The Edge

BLUE-CHIP APPETITE RETURNS AFTER YESTERDAY’S
SELL-OFF OVER MSCI INDEX REBALANCING p3

WEDNESDAY, DECEMBER 2, 2020 w w w. t h e e d g e m a r k e t s. c o m

ISSUE 94/2020

CEOMorningBrief
HOME: Most Malaysian businesses only expect to return to pre-Covid profitability
by end off 2022 — survey p4

Over half of new 1,472 Covid-19 cases from Top Glove-linked Teratai cluster p10
WORLD: OPEC+ talks delayed as split deepens between key Gulf allies p15

SUHAIMI YUSUF/THE EDGE

Govt opens
investigations

into Top Glove over
workers’ housing

Report on Page 2.

WEDNESDAY DECEMBER 2, 2020 2 THEEDGE CEO MORNING BRIEF

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HOME

REUTERS

Govt opens
investigations
intoTop Glove
over workers’

housing

BY AHMAD NAQIB IDRIS & JUSTIN LIM
theedgemarkets.com

KUALA LUMPUR (Dec 1):The Human reported more than 5,000 cases, making was already facing criticism previously from
Resources Ministry has opened 19 inves- it the country’s biggest Covid-19 cluster. the handling of the recruitment of foreign
tigation papers into six subsidiaries ofTop workers.
Glove Corp Bhd, following enforcement Yesterday, Senior Minister (Security
operations in five states amid the spread Cluster) Datuk Seri Ismail Sabri Yaakob “Top Glove will need to acquire or rent
of Covid-19 in the Teratai Cluster, which announced an extension of the enhanced more housing units to meet the require-
originated from the group’s workers dor- movement control order (EMCO) at Top ments. It will have some impact on earn-
mitories in Meru, Klang. Glove’s worker dormitories in Meru , for ings, but it is hard to quantify at the mo-
another 14 days from today until Dec 14. ment,” Chi Hoong said.
The operations in Perak, Kedah, Kelan-
tan, Negeri Sembilan and Johor were con- The developments sparked selling pres- As for the impact of the EMCO exten-
ducted on Nov 26 by the Peninsular Ma- sure onTop Glove shares, which closed the sion on Top Glove’s earnings, Chi Hoong
laysia Labour Department (JTKSM), the day 33 sen or 4.63% lower at RM6.79, estimates it to be less than 5%. “Close to
ministry said in a statement. giving the group a market capitalisation 50% ofTop Glove’s workforce are located
of RM55.7 billion. at the EMCO area in Klang, so with the
“The results of the comprehensive in- EMCO being extended, the overall utili-
vestigation into the accommodations and Analysts: Short-term negative for sation rate is likely to be at 50% to 60%,”
dormitories of employees found that the Top Glove he said.
employers did not comply with the Work- Analysts viewTop Glove’s alleged violation
ers’ Minimum Standards of Housing and of Act 446 and the extension of the EMCO He added that customers who require
Amenities Act 1990 (Act 446),” it said. as short-term negative for the group.They immediate delivery of gloves would likely
said these developments are expected to switch to other producers, as the extend-
The main offence was the firms’ failure affect the glove manufacturer’s share price ed EMCO may result in delayed delivery.
to apply for an accommodation certificate sentiment, although the quantum of impact
from the director-general of JTKSM, and cannot be quantified at this juncture. MIDF Research analyst Ng Bei Shan,
this led to the discovery of other offences, meanwhile, thinks the extension may have
including congested and uncomfortable “The negative news, coupled with the a bigger impact of 8% on Top Glove’s net
accommodations that lacked proper ven- rotation into pandemic recovery-themed income, although this temporary blip could
tilation, the ministry said. play is expected to cause some sell-down be cushioned by higher average selling pric-
in Top Glove shares for the short term,” es (ASP).
Also, the buildings used to accommo- said Malacca Securities Sdn Bhd head of
date the workers did not adhere to local research Loui Low. “We understand that the pace of ASP
authority by-laws, it said. increase is circa 10% month-on-month
Affin Hwang Investment Bank Bhd an- until January 2021. ASP for 2021 is [ex-
It added that it will refer the investiga- alyst Ng Chi Hoong agrees that the news pected to be at] US$65 per 1,000 pieces.
tions papers to the deputy public prosecu- will likely have a negative impact on Top AsTop Glove is a big player in the market,
tor for further action. Each violation under Glove’s share price, especially as the group any disruption in supply will drive the ASP
Act 446 carries a fine of up to RM50,000. higher,” Bei Shan said.

