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Investment & Market Trends

Investment & Market Trends, News

EWOG ‘Acknowledges and Respects’ SSM’s Decision to Freeze Trust Account Funds

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KUALA LUMPUR: The Companies Commission of Malaysia (SSM) issued an order letter to freeze funds in the trust accounts of East West One Planter’s Scheme, East West Horizon Planter’s Scheme and East West Planter’s Scheme 1 on 28 April, to which the East West One Group (EWOG) responded that it acknowledges and respects the decision. According to SSM, the move was a follow-up to the investigations it conducted on the companies under EWOG. “The order letter was sent to Pacific Trustees Bhd – the trustee for EWOG – on 5 April 2024, aimed at safeguarding the interests of investors in the schemes. It is a follow-up to the proposal by EWOG as the main holding company to carry out a recovery and restructuring plan for the schemes by utilising funds in the trust accounts,” SSM said. Through the directive, SSM said Pacific Trustees is required to maintain funds in the Trust Account, Reserve Fund Trust Account and Sinking Fund Trust Account, wherein the said funds are prohibited from being withdrawn and transferred to the management company in line with the provisions of Section 48(4)(a) of the Interests Scheme Act 2016. “However, this fund freeze is subject to a recovery and restructuring plan for the schemes, upon approval by a majority of investors in the investors’ meeting,” it added. Meanwhile, in a statement by EWOG, the company said, “EWOG is fully committed to cooperating with SSM and all regulatory bodies. We are taking necessary steps to ensure compliance and facilitate a thorough and transparent review process.” According to the company, the management of EWOG has sought to bring the ongoing issues to the planters through the organisation of planter’s meetings as provided by the trust deeds and the Interest Scheme Act 2016. However, those attempts have been disrupted by a minority group of planters through court actions.  The latest was an ad interim injunction that halted the meetings scheduled on 5 April 2024. Regrettably, the interim injunction also interrupted ongoing rehabilitation efforts, which commenced early last year. “This disruption in rehabilitation work poses a significant challenge to safeguarding and enhancing the investment interests of the majority of our stakeholders. The delay in rehabilitation has severely affected the yield of our plantations, making it increasingly difficult to restore and maintain the health and productivity of our biological assets, ultimately impacting the value of our investors’ holdings,” the company said. To this end, EWOG urges all planters to come together to support the rescheduling of the planter’s meeting. “It is vital that the voices of all the Planters are heard, and a decision is reached to path the way forward for all our schemes,” it added.

Investment & Market Trends, News, Uncategorized

South Korea Export Growth ccelerates

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SEOUL: South Korea witnessed a surge in export growth last month, signaling the potential for sustained economic momentum following a faster-than-expected expansion in the previous quarter. Adjusted for working-day differences, shipments increased by 11.3% compared to the previous year, as per data released by the customs office yesterday. Unadjusted figures showed headline exports rose by 13.8%, with overall imports also experiencing a 5.4% increase, resulting in a trade surplus of US$1.5 billion. South Korea, a significant player in global trade, has seen demand for its goods rebound since late last year. The economy expanded by 1.3% in the first quarter, surpassing even the most optimistic estimates, largely driven by exports. Despite ongoing Middle East tensions and elevated global interest rates, semiconductor sales have seen a resurgence. Major companies like SK Hynix Inc and Samsung Electronics Co have reported better-than-expected earnings, benefiting from increased demand for memory chips. “Export growth is expected to continue driving growth this quarter, especially fueled by strong demand for semiconductors,” noted Dave Chia, an associate economist at Moody’s Analytics, prior to the release of trade figures. South Korean exporters have particularly benefited from robust demand in major economies like the United States. The International Monetary Fund predicts a growth pickup in advanced economies this year, while emerging markets may experience a slight slowdown. “While Asian exports, especially semiconductors, are likely to remain robust, caution is warranted regarding the broader outlook for external demand,” said Sheana Yue, an economist at Oxford Economics. A major concern for policymakers is the weakening value of the won against the US dollar. While some companies like Hyundai Motor Co have seen improved earnings due to this, smaller firms and importers are grappling with higher costs of raw materials and energy. Additionally, the outlook for demand from China remains uncertain. The second-largest economy is struggling to recover from a domestic spending slump, as highlighted by a surprise decline in industrial profits in March. Exports to China in April totaled US$10.5 billion, marking a 9.9% increase from the previous year, while exports to the United States amounted to US$11.4 billion, a 24% rise, according to the Trade Ministry. — BLOOMBERG

