Ringgit extends gains against US$, hits new high against pound
'Siri, catch market cheats': Wall Street watchdogs turn to AI (The Star)
Bursa Malaysia opens slightly higher (Malay Mail)
At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76. — Reuters pic
KUALA LUMPUR, Oct 25 — Bursa Malaysia opened slightly higher today on buying interest and in tracking overnight gains on Wall Street following upbeat US earnings data.
At 9.17am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 0.48-of-a-point stronger at 1,678.24, against yesterday’s close of 1,677.76.
The index opened 0.32 of-a-point easier at 1,677.44.
However, market breadth was positive as gainers led losers 134 to 120, while 194 counters were unchanged, 1,231 untraded and 20 others suspended.
Turnover stood at 118.62 million shares worth RM51.96 million.
A dealer said US markets were firmer last night after the release of corporate earnings which pointed to resilience in the global economy.
The Dow Jones Industrial finished Monday up 0.46 per cent, while the S&P 500 gained 0.47 per cent and the Nasdaq 0.91 per cent.
Kenanga Research in a note said if the FBM KLCI swiftly takes out its immediate 1,680 resistance, it could set a sight on 1,700 and further up.
“However, an unsuccessful attempt to clear the 1,680 hurdle could see the local bourse retracing towards 1,672, throughout the day,” it said.
Of the heavyweights, TNB, TM and Public Bank went down two sen each to RM14.32, RM 6.56 and RM19.80 respectively, Maybank added three sen to RM7.76 and Petronas Chemicals was flat at RM6.98.
Of the gainer counters, Hong Leong Industries and KL Kepong improved 10 sen each to RM15.70 and RM24.38 respectively, Alliance Group rose six sen to RM3.92 and Gadang Holdings gained five sen to RM3.36.
The FBM Emas Index was up 2.45 points to 11,848.44, the FBM Emas Shariah Index lost 1.74 points to 12,474.04, and the FBMT 100 Index was 3.00 points higher at 11,547.02.
The FBM 70 rose 2.45 points to 13,853.26 as the FBM Ace increased 1.81 points to 5,136.13.
The Plantation Index improved 8.53 points to 7,955.37, the Industrial Index declined 0.93 of a point to 3,163.38 and the Finance Index bagged 3.27 points to 14,488.58. — Bernama
Ignored small-cap stocks set to see revival in fortune (The Star)
What Malaysians want in Budget 2017 (Malay Mail)
BY IDA LIM, YISWAREE PALANSAMY AND ZURAIRI AR
KUALA LUMPUR, Oct 20 — It has been arguably a miserable year on the wallet for many Malaysians who have seen their living costs rise due to the ringgit’s depreciating value caused in part by external economic forces.
With economists saying the grim outlook is likely to continue into the new year, Malay Mail Online asked several groups for their input on what they wish the government to introduce tomorrow’s Budget 2017 that will help ease their financial worries.
We polled consumer groups Federation of Malaysian Consumers Associations (Fomca) and the Malaysian Muslim Consumers' Association (PPIM), in addition to Congress of Unions of Employees in the Public and Civil Services (Cuepacs), and housing groups Real Estate and Housing Developers Association Malaysia (Rehda) and National House Buyers Association (HBA).
We also talked to Medical Tweet Malaysia (MedTweetMY) a loose coalition of doctors and public health educators, the Malaysian Medical Association (MMA), youth groups UndiMsia and the University of Malaya Association of New Youth (Umany), and the Malaysian Public Transport Users Association (4PAM).
Here are some of what Malaysians wished for in 2017, divided into five themes:
For Budget 2017, developers and house buyers alike wanted the government to make more affordable houses available, with Rehda noting that the model of having other house buyers in a private development project shoulder the cross-subsidisation costs of low-cost units was unsustainable.
"Developers should be relieved from the role of providing low cost housing and the role should be reverted back to the Government through one centralised body with a statutory power to build such houses," it said, also asking that the low-cost housing quota for private developers be converted to the higher-priced affordable housing that it said was in greater demand.
