Why many firms are at risk of sliding and failing

Many companies, even well-established ones, are at risk of sliding into irrelevance and failure because they do not reinvent themselves continuously.

This was the key message of former Harvard Business Review editor Kate Sweetman, who said companies today were vulnerable to “six blindfolds” and risk losing out to competition.

Sweetman said many established companies became too arrogant and end up either being replaced or overtaken by their competition, adding that many firms refused to believe that any problems existed.

“This means being either completely blind to organisational or individual problems or dismissing them to protect oneself and or the company,” Sweetman said at Menara Star during a learning session organised by leadership development firm Leaderonomics.



“Many also dismiss their competitors’ successes by refusing to accept a competitor’s success as valid and downplaying a competitor’s strategy and product innovations.”

This, she said, was usually because of companies’ own past successes.

Another blindfold, Sweetman said, was that companies refused to acknowledge negative feedback.

“This refers to the inability to hear anything negative about a project, the company, or yourself and to confront the brutal facts as they will get in the way of agendas, deadlines and commitments,” she said.

She also said plenty of companies had the inability to transfer learning, knowledge, ideas and information across boundaries in ways that resulted in the ability to take action.

The sixth blindfold, said Sweetman, was that companies often thought they knew what’s best for their customers.

“This refers to an inability to have empathy for customer frustration and needs and a lack of inquisitiveness to find out ways to perfectly align to customers’ current and future needs.”

To avoid the blindfolds or rather, pitfalls, Sweetman emphasised that a mindset shift was imperative.

The learning session, themed “Reinvention: Accelerating Results In The Age of Disruption,” also featured a panel discussion that comprised Sweetman, Connecting the Dots Consultancy chief executive officer Bharat Avalani, Selfdrvn founder and chief executive officer Lam Mun Choong, Valiram Group global chief operating officer Ashwin Rajgopal and Uber Malaysia general manager Leon Foong.

The panel discussion was moderated by Leaderonomics chief executive officer Roshan Thiran.



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VW to explore new China venture with JAC Motor

Volkswagen AG is exploring a potential joint venture with Chinese automaker Anhui Jianghuai Automobile (JAC Motor), Chinese media reported on Wednesday.

JAC said in a statement on the Shanghai stock exchange late Tuesday that it was halting trading in its shares because it planned to sign a cooperative memorandum of understanding but gave no further details.

State-owned newspaper China Daily reported, citing sources, that VW and JAC likely aim to build a new joint venture together. Independent financial news outlet Caixin also reported that VW was the unnamed potential partner mentioned in JAC's filing.

According to Caixin, the joint venture would be aimed at making electric cars, with sales in the so-called "new energy vehicle" segment having more than quadrupled in China last year thanks to a raft of government incentives and targets.

An official in JAC's media office declined to comment in advance of a public announcement.

A VW spokesman said the company would release a statement later on Wednesday when contacted about the matter. He did not elaborate.

VW is locked in a dead heat with US automaker General Motors for the title of largest automaker in China, the world's biggest auto market, with GM's primary joint ventures slightly edging out VW's to sell the most cars in the market last year, according to automaker association data.

Global auto brands are only allowed to manufacture cars domestically in China through joint ventures with local partners, with automakers typically limited to two JV partners.

VW already has joint ventures with SAIC Motor and China FAW Group.

JAC Motor is the ninth largest automaker in China by group sales, according to the China Association of Automobile Manufacturers.


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India to focus reforms on tax, banks, infrastructure

India will press ahead with tax reforms, repairing the banking system and getting stalled infrastructure projects moving to drive growth, Finance Minister Arun Jaitley said on Wednesday, but it is not yet ready to sell off its state banks.

Asked what his top economic policy priorities were, Jaitley told a conference he was determined to stick to a "very stiff" schedule that foresees passing critical enabling legislation for a new goods and services tax (GST) this autumn.

Jaitley said the new GST, once implemented, would have a "transformational" impact by creating a common market in India for the first time, while also acting as a transfer mechanism that would aid poorer federal states.

The goal of the federal and state governments would be for the tax to be revenue-neutral and, as the tax becomes established, for its rate to come down over time, Jaitley said.

A revenue-neutral tax changes a country's tax structure but is not intended to increase the overall amount of tax levied.

Jaitley did not say what rate he preferred but the government's economic adviser has pegged a revenue-neutral rate at about 18%.

Jaitley said it was vital to revive the banking sector, but ruled out selling controlling stakes in public-sector banks that control 70% of assets in the financial system and hold the lion's share of India's US$120 billion in bad loans.