Investment & Market Trends, News

Dagang Net, a Subsidiary of DNeX, Achieves CMMI Maturity Level 3 Appraisal

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CYBERJAYA: Dagang Net Technologies Sdn Bhd (“Dagang Net”), a wholly-owned subsidiary of Dagang NeXchange Berhad (“DNeX”), has achieved an impressive milestone by attaining Maturity Level 3 of the CMMI Institute’s Capability Maturity Model Integration (CMMI)® Version 3.0 for its Technology and Human Resource functions. The CMMI framework serves as a guide for organizations aiming to enhance their operational efficiency by improving their capabilities. This appraisal signifies Dagang Net’s adherence to well-defined processes, as per established standards, procedures, tools, and methods. Valid until 12th April 2027, this recognition underscores Dagang Net’s continuous refinement and enhancement of its standard operating procedures over time. Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Executive Chairman of DNeX, expressed pride in this achievement, emphasizing the company’s unwavering dedication to quality output. He highlighted how this milestone not only strengthens customer trust but also underscores Dagang Net’s commitment to delivering innovative solutions and exceeding customer expectations. In line with their dedication to continual improvement, the company actively solicits feedback from customers to identify areas for enhancement. This proactive approach ensures that their products and services remain competitive and relevant in the ever-evolving market landscape. Tan Sri Syed Zainal Abidin Syed Mohamed Tahir affirmed the company’s belief in the journey of continuous improvement, stating their commitment to reviewing product performance, identifying opportunities for enhancement, and implementing improvements based on data-driven insights and customer feedback.

Investment & Market Trends

PublicInvest positive on Farm Price Holdings’ expansion, earnings outlook

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KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) is seeing a positive outlook for Farm Price Holdings Bhd’s (FPHB) expansion plans, particularly its enlarging operational facilities to expand its market coverage for business growth and enhance its supply chain in fresh vegetables. In a report, PublicInvest highlighted several developments that are expected to fuel FPHB’s growth in the near future. These include building more facilities in Senai, Johor, expanding areas for value-added processing, buying new machinery and equipment, increasing their transportation fleet, setting up an additional regional distribution centre, and establishing a sales and marketing office in Singapore. Further, PublicInvest noted that FPHB also has several competitive advantages, which include an established track record, a broad range of products along with value-added services, well-developed supporting infrastructure, a wide network of suppliers to reduce the risk of supply disruptions, a dual-channel distribution system, and an experienced management team. The bank-backed research firm said as of March 27, 2024, FPHB had about 980 stock-keeping units (SKUs) of fresh vegetables. This inventory includes around 510 SKUs of whole fresh vegetables, 320 SKUs of pre-packed vegetables, and 150 SKUs of fresh-cut vegetables. The pre-packed vegetables are mostly sold under FPHB’s brands, Farm Price and TLC Fresh, along with some brands owned by customers. Fresh-cut vegetables are primarily sold to foodservice operators and wholesalers. A small amount of these are also marketed under the Farm Price brand, but none under third-party brands. PublicInvest said that as of March 27, 2024, FPHB’s Senai Centralised Distribution Centre spans 78,721 square feet, including 24,066 square feet of cold room facilities for storage, processing, and packing, alongside areas for ambient temperature storage. The company plans to expand this centre by building additional structures on a 1.9-acre plot purchased in 2023, directly behind the existing facilities. The planned expansion includes a 2-storey operational building with office and cold room facilities, a 4-storey accommodation block for workers, and a covered workshop. When completed, the expanded area will be approximately 84,790 square feet, which includes an extra 4,000 square feet of cold room space. This will increase the centre’s capacity from handling 29,669 pallets per year to about 40,000 pallets per year by 2026. On the same date, an architect was hired to prepare the building plan submission, and the new operational building is expected to start operations by the first quarter of 2026. Additionally, FPHB intends to grow its processing capabilities by adding around 4,000 square feet of floor space at the Senai Centre, particularly to enhance its range of value-added products such as pre-packed and fresh-cut vegetables. The related renovations, which will expand the processing area and the cold room facilities, are set to start in the third quarter of 2025 and should be completed by the end of the fourth quarter of 2025. Touching on earnings forecast, PublicInvest said while FPHB’s current facility is operating at full capacity, the research firm anticipates that the company’s growth will be supported by new distribution centres in Cameron Highlands and Nilai. These centres are expected to start operating in the fourth quarter of 2024. Additionally, FPHB can increase its production capacity by adding extra processing shifts and making more delivery trips if needed. “As a result, we are projecting that FPHB’s core net profit will grow by an average of 18 per cent in the financial years 2024-2025. “This growth is expected to come from better economies of scale, expansion into new geographical areas, and improvements in the supply chain with the start of the new distribution centres,” PublicInvest noted. “FPHB’s net gearing ratio currently stands at 0.4x. We expect the company to be in a net cash position after IPO,” the firm noted.

