The Star Online: Business
The Star Online: Business |
| Posted: 04 Nov 2011 04:55 PM PDT REVIEW: Overnight Wall Street ended mixed but the closely-watched Dow eked out a small positive note, climbing 22.56 points to 12,231.11, supported by gains in Merck & Co Inc and Chevron Corp amid better-than-expected financial results. Over on the New York Mercantile Exchange, crude oil futures sagged 64 cents to US$93.32 as uncertainty that the latest European Union rescue plan would resolve the region's debt crisis sparked a bout of profit-taking activity following the recent steep rally. In the absence of clear direction from the United States, Asian equities fell and commodities slipped, as the dollar spiked to a three-month high following Japan's intervention in the currency market, prompting investors to book profits. Mirroring the sluggish regional trend, Bursa Malaysia's leading indicator, the FBM Kuala Lumpur Composite Index (FBM KLCI) quickly retreated into the negative territory, despite opening the week up 2.84 points to 1,484.66. Trading was lacklustre and it stayed that way until mid-afternoon, where institutional players emerged suddenly to cover their short positions by bidding the blue chips. Apparently, their action helped the local bourse reversing early losses to register a gain of 10.07 points to 1,491.89, also bucking the overall weakness in Asian stocks on Monday. Unfortunately, the upward thrust could not be sustained the next day, as persistent selling in offshore equities, led by overnight Wall Street after euphoria over European measures to resolve the debt crisis faded and doubt took hold, continued to pressure the local market sentiment. News of MF Global Holdings Ltd, the futures broker that made big bets on European sovereign debt, filed for US Chapter 11 bankruptcy protection, added to the downbeat note. Against the negative backdrop, the local bourse dived 16.25 points to 1,475.64 in the wake of fresh liquidation on Tuesday. Thereafter, profit taking selling dominated the floor amid dearth of fresh market-stimulating leads on the horizon and losses in the quality issues dragged the FBM KLCI down 4.69 points to 1,470.95 and an extra 8.58 points to 1,462.37 on Thursday before rebounding 15.14 points to 1.477.51 on renewed bargain hunting yesterday, encouraged by easing worries about eurozone after Greece backed away from a proposed referendum that threatened its membership in the euro and the European Central Bank cut interest rates. Statistics: Week-on-week, the principal index eased 4.31 points, or 0.3% to 1,477.51 yesterday, against 1,481.82 on Oct 28. Total turnover for the regular week stood at 8.148 billion shares worth RM7.222bil, compared with 5.944 billion units valued at RM7.098bil changed hands during the four-day holiday-shortened previous week. Technical indicators: After flashing a short-term sell at the top, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index retraced further to settle at 35% and 47% respectively yesterday. Despite retaining the buy signal, the daily moving average convergence/divergence (MACD) histogram had indicated a tentative bearish divergence pictogram. On the opposite, the 14-day relative strength index touched a low of 53 before ticking up slightly to finish at 58 points yesterday. Elsewhere, weekly indicators were positive, with the weekly slow-stochastic momentum keeping the buy signal and the weekly MACD on the verge of crossing above the weekly trigger line. Outlook: Bursa tripped into correction mode, with the FBM KLCI retracing from the 1,493.08 level on Monday to a low of 1,452.64 on Thursday before halting. The pullback in the key index the past several days was largely attributed to profit-taking activity after a stellar rally and although it had regained some semblance of calm apparently, uncertainty prevails. Uncertainty at this moment entails risks as there may be a delay in the implementation of policies to resolve the eurozone sovereign debt crisis. Hence, it is best to exercise caution in the market place. Based on the daily bar chart, the recovery from the recent ebb of 1,310.53 came to a temporary halt soon after testing the 100-day simple moving average (SMA) line on Monday. Despite the recent correction, the FBM KLCI still maintains a pretty comfortable position above the 21-day SMA and the 50-day SMA. However, we remain neutral, as the market continues to be pressure by the 100-day SMA and the 200-day SMA remains intact. Technically, the mixed signal suggests the local bourse will probably be range-bound in the immediate term, pending a clearer picture to emerge from the eurozone. Initial resistance can be expected at 1,493.28, followed by the 1,510.43, of which a successful penetration may prompt us to shift the outlook to bullish, enroute to the 1,545 points. The upper hurdle is envisaged at the 1,565-1,566 points band, and the next, at 1,580 points. Important support is resting at 1,446.91 points and the lower floor is seen at 1,544 points. Full content generated by Get Full RSS. |
