Time Engineering's Claw Back: TIME Fibre Broadband

TIME dotCom Bhd (TdC),the fixed-line telecommunications solution provider, expects to retain positive growth, particularly with the launch of its new service, TIME Fibre Broadband, said its chief executive officer Afzal Abdul Rahim today.

The company posted RM24.454 million in pre-tax profit in the second quarter ended June 30, 2009 on the back of RM67.898 million in revenue, springing the company into 'the black' for the first time in 14 years.

It also recorded RM11.941 million pre-tax profit in the third quarter ended Sept 30, 2009, raking in RM69.931 million in revenue.

“We see this momentum continuing especially with the launch of the product today,” he said at the “TIME Fibre Broadband” launch.

Afzal said the company would continue to drive sales and increase market share in areas like wholesale, corporate and small-and-medium enterprises.

“We’ll be rolling out more exciting and innovative products in the wholesale and business market segments,” he said.

Afzal said TdC was planning to extend by 85 per cent its fibre broadband coverage in high-density Klang Valley in the second quarter next year.

Its latest service, TIME Fibre Broadband, a high-speed Internet access, offers users at a speed of up to 50 megabits per second currently available in Mont Kiara area.

“We’re looking into expanding the service to other areas under the second and third phases, with more locations undergoing testing and slated for installation of the service,” he said.

Afzal said TdC targeted between 15 and 20 per cent of potential customer base for area in coverage.

He said TIME Fibre Broadband is targeted at young professionals, high bandwidth users and early adopters who are constantly blogging, gaming, social networking and downloading.

“The service is for internet users craving for fastest internet connection without being hindered by slow and unreliable connection speed,” he said.

TIME Fibre Broadband is being offered at competitive rates ranging from RM149 to RM329 for 2Mbps to 10Mbps service package, Afzal said, adding that customers will be able to experience a boost speed of up to 50mbps on demand.

Do you think this could impact positively on Time Engineering and Time dotCom. share prices?

Malaysia: Another Aye Sayer for Property Boom in 2010

Yes, they are slowly coming out to support the possibility of a good property market this year. However, there are caveats.

In its report today, Bernama quoted the comments of MIDF Amanah Investment Bank Bhd. This investment bank is the latest aye-sayer to tell us that the residential property market is expected to thrive this year as it rides on the surge in demand, particularly in the medium-high segment.

Although new property launches in key cities like Kuala Lumpur, Johor Baru and Penang had been less encouraging lately, the expected stronger economy this year should see the launches of previously delayed projects.

“Our survey with key developers shows purchasing interest remained high with take-up rates of new projects at an average of 70 per cent just from private previews or first few days of the launch,” it said in its research note.

Despite signs of sectoral revival, it said the property sector still lacked foreign participation to drive its marketability.

More measures are needed to secure foreign participation apart from the present tax incentives and MSC-status benefits, said the investment bank.

As for property sector, MIDF Amanah Investment Bank maintained a “neutral” call as it expects property sales to undergo a minor correction when Bank Negara Malaysia begins to tighten monetary policy and foreign funds start withdrawing should the economic recovery lose its momentum.

“However, we believe local investors will cushion the downside as property buyers will seize any buying opportunity. We continue to favour counters with exposure to the mid-to-high-end residential market and industrial developments,” said the investment bank.

It said medium and high-end properties benefited from an economic recovery as consumer purchasing power increased, participation in small-and medium-scale property sector also increased from business expansion. Residential sector remained a favourite for hedging purposes, it added.

With the ringgit losing value with each passing month, there is definitely a scramble to convert liquid cash into hard property deals as well as foreign currency accounts.

Whatever happened to our once mighty ringgit?

An answer, please.

Australia: Rate Stand Down

Amidst a strong, vibrant economy, Australia central bank decided to maintain its key cash rate interest rate steady at 3.75%(2nd February 2010). This so surprised many analysts who had expected an increase to 4.0 per cent given signs of impending strength in the economy.

Let us read the Reuters report today.

"The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting.

The Australian dollar fell as investors pared chances of an interest rate rise in March after the RBA’s announcement.

March bill futures rallied to 95.78 from 95.570 before while the Australian dollar fell to $0.8838 from $0.8920.

“A big surprise they left rates unchanged ... they made a couple of mentions of what might be triggering that, the Chinese slowing down their economy, and sovereign concerns have increased.” said Stephen Walters, chief economist at JP Morgan

“I think they’re taking a tactical move to wait and see what’s going to happen over the next few months, and what the impact of the earlier rate hikes will be.”

“They make it clear interest rates have to be adjusted, which is code for going up, they’re just not sure about how quickly they need to do it, so they’re being tactical.”

