SINGAPORE: Fitch Ratings says in a new report that the outlooks of its rated Malaysian banks are expected to remain stable, even if a fresh economic slowdown were to emerge from the mounting global uncertainty.
Downward rating risks could arise should such a downturn, particularly if sharp and protracted, lead to significant capital impairment risks for the local banks.
However, the agency views this likelihood as fairly low, due to their satisfactory loss-absorption qualities and risk management, as well as a prudent regulatory environment.
Fitch believes Bank Negara Malaysia will closely monitor household debt, which - at 76 per cent of end-2010 GDP - remains high and leaves the banking sector vulnerable to sharp increases in unemployment and interest rates.
Precautionary measures may be tightened further to those introduced in 2010-H111 to prevent households from over-extending themselves, particularly in an environment of continued ample liquidity, low interest rates and rising asset prices.
This, together with banks' satisfactory risk management, underpins Fitch's view that domestic loans to individuals will remain of fairly sound quality through credit cycles.
While the ongoing sovereign turmoil in Europe is unlikely to materially impact on the Malaysian bank's credit profiles, global economic prospects are becoming increasingly weak, posing fresh downside risks to the Malaysian economy and banking system.
Fitch believes that the impact of higher credit costs can be absorbed largely through banks' earnings, leaving limited risk of capital erosion.
Such resilience was also observed in the 2008-2009 global economic crisis and is broadly consistent with the conclusion of the agency's stress test.
Petronas Chemicals Group Bhd, the petrochemicals arm of Malaysia's state oil company, rose the most in more than a week in Kuala Lumpur trading after the stock was upgraded to "outperform" with an increased so-called fair value of RM6.72 at RHB Capital Bhd.
Its shares gained 1.3 percent to RM6.08 at 9:15 a.m. local time, set for their biggest increase since Dec. 1. -- Bloomberg
NEW YORK: US stocks ended another rocky week with solid gains Friday after European Union leaders, except Britain, set a tentative pact on tougher fiscal discipline.
The Dow Jones Industrial Average closed up 186.56 points (1.55 per cent) to 12,184.26.
The broader S&P 500 jumped 20.84 (1.69 per cent) to 1,255.19, while the tech-rich Nasdaq Composite gained 50.47 (1.94 per cent) to 2,646.85.
EU leaders meeting in Brussels on the eurozone crisis gave a boost to markets when they declared their willingness to join a "new fiscal compact" that would bring uniform discipline to government spending.
Britain's stance prevented a move to add the new rules into the EU treaty for application to all 27 EU countries.
But the deal will still set the standards for the 17 eurozone countries and the nine non-euro EU countries that agree to it.
The move, tentative and not altogether convincing to some analysts, gave a modest boost to the euro. There were still worries that Standard & Poor's, after warning of a possible credit rating downgrade to eurozone countries on Monday, might follow through in the coming days if it finds the commitments to the new fiscal rules too weak.
"The devil is in the details, and there, the details, we do not know everything," said Gregori Volokhine of Meeschaert.
The summit "does nothing to address the credit crunch that is developing in Europe," said economist Desmond Lachman of the American Enterprise Institute.
"Their failure today to agree on Treaty change to include legally binding rules for budget deficit reduction, leaves the European Central Bank with little cover to support the Italian and Spanish bond markets."
Oil and big international bank stocks were gainers on the news, despite the doubters. ExxonMobil added 1.8 per cent, following oil prices higher.
Morgan Stanley rose 3.2 per cent and Citigroup 3.7 per cent.
Dupont was the only decliner among the Dow's 30 blue chips, losing 3.2 per cent after dimming its outlook for earnings this year, citing slower growth than expected.
On the Nasdaq, Oracle surged 3.1 per cent while Google picked up 1.9 per cent. -- AFP
Kurnia Asia Bhd, a Malaysian insurer, rose to a one-month high in Kuala Lumpur trading as Hong Leong Financial Group Bhd said its stock price is poised to rally.
