The Star Online: Business
The Star Online: Business |
| Posted: 19 Aug 2011 06:29 PM PDT Global foreign exchange market GLOBAL markets continue to recover and sentiments stabilised as the week went on. Global economies, including the US, UK and eurozone are poised to slow down on austerity measures. Risk assets will remain vulnerable to further sell-off even though more consolidations would likely be seen before Bernanke's Jackson Hole Speech on Aug 25-27. The eurozone second-quarter GDP data showed the economy grew by a lower-than-expected rate of 0.2%. Eurozone's CPI remained at 2.5% in July, however the core CPI dropped to 1.2%. The euro, however, gained 0.5% during the week. Much of the volatility seen in the past week eased, as investors ventured into riskier assets and higher-yielding currencies. Meanwhile, Fitch Ratings announced that it had decided to affirm the US sovereign rating at AAA (stable), citing the country's central role in the global financial system. However, the US dollar was softer across the board and at the point of writing, the US Dollar index declined by 0.43% to 74.25. Economic reports from the US were mixed and helped eased fears of a new recession. US producer prices rose by 0.2% in July, ahead of expectations for a 0.1% gain while core prices (excludes food and energy) rose by 0.4%. . UK's unemployment unexpectedly increased to 7.9% while the Monetary Policy Committee Minutes released from the Bank of England's August meeting showed policymakers voted unanimously to keep interest rates on hold. However, the British pound found very good buying interest and gained 1.27% to 1.6487 levels. Demand for riskier assets drove the Australian dollar higher to 1.06 levels before retreating. In the end, the currency was down 0.1% to 1.0364 levels. US dollar/yen pair remains trading in a limited range, hovering above the 76.50 price zone and limited below the 77.00 level. Asian currencies saw a listless week amid lack of positive drivers with the Bloomberg-JPMorgan Asia Dollar index retreating by 0.08% to 119.12. However, the ringgit strengthened during the week, trading at 2.9894-levels. Malaysia's economy grew 4% year-on-year (y-o-y) in the second quarter of 2011 versus a revised 4.9% in the first quarter, but was above Bloomberg's forecast for a 3.6% gain. Overall the main source of growth for the second quarter was mainly underpinned by sustained expansion in private domestic demand and intra-regional trade within the region. Our economics team expects growth momentum to rebound in the final quarter of this year led by support from implementation of the Economic Transformation Projects, bringing full-year GDP growth to 5% for 2011. Singapore's non-oil domestic exports contracted for the first time since May by 2.8% y-o-y as a sharp 16.9% y-o-y contraction in the electronic component continued to weigh on the overall expansion. Hong Kong's economy expanded at a slower pace in the second quarter as GDP rose 5.1% y-o-y from 7.5% in the first quarter. Although consumer prices came in slower than expected, the ringgit retains its fundamental attractiveness and Bank Negara may allow it to appreciate further to rein in inflationary inflation. As such, we expect US dollar/ringgit to trade within the range of 2.9500 to 3.0000, with the 2.96 and 2.97 range appears to be providing congestive support for US dollar/ringgit. US Treasuries (UST) market US Treasuries saw gains extending further as concerns over slowing US economy prompted investors to shift towards relative safe haven assets. Benchmark US Treasury yields for two-, five-, 10-years seen easing lower to reach 0.19%, 0.87% and 2.02% as of Thursday's close. Malaysian bond market The local bond market ended stronger during the week, with further curve flattening seen across the benchmark Malaysia Government Securities (MGS) stocks. On the macro front, all eyes were seen focusing at this week's market moving July CPI and the second-quarter GDP data. Inflation concerns is starting to ease from a 27-month high of 3.5% in June, with the recent print of 3.4% y-o-y for the month of July. Inflation prospects could potentially ease by end-2011, with our economics team estimating full-year average CPI likely to be on the lower-end of the comfort zone of 3%-3.5%. Against a backdrop of less rate hike pressure and easing inflation prospects, we expect this to bode well for bond investments. Benchmark MGS closed mostly firmer as at Thursday's close with yields on the five, seven, 10, and 20-year benchmarks closing 2-5 bps lower at 3.42%, 3.52%, 3.64% and 4.06%. Meanwhile, the three-year benchmark closed 2 bps up at 3.19% while the 15-year benchmark was unchanged at 3.9%. Overall, RM13.6bil worth of trades was transacted with a daily average trading volume of RM3.4bil. In the private debt securities market, a total of RM2.8bil worth of trades was transacted with a daily