Breakfast briefing: Wednesday, June 7 (Update)


MarketWrap: Major US stock indexes ended near session lows on Tuesday as traders shied away from risky assets ahead of major political and economic headlines expected on Thursday. Britain’s general election as it maps its exit from the European Union, the European Central Bank’s policy meeting and former FBI director James Comey’s testimony before a Senate panel could all affect investor sentiment. The DJIA fell fell 47.81 points, or 0.23%, to 21,136.23, the S&P 500 lost 6.77 points, or 0.28%, to 2,429.33 and the Nasdaq dropped 20.63 points, or 0.33%, to 6,275.06. – Reuters


Oil prices edged up on Tuesday, finding technical support after sliding below US$47 a barrel on pressure from a diplomatic rift in the Middle East and sustained high crude inventories in the United States. Benchmark Brent crude oil LCOc1 rose 65 cents a barrel to US$50.12. – Reuters

Forex summary

*The ringgit gained 0.05% to 4.2648 versus the US$

*It lost 0.11% to 4.8055 versus euro

*Up 0.19% to 5.5028 per pound sterling

*Down 0.03% to 3.0907 per Singapore dollar

*Down 0.72% to 3.2150 per Aussie

*Up 0.14% to 3.8948 per 100 yen

Top foreign stories

US job openings hit record high; skills mismatch rising: US job openings surged to a record high in April and employers appeared to have trouble finding suitable workers, pointing to a tightening labour market that could encourage the Federal Reserve to raise interest rates next month. Job openings, a measure of labour demand, increased 259,000 to a seasonally adjusted 6.0 million in April, the highest since the government started tracking the series in 2000. – Reuters

GM investors reject Greenlight share plan, board slate: General Motors Co shareholders on Tuesday overwhelmingly rejected proposals by hedge fund Greenlight Capital to restructure the company’s stock and reshape its board, backing chief executive Mary Barra’s efforts to rev up the company’s stalled share price. – Reuters

Valeant in talks to sell eye-surgery assets to Carl Zeiss: Canadian drugmaker Valeant Pharmaceuticals International Inc is in talks to sell its Bausch & Lomb unit’s surgical products business to Germany’s Carl Zeiss Meditec AG, Bloomberg reported. Valeant’s eye-surgery assets may be valued at about US$2 billion in a sale, Bloomberg reported, citing sources. – Reuters

Top local stories

Felda revamp on soft ground: Federal Land Development Authority’s (Felda) efforts to maximise returns from its assets have been thrown into doubt following a management crisis at its key subsidiary, Felda Global Ventures Holdings Bhd (FGV). It is learnt that the advisers of Felda’s transformation plan have expressed concerns over the abrupt suspension of FGV group president and chief executive officer Datuk Zakaria Arshad. – StarBiz

CIMB formalises strategic tie-up with China Galaxy:CIMB Group Holdings Bhd has formalised a strategic partnership that would see China Galaxy Securities Co Ltd taking a 50% stake in the holding company of CIMB’s ex-Malaysia stockbroking business. The groups, through their units signed a share purchase agreement with both parties becoming 50:50 shareholders in CIMB Securities International Pte Ltd. – StarBiz

RAM Ratings maintains CPO price forecast: RAM Rating Services Bhd has reiterated its forecast for the average full-year crude palm oil (CPO) price at RM2,300 to RM2,500 per tonne despite the stronger-than-expected prices in the first quarter of 2017. CPO prices in the first quarter averaged RM3,152 per tonne, as inventory remained tight although CPO production staged a strong rebound in the same period. – StarBiz

Completion of coastal highway primary KPI for IIB: The completion of the RM180mil Coastal Highway Southern Link is the primary key performance indicator for Iskandar Investment Bhd (IIB) this year, said president and CEO Datuk Khairil Anwar Ahmad. – StarBiz

Bintai Kinden unit wins RM74m job from Myanmar firm:Bintai Kinden Corp Bhd subsidiary Bintai Kindenko Myanmar Co Ltd has won a US$17.5mil (RM74.48mil) contract from Soilbuild (Myanmar) Co Ltd. The company said its subsidiary undertake sub-contract works for the proposed 261⁄2 Somerset Serviced Apartment and 68 Residence in Yangon. – StarBiz

Mixed views on Magnum after IRB tax claim: UOB KayHian has turned positive on numbers forecast operator Magnum Bhd, placing a “buy” call on the stock betting that it can resume its dividend payments, monetise a key asset and incur a smaller claim by the taxman than expected. – StarBiz
MRCB tendering for RM6bil worth of construction jobs:Malaysian Resources Corp Bhd (MRCB) is tendering for RM6bil worth of civil engineering-related jobs to beef up its construction segment. Executive director Mohd Imran Mohd Salim said the company is tendering for rail-related, flood  mitigation and civil engineering-related projects. – StarBiz

Zainol appointed MAHB chairman:Malaysia Airports Holdings Bhd (MAHB) has appointed Tan Sri Syed Zainol Anwar Ibni Syed Putra Jamalullail its new chairman, effective Wednesday. He succeeds Tan Sri Wan Abdul Aziz Wan Abdullah, whose contract as director and chairman of the group expired on Tuesday. – StarBiz

Lower bond yields boosts investor appetite for M-REITs: The recent fall in government bond yields bodes well for investor appetite for Malaysian real estate investment trusts (M-REITs), analysts say.  M-REITs have regained their attractiveness as an investment class in recent weeks, following the widening of the yield spread between the instrument and the Malaysian government securities (MGS) on the back of lower bond yields.

World Bank revision shows Malaysia can hit GDP target: The World Bank’s upward revision of Malaysia’s gross domestic product growth to 4.9% from 4.3% previously shows can achieve its target to become a developed nation by 2020, says Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan. In its bi-annually Global Economic Prospects report, the World Bank forecast Malaysia’s economy will grow by 6, 4 and 5 percentage points in 2017, 2018 and 2019, respectively.

IHH could make more acquisitions in India after its recent stake sale: Despite recently divesting its 10.85% stake in India- based Apollo Hospitals, CIMB Research believes IHH Healthcare Bhd is actively scouring the country for more acquisition opportunities. – StarBiz

Big impact on MISC if it loses case against Sabah Shell: The earnings impact on MISC Bhd could be significant should it lose its case against Sabah Shell Petroleum Co Ltd, adding the company may fell the effect in the next three financial years, said CIMB Research. – StarBiz

Palm oil inventories up in May: Malaysia’s monthly palm oil inventories probably rose by 0.6% in May from a month earlier to 1.61 million tonnes, the highest level since December as production in the world’s second-largest grower reached a seven-month high. Production likely rose 5.8% to 1.64 million tonnes, the highest since October. Exports gained 13% to 1.45 million tonnes, the survey showed, the highest since September. The Malaysian Palm Oil Board is set to release official data on June 13. – Bloomberg