Bursa's net profit fall 12% (Highlights from TheEdge 31st Jan)

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Malaysia
  • Government put effort to curb internal deals between government officials and third parties. Contracts, permits and license should be obtained only through legal channels, not through internal connections as the move will widen the gap between rich and poor. Poor will continue to remain poor, while capitalist remain rich.
  • Bursa Malaysia announced its 4Q19 net profit to have fallen 12% blaming higher operating cost. Quarter revenue increased only 0.3% year-on-year but there was a recognition of one-off impairment loss allowance of RM3.3 million. Annual revenue declined 8.64% thanks to KLCI hitting almost lowest in 2019. Bursa announced divided of 10.4 cent, totaling 2019 dividend of 20.8 cent. This is significantly lower than FY18 and FY17 with 33.6 cents and 53.5 cents.
  • Bursa set to expand new income streams in both its trading and non-trading revenue as it tries to mitigate the rise in operating expenses. One of the main areas is to provide market-related information given Bursa’s position as the “golden source for data” in Malaysia’s stock market. For context, clearing fee in security market takes up more than 50% of Bursa’s total income. If market is bullish and volatile with high volume, Bursa will do well and vice versa. Bursa also wants to focus more in their derivative business.
  • Malaysia will not revise GDP forecast yet as it is too early to assess the impact of Wuhan virus to the Malaysia’s economy. Previously, Thailand cut its GDP forecast to 2.8% to 3.3% as exports were forecasted to be weaker, alongside with the new virus outbreak in China. Malaysia’s export is expected to dip as China is Malaysia’s biggest export.
  • Sime Darby Plantation refinanced about RM3.9 billion involving credit facilities by replacing some of the existing facilities with better pricing and converting some of the group’s working capital facilities to term loans. Its gearing ratio however doesn’t increase with its borrowing stood at RM8 billion as of 3Q19. SDP managing director said the refinancing exercise improved their debt maturities and Sime Darby’s ability to manage operations and finance more flexibly.
  • Lotte Chemical (LCTITAN) announces 4Q19 net profit of RM188 million, a 1500% surge compared to RM7.22 million last year, mainly amounted to one-off gain and a lower write down of inventories. LCTITAN’s margin has been dropping since 4Q18 along with its share price, falling to RM2.23 as of 31st Jan, compared to RM5 as of 2018. Bad management practice IMO.
  • Producer Price Index (PPI) for local production up 3.5% in December 2019 driven by an increase in almost all indices except water supply. PPI is a price index that measures the average changes in prices received by domestic producer for their output, according to Wikipedia. When PPI is high, inflation tends to be higher.
  • Integrated telecommunications infrastructure services company edotco Group has recently debuted its first 5G private network at Langkawi Airport. It has installed the 3.5GHz C-band spectrum that can provide coverage inside the airport.
  • Eighth Wuhan virus case confirmed in Johor Baru but the patient’s condition is currently stable. 14 Chinese nationals from Wuhan that arrived in KLIA on Tuesday were sent back as Malaysia took measure to curb the further spread of Wuhan virus into Malaysia, given its contagiousness.
  • Japan to agree on Mahathir’s request for joint oil spill response in the South China Sea. A five-day workshop that is held in Port Klang last week deployed the Japan Coast Guard patrol vessel and airplane in Malaysia waters for the first time.

Globally
  • Wuhan virus confirmed cases rose to 7,814, and death tolls rose to 170. Mortality rate is declining since the emergence of the virus to 2.18% now.
  • Bank of England remain interest rates at 0.75%. Officials cut GDP forecast to the lowest level since 2008 financial crisis. Should domestic activity growth and inflation doesn’t meet the target, investors expect the rate to be cut late this year.


  • Facebook announced 4Q result with its revenue climbed 25%, the slowest ever although it topped analyst’s estimates. Although US and Canada account for only 10% of Facebook’s global monthly active users and 40% from Asia-Pacific, 50% of Facebook’s 4Q revenue were generated from North America.
  • Samsung profit dipped 38% due to falling memory chip prices, a warning sign for the global technology industry as it navigates trade tensions and the coronavirus outbreak. The fall came as a surprise as Samsung reports detail earning that includes preliminary numbers few weeks before final results. Samsung vice president said there are too many geopolitical uncertainties that might impact the company negatively in the near future.

Disclaimer: This is simply to note down the major incidents that I should take note in TheEdge NewsPaper. I cover as much local news as possible and do not include global news that do not interest me. Please subscribe and read the original TheEdge for more information.

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