Daily News - 28 July 2020

Industrial Insight > Daily News - 28 July 2020
28 July 2020
Compiled by AllianceDBS Research

MALAYSIAN NEWS

LTAT has until Oct 27 to come up with Boustead takeover deal

The Armed Forces Fund Board (LTAT) has been given a three month extension until Oct 27 by the Securities Commission to come up with a firm deal to takeover 59% owned Boustead Holdings Bhd. Boustead, in a filing with Bursa Malaysia, said the press notice by LTAT does not amount to a firm intention to proceed with the proposed privatisation plan. "Accordingly, there can be no certainty that LTAT will proceed with the proposal," it said. On May 28, LTAT had said that it was considering taking its main investee company Boustead private at 80 sen per share, following the weak performance of the company’s share prices. (Starbiz)

Ranhill Utilities wins RM14.7m M&E job in Melaka

Ranhill Utilities Bhd said it was awarded a contract for mechanical and electrical works at the project to expand a water treatment plant in Melaka. The contract was worth RM14.7m, the company said in a filing with Bursa Malaysia. "The Project is expected to be completed within a period of 24 months," Ranhill said. (Starbiz)

Khazanah sells all of its stake in Aemulus Holdings

Khazanah Nasional has exited its investment in Aemulus Holdings Bhd by disposing of its remaining 29.3m shares or 5.33% stake in the semiconductor testing firm. According to a Bursa Malaysia filing today, Khazanah sold the 5.33% stake, held via its unit Bombalai Hill Ventures Sdn Bhd, last Friday. According to bourse disclosures, the sovereign wealth fund first acquired a 15% stake in Aemulus in September 2015. Since December last year, Khazanah has started trimming its stake in Aemulus. (The Edge Markets)

MPay forms JV with Singapore venture capital firm to tap into digital banking

ManagePay Systems Bhd (MPay) said it is forming a joint venture (JV) company, through its wholly-owned subsidiary ManagePay Services Sdn Bhd (MPSB) together with Singapore-based Passion Venture Capital Pte Ltd (PVC), to participate in digital banking in Malaysia. In a bourse filing, MPay said it has inked an agreement to set up a JV company to procure a digital bank licence from Bank Negara Malaysia to operate a digital bank via the JV. MPSB will hold 51% in the JV company, while PVC will hold the remaining 49%. Investment in the JV company will be fully funded by PVC, said MPay. PVC is a venture capital fund management firm registered with the Monetary Authority of Singapore. "PVC invests in start-ups and provides seed money for companies with the potential to grow and tap into the vast global consumer markets," MPay said. (The Edge Markets)

GLOBAL NEWS

US orders for long-lasting goods gained in June

Orders for long-lasting US factory goods rose in June as the economy continued its climb back from disruptions related to the coronavirus pandemic, though a summer surge in virus infections could damp future gains. New orders for durable goods products designed to last at least three years increased a seasonally adjusted 7.3% in June from the previous month, the second consecutive monthly gain, the Commerce Department said July 27. Economists surveyed by The Wall Street Journal had expected orders to rise 5.4%. The auto sector was a big driver. New orders for motor vehicles and parts jumped 85.7% from the previous month. Underlying figures were more modest. New orders for nondefense capital goods excluding aircraft a closely watched proxy for business investment rose 3.3%. Even with two consecutive monthly gains, demand remains well below prepandemic levels. Overall, new orders last month were 15% lower than in February, and core capital orders were down 3%. Manufacturers were already caught up in trade disputes between the US and China. (Wall Street Journal)

US diplomatic footprint in China shrinks as tensions between Washington and Beijing intensify

The Trump administration closed its consulate in the southwestern Chinese city of Chengdu on July 27, reducing America’s diplomatic footprint in the world’s second-largest economy as relations between Washington and Beijing hit a boiling point. The US Consulate in Chengdu opened 35 years ago and up until July 27 employed 200 people, of which 50 were US diplomats and 150 were local hires, according to the consulate website. US Marines lowered the American flag that once flew over the consulate and a covering was placed over the plaque marking its entrance as the US diplomatic staff left its mission in compliance with a Chinese order. The US now has five remaining consulates in Shanghai, Wuhan, Guangzhou, Shenyang and Hong Kong-Macau as well as its embassy in Beijing. Relations between the world’s two largest economies have plunged to their worst point in years over a variety of issues, ranging from trade and cyber security to the Covid-19 pandemic, to China’s territorial claims in the South China Sea and its growing clampdown on Hong Kong’s autonomy. (CNBC)

China's industrial profit growth quickens, signals firming economic recovery

Profits at China’s industrial firms rose for a second straight month and at the fastest pace in over a year, adding to signs the country’s economic recovery from the coronavirus crisis is gaining momentum. The statistics bureau said on July 27 that profits at China’s industrial firms raised 11.5% y-o-y in June to 666.55bn Yuan marking the quickest profit growth since March 2019. May mark the sector’s first monthly growth in earnings since November, before the onset of the coronavirus pandemic. For January-June, industrial firms’ profits fell 12.8% y-o-y to 2.51trn Yuan, but easing from a 19.3% dive in the first five months. After a record slump early in the year, China’s economy rebounded more than expected in the second quarter as virus lockdown measures ended and policymakers ramped up stimulus. But analysts warn that the rebound is heavily reliant on state-led investment, while domestic and global demand remains weak. (Reuters)

Singapore, China affirm economic ties, commit to keeping trade lines open amid Covid-19 outbreak

The Republic and China are committed to keeping global supply chains and trade lines open amid the Covid-19 pandemic. Trade and Industry Minister Chan Chun Sing and vice-chairman of the National Development and Reform Commission of China Ning Jizhe agreed over a video conference call on July 27 to "continue their support for globalisation and global supply chains". Their commitment comes as the world faces major economic challenges due to the coronavirus pandemic. Both Mr Chan and Mr Ning also affirmed the deep economic ties that Singapore and China share, namely in China's Belt and Road Initiative, government-to-government projects and the China-Singapore (Chongqing) Connectivity Initiative - New International Land-Sea Trade Corridor. (The Straits Times)