Bullish stance reaffirmed on semiconductor sector – analyst

Posted on : 07-03-2017 | By : sabah today | In : National Business

KUCHING: Analysts at the research arm of TA Securities Holdings Bhd (TA Research) were bullish on the outlook of the semiconductor sector at this juncture.

The bullish outlook conviction for the semiconductor sector was on the back of higher global sales of semiconductor components which registered an increase of 13.9 per cent year-on-year (y-o-y) growth to US$30.6 billion in January 2017.

TA Research believed that promising prospects of the semiconductor sector would be underpinned by better sales outlook and the weak ringgit environment.

“We believe the trend will continue, expecting positive US dollar sales growth in 2017.

“The recent release of the fourth quarter (4Q16) financial results, (semiconductor players such as) Unisem (M) Bhd (Unisem) and Malaysian Pacific Industries Bhd (MPI) have reported US dollar sales that beat initial guidance,” the research firm said.

The positive sales growth in January 2017 was also the largest y-o-y sales growth achieved since November 2010, it said.

At the same time, the research firm noted the World Semiconductor Trade Statistics (WSTS) has revised its sales growth assumption for this year upwards to 6.5 per cent y-o-y which bode well for the current year outlook.

The organisation believed the sector’s growth will be driven by sensors which is expected to witness an increase of nine per cent y-o-y, analog (7.8 per cent y-o-y) and memory (12.8 per cent y-o-y).

In the meantime, the research firm noted the higher sales growth in January 2017 was spreaded across regions.

It added all regions reported double digit growth rates apart from Europe.

Elaborating further, the research firm observed that sales in China led the pack, increasing by 20.5 per cent y-o-y.

It noted the increased sales was followed by the US market which rose by 13.3 per cent y-o-y, Japan (12.3 per cent y-o-y); Asia Pacific (11 per cent y-o-y and Europe (4.8 per cent y-o-y).

TA Research pointed out that all regions reported positive y-o-y sales for the second month in a row. The research firm also noted billings increased by 52.3 per cent y-o-y to US$1,860.3 billion.

It highlighted that the strong billings marked the strongest rise in billings since February 2011.

As a result, the research firm opined that equipment spending is expected to remain strong into 2017, with investments directed at leading edge memory and foundry fabs.


EU group says China plan ’skews’ high-tech field

Posted on : 07-03-2017 | By : sabah today | In : International Business

BEIJING: Beijing’s plans to use “staggering” subsidies to create national champions in high-tech industries would further skew China’s business playing field and worsen trade frictions, a European lobby group warned on Tuesday (Mar 7).

The EU Chamber of Commerce said in a report state subsidies of hundreds of billions of dollars and foreign technology transfers in 10 sectors were “highly problematic” and urged China to stop interfering in the market.

“We see that Chinese market players are entering the global marketplace, whereas we are still here in front of the Great Wall of China,” the group’s president Joerg Wuttke told reporters ahead of the release of the report on Beijing’s China Manufacturing 2025 plan first announced in 2015.

The report said subsidies for industries including new-energy vehicles, information technology and robotics had “already created problems for both China’s economy and European business”.

“We think China would be better off not picking winners and deciding who’s doing what in the future,” said Wuttke. “The recommendation we have there is, ’stay away, let the market pick the winners’.”

European electric carmakers face “intense pressure to turn over advanced technology in exchange for near-term market access”, and IT companies have seen their market access shrink, the report said.

The Chinese plan’s emphasis on self-sufficiency is “particularly concerning – it suggests that Chinese policies will further skew the competitive landscape in favour of domestic companies”.

This could cause a new flood of overcapacity in those industries, as happened previously in the steel and solar sectors, and exacerbate tensions with China’s international trade partners, the report said.

China’s Communist-controlled parliament is holding its annual 10-day session in Beijing, in which delegates approve growth targets and the national budget.

Beijing has urged its companies to enter markets abroad in search of higher returns and advanced technologies to make them more competitive in a range of high-value sectors from aerospace to agribusiness and robotics.

China ranked 84th globally – behind Saudi Arabia and Ukraine – in the World Bank’s ease of doing business index for 2016, and second to last in an OECD report on the restrictiveness towards foreign investment.

