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Monday, 20 November 2017

(The Edge Financial Daily) ‘Govt freezes approvals for luxury property projects’

KUALA LUMPUR: The government has decided to indefinitely freeze approvals for luxury property developments from Nov 1 to control the oversupply from adversely affecting the economy, said a New Straits Times report yesterday, quoting Second Finance Minister Datuk Seri Johari Abdul Ghani.

Johari said the decision was made after the cabinet scrutinised a detailed Bank Negara Malaysia report, published in June, on the real estate glut.

In the news report, he highlighted that there was an overflow of luxury projects in the country, and said that the freeze would be on shopping malls, commercial complexes and condominiums which sell units above RM1 million.

“This will be temporary until we can clear all the excess supply. There is a stark imbalance between supply and demand and we have to review the strategy in real estate development as we do not want such a situation to adversely affect the economy,” he was quoted as saying.

When asked how long the freeze will be, Johari said it would be indefinite until there was a rise in market demand for ex-pensive properties.

Meanwhile, he said the government would continue to drive the development of affordable homes, specifically those below RM300,000 per unit.

“In this sector, there is a disparity between the 48% demand for affordable homes and the supply that only meets 28% of that. This is the area that needs to be addressed swiftly,” he added.

(The Star) SkyWorld plans projects worth RM2.2bil

PETALING JAYA: SkyWorld Development Sdn Bhd is planning up to four projects worth RM2.2bil in gross development value (GDV) over the next two years.

Its chief executive officer Lee Chee Seng said these projects comprise residential high-rise, integrated and commercial projects in the Klang Valley.

Lee said in a recent interview that the company has a sales target of about RM1.3bil for the financial year ending March 31.

He said while the company will focus on the Klang Valley projects, it will seek opportunities elsewhere too.

“However, after 2020, should there be excellent investment opportunities outside Kuala Lumpur and overseas markets such as in Asia Pacific, it may be carried out via conventional methods of joint venture developments.”

Lee added that the company will be busy with several projects in the pipeline given the 130 acres of land it owns with a total estimated GDV of RM13bil.

The projects include Ascenda Residences with phase one utilising 3.35 acres, the 2.69-acre Bennington Residences, the 4.43-acre Curvo Residences and a six-acre commercial project.

SkyWorld’s other launches include The Hub@SkySanctuary, Setapak, with a GDV of RM164mil, SkyMeridien@Bandar Baru Sentul with a GDV of RM491mil and The Valleys@SkySierra, Setiawangsa with a GDV of RM771mil, all are expected to hit the market between the fourth quarter of this year and the first quarter of 2018.

The developer is also planning to launch a much anticipated residential development dubbed SkyVogue@Taman Desa, with a GDV of RM266mil in the first quarter of 2018.

Lee said SkyMeridien@Bandar Baru Sentul has been well received by potential homebuyers. “One of our launches in Sentul has been well received as we have around 4,000 registrations so far and we have only 780 units available,” he said.

When asked about the possibility of the company planning an initial public offering (IPO), Lee said SkyWorld will look for an opportune time to do so.


(The Star) High cost woes ahead for M'sians - fuel price,food

PETALING JAYA: Malaysians will have to brace themselves for a higher cost of living in the coming months as the year-end seasonal monsoon brings about higher prices for fish and vegetables.

They will also have to cope with higher fuel prices, which has impacted the prices of goods given the higher transportation costs.

An early survey showed the median expectation for headline inflation, which includes volatile fuel and food prices, hovering at the 4.1% level in October.

However, official inflation numbers which will be released on Wednesday could even surpass the country’s inflation rate of 4.3% last September.

Meanwhile, food and non-alcoholic beverage prices increased by 4.6% y-o-y, second only to transportation costs.

Apart from the elevated fuel prices, the weak ringgit and the strengthening of domestic demand may have likely raised inflationary pressure in October.

The ringgit initially strengthened marginally by 0.4% in the first two weeks of October, but later slipped 0.34% to RM4.23 per US dollar by the end of the month.

Speaking to StarBiz, AllianceDBS Research chief economist Manokaran Mottain estimates that October’s headline inflation rate could range between 4% and 4.5%.

He also cautioned that inflationary pressure this month could be higher, given the continuous increase in RON95 and diesel prices, totalling 18 sen and 12 sen respectively over the first three weeks alone.

“The main cause for the expected higher inflation rate in October is the rising fuel prices. The trend is similar to what we have seen in the previous months.

“Higher transportation costs will contribute to higher food prices and this adds to the inflationary pressure. This month, it is likely for the headline inflation to be recorded at a higher level, as petrol and diesel prices have been on the rise,” he said.

Sharing a similar stance, Socio Economic Research Centre executive director Lee Heng Guie pointed out that the net increase in October’s weekly petrol prices exceeded September’s rise in fuel prices.

