Total interbank money market transactions decline to RM3.1 trillion

Total interbank money market transactions decline to RM3.1 trillion
Market manipulation serious form of market abuse
Maritime sector to see continued growth across Asian region
Gaming sector lacking catalysts for now, slight impact from missing aircraft
Inari to expand manufacturing plant to sustain growth
MTC: Glulam holds potential to become lucrative product

Posted: 19 Mar 2014 09:47 AM PDT

KUALA LUMPUR: Total interbank money market transactions, comprising deposits, banker's acceptance (BA) and negotiable instrument of deposits (NIB) in both the conventional and Islamic money markets declined 11.2 per cent to RM3.1 trillion last year.

Bank Negara Malaysia said conventional deposits, which were unsecured borrowings and lendings, became the main trading instrument and took up 71.8 per cent of the total volume.

"However, this trading of deposits was lower in 2013, amounting to RM2.2 trillion compared to RM2.6 trillion in 2012.

"The lower trading volume for 2013 was due to the lower volume from June onwards to year-end when compared to the same period in the previous year," the central bank said in its annual report 2013.

Bank Negara said local banks exercised caution in managing their surplus liquidity and were more measured in interbank lending to preserve liquidity as a precaution to address any potential outflows.

Despite this, expectations for domestic interest rates were well anchored, with no changes for the 3.0 per cent overnight policy rate (OPR), the bank said.

The central bank also shifted the profile of monetary operations in favour of shorter-term instruments as the ringgit money market liquidity and trading were adjusted to the outflows which were taking place across the emerging economies from May to August.

"In 2013, short-term borrowings, which comprised conventional money market borrowings, Wadiah Acceptance and Commodity Murabahah Programme, increased from 32 per cent in 2012 to 43 per cent of total money operations. — Bernama

Market manipulation serious form of market abuse

Posted: 19 Mar 2014 09:46 AM PDT

KUCHING: The Securities Commission Malaysia (SC) views market manipulation as a serious form of market abuse in the financial market.

The SC reiterates its positive stand on the decision by the High Court which affirmed the conviction on the manipulation case of Suremax Group Bhd's (Suremax) shares.

The capital market regulator in a press statement said the Kuala Lumpur High Court had on the same day dismissed the appeal by Datuk Phillip Wong Chee Kheong and Francis Bun Lit Chun and affirmed their conviction for their involvement in the manipulation of Suremax shares.

It said Wong, 52 and Bun, 43, were found guilty under Section 84 of the Securities Industry Act 1983 for the manipulation of Suremax's shares between November 24, 2004 and March 22, 2005.

The SC said they had committed the offence by executing trades in nine accounts that did not involve any change in the beneficial ownership of the said shares, thus creating a misleading appearance of active trading in Suremax shares on Bursa Malaysia.

The SC added they were charged on October 25, 2005 with 38 witnesses being called by the prosecution.

It said both accused testified when the defence was called.

Additionally, the SC said Justice Kamardin Hashim in upholding the conviction by the Sessions Court in January 2011, stated that the trial judge did not err and found that the witnesses called by the prosecution were credible.

He reiterated that the trial was conducted fairly and that there was no prejudice to both appellants during the conduct of the trial.

The SC noted that the High Court will determine the sentence to be imposed on Thursday, March 27, 2014 as counsel for the appellants had asked for submissions be heard by the court before the appeal against sentence is finally decided.

It said the High Court ordered that bail be increased to RM500,000 for each appellant whilst awaiting the outcome on the appeal against their respective sentences.

The SC also noted the two appellants face a jail term of up to 10 years.

Meanwhile, the SC observed that the Sessions Court had, in 2011, sentenced Wong to 24 months jail and imposed a fine of RM3 million whilst Bun was sentenced to three months jail and a fine of RM2 million.

As the capital market regulator, SC says it will consistently monitors market abuse activities and will continue to apply its enforcement powers against persons who are found to have violated the law.

It reiterated its commitment to pursue the enforcement of such offences to ensure that the integrity of the capital market is preserved.

