Economic data showed the overall U.S. Consumer Price Index rose 0.6
percent in September as the cost of gasoline surged, posing a threat to
consumers’ spending power. On the other hand, inflation pressures look unlikely
to derail the Federal Reserve’s ultra-easy policy path.
The S&P 500 is on track for
its second consecutive advance, and its best two-day run in a month on the
heels of last week’s 2.2 percent slide. That was the benchmark index’s worst
weekly decline in four months as investors looked for more evidence on the
global economic climate from large multinational companies.
United Overseas Bank (UOB)
United Overseas Bank (UOB) aims
to double loans to South-east Asian small businesses by 2015 and expects
strongest loan growth to come from Thailand and Indonesia.
To tap on an expected rise in
demand for funding from small businesses, the bank will hire at least 100
relationship managers in the next year, growing its team of regional business
bankers by at least 10 per cent.
It also intends to invest in new
technology, said Victor Lee, UOB group head of business banking, a unit set up
three years ago within its retail bank to serve small businesses – those with
an annual turnover of less than $20 million.
In Singapore, UOB has grown its
sales force by 50 per cent over the last two years to station business banking
managers in all 67 branches.
Mr Lee said it now serves one in
every two small businesses in Singapore, which now accounts for half of UOB’s
business banking revenue.
He thus expects the next phase of
growth to come from Malaysia, Thailand and Indonesia.
Each of the three markets should
contribute at least as much as Singapore does to business banking revenue by
2015, Mr Lee said.
Stable economic growth, increased
domestic spending and strong intra-regional trade flows are trends he thinks
will provide small businesses with opportunities for growth, and UOB with the
opportunity to reach new customers.
A rising number of infrastructure
projects in Malaysia and Indonesia, reconstruction activities in Thailand, as
well as a rise in tourism spending next year may also lift small businesses’
need for financing.
In particular, Mr Lee sees “much
headroom for growth” via UOB’s network of more than 150 branches in Thailand
and more than 200 branches in Indonesia.
Apart from investing more in
people, the bank will be rolling out in both markets a $15-million credit
application tool already in use in Singapore and Malaysia, which has halved
loan processing time.
Bank lending growth in general
has slowed this year on the back of economic uncertainty, but Mr Lee says there
has been some resilience in loans to small businesses.
UOB has seen strong growth in
property loans to businesses here due to increased asset ownership – small
business owners are choosing to buy instead of rent factories and offices.
“Locally, we are seeing strong
growth in property loans because of asset ownership. That growth has
outstripped our expectations this year,” Mr Lee said.
Elsewhere in the region, the
business banking unit’s strength has been in equipment financing. “We are
seeing customers buying their first tractor, or excavator or truck, or renewing
equipment,” he said.
Maxis Bhd
Public Investment Bank initiated
coverage of Maxis Bhd, the country’s largest mobile phone operator, with a
“neutral” rating and a target price of RM7.26 per share, citing dismal growth
prospects due to narrowing profit margins.
“Though we acknowledge
progressive growth from the non-voice segment, we think Maxis’ strategy of
offering more competitive voice packages for the sake of reclaiming its
subscriber losses will eventually depress its margins,” Public Investment said
in a note.
However, the research house said
Maxis’ downside risks will be cushioned by its dividend yield of 40 sen per
share.
Maxis shares slipped 1.02 percent
against the Malaysian benchmark stock index’s 0.86 percent fall.
Susco
Shares in Susco Pcl gained as
much as 10.7 percent to touch their highest since September 1994 on
expectations the oil retailer would get a strong revenue boost from its recent
acquisition of petrol stations of Malaysia’s Petronas.
Susco shares were up 9.1 percent
at 2.64 baht, climbing at one point to 2.68 baht.
The stock has risen around 15
percent since Sept. 17 when it announced the acquisition of Petronas’s assets,
outperforming a 0.7 percent fall of the energy subindex and a 2.2 percent gain
of the broader SET index.
The Petronas assets would
generate around 15 billion baht ($487 million) of revenue per year from the
next year, which would double the revenue base for Susco, bolstering the
stock’s valuation, broker Bualuang Securities said in a report.
“We expect Susco’s forward price
to earnings multiple of 10.5 times, falling from its current price to earnings
of 15.5 times, on the back of the acquired Petronas assets,” it said in note to
clients.
Pertamina
State oil and gas firm Pertamina
on Monday reported $37 million in losses since 2010 due to illegal tapping of
its Tempino-Plaju pipeline in Sumatra.
At a meeting with lawmakers in
Jakarta, Pertamina president director Karen Agustiawan said from 2010 through
Oct. 11 of this year, more than 370,000 barrels of crude oil had been stolen
from the pipeline, resulting in total losses of $37.01 million.
“The number of cases have been
increasing from year to year,” Karen told members of the House of
Representatives’ Commission VII, which oversees energy, mineral resources and
environment.
Karen said crude oil stolen from
the pipeline totaled 8,120 barrels in 2010, with the number increasing almost
twelve-fold to 94,529 barrels in 2011, and soaring to 267,510 barrels from
January to Oct. 11.
Most of the illegal tapping took
place in the South Sumatra district of Musi Banyuasin, where a section of the
pipeline exploded earlier this month, killing nine people, according to Metro
TV, and injuring others. Some of the victims were allegedly illegally siphoning
oil from the pipeline.