“The RON95 petrol price saw a net increase of four sen in October compared with only one sen a month earlier. Considering a low base effect due to relatively lower petrol prices in September last year, transportation costs in October could go up and push the inflation rate higher.

“I expect headline inflation in October to touch 4.4% y-o-y, but November’s inflationary pressure could moderate to around 4%, given the y-o-y high base effect. As for the full-year estimate, headline inflation is anticipated to hover around 3.9% y-o-y,” he said. Inflation was at 2.1% last year.

On the possible monetary initiatives by Bank Negara moving forward, Lee said the central bank was likely to engage in gradual monetary tightening in the first quarter of 2018.

This may involve a hike in the benchmark overnight policy rate by 25 basis points when the Monetary Policy Committee (MPC) meets in its next session.

Last week, in its last meeting for the year, the MPC gave its strongest signal yet that a rise in lending costs is likely as the domestic economy continues to strengthen.

UOB Kay Hian Malaysia Research economist Julia Goh also indicated a possible rate hike of 25 basis points next year.

However, she did not rule out the possibility of Bank Negara considering two rate hikes, provided growth prospects remained strong and demand-side inflation pressures picked up.

“While prices of goods have been rising, the government’s initiatives such as cash handouts, tax cuts and other forms of aid have helped to cushion the pressure on Malaysians’ purchasing power to an extent.

“Given the strong economic performance as seen in recent times, demand-driven inflationary pressure can be expected moving forward,” she said, adding that October’s CPI could rise by 4.3% y-o-y.


(The Edge Financial Daily) Rate hike to come on the back of a stronger ringgit

BY SUPRIYA SURENDRAN & CHESTER TAY

KUALA LUMPUR: The expectation of an interest rate hike next year is likely to be on the back of a stronger ringgit, with some economists predicting it could breach 4.000 to the US dollar in the next 12 months.

The local currency has strengthened 7.4% year to date against the US dollar — the second best-performing currency in Southeast Asia after the baht which gained 8.4% in the same period according to Bloomberg data. The ringgit closed at a fresh one-year high of 4.1610 to the greenback last Friday.

Barclays plc senior regional economist Rahul Bajoria is one of the few economists who predict the ringgit could hit the 4.000 to 3.950 mark, premised on stronger economic growth, international reserves and current account balances.

“We think the ringgit remains attractive and should continue to appreciate in the next 12 months. We like the currency based on [the country’s] strong economic growth, improving reserves and current account balances,” he told The Edge Financial Daily via email.

Deutsche Bank head of Asia macro strategy Sameer Goel pointed out that Malaysia’s balance of payments is sensitive to interest rate differentials, and it would be important to see the basis between global rates and those in Malaysia.

“We expect the same to narrow, as the US Federal Reserve is likely to hike rates in December and another three times in 2018. That said, the ringgit is cheap on the average of our valuation models, and so any likely fallout on the currency should be limited,” he explained.

MIDF Research chief economist Dr Kamaruddin Mohd Nor concurred, expecting the ringgit to appreciate gradually against the US dollar on the back of sustained positive macro conditions.

“Better commodity prices and positive fund flows will be impetus for a stronger ringgit at least in the near term,” he said.

RHB Research Institute Sdn Bhd chief Asean economist Peck Boon Soon noted that the rise in crude oil prices might help im-prove Malaysia’s trade surplus and support the ringgit.

Additionally, he said the central bank’s policy that requires exporters to convert 75% of their proceeds into ringgit would create demand for the local currency.

However, Peck believes that the expectation of an interest rate hike by Bank Negara Malaysia (BNM) has been factored into the recent appreciation of the ringgit. The ringgit touched a one-year high of 4.1745 against the US dollar last Wednesday.

“I don’t think the ringgit will strengthen much [after this]. Our house view is that it strengthened on the weakness of the US dollar because people were uncertain whether the US would raise [the] interest rate by the end of December as [the] inflation rate has remained quite subdued,” he told The Edge Financial Daily.

“People are also watching whether US President Donald Trump will push through his tax cut plan or not and so, that is probably holding back the strong US dollar. Towards the end of the year, you may see expectation building up again on the US interest rate hike, which may weaken the ringgit. We are expecting the ringgit to hit 4.22 against the US dollar at the end of this year,” Peck added.

Socio-Economic Research Centre executive director Lee Heng Guie is also of the view that a much expected hike in overnight policy rate is unlikely to push the ringgit and Malaysian bonds up significantly next year.

“I think a BNM rate rise is more or less factored into the ringgit and the local bond market. That’s because after the BNM hint of policy change on Nov 9, bond yield picked up immediately,” he said, expecting the ringgit to appreciate to the 4.000 level by end-2018.

