Tag: Malaysia

  • Oil prices edge lower, tightening supply outlook supports

    Oil prices edge lower, tightening supply outlook supports

    Crude oil prices edged lower on Monday after sharp gains during the previous session but were supported by expectations of shrinking supply and signs that China-US trade tensions could ease. International Brent crude oil futures on Monday were down 20 cents, or 0.32% at 0339 GMT to $62.54 a barrel, after closing up 3.14% in the previous session to their highest close since Nov 21.

    US West Texas Intermediate (WTI) futures were at $55.13 per barrel, down 13 cents, or 0.24%, from their last settlement. WTI settled 2.73% higher in the last session at its highest close since Nov 19.

    Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling US oil rig counts and sanctions on Venezuelan oil sales.

    “While Venezuela’s output reportedly rose last month, fresh US sanctions on the country could see 0.5 to 1% of global supply curtailed,” said Vivek Dhar, commodities analyst for Commonwealth Bank of Australia in a note on Monday.

    The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department.

    OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters survey.

    However, Russian oil output in January missed the target for the output cuts, Energy Ministry data showed on Saturday. Production last month declined to 11.38 million barrels per day (bpd), but that was only down by 35,000 bpd from its October 2018 level that is the baseline for the pact.

    Russian Energy Minister Alexander Novak has said the country’s overall cuts from the October baseline would total 50,000 bpd in January. Russia has pledged to reduce oil output by 230,000 bpd from October.

    US energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.

    “The collapse in oil prices late last year has resulted in more cautious spending by US oil explorers,” said Dhar.

    Meanwhile, hopes for thawing China-US relations have also helped ease concerns over slowing economic growth.

    “While the US and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress,” ANZ Bank said in a research note.

    US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.

  • Foreign buying on Bursa slows to RM146.8m last week

    Foreign buying on Bursa slows to RM146.8m last week

    Foreign funds snapped up RM146.8 million net of local equities last week during the holiday-shortened week. “Foreign funds resumed their entry into stocks listed on Bursa for the fourth consecutive week albeit at a slower pace compared to the preceding week,“ MIDF Research said in its weekly fund flow report.

    It said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days. However, this foreign buying spree came to an end on the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.

    Risk appetite was weak on Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.

    Notwithstanding this, offshore investors returned to Bursa on Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.

    The catalyst responsible for the boost of foreign net inflows on that day was 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slaps sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cuts in January than initially pledged.

    The momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.

    “We opine that the sentiment was partially supported by the Malaysia’s exports in 2018 which grew by 6.7% to reach almost RM1 trillion. Meanwhile, the FBM KLCI was little changed, declining by less than 1% on Thursday ahead of the long weekend and festive season.”

    The month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.

    “In comparison with the three other Asean markets we monitor, Malaysia has the second lowest foreign net inflow while Indonesia leads,“ said MIDF.

    Foreign investors were the only group which saw a weekly increase in average daily traded value, jumping by 21.0% to remain above RM1 billion for the second week running.

  • Klang Valley malls performed slower last year due to competition

    Klang Valley malls performed slower last year due to competition

    Stronger performances from Gurney Plaza and East Coast Mall compensated for a lower contribution from CapitaLand Malaysia Mall Trust’s Klang Valley shopping malls last year. CapitaLand Malaysia Mall REIT Management (CMRM), which manages CapitaLand Malaysia Mall Trust (CMMT), released its results this week, revealing net property income of RM215 million (US$52.57 million) for the year. Its distributable income was RM161.3 million.

    “Gurney Plaza and East Coast Mall, which collectively accounted for about 68 per cent of CMMT’s net property income, continued their growth momentum last year,” said Low Peck Chen, CEO of CMRM. “This helped to moderate the lower contribution from our Klang Valley malls, which continued to be affected by increasing competition in the vicinity, as well as downtime for asset enhancement works and lower rents at Sungei Wang and The Mines.”

    During the final quarter of last year,  the company completed the asset enhancement works at Gurney Plaza’s Level 4 and improved the tenant mix at East Coast Mall’s ground floor. Tenants, several of them new to Penang and Kuantan, have progressively commenced operations at the newly renovated spaces.