As for the HBA, its honorary secretary-general Chang Kim Loong said the ban since Budget 2014 on the Developers' Interest-Bearing Scheme (DIBS) that artificially increases house prices should not be brought back even for first-time buyers, as the prohibition has been effective to stop prices from going up uncontrolled.
Like Rehda which urged utility companies not to impose charges on developers that were bringing them new customers, HBA also highlighted that the high surcharge from such utility companies was bumping up the final property price.
The 10 per cent (at least RM250 million) cut on the Health Ministry’s budget in January’s Budget 2016 revision caused a public uproar. Groups polled by Malay Mail Online have urged for a reversal to the situation.
“The government must consider the increase of Health Ministry’s operating expenditure, apt with the increasing workload,” said MedTweetMY in an emailed statement.
As analyst Mercer Marsh Benefits predicted that medical cost will rise by 17.3 per cent in the country this year, consumer groups have also called for government intervention into the private healthcare sector.
“Government must also regulate private healthcare sector. I think it's just way beyond affordable now. We need to ensure healthcare is accessible,” said Datuk Paul Selvaraj, secretary-general of Fomca.
The government has committed to its big-money projects such as extending the Light Rail Transit tracks and building the multibillion Mass Rapid Transit projects in the Klang Valley amid the budget revision, but 4PAM said more needs to be done, including improvement to security at rail stations.
4PAM president Ajit Johl wants the government to abolish the fare hike on all public transport services and introduce a more “transparent” mechanism by setting up a Public Transport Tariff Review Committee which would include all stakeholders, saying that years of unrevised tariffs is no excuse to bump up charges drastically.
“So before they set a tariff hike, there must be a KPI (key performance indicators), what they plan to achieve before a tariff hike...This is required now, very, very critical at this juncture because the billions that the government has spent on public transport will go to waste if these mechanisms are not put in place,” he said.
“The government should reinstate the incentives for hybrid cars like the Toyotas and Hondas, that are used by the working class for commuting, instead of giving them for the high-cost models like Audis, BMWs, Mercedes and Volvos… all of which are more like the
rich men's tech toys,” said youth group UndiMsia.
While they have more secure jobs, the 1.2 billion civil servants too have had to tighten their belts all round. Union representatives contacted hoped the government could review their cost of living allowance and standardise it to RM300 across the board as some who live in certain rural areas currently only receive RM150.
“We have not tasted bonus in a while now. If the government is able to, please consider two months annual bonus. We are not asking much,” Cuepacs president Datuk Azih Muda said.
Ever since Budget 2014, civil servants have only been granted half-month pay bonus, while in Budget 2016 they were only given a RM500 “special assistance”.
Students were arguably the worst-hit demographic group in the January budget revision, after 744 places for overseas students scholarship under the Public Service Department were cut to save about RM240 million, according to Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said.
One of UndiMsia’s members related a situation where some teachers even dug into their own pockets to enhance lessons for their students.
The budget revision was also said to bite the coffers of local public universities, forcing their managements to scrape for money, which affected the quality of higher education.
“We urge the government to stop slashing budget for education sector, including higher education, and to increase the allocation instead. Allocations for upgrading the facilities in universities and improving the academic and research sector must also be increased,” said Umany president Ho Chi Yang.
Zeti appointed member of Asian investment bank advisory panel (Malay Mail)
KUALA LUMPUR, Oct 19 — Former Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz has been appointed as a member of the Asian Infrastructure Investment Bank (AIIB)’s international advisory panel.
Zeti, ranked the world’s best central bank chief in 2009 by Global Finance magazine, retired in April after 16 years of being at the helm of BNM.
In a statement, AIIB announced that Zeti would join 10 other key personnel on the advisory panel including former Prime Minister of Pakistan Shaukat Aziz, former Finance Minister of Sweden Anders Borg, former Prime Minister of Japan Yukio Hatoyama as well as Secretary-General of the Global Foundation Steve Howard.
Others include Chair Professor of the Korea National Diplomatic Academy and former Deputy Prime Minister and Minister of Strategy and Finance of South Korea, Dr Oh-Seok Hyun, and former Finance Minister of Nigeria and the former Managing Director of the World Bank Dr. Ngozi Okonjo-Iweala.