"I don't think that public or political opinion has converged to the point where we can think of privatisation in the banking sector," Jaitley told The Economist India Summit in New Delhi.

The government is consolidating some of the public sector banks to strengthen them, but does not plan to reduce the state's share below a threshold of 52%, Jaitley said.

India currently owns stakes of between 60% and 86% in nearly two dozen state-run banks.

Getting stalled infrastructure projects moving would help drive growth and provide development benefits for the 1.3 billion people living in India, the economy of which continues to perform below potential, he said.

The latest gross domestic figures showed that growth in Asia's third-largest economy slowed to 7.1% in the three months to June, from 7.9% previously.

"We are still far below our best," Jaitley said in a podium interview, adding that as India looks to key state elections next year and a general election in 2019, economic reforms should bring growth benefits to voters, but the government must also "blend" them with social programmes.


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Judge halts North Dakota pipeline over tribal protests

A federal judge said Tuesday that construction would temporarily halt on a portion of a $3.8 billion oil pipeline in North Dakota where tensions have flared between Native American protesters and law enforcement.

U.S. District Judge James Boasberg said work would stop at an area near Lake Oahe, which the Standing Rock Sioux tribe has said contains sacred and culturally significant sites. Protests led by the tribe and others have grown more aggressive in recent weeks, with some protesters chaining themselves to equipment and several people getting injured over the weekend, according to the Morton County Sheriff’s Department.



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The pound looks ripe for a selloff

Investors have cheered the recent rally in the pound. But one popular technical indicator suggests that the bears could soon retake control of the U.K. currency, which touched a 31-year low after the U.K. voted to leave the European Union on June 23.

The nine-day relative strength index (commonly referred to as the RSI) has reached levels that have, in the past, been associated with short-term peaks in the pound GBPUSD, -0.2158% according to Kit Juckes, chief currency strategist at Société Générale, in a Tuesday research note.

“Once they roll over, bears have the green light,” Juckes said.

The RSI is used by technical analysts to measure the momentum behind an asset or currency. Over the past year, readings of 70 or greater in the nine-day RSI have preceded selloffs in the pound-dollar pair.

In the latest sign that the economic fallout from the Brexit vote hasn’t been as severe as feared, the U.K. services purchasing managers index bounced back to 52.9 in August, compared with 47.4 the previous month. Readings above 50 indicate growth.

Investors are now turning their attention to Prime Minister Theresa May, who is preparing to begin negotiations with European Union leaders over the terms of the U.K.’s exit from the trading bloc.

A key issue for investors is whether Britain can retain access to the single market—the EU’s free trade area.

“Any sign that the UK is considering a ‘hard Brexit’ instead of keeping EMU market access would likely terminate the GBP rally abruptly,” said Hans Redeker, head of global currency strategy at Morgan Stanley, in a note to clients published late last week.

The pound traded at $1.3405 on Tuesday, up 0.8% from its late-Monday level, as a weak reading on U.S. services-sector activity weighed down the dollar against a broad swath of rivals.





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U.S. stocks are in danger of rolling over

For the past three weeks, the S&P 500 has shifted from a short-term uptrend to a sideways movement. Key market indicators currently register not even one bullish signal. If this continues, the market will not only top out, but could roll over.

Take a look at the technical and sentiment indicators from Friday’s close:

Technical indicators

S&P 500 SPX, +0.30% is above its moving averages but moving sideways = Neutral

MACD (S&P 500; 19,39,9) is above the zero line but pointing down = Neutral

MACD (S&P 500; 19,39,9) is below its signal line = Bearish

S&P 500 is near support @ 2,170 = Neutral (2,150 next support level)

Sentiment indicators

II survey: (Aug. 30) 55.9% Bulls; 20.6% Bears = Bearish

AAII survey: (Aug. 31): 28.6% Bulls; 31.5% Bears = Neutral

VIX: @ 11.98 = Bearish

RSI: (S&P 500) @ 55.25 = Neutral

On the sentiment side, while many investors are leery of this market, most pros are all-in and bullish. In fact, bullish sentiment and complacency are at extremes. On the technical side, MACD is giving out a long-term sell signal as the market stalls out at these elevated levels. It was a red flag when the S&P hit its all time-high of 2,193 but failed to break through to the other side. Once again, it retreated.

On the other hand, if the S&P 500 can’t break below 2,170 or 2,165, it will likely remain in no-man’s land. Nevertheless, most bearish investors are too timid to bet against this market, and who can blame them? According to Lance Roberts at Real Investment Advice, inverse ETF volume is at its second-lowest level in five years. This tells me that bearish investors who don’t trust this market are not willing to put their money where their mouths are.

