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Breakfast briefing: Friday, December 23

by December 23, 2016 General

MarketWrap: US stocks fell on Thursday, weighed down by weakness in retailers, as investors stepped back from a recent rally fuelled by optimism that President-elect Donald Trump will invigorate economic growth. – Reuters

The DJIA finished 0.12% lower at 19,918.88, he S&P 500 lost 0.19% to end at 2,260.96 and the Nasdaq dropped 0.44% to 5,447.42.

Forex summary

*The ringgit lost 0.02% to 4.4777 per US$

*It was 0.02% higher at 4.6736 per euro

*Up 0.45% to 5.4974 per pound sterling

*Up 0.14% to 3.0893 per Singapore dollar

*0.07% lower to 3.2353 per Aussie

*0.07% lower at 3.8119 per 100 yen

Oil prices rose in subdued trading on Thursday, supported by strong US economic data and optimism that crude producers would abide by an agreement to limit output. Brent futures LCOc1 for February delivery settled up 59 cents to US$55.05, or 1.1%. – Reuters

Top foreign stories

US regulator poised to approve Abbott purchase of St Jude: US antitrust enforcers are poised to approve healthcare company Abbott Laboratories’ purchase of medical device maker St Jude Medical Inc, sources said on Thursday. – Reuters

Chinese consortium wins bid for 40% stake in Pakistan bourse: A Chinese consortium is set to acquire a 40% stake in Pakistan’s main bourse, the country’s stock exchange said Thursday. The deal is estimated to be worth about US$84mil (RM376mil), according to an official. – AFP

Limited room for China to tighten policy as debt fear grows: China’s leadership is signalling growth will slow slightly in 2017, policy advisers say, as it struggles to strike a balance between supporting the economy with loose credit conditions and preventing a destabilising build-up in debt. That means the interest rate easing cycle that began in November 2014 and saw six cuts by October 2015 is probably over, they say. – Reuters

US consumer spending slows: US consumer spending increased modestly in November as household income failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period. – Reuters

Top local stories

KLK looks for other targets after failed MP Evans bid: Kuala Lumpur Kepong Bhd (KLK) will seek other merger and acquisition (M&A) targets in the plantation sector after its unsuccessful takeover bid for London-listed Indonesian planter MP Evans Plc, a source said. The companies KLK was looking at were those with brownfield plantation land bank of a decent age and good fresh fruit bunch yields, a source said. – StarBiz

T7 Global aims to return to the black next year: T7 Global Bhd, formerly known as Tanjung Offshore Bhd, aims to return to the black next year in anticipation of better contribution from its oil and gas business before its diversification exercise bears fruit in 2018. – Bernama

International reserves stay at RM399.7b: Bank Negara’s international reserves remained unchanged at RM399.7bil, equivalent to US$96.4bil, as at Dec 15. This is despite the continual outflow of funds in the bond market in November, causing the ringgit to come under pressure. – StarBiz

PNB optimistic about 2017: Permodalan Nasional Bhd (PNB) is cautiously optimistic about its outlook for the stock market next year amid external headwinds. It declared on Thursday lower payouts for its flagship funds, as stocks on Bursa Malaysia head into their third consecutive year of losses on weak corporate earnings growth and a heavy sell-off by foreign investors. – StarBiz

* PNB, which holds a 58.19% stake in UMW Holdings Bhd, is willing to support the company’s plans to consolidate its oil and gas unit with other players in the industry if the need arises. – StarBiz

Boustead Plantations to gain RM527m from land sale: Boustead Plantations Bhd expects to realise an estimated gain of RM527.3mil from selling 677.78ha of freehold land in North Seberang Prai to SP Setia Bhd unit, Setia Recreation Sdn Bhd, for RM620.1mil cash. – StarBiz

Yeo jailed 30 months after being convicted on four charges: Former banker Yeo Jiawei was sentenced to 30 months’ jail on Thursday, a day after he was convicted on all four charges of wit- ness tampering in the money laundering case involving billions of dollars allegedly misappropriated from 1Malaysia Development Bhd (1MDB). – Singapore Straits Times/ANN

KFM says it hasn’t been officially notified by Felcra: Kuantan Flour Mills Bhd (KFM), a PN17 company, said it yet to be officially notified by the sudden change of heart of Felcra Bhd over an initial plan to acquire a stake in the company. – StarBiz

Hai-O inks collaboration deal with Huawei for co-branding of smartphone: Hai-O Enterprise Bhd has inked a collaboration agreement with Huawei Technologies (M) Sdn Bhd for the co-branding of Huawei Mate 9 smartphone. An estimated 500 Huawei Mate 9 units with a limited edition Hai-O packaging initially will be available for Hai-O members and distributors. – StarBiz

Petronas to study Iran oil fields: Petroliam Nasional Bhd (Petronas) has signed an agreement to study two oil fields in Iran. Petronas signed a memorandum of understanding to assess the South Azadegan and Cheshmeh Khosh oil fields. – Bloomberg

Govt may buy more LRT trains to ease congestion: Second Finance Minister Datuk Johari Abdul Ghani said the Government may invest in more trains on the light rail transit (LRT) lines to reduce congestion during peak hours. “We will invest a lot more money for the (LRT train) coaches and so there will be more train coaches during peak hours,” he said, without giving specifics on the amount of additional investments. – StarBiz

Manufacturing business to drive Pharmaniaga’s growth: Leading pharmaceutical player Pharmaniaga Bhd’s catalyst for growth will be its manufacturing business and projections of a higher revenue contribution from Indonesia, says MIDF Research. – StarBiz

MAHB seeks to recover RM298m over LCCT, runway: Malaysia Airports Holdings Bhd (MAHB) has  led separate arbitration proceedings against three consultants to recover RM297.86 million in losses and damages over the proposed development of a new low-cost carrier terminal (LCCT) and a third runway at the KL International Airport. – Edge FD

Poh Huat Q4 net profit jumps 20% on better margins, strong US dollar: Poh Huat Resources Holdings Bhd reported a 20% increase in net profit to RM19.06 million for the fourth quarter, supported by better profit margins and the strengthening of the US dollar against the ringgit. Its revenue rose 8% to RM152.05 million. – Edge FD

Aeon Credit 3Q profit grows 26%: Aeon Credit Service (M) Bhd saw its net profit rise 26% to RM67.05 million in the third quarter on higher revenue and other operating income. Its revenue was up 14% year- on-year at RM280.35 million. – Edge FD