Karen said there are a number of
traditional oil refineries, particularly in Simpang Bayat and Sungai Lilin in
Musi Banyuasin, where stolen crude oil is turned into gasoline, diesel and
kerosene.
“The markets [for the end
products] are Jambi, Lampung, Bangka Belitung and Pekanbaru,” Karen said, as
quoted by the Indonesian news portal tempo.co.
National Police chief detective
Gen. Sutarman, who attended the same House meeting, said a portion of the final
products are also sent to Tangerang, Banten, and some were even exported to
China.
He added that roughly 3,350
people were allegedly involved in illegal tapping activities along the
pipeline, and that South Sumatra Police handled 61 illegal tapping cases from
January to September alone.
The 267-kilometer Tempino-Plaju
pipeline channels crude oil from Tempino village in the Jambi district of Muaro
Jambi to a Pertamina refinery in Palembang’s Plaju subdistrict.
Pertamina announced shortly after
the fatal explosion that it had disbursed $90 million to build a new pipeline
along the same corridor, saying the current conduit was 70 years old and highly
vulnerable to illegal tapping. The new pipeline is expected to commence
operations in December.
PLDT
Philippine Long Distance
Telephone Co. (PLDT) has approved the issuance of new voting shares to allow
the company to comply with the Supreme Court’s interpretation of foreign
ownership limits in local utilities.
In a disclosure, PLDT said it
would issue 150 million new voting preferred shares to BTF Holdings Inc., a
subsidiary of the phone firm’s employee beneficial trust fund. The creation of
the shares was approved in a special shareholders’ meeting last March.
Officials earlier said the shares
would only be issued if the Supreme Court threw out petitions by PLDT’s top
executives—chair Manuel V. Pangilinan and CEO Napoleon Nazareno—that sought a
reversal of a previous decision that said the telco’s ownership structure was
in violation of restrictions on foreigners. In a ruling last week, the Supreme
Court upheld its previous ruling in a vote of 10-3.
PLDT said the new shares would
bring down the voting rights of foreign shareholders in PLDT to 34.5 percent,
down from the previous 58.4 percent.
The new voting preferred shares
“shall have voting rights at any meeting of stockholders for the election of
directors and all other matters to be voted upon by the stockholders in any
such meetings.”
BTF Holdings, as the owner of the
new shares, “shall be entitled to cumulative dividends at the rate of 6.5
percent annually,” the disclosure added. The new shares will not be convertible
into common shares, which have a higher dividend yield.
PLDT said the creation of the new
shares was prompted by the Supreme Court’s change in the definition of the term
“capital” when dealing with local corporations. PLDT said previous opinions by
the Securities and Exchange Commission defined capital to include shares that
did not have voting rights.
Under the old definition, the
company said it complied with constitutional restriction that prohibited
foreigners from owning more than 40 percent of the shares of any public utility
company. However, this changed in 2011 in the case of Wilson Gamboa vs. Finance
Secretary Margarito Teves et al., when the tribunal said that the term
“capital” should only cover shares that gave investors the right to vote.
Yesterday in Asia
Tokyo rose 1.44 percent,
or 123.38 points, to 8,701.31, Sydney gained 0.18 percent, or 8.1 points, to
4,491.5 and Seoul climbed 0.83 percent, or 15.95 points, to 1,941.54.
Hong Kong advanced 0.28
percent, or 58.82 points, to 21,207.07 and Shanghai was flat, giving up earlier
gains to finish 0.11 points up at 2,098.81.
Singapore closed up
0.12 percent, or 3.76 points, at 3,046.81.
Jardine Cycle and Carriage fell
0.06 percent to Sg$50.27 while Keppel Corp. gained 0.27 percent to Sg$11.25.
Taipei rose 0.70 percent,
or 52.12 points, to 7,471.02.
Taiwan Semiconductor
Manufacturing Co. gained 1.27 percent to Tw$87.5 while Hon Hai Precision was
0.11 percent higher at Tw$87.6.
Manila ended 0.31 percent
higher, adding 16.72 points to 5,399.94.
Wellington gained 0.62
percent, or 24.33 points, to 3,940.70.
Fletcher Building was up 2.17
percent at NZ$7.52, Chorus gained 2.08 percent to NZ$3.43 and Telecom put on
0.84 percent to close at NZ$2.40.
Kuala Lumpur ended flat,
nudging down 0.92 points to 1,653.52.
Maxis fell 1.7 percent to 6.85
ringgit, CIMB Group shed 1.4 percent to 7.55 ringgit and Malaysia Marine &
Heavy Engineering eased 1.0 percent to 5.00 ringgit.
Jakarta added 0.36 percent,
or 15.55 points, to 4,329.08.
Astra was up 2.6 percent at 8,050
rupiah and Telkom rose 2.6 percent to 9,850 rupiah.
Bangkok eased 0.24 percent,
or 3.07 points, to 1,287.49.
Mumbai fell 0.73 percent,
or 135.85 points, to 18,577.70.
Tata Motors fell 2.62 percent to
262.3 rupees while Reliance Industries lost 1.21 percent to 813.25 rupees.
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