In today’s edition of Evening 5 — Bank Negara has kept OPR at 3% after holding its final MPC meeting for 2023. Meanwhile, Malaysia Aviation Group says that it is on the path to turning profitable, its first full-year net profit since its privatisation.
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00:00 [Music]
00:04 At its final Monetary Policy Committee meeting for 2023,
00:08 Bank Negara decided to maintain the overnight policy rate at 3%.
00:12 This marks the third consecutive session where the MPC has opted to press pause on the OPR
00:17 despite calls from some quarters for the central bank to raise the key interest rate
00:22 to help stabilize the ringgit, which is at a near 25-year low against the US dollar.
00:27 The last hike happened back in May when BNM increased the OPR by 25 basis points to 3%.
00:33 Commenting on the latest monetary decision, BNM said the advanced gross domestic product estimate
00:38 points to an improvement in economic activity in the third quarter.
00:42 The central bank says that growth in 2024 will be driven mainly by resilient domestic expenditure
00:48 with some support emanating from the expected recovery in electrical and electronic exports.
00:54 While the growth outlook remains subject to downside risks stemming from the weaker than expected
00:58 external demand and larger and protracted declines in commodity production,
01:03 upside risks to growth mainly emanate from stronger than expected tourism activity,
01:07 a stronger recovery from the E&E down cycle, and faster implementation of existing and new projects.
01:14 At the current OPR level, BNM notes that the monetary policy stance remains supportive of the economy
01:19 and is consistent with the current assessment of inflation and growth prospects.
01:23 Going into 2024, BNM said inflation is expected to remain modest,
01:28 as both headline and core inflation had moderated due to easing cost pressures.
01:32 In the third quarter, headline inflation averaged at 2%, followed by core inflation at 2.5%.
01:39 On the global front, despite some signs of recovery emerging in the E&E sector,
01:43 BNM warns that global trade remains soft, partly due to the shift in spending from goods and services
01:48 and ongoing trade restrictions.
01:51 Commenting on the currency market, BNM said expectations of a higher-for-longer interest rate environment
01:56 in the US and increased concerns over the escalation of geopolitical tensions
02:01 had contributed to a persistently strong US dollar.
02:04 Nevertheless, the central bank assured that these developments are not expected to derail Malaysia's growth prospects
02:10 and it will continue to manage risks of heightened volatility, including to provide liquidity
02:15 to ensure the orderly functioning of the domestic foreign exchange market.
02:19 Malaysia Airlines
02:24 Malaysian aviation group, parent company of Malaysia Airlines, is on track to achieve its first full-year net profit
02:29 since its privatisation back in 2014.
02:33 According to Group MD, Datuk Isham Ismail, this is driven by strong demand in the marketplace,
02:38 elevated yields and a lean and agile balance sheet.
02:41 This turnaround comes two years after it completed a restructuring exercise in February 2021
02:46 that saw it achieve a reduction in its liabilities of over RM15 billion.
02:51 Speaking at the two-day KAPA Asia Aviation Summit 2023,
02:54 Isham says that the group has been cash flow positive on a daily basis for the last 27 months,
03:00 with net gearing at 1.09 times and its cash balance at RM5.2 billion as at end October 2023.
03:07 Isham says it forecasts that demand will remain elevated at least until the second quarter of 2024,
03:13 with capacity in the Asia-Pacific region to return to 2019 levels by the end of this year.
03:19 For MAG, he says the airline will attain 93% seat capacity of 2019 levels by the close of 2023.
03:26 According to Isham, fuel as well as foreign exchange and interest rates are major concerns,
03:31 especially when MAG takes delivery of new aircraft, especially if they are on operating leases.
03:37 MAG is betting on most part on Asia, India, Australia and Europe to drive its growth going forward
03:42 and plans to launch routes to Amritsar, Ahmedabad and Trivandrum next week.
03:47 He does note how passenger traffic coming out of China has been disappointing
03:51 given its increasing unemployment rates,
03:53 but still expects recovery in the Chinese market at the end of the second quarter of 2024.
03:58 On Malaysia Airlines' in-flight catering services, Isham says 97% of its meals have returned to normalcy,
04:05 adding that it is still on track to fully restore its in-flight meal services by November 15 this year.
