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Daily Archives: June 2, 2019

Lack of self-confidence impeding B40 group from becoming entrepreneurs

JASIN, Lack of confidence in their own capability is among the reasons those in the low-income (B40) group are reluctant to become entrepreneurs, said Entrepreneur Development Minister Datuk Seri Mohd Redzuan Yusof.

They were often worried of failure to compete with other entrepreneurs in the market during the early stage of business, he said.

We (the ministry) are always encouraging the Malays, especially those from the B40 group, to muster the courage to come forward and be creative, providing them with both opportunities and space to help them kick-start their business.

But today, I see that most of them come only seeking money although the ministry has opened up many avenues for starting a business, he told reporters after the Ihya’ Ramadan ceremony held by the National Entrepreneur Group Economic Fund (Tekun Nasional) and Parti Pribumi Bersatu Malaysia (PPBM) at a mosque here tonight.

Also present were PPBM Jasin parliamentary coordinator Datuk Seri Khairuddin Abu Hassan and Prime Minister Tun Dr Mahathir Mohamad’s political secretary Muhammad Zahid Md Arip.

Mohd Redzuan, who is also the Alor Gajah member of parliament, said apart from lacking self-confidence, the B40 group was also seen as being less informed on available ways to start a business.

In addition to the B40 group, he also urged the youths to be brave in submitting proposals to the ministry that would create opportunities for them to engage in entrepreneurship.

The government, he said, remained committed in finding ways to ensure the group was not marginalised and left behind in terms of income, in line with the goal of developing an entrepreneurial nation.

Source: BERNAMA (News Agency)

CIMB, CapBridge to provide companies access to private capital via investment platform and 1X

KUALA LUMPUR, CIMB Bank Bhd’s recent memorandum of understanding (MoU) with Singapore’s CapBridge Pte Ltd will facilitate capital raising and trading of shares for private companies through the latter’s investment platform and the 1exchange (1X) private securities exchange.

This MoU will see CIMB Bank and CapBridge collaborating to offer the bank’s customers in Malaysia, Singapore, Indonesia, Thailand and Cambodia access to private capital and liquidity through the holistic CapBridge private capital ecosystem, CIMB said in a statement here, today.

The CapBridge Investment platform is a private capital raising platform for growth stage and pre-initial public offering (IPO) companies; while 1X is a trading platform which facilitates a buyer-seller match for private securities listed on the exchange by using blockchain to register and track the shareholdings of investors who trade on the platform.

The wide-ranging partnership provides a unique value proposition to CIMB’s SME (small and medium enterprise) and mid-sized corporation clients looking to raise capital and have part of their shares traded, while remaining private and in full control of their businesses.

Victor Lee Meng Teck, chief executive officer (CEO) of Group Commercial Banking, CIMB Group, said: As the main banker for companies wishing to raise funding on CapBridge’s platforms, CIMB is even better-positioned to help its SME and mid-corp customers access the capital they need to grow their business.

In line with Forward23, CIMB’s next mid-term growth plan, this collaboration with CapBridge also further strengthens our refocused SME proposition to help them grow through tech-driven end-to-end solutions, and by transforming our customer journey.

Meanwhile, Johnson Chen, founder and CEO of CapBridge said, With the CapBridge ecosystem, private companies have a fully integrated private capital solution.

The private companies also can gain access to both growth capital through primary fundraising, as well as enable partial liquidity via secondary trading of private securities on 1X subsequently, he said.

As of today, we are already helping companies list on 1X and we look forward to CIMB’s clients joining our growing ecosystem, and working closely with CIMB Bank to bring our innovative suite of private market capital services to even more growth companies in the ASEAN region.

Tapping on blockchain infrastructure for security, 1X, together with its trust partners, harnesses the immutability and connectivity of the global public Ethereum network to record share ownership.

1X investors with digital wallets can thus directly check their real-time shareholdings without going through a trust administrator.