TheTeratai Cluster contributed to 778
or more than half of the 1,472 new Cov-
id-19 cases today. With this, Teratai has

WEDNESDAY DECEMBER 2, 2020 3 THEEDGE CEO MORNING BRIEF

HOME

KUALA LUMPUR (Dec 2): Investor ap- Blue-chip following MSCI’s index rebalancing ac-
petite has returned for blue-chip stocks, appetite returns tivities, which saw changes to the con-
which were the casualties of Monday’s after yesterday’s stituents of the MSCI Global Standard
final-hour sell-off. Indexes.
sell-off over
Shares in Nestle (Malaysia) Bhd,Tena- MSCI index Among the regions, Asia-Pacific saw
ga Nasional Bhd (TNB) and Hong Leong rebalancing the most changes with 85 new securities
Bank Bhd (HLB) led the rebound among added, while 90 securities were taken off.
selected blue-chips yesterday, following BY ARJUNA CHANDRAN SHANKAR
MSCI’s index rebalancing activities.The & AHMAD NAQIB IDRIS As for Malaysia, no new securities were
three counters were the top three gainers theedgemarkets.com added, but two counters were deleted --
by value on the local bourse. namely Carlsberg Brewery Malaysia Bhd
sen to RM8.19, giving it a market capi- and YTL Corp Bhd.
Nestle settled 1.79% or RM2.40 sen talisation of RM92.1 billion.
higher at RM136.40, valuing it at RM32 The portfolio rebalancing over the
billion. It saw 127,600 shares done. Axiata, the 15th top gainer, rose 6.5% years has shrunk Asean’s weightage, with
or 23 sen to close at RM3.78, for a mar- Malaysia’s reduced the most.
As for TNB, the counter was up 7.7% ket value of RM34.7 billion. CIMB, on
or 78 sen at RM10.86, carrying a market the other hand, climbed 3.3% or 12 sen
capitalisation of RM62 billion. It saw 7.2 to RM3.75, translating to a market cap-
million shares traded. HLB, meanwhile, italisation of RM37.2 billion.
rose 4.2% or 72 sen to RM17.90, trans-
lating into a market value of RM38.8 bil- The better performances seen among
lion. The bank saw 1.89 million shares blue-chip counters yesterday lifted the
done. FBM KLCI up 2.5% or 39.55 points
to 1,602.26.
Other stocks hit by Monday’s sell-
down included Malayan Banking Bhd Investors sold down blue-chip stocks
(Maybank), Axiata Group Bhd, Petronas at the last hour of trading on Monday,
Chemicals Group Bhd (PetChem) and
CIMB Group Holdings Bhd.

Yesterday, PetChem and Maybank
were the fifth and 12th top gainers by val-
ue on the bourse, respectively. PetChem
was up by 9.4% or 60 sen at RM7.02,
while Maybank advanced by 3.7% or 29

KUALA LUMPUR (Dec 1): Sime Darby Sime Darby Jining Energy Development Group Co
Bhd is divesting its entire interest in three to divest Ltd (the parent company of JPSDG) has
joint venture companies operating three provided an unconditional and irrevoca-
river ports in Jining in the Shandong, Chi- Jining ports ble letter of guarantee for all of JPSDG’s
na, for a net amount of RMB293.9 million obligations on a joint and several basis.
(RM181.6 million), to be realised over a BY ARJUNA CHANDRAN SHANKAR
period of three years. theedgemarkets.com In a separate statement, Sime Darby
Bhd group chief executive officer Datuk
In a bourse filing, it announced that its Sime Darby will also subscribe to 49% Jeffri Salim Davidson said the agreements
indirect wholly-owned Sime Darby Over- in a new vehicle with JPSDG, called Jining the conglomerate entered into allow for a
seas (HK) Ltd had signed equity transfer Port and Shipping Port Services Co Ltd staggered exit from its investment in the
agreements (Phase 1 ETAs) with Jining (JPSPS), for RM123.5 million. JPSDG will three Jining ports over three years and are
Port and Shipping Development Group hold the remaining 51% stake. Sime Dar- very much in line with its strategy to divest
Co Ltd (JPSDG) to divest its 70% stake by will then progressively exit JPSPS over non-core assets.
in Jining Sime Darby Port Co Ltd, Jining the next three years, for RM132 million.
Sime Darby Loggong Port Co Ltd and “Over the years, Sime Darby had invest-
Jining Sime Darby Taiping Port Co Ltd. ed a total of RMB291 million (RM179.8
million) in the Jining ports, which have
Following the signing of the Phase 1 contributed RMB141 million (RM87.1
ETAs, JPSDG will pay RM155.7 million to million) in dividends to the group.
an escrow account.Within five days of re-
ceiving updated business licences from the “However, the operations are facing
republic’s State Administration for Market continued downward pressure on margins
Regulation, funds from the account will due to intense competition from neigh-
be released to Sime Darby. bouring ports and additional costs. Given
these factors that are impacting the inland
Three years after the licences have been port sector in China, we consider the dis-
transferred, JPSDG will pay the balance posal price reasonable,” he said.
RM25.9 million to Sime Darby.
The disposal strategy also very much fits
Completion of the Phase 1 ETAs is in with the exercise being undertaken by
conditional upon the provision of a bank the Jining government to consolidate the
guarantee from JPSDG for its obligations, fragmented river port industry in Jining,
the approval of minority shareholders, and he said. “So, it is a win-win situation for us
other typical procedural matters. and for the Jining government,” he added.