Another red flag is that margin debt is once again reaching extreme levels (although less extreme than in January). “Most importantly,” Roberts writes, “the amount of leverage investors are taking on is further confirmation of “greed” and “lack of fear.” He says that when greed turns to fear, that’s when margin debt really matters.




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Russia, Saudi Arabia are all talk, no action when it comes to oil-output freeze

When the world’s top two largest oil producers speak, traders listen. But it will take solid action in the form of a production ceiling for the market to see any lasting impact.

Saudi Arabia, the world’s largest oil exporter, and Russia, the world’s top oil producer, agreed Monday to cooperate on a bid to stabilize the struggling energy market, by setting up a working group to monitor the market and come up with ways to promote stability.

“There are a lot of statements that appear to support higher prices through a production ceiling,” said James Williams, energy economist at WTRG Economics. “However, when examined closely they fall short of a full commitment. An agreement for a cap in production is still up for grabs.”




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KLSE Comex Stocks Recommendations : Epic Research Malaysia

INTERNATIONAL COMMODITY NEWS

• Gold prices held near a more than one-week high during European hours on Tuesday, as investors awaited fresh signals
  about the timing of a possible U.S. interest rate increase this year.The U.S. Institute of Supply Management is to release data on August service sector activity at 10:00AM ET (14:00GMT) on Tuesday.
• Brent crude prices edged lower during Europe’s session on Tuesday, as optimism surrounding an agreement between Saudi Arabia and Russia to stabilize the oil market began to fade.On the ICE Futures Exchange in London, Brent oil For November delivery declined 35 cents, or 0.7%, to trade at $47.28 a barrel by 4:15AM ET (08:15GMT).
• Natural gas futures fell during noon trade in the domestic market on Tuesday as investors and speculators exit positions in the energy commodity amid speculation that peak summer demand for the power plant fuel which is used to fire up air conditioners in the US may be coming to an end.

ECONOMY NEWS

• A top Federal Reserve official on Tuesday repeated his call for gradual interest rate hikes, evidently unfazed by a slow down in U.S. job gains and sluggishness in the services sector that now has traders betting against any rate hike at all this year.It “makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later,” San Francisco Fed President John Williams said in remarks prepared for delivery to the Hayek Group.
• The yen gained on Wednesday after downbeat U.S. economic data made a U.S. interest rate increase this month unlikely, prompting investors to trim their dollar bets and triggering stop-loss orders in early Asian trade.The dollar was down 0.5 percent at 101.50 yen after dipping as low as 101.245 earlier, its lowest since Aug. 26 and well below last Friday’s high of 104.32 yen. It tumbled more than 1 percent against its Japanese counterpart on Tuesday.
• Top British bankers will tell finance minister Philip Hammond on Wednesday to give them a clearer idea of what thecountry’s divorce from the European Union will mean for them when they hold their first meeting since the Brexit vote.Hammond is to meet with executives from major banks and insurers, including Barclays(L:BARC), HSBC (L:HSBA), Standard Life (L:SL) Santander UK, the British arm of Spain’sBanco Santander (MC:SAN), according to sources.

TRADING STRATEGY :

• BUY GOLD ABOVE 1350 TGT 1355 1360 SL 1345.
• SELL GOLD BELOW 1347 TGT 1342 1337 SL 1352.

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KLSE IForex Stocks Recommendations : Epic Research Malaysia

INTERNATIONAL CURRENCY BUZZ

• Forex – Aussie and kiwi move higher, RBA holds rates.
• Forex – Dollar little changed in rangebound trade.
• Forex – USD/CAD pares losses as oil prices turn lower.

EUR/USD

Service sector activity in the U.S. grew for the 79th consecutive month in August, but at a slower pace than expected, industry data showed on Tuesday.n a report, the Institute of Supply Management (ISM) said its non-manufacturing purchasing manager’s index (PMI) fell to 51.4 last month from 55.5 in July. Analysts had expected the index to drop to 55.0.On the index, a reading above 50.0 indicates the non manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.In an immediate reaction, the dollar weakened. EUR/USD was trading at 1.1213 from around 1.1159 ahead of the release of the data, GBP/USD was at 1.3404 from 1.3367 earlier, while USD/JPY was at 102.48 from 103.35 earlier.The US dollar index, which tracks the greenback against a basket of six major rivals, traded at 95.17 compared to 95.62 prior to the release.

