Indonesia's manufacturing activity shrinks for 7th straight month in April

4 May11:11 AM

[JAKARTA] Indonesia's manufacturing activity shrank for the seventh straight month in April as export orders continued to decline and domestic demand remained weak, an HSBC Markit survey showed on Monday.

The purchasing manager's index (PMI) rose slightly to 46.7 in April from 46.4 in March - the lowest reading since surveys began in April 2011 - but remained well below 50, the level separating contraction from expansion. "April's PMI survey highlights the current fragility of the Indonesian manufacturing sector, with both the domestic and export markets sources of weakness," said Pollyanna De Lima, economist at Markit. "Despite the weaker rupiah, businesses struggled to price competitively at a global level as the cost of imported raw materials increased." Output continued to fall as incoming new work slowed, and poor weather hampered activity. As a result, employers shed staff for the ninth straight month. "Companies continued to trim employment, buying levels and pre-production inventories, highlighting an expectation that conditions will remain tough in the near future," De Lima added.

Producers also reported increasing inventories in April. The seasonally adjusted stocks of finished goods index rose to the highest reading since the first month of data collection.

REUTERS

    
 

Asia: Bourses cautious after mixed leads from Wall Street, China

4 May11:13 AM

[HONG KONG] Asian markets made cautious gains on Monday after a long holiday weekend, after Wall Street finished last week on a positive note, but with mixed news on the China economic front.

Hong Kong stocks opened up 0.14 per cent, Seoul tracked up 0.38 per cent and Shanghai made marginal gains at the opening bell following official data last week that showed China's manufacturing activity expanded modestly in April.

Sydney was 0.11 per cent weaker as the Australian dollar slipped on expectations of another interest rate cut to combat a recent surge in the unit.

Tokyo was closed for a public holiday, along with financial markets in Thailand and Malaysia.

But Asian bourses took their lead from a rally on US markets on Friday which reversed a bruising two-day retreat following a dismal US economic growth report.

However, China stocks gyrated after an HSBC survey showed manufacturing activity recorded its worst contraction in a year in April, as subdued domestic demand weighed on growth in the world's second-largest economy.

The British bank's final purchasing managers' index (PMI) came in at 48.9, below the breakeven point of 50 and the weakest since 48.1 in the same month last year.

The figure was down from a preliminary reading of 49.2 and marked the second monthly contraction in a row after March's 49.6.

The index tracks activity in China's factories and workshops and is regarded as a barometer of the health of the Asian economic giant.

China's government on Friday had posted its official PMI at 50.1 for last month, unchanged from March when the gauge showed growth for the first time this year.

On Australian markets, attention was on a central bank meeting on Tuesday expected to address a rebound in the currency which is now back up around 80 US cents - problematic as the nation grapples with the decline of a mining boom.

"The recent surge in the Australian dollar would be viewed quite dimly by the folks at the Reserve Bank," Bill Evans, chief economist at Westpac Banking Corp, told Bloomberg News.

Failing to cut rates "in the face of such strong market pricing will affect the bank's credibility over time," he added.

Oil prices were lower. US benchmark West Texas Intermediate for June delivery fell 21 cents to US$58.94 while Brent crude for June dipped 13 cents to US$66.33.

Gold fetched US$1,182.97 against $1,181.14 late Friday.

AFP

  
 

After record IPO year, Australian listings shrink to almost nothing

Australian IPOs have virtually dried up after a record year, taking their cue from a subdued stock market as investors fret about the country's commodities bust and China's weakening economy. 

PHOTO: BLOOMBERG

4 May10:18 AM

[SYDNEY] Australian IPOs have virtually dried up after a record year, taking their cue from a subdued stock market as investors fret about the country's commodities bust and China's weakening economy.

After an unprecedented US$15 billion of initial public offerings last year, companies raised US$327 million in January-to-March, Thomson Reuters data shows. That's down 96 per cent from a year earlier and a fraction of the US$7.5 billion in the previous quarter. The drop-off reflects the skittish mood in Australian equities. While the market bounced 7 percent in January following a weak 2014 finish, it has since failed to make headway as investors shrug off record low interest rates and watch the all-important iron ore price sink.

