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Reports Malaysia

Malaysia stock market and companies daily report (March 19, 2014)

March 19, 2014, Wednesday, 05:54 GMT | 02:54 EST | 11:24 IST | 13:54 SGT
Contributed by Shares Investment

IMF: Malaysia To Grow 5% In 2014

- The International Monetary Fund (IMF) expects the Malaysian economy to continue to grow at a healthy pace in 2014, supported by a long pipeline of investment projects, strong consumption and the gradually tightening financial conditions.

- The IMF notes that the improved external environment coupled with the factors above should be able to offset the headwinds from fiscal consolidaton.

- In 2013, Malaysia’s growth came in at 4.7 percent while inflation remained low. 2014 is expected to see a growth of 5 percent for Malaysia.

Significance: While near-term prospects are favourable, Malaysia’s economy is exposed to risks from tighter global financial conditions and slower growth in major trading partners. High household debt and banks’ exposure to real estate sector would warrant continued vigilance and additional macro-prudential measures.

Bursa Malaysia Cautions On Hong Leong Capital’s Sharp Rise

- Bursa Malaysia Securities is advising investors to exercise caution in the trading of Hong Leong Capital after the recent sharp rise in the price of its shares.

- Hong Leong Capital has previously confirmed that it was not aware of any corporate development or explanation that could give rise to the unusual trading activities in its shares following Bursa’s query into the company.

- Hong Leong Capital reported its half year results ended 31 December 2013 with revenue increasing 3.7 percent to RM123.3 million while net profit nearly tripled to RM47 million given higher contribution from its fund management and unit trust management divisions.

Significance: Hong Leong Capital’s shares have soared over multiple folds from the close of 11 January 2013 at RM1.42 to yesterday’s close at RM13.10 even after a take-over offer by Hong Leong Financial Group at RM1.71 on 14 January 2013, which lapsed on 25 February 2013.

Amanah Raya Development And Malaysia Pacific Corp Settlement Draws Questions

- Questions were raised about the viability of a RM120 million settlement deal between Amanah Raya Development (ARD) And Malaysia Pacific Corporation (MPC).

- MPC had announced that it would pay RM120 million to ARD to settle a material litigation arising from a joint venture entered in 2008. RM5 million will be paid up upon the execution of the agreement and RM115 million within the next six months. ARD will be able to charge a late interest payment of eight percent per year if MPC is unable to pay the amount.

- While MPC would dispose its only property investment, Wisma MPL, the property would be unlikely to fetch its selling price of RM320 million as the yield for Wisma MPL, without the carpark, is only 1.44 percent.

Significance: While the money is also obtained from advances from major shareholder and proceeds from prospective joint ventures, the disposal of its asset, Wisma MPL could also trigger a PN17 status as that is MPC’s only source of income. The settlement value is likely to weigh on the company’s performance.