Daily News - 30 July 2020

Industrial Insight > Daily News - 30 July 2020
30 July 2020
Compiled by AllianceDBS Research


Axiata raises new debt, cut capex spending for 2020

Axiata Group is taking advantage of the current low-interest-rate environment to raise USD1bn worth of sukuk. It is understood to be one of the largest sukuk raised by corporates since 2015 when the national oil company Petroliam Nasional Bhd (Petronas) raised USD1.25bn sukuk. Axiata deputy group CEO Datuk Izzadin Idris said the bulk of the sukuk will be used to retire some of the group debt and the remaining as working capital for its subsidiaries. “We are targeting to complete the exercise by the end of next month and it will be in tranches with tenures of 10-year, 15-year and 30-year,” he said. (Starbiz)

TM appoints Imri Mokhtar as MD & group CEO

Telekom Malaysia (TM) has appointed Imri Mokhtar as the new managing director and group CEO effective Aug 1, 2020 following the resignation of Datuk Noor Kamarul Anuar Nuruddin effective. TM chairman Tan Sri Mohd Bakke Salleh said Imri is a TM homegrown talent with a strong background in strategy and business operations, and his last positions in TM as chief operations officer as well as acting group CEO prior to that, put him in the best position to take TM forward in its next phase of growth. (The Sun Daily)

Newly listed TCS clinches RM146.3m construction contract

Newly listed TCS Group Holdings has clinched a RM146.3m contract for main building works for serviced apartments in Sentul, Kuala Lumpur. In a bourse filing, the group announced that its wholly-owned subsidiary TCS Construction Sdn Bhd has received a letter of acceptance from Southern Score Sdn Bhd — which is principally involved in construction, contractors, subcontractors and property development — for the construction of the Vista Sentul Residences. The contract is expected to be funded by internally generated funds and/or borrowings. (The Edge Markets)

KNM’s unit bags RM21m contract in Australia

KNM Group’s unit has bagged a contract worth RM20.9m (EUR4.2m) from an Australian oil and gas firm for the supply of air coolers bundles for gas compression stations in Australia. In a filing with Bursa Malaysia, KNM said its indirect wholly-owned subsidiary FBM Hudson Italiana SpA (FBM) has inked a restated goods and services agreement with Origin Energy Upstream Operator Pty Ltd (Origin) for the job. KNM said the tenure of the contract is for a period of 34 weeks, and that the deal will contribute positively to its earnings for the financial year ending Dec 31, 2020, and Dec 31, 2021. (The Edge Markets)


Fed maintains stimulus commitment as economic outlook dims

Federal Reserve Chairman Jerome Powell said on July 29 the US economy faces a long road to recovery that will require greater public vigilance to prevent the spread of the coronavirus pandemic and more spending from Congress and the White House. Fed officials didn’t announce new policy steps at the conclusion of their two-day meeting July 29 and reiterated their pledge to maintain aggressive measures to support the economy. Mr. Powell said various data sources the Fed monitors suggested hiring and consumer spending had slowed recently. He encouraged greater adoption of measures to contain the virus by disputing the idea of a tradeoff between virus suppression and a resumption of commercial activity. Fed officials have been weighing how to provide more support to the economy after moving quickly this spring to cut interest rates to near zero, to ramp up purchases of government debt and to establish an array of emergency lending programs to stabilize funding and credit markets. (Wall Street Journal)

US goods trade deficit narrows amid signs the global flow of goods is improving

The United States’ trade deficit in goods fell sharply in June as exports rebounded following several months of decline, suggesting a recovery in global trade after being severely disrupted by the Covid-19 pandemic. The shrinking goods trade gap reported by the Commerce Department on July 29 did not change expectations that the economy contracted at its steepest pace since the Great Depression in the second quarter because of the coronavirus. The goods trade deficit dropped 6.1% to USD70.6bn last month. Exports of goods accelerated 13.9% to USD102.3bn, eclipsing a 4.8% increase in goods imports to USD173.2bn. Goods imports fell in May to their lowest level since July 2010. The rebound in exports was led by a 144.1% surge in shipments of motor vehicles and parts. Exports of capital goods soared 11.0% and consumer goods jumped 12.6%. There were also increases in exports of industrial supplies and other goods, but shipments of food, feeds and beverages fell. (CNBC)

UK mortgage approvals bounce back in June

Approvals rose in June to 40,010 from May’s record-low reading of 9,273, Bank of England data showed on 29 Jul, a bigger increase than the rise to 33,900 that was the average forecast in a Reuters poll of economists. Households repaid a net 86m pounds (USD111m) of unsecured debt in June, the lowest net repayment since February and much less than the 2bn pounds expected by economists, in a sign that they returned to old spending habits as the lockdown eased. Few households have yet been hit by a big rise in unemployment which is forecast for later this year with the end of government job support measures that have helped more than 9m workers. 29 July figures point to some recovery in British consumer demand, though they give little clue as to whether there will be a rapid bounce back to pre-COVID levels. Consumer borrowing in June was 3.6% lower than a year earlier, a record drop when measured y-o-y, although the rate at which it fell was slower than during the March-May period. (Reuters)

Hong Kong's recession extended as economy shrinks 9% in Q2

Hong Kong's economy contracted for the fourth straight quarter as the coronavirus pandemic and political tensions extend the city's first recession in a decade. The territory's economy contracted 9% y-o-y in the second quarter, according to an advance reading from the Census and Statistics Department Hong Kong July 29. That's worse than the median forecast of -8.3% and follows a revised 9.1% drop in the first quarter that was the worst dating to 1974 data. Revised second-quarter figures as well as an updated forecast for GDP growth in 2020 will be released on Aug 14, according to the government report. The overall economic situation stabilized somewhat during the quarter, especially in May and June when the virus was largely under control, the government said. On a q-o-q seasonally adjusted basis, the economy contracted 0.1% in the three months to June. (The Straits Times)