Since President Xi Jinping took over in 2012, the government has moved away from liberalisation on several fronts, strengthening state-owned enterprises, increasing capital controls and tightening restrictions on free exchange of information and ideas online.

In a report released in January by the American Chamber of Commerce in China, a record 80 per cent of 462 US businesses who replied to a survey said they felt that foreign companies were less welcome than in the past.


SMEs, start-ups told to tap into India’s digital trade platform

Posted on : 07-03-2017 | By : sabah today | In : National Business

KUALA LUMPUR: The Ministry of International Trade and Industry (MITI) is encouraging more local small and medium enterprises (SMEs) and start-ups, in their pursuit to expand their network, to seize opportunities in India’s digital trade platform.

Secretary-General Datuk Seri J Jayasiri said India was a big market to tap, with a population of about 1.8 billion, and there was a huge demand for technology tools and systems.

“As this year has been declared, ‘The Year of Internet Economy’, we have hired Alibaba Group Founder Jack Ma as our advisor on digital economy, but we must also look at other markets and participate in business technology events to get a bigger outreach.

“This would save them (entrepreneurs) a lot of time instead of going to  India physically,” Jayasiri told a press conference after the soft launch of the Asean India Biztech Expo & Conference yesterday.

Last year, Malaysia’s total trade with India stood at RM1.85 billion.

Earlier, Jayasiri said businesses could now look forward to greater opportunities to invest and trade in both goods and services once the Regional Comprehensive Partnership Agreement (RCEP) is concluded, as scheduled, in November.

“Not only will the market of 1.8 billion people be expanded to a lucrative market of 3.5 billion, but also a wide supply chain that would provide opportunities for enterprises of all sizes.

“Businesses of Asean and India can enjoy first mover advantage, if only they are willing to take the bold step to invest now,” he said.

The maiden two-day event beginning May 24, organised by the Asean India Business Council (AIBC) in conjunction with the 25th anniversary of Asean-India relations, will be opened by MITI Minister Datuk Seri Mustapa Mohamed.

Themed, ‘Bridging Borders Through Business’, it would comprise three main components namely exhibition, conference and the Asean-India Achievement and Excellence Awards.

Meanwhile, AIBC Co-Chairman Datuk Ramesh Kodammal said the exhibition would cover high-technology industries including Internet of Things (IoTs), smart machines, customers digital assistance automative and aeronautical, biotech and pharmaceutical.

“We are expecting more than 5,000 visitors and about 120 booths to be put up by India, Malaysia and businesses from other Asean countries.

Trade and investment flows between Asean and India remained modest with an average of US$67.96 billion over 2011-2015.

In 2015, trade figures stood at US$58.74 billion, which represented only 59 per cent of the US$100 billion target set by Asean leaders.

To-date, Asean has free trade agreements with China, Japan, South Korea, Australia and New Zealand.

Asean’s global trade per annum is over US$2.5 billion and 50 per cent of it accounted for imports into Asean.


Govt provides RM50 million grant to assist commodity industry

Posted on : 07-03-2017 | By : sabah today | In : National Business

KUALA LUMPUR: The government is providing a grant of RM50 million to assist the commodity industry in addressing food safety concerns, including reducing the level of containment in palm oil.

Minister of Plantation Industries and Commodities Datuk Seri Mah Siew Keong in this context, gave an assurance that palm oil and its derivatives are indeed safe for consumption as a food item.

“In conjunction with the 100 years of commercial oil palm planting in Malaysia, the government will continue to priortise towards enhancing the quality and safety of Malaysian palm oil products for consumption.

“We have not decided on how companies would receive the grant. But, it is open now to all factories and refineries working together to do research and further increase the quality of palm oil,” he told reporters after officiating the Global Palm and Lauric Oils Conference yesterday.

Malaysia, being a major producer and exporter of palm oil will continue to take measures to address the food safety aspects of palm oil. To further promote the image of the oil palm industry, Mah said Malaysia would embark on the mandatory certification of certified and sustainable palm oil under the framework of Malaysian Sustainable Palm Oil.

“This scheme which was implemented on a voluntary basis beginning 2015 will be made mandatory in stages starting from Dec 31, 2018,” he added.

In another development, Mah, in referring to North Korea, said the industry was not worried about Malaysia’s exports of palm oil and rubber to the country.

