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Thursday, 22 June 2017

(NST) RAM revises Malaysia's economic growth forecast to 5.2pct


KUALA LUMPUR: RAM Ratings Services Bhd has revised upward its forecast on Malaysia’s economic growth this year to 5.2 per cent from 4.5 per cent originally.

This follows a strong expansion in the first quarter as the economy starts to show signs of recovery.

“After a better-than-expected growth performance of 5.6 per cent in the first quarter of the year, the economic recovery momentum is beginning to show signs of sustainability.

Most of this upside stems from a positive turnaround in business sentiment, which has brought about more productive capacity building in the form of machinery and equipment investments,” it said in a statement today.

A significant rebound in external demand has also supported this robust growth and, in part, has been a key driver of higher business confidence exhibited by export-oriented firms, in line with RAM’s Business Confidence Index findings.

RAM has also increased its inflation expectations for 2017 to 3.8 per cent from 3.0 per cent on the back of a stronger-than-expected oil price recovery momentum in the first quarter and upward stickiness of food prices, especially food away from home.

(NST) AirAsia aims more international flights at Senai International Airport


KULAI: AirAsia Bhd is planning to introduce more international destinations for its aircraft to fly from Senai International Airport by the end of this year.

Its chief executive officer Aireen Omar said the airline is expected to add two to three new international destinations from Senai, although she was coy when asked for details.

"It could be to a city in China or India or other cities in the region. You have to wait until we make the announcement," said Aireen.

At the moment, AirAsia, which was just named the World's Best Low-Cost Airline at the 2017 Skytrax World Airline Awards for the ninth consecutive times, fly to five international destinations from Senai, namely Bangkok, Guangzhou, Ho Chi Minh City, Jakarta and Surabaya.

"Senai is key hub for AirAsia in the region and we have a long term plan for it. Moreover, Senai have always been a good partner for AirAsia," said Aireen.

She was speaking to the media after a sending off ceremony for the airline's inaugural flight from Johor Baru to Kuala Terengganu at the Senai Airport. Also present was Senai Airport Terminal Services Sdn Bhd chief executive officer Md Derick Basir.

(The Star) Govt urged to reconsider taxing on low-occupancy hotels

SIBU: The Federal Government has been urged to conduct a proper survey before implementing tourism tax on hotel accommodation.


Sarawak Central Region Hotel Association chairman Johnny Wong said a study on the move was necessary as it was not a one-size-fit-all bill.

The Government planned to impose the tourism tax on hotel accommodation at the rates of between RM2.50 and RM20 per room per night effective July 1

“This tax is only applicable to places with high occupancy rates,” he said.

Johnny gave an example of towns in the central region of Sarawak, including Sibu, Mukah, Bintangor, Kapit, Sarikei and Kanowit where hotel operators were struggling to survive following fewer tourist arrivals.

“Even during Visit Sibu Year 2017, there are only a few tourists here.

“I saw only two Mat Salleh yesterday.

“During the last six months, you can hardly find five or six tourists in this town. So how can we collect tourism tax?” he asked.

Wong said the implementation of tourism tax would adversely affect local travellers as they formed the bulk of the hotel guests.

“With the tourism tax, local travellers who stay at budget hotel will have to pay tourism tax. This will be an extra burden for them,” he said.

Wong said hotel operators were not against the Government’s tax plan but hoped it would not become a burden burden to the people.

He expressed concern that the implementation of the tax would result in the mushrooming of cheap accommodation such as unlicensed room-for-rent.

Separately, Chief Minister Datuk Amar Abang Johari Tun Openg on Tuesday said that the official decision on the tax would be announced after the state Cabinet meeting today.


(The Star) Tanjung Malim to be developed in the next five years

International Trade and Industry Minister II Datuk Seri Ong Ka Chuan hopes to see Tanjung Malim progress in terms of development in the next five years.

The Tanjung Malim MP said the government wants to create lots of residential areas for the youth but his administration also realises the need for better job opportunities and connectivity.

Speaking to reporters after distributing Hari Raya contributions to students of SK Proton City, Ong said there are lots of plans for the town earmarked as 1Malaysia Youth City and Proton City.

“We want to create an industrial area to assist in Proton’s development. Many of the new Proton models are made here and we need the tools for these cars.

“We are negotiating with several international electronic companies to set up their factories here.

“In the future, cars would be full of electronics and this will only boost the development of Tanjung Malim,” he added.

With the development of the area, Ong said it can attract youths to settle down in Tanjung Malim and encourage them not to migrate to big cities in the country.

He hopes to see everything in place in the next five years and the minister said it is only more economical to establish a new industrial area here.

“We are also talking to some of the estate owners here to set up electronic factories on their land because most of the land in Tanjung Malim is privately owned.

“If all goes well, I expect to see more than 10,000 jobs being created in this town.

“We need the momentum and I am confident that will happen,” he said.

At SK Proton City, Ong told parents that he would do whatever it takes to make sure their children stay and work in Tanjung Malim in the future.

“That is my contribution to you. I want to see our youths working here. Most of our youths these days migrate to big cities but in the future, that will reduce.

