MONEY MASTER

Highlights 2016 OTC Asia event. Yesterday, we attended the forum led by MIDA discussing the Malaysian O&G industry. The event, hosted by Y. Bhg. Datuk N. Rejendran (MIDA Deputy CEO, was joined by several speakers namely: Mr. Adif Zulkifli (SVP of Petronas Corporate Strategy), Mr. Maen Razouqi (Schlumberger VP & GM), Mr. Douglas Bruce Moody II (FMC GM) and Mr. Craig McMahon (Wood Mckenzie Asia Pacific Head of Research). Readjustment to the new norm. In essence, most of the major players in the industry have accepted the new norm of low oil prices whereby exuberance is no longer tolerable and are taking multiple initiatives to optimize their cost structures. Petronas has launched Coral 2.0 initiative to save costs and improve efficiencies. Schlumberger, on the other hand, has looked at further optimization in its business involving reduction of Non Performing Time (NPT) through widening scope of work on per staff basis. This is in line with staff cuts, margin shrinkage an...

Economy US: Consumer comfort declines to match low for this year.  Consumer confidence in the US fell last week to match the lowest level this year as Americans grew more pessimistic about the economy and the buying climate. The Bloomberg Consumer Comfort Index slipped to 43.6 in the period ended March 20 from 44.3 the prior week. The measures tracking current views of the economy and the buying climate both dropped to the lowest level since mid-Dec, while perceptions of personal finances rose to a five-month high. (Bloomberg) US: Atlanta Fed downgrades 1Q GDP view to 1.4%.  The US economy is on track to grow 1.4% in the 1Q following disappointing data on durables goods orders and home resales, the Atlanta Federal Reserve's GDPNow forecast model showed. That pace was weaker than the regional Fed's prior estimate of 1.9% on March 19, the Atlanta Fed said. (Reuters) US: Jobless claims climbed less than forecast last week . Filings for US unemployment benefits last w...

Reiterate BUY and MYR4.35 SOP-based TP 4QFY1/16 results, due next week, are unlikely to spring any surprises. Operationally, the conversion of its FPSO Genesis is on schedule (which market has yet to fully appreciate the impact) and the planned sale of its non O&G operations will be concluded by 2HCY16. The expected 15sen special DPS (5% yield) is a short-term catalyst and Yinson stays in position to capitalise on the demand for new FPSO projects worldwide. Results to meet our expectation Yinson’s 4QFY1/16 results are expected to be out next week. We expect Yinson to post a core net profit of MYR40m-49m (-12%-28% QoQ; +7%+32% YoY) in 4QFY1/16. This would bring FY16 core earning to MYR172m-181m, within our forecasts but below consensus’ MYR193m. The FSO/FPSO operations continue to be the Group’s key earnings driver. We expect weaker earnings from OSV and its non O&G operations (trading & transport). We do not rule out a DPS for 4Q16, based on historical trend. C...