2017

PETALING JAYA: Credit Suisse (CS) said it is now time for investors to put their funds into Malaysian stocks as current valuations indicate that local equities are poised for a strong recovery.

Malaysia has underperformed its peers in the emerging markets due to several reasons, among them being the downward pressure on the ringgit as well the selldown in heavyweight sectors such as banks.
Read more at http://www.thestar.com.my/business/business-news/2017/03/18/credit-suisse-its-time-to-invest-in-malaysia/#i2zx9lKYjIzd4hjH.99

But now, according to CS in an extensive report yesterday, while the 34% decline in Malaysian equities on a dollar-adjusted basis over the past 45 months was warranted, the market bottom may be close at hand.

Calling it as “the ultimate contrarian trade”, the research house outlined 10 reasons to be bullish (see table).

Among them is that Malaysia’s GDP growth may see further upside, thanks to a rebound in commodities. Additionally, the government may have more leeway to increase spending, given its conservative average crude oil price forecast of US$48 per barrel, CS said.

“We believe that the recent stability in the commodity complex we have witnessed the last of the downgrades to near term growth expectations.

“We now expect a pick-up in growth to 4.5% this year (above consensus expectations of 4.3%), driven by public infrastructure projects, commodity-related investments and a boost to rural income from the recovery in rubber prices,” it explained.

image: http://www.thestar.com.my/business/business-news/2017/03/18/credit-suisse-its-time-to-invest-in-malaysia/~/media/6e9e3c3809c94d24a57732dee2661843.ashx?h=432&w=620

Another reason is on the improvement of earnings dynamics among Malaysian corporates. CS points out that at the sector level, the recovery in earnings revisions is led by the energy and mining space.

Additionally, among the larger sectors, consumer discretionary and staples have recovered sharply well into net positive territory with industrials and financials improving to at least neutral levels.

Another key catalyst for the markets is the attractiveness of the ringgit at present levels after significant devaluation.

Although Malaysia’s 15-year trend of a weaker ringgit in real effective exchange rate (REER) terms is justified by the steady erosion of its share of global exports, the 18% REER devaluation over the past three years appears severely overdone, given the relatively modest decline in export share over this period, CS noted.

One prominent beneficiary from the repair in the macro environment appears to be the banking sector, which is a heavyweight component for the FBM KLCI.

The research house said that private sector credit growth had just bounced off a 13-year low at 5.6% year-on-year in January compared to 4.2% in September last year.

“Encouragingly, deposit growth recovering back into positive territory should serve to moderate the pick-up in the loan-to-deposit ratio, which is currently at elevated levels which typically dampens credit extension,” it said.

In light of its market recommendation, CS has picked its top 10 stocks which offer superior dividends and free cashflow yields.

The companies are Malayan Banking Bhd, CIMB Group Holdings Bhd, Axiata Group Bhd, Kuala Lumpur Kepong Bhd, Astro Malaysia Holdings Bhd, British American Tobacco (M) Bhd, IJM Corp Bhd, Gamuda Bhd, Alliance Financial Group Bhd and Malakoff Corp Bhd.

To date, the FBM KLCI is already up by 6.3%. Yesterday saw the largest one-day turnover in stocks since May 2016 with total trading volume of 4.98 billion shares valued at RM5.04bil.
Read more at http://www.thestar.com.my/business/business-news/2017/03/18/credit-suisse-its-time-to-invest-in-malaysia/#i2zx9lKYjIzd4hjH.99

 

source: the star online

Medical supplies and equipment based on artificial intelligence (AI) and robotic technology will dominate the global health care sector in the future, industry watchers said Sunday.

The remarks were made during the Korea International Medical Clinical Laboratories and Hospital Equipment Show (KIMES) at the Convention and Exhibition Center (COEX) in southern Seoul where nearly 1,300 medical instrument manufacturers from both home and abroad showcased their latest medical technologies and products.

