Global: OPEC sees oil drop as short-term, expects stronger demand. A drop in oil prices this month is likely to be short-term and will not deflect OPEC from its policy of keeping output high to defend market share, delegates from Gulf OPEC members and other nations said. Falling Chinese stock markets and the Greek debt crisis have raised concern about demand, while the Iranian nuclear deal could lead to higher oil exports from the Islamic Republic. Benchmark Brent crude, trading below USD57 a barrel on Wednesday, has fallen more than 10% in July. (Reuters)
US: Home sales approach eight-and-a-half-year high, prices surge. US home resales rose in June to their highest level in nearly 8-1/2 years, a sign of pent-up demand that should buoy the housing market recovery and likely keep the Federal Reserve on track to raise interest rates later this year. The National Association of Realtors said existing home sales increased 3.2% to an annual rate of 5.49m units, the highest level since Feb 2007. (Reuters)
US: World crises dismissed as Fed Sept. liftoff odds stay at 50%. Six weeks of international turmoil from Greece to China have had zero impact on economists’ outlook for the first Federal Reserve rate rise. (Bloomberg)
EU: ECB increases emergency funding by EUR900m. The cap on Emergency Liquidity Assistance (ELA) to Greek banks has been increased by EUR900m (USD981.4m) by the ECB, people familiar with the matter said. The increase, decided by the ECB's policy-setting Governing Council, takes the level of emergency central-bank funding to almost EUR91bn. (Reuters)
EU: Greek bailout talks to last until second half Aug. European Economic and Monetary Affairs Commissioner Pierre Moscovici said creditor institutions were seeking to conclude talks with Greece on a third bailout in the second half of August. Detailed negotiations are due to open in Athens with experts from the European Commission, the ECB and the IMF on Friday. (Reuters)
EU: Greek PM promises will not allow foreclosure of primary homes. Greek Prime Minister Alexis Tsipras on Thursday pledged his government would never allow banks to seize the primary residences of Greeks as parliament prepared to vote on a bill that toughens rules on foreclosures. (Reuters)
EU: Swiss economy seen rebounding after franc-induced setback. Switzerland’s economy will probably eke out meager growth in the 3Q, ending a recession induced by the central bank’s decision to allow the franc to float freely again and lessening the likelihood of further policy easing. (Bloomberg)
Japan: Government says won't meet 2020 fiscal discipline targets. Japan's government said it will not achieve its target of returning to a primary budget surplus in fiscal 2020, suggesting further steps will be needed to boost revenue and lower spending. The target is considered an important checkpoint for Japan as it seeks to reduce a debt/GDP ratio that is the worst in the industrialized world, with public debt standing at around twice the size of its economy. (Reuters)
Markets
DiGi (Outperform, TP: RM6.00): To expand 4G coverage in Sarawak. Digi Telecommunications SB will expand its high-speed broadband 4G coverage to Samarahan and Sibu by year-end, said its head of Sarawak region, Benny Wee. Currently, the coverage was in Kuching City, Bintulu and Miri City. "We are confident that with the expanding of the 4G coverage in the state, our subscriber base will continue to grow," he commented. (Bernama)
AirAsia (Outperform, TP: RM2.53): Says re-starting Japan flights early next year. AirAsia said it will start domestic and international flights from Japan early next year, after a high-profile exit from the market following the collapse of its joint venture with All Nippon Airways (ANA). The company said it has applied to Japan’s transport ministry to operate commercial flights, becoming the latest budget carrier aiming to crack a market long-controlled by ANA and rival Japan Airlines. (AFP)
Fitters: Acquires 40% stake in AHT Syngas. Fitters Diversified has acquired a 40% stake in A.H.T Syngas Technologies N.V. (AHT Syngas), a Germany-based renewable energy systems supplier to move up the value chain in its renewable energy business for RM6.6m. Fitters Diversified MD Datuk Richard Wong said the acquisition would allow the company to expand into Asia, including China and the South-East Asia region. (StarBiz)