WEDNESDAY DECEMBER 2, 2020 4 THEEDGE CEO MORNING BRIEF

HOME

Most Malaysian businesses only expect
to return to pre-Covid profitability
by end off 2022 — survey

KUALA LUMPUR (Dec 1): Malaysian BY TAN SIEW MUNG Overall, a slightly higher proportion
businesses are cautious on growth outlook theedgemarkets.com than globally have a positive outlook for
as up to three quarters (76%) of them only the next one to two years.This is in spite
expect to return to pre-Covid profitabil- Furthermore, 25% intend to increase of eight in 10 businesses feeling that inter-
ity levels by the end of 2022, a survey by their investments by more than 20%, com- national trade has become more difficult,
HSBC showed. pared with 13% globally. and over half (56%) expecting the trend
to continue in 2021.
According to HSBC global survey Nav- The survey also highlighted that com-
igator: Now, next and how, which surveyed panies will focus their investments on Protectionism continues to be strongly
more than 10,000 companies across 39 three fundamental areas in 2021 — cash felt, and selling through digital channels
markets in the world, Malaysia’s business- flow and capital management, marketing, is seen by Malaysian companies as the
es have lowered their growth expectations, and sales channels. key strategy for combating it, the survey
although they are still more positive than showed.
their regional peers. To support these areas, they plan to
increase investments in technologies that The proportion of companies oper-
And while more Malaysian businesses help target consumers, improve customer ating internationally has increased mar-
say they are thriving (30%) than the glob- experience and promote collaboration. ginally since 2019. Intra-regional trade
al average (24%), their outlook mirrors Malaysian businesses remain optimistic has also grown: 86% of Malaysian com-
the overall decline in global optimism, the despite the unprecedented year panies are trading within APAC, up 10%
survey showed. Almost three quarters (74%) of Malaysian since 2019.
businesses have undergone changes in the
Malaysia’s future growth expectations last 12 months. Behind these changes are China continues to retain the top spot
have also slipped since 2019, but by a the need to reduce costs, future uncertain- of current trading partners, followed by
much smaller amount than globally. ty and change in ways of working. Singapore and Indonesia.