GBP/USD

The pound rose to a one-month high against the U.S. dollar on Monday, boosted by data showing that activity in the U.K. service sector returned to expansionary territory in August, while the greenback remained broadly under pressure.GBP/USD 1.3367 during European morning trade, the pair’s highest since August 3; the pair subsequently consolidated at 1.3367, climbing 0.54%.Cable was likely to find support at 1.3123, the low from September 1 and resistance at 1.3480, the high of July 14.Research group Markit said its U.K. services purchasing managers’ index rose to 52.9 last month from a reading of 47.4 in July. Analysts had expected the index to rise to 50.0.The upbeat data added to current optimism over the strength of the economy and Britain’s ability to overcome any post-Brexit hurdles.

RECOMMENDATION :

• BUY GBP/USD ABOVE 1.3445 TGT 1.3465 1.3495 SL 1.3415.
• SELL GBP/USD BELOW 1.3280 TGT 1.3260 1.3230 SL 1.3310.

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KLSE Stocks Recommendations : Epic Research Malaysia

Malaysia Stock Market:

• The FBM KLCI index gained 11.84 points or 0.71% on Tuesday. The Finance Index increased 0.53% to 14512.94 points, the Properties Index up 0.40% to 1198.87 points and the Plantation Index rose 0.86% to 7911.79 points. The market traded within a range of 16.82 points between an intr-day high of 1689.92 and a low of 1673.10 during the session.

• Actively traded stocks include SANICHI, M3TECH-WA, IRIS, M3TECH, BORNOIL, AAX, REACH-WA,SANICHI-WD, MYCRON and YKGI-WB. Trading volume increased to 1733.30 mil shares worth RM1570.06 mil as compared to Monday’s 1555.51 mil shares worth RM1396.64 mil.

• Leading Movers were BAT (+140 sen to RM51.12), GENTING (+18 sen to RM8.00), WPRTS (+9 sen to RM4.50), CIMB (+9 sen to RM4.83) and AMMB (+8 sen to RM4.40). Lagging Movers were MAYBANK (-2 sen to RM7.87), MAXIS (-1 sen to RM6.24), TENAGA (-0 sen to RM14.68), PETDAG (-2 sen to RM23.36) and HAPSENG (-1 sen to RM7.77). Market breadth was positive with 412 gainers as compared to 341 losers.

• The KLCI closed higher with last minute spike before the closing bell at 1689.92 points amid overnight positive performance in Europe market. The performance of our local bourse was lifted by buying interest in heavy weight counters such as Getting, Westsports Holdings and CIMB.

STOCK RECOMMENDATION :

• BUY AEMULUS ABOVE 0.285 TGT 0.300 0.310 SL 0.265.

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Asian Market Update : Epic Research Malaysia

The US dollar took a tumble and Asian stocks rose to one-year highs on Wednesday after surprisingly weak US services sector activity put paid to already slim chances of an interest rate hike by the Federal Reserve as early as this month.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent, extending its chunky gains of 2.7 per cent over the last two days, to claim a level last seen in July last year.

"When people think there's no immediate rate hike from the Fed, then Asia and emerging markets are the place to go to, as investors seek yields," said Toru Nishihama, senior economist at Dai-ichi Life Research.

Japan's Nikkei slid 0.7 per cent, however, as the yen gained sharply versus the US dollar, putting more pressure on exporters in the world's third-largest economy.


The Institute for Supply Management's index of non-manufacturing activity fell to 51.4, its lowest level since Feb 2010, from 55.5 the month before and well shy of the 55 estimate.

Given the strength in the service sector has been making up for softness in the manufacturing in the past year or so, the data was a blow to the case for the Fed to raise interest rates as soon as this month.

"The Fed now looks certain to keep rates on hold this month," said Shuji Shirota, head of macro economics strategy group at HSBC in Tokyo.

Comments from several Fed officials in recent weeks had boosted bets on a rate hike in coming months, but investors have had to scale back their expectations since Friday's weaker-than-expected US payrolls report.

San Francisco Fed president John Williams, speaking after the ISM data, also said he expects the Fed will raise rates gradually over the next few years.

"Recent hawkish comments from Fed officials were probably intended to warn markets against being too complacent about the chance of a rate hike, rather than to make markets fully price in a rate hike," Mr Shirota said.

US bond yields fell, with policy-sensitive two-year notes yield falling to 0.730 per cent, its lowest since Aug 19, down from 0.853 per cent marked on Aug 29.

US interest rate futures price gained to indicate only about 15 per cent chance of a rate hike this month and just over 50 per cent even by December, compared to above 20 and 60 per cent, respectively, before the data were released.

Declining US yields undermined the US dollar against other currencies and precious metals.

