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| | | SECTOR RESEARCH | | | | | | KL price outlook conference | NEUTRAL
by Chee Ting Ong |
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| | | | | | It is imperative that Brent crude oil price stays in the range of USD60-70/bbl in order for CPO price to trade within the range of MYR2,200-2,700/t in 2018, as the former provides a safety net for CPO. Weather risks and reversal of India's import duty hike would provide upside surprises. We maintain our NEUTRAL call on the sector with selected BUYs on IOI, FR, GENP, SOP, and BAL. | |
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| | MACRO RESEARCH | | | | | | OPR unchanged after Jan hike
by Suhaimi Ilias |
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| | | | | | After raising the Overnight Policy Rate (OPR) by +25bps to 3.25% at its Monetary Policy Committee (MPC) meeting on 25 Jan 2018, BNM kept the OPR unchanged yesterday. The decision is to ensure continued steady growth path amid prospect of lower inflation this year. No change in our view of "One and Done" on OPR this year, unless there are upside surprises to real GDP growth and inflation rate against our current forecasts of slight moderation this year. | |
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| | | | | | Reserves stable at USD103.7b
by Suhaimi Ilias |
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| | | | | | Total gross external reserve at end-Feb 2018 was USD103.7b, unchanged from end-Jan 2018 despite the net foreign selling in both equities and bonds amid the global market correction and volatility, thanks to the sustained trade-related inflows. | |
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| | | | | | KLPRO Index: Testing Critical Support
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell 10.47pts to 1,837.90 yesterday amid regional sell-off. Decliners were led by PMAH, AMM and RHBBANK. Market breadth turned bearish with losers outpacing gainers by 991 to 163. A total of 3.10b shares worth MYR3.17b changed hands. Stock market is expected to remain choppy today though worries over a trade war have dissipated. Sentiment should improve after BNM kept overnight policy rate unchanged at 3.25%. | |
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| NEWS | | | Outside Malaysia:
U.S: White House defends tariffs that some nations may still escape. President Donald Trump's economic advisers defended U.S. plans to impose steel tariffs while leaving the door open for exempting some countries and downplaying the fallout of a possible trade war. "We are the freest trader in the world, hands down," White House trade adviser Peter Navarro told Bloomberg TV. "All we get for that is a half a trillion dollar a year trade deficit that offshores our wealth, offshores our jobs." America's trading partners are "getting the better part of the deal," and have no incentive to get into "any conflict." The U.S. may exempt countries from the duties based on national security considerations, White House Press Secretary Sarah Sanders said. She didn't elaborate on how those determinations would be made and didn't answer when asked which countries would qualify. (Source: Bloomberg)
U.S: Trade gap widens to post-recession high amid tariff threat. The U.S. trade deficit widened more than forecast in January to a post-recession high, adding to figures cited by President Donald Trump as evidence of American weakness while he brings the nation to the brink of a trade war. The gap increased 5% to USD56.6b, the biggest since October 2008, from a revised USD53.9b in the prior month. Exports fell 1.3% from December, the most in more than a year, while imports were little changed. (Source: Bloomberg)
U.S: Consumer credit grew in January by least in four months on a sharp slowdown in use of revolving products such as credit cards, Federal Reserve data showed. Total credit rose $13.9b and follows a revised USD19.2b Dec. gain. Revolving credit outstanding rose USD701m, least since Feb. 2015, after a USD6.1b gain in Dec 2017. (Source: Bloomberg)
E.U: Faster exports and a rebound in investment in 4Q 2017 propelled the euro-area economy to its strongest annual growth in a decade. Trade contributed 0.4 percentage point to GDP in the final three months of 2017, while capital spending gave a boost of 0.2 point, the European Union's statistics office said. The 19-nation economy expanded 0.6% from the third quarter, matching an earlier estimate. (Source: Bloomberg)
China: FX reserves end yearlong rising streak on valuations. China's foreign currency holdings decreased for the first time in more than a year, as rising U.S. Treasury yields weighed on valuations. Reserves fell USD27b to USD3.13t in February, the People's Bank of China said. (Source: Bloomberg) | |
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Construction: MyHSR Corp calls for tender to appoint final survey consultants for KL-Singapore HSR. MyHSR Corp S/B will call for a tender to appoint the final survey consultants (FSC) for the Kuala Lumpur-Singapore High Speed Rail (KL-SG HSR) project this Friday. The FSC tender will be divided into six packages, with three packages reserved for bumiputra firms. The main scopes of the FSC are to conduct land survey and provide land administration support for the land acquisition process for the KL-SG HSR project within Malaysia. Upon approval of the railway scheme for the project, the identified land will be acquired by the government in accordance to Section 8 of Land Acquisition Act 1960 (Act 486). The land acquisition application is expected to commence in June 2018 with the first land to be acquired for the main infrastructures such as stations, maintenance facilities and tunnel portals. (Source: The Sun Daily)
Hibiscus Petroleum: Hibiscus Petroleum's Australia JV granted 5-year renewal term. Hibiscus Petroleum's 78.3%-owned VIC/P57 JV has been granted a renewal term of five years from The Australian National Offshore Petroleum Titles Administrator for the VIC/P57 exploration permit located in the northwest part of the offshore Gippsland Basin, Australia. It is effective from March 7, 2018 to March 6, 2023. The VIC/P57 joint venture comprises Carnarvon Hibiscus Pty Ltd (CHPL), Gippsland Hibiscus Pty Ltd (GHP) and 3D Oil Limited (TDO). CHPL and GHP are indirect wholly owned subsidiaries of Hibiscus Petroleum, which also holds a 13% stake in TDO. In total, the group has a 78.3% interest in VIC/P57. (Source: The Sun Daily)
SCH: Diversifies into fertiliser business with purchase of firm. SCH Group is diversifying into the fertiliser business through the acquisition of an 83.33% stake in PK Fertilizers (Sarawak) S/B (PKF Sarawak) for MYR19.05m. The purchase will be satisfied with MYR11.45m cash and the issuance of 40 million new SCH shares at an issue price of 19 sen per share. It entered into a share sale agreement with PK Fertilizers S/B today for the acquisition. (Source: The Sun Daily)
Atta Global: Buys property development firm for MYR12m. Atta Global Group is acquiring property development company Sungguh Gemilang Development S/B for MYR12m. The proposed acquisition is a strategic move in line with its proposed diversification into property development and would generate synergistic benefits to the group. The purchase consideration comprises cash of MYR1.15m and an assumption of liabilities of MYR10.85m. (Source: The Sun Daily) | |
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