Microsoft chief executive officer, Satya Nadella
Investment & Market Trends, News

Microsoft Plans to Invest US$1.7 Bil in Indonesia

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JAKARTA: In a significant move, US tech titan Microsoft has declared a substantial investment in Indonesia during the visit of its CEO to Jakarta for discussions with governmental representatives. The company has revealed plans to inject a hefty sum of US$1.7 billion over the next four years into the country’s infrastructure for cloud computing and artificial intelligence (AI), alongside initiatives to provide AI training for 840,000 individuals and bolster support for the burgeoning developer community. Highlighting the importance of this investment, Communications and Information Minister Budi Arie Setiadi emphasized its crucial role in Indonesia’s digital progress. He remarked that Microsoft’s commitment signals recognition of Indonesia’s significance within the global digital landscape. The establishment of a research and development center, slated for either Bali or the new capital city being developed in Kalimantan, aims to cultivate AI expertise within the nation. Minister Setiadi underscored the transformative potential of AI technology in enhancing productivity across various sectors, including agriculture and fisheries, thereby driving economic growth. Microsoft’s projections suggest Indonesia’s leading role in AI’s contribution to the national GDP by 2030 within the Southeast Asian region, contingent upon overcoming challenges such as digital proficiency gaps and data governance issues. Microsoft’s CEO, Satya Nadella, reiterated the company’s commitment to empowering individuals and organizations in Indonesia to leverage the upcoming AI advancements. Nadella announced ambitious training targets, aiming to equip 2.5 million individuals across the ASEAN region by 2025, with a significant portion allocated to Indonesia. This investment represents a milestone in Microsoft’s nearly three-decade presence in the country, marking a significant step towards fostering digital innovation and economic growth.

Investment & Market Trends, News

McDonald’s Profits Significantly Affected Due to Hampered Sales from Middle East Conflict

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McDonald’s fell short of quarterly profit expectations for the first time in two years, with cost-conscious consumers overlooking its promotions and international sales hampered by the Middle East conflict. Global comparable sales growth continued its decline for the fourth consecutive quarter, settling at 1.9%, as consumers tightened their purse strings, emphasizing value in their spending habits. Analysts, relying on LSEG data, had anticipated a 2.35% increase. CEO Chris Kempczinski acknowledged the discerning nature of today’s consumers during a post-earnings call, noting that all income brackets are prioritizing value. This trend contrasted sharply with other fast-food chains, such as Burger King-owner Restaurant Brands International, which exceeded quarterly expectations, and Domino’s Pizza, which capitalized on pizza offers. Despite raising prices by mid- to high-single-digit percentages to offset rising costs, McDonald’s observed a diminishing affordability advantage in some markets. In the United States, first-quarter same-store sales growth decelerated to 2.5%, significantly lower than the previous year’s 12.6% surge. Internationally, the picture was mixed, with comparable sales from the company’s international licensees dipping by 0.2%, contrary to expectations of a 0.98% increase. McDonald’s CFO Ian Borden had forewarned of this downturn, citing the Middle East conflict and sluggishness in the Chinese economy. The Middle East conflict has put pressure on US brands like McDonald’s, leading to protests and boycotts. In response, the company bought back its 30-year-old Israel franchise and addressed legal concerns in Malaysia over allegations of supporting Israel. Analysts, such as Jim Sanderson from Northcoast Research, highlighted the uncertain impact of the Middle East conflict on US brands operating internationally, posing risks to their income streams. McDonald’s adjusted per-share profit of US$2.70 missed estimates by two cents, attributed partly to a 10% rise in selling, general, and administrative expenses, driven by investments in digital infrastructure and restructuring efforts. Despite the disappointing results, McDonald’s shares remained relatively stable on Tuesday. — REUTERS