    “We expect the completed asset enhancement initiatives at both malls to contribute positively to our performance going forward,” said Chen.

    In Kuala Lumpur, Sungei Wang’s reconfiguration of its annex is on track and new-to-market and novel experiential concepts will feature in the Jumpa lifestyle zone when it opens in the second half of this year.

    “We continue to refresh our tenant mix to meet the diverse needs of our shoppers, who can now find popular stores like Huawei, Sport Planet and Mr DIY at 3 Damansara, as well as home improvement store SSF and children activity centre Olympic Kids Club at The Mines,” said Chen. “At Sungei Wang, the newly renovated main anchor Giant will soon unveil a fresh concept to draw more shoppers.”

    David Wong, chairman of CMRM, said that against a backdrop of “increasing uncertainties in the global economy and concerns around the rising cost of living,” the company expects consumer and business sentiments to remain cautious this year.

    “Despite the challenging operating environment, we will continue to strengthen CMMT’s performance by proactively managing lease renewals and exploring opportunities in asset enhancement initiatives and acquisitions that will create value for our Unitholders.”

    CMMT is a shopping mall-focused Reit with five shopping malls: Gurney Plaza in Penang, a majority interest in Sungei Wang in Kuala Lumpur, 3 Damansara and Tropicana City Office Tower in Petaling Jaya, The Mines in Seri Kembangan and East Coast Mall in Kuantan, Pahang. The portfolio has a total net lettable area of more than 2.9 million sqft and was valued at RM4.1 billion at the end of last year.

  • Daiso to set up regional distribution centre in Malaysia

    Daiso to set up regional distribution centre in Malaysia

    PKT every24 Logistics Sdn Bhd (PKT) signed a service agreement with Daiso Industries Co Ltd (Daiso) to operate the latter’s regional distribution centre (RDC) located in Port Klang, commencing in the second quarter of this year. PKT is a joint venture company between PKT Logistics Group Sdn Bhd and Daisei every24 Co Ltd. Incorporated in February 2016, it was set up by both parties to explore joint business opportunities in Malaysia.

    PKT said in a statement, in order to serve Daiso in this RDC, it will be constructing a purpose-built warehouse at an estimated investment cost of RM250 million while creating 500 new jobs for the state of Selangor.

    PKT said it shall be providing Daiso haulage, freight forwarding and warehousing services for their transshipment and local cargo, reaching approximately several hundred containers per month.

    Meanwhile, Daiso president Seiji Yano said the group is confident that PKT will be a valuable logistics partner for the group to better serve its outlets and customers across the Middle East and Southeast Asia.

    “We are truly honored by Daiso’s confidence in Malaysia’s logistics capability but most importantly Daiso’s confidence in PKT to deliver quality logistics service to their outlets,” PKT chairman Datuk Wira Jalilah Baba said.

    Daiso is a specialty store retailer of private label products offering a vast lineup of up to 70,000 superior quality products.

    Headquartered in Hiroshima Japan, Daiso has more than 5,270 stores worldwide, served by 17 distribution centers located in Japan, China and Thailand.

  • Lazada to ramp up Southeast Asian grocery offering

    Lazada to ramp up Southeast Asian grocery offering

    Lazada Group has announced plans to ramp up its supermarket business in Southeast Asia as part of its strategy to become the region’s biggest e-commerce ecosystem. The supermarket transformation is being started off in Singapore, as homegrown online grocer RedMart is integrated into the Lazada platform on March 15 following its acquisition in 2016. Following the launch, shoppers will be able to buy groceries and fresh produce along with Lazada’s other product categories on the single platform, boosting the brand’s grocery and supermarket offering to more than 165,000 products.

    Elsewhere in the region, Lazada is looking to launch its grocery and supermarket business in at least one other city from the second half of 2019.

    The new moves are aimed at catering to the growing demand of supermarket shopping as consumers increasingly buy groceries online. The grocery market in Southeast Asia is expected to be worth US$309 billion by 2021, with shoppers filling their baskets online more than twice a month. In Singapore, seven in 10 people who buy their groceries online already do so on RedMart.