The proportion of Malaysian compa- Looking ahead, Malaysian businesses HSBC Malaysia’s commercial banking
nies projecting growth (74%) is also well view innovation and collaboration as the head Andrew Sill said international trade
above the average for Asia Pacific (APAC) top two characteristics of a successful fu- prospects are expected to be positive giv-
(60%), while around one fifth of business- ture business. en the added boost of the recent Regional
es (16%) expect to return to pre-Covid Comprehensive Economic Partnership
levels of profitability by the end of 2020. Despite projecting difficulties in 2021, (RCEP) signing.
Malaysian businesses remain positive
Meanwhile, a minority of less than one about international trade going forward, “With the recent RCEP signing, we will
in 10 (6%) say they are already ahead of as 80% of companies expect their inter- continue to see an increase in intra-Asian
their own pre-Covid levels. national trade prospects over the next one trade, which is already larger than Asia’s
to two years to be positive. trade with North America and Europe
“The resurgence of Covid-19 is the combined,” Sill said, adding this increase
primary threat to recovery for Malaysian They are also confident about the ben- will continue to power global economic
businesses. But its knock-on effects (in- efits and opportunities of international growth and pull the economic centre of
cluding a decline in consumer demand trade. More than half (55%) believe it gravity towards Asia.
and difficulty entering new markets) are makes their businesses more competitive,
also concerns,” the survey said. 47% see it boosting product and service Meanwhile, nearly all Malaysian busi-
development, while almost half (43%) feel nesses (98%) have concerns about their
HSBC Malaysia chief executive officer it leads to greater choice for consumers. supply chain, with the key issues being
Stuart Milne said in a briefing that com- supply chain instability and increased
panies that are more likely to take longer costs.
to recover are those in the services sector.
“Manufacturing will bounce back more In response to these issues, 99% of
quickly, but companies in the services Malaysian businesses have made adjust-
sector, particularly those in tourism, are ments to their supply chain. More than
going to take longer to recover,” he said. half (57%) expect that reshaping their sup-
ply chain will reduce costs. Other benefits
He also said the bank is optimistic in include improved supply chain visibility
terms of Malaysia’s economic prospects, and increased speed to market/moving
as it expects the local economy to contract closer to the end buyer.
5.1% in 2020, and bounce back in 2021
with a growth of 6.2%. Additionally, some of the more pop-
ular changes Malaysian businesses have
In line with global trends, the events undertaken have been the increased us-
of 2020 have not dampened the inclina- age of digital technology, diversifying to
tion of most Malaysian businesses to in- work with more suppliers and choosing
vest to grow, as more than three quarters suppliers for their operational resilience
(78%) intend to increase investments in and ability to deliver quickly.
their business in the next year, over the
two thirds seen globally. CONTINUES ON PAGE 5

WEDNESDAY DECEMBER 2, 2020 5 THEEDGE CEO MORNING BRIEF

HOME

Malaysia’s
manufacturing
sector recovery

moderated
further in
November
— IHS Markit

BY SURIN MURUGIAH
theedgemarkets.com

KUALA LUMPUR (Dec 1): The recov- pace of deterioration was markedly softer Looking forward, IHS Markit said Ma-
ery in the Malaysian manufacturing sec- than in April. laysian manufacturers were increasingly
tor continued to lose momentum midway optimistic regarding the 12-month outlook
through the fourth quarter of the year. It said firms commonly attributed the for production.
latest round of scaling back to the reintro-
According to IHS Markit, businesses duction of restrictions on movement which It said positive sentiment was signalled
continued to scale back production, while dampened domestic and external markets. for the eighth month running amid hopes
new order inflows moderated. that an end to the pandemic would bring
IHS Markit said greater restrictions led about a return to normal operating con-
It said a rise in Covid-19 cases both do- to a fall in new export orders, which reduced ditions and boost production.
mestically and around the world has led to faster than overall new business inflows.
reduced demand for Malaysian manufac- IHS Markit chief business economist
tured goods while supply chains struggled It said a resurgence of infections in ChrisWilliamson said manufacturers con-
to deliver inputs in a timely manner. key markets such as India was cited as a tinue to battle against Covid-19 head-
contributor to ongoing weakness in ex- winds, with renewed restrictions damp-
The headline IHS Markit Malaysia ports, which fell for the eleventh month ening domestic activity while lockdowns
Manufacturing Purchasing Managers’ running. in other countries have limited export
Index (PMI) — a composite single-figure growth as well as caused further delays
indicator of manufacturing performance It said positively, staffing levels among in the supply of materials.
— dipped fractionally for a fifth month Malaysian manufacturers edged towards
in a row, down from 48.5 in October to stabilisation in the latest survey period. “Crucially, however, the impact is far
48.4 in November. less severe than seen earlier in the year,
IHS Markit said the rate of job shed- suggesting the hit to fourth-quarter GDP
This reading signalled a further mod- ding eased to the softest since May and will be much less marked than we saw in
eration in the health of the manufactur- was marginal overall. the second quarter.
ing sector, although the trend appears to
be flattening, while the deterioration was As demand was subdued, firms took ‘Business optimism about the year
considerably less marked than that seen the opportunity to reduce outstanding ahead is also running considerably high-
during the first wave of the pandemic. business, however capacity pressure er than seen earlier in the year, albeit be-
showed signs of emerging as backlogs low the recent peak seen in September,
IHS Markit said the historical relation- of work declined at the softest pace since which bodes well for business spending
ship between official statistics and the PMI June, it said. — especially investment — to show greater
suggests that while gross domestic product resilience,” he said.
(GDP) continued to trend toward stabili- It said in response to slower production Read also: Asean PMI stabilised in No-
sation, output in the manufacturing sec- and order volumes, Malaysian manufac- vember, ending eight-month downturn.
tor had stagnated as both the Malaysian turing businesses scaled back purchasing Click here
economy and key international markets activity.
combated a resurgence in Covid-19 cases.
Holdings of raw materials and semi-fin-
It said both production and new order ished goods also dipped midway through
volumes moderated in November, yet the the final quarter of 2020, as did stocks of
finished products.