Prices should test between 59 sen and 67 sen due to speculation that it has found a buyer for its Kurnia Insurans (M) Bhd. unit, Hong Leong analyst Low Yee Huap wrote in a report today.
The stock climbed 1 percent to 50 sen at 9:25 a.m., set for its highest close since Nov. 4. -- Bloomberg
MEMC Electronic Materials Inc, the second-largest US maker of polysilicon, said it will fire 20 percent of its workforce and cut production after prices for the main raw ingredient used in solar cells and semiconductors plunged.
MEMC will combine its SunEdison project development unit and solar materials business, cutting more than 1,300 jobs worldwide, including 250 in the US, the St. Peters, Missouri-based company said today in a statement.
It will idle a facility in Italy, reduce capacity at a plant in Portland, Oregon, and scale back a factory it's building in Malaysia.
The company is seeking to lower its costs after a global glut of polysilicon drove down prices 63 percent this year.
"Because of oversupply in the solar industry, you can buy polysilicon and wafers below production costs, so it's cheaper for them to just shut down those facilities and buy it on the spot market," said Jeffrey Bencik, an analyst with Kaufman Brothers LP in New York, who rates MEMC shares a "hold."
MEMC will take a $700 million charge in the current quarter and lowered its forecast. The company expects sales of $789 million to $861 million in the fourth quarter, compared with a Nov. 2 forecast of $800 million to $1.1 billion.
"We are reducing capacity and solar materials to take advantage of lower cost product alternatives and achieve a more balanced manufacturing model," Chief Financial Officer Mark Murphy said today on a conference call.
MEMC shares fell 1 cent to $4.20 at the close in New York. - Bloomberg
Bumi Armada Bhd, a Malaysian oilfield-services provider, signed an agreement for US$341.1 million of financing with seven banks today.
They were led by Sumitomo Mitsui Banking Corp, CIMB Bank Bhd, ING Bank N.V, Maybank Investment Bank Bhd, OCBC Bank (Malaysia) Bhd, RHB Investment Bank Bhd and the Bank of Tokyo-Mitsubishi UFJ Ltd, the company said in a statement in Kuala Lumpur today. -- Bloomberg
DRB-Hicom Bhd, an automotive, construction and property group, gained in Kuala Lumpur trading after the Star newspaper reported that it may partner Volkswagen AG to buy a controlling stake in Proton Holdings Bhd.
The stock increased 2.9 per cent to RM2.16 at 10.09am local time. -- Bloomberg
Bumi Armada Bhd, a Malaysian offshore oilfield-services provider, will sign an agreement for financing facilities exceeding US$300 million tomorrow, according to a media invitation.
The agreement will be with several financial institutions, it said, without naming them. -- Bloomberg
Wah Seong Corp, a Malaysian pipe-coating company, fell to a one-month low in Kuala Lumpur trading after HwangDBS Vickers Research Sdn Bhd cut its price target to RM2.50 after losing potential contracts in Australia.