The exchange can also potentially connect to the millions of digital wallets actively seeking regulated and tradeable private equities, thus linking companies to a truly global liquidity or capital pool, Chen added.

Source: BERNAMA (News Agency)

TM to enhance Unifi services in Kelantan

KOTA BHARU, Telekom Malaysia Bhd (TM) Kelantan is enhancing its convergence brand, unifi, to enable 30,000 customers in the state who are still using the copper network switch to the premier service, said its general manager, Azman Yusof.

He said there are some 10,000 unifi customers in the state currently and this was seen as lagging behind the other states.

“Geographical condition, residential locations as well as lack of housing estates are the reasons that the unifi service in Kelantan is somewhat backward compared with other states, since it was introduced 2015.

“Nevertheless, we are always improving the network from time to time with the cooperation of the Malaysian Communications and Multimedia Commission and the state government which are always enhancing the broadband service,” he said in a meeting with the media here today.

On the unifi coverage in the state, Azman said the coverage is only about 40 to 50 per cent of the areas at present.

In the latest development, TM is continuing its #khabarbaik movement offering the latest unifi plan with speed of 300Mbps, including unifi TV unlimited pack with free 100 blockbuster movie vouchers at RM199 per month.

Azman said the package also comes with 600 minutes talk time to all mobile and fixed lines nationwide.

He said since the #khabarbaik movement was introduced, TM had shared several good news which focused on increasing good customer experience by providing unifi installation services within 24 hours.

“The unifi 300Mbps plan can be subscribed from April 15, 2019 via online at unifi.com.my, TMpoint branches nationwide, TM sales representatives as well as registered agents.

“Besides this package, we also offer the unifi basic plan with speed of 30Mbps at RM79 per month, and speed of 100Mbps at RM129 per month,” he said.

For areas not yet covered by the unifi service, he said, TM had just offered the Streamyx Jimat Hebat package in areas under the cooper network with speed of 4Mbps at RM88.

TM has also introduced the unifi Mobile package at RM59 per month with unlimited quota for members of the federal government agencies and departments and state government, as well as military retirees for subscription until June 30, 2019.

“We are also extending this package to workers of small and medium enterprises, for subscription until August 31. This package is suitable for the whole community,” he said.

Source: BERNAMA (News Agency)

IATA says no easy money for airlines in 2019, downgrades profit to US$28 bln

KUALA LUMPUR, The International Air Transport Association (IATA) downgrades its 2019 profit outlook for the global air transport industry to US$28 billion (US$1=RM4.18) from US$35.5 billion forecast in December 2018, amid slowing demand and rising costs.

That is also a decline on 2018 net post-tax profits which IATA estimates at U$30 billion (re-stated).

It said the business environment for airlines had deteriorated with rising fuel prices and a substantial weakening of world trade.

In 2019, overall costs are expected to grow by 7.4 per cent, outpacing a 6.5 per cent rise in revenues. As a result, net margins are expected to be squeezed to 3.2 per cent from 3.7 per cent in 2018. Profit per passenger will similarly decline to US$6.12 from US$6.85 in 2018.

This year will be the tenth consecutive year in the black for the airline industry. But margins are being squeezed by rising costs right across the board � including labour, fuel, and infrastructure. Stiff competition among airlines keeps yields from rising.

Weakening of global trade is likely to continue as the US-China trade war intensifies. This primarily impacts the cargo business, but passenger traffic could also be impacted as tensions rise. Airlines will still turn a profit this year, but there is no easy money to be made, IATA’s director general and chief executive officer, Alexandre de Juniac, said in the statement.

In 2019, the return on invested capital earned from airlines is expected to be 7.4 per cent, down from 7.9 per cent in 2018.

While this still exceeds the average cost of capital (estimated at 7.3 per cent), the buffer is extremely thin. Moreover, the job of spreading financial resilience throughout the industry is only half complete with a major gap in profitability between the performance of airlines in North America, Europe and Asia-Pacific, and the performance of those in Africa, Latin America and the Middle East.

