The Star Online: Business
The Star Online: Business |
| Edaran Tan Chong sees poorer outlook Posted: 21 Oct 2011 10:39 PM PDT SUBANG JAYA: Edaran Tan Chong Motor Sdn Bhd expects poorer outlook for the first half of next year due to the floods in Thailand disrupting its carparts supply chain. Although it does not import cars from the neighbouring country, the Nissan vehicle distributor gets carparts from Thai manufacturers to assemble here. Executive director Datuk Dr Ang Bon Beng said that in view of the floods and global economic uncertainty, "the first half of next year will be very challenging." "The (sales) momentum will be compromised and we may not get the numbers, but perhaps the second half will see improvements, depending on how Thailand addresses its flood problems," Ang told reporters after showcasing the new Livina X-Gear. He said that currently there was no immediate negative impact from the floods as the company had two to three months of carparts supply on standby to keep operations going. "Our business approach is to keep two to three months of stocks, but if the Thai disaster does not recover (during this period), a new situation will arise," Ang said, explaining that the Nissan recovery team was working on alternatives for the supply chain should the floods outlast the supply at hand. "The recovery team is working closely with the Thai team to address the issue, and I am confident they can handle the situation efficiently," he said of the team that previously dealt with the Japan tsunami. He added that the company could source carparts from other manufacturers in China, Japan or Indonesia. Asked if a supply chain disruption will cause a hike in the price of carparts, Ang ruled out the possibility but added that it was too early to tell if there could be delays in delivering vehicles to customers. He said the intended market share for Nissan remained at 5.7% with an expected 1% increase next year. On the Malaysian Automotive Association's total industry volume forecast of 605,000 units this year, Ang believed that it was still achievable. For the third quarter of 2011, the average of monthly TIV is 51, 000 units. On another note, Ang said the company planned to make a "reasonable investment" for expansion, with at least 10 new showrooms in the next five years. There will also be a consolidation of smaller showrooms and upgrade of facilities to provide both sales and services to customers. It will also introduce new vehicles in the segment it is currently under-represented. "We don't have A-segment cars (yet), but I am confident we will be able to fill 95% of the segment in the coming five years," he said. Edaran Tan Chong, the wholly-owned subsidiary of Tan Chong Motor Holdings Bhd, is the local sales and marketing arm for Nissan vehicles. Meanwhile, the Livina X-Gear is the first completely-knocked-down B-segment (Toyota Vios and Honda City) crossover vehicle in Malaysia. It has received 1,500 bookings since its launch in early September. Nissan's zero emission electric vehicle will enter the Malaysian market in the first quarter of next year. Full content generated by Get Full RSS. |
| Outcome of EU meet to set direction Posted: 21 Oct 2011 07:26 PM PDT REVIEW: Bursa Malaysia started the week on solid ground, with the FBM Kuala Lumpur Composite Index (FBM KLCI) running up 9.54 points to 1,451.97, rebounding from the previous session's dip on bargain-hunting activity. Market sentiment was bullish, aided by a strong performance in US markets overnight, where the Dow gained 166.36 points to 11,644.49 and crude oil prices up a hefty US$2.57 a barrel to US$86.80 amid rising hopes that the eurozone debt crisis would be contained, underpinned by an unexpected surge in US retail sales. Adding to the upbeat mood, markets in the Asia-Pacific region advanced between 0.4% and 2% on optimism that China may have successfully reined in inflation. Tracking the positive offshore tone, the local bourse crept up to achieve an intra-day high of 1.465.48 in late trade before trimming gains slightly to end at 1,465.35, firming 22.92 points in active volumes on Monday. Sadly, the upward thrust, riding on a wave of euphoria built on optimism for a quick fix to eurozone debt crisis, lost its momentum the next day as a "less favourable" comment by German Finance Minister Wolfgang Schaeuble, who said "they don't have a definitive solution yet", spooked global equities. Overnight Wall Street led the reversal, slumping 247.49 points to 11,397.00. Elsewhere, Asian stocks plummeted between 1.55% and 4.23% on heavy liquidation pressure, exacerbated by signs that