The stock dropped 1.5 percent to RM1.96 at 9:15 a.m. local time, set for its lowest close since Oct. 3. -- Bloomberg
Business Times : latesthttp://www.btimes.com.my enTuesday, December 06, 2011, 09.07 AMCIMB to expand in Persian Gulf sukuk marthttp://www.btimes.com.my/articles/20111206091603/Article/ http://www.btimes.com.my/articles/20111206091603/Article/Tue, 06 Dec 2011 09:16:04 +0800Malaysia's CIMB Group Holdings Bhd. aims to expand in the Persian Gulf by grabbing market share for arranging Islamic bonds from HSBC Holdings Plc and Standard Chartered Plc, the biggest underwriters in the region this year. CIMB, which dominated global sukuk sales without managing any transactions in the Middle East in 2011, is seeking to form alliances in 2012, Badlisyah Abdul Ghani, chief executive officer of CIMB Islamic Bank Bhd, a unit of CIMB Group, said in a Nov. 29 interview. HSBC and Standard Chartered rank third and fifth for international Islamic bonds sales, as Shariah- compliant debt offerings rose 80 percent to US$25.9 billion in 2011, according to data compiled by Bloomberg. Companies and governments in the six member nations of the Gulf Cooperation Council have issued US$7 billion of Islamic bonds this year, up 77 percent from the same period of 2010, according to data compiled by Bloomberg. Emirates, the world's biggest airline by international traffic, Dana Gas PJSC and Al Hilal Bank may sell sukuk, debt that pays returns on assets to comply with Islam's ban on interest. "We are ready to relook at the GCC markets in a more aggressive manner," said Kuala Lumpur-based Badlisyah. "We have to recognize we aren't big in the Middle East and will look for the right partners in the GCC." The GCC includes Bahrain, the United Arab Emirates, Kuwait, Saudi Arabia, Oman and Qatar. HSBC, Europe's largest bank, had a 22 percent market share of sukuk underwriting, compared with Standard Chartered's 15 percent. Sukuk and#8216;Preference' Financial institutions are venturing into the Middle East to take advantage of increased government spending on building roads, railways and power plants. HSBC Amanah, the Islamic unit of London-based HSBC, expects strong demand for Shariah-compliant products in the Middle East. Some of the GCC members were largely untouched by the so-called Arab Spring, which saw uprisings topple leaders in Egypt and Tunisia and threaten regimes in Syria, Libya and Yemen. "The sukuk pipeline looks very busy for the simple reason that the market remains relatively open, so companies and governments are taking advantage," Razi Fakih, deputy chief executive officer of HSBC Amanah in London, said in an e-mail interview on Dec. 2. "Given the Arab Spring and global market volatility, there is a preference among investors for sukuk because it is less volatile. The outlook looks good for 2012." CIMB set up an office in Bahrain five years ago but doesn't have a deposit-taking bank there, said Badlisyah, whose company arranged 20 percent of global sukuk this year, versus 15 percent and 8 percent for HSBC and Standard Chartered. CIMB was also the biggest underwriter for Malaysian ringgit-denominated Islamic bonds with 31.1 percent market share in 2011, data compiled by Bloomberg show. -- Bloomberg Proton: Unaware of reason for shares' surge http://www.btimes.com.my/articles/20111206105000/Article/ http://www.btimes.com.my/articles/20111206105000/Article/Tue, 06 Dec 2011 10:50:37 +0800Proton Holdings Bhd, Malaysia's state-controlled carmaker, said it isn't aware of any reason for its recent share price surge. "There is no material corporate development not previously disclosed," Proton said in a filing with the stock exchange today. The automaker halted its shares before the announcement after jumping 25 per cent yesterday. -- Bloomberg Proton hits year-high on bids reporthttp://www.btimes.com.my/articles/20111206091211/Article/ http://www.btimes.com.my/articles/20111206091211/Article/Tue, 06 Dec 2011 09:12:12 +0800Proton Holdings Bhd rose to a one-year high in Kuala Lumpur trading after the Business Times reported three groups had submitted bids to buy Khazanah Nasional Bhd.'s stake in Malaysia's national carmaker. The stock climbed 9.3 percent to RM4.92 at 9:04 a.m. local time, set for its highest close since Dec. 2, 2010. DRB-Hicom Bhd, several key shareholders of Naza Group, and Proton Chairman Mohd Nadzmi Mohd Salleh are all interested, according to the report. -- Bloomberg DRB-Hicom rises most in 4 monthshttp://www.btimes.com.my/articles/20111206092823/Article/ http://www.btimes.com.my/articles/20111206092823/Article/Tue, 06 Dec 2011 09:28:23 +0800DRB-Hicom Bhd, an automotive, construction and property group, jumped to the highest level in more than four months in Kuala Lumpur trading after the Business Times reported that it is one of three groups to have submitted bids for a stake in carmaker Proton Holdings Bhd.
