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Mercator Lines said on Monday that it has applied to the court for a stay of proceedings against the company, and for leave to convene meetings with its creditors within the next four months.
PHOTO: MERCATOR
MERCATOR Lines said on Monday that it has applied to the court for a stay of proceedings against the company, and for leave to convene meetings with its creditors within the next four months. Its creditor, the Singapore branch of HSH Nordbank AG, had on Sept 10 filed an application to the Singapore High Court for the company to be placed under judicial management. The application has been fixed for hearing on Sept 29.
Mercator Lines, a dry bulk shipping company, said it intends to oppose the judicial management application as its board and management believe that it is not in the interests of the company, its creditors and its shareholders.
The company said that, as previously announced on June 3, it is working closely with its creditors, independent financial adviser and legal advisers to establish a restructuring plan. It added that negotiations with creditors and potential investors in relation to the restructuring plan "are reaching a conclusion".
Malaysia government bond sale draws fewest bids since December
[KUALA LUMPUR] A Malaysian government bond auction on Monday drew the fewest bids of 2015 as prospects the US will raise interest rates this week for the first time in almost a decade deterred investors.
The 4 billion ringgit (S$1.3 billion) sale of sovereign notes due 2019 had a bid-to-cover ratio of 1.53 times and an average yield of 3.759 per cent, according to central bank data. That's the lowest ratio for a government bond auction since December, when a 3 billion ringgit offering attracted bids for 1.32 times, data compiled by Bloomberg show.
Higher US interest rates would reduce the appeal of emerging-market assets just as funds are exiting amid slowing economic growth in China. The ringgit is also languishing at its weakest level in more than 17 years as a slump in Brent crude weighs on government revenue for Asia's only major oil exporter. Overseas investors cut holdings of the nation's sovereign bonds to a five-month low in August.
"Normally, when it gets closer to a key event risk, players will stay on the sidelines," said Fakrizzaki Ghazali, a credit strategist at RHB Research Institute Sdn. in Kuala Lumpur. "If the Fed were to hike this week, there's a likelihood of more outflows from the Malaysian government bond market." The yield on sovereign bonds due in 2017 dropped seven basis points to 3.41 per cent as of 1:22 pm in Kuala Lumpur, according to Bursa Malaysia prices. That's up from 3.19 per cent at the end of the second quarter. The ringgit was little changed at 4.3195 a dollar on Monday and fell to 4.3798 on Sept 10, the lowest since January 1998.
Asian traders tread carefully ahead of US Fed decision
A mixed bag of Chinese economic data at the weekend added to concerns about the world's number two economy Monday, while investors tread water ahead of a crucial US interest rate decision at the end of the week.
PHOTO: REUTERS
[HONG KONG] A mixed bag of Chinese economic data at the weekend added to concerns about the world's number two economy Monday, while investors tread water ahead of a crucial US interest rate decision at the end of the week.
After last week's China-fuelled turmoil across global markets, there was more of a sense of calm in early exchanges, with dealers confident enough to shift out of safer assets such as the yen and dollar.
China on Sunday released another set of figures that underline weakness in its huge economy - the main driver of global growth - following disappointing reports last week.
The government said growth in industrial production increased below expectations in August while retail sales accelerated a little more than forecast.
Recently a gauge of manufacturing showed the sector contracting in August, while inflation in consumer prices rose but those at the factory gate fell at their fastest pace in six years owing to weakening overseas demand and a slack property market.
While the data is soft, analysts said it could lead to further monetary easing measures by authorities following five interest rate cuts since November.
In early equities trade Shanghai was 0.53 per cent down and Seoul dipped 0.53 per cent and Tokyo slipped 0.54 per cent. However, Hong Kong was up 0.62 per cent and Sydney rose 0.31 per cent.
Beijing also Sunday unveiled a broad set of reform guidelines to partly privatise its vast state-owned companies aimed at making them more competitive overseas and increasing transparency.
The move comes after leaders in 2013 said they wanted the market to play a greater role in the economy, easing government influence on key sectors such as transport, energy production and arms manufacturing.
Among the reported changes are efforts to modernise SOEs (state-owned enterprises), improve management of state assets and diversify their ownership structures through "mixed ownership" - or the introduction of "multiple types of investors" - ultimately meaning more private shareholders or capital.
However, the main focus this week is on the Federal Reserve's policy meeting, with hopes it will hold off hiking borrowing costs until later in the year.
The central bank is expected to announce a lift-off before 2016 but its decision has been muddied by the latest bout of volatility to hit global markets caused by concerns about China's economy and after Beijing announced a shock devaluation of its yuan last month.
"Trading will remain volatile ahead of the (Fed policy) meeting," Bernard Aw, a strategist at IG Asia in Singapore, told Bloomberg News.
"Sunday's data reinforced concerns about China's economy slowing down. Investors may expect more stimulus in the pipeline, which could provide some support to Chinese equities."
US dealers ended last week on a high. The Dow jumped 2.05 per cent, the S&P 500 climbed 2.07 per cent and the Nasdaq rallied 2.96 per cent.
While traders remain wary of any shocks to the financial system they were confident enough to look for riskier investments.
The dollar edged up to 120.68 yen from 120.57 yen Friday in New York, while the euro was at 136.95 yen against 136.64 yen. The yen is regarded as a safe bet in times of crisis and turmoil.
The single currency also ticked up to US$1.1349 from US$1.1333.
Higher yielding emerging market currencies also advanced against the dollar. The South Korean won added 0.36 per cent, while the Malaysian ringgit and Indonesia's rupiah were marginally higher.