Investment & Market Trends, News

Growth Outlook on Asia and Pacific Regions Improved to 4.5%

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SINGAPORE: The International Monetary Fund (IMF) has improved its Asia and Pacific region growth forecast to 4.5% this year, up 0.3 percentage points from the previous projection in October, partially due to carryover from stronger 2023 outruns and policy support. The United Nations agency said the region remains inherently dynamic and will contribute about 60% of global growth this year. The growth forecast for Asia and the Pacific in 2025 will moderate to 4.3%, unchanged from the October projection, with the structural slowdown in China a key factor, it said. IMF also improved its 2024 outlook for Malaysia to 4.4%, up 0.1 percentage point from the previous projection. “Drivers of growth are as diverse as the region, reaching from resilient domestic consumption in most ASEAN countries to strong public investment in China and most notably, in India, as well as a sharp uptick in tourism in the Pacific Island countries,” said IMF Director for Asia and Pacific Department Krishna Srinivasan. He said this at a hybrid press conference on the release of ‘The Regional Economic Outlook, Asia Pacific: Steady Growth Amid Diverging Prospects’ report. According to the IMF, inflation is projected to converge to central bank targets by the end of 2024 in most of the region and output gaps are also expected to narrow, conditional on macroeconomic policies staying the course. “Disinflation has advanced throughout the region albeit at different speeds. In some countries, it remains above target, like Australia and New Zealand. In others, it is at or closer to central bank targets for example, in emerging markets and Japan. However, there are also risks of deflation like Thailand and China,” Srinivasan said. Meanwhile, the IMF said China continues to be a source of both upside and downside risks to the macroeconomic outlook in the region. Against this backdrop, Srinivasan noted that policies aimed at addressing stresses in the property sector and boosting domestic demand will help China and the region while sectoral policies contributing to excess capacity will hurt both. He also said that Asian central banks should continue to focus on domestic price stability and avoid making policy decisions overly dependent on anticipated interest rate moves by the US Federal Reserve as they are now better placed than before to cope with exchange rate movements. “They should continue to allow the exchange rate to act as a buffer against stocks,” he said. Meanwhile, in a related blog post, Srinivasan said that Asian governments need to pursue policies to reduce debt and deficits with greater urgency as progress last year fell behind what the agency had originally projected. “Our forecasts show that on current fiscal plans, debt ratios would stabilise for most economies, provided governments underpin these plans with concrete policies and follow through on them. But even then, debt would remain significantly higher than it was before the pandemic,” he said. Srivinasan added that governments need to streamline expenditures and raise more revenue to reduce debt levels and curtail debt service costs. He also noted that policymakers should be cautious to not aggravate trade frictions themselves as global conflict poses additional risks to trade, as proven by the rerouting of ships around Africa to avoid the Red Sea, which raises shipment costs. “For Asia’s economies, these are unfortunate developments, as many of them are deeply integrated into global supply chains and benefit greatly from trade. Pacific island countries are especially affected, as they are highly dependent on imports and poorly integrated into global shipping networks,” he added. — BERNAMA

Investment & Market Trends, News

Airbus, Positioned to Enhance Malaysia’s Defense Capabilities

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KUALA LUMPUR: Airbus Helicopters reaffirms its commitment to bolstering its current collaborations and network in Malaysia while striving to uphold its dominant position in the market. Addressing reporters at Airbus’ helicopter facility in Subang, Axel de Pascal, Managing Director of Airbus Helicopters Malaysia, emphasized the significance of Malaysia as a key market for the company. Airbus, the European helicopter manufacturer, aims to incrementally expand its market share over the next five years, particularly in the military sector. “We anticipate a rise in military requirements for specialized operations, search-and-rescue missions, and tactical transport within Malaysia and the surrounding region. Our combat-proven multi-role H225M is ideally suited to fulfill a wide spectrum of mission needs,” remarked De Pascal. The H225M is presently contracted by ten military forces globally, with over 170 units delivered, over 40 on order, and an additional 50 supporting governmental agencies in search and rescue missions. Four of these ten H225M military customers are situated in the Asia-Pacific region, including Malaysia. The extensive utilization of the H225M underscores its effectiveness as a force multiplier, enabling swift deployment in diverse weather conditions. Furthermore, numerous operators employ the versatile helicopter for various civil and parapublic missions. The Royal Malaysian Air Force (RMAF) presently operates 12 H225M helicopters from bases in Kuantan and Labuan. Tailored for the most demanding missions, these multi-role H225Ms have actively engaged in numerous military exercises and humanitarian missions over the past decade, including flood rescue operations, pandemic aid delivery, and life-saving missions. The RMAF’s H225M fleet has achieved global recognition as the highest military flyer per aircraft, accumulating over 30,000 flight hours to date. Under Budget 2024, the RMAF has been allocated funding to procure an additional 12 helicopters. Airbus stands ready to propose its H225M for consideration when the time arises. “Malaysia is already well acquainted with the capabilities of the H225M, and stands to benefit from a unified fleet with immediate operational readiness and reduced operational expenses,” added De Pascal. De Pascal reiterated that any expansion in military capabilities would inevitably lead to an expansion of the company’s existing partnerships and ecosystem. “We are confident that the additional H225M helicopters will complement the RMAF’s existing fleet. With an established ecosystem in place, the introduction of additional assets will significantly enhance the air force’s efficiency across all levels.” Airbus has continuously invested in modernizing the multi-role H225 workhorse to align with evolving mission requirements, elevating it to the highest safety standards and reducing its time to market. Recent investments have focused on upgrading the main gearbox, enhancing industrial processes, simplifying maintenance procedures, and improving cost-effectiveness. “With new infrastructural enhancements incorporated into the H225’s industrial process, production will extend beyond 2040, ensuring stability and sustained fleet support for decades to come.” “There are considerable opportunities for the H225M. Airbus is confident that this helicopter platform will become a vital enabler, complementing Malaysia’s existing fleet seamlessly.”