Former Finance Minister of Timor-Leste Emilia Pires, former US Ambassador, Chairman and Chief Executive Officer of Global Strategic Associates Paul Speltz, Professor at the London School of Economics and former Chief Economist at the World Bank Lord Nicholas Stern and former Chief Executive of Hong Kong SAR Tung Chee-Hwa make the remaining members of the panel.
AIIB said the first meeting of the advisory panel was held in Beijing today.
“The panel provides impartial, objective and independent advice to the President, allowing the bank to benefit from the international experience and expertise of panel members,” it said.
At the meeting, panel members discussed the global economic situation and its implications on the bank’s operations, the need to promote green infrastructure in the new global agenda and the importance of increasing private-sector involvement in the region’s infrastructure.
At the end of the meeting, AIIB President Jin Liqun said: “It is a great honour to convene such an experienced and diverse group of international leaders to advise on the development of the bank’s strategy.
“I have no doubt that the advice the panel provides will help shape the development of the bank in the years ahead.
“And I could not ask for a better group of ambassadors to help promote our new bank to the world.” AIIB, a multilateral international development bank, was set up on December 25, 2015, with an initial capital of US$100 billion (RM419.8 billion), one million shares and an initial paid-up capital of US$20 billion. — Bernama
Icahn says a lot of S&P 500 companies 'way overvalued' (The Star)
NEW YORK Billionaire investor Carl Icahn warned on Monday that many S&P 500 companies are "way overvalued," considering soft-to-weakening economic growth in the United States as well as in emerging markets.
Reiterating his stance on equities, Icahn said on CNBC, "I've been concerned for a few years, and more and more concerned. I think it's very difficult when there (are) so many people in the middle class that really don't have the income that they counted on, pension funds are way underfunded ... in a market, economy that has inflation."
Icahn, chairman of Icahn Enterprises, said he is cautious about the U.S. stock market on a long-term basis, but on the short-term period, it is "anybody's guess."
Icahn said he runs a large portfolio and that there are a few gems in the market.
Icahn cited Herbalife Ltd, American International Group Inc and Cheniere Energy Inc as "uniquely undervalued." He added that it takes "years and years and years" to reap huge profits from activism and that serious investors need to be "extremely patient."
About Herbalife, Icahn declined to comment on Bill Ackman, who has been on the opposite side of the bet on the stock, and added that he stood by his major investment.
Herbalife is "undervalued, a good model and gives jobs to a lot of people," Icahn said.
David Tepper, Appaloosa Management president and founder, was on the same CNBC segment and also provided a gloomy backdrop for U.S. equities: "It's a difficult environment. It's an environment (with) OK, not great returns."
Tepper said he is "pretty cautious" on the market and "not outright bearish."
"We're pretty light on the stock market right now. And we have a lot of cash. We're probably more positioned in the bond market right now," he said.
On U.S. presidential candidates Hillary Clinton and Donald Trump, Tepper said: "You have one person with a questionable judgment and the other person that may be demented, narcissistic and a scumbag. I'm not saying which one is which. You can make your own decision on that."
Tepper said, "As far as support, I am sitting on the sidelines. I'll probably vote for one - I'll vote at the end of the day. I'm in Florida, so my vote counts." - Reuters
Oil speculators most bullish since 2014 after a wild two months (Malay Mail)
NEW YORK, Oct 17 — Oil investors must be getting dizzy.
In the two months since Opec began talking about capping production, speculators’ sentiment has swung wildly, with government and exchange data showing the four biggest weekly position changes ever for the two global benchmark crudes. The latest shift is to optimism, with money managers the most bullish on West Texas Intermediate oil in two years.
“Since the summer we’ve had big moves in net length,” said Mike Wittner, head of oil-market research at Societe Generale SA in New York. “It usually has trended up or down over a couple of months. Now this is happening in a matter of weeks. We’re seeing huge shifts.”
Money managers reduced bets on lower WTI prices by more than half in the past three weeks as Opec agreed to its first deal to cut output in eight years. That drove net length to the highest since July 2014 in the week ended October 11, Commodity Futures Trading Commission data show.
