Tuesday, 15 October 2019

(The Star) Boost for big boys in theme parks

Bigger players must come in and ‘fly-by-night’ theme park projects need to be kept out of the picture in order for the 100% tax exemption for theme parks to propel the tourism industry.

Malaysian Association of Tour and Travel Agents (MATTA) president Datuk K.L. Tan said theme parks are definite attractions for both domestic and foreign tourists, but it will take bigger plans to draw foreign tourists.

“Theme parks in Kuala Lumpur are doing well. I hope theme park companies will open more in other states like Kota Kinabalu, Kuching and also on the east coast.

“But we will need bigger plans to draw in the international market, ” he said.

Finance Minister Lim Guan Eng announced that new investments in international theme park projects will be given income tax exemption of 100% of statutory income or an Investment Tax Allowance of 100% to be set off against 70% for five years.

Malaysian Association of Hotels Penang chairman Khoo Boo Lim said the incentive will help theme park operators to survive while they gain market traction.

“The investment in proper theme parks is very high. The returns are pretty long-term. It is not going to be nice to see a theme park collapse and discourage more of such investments.

“Theme parks are good because they create jobs, contribute to other industries and provide entertainment to both local and international communities, ” he said.

Khoo cautioned against ‘fly-by-night’ theme park projects mushrooming to get the 100% tax break.

The chief executive officer of Escape theme park in Teluk Bahang, Sim Choo Kheng, also hopes the government will watch out for theme park projects “that are actually real estate projects.”

“There have been a few theme park projects in the past that are actually township developments. After a few years, the theme park fails and the development around it becomes a ghost town.

“As a theme park operator, I am elated that the government is giving us such recognition and encouragement.

“But, I hope the government will be careful of property developers taking advantage of the tax exemption, ” he said.

(The Star) DBKL urges city folk to provide feedback for Kuala Lumpur 2040 Development Plan

Sofian Abdullah, 30, and his wife Mona Sulaiman, 28, just got married and are planning on starting a family.

As both work in Kuala Lumpur, the couple are looking to buy property that is not only affordable, but also not too far away from their place of work and has all the amenities they require for raising children.

They are keen on buying an apartment in a new development in Cheras. The project is estimated to be completed by 2023.

But they are concerned that the neighbourhood, although ideal for now, might become too crowded and congested in the future.

They want to ensure that the current facilities such as a playground and football field will still be there in 10 years’ time for their future children to play in, the wet market that is walking distance from their home will not be replaced by commercial development and traffic jams in the area will not go from bad to worse.

These are genuine concerns of the majority of people who are living and working in Kuala Lumpur and seeking reliable information about the future of their homes and city.

For these reasons, Kuala Lumpur City Hall (DBKL) is calling ratepayers to actively participate in engagement sessions next year to provide feedback once the local authority starts drafting the Kuala Lumpur 2040 Development Plan (KL2040DP).

The KL structure and city plan 2020.

KL2040DP, for the period of 2020 to 2040, is aimed at propelling Kuala Lumpur to a sustainable and liveable city.

“KL2040DP is a strategic plan mapping the city’s growth in the long term and if it is followed properly, the city will grow in a sustainable, systematic way, ” said DBKL Advisor on Planning Datuk Mahadi Che Ngah.

“It guides city planners on the sustainable use of land to overcome issues of urbanisation by managing land use on the basis that the needs of the present are met without compromising the needs of Kuala Lumpur’s future residents, ” Mahadi said.

“So the KL2040DP will tell us what Kuala Lumpur is going to look like in 2040, ” he added.

Instead of relying on information from a sales brochure or realtors and developers, residents will be able to make decisions based on the KL2040DP.

“DBKL will start preparations on the new city plan for the next two decades early next year, ” Mahadi said.

“Our main focus is city planning, plot ratio and population density as well as ways to resolve traffic congestion, carbon emissions and climate change, ” he added.

As such, with the KL2040DP, Kuala Lumpur residents such as Sofian and Mona can obtain important information on the future development of the neighbourhood they plan to live in.

Mahadi explained that the Development Plan contained two main plans, the Structure Plan and the Local Plan.

Unlike the KL Structure Plan which is about strategies and policies, he said the KL Local Plan was more detailed and translated what was in the structure plan on a micro level.

