This article first appeared in The Edge Malaysia Weekly on March 26, 2018 - April 1, 2018
THE world is closely following China’s plan to impose tariffs on up to US$3 billion of US imports — a response to the latter’s decision to levy tariffs on up to US$60 billion of Chinese imports over intellectual property violations. Prior to announcing the trade action, US President Donald Trump insisted that he viewed China as a “friend” and said he had “tremendous respect” for China President Xi Jinping — but do his actions speak louder than words?
“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the country’s Ministry of Commerce said in a March 23 statement. Chinese media reports say the government has long been preparing for the possibility of such a move and has mentioned the possibility of legal action under the World Trade Organization framework as well as retaliatory tariffs on soybeans, aeroplanes, cars, cotton, apples, wine, pork and ethanol. Chinese citizens may decide to boycott US goods, reports say.
At the time of writing, major stock indices were lower on trade war fears.
On March 22, US Federal Reserve chairman Jerome Powell guided for three rate hikes this year — after raising rates by 25 basis points — while minutes from the Bank of England’s March monetary policy meeting indicate a possible rate hike in May.
And that would be the global backdrop as the spotlight in Malaysia moves to the central bank on Ash Wednesday (March 28).
Bank Negara Malaysia is scheduled to release its 2017 annual report and Financial Stability and Payment Systems Report, which contains a summary of its outlook for economic, monetary and financial conditions this year. It is also expected to have the central bank’s views on current issues, such as affordable housing, youth unemployment and loan growth.
The Bank of Thailand is slated to announce its benchmark rate the same day (March 28). Other key economic releases this week include exports and trade data from New Zealand (March 26), Hong Kong (March 27) and Thailand (March 30). Industrial production data is expected from Singapore (March 26), Japan (March 30) and South Korea (March 30). Fourth quarter 2017 gross domestic product data is expected from South Korea and the US (March 28) as well as the UK and Canada (March 29).
Also set to be released on March 29 is the GfK Consumer Confidence Index in the UK, and the core PCE (personal consumption expenditures) price index and University of Michigan Sentiment Index in the US. The eurozone’s business climate, consumer sentiment, economic confidence and industrial sentiment indices are slated for March 27.
On March 30, Malaysia will release its February Producer Price Index while a number of regional markets — including in Indonesia, the Philippines, India, Singapore and Hong Kong — will be closed for Good Friday alongside those in Australia, New Zealand, the US, Canada and most of Europe.
The proposed “anti-fake news” law is scheduled for first reading in Parliament this week, with less than a fortnight left to its final seating on April 5.
On the Malaysian corporate front, several large real estate-related companies and trusts are having their respective annual shareholders’ meeting this week: Eco World International Bhd (EWI) and Eco World Development Group Bhd (EcoWorld Malaysia) on March 28 and Pavilion Real Estate Investment Trust, CapitaLand Malaysia Mall Trust and Amanah Harta Tanah PNB on March 29.
Annual general meetings scheduled for this week include that of Insurer LPI Capital Bhd on Tuesday, Bursa Malaysia Bhd on Wednesday, Mynews Holdings Bhd on Thursday and Inari Amertron Bhd on Friday. Bursa, LPI and EWI are also scheduled to have their respective extraordinary general meetings, alongside Aemulus Holdings Bhd (March 29), Ekovest Bhd (March 29) and Goh Ban Huat Bhd (March 27).
Bursa is asking shareholders to vote on a proposed one-for-two bonus issue, LPI has proposed a one-for-five bonus issue while Aemulus is seeking approval for a one-for-four bonus issue.
Shareholders of Ekovest are going to vote on its proposed takeover of Iskandar Waterfront City Bhd (IWCity). Independent adviser BDO Capital Consultants Sdn Bhd told IWCity minority shareholders to accept Ekovest’s offer, describing the cash option as “not fair but reasonable” and the share exchange option as “fair and reasonable”.
Meanwhile, EWI is looking to approve a variation in the use of proceeds raised from its initial public offering last April. The proposal essentially increases the portion earmarked for general working capital by reducing working capital originally apportioned for its UK projects and the West Village project. EcoWorld Malaysia, GuocoLand Ltd and executive vice-chairman Tan Sri Liew Kee Sin collectively own 64.3% of EWI and had on Jan 15 provided irrevocable undertaking to vote in favour of the resolution, EWI’s circular to its shareholders show.
Ceramic wares maker Goh Ban Huat wants shareholders to approve its proposed diversification into construction and property development as well as its plan to acquire 15 vacant industrial parcels, a vacant commercial parcel, a vacant hostel parcel and 29 semi-detached factories (built-up: 340,542 sq ft) in Pekan Nenas Industrial Park, Pontian, Johor, for RM143 million cash.
The company also plans to change its name to Paragon Globe Bhd. Independent adviser Mercury Securities believes the proposed acquisition is “fair and reasonable” and recommends a vote in favour.
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