04:11 (Music)
04:16 Mitsui & Co. is investing US$58 million in Aksyata Digital & Analytics
04:22 through ADA's holding company, Aksyata Digital Services, which is a hold-your-own unit of Aksyata Group.
04:28 Mitsui's additional investment values ADA, Asia's largest independent data and AI company,
04:33 at US$550 million and increases its stake in ADS from 3.29% to 20%,
04:41 resulting in an effective 12.69% stake in ADA.
04:45 Notably, the Japanese conglomerate has been working closely with ADS and ADA
04:50 following its initial investment in 2019
04:52 and is now intensifying efforts to deliver data and AI solutions to partners and clients in the Asia-Pacific region.
05:00 Group CEO and MD of Aksyata, Vivek Sud, said that Mitsui's substantial business capabilities
05:05 derived from a global portfolio will further enhance ADA's expertise in AI and data analytics.
05:12 Toru Matsui, a representative director and senior executive MD at Mitsui, said the additional investment in ADS
05:18 will strengthen its customer relationship management strategy to develop digital marketing business clusters
05:23 that contribute to its consumer-centric businesses.
05:27 ADA CEO Srinivas Gattamneni says that the group is excited about the prospect of deepening its collaboration with Mitsui
05:35 to empower their partners with cutting-edge data, AI and technology solutions,
05:40 and says this represents a significant step forward as it enters its next phase of growth.
05:45 Stella Holdings received shareholders' approval to buy construction firm Pembinaan Tegomaju
05:55 in an extraordinary general meeting on Thursday.
05:58 In a statement, Stella said the acquisition, which comes with a profit guarantee of $120 million
06:03 for FY24, FY25 and FY26 on an aggregate basis, is especially noteworthy due to PTM's $1.16 billion worth
06:12 of outstanding orders in areas such as roadworks, building construction and mechanical and electrical projects.
06:19 Moreover, PTM has submitted quotations and is in discussions for contracts totaling approximately $1.78 billion,
06:26 amplifying the earnings potential over the next three years.
06:29 After the EGM, Stella Managing Director Datuk Benson Lau said that the group's unanimous decision to acquire PTM
06:36 marks a pivotal moment for the company as the new addition brings a vast $1.16 billion worth of outstanding orders
06:43 into its portfolio, thereby solidifying its growth prospects.
06:47 Complementing this acquisition, Stella will undergo a rebranding to become Baria,
06:52 a change that encapsulates with wider vision and growth objectives.
06:56 The EGM also gave the green light for a private placement of up to 50 million shares,
07:00 representing around 74.63% of the current total number of issued Stella shares or 11.99% post-acquisition.
07:09 The exercise aims to raise $40 million for necessities like construction materials, labour costs and subcontractors.
07:21 Bijaya Corp has emerged as a substantial shareholder of Celcon after acquiring 55 million shares or 5.43%.
07:28 This makes the Tan Sri Vincent Tan Ling conglomerate the third largest shareholder of the waste and wastewater engineering firm.
07:35 B Corp did not reveal the purchase price of the stake acquisition.
07:39 However, based on Celcon's latest closing price of 21.5 cent, the stake would have cost 11.83 million ringgit.
07:46 Celcon's share price jumped 14% today to close at a near three-month high, giving it a market capitalization of 218 million ringgit.
07:54 Celcon's largest shareholder is its Executive Deputy Chairman Tan Sri T.T.M. Lee,
07:59 with a direct interest of 5.785% and an indirect interest of 6.761%,
08:04 followed by T's spouse Datian Goh Faik Lin, with 10.58% stake in the company.
08:10 Goh is also Celcon's non-independent and non-executive director.
08:14 Celcon's financial performance has been languishing, with the group registering a net loss of 41.33 million for FY2022.
08:22 Prior to that, the group had been in the red for three consecutive years,
08:25 with a net loss of 4.39 million in FY2018, 9 million in FY2019, and 8.06 million in FY2020,
08:34 before returning to the black in FY2021, posting a net profit of 16.78 million ringgit.
08:41 [Music]