Highlights from TheEdge 21stJan

on

Malaysia
  • Allegation of Malaysia’s refined palm oil cargoes were being held up at India’s report were denied by India’s palm oil trade body. New Delhi is also unhappy with Zakir Naik for money laundering and hate speech in India. Mahathir said we are too small to retaliate and should find ways to overcome the trade curb. CPO price continue to soar to RM2,962/tonne and Kenaga target KLK and Genting Plantation to benefit from the CPO price soar. I am not sure why CPO will soar given expected lower consumption from China as China purchase more commodities from China, alongside with India’s ban. Feel free to comment below to discuss!
  • Fund managers and equity strategists are optimistic for Malaysia’s 2020 corporate earning growth as tensions like trade war and Brexit subsides. Plantation and construction sector were expected to recover in 2020 as CPO prices soar with restart of mega projects. Electronic manufacturing companies are also expected to turn better as trade war subside. Exports were down 12% in 2019. KLCI earning has fallen to as low as 87 cents (normally analyst take EPS multiply by a value of 18-20 so 18X87 = 1560). Doesn’t really matter as long as you are not buying index fund. Its just an indication of how the big cap performed, read more from my post How did KLCI Performed 2019?
  • Mavcom fined RM2 million each for both AirAsia and AirAsiaX as they failed a second time to comply to Mavcom’s Air Quality of Services Framework. Last year AirAsia were fined due to lack of transparency in billing with credit card charge fee separate from base airplane fares. 
  • After PLUS, Khazanah is expected to answer next for collaboration between Malaysia Airlines (MAS) and AirAsia. Khazanah spokesman said best solution has still yet to be found. Personally, collaboration between these two airlines is not viable as both of them operates with a different business model (Low-cost airlines for AirAsia, Full Services Airlines for MAS). When two airlines consolidate, they combine their market share and achieve economies of scale to reduce cost. So it might be difficult for both of them to reach a common agreement.
  • British Tobacco (BAT)’s prospect continues to darken as share price close down at RM12.70, from a peak of RM71.14 @2014. Net profit of BAT fell 25% for its 3Q19, driven by lower volume and absence of one-off factor last year. With more and more youngster preferring RELX (Mini-vape) going up, tobacco’s revenue growth is expected to fall short. 
  • Proton launching 2020 X70 model soon, and plan to increase export from 1070 units to 4000 units. Last year Proton sales was up 55%, and holds 16.7% of the domestic market share, finishing the second in overall sales. Good news for its parent DRBHICOM but POSMALAYSIA is a pain in the ass for DRBHICOM.
  • MultiSports to be delisted on Jan31 unless appeal is submitted.
  • China-Malaysia’s bilateral trade rose 14%, with China continue to be Malaysia’s biggest trading partner. InvestKL targets RM5billion investment in sector such as ICT, Ai, medical devices and consumer technology. 
  • Foreign Direct Investment up RM320 million last week (largest since 32 weeks), but KLCI continue to drop last week. Maybe the money went to mid to small cap company?
  • CIMB joins Petronas as the ninth panel bank for its vendor financing program (VFP). VFP is set to provide financing solutions to SME in oil and gas segment. 
  • BNM policy review on its interest rate will be today and tomorrow (21st and 22nd Jan). Most analyst expects BNM to remain 3% OPR rate, as global uncertainties subside. Government also announced GDP growth projection of 4.8% compared to 4.7% last year, signaling its confidence in achieving future growth. However, if domestic sentiments continue to sour, BNM might need to stimulate the economy again.
  • DUFU proposes 1 to 1 bonus issue, as its share price reach a record high of RM4. Normally bonus issue allows more participation from investors as investors often look at ‘WAH RM4, RM2 seems cheaper’ but forgets that P/E stays the same after bonus issue.
  • Kerjaya awarded RM332 million contract, making its year-to-date contract RM950 million. 
Globally 
  • International Monetary Fund (IMF) cut its 2020 global growth projection due to slowdowns in India (GDP growth of 1.1%) and other emerging markets but tide could turn for manufacturing and commodity industry as US-China proceed for tariff rollback. 
  • Hongkong’s Moody rating down to ‘Aa3’ to ‘Aa2’, moving the protesting country’s outlook from stable to negative. Malaysia’s current Moody’s is at ‘A3’, which is like 3 ratings (Aa3-> A1->A2->A3) lower than HongKong, still long way to go huh?
  • Nisha Gopalan said Asia’s equity has been performing bad with payout getting worse, and unlikely to get better. However, he stated that institutional investors are more exposed to the risk than individual investors as institutional investors are more illiquid and take more years to pay off. Retail investors like us can still consider Asia but should grow increasingly aware of the deteriorating returns in Asia.
  • Tencent to increase oversea investments in industry specifically at ‘smart retail’ like Pinduoduo, Meituan TianPing, Gaming company Riot Games and SuperCell.
  • Rupiah might become Asia’s strongest currency in 2020, with the Indonesian currency rallied up seven weeks consecutively. Local bonds offer yield between 5% to 8%. Thai Baht was Asia’s best performing currency last year.


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

Comments

Post a Comment