| Ad spending going strong in Q3 Posted: 04 Nov 2011 04:54 PM PDT ADVERTISING spending on media in the country maintained a good growth momentum in the third quarter (Q3) even as consumer confidence began to wane. According to market research firm Nielsen Malaysia, it grew 11.3% year-on-year to RM2.8bil in that period. The double-digit growth came at a time when consumers seemed to be more cautious in spending. The Nielsen Consumer Confidence Index registered a nine-point drop during the same quarter the biggest quarterly decline in three years. Less than a third of online consumers polled felt that the next 12 months was the right time to buy items they wanted. Girish Menon, chief executive officer of media specialist GroupM Malaysia, says advertisers do not cut their spending based on consumer confidence numbers. "But they will be forced to review their spending if the revenue numbers are not meeting expectations," he tells StarBizWeek. "If there is a drop in confidence, usually the impact will be first seen in some leading indicators like real estate and automobile purchases. Usually, fast-moving consumer goods (FMCG) and basic services like telcos' will not be seriously affected, as people will not sacrifice their daily basic' requirements." For the first nine months of the year, advertising expenditure (adex) rose 13.4% to RM7.8bil compared with last year's corresponding period. If the momentum continues in the fourth quarter, 2011 would see an adex growth that is almost as strong as last year's 15.8% growth. (Note that the 15.8% growth figure excluded pay TV, as Nielsen only began monitoring Astro channels in 2010.) Menon reckons overall growth of adex is not likely to exceed 14% this year. "Under normal circumstances, if we had achieved 13%-14% growth by September, we would have expected a strong push during the fourth quarter, coinciding with the year-end build-up (festive season, pre-Chinese New Year campaigns). "However, with recent negative sentiments in Europe, many multinational advertisers are being a bit more cautious. Even if they are not actively cutting budgets, they are certainly not going for their stretch' numbers," he says. On Monday, the Organisation for Economic Cooperation and Development lowered its growth projections for the euro-area economy, saying it might grow 1.6% this year and 0.3% in 2012 instead of the 2% forecast earlier for each year. Starcom Mediavest Group Malaysia boss Ranga Somanathan, who is also the Media Specialists Association president, cited certain sectors as contributing to the good adex growth for year-to-date September. They included the toiletries sector, which was the largest sector spender with the highest absolute adex growth year-on-year, and automotive, which saw the highest percentage growth year-on-year (the biggest category growth came from passenger cars of 1,001-2,000cc). Other contributing sectors were finance (mainly boosted by the insurance services category), retail (mainly contributed by automotive retail and fast-food centre categories) and entertainment (with key contribution from the photography segment). Ranga expects adex growth for the entire year to remain strong within 13%-15% if the general election is called this quarter, along with the contribution from year-end festive season sales and the travel and tourism industry. Noting that the reasons of falling confidence vary, he believes that the consumer is still very resilient. "The domestic consumption is still strong. Off-take data across most categories, especially essentials like food and beverage, beauty and healthcare, and financial services (insurance) are trending positive. "Given the people-friendly budget, Economic Transformation Programme/Government Transformation Programme, and people-friendly incentives in conjunction with the election, the consumer behaviour will be still optimistic even though consumer sentiment (confidence) will be soft. "This contradiction was noted during the 2008 economic situation," says Ranga. He says that with annualised gross domestic product (GDP) growth to be around 5%, the adex growth will continue to be robust. According to Bank Negara, GDP growth in Q2 slowed to 4% compared with 4.9% in Q1; but last month Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said a minimum target growth of 5% for the year was still achievable. Meanwhile, the Nielsen online poll conducted in September shows that almost half of online consumers felt the nation was in economic recession - an eight-percentage point jump from the previous quarter. Optimism on personal finances in the coming 12 months dropped slightly. Nielsen Malaysia managing director Kow Kuan Hua says the majority of FMCG goods categories tracked by Nielsen (61 out of 76 categories) showed a month-on-month decline in sales value in September, reflecting consumers' wait-and-see' attitude. "The jury will only be out in the fourth quarter whether this is a one-time slowdown or otherwise. "For now, consumers are deferring plans to purchase discretionary items such as major durable goods," Kow says. Despite the nine-point drop in online consumer confidence, Malaysia reported the 10th highest consumer confidence index score (along with Norway) among the 56 countries surveyed by Nielsen. In fact, the country has maintained an index score of above 100 since the third quarter of last year. Full content generated by Get Full RSS. |