FROM PAGE 4 According to the survey, 99% of Ma- laysian companies recognise the business
laysian companies think there are multi- opportunities of becoming more sustain-
According to the survey, three fifths of ple opportunities for their business from able. For them, the most important are:
Malaysian businesses will make it their im- improving their environmental and ethical promoting new ways of working, improving
mediate priority in 2021 to focus on us- sustainability. At least two thirds of com- employee wellbeing, attracting more invest-
age of digital technology (56% versus 48% panies in Malaysia have set a wide range ment and increasing customer demand.
globally). of environmental, social and governance
(ESG) targets. What’s more, 97% of Malaysian com-
Social focus is also an increasing trend panies (86% globally) expect their sales to
in Malaysia, as Malaysian businesses seek This reflects the fact that 99% of Ma- grow from a greater focus on sustainability.
to improve sustainability.

WEDNESDAY DECEMBER 2, 2020 6 THEEDGE CEO MORNING BRIEF

HOME

Malaysian banks ings noted that repayment rates for major icantly lower than 70%-80% of loans un-
show resilience banks’ retail and small and medium enter- der the first moratorium.We expect more
after blanket loan prise (SME) portfolios have significantly eligible borrowers to opt out of this mor-
improved since October. atorium, given that the deferral implies
moratorium higher financing costs eventually.
lifted — S&P “On average, the proportion of the loan
Global Ratings book that requires further repayment assis- “As a result, the final coverage of the
tance has dropped to 8%-13% for major additional three-month moratorium could
BY EMIR ZAINUL Malaysian banks we rate, from 70%-80% be notably lower than 25% of banks’ loan
theedgemarkets.com in the initial phase of the blanket mora- books,” it said.
torium,” it said.
KUALA LUMPUR (Dec 1): Malay- S&P Global Ratings maintains forecast
sian banks have proven their durability However, it pointed out that the in- of 15-20 bps net interest margin
by demonstrating resilient credit portfo- dustry only has repayment data for one compression for 2020
lios as they transition out of the blanket month, and that a longer period of obser- S&P Global Ratings maintains its forecast
six-month loan moratorium that ended vation is needed to confirm the underlying of 15-20 basis points (bps) in net interest
in September, according to S&P Global resilience of affected portfolios. margin compression this year, and believes
Ratings. sector-wide return on assets could drop
Three more months of loan to 1%-1.2% in the next 12-24 months,
But the credit rating agency warned moratorium for B40 will only affect from 1.5% in 2019.
that initial recovery of repayments may Malaysian banks marginally
end up being an unreliable indicator. S&P Global Ratings opined that the ad- Besides that, it noted that the indus-
ditional three-month moratorium offered try’s gross impaired loan ratio remained
In a statement today, S&P Global Rat- to all bottom 40% income earners (B40) at 1.4%-1.5% during the blanket morato-
and SME borrowers will only marginally rium, and is expected to reach 3.9%-4%
affect Malaysian banks’ asset quality, giv- by end-2021.
en that the B40 segment makes up only
10%-20% of loan books. S&P Global Ratings also maintains its
forecast of 130 bps for cumulative credit
“We estimate 25%-40% of local banks’ costs (annual provisions as a percentage
gross loans are eligible for this relief, signif- of gross loans) over 2020 and 2021.