    “We want to drive the evolution of grocery shopping in the region by combining our unparalleled assortment of products and superior logistics network to transform the way customers get their daily essentials and fresh produce,” said Jing Yin, co-president of Lazada Group. “Most of us shop for groceries and other household items very frequently. This presents a unique opportunity for Lazada to be part of our daily lives.”

  • Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam’s recent economic achievements notwithstanding, much effort is needed for it to close the gap with other countries, a minister has said. Minister of Planning and Investment Nguyen Chi Dung said at a conference Wednesday that while Vietnam’s GDP per capita had surged by 27.4 times in the last 30 years to almost $2,590 last year, Malaysia had achieved this figure 20 years ago.

    Thailand had done so 15 years ago and Indonesia 10 years ago.

    The main limitations of its economy were low labor productivity, economic efficiency and competitiveness, and the country also faced the risk of being stuck in the middle-income trap.

    According to the 2018 Vietnam Annual Economic Report, average productivity per worker was VND60.73 million ($2,600) in 2017, lower than that of China, Japan, the Philippines, Thailand, and Cambodia.

    Currently the country also faced challenges like the U.S.-China trade war, the minister said.

    For these reasons, institutional reforms were necessary to achieve a more sustainable economy, he noted.

    Macroeconomic stability and high economic growth with innovation in science and technology were imperative.

    The private sector had to remain one of the pillars of the economy in future, Dung said. “If Vietnam doesn’t catch the 4.0 train, the gap between it with other countries will become wider. Vietnam needs to narrow that gap.”

    Vietnam’s GDP has grown at 6.8 percent a year on average for the last 20 years, and the economy has grown 39 fold in the period to $245 billion last year.

    Growth last year was 7.08 percent, the highest in a decade.

  • Starbucks to open three more Starbucks Reserve in Malaysia

    Starbucks to open three more Starbucks Reserve in Malaysia

    Berjaya Starbucks Coffee Company Sdn Bhd, which opened its eight Starbucks Reserve concept store in Berjaya Times Squar, plans to open two to three more such stores this year. “The reception has been really good for Starbucks Reserve (stores). We hope to be able to have about two or three Reserve (outlets) every year,” Berjaya Food Bhd’s CEO and Starbucks Malaysia and Brunei managing director Sydney Quays said.

    “The Reserve concept store is not something that you can open many because it is very exclusive. The coffees that we have in a Reserve are very exclusive and you don’t get that in other outlets. So it is very critical that we expand carefully and in locations that are very well appreciated,” he added.

    Historically, Quays said the group has always aimed to open 30 stores a year, with investment around RM50 million to RM60 million.

    According to Quays, the investment for a Reserve concept store is 30% higher compared to the non-Reserve concept stores.

    The Starbucks Reserve Berjaya Times Square joins locations at The Garden Mall, Sunway Pyramid, SkyAvenue Genting Highlands, Publika, Desa Parkcity, Four Seasons Place Kuala Lumpur and Paradigm Mall Johor.

    On its outlook, Quays believes the consumer sentiment has improved as a lot of uncertainty is over, and the rising tourists numbers also augurs well for its business.

    Asked whether the sugar tax announced in Budget 2019 will impact its business, Quays said he is of the view that the new tax will not be a big issue for Starbucks Malaysia.

    “Obviously sugar is an add on product for us, but we have not experienced any negativity in that and I don’t think it will affect us very much,” he said, adding that increase in price to its products is unlikely at this point of time.

    Berjaya Starbucks has 282 outlets in the country comprising 42 drive-thru outlets.

  • Palm falls as data shows slower exports

    Palm falls as data shows slower exports

    Malaysian palm oil futures fell last week, after data from a cargo surveyor showed exports grew more slowly than expected in January. The benchmark palm oil contract for April delivery on Bursa Malaysia Derivatives Exchange dropped 0.2% to RM2,299 a tonne. Trading volumes stood at 24,751 lots of 25 tonnes each.