The US dollar, which had slumped 1.38 per cent on the yen on Tuesday, shed another 0.5 per cent to 101.48 yen.

The yen gained additional support from a media report that the Bank of Japan's board is struggling to agree on a common front in its planned policy review.

The euro maintained Tuesday's 0.96 per cent rise against the US dollar, the biggest daily gain in three months on Tuesday and last stood at US$1.1247.

A resurgent British pound rose to near eight-week high of US$1.3445 on Tuesday and held firm at US$1.3416.

Gold rallied to US$1,352.4 per ounce to near three-week highs on Tuesday, and last stood at US$1,350.

The Australian dollar took a breather. It was last down 0.2 per cent at US$0.7668 after GDP data largely met expectations, with Australia's annual growth clocking its fastest pace in four years last quarter, clinching a remarkable run of 25 years without recession.

Oil prices kept some distance from three-week lows touched last week, maintaining a part of gains made after Saudi Arabia and Russia agreed on Monday to cooperate in world oil markets, saying they will not act immediately but could limit output in the future.

Brent crude futures stood at US$47.49 per barrel, up 0.5 per cent on the day and above its low last week of US$45.32.

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Opening Market Update : Epic Research Malaysia

MALAYSIA share prices opened lower on Wednesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 9.420 points to 1,680.350.
Volume was 40.024 million lots worth RM39.73 million.
Gainers outnumbered losers 92 to 70.


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Companies Bill 2015 to take effect next year

The Companies Bill 2015, which will replace the Companies Act 1965, will be implemented in stages from next year.

Companies Commission of Malaysia (SSM) chief executive officer Datuk Zahrah Abd Wahab Fenner said that companies would see some changes in the enforcement as early as in the first quarter.

"Right now the Bill is awaiting the consent of the Yang di-Pertuan Agong Tuanku Abdul Halim Mu'adzam Shah.

"Once we obtain the nod, SSM will enforce it in stages. We are currently working out the details, including the fee structure," she told reporters at the SSM National Conference 2016 in Kuala Lumpur on Tuesday.

The Companies Bill 2015, which is said to be a more modern set of legislation, places emphasis on better governance and internal controls in business operations.

Zahrah said under the new legislation, companies would have to comply with, among others, new rules for better business reporting and improved auditing and acounting.

The Companies Bill 2015 was passed by Parliament on April 28, 2016.

She said the new legislation would encourage more young entrepreneurs to start their own businesses as starting a business would be made simpler, with the removal of multiple forms and the introduction of a super-form.

"Under the 2015 Bill, new set-ups will not be required to have the Memorandum and Articles of Association and common seal at the point of registration.

"A flat incorporation fee will be introduced, depending on the type of companies registered. This will translate into lower cost in starting a business," she said.

Zahrah urged young entrepreneurs, especially those operating via online, to also register their businesses.

They will be fined RM50,000, or face a two-year jail or both, if they fail to do so, she said. - Bernama


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Affordable housing in Penang to be key sales driver

AllianceDBS Research said the Penang property market has been facing challenging conditions since 2014 as property prices continue to rise, albeit at a slower pace.

“We notice that transaction numbers have continued to extend its decline in 2016 and there is no sign of a recovery in the near term as prices remain stubbornly high.

“Also, property launches have been experiencing slower take-up like that seen prior to 2011, when projects took 2-3 years to be fully sold, a sharp contrast to the sold-out-upon-launch affairs that we have been experiencing over the past few years,” Alliance said in a report.

Nevertheless, it said the removal of speculative fervour in the property market would also position developers for a healthier market.

“We expect property development projects in attractive locations, with attractive pricing and selling points, to continue to do well despite the softer sentiment,” Alliance said.

It noted that developers are increasingly more aggressive in engaging property agents to help market their launches even beyond Malaysia, given the challenging environment.

“We understand agents could be entitled to as much as 5% of project GDV, implying higher marketing costs, while selling price hikes may be capped by relatively weak sentiment,” Alliance said, adding that the slower economic outlook had resulted in more potential buyers adopting a wait-and-see attitude before committing to the purchase of properties.

The research house said developers have also been incorporating more affordable homes in their launch pipelines while the absolute property prices have been kept low by offering smaller built-up units. Affordable landed properties with ready infrastructure and amenities remain in demand, as evident in some of the launches in Seberang Prai.

Developers have also been looking for cheaper land in mainland Penang to tap on the demand for affordable housing.

“Mainland Penang’s property transactions have been gaining more market share from Penang Island with a 55-60% market share, compared to about 40% in 2009,” it said.