China: Stocks decline most in three weeks on slowdown concerns
China's stocks slumped, dragging the benchmark index down the most in three weeks, after data over the weekend added to concern the economic slowdown is deepening.
PHOTO: EPA
[SHANGHAI] China's stocks slumped, dragging the benchmark index down the most in three weeks, after data over the weekend added to concern the economic slowdown is deepening.
The Shanghai Composite Index slid 3.2 per cent at the 11:30 am local-time break, led by technology and financial companies. The value of shares traded on the gauge was 26 percent below the 30-day average for this time of day. The Hang Seng China Enterprises Index dropped 0.7 per cent, reversing a 1.4 per cent advance.
August economic data released Sunday showed a challenging picture for policy makers. Industrial output missed economists' forecasts, while investment in the first eight months increased at the slowest pace since 2000. The government also announced some details about plans to reform state-owned enterprises, including encouraging private investment.
"The economic reports don't look good so investors prefer to be on the sidelines," said Wu Kan, a Shanghai-based fund manager at JK Life Insurance Co. "The SOE reform rules were widely expected by the market and aren't very detailed, therefore the reaction is limited. The market could fall to a lower level." Industrial output rose 6.1 per cent in August from a year earlier, missing the 6.5 per cent estimate. Fixed asset investment excluding rural households climbed 10.9 per cent in the first eight months versus the 11.2 per cent median projection of economists surveyed by Bloomberg. Five interest-rate cuts since November and plans to boost government spending have yet to revive an economy mired in a property slump, overcapacity and factory deflation.
The Hang Seng Index lost 0.1 per cent. The CSI 300 Index dropped 3.5 per cent. Investors pulled a net US$1.7 billion from equities on mainland and Hong Kong bourses during the week to Sept 9, a ninth straight week of outflows, according to China International Capital Corp.
Four companies including Haitong Securities Co and Huatai Securities Co were fined 178.5 million yuan (S$39.5 million) by the securities regulator for failing to adequately check clients' identities, Deng Ge, a spokesman from the China Securities Regulatory Commission, said at a briefing in Beijing on Friday.
Margin traders reduced holdings of shares purchased with borrowed money on Friday, with the outstanding balance of margin debt on the Shanghai Stock Exchange falling by 0.2 per cent to 618.9 billion yuan.
Japan Post said to pay underwriters US$191 million in fees for IPO
A man walks past an advertising poster in the headquarters of Japan Post in Tokyo.
PHOTO: REUTERS
[TOKYO] Japan Post Group's underwriters are set to earn about 23 billion yen (S$269.3 million) in fees for managing the world's biggest initial public offering since Alibaba Group Holding Ltd's 2014 share sale, according to people with knowledge of the matter.
Managers of the 1.4 trillion-yen IPO will get 1.7 per cent fees for the retail tranche and 1.5 per cent for the portion sold to institutional investors, one of the people said, asking not to be named because the information is private. That works out to a 1.64 per cent average fee, according to calculations by Bloomberg.
The state-owned postal giant is paying the lowest fee, expressed as a percentage of deal size, on record for a major IPO in Japan and less than half the average for first-time offers in the country since 2010, data compiled by Bloomberg show.
Large IPOs and sales of government assets tend to generate lower fees. E-commerce giant Alibaba paid 1.2 per cent fees for its US$25 billion offering a year ago, Bloomberg-compiled data show.
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Japan Post Holdings Co and its banking and insurance units are set to list on the Tokyo Stock Exchange on Nov 4 following the IPO, the nation's biggest since 1998. Companies going public in Japan on average paid 3.8 per cent in underwriter fees since the start of 2010, according to data compiled by Bloomberg.
Nomura, Mitsubishi UFJ Nomura Holdings Inc and Mitsubishi UFJ Morgan Stanley Securities Co are responsible for selling almost half the stock, people familiar with the matter said last week. Goldman Sachs Group Inc and JPMorgan Chase & Co are also global coordinators of the deal.
Spokesmen for Japan Post and the four brokerages declined to comment, as did Finance Ministry officials. The total fees are based on indicative prices announced last week and the amount may change depending on book building and pricing, the people said.
Daiwa Securities Group Inc, SMBC Nikko Securities Inc. and Mizuho Securities Co. are among more than 50 other firms underwriting the sales. Japan Post is targeting individual investors for at least 70 per cent of the IPO, people with knowledge of the matter said last week.
China interbank market opens lending facilities to qualified members
Qualified members of China's interbank market will be eligible to apply for central bank lending facilities starting on Monday, the market operator announced on its website.
PHOTO: AFP
[SHANGHAI] Qualified members of China's interbank market will be eligible to apply for central bank lending facilities starting on Monday, the market operator announced on its website.
China's central bank employs lending facilities such as the short-term lending facility and medium-term lending facility to supplement its standard open market operations which are conducted every Tuesday and Thursday.
Previously, such facilities were only open to Chinese banks selected on a case by case basis by the central bank.
Najib delivers RM20b boost for Malaysian stock market
Malaysian Prime Minister Najib Razak said on Monday a government equity investment firm would be given RM20 billion (S$6.54 billion) to shore up the country's stock market.
PHOTO: EPA
[KUALA LUMPUR] Malaysian Prime Minister Najib Razak said on Monday a government equity investment firm would be given RM20 billion (S$6.54 billion) to shore up the country's stock market, and announced other measures to support its slowing economy.
Mr Najib told a news conference the equity investment firm, ValueCap, will invest in undervalued Malaysian companies.
He also announced that the factory sector would be exempted from import duties until the economy recovers, but did not specify which sectors would be affected.
The ringgit currency has lost almost 19 per cent of it value against the dollar so far this year, and Malaysia's stock market has retreated 8.95 per cent this year.
