Domestic News
1. Freight Mgmt gets licence to provide courier service
Freight Management Holdings Bhd said it has obtained a licence from the Ministry of Communications and Multimedia Malaysia to operate a courier service to serve both the domestic and international markets.
In a filing with Bursa Malaysia, Freight Management said the licence — a Class A Non-Universal Service Licence — was awarded to its wholly-owned subsidiary, Parcel To Post Services Sdn Bhd (PTSP), and is valid for the next three years until July 31, 2020.
With the licence, Freight Management is joining another 128 firms in the country that are licensed to provide courier service, according to the latest statistics found on Malaysian Communications and Multimedia Commission’s website, an entity that regulates the postal services industry.
Freight Management previously said PTSP, which was incorporated on March 29 and is offering multimodal freight services that include sea, land, air, tug and barge, and rail, would carry out last mile delivery services.
Separately, Freight Management announced a second-interim dividend of 3.5 sen in respect of its FY17 — payable on Nov 14 — following the release of its quarterly results for its fourth quarter ended June 30, 2017 (4QFY17).
Freight Management said net profit for the quarter came in 5% higher at RM5.82 million from RM5.52 million a year ago, boosted by an 18% rise in revenue to RM124.16 million from RM105.14 million previously.
The higher quarterly earnings, the logistic firm said, was due to improved results across its business division — except for landfreight and the tug and barge divisions, with the latter sinking deeper into the red.
For its full FY17, net profit was up 6% to RM21.03 million from RM19.87 million a year ago, as revenue grew 11% to RM461.29 million from RM413.77 million.
On prospects, Freight Management said it will continue to strengthen its customer base, while improving its operational and cost efficiencies. It expects FY18’s performance to “remain positive”.
Listed since February 2005, shares in Freight Management closed unchanged at RM1.24 today, giving it a market capitalisation of RM230.82 million.
2. Prestar Resources 2Q net profit triples on land disposal gain, declares 2 sen dividend
Prestar Resources Bhd’s net profit more than tripled in its second quarter ended June 30, 2017 (2QFY17) to RM18.04 million from the RM5.17 million seen in the same period last year due to recognition from a land and factory disposal.
In a filing with the stock exchange today, the steel-processing player said its 2QFY17 revenue grew by 10.3% to RM168.83 million from RM153.04 million.
Net profit for its cumulative six-month period also grew by more than three times to RM27.33 million versus RM8.32 million mainly due to strong demand and higher sales margins.
Meanwhile cumulative revenue grew 15.6% to RM344.55 million from RM298.01 million last year.
On prospects, the group said it will continue to adopt a “cautious and pragmatic” approach amid an expected slowdown in demand towards the end of the current quarter.
In a separate bourse filing, it announced a single-tier interim dividend of 2 sen per share for its financial year ending Dec 31, 2017, with a payment date to be announced later.
3. Dayang’s 2Q net loss widens to RM48.1m on impairment, forex losses
Dayang Enterprise Holdings Bhd’s net loss widened to RM48.1 million in the second quarter ended June 30, 2017 (2QFY17) from RM1.95 million a year earlier due to lower charter rates, impairment losses and foreign exchange losses.
Its bourse filing showed that quarterly revenue dropped 1.3% to RM191.02 million from RM193.58 million.
“The slight decrease in revenue and the higher loss before tax incurred in the current quarter is mainly due to lower charter rates. In addition, the loss before tax in the current quarter has taken into account of impairment loss on property, plant and equipment of RM50.4 million and net realised/unrealised foreign exchange loss of RM16.5 million,” Dayang said.
As for the cumulative six months of FY17 (1HFY17), Dayang sank deeper in the red with a net loss of RM90.8 million, versus the RM28.34 million recorded in 1HFY16, although revenue improved by 1.2% to RM308.93 million from RM305.41 million, attributed to higher value of work order received and performed in the period under review.
“Despite that, the group registered a higher loss before tax for the financial period ended June 30, 2017 mainly due to an impairment loss on property, plant and equipment of RM50.4 million and net realised/unrealised foreign exchange loss of RM24.5 million as compared to a net realised/unrealised foreign exchange loss of RM10.1 million in the corresponding period-to-date,” the group explained.
Moving forward, Dayang said business activities in the topside structural maintenance (TSM), hook-up and commissioning (HUC), engineering procurement construction and commissioning (EPCC) and offshore support vessels (OSV) services improved in 2QFY17 with the gradual increase in work orders from oil companies.
The utilisation rate for the fleet of vessels improved from 24% in 1QFY17 to 62% in the 2QFY17, bringing the average fleet utilisation to 44%.
“However, the increased activities and the profits generated from the maintenance contracts and the higher vessel utilisation in the second quarter was negated somewhat by the reduction in the charter rates of a few vessels and the group continues to be dragged by impairment and unrealised translation loss in foreign exchange in Perdana Petroleum Bhd,” it said.
“Nevertheless, the group and its board of directors are committed to navigate through these stormy waters and to ensure the group’s continued sustainability and to ride through this prolonged down cycle in the oil and gas market. The group is cautiously confident of turning around its loss making OSV subsidiaries with the impending relisting of PPB (Perdana Petroleum), scheduled before the end of September 2017,” it added.
Further, Dayang said it will continue to leverage on its balance order book of RM2.3 billion, especially within the core competencies of TSM/HUC/EPCC contracts and OSV charters for the rest of this year till 2019.