Maritime sector to see continued growth across Asian region

Posted: 19 Mar 2014 09:46 AM PDT

SINGAPORE: The maritime sector will see continued growth across Asia with its share of global seaborne trade expected to increase by over 40 per cent in the years ahead, said Singapore's Senior Minister of State for Finance and Transport, Josephine Teo.

She said Asia has been seeing signs of recovery since the second half of 2013, with improved earnings particularly in the dry bulk and tanker segments.

"This has been driven by the recovery of advanced economies like the US and Europe as well as continued growth in Asia and emerging markets," she said.

Teo said this at the opening of the Asia Pacific Maritime 2014 (APM) here yesterday.

She said the IHS World Trade Service has predicted that Far East-Europe seaborne containerised trade would grow at 4.6 per cent per annum from 2014 to 2016, while intra-Asia seaborne containerised trade was expected to grow at 5.8 per cent per annum from 2014 to 2016.

"As a result, Asia's share of global seaborne trade is expected to increase by over 40 per cent in the years ahead," she said.

Looking ahead, Teo said, Asia could expect continued growth.

"It is therefore fitting that this year's APM has adopted the theme, 'Repositioning for Growth in the Asia-Pacific Region'.

"Asia will be the key engine behind global trade growth, both today and in the medium term," she said. — Bernama

Gaming sector lacking catalysts for now, slight impact from missing aircraft

Posted: 19 Mar 2014 09:45 AM PDT

KUCHING: The gaming sector currently lacks any further catalysts to excite its players, additionally hampered by lower tourist counts indirectly caused by the missing MH370.

"We note that the recent aircraft disappearance may further impede visitor growth over the near to medium term period," highlighted analysts at RHB Research Institute Sdn Bhd (RHB Research) in its view on the industry.

This was in line with Genting's Singapore unit management who turned cautious on its FY14 outlook in view of the Chinese government's move to improve governance.

"This concurs with our cautious view amidst China's subpar economic headline numbers."

As Genting Highlands' outdoor theme park will be closed for three years to make way for the RM1 billion world's first Twentieth Century Fox theme park, RHB Research forecast flattish visitation growth of one to two per cent for the financial year 2014 forecast (FY14F) and FY15F at this juncture.

For the non-forecast operations (NFO) segment, the research house cautioned that rising cost of living amidst the government's move to rationalise subsidies, coupled with increasing competition from illegal NFOs, would continue to cap industry growth, which we forecast at three to five per cent annually over the medium term.

"We forecast sectorial earnings growth of 5.1 per cent for 2014 and 6.2 per cent for 2015," it said. "This pales in comparison with Macau's casino operators, for which consensus has projected an average earnings growth of 22 per cent for CY14 and 17.5 per cent for CY15."

This, RHB Research added, hinges on the sturdy growth of Macau's gross gaming revenue, which surged 23.7 per cent to US$8.3 billion in the first two months of this year.

"In view of the relatively flat growth of Malaysia's gaming companies, we opine that the existing valuation gap of 35 to 40 per cent between Malaysian and Macau gaming stocks is likely to remain in the near term.

"All in all, we maintain our neutral stance on the gaming sector."

Inari to expand manufacturing plant to sustain growth

Posted: 19 Mar 2014 09:45 AM PDT

by Adrian Lim, adrianlim@theborneopost.com. Posted on March 20, 2014, Thursday

KUCHING: Inari Amertron Bhd (Inari) is set to further expand its manufacturing plant to sustain its future growth.

Following a company visit, the research arm of Affin Investment Bank Bhd (Affin Research) said the company is allocating additional capital expenditure (capex) of RM40 million in financial year 2015 (FY15) on top of its annual capex of RM40 million.

Affin Research said the additional capex is largely to cater for the higher production activity in the radio frequency (RF) and fibre optics segment.

The research firm added that will include a new plant in Penang, further expansion to one of its existing plants in Penang and expansion of its existing Clark facility in the Philippines.

Affin Research observed that Inari Amertron's facilities in Manila and Clark have witnessed vast operational improvement in the past nine months.

The research firm observed that its Manila's plant is focused on matured fiber optics assembly and testing while its Clark facility is dedicated for more advanced fibre optics products as well as infrared (IR) sensors.