Photo from ‘KIMES 2017’ (Yonhap)

The annual event, the 33rd of its kind, is hosted by the Ministry of Health and Welfare. The ministry said the goal of the event is to navigate the future of the global health care industry, which is largely seen as the next new growth engine.

Global IT giant IBM Corp. showcased its AI-based supercomputer called “Watson” that can diagnose and treat cancer, one of the leading causes of the death in the world.

Last year, Gachon University Gil Medical Center in Seoul employed Watson for the first time in the world to assist doctors in diagnosing cancer. Andrew Norden, Deputy Chief Health Officer at IBM Watson Health, said AI devices like Watson were created to help doctors not to replace them.

The doctor added that Watson can become human doctors’ greatest helpers, predicting more hospitals will adopt the system in the near future.

In a bid to raise the country’s competitiveness amid growing calls for South Korea to revamp its R&D strategy to catch up with other global powerhouses, the Seoul government has rolled out various measures to stimulate growth momentum.

South Korea-based SELVAS AI Inc. also unveiled its AI-based medical speech transcription solution, “Selvy MediVoice” and heath checkup machine, “Selvy Checkup.”

The midsized company supplies human-machine interaction (HMI) solutions, such as handwriting, image and speech recognition, through specialized research and development based on state-of-the-art deep learning technology.

“Visitors can experience the service of having six major cancers including lung and liver as well as other major diseases checked if they bring results of the latest health checkup through the Selvy system,” the company said in a press release.

Reflecting the growing interest in this field, companies taking part in the exhibition showcased more than 30,000 examples of advanced medical supplies and equipment, hoping to grab the attention of international buyers.

Major research centers and leading tech firms, including Samsung Electronics Co., as well as venture firms also introduced their latest robotic hardware to potential customers.

Curexo, one of the leading companies in the field, introduced the latest surgical robots created through a joint project with Hyundai Heavy Industries Co.

Market sources said that medical robots have increasingly taken over the surgical table at many local hospitals on the back of the government’s robust efforts for support measures and advanced medical technology. They said such developments will gain speed down the road and it can benefit people needing medical attention.  (Yonhap)

Source: The Korea Herald > Business > Technology

LG Hausys has won an award in recognition of the technological innovation of its roof rack material at the JEC World 2017 in Paris, it said Thursday.

The roof rack is a tool consisting of two long sticks for the fixation of baggage on vehicle roofs. It is made of continuous fiber thermoplastic, known as CFT, proprietarily developed by LG Hausys. The latest roof rack is about 30 percent lighter than existing products made of aluminum.

It was co-developed by the LG unit and South Korea’s largest automaker Hyundai Motor.

(LG Hausys)

The JEC World that kicked off Tuesday is a three-day exhibition for cutting-edge materials and parts, attended by around 1,200 related businesses.

LG Hausys plans to mass produce the product next year to supply it to local automakers.

The home interior material provider is expanding its material business to vehicles with an aim to develop light materials for automobiles. The company acquired a 50.1 percent stake in Slovakian carbon fiber maker c2i as part of the business expansion.

By Song Su-hyun (song@heraldcorp.com）

The lady of the Samsung family Hong Ra-hee, 72, resigned last week from her position as the director of Leeum Samsung Museum of Art for personal reasons. The decision astounded the business and art communities as the “super collector” had the discerning eyes and financial capabilities to purchase valuable art works.

As of March 7, Hong ranks 10th on The Superich Team’s “Korea’s Richest 100,” and is the richest female within the country.

Director of Leeum Samsung Museum of Art, Hong Ra-hee (Yonhap)

She owns close to 1.1 million shares of Samsung Electronics’ common share which accounts to 2.2 trillion won ($1.9 billion) when standardized by the closing price of March 1.

She was also listed as the 1,694th richest person globally according to Forbes’ count of world’s billionaires.

Following the increased value of Samsung Electronics’ stocks on Feb. 28, the value of her assets also jumped by 80.2 billion won.

Being the richest person born in the year of the chicken, she has received much attention since the beginning of this year.