KUALA LUMPUR (Dec 1): KeretapiTan- KTMB brings Northrop University in the US, Mohd Rani
ah Melayu Bhd (KTMB) has appointed back Mohd was previously the group CEO of Pos Avi-
Mohd Rani Hisham Samsudin as its new Rani Hisham ation Services Sdn Bhd (formerly known
chief executive officer (CEO), effective to- Samsudin as KL Airport Services Sdn Bhd) under
day. as CEO DRB-Hicom Bhd. He was also CEO of
KN Sime Logistics Sdn Bhd.
This is the second time Mohd Rani, 58, BY ARJUNA CHANDRAN SHANKAR
is leading the loss-making national railway theedgemarkets.com The Edge Malaysia reported on Aug 12,
company. He held the post from 2017 to 2019, that Mohd Rani stepped down as
2019. Rani was the CEO of Kontena Nasion- CEO of KTMB in September last year fol-
al Bhd since October 2019. According to lowing the expiry of his two-year contract.
In a statement, KTMB chairman Datuk MMC Corp Bhd’s website, Mohd Rani His departure came after a “surat layang”
Rameli Musa said Datuk Kamarulzaman Hisham has over 23 years of experience or poison pen letter was sent to the MoF,
Zainal ended his term yesterday (Nov 30) in transport and logistics. A graduate of accusing him of wrongdoing. However, an
after just over a year on the job. No reason internal audit subsequently cleared him of
was given for his departure. any wrongdoing.

Kamarulzaman took over the role from The poison pen letter followed a letter
Mohd Rani in September last year. KTMB sent by Mohd Rani to former finance min-
is an entity under the purview of the Min- ister Lim Guan Eng, in which Mohd Rani
istry of Finance. had expressed the national railway compa-
ny’s unhappiness with private firm Dhaya
“KTMB wishes to thank Datuk Maju Infrastructure (Asia) Sdn Bhd’s per-
Kamarulzaman for his service. The ap- formance in undertaking the first phase
pointment of the new CEO comes with of the Klang Valley Double Track project
individual challenges, particularly as the (KVDT1) worth RM1.41 billion.The letter
company is experiencing a drop in pas- then named India’s IRCON Internation-
senger volume as a result of the Covid-19 al Ltd, MMC Gamuda JV Sdn Bhd, IJM
pandemic. Construction Sdn Bhd and Emrail Sdn
Bhd for consideration when appointing
“He has to ensure that the future de- the new contractor for the KVDT Phase
velopment plans for the company will 2 project.
be executed soon in line with the cur-
rent conditions. This includes the agen- Dhaya Maju LTAT Sdn Bhd is now in
da of operational and asset payments, the an ongoing lawsuit against the government
strengthening [of KTMB’s] structure and andTransport Minister Datuk SeriWee Ka
management and the optimisation of cor- Siong for cancelling the KVDT2 project
porate values as the country’s main rail tender awarded to the company.
transport provider,” said Rameli.

During his absence from KTMB, Mohd

WEDNESDAY DECEMBER 2, 2020 7 THEEDGE CEO MORNING BRIEF

HOME

KUALA LUMPUR (Dec 1): Integrated Vizione to inject given the strong demand for gloves.
construction engineering group Vizione RM30m in capex When asked about oversupply issues
Holdings Bhd has allocated RM30 mil-
lion to capital expenditure for its recently to boost glove in the glove industry with so many new
acquired glove manufacturer, to boost its business capacity entrants, Ang replied that he is unfazed
annual production capacity more than by the situation, as he believed that the
threefold to 1.6 billion pieces of gloves BY JUSTIN LIM demand for gloves is unlikely to taper off
over the next 18 months, from 500 mil- theedgemarkets.com even after Covid-19 vaccines are availa-
lion pieces currently. ble because glove use will increase as the
ings accretive for Vizione as SSN has a masses rush to be vaccinated.
The capex was announced after glove business running currently, which
Vizione’s wholly-owned subsidiary VIP will be able to contribute to Vizione’s top Meanwhile, on the construction out-
Index Sdn Bhd inked a deal to buy a 51% and bottom lines immediately. look front,Vizione’s Ng said political sta-
stake in glove manufacturer SSN Med- bility is an important indicator for the
ical Products Sdn Bhd for RM5 million Despite lower profit guarantee, SSN recovery in the industry.
cash today. executive director Clinton Ang Teck
Leong said the company is targeting to He has confidence in the Perikatan
In a virtual press conference today, achieve a profit before tax (PBT) of up National government to deliver more
Vizione managing director Datuk Ng Aun to RM30 million in FY21 on the back of construction projects next year after the
Hooi said this is a golden opportunity for a revenue projection of between RM100 Budget 2021 is passed.
Vizione to venture into the glove-making and RM120 million.
business as demand for gloves is expected Currently, it has a tender book of over
to remain robust amid rising Covid-19 It has an even more ambitious target RM2 billion, mostly from government
cases around the world. for FY22, as Ang has projected PBT to projects such as hospital projects, infra-
more than triple to RM100 million on structure works and housing projects. It
The capex injected into SSN will add a revenue projection of RM200 million. expects to achieve at least 20% of suc-
another six lines equipped with advanced cess rate.
machinery, for a total of 12 lines. Ang said the profit projection came af-
ter SSN’s glove factory capacity was fully Meanwhile,Vizione has an order book
Furthermore, he said that the opti- booked until the third quarter next year, of about RM1.8 billion, which Ng ex-
mism about the glove business venture is while its additional incoming capacity will pects will continue to provide earnings
supported by a one-year profit guarantee, also be secured from its existing clients visibility for the group.
whereby SSN shall achieve a profit before
tax of RM15 million for the financial year The share price of Vizione closed
ending Dec 31, 2021 (FY21). up half a sen or 1.18% to 43 sen today,
bringing it a market capitalisation of
Also, he added that the acquisition of RM338.32 million.
a 51% stake in SSN is seen to be earn-
Year-to-date, the counter has declined
32% from 63 sen on Jan 2.

