Economy
US: Fed minutes may give clues on when balance-sheet runoff to start. Federal Reserve officials have mapped out plans to reduce their USD4.5trn balance sheet, but they’ve left out one key detail: the starting point. Clues about whether they’ll begin the asset reduction before another rate hike could come from the record of policy makers’ debate last month. Minutes of that June 13-14 meeting will be released at 2 pm on Wednesday in Washington. (Bloomberg)
EU: Lawmakers pass new rules to tackle multinationals' tax avoidance. The European Parliament passed a directive requiring big multinationals to report tax and financial data separately in all countries where they operate, a measure aimed at tackling tax avoidance and profit shifting to countries with lower taxes. The new rules are part of a wider overhaul of tax regulation spurred by the so-called Panama Papers and other revelations of widespread tax avoidance by companies and wealthy individuals. (Reuters)
EU: Register could create market for soured bank debt, says ECB's Mersch. Setting up a EU-wide register of bad bank debt could help to create a viable market for the EUR900bn worth of soured credit that is weighing on the bloc's bank sector, ECB board member Yves Mersch said. “One possibility to address the large stock of non-performing loans could be to create an EU-wide template and reporting system for such loans, alongside minimum standards for transparency," Mersch said. (Reuters)
EU: ECB's Nowotny says inflation target must be viewed flexibly. The ECB's target of inflation under but close to 2% should not be applied too narrowly, Governing Council member Ewald Nowotny said, arguing for it to be seen as a flexible and medium-term target. In a speech on monetary policy, Nowotny said the target "should also include a certain flexibility". (Reuters)
UK: BOE demands tougher line on consumer lending. The BOE took a tougher approach toward banks over their booming lending to consumers on Tuesday, ordering them to apply credit rules prudently and prove by Sept they are not being too complacent about risks to their balance sheets. The BOE, which can force curbs on lending, said last week it had spotted weaknesses in the way firms have been ramping up offers of credit to consumers who are the main driver of Britain's economy. (Reuters)
China, Germany: Step up as US retires from world leadership. The US traditionally takes point in the search for common approaches to the big global issues of the day at G-20 summits. Not this time. When world leaders meet in Hamburg on Friday, China and Germany will move in to usurp the US’s role. The two industrial powerhouses of Asia and Europe are being nudged into an informal alliance to pick up the leadership baton that the US is accused of having dropped since President Donald Trump’s inauguration earlier this year, according to diplomats and officials from several Group of 20 members. (Bloomberg)
Malaysia: 2017 GDP growth can hit 5% or more, says Mohd Irwan. Malaysia's economy can grow 5% or more this year, based on the country's first-half performance, said Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah. "The country's economy is performing well, and I personally think we can achieve 5% or more in GDP growth, backed by the strengthening economic environment, the increase in exports and investments, and job creation,” he said. (Bernama)
Malaysia: Bank Negara says no new policy on foreign ownership of insurers’ local units. Malaysia’s central bank said that foreign shareholders of local insurers must honour their commitment in maintaining specified levels of domestic shareholding. Bank Negara Malaysia (BNM) said there is no new policy on foreign ownership in insurance companies, and that the requirement is part of commitments made by foreign shareholders when they applied for entry into the Malaysian insurance market. (Reuters)
Markets
UEM Edgenta: Bags RM76m hospital support service job. UEM Edgenta, an asset and facilities management, announced that its wholly-owned unit has been awarded a hospital support services contract from the Ministry of Health, valued at RM75.5m. It said the hospital support service contract is valid for two years, commencing from Sept 1, 2017 until Aug 31, 2019. It added that it will provide the hospital support service at the National Cancer Institute in Putrajaya. (The Edge)