China's robust growth was moderating. On the domestic front, the FBM KLCI drifted deeper into the red from the opening bell to a low of 1,433.97 before paring losses marginally in late session to settle at 1,439.94, falling 25.41 points on Tuesday. A day after the tumble, another news story emerged on the horizon and this time it was complimentary to the eurozone development. Apparently, investors latched onto Britain's Guardian newspaper report of agreements to strengthen the eurozone rescue fund to bid up stocks aggressively, which helped the Dow to recoup some 180.05 points to 11,577.05 in overnight trade. As expected, most Asian markets reacted accordingly and in line with the offshore advances, the local bourse rebounded 10.31 points to 1,450.25 on fresh bargain hunting in mid-week. Thereafter, Bursa Malaysia continued to track the eurozone development and in line with overseas losses, the key index shed 9.07 points to 1,441.18 on Thursday and an extra 2.35 points to 1,438.83 in the absence of fresh leads yesterday. Statistics: Week-on-week, the principal index shed 3.6 points, or 0.2% to 1,438.83 yesterday, compared with 1,442.43 on Oct 14. Total turnover for the regular week stood at 7.391 billion shares worth RM6.584bil, versus 5.306 billion units valued at RM6.485bil a week ago. Technical indicators: The oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index continued to weaken after flashing a short-term sell at the top on Oct 14. They ended at 40% and 53% respectively yesterday. Elsewhere, after peaking out at a reading of 78, the 14-day relative strength index drifted sideways with a mild downward bias to end at 58 points yesterday. Although the daily moving average convergence/divergence (MACD) histogram retains the "buy" mode, maintaining the posture above the daily signal line, the upward momentum has decelerated. In stark contrast, the weekly measurements sustained recovery, with the weekly slow-stochastic momentum index climbing higher and the weekly MACD showing a convergence pictogram. Outlook: Bursa Malaysia slipped into consolidation after hitting a high of 1,465.48 on Monday, the best since Sept 9. Based on the daily bar chart, the key index had violated the steep short-term ascending line during intra-week session. Theoretically, a breakdown usually does not bode well for the market, as it may indicate that the recent uptrend has concluded; going forward, the FBM KLCI would be in great danger of suffering more pullback on correction. In the present scenario, the key index is still supported by the 14-day simple moving average, which is on the rise. Therefore, further observation is needed. Meanwhile, investors are advised to adopt a cautious stance pending a clearer picture to emerge.Technically, the falling slow-stochastic momentum index, weakening 14-day RSI and a slowdown in the uptrend on the daily MACD suggest the local bourse is likely to consolidate in the immediate term, unless there is a concrete solution to the eurozone debt problems from the European Leaders' summit this weekend. Resistance is expected at 1,465.48 points, followed by the 1,480 points. The next upper hurdle is resting at the 100-day SMA of 1,500 points and the next, at the 200-day SMA of 1,514 points. A retreat below 1,420 points will drag the key index to the 1,400-point level. If that happens, the lower support floors of 1,380 points, 1,353 points, 1,340 points would be vulnerable. Full content generated by Get Full RSS. |
| Posted: 21 Oct 2011 07:25 PM PDT Global Foreign Exchange Market The euro (EUR) rallied near a one-month high against the US dollar (USD) after the G20 finance ministers and central bankers called for decisive measures to fight the eurozone debt problems. Risk appetite heightened and world equities rose after the meeting on hopes for a concrete plan to resolve Europe's sovereign debt crisis. Focus now turns to the EU Summit on Oct 23 where an action plan will be presented to the G20 leaders' summit on Nov 3. Market expectation that a grand rescue plan would be unveiled partly at the EU summit was dented by German comments to the contrary. Risk appetite remains in check after rating agency Moody's cut Spain's rating by two notches to A1 from Aa2 and assigned a negative outlook. This came just four days after S&P's downgrade and less than a month after Fitch's downgrade. As a result there was a sharp decline in the EUR/USD and a pullback from riskier currencies. The EUR ended the week 0.74% lower at 1.3770 levels. The USD was bid as risk sentiment soured. The US dollar index jumped 0.45% to 76.90 levels. Markets also absorbed