Forty per cent of Malaysia’s total exports to North Korea comprises palm oil and rubber.

Palm oil exports to North Korea last year was only worth RM3 million and rubber at RM1.2 million. Bilateral trade between the two countries last year stood at RM10.7 million.

On the outlook for palm oil, Mah expects exports to reach RM70 billion this year from RM67 billion in 2016 and crude palm oil price to average between RM2,700 and RM2,800 per tonne this year.

“We are maintaining our earlier forecast that the CPO will average between RM2,700 per tonne and RM2,800 per tonne in 2017.

“This is on anticipation of higher prices, driven by various government efforts and initiatives, including venturing into various other markets, especially India and Iran,” said Mah.


MISC tops MPRC (Malaysia Petroleum Resources Corporation) 100 rankings for 2015

Posted on : 07-03-2017 | By : sabah today | In : Uncategorized

Kuala Lumpur: MISC Bhd has topped the Malaysia Petroleum Resources Corporation (MPRC 100) rankings for 2015 due to its higher revenue contribution from its offshore business unit.

The rankings were announced by MPRC, the industry development agency under the Prime Minister’s Department.

Besides MISC, SapuraKencana Petroleum Bhd and Dialog Group Bhd bagged second and third place in the ranking.

These companies are publicly traded and privately held oil and gas services and equipment (OGSE) companies.

“Other significant movers in the list included EA Technique (M) Bhd, which vaulted to the 23rd spot from 74th, Petroleum Geo-Services Exploration (M) Sdn Bhd advanced to 48th from 114th previously while Grade One Marine Shipyard Sdn Bhd notched up to 63rd spot after coming in at 194th in the previous year,” it said in a statement.

The MPRC100 also analysed the OGSE industry performance for the year ended 2015.

In 2015, overall revenue for OGSE fell 11 per cent to RM65.8 billion while total OGSE profit before tax declined to RM3.1 billion in 2015 from RM6.5 billion in 2014.

This was attributed mainly to asset impairment losses recognised by offshore drilling rig and vessel owners in response to declining rates and demand.


Higher export of commodities spur January trade figure

Posted on : 07-03-2017 | By : sabah today | In : National Business

KUCHING: The exports of commodity-related products pushed the country’s exports figure in January to reach double-digit growth levels.

The research arm of Hong Leong Investment Bank Bhd (HLIB Research) in a report yesterday said exports of commodity-related products charted strong growth of 35 per cent year-on-year (y-o-y) in January 2017.

The stronger exports in January compared with 22.7 per cent in December 2016 was due to continued recovery in commodity prices and export volume.

HLIB Research observed that the crude petroleum prices grew by 43 per cent y-o-y in January, the second increase after more than two years of decline.

At the same time, the research firm observed that the refined petroleum product prices recorded higher growth of 23 per cent y-o-y.

Having said that, export volumes of crude petroleum, petroleum products and liquefied natural gas (LNG) continued to expand in January.

The export growth in January has benefited from the ongoing recovery in commodity exports and continued expansion of manufactured exports.

Additionally, HLIB Research said manufactured exports registered a slightly faster annual pace of growth of 7.7 per cent y-o-y as compared to a growth of 7.2 per cent y-o-y in December 2016.

The faster growth was due to higher growth in the electrical and electronics segment and the rebound in metal exports whcih offset the decline in export for machinery and chemical products.

Likewise, the research firm noted the intermediate imports grew further by 10.4 per cent y-o-y which suggested continued expansion in manufactured export growth in the near-term.

On another note, HLIB Research said Malaysia’s exports to all major countries expanded at a faster pace on an annual basis.

The research firm pointed out that exports to major trading countries for instance China, Japan, European Union and Association of Southeast Asia Nations (Asean) recorded double-digit growth.

Moreover, it noted exports to the US picked up but remained modest with a growth of 5.6 per cent y-o-y in January.

As a whole, the research firm noted Malaysia’s gross exports expanded by 13.6 per cent y-o-y in January which was higher than the 10.7 per cent y-o-y growth in December 2016.

Going forward, HLIB Research opined that the country’s exports will continue to remain resilient in the near term supported by exports of manufactured goods.


