated Circuit Manufacturing. - StarBiz

 

Budget impact on equity market seen neutral to mild: Budget 2018 is expected to have a neutral to mildly positive impact on the overall local equity market. Analysts said several sectors, including construction, consumer, retail, automotive, aviation, hospitality, banking and property, were key beneficiaries of the budget. - StarBiz

 

Kejuruteraan Asastera to raise RM20m from IPO: Kejuruteraan Asastera Bhd plans to raise RM20mil from its listing on the Ace Market of Bursa Malaysia. The electrical engineering services company plans to sell 80 million new shares at 25 sen each. - StarBiz

Breakfast Briefing