(The Star) Johor mulls easing rules on foreigners buying homes

JOHOR BARU: Johor is prepared to relax regulations on foreign ownership of houses, and is looking into how it can be implemented.

Housing and Local Government Committee chairman Datuk Md Jais Sarday said the state was studying the possibility of providing incentives for developers to build homes costing between RM150,000 and RM400,000 for people who are in the mean income of middle 40 (M40).

He said that at present foreigners could only purchase houses which cost more than RM1mil.

“Maybe we can look at relaxing the requirements based on the size of the houses. We need to come up with a mechanism to address these issues including in the International Zones by early next year,” he said after attending the state-level Landscape Day celebrations at Sireh Park in Iskandar Puteri here yesterday.

He was asked to comment on a recent Bank Negara report on housing issues nationwide.

At present there are more than 80,000 units of unsold bumiputra property statewide. Unsold non-bumiputra property is estimated at about 40,000 units.

Md Jais also thanked local developers for doing their part in building affordable houses but wanted more houses to be built for those in the M40 bracket.

“We may need to provide incentives to developers to build such homes,” he said, adding that those in the M40 bracket were not eligible for homes below RM150,000.

On affordable homes, Md Jais said the state has a target to build 60,000 by 2020 and so far 15,000 have been completed.

“We cannot compromise on this as it is our target that needs to be achieved,” he said, adding that they were allocating 65% of affordable houses for bumiputras, 25% for the Chinese and 10% for Indians.

Md Jais said that in future there would be more promotions to publicise affordable and low-cost housing projects.

“If the bumiputra quota cannot be achieved, then we are willing to open it up to non-bumis,” he added.


(The Star) Carey Island port project to go on as planned

BENTONG: The Government will develop the Carey Island port as planned, contrary to reports that the project has been put on hold, Datuk Seri Liow Tiong Lai said.

The Transport Minister said the mega port project was vital as it would add another 30 million 20-foot equivalent units (TEU) in container throughput.

“Carey Island has always been in our plans to further expand Port Klang.

“With Northport and Westport, Port Klang can only handle 30 million TEUs of container cargo,” Liow said.

“Those who spread lies and fake news might have an ulterior motive,” he said.

Liow added that the Carey Island port would not just be a port but a port city, an encouraging and promising project for the nation.

Singapore’s The Straits Times had recently quoted a source familiar with the project that the Carey Island port development had been called off.

The Carey Island Port is a massive port-industrial city project, with infrastructure investments of more than RM200bil covering an area of over 100sq km – more than twice the size of Putrajaya.


(The Star) Klang third bridge named after 18th century warrior

KLANG: The new Klang third bridge is now named Jambatan Raja Muda Nala after the early 18th century warrior and Raja Muda Selangor.

The name was announced by Selangor Ruler Sultan Sharafuddin Idris Shah who launched the official opening of the bridge here yesterday.

The first two bridges in Klang are known as Jambatan Kota and Jambatan Musaeddin.

Raja Muda Nala was one of four children of the first Sultan of Selangor, Sultan Sallehuddin Shah.

Azmin said the 2.5km bridge, which costs RM199mil, links the northern and southern parts of Klang through Jalan Goh Hock Huat and Jalan Sungai Bertih.

Construction began in July 2014 and was completed in May this year.

“The opening of the bridge is expected to reduce traffic congestion in Klang by 20% and ease the load of Jambatan Kota and Jambatan Musaeddin,” he added.

At another function in Petaling Jaya last night, Sultan Sharafuddin launched the opening of the refurbished Kota Darul Ehsan arch.

The Ruler expressed his pleasure and gratitude to the Selangor government for carrying out the arch’s facelift project.

“The arch was opened in 1981. And after 36 years, it has been given a fresher and more pleasant appearance as the icon for the state.

“I am pleased with the outcome and hope that the people will treasure this landmark, the pride of Selangor,” he added.

Sultan Sharafuddin said the arch was constructed on Feb 1, 1974, following the creation of Kuala Lumpur as a Federal Territory.

“At that time, my late father Sultan Salahuddin Abdul Aziz Shah had decreed that an arch should be built to mark the border between the Fede­ral Territory and Selangor,” he said.

Situated along the Federal Highway, the Kota Darul Ehsan arch underwent a facelift from April 2015 to Sept 30 this year.

Among the changes carried out were the use of safe and lightweight materials for the carvings and motifs on the walls and pillars without compromising the safety of motorists or the original design. Work was also done on the arch’s flag poles, Selangor coat of arms and cannons and suitable colour schemes that reflect the image of Selangor were used.

Other upgrades included a special lighting system and planting of trees and shrubs around the arch.