The opening of the Second Penang Bridge in March 2014 has spurred the economic development of Batu Kawan, Penang’s third satellite city located in Seberang Prai Selatan district (South of Mainland Penang).

“Thanks to the improved connectivity, Seberang Prai Selatan experienced an explosive population growth of 25% over 2009-2014, compared to the state’s 4% growth. Penang state government’s investor friendly initiatives to promote Batu Kawan via catalytic projects have also driven the area to be the next growth corridor,” Alliance said.

With the participation of various industry-leading brands, Batu Kawan is no longer perceived as a backwater, but an emerging township promising vibrant residential lifestyle at a fraction of the cost in Penang Island.

“Eco World is poised to be one of the largest private landowners in Batu Kawan with its recent acquisition of 375 acres of prime land in Batu Kawan to tap on the rising prospects there.

“Other established developers at/near Batu Kawan include Aspen Group (245 acres), Paramount Corp (29 acres) and Tambun Indah (380 acres),” Alliance said.




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Huawei’s FusionSolar seminar reveals potentials, opportunities in PV sector

The Malaysia FusionSolar Seminar organised by Huawei in Kuala Lumpur on Aug 23 was timely as South-East Asia’s photovoltaic (PV) market has flourished in recent years and Malaysia’s power consumption capacity is projected to increase to 1GW by 2020.

With the 1GW PV plant capacity available in the next five years, the seminar reveals many potentials and opportunities for the PV industry in Malaysia.

Malaysia’s solar PV industry development is also supported by the country’s existing policies and regulations, which are conducive in bringing in advanced products and technologies, such as from high tech enterprises like Huawei, to Malaysia’s PV market.

Many key leaders attended the seminar themed Lead to Smart PV Industry, including Energy, Green Technology and Water Ministry deputy secretary-general Datin Badriyah Abd Malak, Malaysian Photovoltaic Industry Association president Ahmad Shadzli Abdul Wahab, Malaysian Solar Resources operation manager Datuk Seri A.H. Ong, Plus Solar executive director Ko Chuan Zhen, BKK director Thatree Homsirikamol and Huawei FusionSolar chief scientist Dr Yunfeng Liu.

Also participating in the seminar were many valuable guests such as investors, consulting companies, EPC (engineering, procurement and construction) contractors and local banks who shared opinions of policies in Malaysia and their experiences in solar plant development.

The seminar kicked off with Ahmad Shadzli’s speech on the PV industry in Malaysia, followed by a speech from Datin Badriyah on the subject of Solar PV Investment Opportunity in Malaysia.

Furthermore, James Lee, project director from Malaysian Solar Resources Sdn Bhd (MSR), shared a project development case study. A point that resonated with MSR was the fact that Huawei’s string inverter had zero failure rates to date.

Ko then cited the success factors in a solar project development. The success factors included local government regulations and policies, feasible financing modeling, investment location, proven technology and a reliable EPC company.

Huawei provides reliable inverter maintenance support, lightweight, consumable-free and quick replacements, installation facilitation and maintenance of power plants.

During the seminar, Huawei held a signing ceremony with MSR, and also one with Plus Solar.

MSR signed a memorandum of understanding (MoU) with Huawei and looks forward to further cooperation. Plus Solar signed an MoU with Huawei, which says that Plus Solar will utilise Huawei’s string inverters in developing its 100 MW power plant in the following three years.

Huawei, as the global smart PV leader, launched FusionSolar Smart PV Solution, which has been quickly adopted and applied in scale globally.



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CPO price surges as inventory heads to 4-year low

Crude palm oil prices (CPO) are closing in on multi-year highs after preliminary findings indicate a supply crunch which could see the lowest monthly palm oil inventory in more than four years.

The accelerating depletion in palm oil stocks was due to rising export demand as well as lingering effects from the El Nino weather phenomenon.

According to CIMB Research, a survey of 24 planters show that Malaysian palm oil inventories may have fallen to 1.45 million tonnes as at end August, or the lowest figure since January 2011, according to Malaysian Palm Oil Board (MPOB) figures.

“This would represent an 18% month-on-month decline. The sudden strong pick-up in demand for palm oil last month exposed the prevailing tight global palm oil supply situation following the sharper-than-expected drop in global palm oil output,” said the research house in a note.


Another positive surprise for the industry is the stronger-than-anticipated demand from key export destinations such as China and India.

CIMB forecasts that Malaysian palm oil exports grew by 27% month-on-month in August based on estimates from cargo surveyors SGS and ITS. This was far more than the projected 5% m-o-m increase that was initially expected by the research house.