“For example, let’s take Bangsar South. If the structure plan says Bangsar South is going to be the next employment centre of the city, the local plan will show details such as land use and zoning.

“The plan will show if a particular plot of land is meant for commercial or mixed-use, industrial, residential, open space, institution or special use, ” said Mahadi.

“It will provide guidelines and also show the intensity of land use so residents can determine from the plan what is allowed or not allowed (to be built) on the land and how high a building can go, ” he added.

City residents will have an idea what’s allowed in their neighbourhood and they can not only plan for their future but also participate in ensuring that there are no infringements on land use.

“From the plan, you can find out if a car workshop is allowed to operate in your area or if the kindergarten behind your house is allowed to be there or not, ” he said.

Even past developments can be addressed in the coming plan.

Mahadi assured that they could and would be addressed in the new plan.

“It opens up the possibility of rezoning and redevelopment of dilapidated areas and upgrading of infrastructure in the city as well as policies to regulate future development in an area.”

Mahadi elaborated that while the plan contained detailed provisions with regard to land use, it is intended for use by all stakeholders, from residents and property owners to developers and the community, for the assessment of all planning and development applications in the city.

He added that the plan also contributed to the growth and character of Kuala Lumpur as well as improvements to the natural and built environment, transportation and public facilities.

“Participatory governance is what we want to achieve, to get the people to provide feedback.

“It is part of the new urban agenda that we have adopted from the United Nations, whereby we pledge to ensure that ‘no one is left behind.”

“So we want everyone from the youth and senior citizens to the physically challenged to study the plan, look at the area you live in and give your feedback and highlight the shortcomings in your neighbourhood, ” Mahadi said.

For KL2040DP, community feedback will be obtained via public engagements, focus group discussions and town hall sessions. The public can also email their views to or through the Facebook page “Pelan Pembangunan Kuala Lumpur 2040.

Meanwhile, on the Kuala Lumpur City Plan 2020 (KLCP2020) which was gazetted in October 2018, DBKL has received several applications to amend the permissible land use, zoning and intensity of development from landowners and developers.

“At the same time, we are also encouraging the public to participate in our efforts to modify the current plan.

“Soon, the draft local plan will be out for public scrutiny and the public can give their opinion, ” said Mahadi.

(The Star) Axis-REIT to buy Johor building

PETALING JAYA: Axis Real Estate Investment Trust (REIT) has proposed to acquire an industrial building within Pelabuhan Tanjung Pelepas, Johor, for RM65mil cash.

In its filings with Bursa Malaysia, Axis-REIT said the proposed acquisition of the property, comprising a single-storey warehouse-cum-office building together with ancillary buildings, would be accretive to its distributable income.

(The Star) Loke: Govt supports PTP’s expansion plan

JOHOR BARU: The port of Tanjung Pelepas (PTP) would be able to take in 30 million twenty-foot equivalent units (TEUs) by 2030 following its expansion, which has received the support from the Federal Government.

Yesterday, Transport Minister Anthony Loke said that Federal Government has given its full support for PTP to expand its capacity.

According to Loke, PTP presently could take up to 12.5 million TEUs in its capacity and envisages a steady growth of between eight to nine percent yearly.

“PTP is almost reaching its maximum level in handling TEUs and when its reaches about 9 million TEUs presently, its berth must be expanded for them to handle higher volume of TEUs.

“The expansion of ports, especially PTP, is utmost important as Malaysia is a maritime country where the port location along the Melaka Straits, which is one of the busiest sea routes in the world, will give Malaysia an advantage to become the major logistic hub in the region, ” he said when met after officiating at the Johor Port Week and Port Conference 2019 at a hotel here yesterday.

Loke added that the government was committed in PTP’s expansion plan and he would be meeting with Johor Mentri Besar Datuk Dr Sahruddin Jamal to further discuss on the matter.

The expansion work would be carried out in several stages where it will take between five to 10 years after receiving the approval from the state government.

“PTP has many times requested to the government to expand its area and we believe now is the right time to widen it due to its high handling rate.

“The cost of its expansion will be borne by the private sector, which is also the port main operator, ” he said.