average trade volume of RM706mil. The GG/AAA and AA segments contributed 54% and 34% of trades respectively with the remainder by the single-A segment. In the GG/AAA segment, notable transactions include Cagamas 2012-13, of which yields rose 3 bps to 3.53% with RM540mil done, Syarikat Borcos Shipping 2005-16 which closed unchanged at 3.85% with RM160mil done, and Hyundai Capital bonds maturing 2011-13, which closed 2-5 bps lower at 3.66%-3.92% with RM170mil done. Meanwhile, within the AA segment, trading activities continue to skew towards banking and power sector bonds. Banking bonds of CIMB Group 2004-16 and Public Bank 2008-17 garnered trading volume of RM65mil and RM58mil, with yields settling at 4.06% and 4% respectively. Ringgit interest rate swap (IRS) market The ringgit IRS yield curve continue to flatten during the week as worries on US slow growth and Europe sovereign debts problem seen weighing on IRS rates. The rates ended the week by 1~4 bps. For enquiries, contact: fx-research@ambankgroup.com or bond-research@ambankgroup.com Full Feed Generated by Get Full RSS, sponsored by Used Car Search. |
| Posted: 19 Aug 2011 06:27 PM PDT IT was a finger-lickin' good feeling for creative agency BBDO/Proximity Malaysia (BBDO) when it recently won back the KFC account, the one it had managed for over 19 years but lost about three years ago. Naturally, BBDO group chief executive Jennifer Chan admits that being partners with the fast-food giant once again is a big deal. "We're pleased and very excited. KFC was with BBDO even before I joined the agency," she tells StarBizWeek. BBDO lost its RM25mil KFC account to rival agency McCann Erickson in 2008 after nearly two decades of partnership with the fast food company. KFC had opted for McCann Erickson after a review was conducted which involved agencies Ogilvy and Mather, Saatchi and Saatchi and McCann Erickson. According to reports, the decision was made by KFC's then owners, Johor Corp (Johor state government's investment arm). KFC's creative account returned to BBDO last month when it was appointed as the agency of record, responsible for the chain's entire local creative remit, following a four-way pitch. Ogilvy & Mather, Grey Worldwide and Lowe & Partners were the agencies shortlisted for the pitch. BBDO will handle all of the brand's communication campaigns and marketing initiatives, replacing incumbent McCann Erickson, whose contract expired at the end of July. "BBDO has had a huge impact on KFC. Winning back the account shows that they (KFC) acknowledge our role in boosting its business." Chan reminisces that one of BBDO's proudest moments managing the KFC account was when the fast food operator announced it had hit the RM1bil sales mark. The partnership also saw them winning a host of accolades, both local and international, such as "Best Use of Multimedia" at Cannes Lions in 2005, in addition to awards won at Adfest, One Show and of course, the Kancils. Among its more memorable work was working on KFC's introduction of rice to its menu so popular was the campaign that people would actually use the tagline "you never eat rice" in their daily conversations! According to Nielsen, KFC was the 10th biggest advertiser in the country last year, spending RM70.9mil on media (excluding pay TV ad spend). BBDO group account director Adrian Sng, who boasts almost two decades of experience in the advertising and customer relationship management industry, says that KFC "made his career." "We won several awards with KFC and working with them has been one of my (career) milestones," he says. Chan declined to reveal for how long the account with KFC was for, saying only that it would be a "long-term" partnership. "It will be a long-term partnership so that KFC can meet the targets that it has set to achieve," she says. Sng says that while BBDO has managed the KFC account before, he points out that the business environment has changed significantly over the years. "There need to be new strategies implemented to evolve and be current. KFC is ambitious about their plans going forward with new and innovative efforts in the pipeline." Apart from shifting its creative duties, KFC is said to have also called for an all-new agency media pitch. It was reported that four agencies were invited to the pitch, namely Mindshare, Trapper MPG, Universal McCann and Zenith Media. It is unclear when the results will be announced. It is learnt that incumbent Carat was not invited to the pitch, a situation similar to that of McCann Erickson, which was not invited to pitch for the creative account of the fast food chain several months ago. KFC could not be reached for comments at press time on the agency media pitch. Full Feed Generated by Get Full RSS, sponsored by Used Car Search. |