weakness in the form of Empire manufacturing data that came in below expectations at -8.48. Mixed economic data from the US provided little inspiration. Headline CPI in the US unexpectedly rose to 3.9% year-on-year in September with core CPI unchanged at 2.0% year-on-year. Over in the UK, the Bank of England (BOE) was placed in an even more difficult position after inflation came in way above its 2% target to 5.2% year-on-year in September. The BOE minutes showed that the decision earlier this month to increase the bank's dormant asset purchase programme by 75bil received a unanimous vote from the MPC. Following the release, /USD fell, before ending the week almost unchanged at 1.5800. USD/Japanese yen (JPY) rallied above 77.0 levels on talk of possible measures the Japanese might announce to weaken the JPY. However, the rally faded and USD/JPY retreated to close the week at 76.80. Australian dollar (AUD) continued to be dictated by price action in equities, resulting in AUD/USD plummeting 1.18% for the week. Asian currencies retreated as the European debt crisis bolstered demand for USD and eroded appetite for emerging-market assets. The Bloomberg-JPMorgan Asia Dollar Index declined by 0.41% to 115.52. In tandem with regional currencies, the ringgit (MYR) slipped 1.13% against USD from the week's open to trade near 3.1580-levels. In China, gross domestic product expanded at the slowest pace in nearly two years in Q3, adding to evidence the economy is heading towards a soft landing as government efforts to cool inflation slowly takes effect. The GDP growth moderated to 9.1% in Q3 from 9.5% in Q2. China's inflation rose 6.1% year-on-year in September while PPI inflation decelerated by 0.8ppt to 6.5%. The main focus remains on the EU summit this weekend. France and Germany have said no decisions would be adopted before a second meeting to be held by Wednesday (Oct 26) at the latest. We expect the final statement to be strong on headlines, but thin on details. Uncertainties surrounding the European debt crisis could weigh on currencies and stocks. As such, we expect USD/MYR to trade within the range of 3.1100 to 3.1700. US Treasuries (UST) Market During the week, UST curve flattened with 2-year yields rising by 0.28bps to 0.262% while the 10-year yield declined by 7.2bps to 2.175%. Malaysian Bond Market This week, trading in local govvies generally thinned with players staying on the sidelines, awaiting details of the reopening of the 10-year Malaysian governmenet securities (MGS) and September CPI data. At time of writing, September CPI has yet to be announced, with the Bloomberg consensus expecting a print of 3.3% year-on-year. Meanwhile the issue size of the 10-year MGS reopening was announced at RM3bil, well within market expectations. Tender date for the mentioned bonds is scheduled for next Friday, Oct 28. Benchmark MGS yields closed mostly higher during the week. At the shorter end, the 3, 5 and 7-year yields closed at 3.16% (+1 bp), 3.37% (+5 bps) and 3.58% (+1 bp). At the longer end, the 10-year yield closed 2 bps higher at 3.73%, the 15-year yield closed 5 bps lower at 3.98% while the 20-year MGS was not traded. Overall, RM7.1bil worth of trades were recorded in the MGS/GII market, with daily average trading volume of RM1.8bil compared with RM1.9bil in the previous week. In the private debt securities (PDS) market, RM1.8bil trades were recorded with daily average trading volume of RM446mil, slightly lower than RM497mil in the previous week. The GG/AAA and AA segments contributed 46% and 50% of trades respectively while the remaining came from the single-A segment. In the GG/AAA segment, notable trades included Cagamas 10/17 which closed 3 bps lower at 3.75% with RM250mil done, and OCBC Ltd 3/13 with its yields edging 6 bps up to reach 3.81% with RM135mil done. Prasarana bonds maturing 2021-2029 closed 1-4 bps up at 4.00%-4.41% with RM120mil done in total. In the AA segment, RM100mil trade was done on Hong Leong Bank 8/15 which ended 1 bp lower to 4.02%. Meanwhile RM98mil was reportedly done for Kencana 8/16, with yields easing 20 bps to reach 4.50%. MYR Interest Rate Swap (IRS) Market MYR IRS rates are relatively flat during the week after reports of disagreements emerged among member states of EU on the bailout fund. The drag on finalising the deal has added downward pressure on the rates market. The rates ended the week lower by 1~3 bps. > For FX enquiries, please contact: For Fixed Income enquiries, please contact:bond-research@ambankgroup.com Full content generated by Get Full RSS. |
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