Domestic News
1. Maxwell gets six-month extension to uplift PN17 status
Financially distressed Maxwell International Holdings Bhd has received the nod from the stock exchange regulator to extend the time to submit its regularisation plan by six months until Jan 31, 2018.
However, the Practice Note 17 (PN17) group added that the extension of the time comes with the condition that it must, via its principal adviser M&A Securities Sdn Bhd, make the requisite announcement by Nov 30.
According to the China-based group’s 2016 annual report, the requisite announcement will contain the details of the regularisation and sufficient information to demonstrate that the group is able to comply with all the requirements set to uplift the PN17 status.
The requisite announcement, added Maxwell, will also include a timetable for the complete implementation of the regularisation plan.
“The aforesaid extension of time is without prejudice to Bursa Malaysia’s right to proceed to suspend the trading of the securities of Maxwell,” it added in a regulatory filing with the local bourse.
Maxwell had slipped into PN17 status on Aug 2, 2016 after its external auditors expressed a disclaimer opinion in its audited financial statements for the financial year ended Dec 31, 2015.
Maxwell, a shoes, apparels and garments manufacturer, is among 12 China-based companies listed on Bursa Malaysia, the majority of which are operating at a loss.
Listed on the Main Market since January 2011, Maxwell shares plunged 0.5 sen or 25% to 1.5 sen, giving the group a market capitalisation of RM6 million.
2. Nova MSC bags RM15m software job from S’pore authority
Loss-making Nova MSC Bhd has bagged a software upgrade and maintenance job from Singapore’s Urban Redevelopment Authority (URA), which is worth US$4.72 million (RM14.8 million).
This is the first job that Nova MSC has managed to clinch this year.
According to Nova MSC, the job requires it to maintain the Singapore authority’s Development Application Exchange Systems for three years, starting from today until Jan 10, 2020.
The job, Nova MSC added, could be mutually extended and followed by a one-year warranty period and two years of maintenance services to be renewed annually.
“The contract is expected to contribute positively to the result of the group for the financial year ending March 31, 2018,” said Nova MSC, a software solution specialist to manage government transactions and healthcare management, in a filing with Bursa Malaysia today.
Nova is chaired by Tunku Datuk Seri Nadzaruddin Tuanku Ja’afar, a mathematician and also the member of the Negeri Sembilan royal family.
A patron for Malaysia Futures Brokers Association, Nadzaruddin, via Raden Corporation Sdn Bhd and various other proxies, has a collective 18.12% stake in Nova MSC, according to the firm’s latest annual report.
Listed on the ACE Market, shares of Nova MSC closed unchanged at 7.5 sen today, giving it a market capitalisation of RM51.24 million.
3. Salutica net profit down 68% on deferment of new product launch
Electronic manufacturer Salutica Bhd posted a 68.4% drop in its net profit to RM2.37 million for the fourth financial quarter ended June 30, 2016 (4QFY17) from RM7.51 million a year earlier.
In a filing with Bursa Malaysia, Salutica attributed the drop in profit to the deferment of new product launch which affected the absorption efficiencies of fixed and variable overheads.
Quarterly revenue fell 28.2% to RM51.7 million compared with RM72.04 million previously.
For the full year ended June 30, 2017 (FY17), Salutica’s net profit decreased 20.4% to RM19.35 million against RM24.33 million due to the cost incurred for development of several new products.
However, revenue came in 2.18% higher at RM247.09 million versus RM241.83 million a year ago contributed by the increased sales of Bluetooth headsets.
Salutica said revenue from sale of Bluetooth headsets contributed RM236.6 million or 95.8% to total revenue, followed by non-Bluetooth products and in-house brand FOBO of approximately RM10.5 million or 4.2% of total revenue for FY17.
Moving forward, Salutica will continue to focus its research and development capabilities on small form factors and high precision manufacturing processes.
It also expects the sales of its in-house brand FOBO to grow by increasing the marketing and sales activities through expansion of sales distribution channels and promotional activities.
“The board is of the opinion that the group’s prospects will remain favourable,” it said.
Salutica share closed three sen or 2.07% lower at RM1.42 with 1.13 million shares traded, for a market capitalisation of RM550.96 million.
International News
1. European stocks break three-day losing streak
European stocks broke a three-day losing streak on Tuesday, building on gains in other markets and boosted by rising commodity prices.
US stocks also looked set to open higher, with Wall Street futures up 0.2%. Gains by mining companies boosted European shares after strong commodities prices steadied Asian markets earlier.
London copper rose to a three-year high, zinc held close to its highest in a decade and nickel, which is used in stainless steel, reached a high for the year.
BHP Billiton, the world’s largest mining company, reported a surge in underlying full-year profits and said it would exit its underperforming US shale oil and gas business, pleasing shareholders who had called for a sale.