The Organisation of Petroleum Exporting Countries agreed on September 28 in Algiers to trim output to a range of 32.5 million to 33 million barrels a day, which is due to be finalised at the Vienna summit next month. Opec took a step toward coordinated supply curbs with Russia last week and will meet for a “technical exchange” to set a road map for output levels later this month.
The swings in sentiment have tracked the rocky road to US$50 (RM210.55) a barrel oil. Speculators’ combined WTI and Brent crude net position rose or fell more than 100,000 contracts four times in the past two months, the only moves of that size in CFTC and ICE Futures Europe data going back to 2011.
Prices began to rise after Opec’s president said August 8 that the group would hold informal talks in Algiers and Saudi Arabia signaled August 11 it was prepared to discuss taking action to stabilise markets. Futures gave up most of those gains amid doubts that Saudi Arabia and Iran to reach an deal, before the agreement in Algiers sparked the latest rally.
“The change in tone from the Saudis is important,” said Kurt Billick, the founder and chief investment officer of Bocage Capital LLC in San Francisco, which manages about US$432 million in commodities equities and futures. “Getting to a yes in Vienna is challenging. That they are willing to talk about a deal is a big change.”
Money managers’ short position in West Texas Intermediate crude, or bets on falling prices, shrank by 28 per cent to 71,407 futures and options. Longs rose 1.8 per cent to the highest since June 2014. The resulting net-long position increased 13 per cent.
WTI increased 4.3 per cent to US$50.79 a barrel in the report week, before settling at US$50.35 on October 14.
In other markets, net-bullish bets on gasoline rose 19 per cent to 36,650 contracts, the highest since March 2015, as futures slipped 1.1 per cent in the report week. Wagers on higher ultra low sulphur diesel prices climbed 46 per cent to 9,074. Futures rose 2.1 per cent.
The scale of the internal differences Opec must resolve before securing a deal to cut supply was revealed October 12 as the group’s latest output estimates showed a half-million-barrel difference of opinion over how much two key members are pumping.
“The bottom line is that they’ve made an agreement,” Wittner said. “If you are going short you are betting against the Saudis, which isn’t a good thing historically.” — Bloomberg
Analyst: Malaysia, Indonesia 2017 palm output to surpass 2015 record (Malay Mail)
KUALA LUMPUR, Oct 13 — Palm oil output in the world’s top two producers Indonesia and Malaysia will rise next year and likely surpass the 2015 record, as trees recover from a crop-damaging El Nino weather pattern, said leading industry analyst Dorab Mistry today.
The recovery in palm oil output will lead to a “massive rebuilding of stocks” in the oil-year ending Sept. 30, 2017, he also said.
“It is too early to forecast Malaysian and Indonesia production for calendar year 2017 but it is more than likely to exceed the record production of 2015,” Mistry said at an industry conference in Kuala Lumpur.
The expectations of rising stockpiles could weigh on benchmark palm oil prices, which are up nearly 7 per cent this year on tight supplies after yields were impacted by the lingering effects of last year’s El Nino.
Palm oil climbed to a two-week top of RM2,661 a tonne yesterday on forecasts of lower output for this year due to the El Nino. Palm oil was trading just above RM2,620 per tonne this afternoon.
Mistry maintained his global outlook for a strong output recovery of nearly 6.5 million tonnes for the oil-year 2016/17 and calendar year 2017.
However, he adjusted his crude palm oil price target, saying it would drop to 2,200 ringgit by end-December - instead of in November as earlier expected - because of recovering production and rising stocks.
“Most of the additional supply will simply replenish stocks,” said Mistry, who is also the director of Indian consumer goods company Godrej International. “Currently I do not expect stocks to become burdensome.”
Crude palm kernel oil prices are also expected to decline from current levels around US$700 a tonne higher than crude palm oil values, to premiums of US$200-250 on slower demand, he said.
Kernel oil prices reached a five-year top of RM6,200 per tonne in late August, highest since March 2011, on tight supplies, according to assessment prices by Thomson Reuters. — Reuters