Warren Hogan, ANZ’s head of Australian Economics, said: “It’s a big surprise to the market and most forecasters, including us.

“What they’ve told us is the case for further interest rate increases is there – they’ve explicitly stated it – but they just want to see a little bit more information about how the economy is reacting to the rate hikes from last year.

“So I don’t think this fundamentally changes the outlook for interest rates, which is for them to move higher. We still think they’ll get to 4.75 (by the end of the year). I think they’ll go next month (for the next move).”

So the stand-down on interest rate is not really going to stump the positive expectations of many. They expect the authorities to up the rates at the subsequent meetings this year.

We shall wait.

Naysayers Can Really Spoil Your Day

Believe in the nay-sayers and you would believe anything. So let us not get pessimistic about these infernal predictions and look forward with a 'can do' spirit.

Let us read one nay-sayer prediction based on currents fears and horrors scenario building. It is from a Reuters report dated 29 January 2010.

"The adage ‘as January goes, so goes the year’ bodes ill for equity investors after the S&P 500 closed out its worst month in almost a year. In the coming week, they will have to contend with fears of sovereign defaults and the potential for unpleasant surprises in the US labor market.

US corporations have so far handily beat analysts’ earnings forecasts. With heavyweights like Exxon Mobil Corp and United Parcel Service Inc set to report next week, investors will be looking for that to continue, going some way to offset the perception that political risk is on the rise.

The Standard & Poor’s 500 Index fell 3.7 per cent in January and is off nearly 7 per cent from its high this month. Investors are worried that Greece’s debt troubles may herald a wave of sovereign defaults in the euro zone that could derail an economic recovery.

“There’s a lot of concerns going on as far as the sovereign debt is concerned in a lot of the nations, specifically in the euro zone,” said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.

A heavy week for economic data will culminate in yesterday’s non-farm payrolls report. Analysts believe the economy added 5,000 jobs in January, according to a Reuters poll. Another negative surprise after the previous month’s unexpected surge in job losses could roil markets.

“The next headline is going to be this unemployment data that is coming out, and there is no indication it is going to be moving in the direction in which we want it to move,” said Jonathan Corpina, senior managing partner of Meridian Equity Partners in New York.

Friday’s jobs number will be presaged by the ADP private- sector jobs report on Wednesday.

Around 500 US companies have reported quarterly earnings so far and of those, 73 per cent have beaten earnings estimates, exceeding the 68 per cent that beat in the last two quarters, according to data from Bespoke Investment Group.

But that positive earnings picture has not translated into gains for the stock market this time around.

Bespoke Investment Group’s data shows the average stock of a company whose earnings beat estimates gained only 0.8 per cent, compared with a 2.9 per cent drop in those that missed.

“The companies beating aren’t being rewarded by nearly as much as the companies that miss are being punished,” Bespoke Investment said in its research note.

After consecutive quarters when better-than-expected earnings helped drive stocks up more than 66 per cent from last year’s lows, fourth-quarter numbers may have already been factored into the market.

Highlights in the second full week of earnings will include Exxon Mobil on Monday, which is the first of a number of energy companies reporting, as well as delivery service UPS on Tuesday. UPS, viewed as a window on the economy’s health, raised its profit forecast earlier this month.

Exxon is expected to post earnings per share of US$1.19, while UPS is seen reporting 73 cents per share.

The US economy grew at its fastest pace in more than six years in the fourth quarter of 2009, expanding at an annual pace of 5.7 per cent — much more than most economists had expected.

There will be an early indication of the sustainability of growth when the Institute for Supply Management releases its manufacturing report for January. Economists in a Reuters poll are expecting a reading of 55.2, showing an expanding sector for the sixth straight month.

That will be followed by the ISM’s service sector survey on Wednesday, expected to edge into growth mode after the largest segment of the US economy struggled to find its footing in the fourth quarter of last year.

“The economy is showing no signs of a self-sustaining recovery,” said David Wright, portfolio manager at Sierra Core Retirement Fund in Santa Monica.

“Essentially the fuel was used in sustaining the rally as far as it did, and we are now beginning a down cycle that I expect to be prolonged and severe.”

For the final week of January, the S&P 500 slid 1.7 per cent, while the Dow Jones industrial average declined 1.1 per cent and the Nasdaq Composite Index fell 2.6 per cent.

For the month of January, the blue-chip Dow average dropped 3.5 per cent — close to the S&P 500’s 3.7 per cent decline — and the Nasdaq lost 5.4 per cent.

If this January is anything to go by — and the Stock Trader’s Almanac shows only six major occasions since 1950 when January’s performance has not been an indicator for the rest of the year — Wright’s prediction may come true."

Would that be the Year of the Tiger 2010?

USA: Growth Shoots Nonetheless

This is welcome news!