KUALA LUMPUR (Dec 1): Palm oil Palm oil prices 2021 onwards due to a slowdown in new
prices will continue to rise in the first to keep rising in plantings across top producers Indonesia
half of 2021 as global supply squeezed first half of 2021 and Malaysia since 2015.
by a La Nina weather pattern is set to on tight supply
remain tight, the Council of Palm Oil “It must also be highlighted that Indo-
Producing Countries (CPOPC) said on — CPOPC nesia’s smallholders replanting oil palms
Tuesday. totalling 500,000 hectares by the end
BY MEI MEI CHU of 2022 should sustain adequate palm
Disruptions from persistent heavy Reuters oil supply for the world,” CPOPC said.
rainfall in Southeast Asia means global
supply will remain tight until the first REUTERS Indonesia and Malaysia, the two big-
quarter of next year, CPOPC said in an gest producers of palm oil, have limited
outlook published on its website. expansion of new plantations in response
to criticisms of deforestation and the de-
“Towards the second half of 2021, struction of natural habitats.
adequate rainfall and better crop man-
agement incentivised by the current high While tight edible oil stockpiles in
palm prices will significantly boost pro- top markets India and China are keep-
duction,” it said. ing imports healthy, CPOPC said India
could curtail its palm oil purchases if its
Malaysia’s benchmark crude palm oil domestic harvest of other oilseed crops,
prices rose to RM3,348 a tonne on Tues- which have been increasing, are good.
day, staying close to more than eight-year
highs hit in November. Consumption in Europe is expected
to fall due to restaurant closures and
A deficit in the global supply of veg- lower biodiesel usage hit by the Cov-
etable oils as unfavourable weather dis- id-19 pandemic.
rupts production of soy, sunflower, and
rapeseed oil would also support crude “On the whole, the palm oil outlook
palm oil prices going into 2021, and in 2021 looks favourable compared with
encourage a demand switch to cheaper the average prices of 2019 and 2020,”
palm oil, CPOPC said. CPOPC added.

It cautioned that it sees structural It estimated palm prices this year
changes in global palm oil supply from would average around RM2,600-2,650
a tonne.