The stock gained 4.1 percent to RM2.29 at 9:15 a.m. local time, set for the highest close since Aug. 4. -- Bloomberg
Hiap Teck jumps on mining licencehttp://www.btimes.com.my/articles/20111206092705/Article/ http://www.btimes.com.my/articles/20111206092705/Article/Tue, 06 Dec 2011 09:27:05 +0800Hiap Teck Venture Bhd, a Malaysian steel-products manufacturer, rose to a one-month high in Kuala Lumpur trading after the Edge newspaper reported that its 55- percent owned unit Eastern Steel Sdn Bhd had won a licence to mine iron-ore in Terengganu state.
The stock climbed 3.4 percent to 91 sen at 9:17 a.m. local time, set for its highest close since Nov. 1. -- Bloomberg
TRC Synergy gains on Putrajaya jobhttp://www.btimes.com.my/articles/20111206091331/Article/ http://www.btimes.com.my/articles/20111206091331/Article/Tue, 06 Dec 2011 09:13:31 +0800TRC Synergy Bhd, a construction company, gained the most in more than a month in Kuala Lumpur trading after securing a RM38.1 million development contract from Putrajaya Holdings Sdn Bhd.
The stock rose 1.7 percent to 61.5 sen at 9:02 a.m. local time, set for the steepest increase since Nov. 4. -- Bloomberg
MAHB sees 6.6pc passenger growthhttp://www.btimes.com.my/articles/20111206091103/Article/ http://www.btimes.com.my/articles/20111206091103/Article/Tue, 06 Dec 2011 09:11:03 +0800Malaysia Airports Holdings Bhd said it expects passenger numbers to grow by 6.6 per cent next year at its 12 airports in Malaysia, India and Turkey, after likely expanding 10 per cent this year.
The Subang, Selangor-based company said it will target 10.4 per cent return-on-equity and RM822 million in Ebitda in 2012. The next financial year will be "challenging" and "profitable," it said in a statement. -- Bloomberg Sanichi falls after 74pc rise yesterdayhttp://www.btimes.com.my/articles/20111206103637/Article/ http://www.btimes.com.my/articles/20111206103637/Article/Tue, 06 Dec 2011 10:36:37 +0800Sanichi Technology Bhd, a precision moulds maker, fell 2.5 per cent to 19.5 sen. The company said in a statement it was unaware of the reason for a 74 per cent jump in its shares yesterday. -- Bloomberg
KL shares in negative territoryhttp://www.btimes.com.my/articles/20111206094724/Article/ http://www.btimes.com.my/articles/20111206094724/Article/Tue, 06 Dec 2011 09:47:25 +0800Fear over ratings agency Standard and Poor's warning to downgrade euro zone ratings deflated share prices on Bursa Malaysia in early trading today, dealers said. As at 9.25am, the FTSE Bursa Malaysia KLCI remained in the minus territory, off 10.28 points at 1,479.67, after opening 5.14 points lower at 1,484.81. Dealers said the local bourse may come under further pressure today following the weak market sentiment across the board. The Finance Index plunged 81.98 points to 13,196.72 and the Plantation Index declined 54.04 points to 7,823.04 and the Industrial Index slipped 24.98 points to 2,670.04. The FBM Emas Index fell 51.78 points to 10,129.41 and the FBM70 Index eased 4.0 points to 11,046.52 but the FBM ACE Index increased 5.28 points to 4,214.2. Decliners led advancers 151 to 112 while 175 counters were unchanged, 1,045 untraded and 23 others were suspended. Volume stood at 301.248 million shares worth RM125.908 million. Among active counters, Sanichi Technology dropped 1.5 sen to 18.5 sen, Compugates slipped 0.5 sen to 7.5 sen but Proton-CG earned 5.5 sen 42.5 sen. Among heavyweights, Maybank lost 7.0 sen to RM8.22, Sime Darby fell 10 sen to RM8.88, CIMB dipped 12 sen to RM7.09 but Petronas Chemicals increased 1.0 sen to RM6.18. -- Bernama US stocks pare gains after S&P warninghttp://www.btimes.com.my/articles/20111206080359/Article/ http://www.btimes.com.my/articles/20111206080359/Article/Tue, 06 Dec 2011 08:04:01 +0800NEW YORK: US stock