Daily News - 4 Aug 2020

Industrial Insight > Daily News - 4 Aug 2020
4 August 2020
Compiled by AllianceDBS Research

MALAYSIAN NEWS

Govt to continue with SSLR project

The government is set to continue with the Sarawak-Sabah Link Road (SSLR) project comprising Phase 1 from Lawas to Kampung Pa' Berunut and Phase 2 from Kampung Pa' Berunut to Long Lama. Senior Minister for Infrastructure Development and Works Minister Datuk Seri Fadillah Yusof said a letter of intent had been issued to the contractor on July 7, while the Letter of Acceptance will be issued when the contractor meets the conditions set out in the tender documentation. "As for the Trans-Borneo Highway project, the project will also continue, but priority will be given to the completion of the Pan Borneo Highway project and the SSLR project first," he said. (The Edge Markets)

AirAsia plans to resume Malaysia-Singapore flights in mid-August

AirAsia Group is gearing up to resume flights between Malaysia and Singapore — including the Kuala Lumpur-Singapore route that is touted as the world's busiest — in the week of Aug 17, following both countries' decision to implement the Reciprocal Green Lane (RGL). This will be followed by other international destinations, subject to approvals from authorities, AirAsia said in a statement. To start with, AirAsia will launch daily flights between Kuala Lumpur and Singapore and one weekly flight each between Singapore and Penang, Kota Kinabalu, Kuching, Ipoh. (The Edge Markets)

TDM completes purchase of TH Plantations' stake in THP-YT

Terengganu state-owned company TDM has completed the purchase of a 70% stake in THP-YT Plantation Sdn Bhd from TH Plantations Bhd on July 31, following the fulfilment of all conditions precedent stipulated in the share purchase agreement. Chairman Raja Datuk Idris Raja Kamarudin said with THP-YT Plantation officially becoming a TDM subsidiary on Aug 1, TDM had taken over the management and governance of the former's 2,594.5-hectare (ha) Bukit Bidong Estate in Setiu, Terengganu. “Under our business development plan, TDM is always on the lookout for assets to be developed and which have the potential to give accretive earnings in the fields of healthcare and plantations. (The Edge Markets)

RM20.37bn paid for ECRL so far

The government, via Malaysia Rail Link Sdn Bhd (MRL), has paid out some RM20.37bn to East Coast Rail Link (ECRL) lead contractor China Communications Construction Company Ltd (CCCC), said the Minister of Transport Datuk Seri Wee Ka Siong. “Until July 3, 2018, MRL has paid RM10.01bn to CCCC, comprising advance payment for Phase 1(Kota Bharu — ITT Gombak) and Phase 2 (Gombak-Port Klang), double track and Northern link (Kota Bharu — Pengkalan Kubor). “Projet development payment of RM9.67bn across eight transactions has also been made,” said Wee in a parliamentary written reply. (The Edge Markets)

Hong Leong Asia garners 97% stake in Tasek Corp via VGO

Tasek Corp 's controlling shareholder Hong Leong Asia has garnered 97.19% shareholding in the cement manufacturer as at the close of the unconditional voluntary takeover offer (VGO) at 5pm (3/8), according to the filing with Bursa Malaysia. The VGO at RM5.80 per share, which was launched by Hong Leong Asia's investment vehicles HL Cement (Malaysia) Sdn Bhd and Ridge Star Ltd, was to pave way for a privatisation exercise. Tasek Corp shares will be suspended on Aug 11, the filing said. To ensure success of the privatisation exercise, Hong Leong Asia raised the offer price from RM5.50 per share to RM5.80. Meanwhile, it also extended the closing of the VGO twice from the initial date on June 23. (The Edge Markets)

GLOBAL NEWS

Global factories increase production but overseas demand remains soft

Factories across the US, Europe and parts of Asia increased production in July, but the upswing was held back by weak global trade and suggested a long and precarious road ahead for the global economy. Export orders were soft across most of the countries surveyed in July by research firm IHS Markit, and activity contracted in two export powerhouses, Japan and South Korea. With the international outlook uncertain, manufacturers in most countries saved costs in July by cutting jobs. In the US, two surveys of purchasing managers showed improved manufacturing activity. IHS Markit’s manufacturing index which measures activity at factories rose to 50.9 last month, compared with 49.8 in June. The Institute for Supply Management separately said its July manufacturing index rose to 54.2 from 52.6 the prior month. (Wall Street Journal)

US: Coronavirus stimulus talks to resume after jobless aid lapses

Democratic leaders and White House officials planned to meet Aug 3 on a new coronavirus aid package, under rising pressure to strike a deal as millions of Americans go without a USD600-a-week federal jobless supplement. On Aug 1, House Speaker Nancy Pelosi (D., Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y.), along with Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows, emerged from an hours long meeting to say their conversation had been the most productive to date. But a deal stalled out over differences on whether to cut the jobless supplement or provide aid to financially strapped states and localities, how much money to allocate for controlling the virus and for food stamps, and myriad other issues. After two hours of talks, Messrs. Mnuchin and Meadows left Mrs. Pelosi’s office to brief Senate Majority Leader Mitch McConnell (R., Ky.) and said talks would resume Aug 4. Mr. Trump told reporters at the White House on Aug 3 that he is considering issuing executive orders to help people affected by the pandemic, including taking steps to prevent people from being evicted from their homes. (Wall Street Journal)

Eurozone factory activity bounced back to growth in July: PMI

Manufacturing activity across the Eurozone expanded for the first time since early 2019 last month as demand rebounded after more easing of the restrictions imposed to quell the spread of the new coronavirus, a survey showed on Aug 3. To offer support to the ravaged economy, the European Central Bank has ramped up its stimulus measures and European Union leaders have agreed on a 750bn Euro recovery fund. Still, the economy contracted a record 12.1% last quarter, official data showed on July 31, although a July Reuters poll predicted 8.1% growth this quarter. Factories appear to be playing their part in the recovery. IHS Markit’s final Manufacturing Purchasing Managers’ Index bounced to 51.8 in July from June’s 47.4 - its first time above the 50 mark that separates growth from contraction since January 2019. An initial “flash” release had it at 51.1. An index measuring output which feeds into a composite PMI due on Aug 5 leapt to 55.3 from 48.9, its highest since April 2018. (Reuters)

Singapore factory activity expands in July after 5 months of contraction

Manufacturing activity in Singapore made a surprise jump into expansion territory last month after five straight months of contraction amid the coronavirus-induced slump. However, the outlook for the rest of the year remains uncertain amid resurgence in infections in several major economies, prompting a reimposition of some lockdown measures. The Purchasing Managers' Index (PMI) rose 2.2 points last month to 50.2 - higher than the 48.6 median estimates in a Bloomberg survey of economists. The electronics sector PMI also increased last month, but the 1.6-point rise to 49.2 kept it within contraction territory for a sixth month in a row, according to data released Aug 3. Overall, manufacturing PMI had been in recovery after hitting a trough of 44.7 in April - the lowest since November 2008 during the global financial crisis. (The Straits Times)