INVE$T | Market Sentiments
AirAsia Group renames airline holding company to create clear distinction from digital business
AirAsia Group Bhd has renamed its 100%-owned subsidiary AirAsia Investment Ltd to AirAsia Aviation Ltd in a corporate reorganisation to create a clear distinction between AirAsia Group’s airline and digital businesses. Bo Lingam, formerly president (airlines) for AirAsia Group, takes over as group CEO of AirAsia Aviation to oversee the group’s four airlines, namely AirAsia Malaysia, AirAsia Philippines, AirAsia Thailand and AirAsia Indonesia. As AirAsia’s rapid transformation from an airline into a digital travel and lifestyle services group continues to gain strong momentum, the holding company for the airline group has been officially renamed AirAsia Aviation Ltd.
According to Bo Lingam, this structural change helps facilitate strong projected growth in both airline and non-airline portfolio businesses.
Earlier in the week, AirAsia Group’s group chief executive officer Tan Sri Tony Fernandes said the budget airline’s digital businesses, which have a valuation of over US$1 billion (about RM4.16 billion), have achieved unicorn status in record time at under two years since the group accelerated the growth momentum of its non-airline businesses during the Covid-19 pandemic-driven aviation sector downturn. AirAsia Group should no longer be known as just an airline.
URUS programme to assist B50 borrowers who have lost jobs, income — BNM
According to Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus, BNM welcomes the Financial Management & Resilience Programme (URUS) by Agensi Kaunseling dan Pengurusan Kredit (AKPK) and the banking industry, which seeks to aid B50 borrowers with performing loans who have lost their jobs or who are experiencing income loss of at least 50%. Eligible borrowers who wish to apply for the programme can approach their banks starting from Nov 15, 2021 to Jan 31, 2022. BNM has been working with AKPK to put in place a holistic debt management and financial planning solution. The aim is to provide appropriate support to borrowers so that they not only meet their loan obligations but importantly, return to a firmer financial footing. This will strengthen the financial resilience of borrowers in the longer term. The central bank also encouraged those that are not eligible for URUS to also approach their banks to discuss other repayment solutions that suit their financial circumstances. Borrowers and customers facing any difficulty with their applications may contact BNM TELELINK at bnm.my/RAsurvey to seek assistance, and that they may obtain more information on the new scheme by visiting banks’ and AKPK’s websites. There will be further enhancements to BNM’s Fund for SMEs in the Budget 2022, targeted at assisting businesses in their cash flow management and reposition themselves with the reopening of the economy. Despite heightened credit risks, bank financing to SMEs continues to expand with the additional capacity provided through the fund and credit guarantee schemes. A total of RM154 billion was disbursed to SMEs, 4% higher than the pre-pandemic level, with a total of RM18 billion allocated under the fund to augment financing by the banking system to SMEs. Loans outstanding for the SME segment increased 6% year-on-year, and efforts are underway to develop debt equity and blended financing initiatives to enable SMEs access to a wider range of appropriate financing options across their growth cycle. This will be important to lower the leverage and strengthen the long-term resilience and capacity of SMEs, and increase their contribution to the economy.
Maybank IB retains ‘positive’ call on regional plantations
According to Maybank Investment Bank (Maybank IB) Research, it has maintained its “positive” call on the regional plantation sector based on expectations of crude palm oil (CPO) prices staying relatively lofty until the first quarter of 2022 (1Q22). CPO prices were expected to remain lofty on supply concerns although it may not sustain at RM5,000 per tonne. Near-term CPO price may continue to be supported by the fact that palm oil output will enter into a seasonal low yield period in 1Q22. According to the Malaysian Palm Oil Board, September 2021 stockpile fell 7% month-on-month to 1.75 million tonnes below street estimates of 1.87 million tonnes. The recent CPO price rally to above RM5,000 per tonne (spot month) has further narrowed CPO price discounts. It maintain the view that the current high CPO price is not sustainable as a wider discount is needed to sustain demand. India’s demand for vegetable oils will likely weaken post Deepavali. In 4Q21, the market will closely monitor ongoing South America planting season of crops for new price direction. The market is expecting record planting and harvest at this juncture. A confirmation and potential impact of La Nina on South America crop development till its harvest in March and April 2022 will be a key swing factor to watch in the coming months.
Eye On The Markets
This week, on Friday (15Oct), the Ringgit opened at 4.1565 against the USD from 4.1665 on Monday (11Oct). Meanwhile, the Ringgit was 3.0827 to the Sing Dollar on Friday (15Oct). On Monday (11Oct), the FBM KLCI opened at 1567.88. As at Friday (15Oct) 10:00am, the FBM KLCI is up 26.07 points for the week at 1593.95. Over in US, the overnight Dow Jones Industrial Average closed up 534.75 points (+1.56%) to 34,912.56 whilst the NASDAQ added 251.80 points (+1.73%) to 14,823.40.