Comintel: Gets SEDA nod to extend feed-in-tariff date to Dec 31. Comintel Corporation’s request Sustainable Energy Development Authority Malaysia (SEDA) for an extension in the feed-in-tariff commencement date has been approved. Comintel said SEDA had allowed its unit Comintel Green Technologies SB’s request to start the feed-in-tariff on Dec 31 instead of May 31. (StarBiz)
Taliworks: Proposes 2-into-5 share split. Taliworks Corp has proposed a share split whereby every two of its existing ordinary 50 sen shares will be subdivided into five 20 sen shares. Taliworks is also proposing to issue up to 241.9m free warrants on a one-for-five basis after the proposed share split. It said that the higher volume of shares would enhance the marketability and trading liquidity of its shares while the lower price per share would make them more affordable and appealing to a wider group of public shareholders and/or investors. (StarBiz)
Golden Land: Plans cash distribution of 88 sen per share. Golden Land (GLB) plans to undertake a cash distribution of 88 sen per ordinary share, subject to the completion of the RM655.0m proposed disposal of its subsidiaries and land in Beluran, Sabah, to Felda Global Ventures Holdings’ (FGV) unit. (StarBiz)
MRCB-Quill REIT: 2Q net profit soars on Platinum Sentral contribution. MRCB-Quill Real Estate Investment Trust (REIT) (formerly Quill Capita Trust) (MQReit) recorded a net profit of RM13.6m for 2Q FYE30 June, 2015, a 59.2% jump from a year earlier due to recognition of the full-quarter income contribution from Platinum Sentral. This was achieved on an 85.4% growth in revenue to RM32.2m, attributed mainly to additional revenue arising from the RM740.0m acquisition of Platinum Sentral in Kuala Lumpur on March 30, higher revenue from Plaza Mont’Kiara as well as rental rate increases for some properties. (StarBiz)
MARKET UPDATE
The FBM KLCI might share the negative tone on Wall Street overnight which was dragged by a selloff in technology stocks following disappointing results from Apple, IBM and Microsoft as well as continued weakness in oil prices. At the closing bell, Apple shares dropped more than 4% in response to a poorly-received set of results released after the close on Tuesday, helping to pull the S&P 500 equity index down by 0.2% to 2,114.15 and the Nasdaq Composite by 0.7% to 5,171.77. The Dow Jones Industrial Average dropped 68.25 points, or 0.4%, to 17,851.04 with more than half of the Dow’s drop coming from Apple’s losses. Meanwhile, home-builder stocks rallied after the pace of existing home sales hit the fastest rate since 2007. Across the Atlantic, European stocks also fell as investors turned their attention away from Greece toward corporate earnings. Performance-wise, Germany’s DAX lost 1.1% to 11,604.80, France’s CAC 40 eased by 0.7% to 5,106.57 and the U.K.’s FTSE 100 shed 0.3% at 6,769.07. On a positive note, Goldman Sachs raised its threemonth view on European equities to overweight, citing reduced risks from Greece’s debt crisis as a key factor in the decision.
Back home, the FBM KLCI lost 6.66 points or 0.4% to end at 1,729.53 with 1.66bn shares changed hands valued at RM1.68bn. The regional markers also closed mostly lower, retreated after several consecutive sessions of gains. On the major indices, Japan’s Nikkei Stock Average lost 1.2% at 20,593.67 and Australia’s S&P ASX 200 declined by 1.6% to 5,614.6 and Hong Kong’s Hang Seng Index finished down 1% at 25,282.62. Elsewhere, the Shanghai Composite Index recovered from the early losses and closed 0.2% higher at 4,026.04, its fifth consecutive session of gains. On corporate news, Golden Land plans RM190.3m (or 88 sen per share) cash distribution to reward its shareholders via a share capital reduction and repayment and the proposed distribution of a special dividend of 13 sen per share, subject to the completion of a RM655m disposal of plantation land to Felda Global Ventures Holdings.
Source: PublicInvest Research - 23 Jul 2015