There are some voices in the business world that claim her position as Samsung Electronics’ dominant shareholder with 0.77 percent of the stock shares will allow her to exert a significant influence in making important decisions, such as corporate succession and possible system separation that may take place in the near future.

There are only three among the Samsung family that owns common stocks in Samsung Electronics: Chairman Lee Kun-hee (3.54 percent), Vice Chairman Lee Jae-yong (0.6 percent) and Hong.

Hong’s husband, Lee Kun-hee, is the richest man in Korea with around 15.2 trillion won.

Her eldest son, Lee Jae-yong, ranks third with approximately 6.6 trillion won.

The two daughters, Samsung C&T Fashion Group President Lee Seo-hyun and Hotel Shilla CEO Lee Boo-jin, each own about 1.6 trillion won worth of stock assets comprised of Samsung SDS (3.9 percent) and Samsung C&T (5.51 percent).

Hong’s presence, however, meant more than a mere lady of the house.

Having graduated as a major of applied art from Seoul National University, Hong gained recognition from her father-in-law, Samsung founder Lee Byung-chull, who was also a prolific buyer of antiques.

She receiving special training from Lee who gave her 100,000 won every day to buy valuable antiques.

Along with her keen insights, her connections and wealth allowed her to expand her influence over the world of art and become the director of Ho-Am Museum of Art in 1995. Ho-Am Museum of Art, named after Lee Byung-chull’s pen name, Ho-Am, opened in 1982 displaying Lee‘s collection of 1,200 Korean art works.

Hong has also served as the director of Leeum Samsung Museum of Art since 2004. The museum, located in Yongsan-gu Hannam-dong, is well-known for its large size, exhibiting about 15 thousand art works.

Leeum Samsung Museum of Art located in Hannam-dong, Seoul (facades.com)

Hong is the indisputable No. 1 on the “influential figures in the Korean art circle” survey by the Korea Art Price Appraisal Association and Art Price, a technical journal on art, showing that she is more than just a lavish buyer but a true collector of insight.

Her husband’s ill health, as well her son’s arrest on Feb. 17 are presumed to be the major reasons behind her recent resignation. There had been rumors of her wanting to “lay everything down.”

This was not the first time she had resigned from her position as director. The Samsung slush fund incident of 2008 led to her resignation from Leeum, Ho-Am and Samsung foundation of culture for three years.

Hong was born in 1945 to Kim Yoon-nam and Hong Jin-ki, former chairman of Joongang Ilbo and also the 9th Minister of Justice and 21st Secretary of Interior. When her father was working as a judge at Jeolla Province, he named her “Ra-hee” which means “happiness gained in Jeolla Province.”

She has five younger siblings: Joongang Ilbo Chairman Hong Seok-hyun, BGF Retail Chairman Hong Suk-jo, Bokwang Investmemt Chairman Hong Seok-joon, Bokwang Group CEO Hong Seok-kyu, and Leeum Senior Deputy Director Hong Ra-young.

It is likely that Hong Ra-young along with Deputy Director Lee Joon will take over the management of Leeum after her resignation.

By the Superich Team
Lee Se-jin
Yim Ji-min (jiminy@heraldcorp.com)

KT and LG Uplus, the second and third largest mobile carriers in South Korea, on Wednesday announced that the two mobile carriers will join hands for a music content platform as part of efforts to enhance their Internet of Things and artificial intelligence businesses.

LG Uplus decided to purchase a 15 percent stake, or about 7.38 million shares, in KT Music, an operator of online music streaming service Genie, for 26.7 billion won  ($23 million) at a board meeting. With the acquisition, LG Uplus has become the second-largest shareholder of the music company after KT.

On the same day, KT Music’s board of directors held its own meeting to approve the stake sale and change the company’s name to Genie Music.

KT CEO Hwang Chang-gyu (KT)

The partnership between the two mobile carriers signals that cooperation has begun within the telecommunication industry to expand the fledgling home IoT and AI service markets. Media content, such as music and movie, is considered one of key pillars of the new markets.