The good news is that airlines have broken the boom-and-bust cycle. A downturn in the trading environment no longer plunges the industry into a deep crisis. But under current circumstances, the great achievement of the industry � creating value for investors with normal levels of profitability, is at risk. Airlines will still create value for investors in 2019 with above cost-of-capital returns, but only just, said de Juniac.

Among others, IATA, which represents some 290 airlines comprising 82 per cent of global air traffic, said Asia Pacific airlines will deliver a net profit of US$6.0 billion, down from US$7.7 billion in 2018.

That represents a net profit per passenger of US$3.51 and a net margin of 2.3 per cent.

The region is showing very diverse performance. Accounting for about 40 per cent of global air cargo traffic makes the region the most exposed to weakness in world trade, and that, combined with higher fuel costs, is squeezing the regions’ profits.

Source: BERNAMA (News Agency)

Local institutions remain supportive, net buyers of RM230.67 mln

KUALA LUMPUR, Local institutions have continued to support the Malaysian equities market, remaining net buyers after pumping in RM253.53 million this week compared with RM230.67 million during last week’s holiday-shortened trading week.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said local institutions dominated 41.36 per cent of the market this week, while foreign investors (41.17 per cent) and local retailers (17.27 per cent).

Local retailers turned net sellers on Bursa Malaysia this week, with outflows amounting to RM17.34 million against inflows of RM22.31 million last week, while foreign investors remained net sellers, recording outflows of RM236.19 million this week against RM252.98 million last week.

Foreign investors, however, were net buyers on Thursday with inflows of RM150.77 million, the highest in four days, he said.

I take this as a positive sign in view of the emergence of values among the listed stocks such as banking and manufacturing.

While the recent rating upgrade for Malaysian equities by HSBC and UBS has also lifted the sentiments, he told Bernama.

Europe’s largest bank, HSBC, has upgraded its ‘Underweight’ rating on Malaysian equities to ‘Neutral’, while Swiss financial giant, UBS, has placed a better rating of ‘Overweight’ from ‘Neutral’, saying the country’s stock market displays ‘defensive’ qualities that could withstand an escalation in the US-China trade war.

UBS said that Malaysia fits the bill as a market that’s defensive and offers safety amid the current global environment, while HSBC said the country’s economy looks resilient, with domestic demand strong and manufacturing growth holding up.

Throughout this week, Mohd Afzanizam said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) had been holding up well at above the psychological support level of 1,600, and posted a five-day winning streak despite volatile performance by its global peers, also supported by better financial performance of companies.

In some sense, there is hope the FBM KLCI could sustain the current positive momentum as values may have emerged, which would entice the foreign investors to come in, he elaborated.

Meanwhile, Prime Minister Tun Dr Mahathir Mohamad, who attended the 25th International Conference on The Future of Asia or Nikkei Conference in Tokyo, said Malaysia was not as badly affected as other countries amid the China-US trade war.

The Prime Minister also said Malaysia is proposing a new currency based on gold as it is more stable as opposed to the current currency trading which is manipulative.

He said by using the precious metal, it could be used to evaluate the exports and imports activities among the East Asian countries.

We can make settlement using that (new) currency (using gold). That currency must relate to the local currency as to the exchange rate, and that is something that can be related to the performance of that country.

That way we know how much we owe, how much we have to pay in the special currency of East Asia, he said during a dialogue session at the conference.

Commenting on the proposal, Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said by having gold as a standard fixed asset would make the ringgit more stable and allow it to become a self-regulated fixed asset.

This would cause a great challenge for people to speculate the currency, or to push it up or down, he said.

I think using gold as a standard is good as it will deter speculation, at the same time, giving us room to control the inflation, which means the government can only print money as much as the gold, whilst having inflation in check.

I support this idea, and hope it will be done in a small manner and fair to everybody. Give us (corporate players) some time, he explained.