Sinmah: Sells assets in Batu Pahat for RM12.3m. Sinmah Capital is selling four pieces of land, together with 22 broiler farms, a chicken processing plant and a two-storey shophouse, in Batu Pahat, Johor, for a combined RM12.3m cash, as part of its plans to dispose of certain assets which it deems to be no longer necessary to its poultry division operations. The total original costs of investment by Sinmah in relation to the four assets were RM8.3m. As such, it expects to net a total pre-tax profit on disposal of RM8.1m, which will be used to strengthen the group's cash flow and reduce its gearing. (The Edge)
Kumpulan Jetson: Building subcontract of RM919m gets rescinded. Kumpulan Jetson said MCC Overseas (M) SB has withdrawn a RM919.3m contract with its wholly-owned subsidiary Jetson Construction SB (JCSB) on alleged misrepresentation or non disclosure of a certain matter. Jetson said JCSB had on Monday (July 3) received a letter from MCC on its decision to rescind the award to JCSB to undertake subcontract works for a mixed commercial project in Jalan Conlay, citing there was an alleged misrepresentation or non-disclosure that one of the substantial shareholders of Jetson is a director of a third party consultant to the employer of the project. (The Edge)
Kawan Food: Announces 1-for-3 bonus issue. Kawan Food has proposed a bonus issue of 89.9m new shares on the basis of one bonus share for every three existing shares. This, said the group, will expand its issued and paid-up capital by a third to 359.5m shares from 269.6m shares. The frozen food manufacturer and exporter said the bonus issue is part of its reward to shareholders for their loyalty and continuing support. In addition, the issue could improve the liquidity and marketability of the group’s securities by way of a larger capital base. (The Edge)
Aeon Credit: 1Q net profit jumps by 20.9%. Aeon Credit Service (M)’s net profit jumped 20.9% in the 1QFY18 to RM75.8m from RM62.7m in the previous corresponding period, partly boosted by bad debt recovery and commission earned from sale of insurance products. On its prospects, AEON Credit said it expects to be able to continue with its current financial performance for the FYE Feb 28, 2018 (FY18) based on the scheduled implementation of its business plan. (The Edge)
IPO: Lotte Chemical Titan raises RM3.8bn. Lotte Chemical Titan Holding raised about RM3.77bn from an IPO after pricing its shares at the bottom of an indicative range. The IPO was, nevertheless, the biggest stock market flotation in Malaysia since 2012. The integrated petrochemical producer, part of South Korean conglomerate Lotte Group, had initially planned to price its offer last week. However, due to a lukewarm reception from investors it instead relaunched the IPO on Monday after slashing the shares on offer by a fifth to 580m. On Tuesday, Lotte Chemical Titan said the IPO had been priced at RM6.50. (The Edge)
Market Update
The FBM KLCI might open with a whimper today as trading activity slowed markedly overnight due to the July 4 holiday in the US. European equities ended lower after a late flurry of selling, while bond prices were little changed and the euro inched further away from a one-year high hit against the dollar last week. Oil rose for a ninth successive session — albeit only marginally — while gold managed to pull off an eight-week low. European equity indices suffered modest falls, despite further gains for energy stocks. The pan-regional Stoxx 600 ended 0.3% lower, having spent most of the day barely changed. The FTSE 100 index shed 0.3% to 7,357.23, under pressure from falls for the U.K. benchmark’s oil companies and banks. Germany’s DAX 30 index slipped 0.3% to 12,437.13, while France’s CAC 40 lost 0.4% to 5,174.90. Oil prices continued to regain ground, with Brent climbing as high as US$49.90 a barrel — its strongest level for nearly four weeks — before easing back to US$49.74, still up 0.1% on the day. US West Texas Intermediate was also 0.1% higher at US$47.11.
Back home, the FBM KLCI index lost 6.59 points or 0.37% to 1,762.08 points. Trading volume increased to 1.90bn worth RM1.80bn. Market breadth was negative with 348 gainers as compared to 488 losers. Stocks in the region mostly fell, with risk appetite dented after North Korea launched another ballistic missile. South Korean stocks ended lower after North Korea said it successfully test-launched an intercontinental ballistic missile, claiming a major advance in its attempt to threaten the U.S. with a nuclear-tipped weapon. Elsewhere, Japan’s Nikkei closed lower by 0.1%, Hong Kong’s Hang Seng index fell 1.5% and the Shanghai Composite index lost 0.4%. Meanwhile, the S&P/ASX 200 in Australia gained 1.8% after closing Monday at its lowest level in nearly two weeks.
Source: PublicInvest Research - 5 Jul 2017
http://klse.i3investor.com/blogs/PublicInvest/126761.jsp