The two firms will seek collaboration on the supply and marketing of music content and also work together with the country’s leading entertainment agencies, S.M. Entertainment, YG Entertainment and JYP Entertainment, the companies said.

LG Uplus Vice Chairman Kwon Young-soo (LG Uplus)

Uplus is focusing on its home IoT service centering on the company’s LG U+ IPTV service, while KT has been making efforts in the AI platform business, launching AI-based home speaker GiGA Genie in January.

“The two companies will try to combine their outstanding IoT and AI technologies in order to provide services that meet consumers’ satisfaction,” said KT CEO Hwang Chang-gyu.

LG Uplus plans to introduce various music services to its subscribers this year, taking advantage of KT’s Genie service.

For LG Uplus, the partnership is also expected to support its plan to launch an AI-based platform in the second half of this year, which would be similar to KT’s GiGA Genie and SK Telecom’s AI speaker NUGU.

“The company decided to make the investment in order to offer better content for our subscribers and refrain from wasteful competition in the industry,” said LG Uplus Vice Chairman Kwon Young-soo.

By Song Su-hyun (song@heraldcorp.com)

Foreign ownership of South Korean stocks reached a fresh high this week with offshore investors owning more than 50 percent in dozens of listed companies, data showed Thursday.

Foreign investors held 523.1 trillion won ($463 billion) worth of local stocks traded on the main bourse and secondary KOSDAQ market as of Wednesday, according to the data by the Financial Supervisory Service and the bourse operator Korea Exchange.

Except for November, offshore investors have been in a net buying mode since February last year, buoyed by such positives as improving corporate earnings, the undervaluation of local stocks and hopes for stimulus down the road.

Foreign stock ownership has been renewing all-time highs nearly daily since December, with the value topping the 500 trillion-won mark early this year.

As of end-February, foreign ownership was equivalent to 31.8 percent of the total capitalization of all listed stocks.

According to the data, foreign investors owned more than 50 percent of 36 companies traded on both bourses as of Wednesday, up four from the end of 2015.

Of the total, 24 companies are listed on the main stock market, with the remainder registered with the tech-heavy secondary bourse.

The firms include such large caps as tech behemoth Samsung Electronics Co. (50.72 percent), leading steelmaker POSCO (55.07 percent), Shinhan Financial Group (67.82 percent) and KB Financial Group (64.51 percent).

Foreign investors had the highest 92.22 percent stake in US cosmetics maker Englewood Lab, followed by Korea Ratings with 83.3 percent and Hankuk Glass Industries Co. with 80.68 percent.

Offshore investors’ ownership of foreign companies listed here ranged from 60 percent to 70 percent, with their stake in Chinese toymaker Heng Sheng Holding Group the highest at 75.07 percent. (Yonhap)

Source: The Korea Herald > Business > Finance

South Korea’s trade with the United States has grown an average of 1.7 percent per year for the past five years on the back of the bilateral free trade pact despite a downturn in world trade, government data showed Tuesday.

Korea-US trade reached $109.7 billion last year, up from $100.8 billion in 2011, one year before the Seoul-Washington free trade agreement took effect, according to the data by the Ministry of Trade, Industry and Energy.

Over the same period, world trade retreated an annual 3.5 percent amid a protracted economic slump.

South Korea’s exports to the US gained an annual 3.4 percent over the five-year period, while the country’s entire outbound shipments fell 2.3 percent on average.

Imports from the world’s biggest economy edged down an average 0.6 percent per year, compared with a 5 percent annual drop in overall imports during the 2011-2016 period.

Asia’s fourth-largest economy saw its trade surplus with the US more than double to post $23.25 billion in 2016 from $11.64 billion in 2011, with an average growth rate hitting 14.8 percent over the five-year period.

The sharp increase in the trade surplus sparked concerns that US President Donald Trump will push to renegotiate the Korea-US FTA, as he has denounced the deal as a job destroyer, hinting that he would seek to revise the terms.

