Breakfast briefing: Friday, January 22

Market wrap: Wall Street staged a modest rally on Thursday as oil prices recorded their biggest gain this year and ECB president Mario Draghi raised hopes of more stimulus for Europe. Seven of 10 major S&P 500 sectors climbed. Helping global and US stocks, the European Central Bank kept its main rates on hold and Draghi said the central bank would "review and possibly reconsider" its monetary policy as soon as March. Also boosting share prices, oil spiked from a 12-year low after US crude stockpiles did not rise as much as feared. - Reuters

DJIA ended 0.74% stronger at 15,882.68 points, and the S&P 500 gained 0.52% to 1,868.99 and the Nasdaq edged up 0.01% to 4,472.06.

Forex summary

*The ringgit gains 0.82% to 4.3455 per US$

*It rose 1.26% to 4.7161 per euro

*Up 0.48% to 6.1802 to the pound sterling

*0.40% higher to 3.0343 per Singapore dollar

*0.93% down to 3.0479 per Aussie

*Up 0.93% to 3.6875 per 100 yen

Energy

Oil prices rebounded over US$1 a barrel from 12-year lows on Thursday, their biggest daily gain this year, as rallying financial markets gave some bearish traders reason to take profits on record short positions. Benchmark Brent futures for March delivery rose US$1.37 to settle at US$29.25 a barrel, a 4.9% gain. Brent rose as much as 7% during the session to US$29.84. - Reuters

Top foreign stories

Yahoo to decide next strategic steps after quarterly earnings: Yahoo Inc will decide on its next strategic steps only after releasing quarterly earnings on Feb 2, people familiar with the matter said, as the company continues to resist investor calls to explore a sale of its core Internet assets. Yahoo wants to gauge shareholder reaction after presenting its strategic vision during the earnings conference call, one of the people said. - Reuters

AmEx to cut US$1b in costs by end of 2017: Credit card issuer American Express Co said it would cut US$1 billion in costs by the end of 2017 as it responds to intensifying competition in the payments industry. The company reported its fourth straight decline in total revenue, net of interest expense, by 7.6% to US$8.39 billion. Net income attributable to common shareholders fell to US$873 million from US$1.44 billion a year earlier. - Reuters

As Chinese defaults rise, private placements sweep risks under mat: Chinese brokers are directing large amounts of capital fleeing China's tumbling stock market into high-yielding private debt, aiding embattled corporates but also raising risks for buyers including mutual funds, trusts and ultimately retail investors. Newly announced private placements were more than 60 billion yuan (US$9.12 billion) in November on the Shanghai exchange alone, more than the total new corporate debt issued in both Shanghai and Shenzhen as recently as April. - Reuters

AB InBev shortlists Asahi, ThaiBev for Peroni, Grolsch purchase: Japan's Asahi Group Holdings and Thai Beverage have made it through to the final stages of an auction to buy SABMiller's Peroni and Grolsch beer brands, several sources said on Thursday. Private equity firms PAI Partners and Bain Capital have also moved to the next round of bidding, they said. European buyout fund EQT emerged as the fifth bidder to be shortlisted by the seller, Anheuser-Busch InBev, two of the sources said. - Reuters

Top local stories

Bank Negara cuts reserve requirement: Bank Negara made a surprise cut in the statutory reserve requirement (SRR) by half a percentage point to 3.5% but kept the overnight policy rate unchanged at 3.25%. Alliance Research chief economist Manokaran Mottain said the SRR cut will release around RM6bil into the banking system. - Starbiz

GDEX places out 10% of its shares to Japan's Yamato: GD Express Carrier Bhd (GDEX) is placing out 10% of its shares to Japan's Yamato Holdings in a deal worth RM217.3mil.
The Japanese logistics player intended to increase its stake in GDEX to 23% by buying more shares from other shareholders, the company said in a statement. It did not name sellers. - StarBiz

Nexgram withdraws Ire-Tex takeover offer: Nexgram Holdings Bhd has withdrawn its takeover offer for Ire-Tex Corp Bhd, a deal that was first announced on Nov 20, 2015. The withdrawal is subject to the Securities Commission's consent. “Upon the consent of the SC, the offer shall cease and all acceptances received pursuant to the offer shall be returned to the accepting holders,” Nexgram said. - StarBiz

Seacera unit wins RM14.88mil contract: Seacera Group Bhd subsidiary SPAZ Sdn Bhd has been awarded a RM14.88mil contract by Turnpike Synergy Sdn Bhd for the construction of one block of quarters for the Ampang Jaya Traffic Police and an auxiliary building in Pandan Indah, Kuala Lumpur. - StarBiz

