KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Heineken NV reported an €874 million (US$949 million or RM4.40 billion) impairment on its stake in China Resources Beer Holdings Co, reflecting weakened consumer spending in China, the US, and Europe. This financial hit is attributed to a decline in the valuation of its Chinese partner due to slumping demand and share price concerns.
Key Takeaways:
Impairment Details: Heineken cited a decline in the valuation of its 40% stake in China Resources Beer Holdings Co. This stake was initially acquired for US$3.1 billion in 2018, aimed at leveraging China Resources Beer's distribution network and expanding into the premium beer segment.
Market Impact: Heineken shares fell by as much as 7.4% on Monday in Amsterdam and have decreased by 7.3% over the past 12 months. Beer volume grew 2.1% organically in the first half of the year, missing the Bloomberg estimate of 3.7%. Heineken also narrowed its full-year operating profit forecast to a range of 4% to 8%.
CEO’s Perspective: Heineken CEO Dolf van den Brink described the impairment as a "technical adjustment," not reflective of the underlying performance. He also expressed caution regarding consumer sentiment in developed markets like North America and Europe.
Market Conditions: Consumer spending in China has struggled to rebound post-pandemic, further affected by a real estate crisis. In the US, market conditions remain depressed, and Europe has seen intensified competition and cooler weather impacting beer volumes.
Forecast and Strategy: Heineken's revised operating profit forecast reflects cautious optimism. The company plans to increase investment in marketing in key markets like Mexico and South Africa, focusing on its premium and zero-alcohol beers. Despite challenges, Heineken remains committed to its investments in Nigeria, where it faces inflation and currency exchange issues.
Analyst Reactions: RBC analysts noted that Heineken's results missed expectations across most metrics, particularly in Europe, where the performance was weak.
Conclusion: Heineken is navigating a challenging environment with strategic investments and a cautious outlook. Despite a significant impairment in China, the company remains focused on leveraging its strong brand portfolio and exploring growth opportunities in key markets.
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