    “The export numbers released are below yesterday’s (Wednesday’s) market rumour. The ringgit’s strength also pushed the market lower,” a Kuala Lumpur-based trader said, adding that the coming long holiday weekend should prompt traders to cover short positions. “That should limit any big sell-offs,” the trader said.

    Cargo surveyor Intertek Testing Services said yesterday exports of Malaysian palm oil products for January rose 14.7%, while independent inspection company AmSpec Agri Malaysia reported a 15.5% increase.

    Palm oil may slide into a range of RM2,256-RM2,274 per tonne, as its correction from the Jan 28 high of RM2,333 looks incomplete, Wang Tao, a Reuters market analyst for commodities and energy technicals said.

  • AirAsia strengthens Malaysia-Thailand connectivity with new Chiang Rai hub

    AirAsia strengthens Malaysia-Thailand connectivity with new Chiang Rai hub

    AirAsia has further strengthened Malaysia-Thailand connectivity with the launch of a new route from Kuala Lumpur to Chiang Rai, its seventh and newest hub in Thailand. AirAsia Thailand, which will base an Airbus A320ceo at Chiang Rai’s Mae Fah Luang International Airport, will also operate new services to Phuket, Singapore and Macau, providing a massive boost to the local tourism and business communities, the airline said in a statement.

    AirAsia currently operates a total of six routes to and from the capital of Thailand’s northernmost province, including existing services from Bangkok Don Mueang and Hat Yai.

    AirAsia Thailand director of ground operations Witchunee Kuntapeng said the opening of its new hub in Chiang Rai is much like building a new home.

    “Chiang Rai has great potential to be one of the top tourism destinations in Thailand, with its unique Lanna culture and hill tribe way of life recently gaining global attention.

    “We believe it is a great time to promote Chiang Rai to travelers and are pleased to see that our four new routes between Chiang Rai and Phuket, Macau, Singapore and Kuala Lumpur have been well received. We’d like to thank the local community for their wonderful support,” Kuntapeng added.

    A welcoming ceremony led by Chiang Rai vice governor Paskorn Boonyalug, Tourism Authority of Thailand executive director for the East Asia region Titiporn Manenate and local travel agents was held at the new hub for each of AirAsia’s four inaugural flights from Phuket, Macau, Singapore and Kuala Lumpur between Jan 30 and Feb 1, 2019.

    The flight from Kuala Lumpur saw a load factor of 85% percent, proving the airline’s efforts to promote Chiang Rai as a leading destination for overseas visitors was off to a great start, it added.

  • McDonald’s challenging US market mitigated by international sales

    McDonald’s challenging US market mitigated by international sales

    Strong international sales ensured respectable McDonald’s results in the latest quarter as the fast-food giant encountered challenges in its core US market. Global sales slipped 3 per cent in the three months to December, to US$5.16 billion, although this was largely due to currency translations, without which sales would have been flat. While the company did not break out Asian performance, it said international same-store revenue rose 5.2 per cent.

    Same-store sales in the US rose 2.3 per cent, primarily due to increased prices, given foot traffic in stores fell by 2.2 per cent. Global visitor numbers crept up by a mere 0.2 per cent.

    Breakfast remains its most challenging category, with the chain struggling to attract diners in the mornings. While that mealtime accounts for about a quarter of its total sales, the breakfast market is experiencing fierce competition among rival chains.

    “We’re doing well with average check growth but we really want the customer to come back and more often,” CEO Steve Easterbrook said in an investor presentation about the McDonald’s results.

    He said McDonald’s is trying to recover breakfast customers by trialling different price promotions, launching localised advertising campaigns and improving the drive-through service.

    More stores, more kiosks

    Globally, McDonald’s plans to open a net 750 new stores this year. It will also speed up the rollout of its digital touchscreen ordering systems. Easterbrook says stores with self-ordering kiosks were achieving higher sales than those without.

    Commenting on the McDonald’s results, Neil Saunders, MD of GlobalData Retail, said the kiosks and order-by-app services need to be rolled out faster.