India’s demand grew 126% month-on-month due to the upcoming Diwali season while exports to China increased 28% m-o-m after its government stopped releasing its rape oil reserves, it added.

The latest prices from both the spot and futures markets have been supportive of the supply shortage angle.

The third month benchmark CPO futures contract for December delivery peaked at RM2,601 a tonneyesterday, or near a three-year high. It subsequently closed at RM2,592 a tonne.

Production tends to be seasonally weak during the final months of the year due to the monsoon season. On the other hand, the damage arising from of El Nino on palm crops could exacerbate the supply disruption in the coming months.

For the month of December during last year as well as in 2014, actual settlement prices averaged around RM2,150 a tonne.

Production tends to be seasonally weak during the final months of the year due to the monsoon season. On the other hand, the damage arising from of El Nino on palm crops could mean lower production in the coming months.

According to Bloomberg data, CPO prices have averaged RM2,535 a tonne to date, or at the high end of research house estimates.

Among CIMB’s top picks in the plantation sector are Felda Global Ventures Holdings Bhd (FGV) and Genting Plantations Bhd. It has an “add” call on the two firms with target prices of RM2.76 and RM11.40 respectively.

The research house favours FGV for its business turnaround plan and Genting Plantations for its young estates, solid balance sheet and strong management.


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Dollar meanders as investors look for central bank clarity

The dollar meandered against yen and other major currencies on Tuesday, amid uncertainty over the timing of the Federal Reserve’s next rate increase. Lack of clarity over the Bank of Japan’s policy outlook also led the yen to trade sideways.

The dollar’s DXY, -0.09% rising momentum since Friday’s U.S. jobs data against the yen and the euro has eased, weighed on by skepticism over the pace of the Federal Reserve’s rate increases.

“(Fed official) comments are suggesting they’ll do at least once this year, but the market isn’t convinced,” said Kosuke Hanao, head of FX at HSBC in Tokyo.

Hanao himself believes that either the Fed will act in September and pass in December, or leave the rate unchanged in September and strongly signal an increase in December.

More Fed official speeches are scheduled later this week, including one by Federal Reserve Bank of San Francisco President John Williams.

The dollar USDJPY, -0.06% was at ¥103.66, compared with ¥103.44 late Monday in North American trading hours, according to EBS. The euro EURUSD, +0.0987% was unchanged at $1.1148. The British pound GBPUSD, +0.3157% was at $1.3325, from $1.3303, after getting a boost Monday on the release of surprisingly strong U.K. services activity data.



Michiyoshi Kato, senior vice president of forex sales at Mizuho Bank, said BOJ Gov. Haruhiko Kuroda probably wants to weaken the yen a bit more to help generate a 2% inflation, but he doesn’t want to trigger a massive devaluation of the Japanese currency either. Kato said that is likely to be a key issue which the BOJ will try to address at its planned comprehensive review of monetary policy later this month.

“So long as crude oil prices remain low, the weak yen is the only way to achieve 2% inflation,” he said. “But if you do that too much, you’ll cross the point after which there is no way back.”

BOJ’s massive bond buying had some effects on weakening the yen, but it wasn’t enough to achieve a 2% inflation. A negative reserve rate of 0.1% triggered yen buying. Meanwhile, Kuroda has ruled out direct financing of government debt.

Hanao pointed out that the BOJ governor in a speech Monday delivered a clear message that the upcoming policy review would lead to more easing — not less — but “details were unclear.”





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Oil rises after Russian-Saudi agreement, but off day’s highs as deal underwhelms

Oil futures advanced Monday but had come off higher levels after an announcement from Russian and Saudi Arabian officials didn’t deliver as much as investors had anticipated.

October West Texas Intermediate crude CLV6, +2.16% rose by 58 cents, or 1.3%, to $45.02 a barrel, while November Brent crude LCOX6, +0.52% tacked on 48 cents, or 1%, to $47.31 a barrel.

But oil prices had shot much higher following a Reuters report that Saudi Arabia’s energy minister, Khalid A. Al-Falih, was set to make a “significant announcement” at the G-20 meeting in China. That raised expectations that the Saudis and Russians would say they had agreed on an output cap aimed at lifting energy prices.

Brent futures had jumped more than 5% to trade above $49 a barrel, and WTI futures had climbed more than 4% to trade above $46.

But prices came off those session highs after the release of the statement itself. The world’s two largest oil producers said they will set up a working group to monitor the oil market and come up with recommendations to promote stability, according to reports.

Al-Falih and his Russian counterpart, Alexander Novak, will meet in Algeria in October and in Vienna in November to discuss how to cooperate under the new agreement, the reports said.