On other development, the global oil prices fell sharply on Friday to their lowest in more than three months, weighed by worries over US President Donald Trump’s trade policy, as well as a slowdown in Chinese economy, which has cast doubt on the outlook for global demand.

The benchmark Brent crude fell 2.6 per cent to US$63.60 per barrel (US$1=RM4.18), while the West Texas Intermediate dropped 2.4 per cent to US$55.25 per barrel.

Source: BERNAMA (News Agency)

Malaysias inclusion in US watchlist likely a Washington ploy to boost export — Experts

KUALA LUMPUR, June 2 (Bernama) � Malaysia’s inclusion in the United States (US) Treasury’s monitoring list of potential currency manipulators is likely a ploy by Washington to gain exchange rate competitiveness to boost its exports, say experts.

However, it is not expected to have a significant impact due to the country’s good trade policy, reputation for economic and exchange rate flexibility, as well as huge external balance, said Phillip Capital Management, Asia-Pacific, Senior Vice President (Investment) Datuk Dr Nazri Khan Adam Khan.

Malaysia’s export advantage is not based on floating rate but product competitiveness, he said.

Given that, I don’t think this will affect our economic standing because I think this is temporary and at the end of the day, our economic fundamentals and our real competitive edge has nothing to do with the exchange rate, he told Bernama when asked on the matter.

Bank Negara Malaysia (BNM) had also said that the country’s economy was unaffected by it.

They are using this list probably to boost American export and to curb the export from emerging countries, Nazri Khan said.

Malaysia is among nine countries in the list, alongside China, Germany, Italy, Ireland, Japan, South Korea, Singapore and Vietnam. The inclusion comes with no immediate penalty.

The number of countries on the US watch list expanded after Treasury Secretary Steven Mnuchin lowered the threshold for qualification. Countries with a current account surplus equivalent to two per cent of gross domestic product (GDP) are now eligible for the list, down from three per cent previously.

Other thresholds include persistent intervention in markets for a nations currency and a trade surplus with the US of at least US$20 billion (US$1=RM4.18). Countries that meet two of the three criteria are placed on the watch list.

Malaysia met two of the three criteria amid a significant bilateral trade surplus with the US of US$27 billion and material current account surplus of 2.1 per cent of GDP.

In the report, the US Treasury said that Malaysia’s central bank has over the last few years intervened in both directions in foreign exchange markets. It estimates that in 2018, BNM sold about US$11 billion in foreign exchange, which is equivalent to 3.1 per cent of GDP to resist ringgit depreciation.

However, it also welcomes Malaysia’s external rebalancing in recent years.

The authorities should pursue appropriate policies to support a continuation of this trend, including by encouraging high-quality and transparent investment and ensuring sufficient social spending, which can help minimise precautionary saving, it said.

This external rebalancing was facilitated by higher levels of both consumption and investment, following years of elevated national savings. In 2008, gross national saving was 38 per cent of GDP; by 2018, it had fallen to 26 per cent of GDP.

This indicates that the consumption and investment have been very active and the US Treasury Department appears to be advising that the Malaysian government should continue its policies to encourage more high-quality and transparent investment, as well as ensuring sufficient social spending, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said.

Besides the possibility of expanding the social spending, he said the government was also expected to continuously execute infrastructure projects that would result in minimal surplus current account balance.

In that sense, we should not be too alarmed whether it would result in massive capital outflows. In fact, it really goes to show that the Malaysian ringgit is undervalued, and therefore, it should appreciate over time.

He said Malaysia’s current account surplus balance had also narrowed substantially to 2.1 per cent of GDP last year from 17.2 per cent of GDP in 2008, showing that the rebalancing had been significant.

Perhaps, the ringgit should appreciate given that the average ringgit per US dollar since the country removed the currency peg in July 2005 stood at 3.5657, he added.

Source: BERNAMA (News Agency)