(The Star) Analysts positive on F&N’s Perlis land acquisition

KUALA LUMPUR: Following FRASER & NEAVE HOLDINGS BHD’s (F&N) proposed acquisition of land to venture into upstream milk production, brokerage firms are positive on the move in the medium to longer term.

Recently, F&N proposed to acquire 4,453 ha of MSM Malaysia Holdings Bhd’s plantation land, known as Ladang Chuping, in Perlis for RM156mil cash.

It is slated for completion in the second quarter of next year pending approval from the relevant authorities.

CGS-CIMB Equities Research said the proposed acquisition could help in reducing reliance on fresh milk imports, improve quality control and lower foreign exchange exposure.

With F&N’s proposed venture, the research house expects capital expenditure (capex) for financial years 2020 and 2021 to surge to RM300mil annually from RM150mil currently.

“Factoring in the higher capex spend, our FY20-21F earnings per share (EPS) will lower by 2.1% to 2.6%.

“We keep our FY19-21F EPS unchanged pending completion of the proposed acquisition of the land.

“We maintain out hold call and target price of RM35.20 per share, ” it added.

Meanwhile, for the first stage of its expansion, F&N has allocated around RM650mil, inclusive of land acquisition costs and clearing expenses, to host 4,000 milking cows.

CGS-CIMB Equities Research noted that phase one of its expansion plan was not an issue as the company is in a net cash position of RM266mil.

Having said that, the research house believes the stock is fairly valued at this juncture, which is 27.3times of calendar year 2020 forecast price-to-earnings ratio.

“We do not see any major re-rating catalysts in the short term, ” it noted.

Moreover, TA Securities is also optimistic on F&N’s proposed acquisition.

The brokerage said that the vertical integration would contribute positively to the company’s medium-term strategy.

“It would enable new income source from farming, strengthen its value chain which could expand margin and profitability while also improving sustainability of supplies to its existing downstream production, ” the research house said.

Upon successful vertical integration, it believes improving profitability is expected to occur given that F&N is currently operating at a lower gross profit margin of 29% to 31%.

Vietnam Dairy Products JSC, an affiliate of F&N involved in farming, production and distribution of milk operates with a hefty gross profit margin of around 45%.

TA Securities reckons that the purchase for the proposed Ladang Chuping land of RM156mil is fair given the valuers’ appraised values ranging in between RM150mil to RM190mil.

As such, the brokerage firm has upgraded F&N to a “buy” call from “sell” with a target price of RM42 per share on the back of vertical integration as a strong catalyst in the medium term.

(The Star) Extra RM100mil tax from higher income earners

KUALA LUMPUR: The government plans to collect an additional RM100mil from the higher income tax rate for those earning above RM2mil per year, said Finance Minister Lim Guan Eng.

The government has introduced a new tax rate for those earning above RM2mil at 30%, up from the current 28% rate.

Lim said the new tax band came from a proposal by the World Bank, which suggested a higher rate of 35%.

“The World Bank said our top marginal tax rate for the country is too low compared with other neighbouring countries and advised us to increase it.

“Even by increasing the income tax rate to 30%, Malaysia is still ranked among the lowest compared to neighbouring countries, ” he said at a dialogue session at the Budget 2020 Forum yesterday.

The new tax rate was said to affect 2,000 people.

Lim pointed out that the wealthy should be able to afford the increase in tax, and said the move would contribute to the country’s economic growth.

When asked if the new tax rate would lead to the government implementing wealth or inheritance taxes in the future, Lim said there is no plan for such a tax regime in the near term. “A wealth tax is not on the table at the moment, unless there is a drastic change, ” he said.A wealth tax is a levy on the total value of personal assets, including bank deposits and real estate. Meanwhile, an inheritance tax is a tax paid by a person who inherits money or property from a person who has died.

Lim said among the main objectives of Budget 2020 were to ramp up the country’s digitalisation agenda and getting more graduates into the workforce.

“To spur higher private investment and to upgrade the structure of our economy is for us to fully embrace the digital economy.

“Private sector adoption of the latest technologies can bring significant breakthroughs for Malaysia, but it also requires significant upfront investments in infrastructure and the accompanying ecosystem, ” he said in his welcoming speech.

“The private sector cannot do this alone. Selective state intervention is required to improve competitiveness, prioritise investment in strategic areas and structure incentives around industrial policy goals, ” he added.