Mining companies were winding down debt and moving into a period of more sustainable profitability, Jasper Lawler, senior market analyst at London Capital Group. “We’re in a period of divergence between oil and metals,” he said.
The surge in mining shares pushed the broad index of European stocks up 0.4% on the day.
Meanwhile, the euro fell against the US dollar on Tuesday, giving back most of its overnight gains as gains by the US dollar prompted investors to square positions before a central bank conference this week.
Strong gains for the euro this year led investors to worry that European Central Bank chief Mario Draghi would not be able to ignore the issue as he prepared to speak at Thursday’s conference of central bankers in Jackson Hole, Wyoming.
“Even if Draghi does not even want to suggest a verbal intervention against euro strength, he cannot come across as completely carefree regarding the euro either,” Commerzbank analyst Esther Reichelt said.
A stronger euro cuts the price of imports, curtailing euro zone inflation. That makes it harder for the ECB to withdraw stimulus measures put in place after the debt crises of 2010-2012. The ECB’s key target is to boost inflation to just under 2%.
“I therefore consider levels beyond (this month’s) high of US$1.1910 to be extremely risky ahead of Jackson Hole,” she said.
Two sources have said Draghi will not deliver any new policy message at Jackson Hole.
The euro may have also been affected by proposals to introduce a parallel currency in Italy that have upped the ante for elections due next year.
The dollar index, which tracks the US currency against a basket of six major currencies, was up 0.3% to 93.218
Tepid US inflation data have made it less likely the Federal Reserve will raise US interest rates anytime soon, weakening the US dollar. So have doubts that US President Donald Trump can implement the stimulus programmes and tax reforms he had promised.
Elsewhere, crude oil prices rose, lifted by indications that supply is gradually tightening, especially in the United States. Brent crude futures LCOc1 added 34 cents to US$52 per barrel.
2. US admiral says remains found inside damaged destroyer
US Pacific Fleet Commander Admiral Scott Swift on Tuesday said divers have found human remains inside the USS John S. McCain, which collided with a merchant vessel this week.
“The divers were able to locate some remains in those sealed compartments during their search today,” Swift told reporters at Singapore’s Changi Naval Base, where the damaged vessel is docked.
Swift also said the US Navy was working to identify a body found by the Malaysian navy to see if it was one of 10 missing US sailors in the accident.
The USS John S. McCain and the tanker Alnic MC collided on Monday while the US ship was nearing Singapore on a routine port call. The impact tore a hole in the warship’s port side at the waterline, flooding compartments that included a crew sleeping area.
3. Cambodia PM orders English-language newspaper to pay taxes or close
Cambodian Prime Minister Hun Sen denounced the media, non-governmental organizations (NGOs) and the United States on Tuesday, amid growing government impatience with criticism ahead of a general election next year.
Hun Sen has ruled Cambodia for more than three decades and has shown no signs of any willingness to relinquish power.
His Cambodian People’s Party won local elections in June, although the opposition Cambodia National Rescue Party fared reasonably well, increasing expectations of a close contest in the general election.
Hun Sen directed much of his anger at the English-language Cambodia Daily newspaper, saying it had to pay taxes accrued over the past 10 years by Sept. 4 or face closure.
“Pay taxes to the state if you want to exist. If you don’t pay taxes, pack your bag and leave,” Hun Sen said in a speech at a ceremony in Phnom Penh.
He called the daily “thief chief”.
The Cambodia Daily was founded by an American journalist in 1993 and has come in for criticism from the government at times over the over years for coverage of issues such as corruption, human rights and the environment.
The paper’s general manager, Douglas Steele, issued a statement in which he did not refer to the demand for tax but expressed his hope to “fast forward through the current political theatrics”.
“If the prime minister is using this as a pretext for a political decision to close down the free press before next year’s elections, is it shocking that a politician would do politics?” Steele asked.
Fresh News, a pro-government news outlet, leaked a letter on Aug. 4 from the finance ministry ordering the newspaper to pay US$6.3 million in back taxes, penalties and interest within a month or face the seizure of its assets and closure.
Hun Sen also attacked the United States and NGOs.
“The Americans invaded Iraq and Iraqis died, why hasn’t the US been punished?” he said. “The Americans brought trouble to Libya, Syria, Yemen, why aren’t the Americans punished?”
Arend C. Zwartjes, public affairs officer at US Embassy in Cambodia, declined to comment.
Hun Sen also criticized NGOs and the European Union for funding a consortium of election monitoring groups that criticized some aspects of the June local elections.
Hun Sen’s opponents accuse him of using various measures including legal action and intimidation to silence critics and undermine the opposition ahead of the general election.
Source: The Star & TheEdgeMarkets