WEDNESDAY DECEMBER 2, 2020 8 THEEDGE CEO MORNING BRIEF

HOME

NEWS IN BRIEF

AME plans to establish and list BCorp unit wins exclusive distribution rights for Peugeot vehicles in Malaysia
industrial REIT
KUALA LUMPUR (Dec 1): A new company that is 51% owned by Berjaya Corp Bhd
KUALA LUMPUR (Dec 1): AME Elite (BCorp) and 20% owned by Bermaz Auto Bhd (BAuto) has secured the sole rights to
Consortium Bhd is looking at establishing distribution new Peugeot vehicles in Malaysia. Berjaya Auto Alliance Sdn Bhd (BAASB)
and listing a real-estate investment has also won the rights for after-sales services and spare parts distribution for
trust (AME REIT) on Bursa Malaysia’s Peugeot Citroen and DS vehicles. BCorp CEO Datuk Seri Robin Tan said in a statement
Main Market. The integrated industrial the conglomerate is pleased to be given the opportunity by French car manufacturer
space solutions provider said the REIT’s Groupe PSA to be part of this new collaboration. “It is our plan in the near future to
initial investment portfolio will include introduce our global successes such as the all-new Peugeot 2008 in Malaysia... Groupe
industrial properties that are currently PSA has made Malaysia its export hub for the region,” said Groupe PSA South East Asia
owned by its subsidiaries, which will senior vice president Laurence Noel in a statement. — by Arjuna Chandran Shankar/
be identified later. Currently, AME theedgemarkets.com
owns and manages industrial leasing
properties at its industrial parks in Samaiden bags second power plant Paper-based packaging producer
Johor, namely i-Park@SiLC, i-Park@ contract award in November HPP Holdings gets Bursa nod for
Indahpura, i-Park@Senai Airport City, ACE listing
and District 6. AME group managing KUALA LUMPUR (Dec 1): Newly listed
director Kelvin Lee Chai said this REIT Samaiden Group Bhd has won the bid to KUALA LUMPUR (Dec 1): HPP Holdings
will allow investors access into a growing develop a 1.2 megawatt biogas power Bhd, which is involved in the production
portfolio of high-occupancy properties plant in Bachok, Kelantan — its second and trade of paper-based packaging and
with resilient demand. It will also be power plant contract for the month of rigid boxes, is set to be listed on the ACE
an instrument of growth for AME, “by November. Its 60%-owned SC Green Market of Bursa Malaysia by the end of
unlocking value and enabling the group to Solutions Sdn Bhd, who participated in the year, after securing approval from the
continue pursuing our plans of expanding a competitive e-bidding exercise for the stock exchange. HPP Holdings has inked
the landbank for our industrial parks project in June, has been selected by an underwriting agreement with its sole
segment, and increasing the capacity of the Sustainable Energy Development underwriter, Affin Hwang Investment
our construction division,” Lee said in a Authority (SEDA) as a successful bidder. Bank Bhd, for the initial public offering.
statement. — by Arjuna Chandran Shankar/ In a filing, Samaiden said the project Affin Hwang will also be the principal
theedgemarkets.com is expected to be completed by Nov adviser, sponsor, and sole placement agent
17, 2023 — the scheduled feed-in for the IPO. In a statement, HPP Holdings
SC grants UEM Sunrise more time tariff commencement date. From the managing director Kok Hon Seng said
to work on proposed merger with commencement date, SC Green will hold the company has timed the IPO to fit its
EcoWorld the feed-in tariff for 21 years at the rate of expansion plans and are now finalising its
RM0.3963/kWh. Today’s announcement prospectus for the launch to take place
KUALA LUMPUR (Dec 1): The came after Samaiden disclosed on Nov 23 before the end of the year. HPP is 67.02%
Securities Commission Malaysia (SC) it had secured a RM115.6 million contract held by Aurora Meadow Sdn Bhd, which is
has approved UEM Sunrise Bhd’s from BTM Resources Bhd to develop a controlled by Kok, Lau Tee Tee @ Lau Kim
application for more time to announce 10 megawatt biomass-based power plant Wah, Ng Soh Hoon and Chong Fea Chin —
any firm intention to make a takeover in Teluk Kalong, Terengganu. — by Emir who are promoters of HPP Holdings’ IPO.
offer for Eco World Development Zainul/theedgemarkets.com — by Emir Zainul/theedgemarkets.com
Group Bhd (EcoWorld). UE Sunrise now
has until Jan 31 next year to make its UWC’s 1Q profit nearly doubled, semiconductor businesses also expanded
announcement on the matter, the group lifted by strong demand from clients as it focused on delivering high value
said in a filing with Bursa Malaysia. products and moving into the front-end
But the SC wants UEM Sunrise and KUALA LUMPUR (Dec 1): Engineering semiconductor supply chain. All these
EcoWorld to decide by Jan 2 on support services provider UWC Bhd collectively contributed to the group’s
whether to proceed with discussions reported a near doubling in its first sterling performance,” UWC said in a
on the proposed merger. If they want quarter net profit from a year ago, statement. — by Syahirah Syed Jaafar/
to proceed, they must jointly submit boosted by stronger demand in both its theedgemarkets.com
an application, by Jan 15 at the latest, semiconductor and life science businesses.
for a final extension of time based on The group’s net profit for the three
a timeline agreed by their boards of months ended Oct 31, 2020 jumped to
directors, the filing added. — by Syahirah RM21.71 million from RM11.22 million
Syed Jaafar/theedgemarkets.com a year ago, as revenue rose 52.4% to
RM71.5 million from RM46.91 million.
It also enjoyed higher profit margin due
to improved efficiencies. “Being involved
in the Covid-19 test equipment supply
chain, UWC saw increasing demand for its
products as countries continue to battle
against the pandemic. The life science and

WEDNESDAY DECEMBER 2, 2020 9 THEEDGE CEO MORNING BRIEF

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