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Breakfast briefing: Wednesday, April 19

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by April 19, 2017 General

MarketWrap: The S&P 500 fell for the fourth time in five sessions on Tuesday, weighed down by a drop in Goldman Sachs and Johnson & Johnson following their quarterly results, while geopolitical tensions added to investor caution. The DJIA fell 113.64 points, or 0.55%, to 20,523.28, the S&P 500 lost 6.83 points, or 0.29%, to 2,342.18 and the Nasdaq dropped 7.32 points, or 0.12%, to 5,849.47.. – Reuters

Energy

Oil prices fell on Tuesday, then slid more in post-settlement trade after an industry group reported that US crude stockpiles fell less than expected in the latest week while gasoline stockpiles grew unseasonably. Brent crude futures swooned as low as US$54.61, the lowest since April 7, then settled down 47 cents at US$54.89 a barrel. – Reuters

Top foreign stories

Goldman Sachs licks wounds in equities trading as peers grab share: Goldman Sachs Group Inc on Tuesday became the first Wall Street bank this earnings season to report lower equities trading revenue, signalling it was unlikely to reclaim the top market share ranking from Morgan Stanley any time soon. Goldman said its first-quarter equities trading revenue fell 6%, compared to gains of 2% to 10% at Citigroup, Bank of America Corp and JPMorgan Chase & Co. Morgan Stanley will report results on Wednesday. – Reuters

Yahoo’s first-quarter revenue jumps 22%: Yahoo Inc reported a 22.1% increase in first-quarter revenue to US$1.33 billion, ahead of the sale of its core internet business to Verizon Communications Inc. Net income attributable to Yahoo was US$99.4 million, or 10 cents per share in the quarter, compared with a net loss of US$99.2 million, or 10 cents per share, a year earlier. – Reuters

KKR-backed consortium makes US$4.7b cash offer for Australia’s Tatts: A consortium backed by US private equity giant KKR & Co offered A$6.15 billion (US$4.65 billion) cash for Australian lottery operator Tatts Group Ltd, threatening an agreed merger with Tabcorp Holdings Ltd, sources said on Wednesday. – Reuters

IBM posts first revenue miss in five quarters: International Business Machines Corp reported a bigger-than-expected decline in revenue for the first time in five quarters due to weak demand in its IT services business, a sign that the company’s turnaround could take longer than expected. IBM’s overall revenue decline increased to 2.8% in the first quarter from 1.3% in the fourth quarter, and widely missed analysts’ expectation of a 1.6% drop. – Reuters

Japan government fund, bank mull bid with Broadcom for Toshiba chip unit: A Japanese government-backed fund, Network Corp of Japan, and Development Bank of Japan are considering a joint bid with Broadcom Ltd for Toshiba Corp’s semiconductor business, a move that would vault the US chipmaker into the lead to buy the prized unit, the Asahi newspaper said on Wednesday. – Reuters

FGL terminates takeover deal by Chinese insurer Anbang: US annuities and life insurer Fidelity & Guaranty Life said on Tuesday it has terminated its agreement to be acquired by Anbang Insurance Group Co Ltd, becoming the latest deal involving the Chinese insurer to have fallen through in recent years. – Reuters

Top local stories

SP Setia buys prime land in Singapore: SP Setia Bhd, which is turning into Permodalan Nasional Bhd’s (PNB) regional property powerhouse, has won a highly-competitive bid to develop a piece of prime land in Singapore. The property developer was awarded the tender by Singapore’s Urban Redevelopment Authority for the 1.87ha on Toh Tuck Road at a winning bid of S$265mil (RM847.6mil). – StarBiz

KWAP buys 5.4% stake in edotco for US$100m: Retirement Fund Inc (KWAP) has bought a 5.4% stake in edotco Group Sdn Bhd, which owns telecommunications towers in Asia, for US$100mil. The private placement of shares to the pension fund followed the year-end share placement to Khazanah Nasional Bhd and Innovation Network Corp of Japan which raised US$600mil for edotco. Khazanah and INCJ hold a 10.7% and 21.5% stake respectively in edotco, while Axiata Group Bhd holds the balance 62.4%. – StarBiz

Bankers: Lotte unit likely to get cornerstone investor: The Lotte Group’s plan to float its Malaysian petrochemical arm would likely include a cornerstone investor in the form of a large local institution, say bankers. The Lotte Group, South Korea’s fifth-largest conglomerate, is planning an initial public offering (IPO) Lotte Chemical Titan Holding Sdn Bhd, on Bursa Malaysia, eyeing to raise between US$1bil and US$1.5bil. – StarBiz

Property prices remain steady: House prices have remained steady despite a slowdown in property sales and a huge overhang of unsold units.
According to the Valuation & Property Services Department’s Property Market Report 2016, prices of residential property continued to grow, albeit moderately despite the current market glut.On quarterly movements, the report showed a contraction of 0.7% in the fourth quarter of 2016. – StarBiz

Sime Darby offers to buy 2018 and 2023 sukuks:Sime Darby Bhd has launched a tender offer to buy for cash any and all of its US$400mil sukuk due in 2018 and another US$400mil sukuk due in 2023. – StarBiz

BAT has no plan to increase cigarette prices for now:British American Tobacco (M) Bhd (BAT) has stressed that it has no plan to increase its cigarette prices for now. Managing director Eric Stoel said the Government’s move to freeze further excise duty hikes this year was pertinent to assist in stabilising the tobacco industry and reducing contraband cigarettes in the market. – StarBiz

i-City boosts I-Bhd earnings: I-Bhd’s net profit rose 21% to RM18.59mil for the first quarter, underpinned by the property development segment as demand for properties in i-City, Shah Alam remains strong. Revenue came in 27.8% higher at RM102.84mil from RM80.45mil a year ago. – StarBiz

Mier: Ringgit’s fair value is 4.20 against US dollar: The ringgit’s fair value is at about 4.20 against the US dollar, but there are no indications the currency will improve in the near future, says Malaysian Institute of Economic Research (Mier) executive director Prof Zakariah Abdul Rashid. He said  the estimation of the ringgit’s fair value was based solely on the country’s economic fundamentals. – StarBiz

Global passenger traffic increased 3.5% in February, says ACI: Global passenger traffic increased 3.5% in February which was below the past 12-month growth trend of 5.3%, according to the Airports Council International. It said the world’s airports reported a rise of 5.7% in international passenger traffic and 1.9% in domestic traffic. – theedgemarkets

ML Global eyes more JVs, land buys to undertake property projects:ML Global Bhd, which is planning to diversify into property development and investment, says it is in the midst of exploratory talks to buy more lands and to undertake more joint ventures to develop small to medium scale projects. – theedgemarkets

March car sales up 10%, production rises 3%: Malaysia’s total vehicle sales in March grew 10.1% to 53,717 units compared with 48,788 units a year earleir, said the Malaysian Automotive Association (MAA). Total production rose 3.2% to 49,356 units from 47,810. MAA attributed the sales rise to the longer working month of March as well as the rush to deliver new vehicles to customers on time by companies with financial year end of March 31, 2017. – theedgemarkets

PetChem approves US$442m investment for new plant in Pengerang:Petronas Chemicals Group Bhd (PetChem) has approved a final investment decision for an Isononanol plant within the Pengerang Integrated Complex in Pengerang, Johor, for a total investment cost of US$442 million. It said the project is expected to come on-stream by the second half of 2019 and will be undertaken by a wholly-owned subsidiary. – theedgemarkets

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