    “This isn’t just a case of installing and implementing the technology, it is about getting customers to actually use it. Consumers need to be given more incentives to use the new ways of ordering, especially mobile, as many still shun the technology,” said Saunders.

    “Longer term, more automation in the kitchen is also critical – something that will be particularly beneficial now McDonald’s menu options are more varied and complex.”

    Saunders described the latest McDonald’s results as “reasonable”. But he said a 6.7 per cent decline in operating income suggests that McDonald’s is having to work harder for much slimmer rewards.

    “In our view, this does not sit well with the increasing complexity and higher levels of capital expenditure the company is introducing into the business.”

    Saunders believes McDonald’s is on the right track. “However, this year will be a more challenging year than last and it will be a balancing act between keeping both customers and franchisees happy.”

  • Food trends and their impact on consumption

    Food trends and their impact on consumption

    We are a young nation of 1.2 billion consumers. We are more connected to each other and the rest of the world than ever before. We travel within India and outside India more frequently. We are more informed about ourselves, about what we eat, about our environment and also about the impact of our consumption on environment. We see a large number of trends and counter trends that influence us. Some of these are fads that just pass away and some are here to stay. Here are some key trends that will have an impact on the way we consume.

    Food is an experience

    Indians have historically valued pure, freshly cooked home-made meals. The trend of eating out, widely prevalent in the West, has slowly emerged in India over the past few years. Eating out is no longer considered as a means of satiating hunger nor is it limited to the rare occasions. Shopping and casual outings, spending free time and experimentation are, not surprisingly, the new reasons for eating out!

    As per a recent Nielsen report, on average, Indians spend Rs 6,300 per year on eating out with affluent Indians spending approximately twice as much as their middle class counterparts.

    Usage of “Let’s Do…” for food is a true reflection of Food as an Experience. Consumers are frequently experimenting with a variety of cuisines, flavors, and combinations of food that were hitherto either unavailable or unheard of in the Indian market.

    Cross-cultural influences abound in dishes. Some examples of the innovative confluence of flavors are peri peri bhel, Schezwan and chocolate dosas and a wide variety of Frankies. Even the quintessential lassi can be found with a multitude of western influences such as chia seed additions and imported fruit flavors. Tikka and tandoori flavored mayonnaise, Indian versions of Chinese dishes, Chettinad sandwiches and paneer tikka pizzas are instances of Indian flavors seeping into western culinary dishes. The same is reflected in some of the food product launches.

    Variants range from quinoa rawa upma insta mix, smoky tikka mayonnaise & tamarind date chutney to beverages such as jamun kalakhatta, kokum, gol gappe ka pani, aam panna, and jal jeera made specifically as substitutes to fruit- based juice. These immensely popular products reveal the inclination of the Indian consumer towards mixing flavors.

    Health is Imperative

    As a nation, India is performing better on all indices of health such as quality and longevity of life. Indians are living better, longer and have healthier life spans. Thanks to mobile apps and wearable devices, it is possible to constantly monitor the heartbeat, quality of sleep, blood pressure and even the number of steps taken during the day. The entire idea of health has transformed from being curative to becoming preventive in nature.

    Although consumers are time constrained due to hectic work schedules, especially in urban areas, they are looking for avenues to build and maintain a healthy life style. While physical activity forms a core part of this endeavor, Indians are proactively choosing the right food products to meet their diet and health goals.

    Food products in the market range from breakfast cereals such as oats and muesli to vitamin pills. There is a marked rise in the consumption of baked goods, health biscuits, multi-grain flours, green tea and other health drinks. Furthermore, consumers are willingly buying premium products that promise health benefits. Some of the health attributes perceived to be the most important are high protein, high fiber, low cholesterol and low fat.

    Oats-based mango flavored, calcium and fibre-rich ready-to-drink breakfast option and power sprouts, honey dates flavored malt-based food drinks are good illustrations of healthy beverages available on the shelves. Snack packs of sweet and savory yoghurt and snack combos such as the Jalapeno Greek yoghurt with barley puffs are healthy replacements for the “in between meals” snacks that Indians are prone to eating. Packed khichdi mix infuses the health quotient of broccoli, carrots and almonds in the consumer’s diet. Another unique example is the gluten-free alternative to spaghetti made by cutting vegetables into thin noodle shapes or curls.