Reuters has this report. Let us read it.

"The White House on Friday hailed a report of 5.7 per cent economic growth in the fourth quarter as “the most positive news to date on the economy” and said the Obama administration’s focus must remain on job creation.

“It is important not to read too much into a single report, positive or negative,” White House economist Christina Romer said. “There will surely be bumps in the road ahead ... Nonetheless, today’s report is a welcome piece of encouraging news.”

Romer was responding to a Commerce Department report of faster-than-expected growth in the fourth quarter, the quickest pace in more than six years, as businesses reduced inventories less aggressively.

“Today’s GDP report is the most positive news to date on the economy,” she wrote in a statement on the White House web site.”

Romer made clear that the latest economic figures only reinforced President Barack Obama’s intention to make job creation, which has lagged as the economy emerged from deep recession, his administration’s top priority.

“While positive GDP growth is a necessary first step for job growth, our focus must remain on getting Americans back to work,” she said. “That GDP rose strongly in the fourth quarter of last year while employment fell and the workweek increased only slightly emphasizes the need for policy actions designed to help spur private sector job creation.”

Romer cited an “inventory bounce” by US businesses as a part of the jump in fourth-quarter GDP growth.

“This inventory bounce, though likely to be transitory, is a normal part of healthy recoveries. As firms’ confidence in the future increases, their desire to run down inventories wanes. This change in behavior is often a powerful force for growth early in a recovery,” she said."

I do hope with the chorus of good news from India to Washington,the world economy can ratchet upwards without looking back.

India: Now It is Their Turn for Possible Rate Hikes

Yes, India’s central bank did leave its short-term interest rates unchanged today (29 January 2010). However,it raised banks’ cash reserve requirements by a higher-than-expected 75 basis points. This is to be implemented in two phases and indicative of rising inflation.

“Though the inflationary pressures in the domestic economy stem predominantly from the supply side, the consolidating recovery increases the risks of these pressures spilling over into a wider inflationary process,” it said in its third quarter review.

The Reserve Bank of India (RBI) said the CRR would be increased by 50 basis points from Feb 13 and a further 25 basis points to 5.75 per cent from Feb 27.

It held its lending rate, or the repo rate, unchanged at 4.75 per cent and its reverse repo rate, at which it absorbs surplus cash from banks, unchanged at 3.25 per cent.

Despite increasing inflationary pressures, the central bank has been under pressure from senior government officials to hold off from raising its policy rates, which they argue would undermine the economic recovery.

The central bank lifted its wholesale price index inflation forecast for the end of the fiscal year in March to 8.5 per cent from its earlier forecast of 6.5 per cent, but said it expected inflation to moderate starting in July, assuming a normal monsoon and global oil prices holding at current levels.

It also lifted its forecast for GDP growth in the current year to 7.5 per cent, from an earlier target of 6 per cent, and said that the current rate of growth is likely to be sustained in the financial year that ends in March 2011.

The bank rate, used by banks to price long-term loans, remained unchanged at 6.0 per cent.

A Reuters poll last week showed 24 out of 25 economists expected the RBI to raise bank reserve requirements, or the cash reserve ratio, by up to 50 basis points.

Most economists had expected the central bank to keep core interest rates on hold, and Indian overnight indexed swap rates had ruled out a rate rise.

The cash reserve ratio was cut by 4 percentage points in five moves between October 2008 and January 2009 as the central bank moved to support the economy during the global financial crisis.

The RBI had cut the repo rate by 4.25 percentage points in six steps between October 2008 and April 2009. The reverse repo rate was cut by 2.75 percentage points in four steps since December 2008.

The RBI joins other central banks in Asia in taking steps to start unwinding ultra-loose monetary policy. Yesterday, the Philippines raised a short-term lending rate, and this month China started to tighten policy by raising banks’ reserve requirements and accepting higher yields at bill auctions.

Australia was the first Group of 20 country to begin raising rates as the global economy recovers from its worst downturn since the Great Depression. The Reserve Bank of Australia has raised its key cash rate by 75 basis points since October.

So it looks like growth is around the corner and fears of inflation have compel central banks to head off such pressures before they can bubble in.

The China Treasure Restaurant

We took the opportunity of patronising the halal Chinese restaurant called "China Treasures" for lunch today(29 January 2010).It is situated at the Sime Darby Convention Centre off Bukit Kiara.

We had our choice of timsum. Do not compare it with the traditional timsum that has pork ingredients in them. We had the usual harkou,the fried carrot cake with bean sprouts,fish balls,prawn fritters,chicken wings and some other dishes. We also ordered a dish of seafood noodle.

I guess the food was not too bad. Cost us RM128 with tax.

Will we go there again? Possibly.