“To the children here, study well and also learn to be good human beings. There is no point getting lots of A’s when your attitude is not right.”

Ong gave away contributions worth RM50 to each student and there were 284 students at the event.

“This is my way of telling them to study hard and do well in their life,” he told reporters.


(NST) New, attractive package for 28 Dutamas


BT HOMESTEAD Development Sdn Bhd is taking a conservative approach for the sale of the remaining units at its 28 Dutamas project in Kuala Lumpur as buyers face issues with end-financing.

End-financing issues and loan rejections have been plaguing the property market since 2014. This has affected first-time home buyers and upgraders, as well as developers who are unable to sell their properties in large quantities.

BT Homestead director GB Tan said the company was offering an easy ownership package for the remaining units in 28 Dutamas in order to fully sell off the project.

28 Dutamas, located on a 1.26ha freehold site along Jalan Dutamas Raya, was launched in 2014, and almost 80 per cent of the units have been sold.

It comprises two 23-storey blocks with 250 units of condominiums and penthouses. The gross development value (GDV) is RM238 million.

The built-ups for the units range between 1,253sq ft and 1,719sq ft and penthouses from 1,855 sq ft and 2,590 sq ft.

The selling price was RM688,000 to RM1.6 million when it was launched in 2014.

The final units for sale consist of Type C layout with a built-up of 1,719 sq ft.

Tan hopes to sell these units over the next few months.

“28 Dutamas has attracted a lot of interest with a majority of buyers from the middle-to-upper-middle income group in their late 30s to 50s,” he said.

Tan said barring any unforeseen circumstances, capital appreciation for this project is expected around 10 to 20 per cent in the next five years, and rental yield of between four and five per cent per year.

“With its ideal location, quality finishing and host of facilities, we are certain that the value of 28 Dutamas will steadily increase year after year, offering good returns to investors.”

(NST) Leasing market likely to remain challenging



THE leasing market for prime office space in Kuala Lumpur is expected to remain challenging as new supply comes in.

Rents for older buildings in the Golden Triangle may come under pressure as landlords look for tenants to backfill space vacated by companies that are either downsizing or moving out of the area.

The Golden Triangle is the premium business district with a high concentration of tenants from the banking, insurance and services sector.

It is also Kuala Lumpur’s main shopping and nightlife district, as well as home to four- and five-star hotels.

According to the Knight Frank Asia-Pacific Prime Office Rental Index for the first quarter of this year, rent in Kuala Lumpur quarter-on-quarter declined by 0.9 per cent and 0.8 per cent respectively, with the market anticipating significant incoming supply this year.





Knight Frank Malaysia executive director of corporate services, Teh Young Khean, said the Kuala Lumpur office market continued to be under pressure during the quarter under review amid high impending supply and weak occupational demand.

According to the National Property Information Centre’s property market report for last year, office building completions in Kuala Lumpur were around 320,643 sq m, but the take-up rate was only for 24,646 sq m.

New supply of office space for Kuala Lumpur this year and next year is expected to be between 4.72 million and six million sq ft, respectively.

Among the mega real estate projects that will add on to the worrying supply of office space in Kuala Lumpur are the Tun Razak Exchange, KL118, Bandar Malaysia and Bukit Bintang City Centre.

Teh believes that landlords, faced with current challenges in the market, may be more willing to make concessions.

Singapore, which expects its prime-office leasing market to bottom out next year, is also facing a similar decline in rental earnings, the index showed.







The Asia-Pacific Prime Office Rental Index was launched recently. It sees the addition of Manila, bringing the total number of markets tracked to 20.

For the first quarter of this year, the index grew one per cent quarter-on-quarter due to rising rents in 10 of the markets over the quarter, with rental declines experienced in five of the 20 markets tracked.

Knight Frank Asia Pacific head of research, Nicholas Holt, expects an improving outlook for Asia-Pacific prime office markets with stable economic growth strengthening occupier demands.

“United States political uncertainty, rising interest rates and Chinese capital controls all made waves during the first quarter of this year. Amid these uncertainties, however, global economic activity continued to gain momentum.

“With a moderate rise in commodity prices and improving market sentiment, these positive elements bode well for several Asia-Pacific prime office markets for the rest of the year,” said Holt.

Over the next 12 months, Knight Frank expects rents in 15 out of the 20 cities to either remain steady or increase, which is up from 12 in its previous forecast.

Bangkok continues its strong performance, recording both the highest year-on-year (9.6 per cent) and quarter-on-quarter (3.1 per cent) growth rates in Asia-Pacific.

Rents have been increasing for more than two years and it may persist due to strong absorption amid tight supply.

China’s prime office market seemed to be moving positively.

Grade A office rents in Shanghai remained unchanged for the third consecutive quarter, as strong demand from fast-moving consumer goods and retail enterprises counterbalanced the completion of 720,000 sq m of prime space.

Similarly, Beijing welcomed 135,800 sq m of prime stock last quarter with rents staying high, as finance, Internet and high-tech sectors continue to drive leasing activity in the Chinese capital.