    Consumption of dietary supplements, especially in relation to adult nutrition, has also boomed. There is an emergence of “immunity boosting” foods as a major category in the market.

    These supplements can induce weight gain or weight loss or nourish the body with vital elements such as calcium, iron, omega 3 and vitamins. Moreover, active adults are consuming copious amounts of whey proteins and energy beverages.

    Consumers are as conscious of the wellness of their children as they are of their own. For instance, consumers are willing to experiment with chocolate-flavored nutritional supplements for children in a bid to ensure holistic growth. Busy parents who rely on prepackaged food or ready-to-eat meals are some of the key purchasers of probiotic drinks meant for children.

    The wide acceptance of health and wellness foods has created a Rs 10,352 crore market with a growth rate of about 10 percent. The sales contribution is the highest in non-metro but urban cities, at 40 percent. This is closely followed by rural areas at 32 percent and urban areas at 28 percent. The category penetration is highest in the south followed by the east.

    Natural & Ayurvedic Way of Life

    We see both these trends- Health and Tradition- coming together in Ayurveda and Natural Foods. The growing belief that natural products are uncontaminated and best is getting firmly ingrained in the minds of Indian consumers as the word “processed” implies a negative connotation of unoriginality. Ingredients recommended by our ancestors such as tulsi, turmeric, neem, lemon, mustard oil, ghee, saffron, amla juice, cold pressed oils of nuts and seeds are all finding their way on to the consumer’s plate. Food items made with these ingredients are not only considered as healthy but also as comfort food since consumers perceive that they have made a special effort to look after themselves. The re-emergence of yoga has only served to boost this trend. Consumers will continue to turn to nature to search for viable but healthy food options. This trend also manifests itself in organic foods though they are still a niche and are hampered by a lack of trust and high premiums. We foresee that the natural and ayurvedic trend will be stronger in the years to come and that multiple entrepreneurs will establish profitable ventures in these categories.

    Increasing Share of Proteins & Dairy

    The biggest trend as a Nation that we see is the shift to Proteins and Fats. For the first time in Indian history, milk has become the biggest agriculture crop at almost INR 5 lakh crore. It’s now bigger than all cereals and pulses put together and is 20% of the agricultural output. This shift towards fats and proteins from the traditional intake of carbohydrates for subsistence is the biggest perceptible proof of prosperity of the people. Though India is 70% non-vegetarian, it apparently has not yet crept into daily dietary preferences. Milk appears to be the most economic and culturally accepted protein source of daily diet in our country. It can also be seen as the reflection of the dietary habits of a younger India. In Modern Trade, we have seen milk and value-added milk products increasing their share and new entrepreneurs and new products coming up. We envision this trend to become stronger in the times to come.

    Startups in Food

    The emergence of modern trade and e-commerce has made it easy to be a single product company and has fostered innovation and entrepreneurship. Launching a new FMCG product is no longer the domain of multinationals or big players with financial and distribution muscle. Small and medium enterprises that were previously deterred by the huge capital investments required for distribution networks while launching new products can now easily develop and bring their products to the market in a cost effective manner.

    This has had a profound effect on the number of launches of innovative products in the market. Quinoa puffs, butter spreads, health and energy bars, pasta kits, packaged ready to cook idli/ dosa batters, raw juices, water based functional beverages, are all excellent examples of new age products built and marketed by small companies being widely accepted by the consumer base.

    In conclusion, the purchasing decisions of consumers are affected by trends to a large extent. As enablers in the consumer’s shopping journey, recognizing and translating these trends into viable business opportunities remains a key concern for manufacturers and retailers today.

  • CIMB completes Asean footprint

    CIMB completes Asean footprint

    CIMB Group Holdings Bhd is finally completing its operating footprint in Asean with the launch of its banking presence in the Philippines. It has received regulatory approval from the Securities and Exchange Commission of the Philippines for its investment banking joint-venture in the country, CIMB Bancom Capital Corporation.

