EVENING 5: AAX’s application to exit PN17 rejected

The Edge TV

In today’s edition of Evening 5 — AirAsia X suffers a setback as Bursa rejects its application to shed its PN17 status. Meanwhile, the ringgit falls to 4.7703 against the US dollar, its lowest since the Asian Financial Crisis.

Transcript

00:00 [Music]

00:04 AirAsiaX has suffered a setback in its bid to get Bursa Securities to lift its classification

00:10 as a financially distressed company. In a Bursa filing, it said Bursa rejected the

00:15 Medium Hall Airlines' application for proposed relief and PN17 upliftment.

00:21 Bursa did, however, grant AAX another extension, this time until January 17th next year,

00:28 to submit its regularization plan. Its latest extension is due to expire on October 28th.

00:34 AAX said it would look at its options, including filing an appeal. While the reason for Bursa's

00:40 rejection was not disclosed, an investment analyst believes it could be due to increased

00:46 scrutiny of airlines after what happened with MyAirline recently. The analyst told The Edge

00:52 that the knock-on effect is Capital A having its own PN17 regularization plan knocked back,

00:58 and that Capital A needs AAX to get out of PN17 first, then sell its four short-haul airlines

01:05 to AAX to get out of its own PN17 status. At the close, AAX shares were down 7.1% at RM2.9,

01:14 valuing the airline at RM934.4 million, while Capital A settled down 4.8% at

01:21 RM0.885 for a market value of RM3.73 billion.

01:26 Agriculture and Food Security Minister Dato' Sri Mohamad Sabu said the date for prices of chicken

01:38 and eggs to be floated in the market is expected to be announced on October 30th. According to a

01:44 report by Benama Newswire, the minister said discussions and meetings are being held with

01:49 the stakeholders and industry players who are involved in production to ensure prices remain

01:54 at reasonable rates. He said he would be unable to say how long the food staple would be floated,

02:00 as it would depend on the situation. Prime Minister Dato' Sri Anwar Ibrahim, when tabling

02:04 Budget 2024 last week, announced that the temporary price controls for eggs and chicken

02:10 would be lifted as current trends indicated that the supply of both is now stable. Anwar said the

02:16 move would enable the local market to function freely in ensuring sufficient supply of both products.

02:22 The ringgit fell to its lowest level against the US dollar since the 1998 Asian financial crisis,

02:34 weighed by the greenback's rise and a widening rates differential with the US.

02:39 A Bloomberg report noted the currency fell to as low as 4.7703 per dollar. It is the worst

02:45 performer in Asia this year after the yen. The latest bout of losses come as the dollar gains

02:51 amid concerns over the Israel-Hamas war, while Malaysia booked a 13.7% fall in exports in

02:57 September, its seventh straight month of decline. This was partly due to a slowdown in China.

03:04 Meanwhile, Bank Negara's decision to pause interest rate hikes is also adding headwinds

03:09 for the currency. Quoting Mizuho Bank Head of Economics and Strategy, Vishnu Bharathan,

03:15 the report said the ringgit's underperformance has been due to real rate spreads that could turn a

03:20 lot more unfavourable, especially as the subsidy rollback hits inflation and reveals softer real

03:26 policy rates. He added that policymakers face a trade-off between economic headwinds from higher

03:32 rates or the risk of not responding and endangering macro and ringgit stability.

03:37 BNB has exercised its put option to dispose of all its shares in Maybank Asset Management Group

03:48 or MAMG to Maybank for a cash consideration of RM70.39 million in a related party transaction.

03:56 According to Maybank's filing with Borsa Malaysia, its acquisition represents a 20% stake or 8.34

04:03 million shares and upon completion, MAMG will be its wholly-owned subsidiary. PWC Capital,

04:10 which was jointly appointed by the two parties, determined the fair value to be RM70.39 million.

04:17 The banking group said that the purchase consideration will be satisfied in cash

04:21 and funded by internally generated funds. The proposed acquisition is expected to be

04:27 completed by the fourth quarter of this year. Notably, Amanah Saham Bumiputra, a PMB-managed

04:33 fund, is the major shareholder of Maybank with a 31.03% stake. Shares in Maybank closed 0.11%

04:41 higher at RM8.96, giving it a market capitalization of RM108.06 billion.

04:49 MITI Minister Tengku Dato' Sri Zafarul Abdul Aziz said,

04:57 "Approved permits for imported completely built-up cars remain relevant and essential

05:02 for protecting and supporting the development of the national automotive industry."

05:07 He explained that the primary purpose of the government's use of APs to import cars,

05:12 including electric vehicles, is to monitor and support the automotive industry in Malaysia.

05:18 This is in line with the National Automotive Policy 2020,

05:22 which aims to establish Malaysia as a hub for energy-efficient vehicles.

05:26 He said the AP mechanism also promotes inclusive growth within the automotive industry,

05:32 as it encourages the involvement of Bumiputra entrepreneurs in the automotive supply chain.

05:38 The minister added abolishing APs for CBU cars would risk non-standard vehicles being dumped here,

05:45 posing risks to users. The current mechanism, he said, means imported CBU vehicles are subject

05:52 to his ministry's rules and regulations, such as Bumiputra equity and minimum paid-up capital requirements.

05:58 [Music]

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