Al-Falih described an output freeze as a “favorable option, but not necessary today.”

Investors had hoped that Russia and Saudi Arabia would issue a “more concrete/policy statement to curb the supply,” wrote Naeem Aslam, chief market analyst at Think Markets, ahead of the announcement.

On Friday, WTI crude settled 3% higher after Russian President Vladimir Putin urged oil-producing nations to agree on a production cap at an informal meeting of the Organization of the Petroleum Exporting Countries in Algeria later this month. But the U.S. oil benchmark last week still suffered a weekly loss of roughly 6.7%.



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Pound rises after U.K. services data stages a surprise

The pound gained against the U.S. dollar Monday, lifted by an unexpected jump in U.K. services activity, though it has come off its session highs.

The U.S. Dollar Index DXY, -0.01% , which measures the greenback against other currencies, was down 0.1% at 95.780. Against the euro EURUSD, +0.0628% the shared currency bought $1.1149, compared with $1.1160 late Friday.

Sterling shines: The pound GBPUSD, +0.2029% jumped to a session high of $1.13376, its strongest level since late July, after the release of data on the U.K.’s services sector in August. Sterling eventually pared its gain to $1.3310, compared with late Friday at $1.3295.

The U.K. services activity purchasing managers’ index came in at 52.9, IHS Markit said Monday. Expectations were for a level of 50, according to FactSet. The 5.5-point monthly gain from the reading of 47.4 for July is the largest in two decades, IHS Markit said. A reading of 50 and above indicates expansion.

The services report, which reflects activity in the wake of the Brexit vote, was closely watched to see whether it would follow recent PMI readings on construction and manufacturing, which both outstripped expectations.




For “the first time in nine weeks, bearish bets against the pound edged lower, encouraged by the better tone of recent U.K. data releases,” analysts at Rabobank said in a note. However, “the level of outstanding net short positions remains very large by historical standards.”

Yen: Meanwhile, the dollar lost ground against the yen after Bank of Japan Gov. Haruhiko Kuroda at the G-20 meeting in China failed to send any strong signals for future monetary policy.

The U.S. dollar USDJPY, +0.13% was trading at ¥103.40, down from ¥103.93 late Friday in New York. The yen also moved higher against other rivals.




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KLSE Comex Stocks Recommendations : Epic Research Malaysia

INTERNATIONAL COMMODITY NEWS

• Gold gained in Asia on Tuesday as investors continued to mull the chances of a Fed rate hike this month in the wake of weaker than expected U.S. jobs data at the end of last week.Gold for December delivery on the Comex division of the New York Mercantile Exchange rose 0.31% to $1,330.85 a troy ounce.

• Crude gained further in Asia on Tuesday as investors reassessed a new twist in proposals to freeze output by major producers and sent futures sharply higher.Crude oil for October delivery on the New York Mercantile Exchange jumped  2.12% to $45.38 a barrel. On the ICE Futures Exchange in London, Brent oil for November delivery gained 0.29% to $47.77 a barrel.

•  U.S. natural gas futures fell to the lowest level in nearly two weeks on Monday, as traders reacted to the reality that higher summer demand for the commodity is coming to an end.Demand for natural gas tends to rise in the summer  months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

ECONOMY NEWS

• Venezuelan President Nicolas Maduro has enlisted a Spanish academic he has hailed as the “Jesus Christ of economics” to help the South American country manage chronic product shortages.Alfredo Serrano is the only foreigner to form part of the Superior Organ of the Grand Mission of Sovereign Supply, a group of civilians and military officers tapped by socialist President Nicolas Maduro in response to the country’s economic crisis.

•  More than a third of Arab banks have seen their business links with foreign banks shrink over the past four years because of pressures such as economic sanctions and concern about money laundering, according to a study published  on Monday.”The inability of banks in some Arab countries to enter into correspondent relationships with foreign banks could have a deleterious impact on trade and remittances and ultimately on real economic activity,” the Arab Monetary Fund said in the study.

• The world’s biggest hedge fund firm thinks that China is preparing for a bust.Ray Dalio’s Bridgewater says that China  has experienced an “unsustainable buildup of credit,” which is “typical of debt boom and busts,” according to a private  note to investors viewed by Business Insider.”This rapid expansion in credit looks like it has created significant vulner abilities in the Chinese financial system at a time when the economy is still near the front end of a material loss cycle,” the note added.

TRADING STRATEGY :

• BUY GOLD ABOVE 1330 TARGET 1335 1341 SL 1325.

• SELL GOLD BELOW 1321 TARGET 1316 1310 SL 1326.

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