    CIMB Group CEO (group ventures and partnerships) Effendy Shahul Hamid said CIMB Bancom will look to deliver value added advisory and cross-border capital market services to Philippine corporates looking to expand and grow across Asean, as well as capitalise on CIMB’s strong presence in the region to originate inbound deals to the Philippines.

    CIMB Bank Philippines Inc (CIMB Philippines) aspires to be the nation’s first all-digital and mobile-first bank, promising to make banking simpler, more convenient, and hassle-free, according to the group’s statement.

    “We look forward to bringing a differentiated and digital proposition to the market. Internet and mobile penetration in the Philippines remains one of the highest in the world, a clear sign of the progressive and modern society we hope to serve,” said Effendy.

    CIMB Philippines CEO Vijay Manoharan noted that consumers need innovative financial solutions that are relevant to their needs as well as help them get ahead and advance their financial well-being, but they do not necessarily need a physical bank.

    “By offering most of our products via the Octo app securely, we are offering the next-level any day, any time convenience for our customers by enabling them to effectively ‘carry’ our bank branch in the palm of their hands.”

    CIMB Philippines’ partners include 7-Eleven and DragonPay, with a total of 8,000 convenient customer touchpoints nationwide.

    The CIMB Bank Visa-powered Debit Card is accepted at any of the 20,000 Bancnet, Visa, and Visa Plus automatic teller machine (ATMs) nationwide and two million Visa and Visa Plus ATMs worldwide.

    To cater to those who want to really start preparing for what’s ahead and save for the future, CIMB Bank offers the UpSave Account, which allows greater savings with its high interest rate of 2% per annum (eight times higher than other banks).

  • Axiata buys 80% stake in Laos firm

    Axiata buys 80% stake in Laos firm

    Axiata Group Bhd’s 63%-owned subsidiary edotco Investments (Labuan) Ltd (edotco Labuan) is acquiring an 80% stake in Laos’s Mekong Tower Company Ltd (MTCL) for LAK12.8 billion (RM6.08 million) cash. Axiata said in a filing with the stock exchange that edotco Labuan had entered into a share subscription agreement (SSA) with Viphet Sihachakr (VS) and MTCL for the purchase.

    The SSA is subject to, amongst other, procurement of operating licence or other form of authorisation from the Ministry of Post and Telecommunications of the Government of Laos to MTCL for the provision of infrastructure solutions for telecommunications and network operators in Laos; registration of MTCL with the Ministry of Industry and Commerce of the Government of Laos; and procurement by VS of viable business including relevant concessions and/or incentives in Laos.

    Unless waived by the parties, the conditions must be satisfied not later than six months from the date of the SSA.

    “The proposed subscription provides opportunities for edotco group to expand into a new market and grow organically via build-to-suits and inorganically with sizeable sale-and-leaseback prospects,“ Axiata said.

    The Laos tower market is expected to undergo intense growth in tandem with a national drive towards 4G adoption, with an estimated demand of no less than 5,000 towers over the next three years, underscoring the need for an independent tower player to meet the requisite capital expenditure and cost optimisation burdens incumbent on local mobile network operators.

  • Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia Bhd’s net profit in the fourth quarter ended Dec 31, 2018 (Q4FY18) was down by 6.2% to RM51.9 million, from RM55.27 million a year ago, mainly due to lower contribution from the securities segment.

    Revenue for the quarter declined 8.7% to RM128.9 million, compared with RM141.2 million in the previous corresponding quarter.

    The exchange has approved a second interim dividend of 11.6 sen per share for FY18, amounting to about RM93.7 million which is payable on Feb 28, 2019. With that, the total dividend (including special dividend) declared for the year amounts to 33.6 sen per share.

    Bursa’s full-year net profit was slightly up by 0.4% to RM224.04 million, from RM223.04 million a year ago, while revenue decreased by 1.2% to RM550 million, against RM556.8 million previously.