“The TSM, HUC and EPCC should see more renewed activities over the next few years by oil majors and the group should likely benefit from this. The group is currently awaiting the results of some tenders for jobs amounting to RM4 billion,” said the group.
“Any successful win in this should see a replenishment of order book for a further five years. Though we cannot predict the outcome of these tenders, the group has always demonstrated operational track record and has a clear market leadership in the Brownfield services segment,” it added.
Amid all the challenges and a difficult oil and gas industry, Dayang said it remains vigilant and will continue to exercise due care and prudence in the running and administration of the company’s business.
Dayang closed up 1.1% or 1 sen at 88.5 sen, valuing it at RM853.86 million.
International News
1. Euro perched near day’s highs on PMI data
The euro held near the day’s highs on Wednesday, propped up by strong readings on German and French PMI surveys though analysts warned the single currency’s gains could be short-lived due to concerns about heavy one-sided bets.
“In terms of the euro positioning, we are at extremely stretched levels both against the US dollar and the pound,” said Richard Falkenhall, senior FX strategist at SEB, adding there was little likelihood of Draghi signalling any policy change at Jackson Hole.
The euro hopped 0.23% higher to the day’s highs at US$1.1788 against the dollar and climbed to a fresh 10½-month peak against the British pound, near 92 pence.
Investors are awaiting speeches from Fed Chair Janet Yellen and Draghi at Jackson Hole on Friday, though neither is expected to announce new policy messages. In a speech in Germany on Wednesday, Draghi steered clear of market-sensitive comments.
PMI data from Germany and France propped up the single currency, with both countries registering strong private sector growth in August, separate surveys showed. That served to lift confidence that the euro zone’s biggest economies are likely to maintain their robust momentum in the September quarter.
Latest positions according to CFTC data indicate that long euro bets are at their biggest levels in nearly seven years and the euro’s strength has lured some of the world’s biggest bond investors back into euro zone debt.
The dollar struggled against its rivals with a broad trade-weighted index falling to 0.2% on the day to 93.35, with very little in terms of top tier economic data to change the dollar outlook until Yellen’s speech.
Political noise also weighed on the greenback’s outlook though some market strategists said the dollar may be ripe for a bounce.
At a rally with his supporters in Phoenix, US President Donald Trump reaffirmed his vow to build a wall on the US-Mexican border. “If we have to close down the government, we are building that wall,” he said.
“This year’s heavy unwind in long dollar positions suggests that currently the dollar should be more susceptible to good news than to bad,” Rabobank strategists said in a note.
2. Gold inches up as focus shifts to central bankers’ meeting
Gold prices edged up on Wednesday, with investors turning to the precious metal amid political uncertainty in the United States before a major central banking conference this week.
Spot gold was up 0.3% to US$1,287.51 an ounce at 1107 GMT, after shedding 0.5% in the previous session. US gold futures inched up 0.1% to US$1,292.80 per ounce.
“Gold’s kind of hanging in there before this Jackson Hole meeting. It is in a wait-and-see mode but we should have a better idea of direction by the end of this week,” said Fawad Razaqzada, a technical analyst at FOREX.com.
“There can be an argument made for a bearish view on gold at this stage. If the dollar were to come back due to short covering and given the rally in US stocks we saw yesterday, the buck-denominated and safe haven metal could fall out of favour,” he said.
Markets are turning their focus to a meeting of central bankers in Jackson Hole, Wyoming, later in the week where Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on the outlook for monetary policy and interest rates.
Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
“Most of the people are now looking for hints from the Jackson Hole meeting between the central bankers,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“The most important thing is economic fundamentals … Central banks are going to have tightening measures in monetary policies to have normalisation. So I don’t have much higher upward momentum for prices,” To said.
The dollar inched lower after US President Donald Trump raised the prospect of a government shutdown as he tries to force through his plans to build the wall along the border with Mexico.
Gold usually fairs well in times of geopolitical uncertainty, while stocks and the dollar generally retreat.
Draghi is also due to give a speech in Germany later in the day.
Adding to political jitters that support gold, the United States on Tuesday imposed new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang’s weapons programmes.
“On the other hand what has been supporting gold for the last six months or so is the risk aversion,” Wing Fung’s To said, referring to uncertainty around the Trump administration in particular.
Among other precious metals, silver rose 0.4% to US$17 an ounce, while platinum was flat at US$975.25.
Palladium lost 0.2% to US$934 after touching an over 16-year high at US$940 on Tuesday.
3. CapitaLand inks strategic alliance with Alibaba and Lazada
CapitaLand announced today an agreement with Alibaba to manage its new Shanghai headquarters. Alibaba Shanghai Centre consists of four office towers and a retail podium.
Separately, CapitaLand signed an agreement with Lazada Singapore to launch an exclusive online mall. The shop-in-shop agreement with Lazada will position CapitaLand as the first omni-channel retail landlord that connects retailers with both online and offline shoppers.
“Real estate remains an important part of a holistic customer journey, as affirmed by leading digital players who are seeking to gain a foothold in the physical space”, says Lim Ming Yan, President & Group CEO of CapitaLand Ltd.
“The key to unlocking the next stage of growth lies in blending physical and digital channels to create a seamless (offline and online) experience that is sought after by consumers”, says Lim. The forging of alliances with online retailers is part of CapitaLand’s strategy to combine offline and online business models to achieve long-term success.
Source: The Star & TheEdgeMarkets