When asked why the government is incentifying the equity crowdfunding (ECF) and peer-to-peer (P2P) platforms, Lim said the effort is also to encourage more innovations in the financial system.

“It is not just about having more platforms, but we also want to encourage the technology development behind it. We should have a liberalised but regulated financial system, ” he said.

On the country’s largest toll concessionaire PLUS Malaysia Bhd, Lim reiterated that the government is open to any parties that want to take over the highway, so long as it doesn’t impact the government’s debt service charge as well as savings for road users.

Last Friday, Lim announced that the government is giving 18% discount on the toll rates on all highways owned by PLUS.

In his Budget 2020 address, he said the discount will result in RM1.13bil in savings for highway users in 2020, and up to RM43bil over the entire concession period until 2038.

At the moment, Khazanah Nasional Bhd controls a 51% stake in PLUS, while The Employees Provident Fund (EPF) owns the remaining 49%

On another matter, Lim stressed that the previous government has “stolen” the fund that was supposed to be a refund to businesses for the goods and services tax (GST).

“The special dividend of RM30bil from Petronas is a one-off dividend to the government to pay GST tax refunds, ” he said. “Most importantly, the government had refunded what businesses had not been able to get back for the past five years. But why was this not highlighted?” he said when asked by the moderator if the government would not “raid” Petronas again.

Last year, Lim claimed the RM19.4bil GST refunds was “stolen” by the former Barisan Nasional administration.

However, the Public Accounts Committee which looked into the issue said no refunds were missing.

(The Star) More M&A deals forecast in 2020

KUALA LUMPUR: Malaysia’s deal activity outlook is brightening, with research and analysis consultancy Oxford Economics expecting the number of mergers and acquisitions (M&A) transactions in Malaysia to increase to 221 deals in 2020, from an expected 218 deals in 2019.

“But the value of these deals will fall to US$6.5bil (RM27.16bil) from US$8.9bil, ” according to law firm Wong & Partners’ fifth annual Global Transactions Forecast report, which is produced in conjunction with Oxford Economics yesterday.

Commenting on the report, Wong & Partners deputy managing partner from the corporate, commercial and securities practice, Munir Abdul Aziz expects the M&A and capital market activities in the country in 2019 and 2020 would be driven by three principal factors, namely: — Bernama

(The Star) Gamuda seen as getting fair deal for highways

PETALING JAYA: GAMUDA BHD is seen as getting a fair deal with regard to the disposal of its tolled highways but going forward it will have to search for new businesses with recurring incomes to fill the vacuum.

In the Budget 2020 announcement last Friday, Finance Minister Lim Guan Eng said the Cabinet has approved the takeover of four Klang Valley tolled highways, which will be funded via government-guaranteed borrowings.The highways are Shah Alam Expressway, Damansara-Puchong Expressway, Sprint Expressway and Smart Tunnel.

Analysts expect the previous definitive contract terms to remain unchanged, including the acquisition value of RM2.36bil and change of ownership (from Gamuda to government) to be finalised by the end of 2019.

Gamuda shares rose only two sen to RM3.77, while its 44%-owned Lingkaran Trans Kota Holdings Bhd gained 15 sen, ending the day at RM4.81.

Gamuda had previously guided that a portion of the proceeds will be redistributed to shareholders and the remainder to be redeployed for working capital for the Penang Transport Masterplan (PTMP) and other projects.“Due to the shrinking pool of infrastructure-related projects in the country, the company is shifting its focus to tender for building jobs domestically and planning to venture into overseas markets including Australia (via its 50% stake acquisition in Martinus Rail), Singapore, Vietnam and Taiwan for infrastructure-related works, ” UOB KayHian, which has a Hold on the stock said in a note.

At present, the company’s order book stood at RM10.5bil, inclusive of the turnkey contract for AG MRT2.

Post revision of MRT2, Gamuda with its partner MMC Corp became the turnkey contractor with the contract value reduced to RM30bil, from RM39bil while assuming an average profit before tax margin of 8%.

However, AmInvestment Bank said the PTMP project, along with the MRT3 project were not mentioned during the budget speech.

