The Week That Was - Kossan, palm oil, CITI, Microsoft

World champion: Katherine Yee Kit Mun showing rubber gloves manufacture by Top Glove Sdn Bhd at the 9th International Rubber Glove Conference and Exhibition held at the Kuala Lumpur Convention Centre. AZHAR MAHFOF/The Star (4/9/2018)

Kossan makes RM1bil in 3 months

GLOVE maker Kossan Rubber Industries Bhd made a net profit of RM1.01bil in the first quarter ended March 31, its best quarterly results so far, backed by higher sales volume and surging prices.

The company told analysts on Wednesday that robust demand continued to push the average selling prices or ASPs higher in the second quarter, but hinted that prices are nearing their peaks.

Kossan also said that the company is producing gloves at full capacity at least until the end of this year.

CGS-CIMB Research estimated that the company would make RM3.8bil in net profit this year, or about RM1.50 sen a share.

Earnings is expected to fall sharply next year to RM1.6bil, or 64 sen a share, based on an assumption that ASPs would fall from current US$85 per 1,000 gloves as of end of March to US$44 in 2022.

Palm oil prices bullish

CRUDE palm oil (CPO) prices on Bursa Derivatives raced to a new high this week, with the May futures contract hitting RM4,463 a tonne yesterday. The most actively traded third month contract for delivery in July breached the RM4,000 a tonne level.

The price of palm oil has almost doubled from where it was a year ago, driven largely by the tight supplies of vegetable oil worldwide.

In March, CPO prices averaged at RM4,042 a tonne, a new monthly record high. April is shaping up to be another bumper harvest for planters.

Meanwhile, rival soybean prices are trading at their highest level in seven years as unfavourable weather condition in North America hurt production.

The prices of corn are also trading at an eight year high.

Citi seeks to reassure customers

CITI Malaysia’s top executives on Wednesday seeks to reassure that the bank’s consumer business operations and offices will continue operate amid uncertainties following its parent’s, Citigroup, decision to exit the consumer franchise in the country.

Citi Malaysia consumer business manager Elaine Fan (pic below) said all products and services would continue as normal and there would be no change in the level of service.

Citi Malaysia has been operating since 1959 and currently employs over 5,000 people.

Microsoft’s billion-dollar investment

MICROSOFT Corp will invest US$1bil (RM4.12bil) over the next five years in Malaysia as part of a new partnership programme with government agencies and local companies, Prime Minister Tan Sri Muhyiddin Yassin said on Monday.

Under the Bersama Malaysia Initiative, Microsoft has formed five partnerships with the Malaysian Administrative Modernisation and Management Planning Unit, Human Resources Development Fund, Petronas, Celcom, and Grab.

The investment from Microsoft came after the government in February gave conditional approvals for Microsoft, Google, Amazon and Telekom Malaysia Bhd to build and manage hyper-scale data centres and provide cloud services.

These cloud service providers will invest between RM12bil and RM15bil over the next five years.

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