As for the company's financial performance, Affin Research believed that its net margin is expected to improve by six to seven per cent in FY14.

The research firm explained that the higher margin will be supported by Inari's efforts to spur growth and enhance business efficiency.

It said some of the efforts undertaken by Inari include better cost management, lower production cost through bulk purchase of its raw material, reduction of wastage on raw material through recycling efforts and leverage on Amertron's key customer, Avago Technologies Ltd for new product development.

Affin Research analyst Chris Ong said, "We expect Amertron's FY14 revenue for its Philippines operation to reach RM338 million or approximately 50 per cent year-on-year (y-o-y) growth and its China unit to contribute RM100 million or 20 per cent y-o-y growth.

"Prior to Inari's acquisition of Amertron Inc (Global) Ltd in June 2013, Amertron's FY12 and FY13 revenues at its Philippines operation were RM270 million and RM225 million respectively.

"Its China's operation accounted for RM90 million and RM83 million in FY12 and FY13.

"The average net margin for Amertron then was approximately four per cent," Ong noted. The analyst believed that Inari's margins enhancement will be derived from cutting down inefficiency.

Ong expects further improvement to Inari's FY15's earnings per share and dividend per share are possible given the company's efforts to transform the operations of the group.

On another note, Affin Reseach observed that Inari's plant in Kunshan, China was recently qualified by a leading smartphone player for an infrared product in February 2014.

The research firm said although the contribution from the product could be minimal in the near term, the prospects for business improvement in the future could be encouraging.

It pointed out that further catalyst for the company's share price to move higher could be the transfer of its listing status to the Main Market in the future.

MTC: Glulam holds potential to become lucrative product

Posted: 19 Mar 2014 09:44 AM PDT

KUALA LUMPUR: Malaysia must diversify into the usage of glue laminated timber or glulam as it has enormous potential for growth, says a top Malaysian Timber Council (MTC) official.

To this end, chief executive officer Datuk Yeo Heng Hau said steps were in place to promote glulam and increase its usage in the country's construction industry.

MTC has identified glulam as an innovative material that holds much potential in taking the timber industry to a higher level, he told Bernama today.

Yeo said glulam, which was strong enough to be moulded into various forms, was extensively used in the construction of stadiums and bridges.

Glulam is an engineered stress-graded product created by bonding individual pieces of timber.

Yeo said the move to diversify manufactured timber products was the key ingredient in achieving the export target of RM53 billion by 2020 and ensure the growth of Malaysia's timber
industry.

"Due to its versatile properties, glulam has a better strength-to-weight ratio than steel and has the ability to be shaped into forms ranging from straight beams to complex curved members."

Yeo said that glulam was extensively used in many countries as building components when long spans are desired, such as in the construction of stadiums and bridges.

Yeo said MTC signed a memorandum of understanding with Ahmad Asmadi Architecture and the Public Works Department to establish a standard design for the construction of 'suraus' or Muslim prayer houses using glulam.

He also said the promotion and adoption of glulam in Malaysia would be accelerated by MTC's glulam roadmap which has identified key areas of focus to further develop the industry and encourage increased use of the material in construction.

Turning to timber exports, Yeo said the export of major timber products for 2013 fell 3.3 per cent to RM19.5 billion.

Of the total, RM1.85 billion was contributed by Sabah, RM7.31 billion by Sarawak while the remaining RM10.38 billion came from the Peninsula.

Among major export destinations were Japan (RM4.18 billion), the United States (RM2.31 billion) and India (RM1.53 billion).

In 2012, export of timber products were marginally lower at RM20.2 billion against exports of RM20.03 billion recorded in 2012.

Yeo said participation in international trade fairs and trade missions were generally recognised as important marketing tools to promote value-added timber products such as mouldings, flooring, doors and furniture.

Among the major trade fairs MTC would take part this year include the International Design Exhibition in Dubai from May 19-22, the North American Wholesale Lumber Association Traders Market in Chicago from Nov 12-14 and the International Furniture Fair in Tokyo from Nov 26-28.
— Bernama