“With reduced recurring toll road earnings (that make up 35%–40% of Gamuda’s total earnings), the defensiveness of Gamuda’s earnings will be eroded, resulting in a higher risk premium, ” the research firm said in a note. It said it is maintaining its underweight call and forecasts considering that valuations of construction stocks, Gamuda included, have run ahead of their fundamentals in the heat of the euphoria sparked by the recent revival of the East Coast Rail Link and Bandar Malaysia projects.

(The Star) TNG eWallet eyes 80% penetration rate by 2020

PETALING JAYA: Touch ‘n Go eWallet is aiming to achieve at least an 80% penetration rate for both users and merchants by 2020.

“We’re reaching out to as many major retail corporations as possible, while simultaneously looking at SMEs, and even individual traders at pasar malam or mamak restaurants, ” said TNG Digital Sdn Bhd chief executive officer Ignatius Ong.

The Budget 2020 which was announced on Friday saw the announcement of a one-time RM30 ewallet payment for users who are Malaysians aged 18 years and above and who are earning RM100,000 and below a year.

It will be claimable from Jan 1 to Feb 29 next year and the approximately RM450mil ewallet payout is expected to benefit 15 million Malaysians.

Ong said Touch ‘n Go eWallet now has over 5 million users and is aggressively growing its reach in the country.

“As the largest e-wallet in Malaysia both in terms of size and usage, we are always looking at ways to expand our business in a way that we are at every daily touchpoints of consumers, ” he said.

Ong also highlighted one of Touch ‘n Go eWallet’s features which is the money back guarantee (MBG) feature noting that it is the first-ever safety and security policy for mobile payments in Malaysia.

“With our MBG policy, we are committed to future-proofing Malaysia’s ePayment ecosystem and to better serve our users by giving them the confidence.

“Users can trust us, continue to pay confidently and transact with our app, knowing that the transactions are protected and s refund is available for any unauthorised transaction, ” he said.

Ong said he hopes that the Touch ‘n Go eWallet will help propel Malaysia into a total cashless society by bringing forth the highest security of payment transactions and most importantly, convenience to its users.

“My plan is to make sure that users can access payment through the Touch ‘n Go eWallet wherever they are.

With that said, the team at TNG Digital are constantly engaging with SMEs, local mom-and-pop shops and business owners in and outside of the Klang Valley to educate, inspire and engage with potential users and partners, ” he said.

He noted Bank Negara’s initiatives to drive the agenda of moving towards elevating the e-Payment system and encouraging people to embrace the cashless economy.

“Bank Negara has taken steps in reducing cash dependency for Malaysians, and with the Touch ‘n Go eWallet, we are also doing our part in ensuring that average, everyday Malaysians are also slowly embracing the cashless payment method, ” Ong said.

He said other value added features included PayDirect and RFID that allows its users to pass through tolls with the deductions happening in the Touch ‘n Go eWallet.

“For PayDirect, we have stitched the Touch ‘n Go card together with our eWallet to allow people to pass through tolls without having to reload at the toll counters.

“It’s a simple step of adding your card to your eWallet and the reloads and deductions will happen instantly, ” he said.

(The Star) G3 Global yet to get confirmation on tender for TPM land

PETALING JAYA: G3 Global Bhd has clarified that it has yet to receive confirmation on its tender submitted to develop a piece of land in Technology Park Malaysia (TPM).

G3 Global said it had on June 14,2019 submitted a tender to Technology Park Malaysia Corp Sdn Bhd (TPM Corp), expressing its interest to develop a piece of land in TPM.

“However, the company has, as of now, yet to receive any decision in writing from TPM Corp informing its decision on the said matter.

“The board is cognisant of the need for proper dissemination of information to the public and would release announcements on Bursa Malaysia on any material issue on a timely basis as required by the Main Market Listing Requirements of Bursa Securities, ” it said in a filing with Bursa Malaysia.

On Monday, StarBiz reported that G3 Global and its partners had secured a piece of land in TPM to build their iconic artificial intelligence (AI) park.

Landowner TPM Corp had in April launched a request for proposal for the development of its institutional and industrial land in Phase 3 of TPM in Bukit Jalil.

The AI park is a three-party collaboration between G3 Global, China’s SenseTime Group Ltd and China Harbour Engineering Co Ltd, that are jointly investing US$500mil (RM2.09bil).