Lay Hong shares sold at RM5 apiece off-market: A big block of shares in poultry firm Lay Hong Bhd was transacted at a steep discount of 37.5%, sparking speculation that either a new strategic shareholder, or newly substantial shareholder NH Foods Ltd has increased its stake in the company. The eight million shares sold off-market deal equates to a 13.8% stake and is valued at RM40mil at the crossing price of RM5. Lay Hong closed at RM8 on Thursday. - StarBiz

Vehicle sales seen to fall for first time in 6 years: The Malaysia Automotive Association has forecast Malaysia’s total industry volume will drop by 2.5% to 650,000 units in 2016 against last year - the first fall in sales in six years - due to subdued consumer sentiment, a sluggish economy, weaker ringgit and tighter lending requirements. - StarBiz

Pecca Group gets SC nod for IPO: Pecca Group Bhd has obtained approval from the Securities Commission (SC) for its proposed initial public offering (IPO) on the Main Market of Bursa Malaysia. The IPO will involve an offer for sale of 43.33 million existing shares and a public issue of 47.80 million new shares. - StarBiz

Gadang’s Q2 net profit doubles: Gadang Holdings Bhd’s net profit more than doubled to RM17.7mil in the second quarter, despite a 11% drop in revenue to RM102mil, on improved margins from construction activities and higher contribution from its property division. - StarBiz

F&N to boost production: Fraser & Neave Holdings Bhd plans to spend about RM300mil over the next two years to boost production capacity and improve its operating cost structure. But the capital expenditure figure could be “far greater” than RM300mil, as there were also other projects currently in the approval process, said CEO Lim Yew Hoe. - StarBiz

SLP Resources sees record profit amid China drive: SLP Resources Bhd, Malaysia’s best performing small-cap stock, predicts another year of record profit as a slumping ringgit boosts sales and the Chinese government’s easing of population curbs opens a new market for its packaging products. - Bloomberg

Upbeat outlook for medical device exports: Export revenue of the medical device industry is expected to increase by double digits in 2016, in tandem with the projected growth of the Asean medical device market, which is expected to double to RM8bil by 2017. For the first 11 months of last year exports of medical devices rose 13.6% to RM14.1bil from RM13.5bil in 2014. - StarBiz

Ex-Petronas CEO Shamsul is NCB chairman: NCB Holdings Bhd, which operates Northport in Port Klang, Selangor, and Kontena Nasional Bhd, has appointed former Petroliam Nasional Bhd (Petronas) president and chief executive officer Tan Sri Shamsul Azhar Abbas as its non-independent and non-executive chairman. - Edge FD

GUH calls off China water treatment project: Printed circuit boardmaker GUH Holdings Bhd has called off its proposed investment in a water treatment plant in Jiangsu Province, China with the Development General Company of Jiangsu Gaochun Economic Development Zone, after it failed to materialise. - Edge FD

High Court orders Kian Joo to pay RM9.3mil to former ED: Kian Joo Can Factory Bhd and two of its units have been ordered by the Kuala Lumpur High Court to pay RM9.342mil in relief to ousted former executive director See Teow Koon. The can and carton maker said the sum included RM8.823mil in retirement gratuity, contractual bonus and salary arrears claimed by See till he reaches 70 years old, as well as RM519,075 in litigation costs. - StarBiz

Evyap Group to shift bar soap manufacturing to Malaysia: Evyap Holdings AS, one of the world’s largest privately owned soap makers, plans to shift its production of bar soaps from Turkey to Malaysia by the end of this year. The group, which has a wholly-owned subsidiary in Malaysia called Evyap Sabun Malaysia Sdn Bhd, set up a production facility in Tanjung Langat, Johor, at the end of 2014. - Edge FD

AGMs/EGMs

Astino Bhd

Time: 10.30am

Venue: Melati Room, Saffira Country Club, Lot 2679 Mk 1, Jalan Todak Bandar Seberang Jaya, Seberang Jaya Tengah, Penang

Ho Hup Construction Company Bhd

Time: 10am

Venue: Bukit Jalil Golf and Country Resort, 1st Floor, Langkawi Room, Jalan Jalil Perkasa 3, Bukit Jalil, Kuala Lumpur

* Ho Hup seeks shareholder approval for the purchase of 70% stake in Intact Corporate Approach Sdn Bhd by 75%-owned subsidiary Ho Hup Ventures (Johor) Sdn Bhd for RM20 million cash.

ALL NEWS