| Tesco giving the personal touch to customers via loyalty card Posted: 19 Aug 2011 06:26 PM PDT TESCO Malaysia is taking a step further in bringing personalised shopping to consumers by giving them a reason to smile while they shop using the Tesco Clubcard. Essentially a loyalty card, the Clubcard is the brainchild of Dunnhumby, a UK-based retail media group which is currently a subsidiary of Tesco. Speaking to StarBizWeek, Dunnhumby Malaysia general manager Michael Hawkins says besides gathering consumers' data using the card, Tesco can understand the buying patterns of its customers and personalise the buying experience for them. "The average shopper spends about RM80 on a wide range of products on every visit, but to us there is no such thing as an average customer. All customers are unique in their own buying patterns," he says, adding that Tesco's most loyal customers constitute about 6% of the retail giant's local customer base and represent nearly 30% to 35% of its total sales combined. "At Tesco we understand the needs of our customers and we're doing our bit to show our appreciation for the continued support." According to him, other loyalty cards in the market may have a larger set of data than Tesco has, but the winning formula is the way the hypermarket utilises the set of data and build on the leverage to grow the business further. "Through the loyalty card, we know the demographics of our customers, and we can give them offers and relevant marketing tips they would be interested in, instead of an impersonal sales approach," he says. Hawkins says that the challenge of being a hypermarket is to personalise the shopping for everyone and treat them as if they were frequenting a mom and pop shop without the possible physical interaction with all of them. "One loyal customer is equal to 12 newly acquired customers, and instead of going through the conventional marketing strategy of going after new customers, history and data has shown that it is far more effective to retain your existing customers first," he says. Completely unique to Tesco Malaysia, the hypermarket sends about a million cash vouchers and product coupons to its two million strong membership base, of which 455,000 different unique combinations of coupons are used, with 55% of the customers getting a completely unique set of rewards. "In a sense, we cater for every diverse background, socially and culturally, that Malaysia has. Promoting the loyalty factor is a unique way to lock customers in with Tesco, while attracting new customers and growing our business in tandem with the expanding customer base," he says. In terms of maturity, Tesco Stores (Malaysia) Sdn Bhd marketing director Vivian Yap says that Tesco Malaysia is still in its adolescent stages with its tenth year presence in the country. "We have come a long way, but in terms of expansion and growth, we still have markets we are not in yet, and we have a team of dedicated people working very hard on that, which will obviously open up more customer base for us," she says. On top of that, she says Tesco has also invested around RM56mil in giving out cash vouchers and coupons to customers via the usage of its Clubcard, while also slashing prices and offering promotions to give consumers the benefit of a better deal. Although Tesco Malaysia has a smaller base of stores compared to some of the other known hypermarkets, a research by Kantar Worldpanel showed that the retailer, with 43 stores countrywide, has a higher market-share than its direct competitor which runs over a hundred stores. Talking about consumer trends, Yap says currently consumers are concerned over the escalating inflationary pressures while the household income remains at stagnant levels, resulting in a weaker purchasing power. "People are not so loyal in the market at the moment, where they are willing to trade down to other brands, which presents an opportunity to us as well," she says. She adds Tesco has its own branded goods under the Tesco Value and Tesco Choice, and nowadays the retailer is seeing a lot of customers willing to switch brands due to the cost-saving opportunity these brands provide. "We are still trying to give customers more options to choose from, and now with Tesco-branded goods, consumers can buy the same quality of goods as other national leading brands, albeit at 20% cheaper," she says. Moving forward, she says the larger Tesco group is also experimenting on various technologies like radio frequency identification, digital shopping and even commerce via mobile phones. "These are very appealing technologies; however, their development depends on the readiness of the consumer, and if customers don't find them relevant, it'll be pointless to implement them," she says. "For now the Tesco Clubcard will be integral to the growth of Tesco in Malaysia, and essentially it is all about helping you spend less," she says. Full Feed Generated by Get Full RSS, sponsored by Used Car Search. |
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