The average size of an IPO in the March quarter was US$30 million, down from US$270 million in the December quarter and US$100 million a year earlier. Last year, many private equity firms offloaded assets they had held since the aftermath of the global financial crisis. This year has been marked by just one big listing and a spate of tiny IPOs by small companies. "We've had a very long bull market since the bottom in '08, and we find it hard to find value," said Geoff Wilson, chairman of Wilson Asset Management, which bought shares in Monday's market debutant MYOB .

As IPOs stall, early investors in private businesses are keeping the companies on their portfolios for longer in the hope of a more profitable exit. Some investors are selling relatively small stakes to the public. Bain Capital is retaining a majority stake in accounting software firm MYOB, which raised A$833 million (S$867 million). It is expected to be Australia's biggest IPO in 2015, but is dwarfed by each of the top five listings of 2014.

The big listings of 2014 have turned in mixed performances, with those towards the year-end faring worse as the share market entered a period of volatility due to concerns about the Chinese economy. After listing in November, Medibank gained as much as 20 per cent by mid-February but closed at a premium of just 1 per cent on Friday. Aged care firm Estia Health listed in December and did not trade over its issue price until late February. Hospital operator Healthscope has meanwhile risen by a third since listing in July. Cleaning and catering firm Spotless is up 42 per cent since its May IPO.

REUTERS

    
 

foodpanda raises another US$100m; total funding tops US$310m

By

Jacquelyn Cheokjaccheok@sph.com.sg@JacCheokBT

4 May11:04 AM

FOOD-DELIVERY platform foodpanda has raised an additional US$100 million in what is said to be its second Series E round, taking total funding to over US$310 million since its founding in 2012.

Led by Goldman Sachs (which foodpanda said has "deep expertise in online marketplaces"), this latest funding round also saw participation from its earliest investor, Rocket Internet.

"The company will use the recent investment to further expand its own delivery activities and improve overall customer experience across its 40 markets," foodpanda said on Monday.

This announcement comes a week after foodpanda Singapore launched its premium delivery service with selected food outlets, allowing users in the central business district to receive their food in under an hour while at the same time cutting the delivery charge by up to 50 per cent.

In March, foodpanda raised 37 million euros (S$55.1 million) in Series E from Rocket Internet. In February, it snapped up six rival sites across seven markets - among them Food Runner in Singapore and Just Eat in India - to beef up Rocket Internet's newly minted Global Online Takeaway Group.

The platform reportedly now partners some 400 restaurants in Singapore, where it is believed to have been founded. Globally, it operates in over 580 cities in 40 markets - mostly emerging markets - partnering more than 60,000 restaurants.

    
 

QT Vascular issues update on patent-claim lawsuit

By

Claire Huanghuangjy@sph.com.sg@ClaireHuangBT

QT Vascular said on Monday its board had issued an update on the ongoing litigation against specialty balloon angioplasty company AngioScore, Inc during its annual general meeting on April 30, 2015.

PHOTO: QT VASCULAR

4 May10:24 AM

QT Vascular said on Monday its board had issued an update on the ongoing litigation against specialty balloon angioplasty company AngioScore, Inc during its annual general meeting on April 30, 2015.

The group said that CEO Eitan Konstantino had reaffirmed that the board's position on the information regarding the patent claim as stated in the initial public offering (IPO) document still remains valid and will not have a material effect on the financial position or profitability of the group.

The probability that AngioScore could obtain a permanent injunction against Chocolate PTA is minimal because AngioScore does not practise the '119 Patent, it added.

The company also believes that a new available design of Chocolate PTA will materially reduce the risks related to the patent claim on Chocolate PTA.

In its update, the group said the patent claim does not implicate intellectual property (IP) and that it is not at risk of losing IP (including patent applications) as a consequence of the claim.

The clarifications follow a patent-infringement lawsuit initiated against QT Vascular by AngioScore on June 29, 2012.

This was stated in QT Vascular's IPO document.

The proceedings were taken in the federal trial court of the Northern District of California, United States.

On April 29 this year, QT Vascular issued an update on the litigation including the patent claim and the state law claims. The announcement stated that the patent claim is currently scheduled for trial in September 2015.

AngioScore's claim is that QT Vascular's Chocolate PTA infringes the '119 Patent, a patent that claims a very specific design for an angioplasty balloon catheter and a non-deployable stent.

    
 

Taiwan: Stocks edge up on overseas markets, weak PMI caps gains

Taiwan stocks rose slightly on Monday but gains were capped by a weak reading in manufacturing activity at home. 