    For the year under review, securities market trading revenue increased 2.4% to RM265.8 million from RM259.6 million in FY17, mainly due to higher average daily trading value (ADV) for securities market’s on-market trades (OMT) in FY18.

    However, non-trading revenue saw a marginal decrease of 0.1% to RM165.9 million from RM166.1 million in FY17 due to lower listing and issuer services revenue.

    Bursa CEO Datuk Seri Tajuddin Atan said despite market volatility and challenging global economic environment, the exchange’s financial performance remained resilient.

    “Throughout the year, to create a more facilitative environment, we continued implementing initiatives to further enhance the vibrancy and liquidity of the market,” he added.

    At 2.35pm, Bursa’s share price was trading 7 sen or 0.9% lower at RM7.32 on 751,900 shares done.

  • Chinese New Year to drive sales for businesses

    Chinese New Year to drive sales for businesses

    Despite lacklustre consumer sentiment, businesses are gearing up for brisk sales as consumers do their Chinese New Year (CNY) shopping for the much celebrated festival next week, with many businesses citing CNY as an important sales contributing season. LG Electronics Malaysia general manager of marketing Kong Mun Keen said festive season campaigns, whether CNY or Hari Raya, contributes bigger sales for LG.

    “We often see a spike in sales whenever festive seasons are fast approaching,” he said, adding that this year, LG Electronics Malaysia has allocated a “substantial amount of budget” for its CNY campaign.

    Although only a month into 2019, he said LG Electronics is “on the right track” in terms of sales.

    By distinguishing itself with its technology and product experience, Kong said LG’s strategy has always focused on reaching out to all Malaysians, evident through its brand store openings in 2018, where it works with partners to drive new consumer touchpoints.

    “Malaysia has always been a priority market, given that LG has secured and maintained a strong position in the home appliances and home entertainment segments here. With our premium and unique positioning coupled with innovative and consumer-centric products line-up, we are confident that there will always be a demand for our products here,” said Kong, adding that it is constantly ensuring that its products can integrate seamlessly into consumers’ lives.

    For big-ticket items like cars, Edaran Tan Chong Motor Sdn Bhd (ETCM) executive director Tan Keng Meng expects its CNY sales to be about the same as last year’s or better.

    “It’s always CNY and Raya. These are the two peak seasons,” said Tan.

    In conjunction with CNY, ETCM added the new imperial red colour to the popular Nissan Serena 2.0L S-Hybrid Premium Highway Star, featuring a two-tone theme. Additionally, ETCM continues the introduction of Nissan X-Trail X-Tremer in passion red and two additional colour options.

    Meanwhile, a Uniqlo Malaysia representative said festive periods are traditionally good opportunities for retailers to grow their sales, adding that it continues to experience healthy sales growth this year.

    “We believe this is due to our commitment to produce high-quality products at accessible prices while keeping with today’s fashion trends. Customer service is also a top priority to ensure that our customers have the best shopping experience possible.”

    As with previous years, it believe that customers are always looking for something new and fresh to start their new year.

    “We are bringing many new items to the store for customers to choose. We will also be launching the Uniqlo U collection on Feb 1 for last minute shoppers to get their new year clothes.”

    The representative said customers are consistently looking for items that are value for money and Uniqlo is well positioned to meet their needs.

    Tohtonku Sdn Bhd head of marketing Vicky Lim said CNY is one of the peak seasons for sales with its back-to-back promotions in December and January.

    But instead of spending on CNY promotional campaigns, Lim said, the company, which markets personal care and household products with brands like Follow Me, Nutox and Nanowhite, still focuses on brand communications.

    A representative for The Body Shop said although CNY is not its largest festive season sales contributor, it dresses up its stores with decorations that symbolise the blooming of spring and the festive mood of CNY.

    “We offer prosperous gifts such as hampers. This year we picked British rose as the main product that appeals to a wider target audience and with its colour of pink, it’s in line with the colour scheme that represents CNY.

    “Our staff are also dressed in mandarin Oriental tops and we play both instrumental and vocal music that reminds you of CNY.”