The massive surplus has also been under fire from the US government, which could designate South Korea as a currency manipulator.

But in the service sector, South Korea posted a $14.09 billion trade deficit with the US, with an annual growth rate of 10.8 percent from 2011, due to a rise in royalty payments from intellectual property.

Also, South Korean investors invested a total of $37 billion over the 2012-2016 period, up more than 60 percent from $23.1 billion tallied over the 2007-2011 period.

“The Korea-US FTA has been a win-win success to both countries,” said the trade ministry. “Despite a slowdown in world trade, bilateral trade has maintained an upward curve for the past several years.” (Yonhap)

 

Source: The Korea Herald > Business > Economy

Cigarette sales have dropped for three consecutive months, likely linked to the government’s move to put graphic warnings on cigarette packs, according to data Monday.

South Koreans purchased some 240 million cigarette packs on the domestic market in February, seeing a 22.6 percent fall from 310 million packs in November 2016, according to the Ministry of Strategy and Finance.

Sales amounted to 290 million packs in December and 280 million cigarette packs in January this year.

(Yonhap)

The gradual slide in sales came as the government began to dictate that cigarette packs sold in Korea carry graphic warnings about 10 adverse effects on human health, including cancers, heart disease and erectile dysfunction, starting Dec. 23, 2016.

According to the plan, one of 10 disturbing photos must be placed on the upper part of a cigarette pack and cover at least 30 percent of the entire display, along with a hotline that directs a caller to a tobacco rehabilitation center run by the National Cancer Center.

The number of those visiting cigarette rehabilitation center has almost doubled in the last three months. Some 26,000 people were estimated to have been registered in a rehabilitation program at state-run health facilities as of December, while the number soared to 51,000 in January.

“Since the graphic warnings started to appear on cigarette packs, more and more people are likely to quit smoking,” the ministry said. “We expect another drop in the number of smokers next month.”

The smoking rate in Korea has continued to drop, especially since the hike in price by 2,000 won ($1.70) per cigarette pack in January 2016. The rate of men smoking cigarettes slid to 39.3 percent in 2015, according to data in 2016, marking the first time it had fallen below 40 percent.

The ministry announced in 2015 that it aimed to lower the smoking rate among South Korean men to 29 percent by 2020.

By Son Ji-hyoung (consnow@heraldcorp.com)

South Korea’s No. 2 carmaker Kia Motors Corp. and its larger affiliate Hyundai Motor Co. have been ramping up efforts to boost their brand recognition in the United States by sporing major golf tournaments, industry sources said Tuesday.

The American unit of Kia Motors will sponsor the eighth annual Kia Classic LPGA tournament to be held at Park Hyatt Aviara Golf Club in California from March 20-26, which will bring together the top 100 players in terms of 2016 LPGA prize money rankings, including world No. 1 Lydia Ko.

This file photo shows Lydia Ko posing after winning the 2016 Kia Classic LPGA tournament. (Kia Motors Corp.)

Kia will provide vehicles to be used by participating golfers, hold an exhibition of its cars and host a variety of events to promote its brand.

The upcoming tournament’s prize money totals $1.8 million with Kia offering the winner its latest Cadenza full-size sedan.

n the sidelines of the tournament, Kia will hold a golf clinic for young players and an autograph session by participating golfers.

Kia plans to donate part of the proceeds from ticket sales to a US nonprofit organization dedicated to helping retired soldiers find jobs and assimilate into society. The carmaker will also give away free tickets to families of active US service members.

“Based on a successful LPGA partnership, Kia has been engaging in efforts to burnish its image through golf,” a Kia official said.

“Kia is very pleased to contribute to the community where its US unit is based, through the sponsorship.”

Meanwhile, Hyundai also sponsored two golf tournaments at home and abroad — the KPGA tour Genesis Championship and the Genesis Open in Los Angeles — in February in an effort to promote its luxury brand Genesis. (Yonhap)

Source: The Korea Herald > Business > Industry