PHOTO: REUTERS

4 May10:42 AM

[TAIPEI] Taiwan stocks rose slightly on Monday but gains were capped by a weak reading in manufacturing activity at home.

As of 0220 GMT, the main TAIEX index rose 0.2 per cent to 9,834.80, after closing down 0.3 per cent on Thursday.

Taiwan's financial markets were shut Friday for the Labor Day holiday. After the long weekend, gains were limited by tentative trading in overseas markets.

The HSBC's PMI reading issued on Monday for Taiwan contracted for the first time in 20 months in April, indicating a sluggish start for the tech export-driven, trade reliant economy in the second quarter.

The electronics subindex was down 0.1 per cent, while the semiconductor index was off 0.7 per cent.

However, the financial subindex was gaining 0.8 per cent, helping to lift the overall index.

Financial stocks, some of which are seen as close to the government or which have exposure to China, were up on hopes that a key meeting between Taiwan's ruling party and its counterpart in China on Monday might bring more business opportunities.

Shares in Fubon Financial Holding rose 1.7 per cent, while those in Chang Hwa Commercial Bank were 0.8 per cent higher.

The Taiwan dollar was up T$0.071 to stand at T$30.681 to the US dollar.

REUTERS

    
 

China: Stocks drop with Aussie, copper on weak PMI as gold gains

Chinese shares dropped with Australia's dollar and copper futures halted a seven-day rally as a private China factory gauge showed a faster-than-estimated contraction. US oil slipped, while gold climbed. 

PHOTO: REUTERS

4 May10:31 AM

[BEIJING] Chinese shares dropped with Australia's dollar and copper futures halted a seven-day rally as a private China factory gauge showed a faster-than-estimated contraction. US oil slipped, while gold climbed.

The Shanghai Composite Index slid as much as 1.2 per cent by 10:58 am in Tokyo, while a gauge of mainland companies listed in Hong Kong erased earlier gains. Copper futures slid 0.9 per cent on the Comex. The Aussie lost 0.5 per cent, as the Bloomberg Dollar Spot Index extended Friday's 0.6 per cent rebound. The Korean won also retreated. Gold climbed 0.4 per cent. US oil was at US$58.77 a barrel.

The final April Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics fell to 48.9, the lowest since in a year, with the China Securities Journal forecasting second- quarter economic growth will slow to 6.8 per cent. Australia's central bank reviews rates Tuesday. The dollar pared a third weekly decline Friday, rallying against major peers as two Federal Reserve officials said US interest rates could be raised at any time.

"Expectations of further stimulus have been the key driver for Asian equities," Evan Lucas, a markets strategist at IG Ltd in Melbourne, said by phone. "There's probably a risk of a short-term pullback for the market. But medium-term, the bias will probably be on the upside. China has got so many levers to pull so they're in a slightly comfortable position. They're trying to moderate the slowdown." Dollar Moves The factory reading missed the median estimate of 49.4 in a Bloomberg survey and was lower than the preliminary reading of 49.2. Numbers below 50 indicate contraction. The deterioration contrasts with the official manufacturing PMI for April that suggested a stabilization.

Gauges on manufacturing are also due Monday for Taiwan, Vietnam and India. Japan, Thailand, Malaysia, India and the UK are closed for holidays.

Bloomberg's dollar index, a gauge of the currency versus 10 major counterparts, lost 3 per cent in April, its first decline since June last year. The currency weakened amid speculation that a run of mixed economic data means the Fed will put off rate increases. The index rose 0.1 per cent Monday.

John Williams, chief of the San Francisco Fed and a voting member of the Federal Open Market Committee, said policy makers would be making judgments at each gathering based on the latest economic data. Cleveland Fed President Loretta Mester, who doesn't vote this year, told reporters Friday that "all meetings are on the table" for the first rate increase in nine years.

West Texas Intermediate crude oil dropped 0.6 per cent Monday following a 25 per cent jump in April, its steepest monthly advance since 2009. Brent crude slipped 0.3 per cent to US$66.25 a barrel.

US drillers reduced the number of active rigs for the 21st week, according to data from Baker Hughes Inc the number of rigs dropped by 24 to 679, the fewest since September 2010, boosting speculation American output may start to ease up. Iraq increased exports in April to the most in three decades, according to an Oil Ministry spokesman for the second-biggest producer in the Organization of Petroleum Exporting Countries.

BLOOMBERG