In Guangzhou, however, the vacancy rate declined by 3.5 percentage points to 13 per cent with no new prime office space coming on line during the quarter.

Mainland China companies remained the most important source of new take-up in central Hong Kong.

Landlords stayed aggressive due to limited supply, thus further pushing rental levels upwards.

Across Australia, all four major cities tracked saw their prime rents increase last quarter.

Strong demand continued to drive rental growth in Sydney and Melbourne central business districts, reinforced by these periods of little new development and stock withdrawals.

Net absorption for premium office buildings in Perth has benefited from the flight-to-quality with tenants relocating from Grade-A and below to higher quality premium space.

Brisbane experienced a decline in vacancy rate due to a combination of rising demand from the expanding state government workforce and the withdrawal of office stock.

(The Edge Financial Daily) Topping-off ceremony for H2O

Titijaya Land to launch two more high-rise residential projects in 3Q

PETALING JAYA: Titijaya Land Bhd is aiming to launch two high-rise residential projects with a RM3.25 billion gross development value (GDV) by third quarter of this year.

Its executive director Charmaine Lim Puay Fung said the properties are the 2.02ha Riveria City @ KL Sentral (RM1.45 billion GDV) and 2.42ha 3rd Avenue @ Embassy Row Kuala Lumpur.

“We are going to launch the Riveria in the next quarter. It is a high-rise lifestyle office and two blocks of serviced apartments. The 3rd Avenue, with a New York concept, is located at a residential hotspot,” she added.

She told reporters this on the sidelines of the H20 Residences @ Ara Damansara topping-off ceremony here yesterday.

“The ceremony symbolises the last stage of the development and construction to be completed by the second half of next year,” said Lim.

The H20 Residences project focuses on a flexible, modern and compact layout and 70% of the units have been taken up. The selling price is at an average of RM850 per square foot.

Going forward, Lim said Titijaya Land will still specialise in smaller units, as demand from first-time homebuyers is still strong.

On plans to acquire more land bank, she said the company is always on the lookout for new purchases within Malaysia, particularly in the Klang Valley and Penang.

Titijaya Land has a current land bank of 111.28ha with a GDV of RM13 billion. — Bernama


(The Edge Financial Daily) AEON Credit to expand insurance business, launch e-money platform

BY ANNETE APPADURAY

KUALA LUMPUR: AEON Credit Service (M) Bhd plans to make its insurance business one of its core segments within the next three years, says its chairman Datuk Abdullah Mohd Yusof.

“There is huge potential for our insurance business. With a [six million] customer base from our sister companies of AEON Co (M) Bhd and AEON BiG (M) Sdn Bhd, we hope to make it one of our core segments [in three years],” Abdullah said, adding that the group needs to build the requisite infrastructure for growth of the segment.

“We [operate as an] insurance agent, and we are currently [working with] Prudential Malaysia, Chubb Insurance Malaysia Bhd and Tokio Marine Insurans (M) Bhd,” he told reporters after the group’s annual general meeting yesterday.

Abdullah added that for the financial year ended Feb 28, 2017 (FY17), the group’s insurance segment contributed RM11 million to its overall revenue of RM1.1 billion. That’s just 1% of its total top line.

The group’s main revenue contribution for FY17 came from its personal financing segment at RM270.7 million, while its motor financing segment clocked in at RM245.6 million, followed by its easy payments division at RM121.9 million. The group’s credit card segment contributed RM107 million to overall revenue for FY17.

Abdullah said the group intends to tap into the huge growth potential of the Malaysian insurance market, but could not comment on specific growth targets for the segment.

“[We have to adhere to] an agency’s restriction of two life insurance providers and two general insurance providers. But we plan to expand the segment by doing cross-selling across our existing customer database,” said the group’s executive director and chief financial officer Lee Kit Seong.

Meanwhile, the group plans to launch its e-money platform nationwide by the end of the current FY18, under which the group will offer innovative prepaid cards to customers.

“We [now] already have a test programme within AEON Group for the [e-money platform], so once the systems have been stabilised, we will launch the [e-money segment] nationwide, hopefully by the end of the current financial year,” Lee said.

Under the platform, the group will issue prepaid cards that will enable customers to earn reward points from spending, and give them access to exclusive merchant privileges. Besides retail customers at AEON stores, it is aimed at the untapped market of cash users.

“This will be a potential core business for us because now [there is an increase in the use of ] mobile payments, and [it is also in line with] Bank Negara Malaysia’s aim to move towards a cashless society,” Lee added.

Yesterday, AEON Credit shareholders approved the group’s proposed renounceable rights issue of a three-year minimum 3.5% irredeemable convertible unsecured loan stocks (Iculs) on the basis of two Iculs for every one existing AEON Credit share held to raise RM432 million.

According to Lee, RM155 million of the proceeds from the rights issue will be used to repay long-term loans, while RM272.4 million will go towards working capital to finance the group’s new receivables.

The remaining RM4.6 million will be used to finance the rights issue exercise.

The company also got shareholders’ nod for its proposed bonus issue of 72 million new shares, on the basis of one bonus share for every two existing shares.