markets pared gains Monday on news that Germany and five other triple-A eurozone countries face the prospect of a credit downgrade. The Dow Jones Industrial Average pulled back from triple-digit advances and rose 78.41 points (0.65 percent) to finish the day at 12,097.83. The tech-heavy Nasdaq Composite added 28.83 points (1.10 percent) to 2,655.76, while the broader SandP 500-stock index advanced 12.89 points (1.03 percent) to 1,257.08. Denting sentiment was a Financial Times report that US-based ratings firm Standard and Poor's was poised to announce later Monday that its was putting the triple-A rated Germany, France, the Netherlands, Austria, Finland, and Luxembourg on "creditwatch negative" due to the deepening eurozone public debt crisis. SandP announced after the markets closed that it had put the six top-rated countries and nine other eurozone members on "creditwatch negative" due to the deepening eurozone public debt crisis. "Today's CreditWatch placements are prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole," SandP said in a statement. The news of the looming warning shook Wall Street sentiment. "The retreat came from a negative reaction to the notion that Europe's AAA-rated countries could face a downgrade from analysts at SandP," Briefing.com analysts said. Still, stocks managed to extend last week's sharp rally amid increasing optimism that Europe was heading toward a solution to the eurozone sovereign debt crisis. Traders digested news that Germany and France, the eurozone's biggest economies, want a new European Union treaty by March with tougher budgetary rules to deal with the eurozone debt crisis. The agreed goal came after talks between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Monday in preparation for an EU summit Thursday and Friday. In a further sign that Europe was coming to grips with the threat of widespread debt contagion, Italy, the zone's third-largest economy, presented a tough austerity package of spending cuts, tax hikes and pension reforms to parliament. Financial shares benefited from the better outlook. JPMorgan Chase jumped 3.7 percent, Bank of America gained 2.7 percent and Morgan Stanley surged 6.8 percent. A pair of US economic indicators appeared to have little impact on the markets. The ISM's service sector activity index showed an unexpected slowdown in growth in November as employment fell. Factory orders dropped for the second straight month in October, the Commerce Department reported, in line with market expectations. Discount retailers were in focus after Dollar General posted strong earnings for its fiscal third quarter and served up a positive full-year outlook. Dollar General was up 1.6 percent at US$40.58, Wal-Mart rose 0.4 percent and Costco added 0.5 percent. Stocks extended last week's powerful rally that left the Dow up 787.64 points, its second-highest weekly point gain in three years. -- AFP Full content generated by Get Full RSS.
Proton Holdings Bhd, Malaysia's state-controlled carmaker, surged to the highest level in more than nine months in Kuala Lumpur trading after the Edge newspaper reported that Khazanah Nasional Bhd may ask for bids for its 43 percent stake in Proton.
The stock gained 14 percent to RM4.10 at 9:05 a.m. local time, set for the highest close since Feb. 24. -- Bloomberg
Tenaga Nasional Bhd, rose to its highest level in almost three weeks in Kuala Lumpur trading after signing a 25-year agreement to buy electricity from Malakoff Corp's Tanjung Bin power plant when completed in 2016.
The stock rose 1.4 percent to RM5.72 at 9:12 a.m. local time, set for its highest close since Nov. 16.
Tenaga also agreed to sell Malakoff coal for the plant, the company said in a statement.-- Bloomberg
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