| SDB in Penang debut with By The Sea Posted: 04 Nov 2011 04:54 PM PDT SELANGOR Dredging Bhd (SDB) will be making its debut on Penang shores, literally, with a breezy project known as By The Sea. The foray into the island's famed Batu Ferringhi beach comes just several months after the launch of its fourth project in Singapore. The Kuala Lumpur-based developer has completed several projects in the Klang Valley. "I believe I could do something different with this piece of land in Penang," says SDB managing director Teh Lip Kim. The move by the property developer is seen as a strategy to extend its branding into cities favoured by the expatriate community and Asia's well-heeled, says the Real Estate and Housing Developers' Association Malaysia (Rehda) Penang chief Datuk Jerry Chan. According to a survey by ECA International on 254 cities, George Town, the capital of Penang, is the eighth most liveable city in Asia, while Singapore is Asia's most liveable city. The project comprises 138 units of serviced suites spread over three blocks of between five and 11 storeys. There will also be a low-rise commercial block to provide basic amenities to the residents and the public. The site of the development is located between Bank Negara's holiday complex and a community mosque. The two hotels closest to it are the Hard Rock Hotel and Park Royal, both of which are just less than five minutes' walk away in opposite directions. Teh's confidence in providing something different stems from the fact there will be two major focal points in the development that sits on 4.7 acres. The first focal point of the RM230mil development is the beach which it will share with some of the island's most popular five-star and boutique hotels Shangri-La's Rasa Sayang Spa and Resort, Golden Sands Resort, Hard Rock Hotel and the newly-refurbished Lone Pine. Her second focal point is Sungai Satu, or One River, which flows through the land. The development will use the river as a border to separate the suites from the amenities block. The river, which flows past a cluster of squatters, will be cleaned and rehabilitated by the time it flows into By The Sea. "The rubbish will be cleared and the water clarity improved considerably by the time it flows past the project and enters the sea," she says. The river banks will be landscaped to add to the serenity and ambience of By The Sea. Because beaches are public areas, the project will be set 60 m inland in order to create a park and a recreation area for residents. "There will be value in the open space," Teh says. Priced at an average of RM1,200 per sq ft, By The Sea will be setting new benchmark in a predominantly tourist-centred area dotted by hotels. It is expected to be completed in the first quarter of 2016. At that price and in today's uncertain economic climate, Teh says she is targeting the Penang diaspora who would like to return to the island. The company is known for setting new benchmarks. In Puchong, the gated and guarded development AmanSari has set new standards in what was then a fairly ordinary township, while Ameera and Five Stones adds a new dimension to high-rise living in SS2, Petaling Jaya, an established township with predominantly landed terraces. Teh's main forte is landscaped housing, and this normally comes with a premium. She will use the same formula in the Penang property. While SDB's lifestyle concept developments may be new to the local Penang population, buyers in the Klang Valley and Singapore are familiar to its style and concept. In Singapore, the company recently launched Hijauan on Cavenagh in District 9, one of the city state's most prestigious areas and just minutes away from Orchard Road. The six-storey residential block sits on a half-acre plot and will have a total of 41 apartments with units ranging between 463 sq ft and 1,884 sq ft. The units are priced between S$1.3mil and S$3.5mil each. It will be built on the former Cavenagh Mansion land. Hijauan is expected to be completed in the third quarter of 2015. Cavenagh Road was named in honour of Maj-Gen William Orfeur Cavenagh, the last India-appointed governor of the Straits Settlements who governed from 1859 to 1867. Hijauan will have a combination of garden units, penthouse and typical units but all will enjoy the greenery in a coveted green lung within walking distance from Orchard Road and a tree-lined passageway besides the Istana and adjacent to 25,000 sq ft of lush state land. The Istana is the official residence and working office for both the President and Prime Minister of Singapore and is also the place where they receive and entertain state guests. A link bridge will connect Hijauan to Orchard's Centrepoint shopping mall. Twelve of the 41 units have been sold. Besides Hijauan, SDB's other project in the city state includes Jia, OKIO and Gilstead Two. The company recently bought two acres in Singapore's Pasir Panjang near the National University of Singapore. With today's concerns about eurozone, Teh says Singapore, like Britain, is seen as a safe haven for property investment, particularly if they are located in London's zone 1 and zone 2. "Similarly, I see the same in Singapore. For me, (whether it is Singapore, Klang Valley or Penang), I want to do something different," says Teh. Next year, Teh says SDB will launch a development in Cheras that will set tongues a wagging. For now, her focus will be By The Sea and Singapore's Hijauan. Full content generated by Get Full RSS. |
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