PM: Trade & investment between M’sia-Saudi Arabia to improve further

Posted on : 07-03-2017 | By : sabah today | In : National

KUALA LUMPUR: Prime Minister Najib Razak is confident that economic and trade relations, as well as, two-way investment between Malaysia and Saudi Arabia will improve further in the future.

This is especially so after the visit of Saudi Arabia’s King Salman and the signing of the new partnership between Petronas and Saudi Arabian Oil Company (Aramco).

“Moreover, during the visit, we signed a large number of memorandums of understanding between private sector companies in both countries worth more than nine billion ringgit.

“This is evidence of a great desire on both sides to increase business volume and strengthen economic ties,” he said in a recent interview with Al Arabia News Channel General Manager Turki Aldakhil.

Najib was asked on the cooperation between Malaysia and Saudi Arabia and the wider Gulf Cooperation Council.

The Prime Minister said total trade todate between Malaysia and the Gulf Cooperation Council (GCC) amounted to RM45 billion, with United Arab Emirates ranking first in trade exchanges followed by Saudi Arabia.

The GCC groups Bahrain, Oman, Qatar, Saudi Arabia and the UAE.

Meanwhile, King Salman led a 600-member powerful entourage to Malaysia from Feb 26 to March 1, 2017 as part of his month-long Asian tour which also included visits to Indonesia, Brunei, Japan, China, the Maldives and Jordan.

The visit to Malaysia was reported to have yielded RM40 billion in potential investments with the biggest chunk coming from Petronas-Aramco share purchase agreement worth RM31 billion.

Seven Memorandum of Understandings, with an estimated value of RM9.74 billion, were signed between Malaysian and Saudi companies, covering areas such as construction, halal cooperation, aerospace and haj services.

Malaysia already has a strong presence in Saudi Arabia’s construction sector with 19 contracts, worth RM18.5 billion, awarded to Malaysian companies, to date.

In terms of trade, total trade between both countries increased by 27.8% to RM14 billion last year from RM11 billion in 2015.


Malaysia will continue sending students to Japan and South Korea – PM (an exclusive interview with Al Arabiya News Channel in conjunction with Saudi Arabia’s King recent visit to Malaysia.)

Posted on : 07-03-2017 | By : sabah today | In : National

KUALA LUMPUR– Malaysia has sent many of its students to Japan and South Korea, and will continue to do so, as well as to almost parts of the world, said Prime Minister Datuk Seri Najib Tun Abdul Razak.

He said sending Malaysian students to study in Japanese and Korean universities, for instance, had helped them to acquire the Japanese work ethics.

“I can tell you that this step has contributed to the achievement of our development, but it was not only limited to the adoption of economic policies, there are other reasons to which we owe the success achieved in our country today,” he said in an exclusive interview with Al Arabiya News Channel in conjunction with Saudi Arabia’s King Salman Abdulaziz al Saud’s recent historical visit to Malaysia.

Starting from 1981, Malaysia has adopted the ‘Look East’ policy. This policy looked at Korea and Japan and sought to use these countries as examples.

In the interview which was conducted by Al Arabiya general manager Turki Aldakhil recently, Najib was asked to what degree has the Japanese model helped in the success of Malaysia’s experience.

“Yes, in the beginning we have benefited from theirs and we have adopted a policy that echoed the two Japanese and Korean experiences because they were the success stories of the seventies and eighties of the last century.

“We believed that these were the economic plans that we should follow in their footsteps. We have learned from these two experiments and embraced some of their components. We focused on economic policies and work ethic in both,” he said.

Commenting on ethnic and religios diversity, the Prime Minister said although the Malaysian society is characterized by great diversity the people had been successful in working together as one nation.

He said despite facing many challenges, Malaysia still made a great success because its relied on the strengths of each ethnic group and had adopted a policy to build a national unity.

“When I assumed my duty I launched the concept of ‘1Malaysia’ in order to emphasize some of the core values that promote a sense of loyalty and collaboration.

“When we have won our independence, many people were not optimistic about our ability to achieve success as a nation but we proved our critics wrong,” he said.

Najib said the diversity had its merits but it also posed challenges and the most important of these challenges was to avoid internal conflicts between different ethnic groups.

“We have succeeded in that to a large extent. But most importantly we need to move forward as one synergistic nation.

“This is what we must work on and I realize that despite the peace and harmony which we enjoy today we need to work to promote national integration and national unity,” he added.