Investment & Market Trends, News

CIMB Group Achieves Forward23+ Targets Amid Uncertainties

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KUALA LUMPUR: CIMB Group Holdings has achieved its Forward23+ targets despite external uncertainties, reaffirming its commitment to becoming the leading focused ASEAN bank. Speaking at the company’s 67th annual general meeting (AGM) virtually with shareholders, the group’s Chairman Datuk Mohd Nasir Ahmad said that with the varied challenges in the banking industry in 2023, CIMB marked an exciting phase as the Forward23+ strategic plan continued to gain strong momentum. “For the second consecutive year, we have achieved the top quartile within the global banking industry in the S&P Global Corporate Sustainability Assessment, achieving our Forward23+ targets 2 years ahead of the plan. “Among 400 international financial institutions, CIMB ranked 7th worldwide in the 2023 Financial System Benchmark. “These recognitions reinforce our ongoing sustainability agenda and leadership as we strive for sustainable growth to unlock new possibilities and opportunities into the future,” he said in a statement filed with Bursa Malaysia. Meanwhile, CIMB Group’s Chief Executive Officer Datuk Abdul Rahman Ahmad said the bank made significant progress under the Forward23+ strategic plan and is on track to deliver the targets across most profitability metrics set under the plan 4 years ago. “As we enter the final year of Forward23+, our focus is to enhance current account savings account (CASA) and deposit franchise with an emphasis on effective balance sheet management to improve net interest margin regionally. “Further, we intend to maintain non-interest income growth through wealth management and affluent segment, as well as to continue our cost discipline and improve asset quality to deliver our ambitious 2024 targets,” he added. CIMB Group saw continued positive momentum in the financial year ended 31 December 2023 (FY23), driven by strong underlying performance across all business segments and geographies. Over the past 2 years, the Group has achieved cumulatively RM86.2 billion of sustainable finance under the group’s Green, Social, Sustainable Impact Products and Services (GSSIPS) Framework, inching closer to its revised sustainable finance target of RM100 billion by 2024, tripled from the initial target of RM30 billion announced in 2021. — BERNAMA

Investment & Market Trends, News

MKH Oil Palm Berhad Makes Successful Main Market Debut

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KUALA LUMPUR: MKH Oil Palm (East Kalimantan) Berhad, known as MKHOP, has successfully entered the Main Market of Bursa Malaysia Securities Berhad. The company’s stock, categorized under the plantation sector, is listed as MKHOP with the stock code 5319. Its initial share price opened at 63 sen, reflecting a 1.6% premium over the issue price of 62 sen, with an initial trading volume of 12,134,600 shares. Tan Sri Dato’ Chen Kooi Chiew, the Non-Independent Non-Executive Chairman of MKHOP, highlighted the significance of this milestone, emphasizing the company’s commitment to long-term growth. With proceeds of RM136.4 million from the IPO, MKHOP plans to expand its plantation estates, enhance operational efficiency, diversify product offerings, and invest in sustainability initiatives, including improving living conditions for its workforce and reducing reliance on diesel generators.   Given the current El Nino dry weather conditions affecting global CPO supply and supporting CPO prices, MKHOP is focusing on improving production efficiency to capitalize on favorable market conditions. The company expresses confidence in the long-term growth prospects of the oil palm industry, driven by global population growth and increasing demand for edible oils and fats.   MKHOP’s financial performance for the first six months of 2024 remained robust, with a net profit of RM26.5 million and revenue of RM168.4 million. The company also maintained healthy cash and bank balances of RM89.6 million as of March 31, 2024.   M & A Securities Sdn Bhd acted as the Adviser, Managing Underwriter, Joint Underwriter, and Joint Placement Agent for the IPO, with Kenanga Investment Bank Berhad and AmInvestment Bank Berhad serving as Joint Underwriter, Joint Placement Agent, and Joint Placement Agent, respectively.

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