(The Edge Financial Daily) ‘Brace for rate hikes next year’

(Subtitle) Most economists have pencilled in two increases in 2018

BY CHESTER TAY & SUPRIYA SURENDRAN

KUALA LUMPUR: As the Malaysian economy put its foot on the gas pedal in the third quarter of the year, the strong growth has given the central bank more flexibility to adjust interest rates. If this indication represents Bank Negara Malaysia (BNM) starting a rate rise cycle, a key question is how high will they go?

Most economists have pencilled in two rate hikes in 2018. UOB Malaysia senior vice-president of global economics and market research Julia Goh expects a 25 basis points (bps) overnight policy rate (OPR) hike next year, but said the odds of a second hike are high given Malaysia’s gross domestic product (GDP) growth coming in at 6.2% year-on-year (y-o-y) for the third quarter of 2017 (3Q17) last Friday.

The economy grew 5.8% y-o-y in 2Q17.

“We do not rule out the possibility of two rate hikes next year, provided growth prospects remain strong at least within the 5% to 5.5% range and demand-side inflation pressures creep higher,” she said in a note to clients last Friday.

When contacted, Goh said measures announced during Budget 2018, such as personal income tax cuts, the 1Malaysia People’s Aid and payments for the civil servants and retirees could result in a potential increase in disposable income of RM15.5 billion, that could increase private consumption by 0.6%.

“This provides continuous support for consumer spending even after one of the key stimulus measures announced last year expires, that is, when the Employees Provident Fund contribution rate normalises [back to 11% employee contribution from the optional 8% granted in recalibrated Budget 2016] at the start of next year,” she told The Edge Financial Daily.

Oxford Economics lead Asia economist Sian Fenner opined that while a second rate hike by BNM is not absolute, the first rate rise is imminent.

“We think that BNM is going to start normalising interest rates, following its recent monetary policy meeting where there was definitely a shift in its tone. This is broadly on the back of an optimistic outlook both in the domestic and external environment,” she told The Edge Financial Daily.

Fenner sees the central bank raising its benchmark interest rate 25bps in 1Q18.

“At the moment, we don’t think a second rate hike is off the table. We could see one later next year, but that would be more economic data determined — inflationary pressures coming through, a solid labour market, etc — that would definitely push for two rate hikes,” she said.

“Our view is that BNM could take a more gradual approach to normalising the interest rate,” she added. Malaysians are already grappling with a high cost of living, evidenced by inflation numbers that came in at 4.3% in September from 3.7% in August, due to rising fuel prices. A rate rise will spell some better news for savers, but would lift the national debt service, which already stood among the highest in Asia in terms of household debt at 85.6 % of GDP as at the first half of 2017.

Affin Hwang Investment Bank chief economist Alan Tan, who expects the OPR to be increased by 25bps towards the middle of 2018, is of the view that a rate hike is unlikely to have a significant impact on consumer spending.

“A 25bps hike in a way is a form of normalising the interest rate from a low level of 3%. We do not see that as having a significant impact on consumer spending.

“[Likewise,] we believe a 25bps hike will not change business sentiment. BNM is examining the current degree of accommodation of [monetary policy] and that’s also why we believe that the central bank would not hike the OPR anytime soon as it would want to assess where the economy is heading in the first half of next year. The decision on rate hike would be very much [economic] data dependent, especially in the first half of 2018,” said Tan.

“The market should not see this (the rate hike) as a form of significant tightening on monetary policy going forward as we feel BNM is still in favour of an accommodative monetary policy to support economic growth,” he added.

Barclays plc senior regional economist Rahul Bajoria, who sees one rate hike from BNM in 1Q18 — an expectation the firm has had since 2017, concurred.

“A 25bps rate hike will have limited impact on consumer spending. Household debt is an ongoing issue, but it has not risen as a percentage of GDP in recent years, which means it is contained,” he told The Edge Financial Daily.

“[As for businesses,] I think [they] have seen decent profitability growth, and a small rate hike would not make a dent to their funding needs or debt servicing,” he added.

Deutsche Bank Singapore managing director and head of Asia macro strategy Sameer Goel is looking at one rate hike from BNM next year, most likely after the general election.

“The headline inflation is high and the [3Q17] GDP growth is strong. Narrowing slack in the real economy poses upside risks to core inflation, which has so far been benign. Hence, it would be appropriate for the central bank to begin tightening its monetary policy,” he said.

MIDF Research chief economist Dr Kamaruddin Mohd Nor opined that all the ingredients for a rate hike next year are in place.

“A broad-based uptick in global growth and favourable domestic macroeconomic conditions are the main reasons behind the anticipated move, if any.

“The unwinding of the US Federal Reserve’s balance sheet is benign to the potential move. The recent rally in crude oil prices drove up headline inflation in recent months. Core inflation is expected to follow through with domestic demand starting to kick in, thus the hawkish tone by BNM,” he said.

On the local bond market, Aberdeen Asset Management research analyst (macro) Lee Jin Yang estimated that at least one rate hike has been priced in within the market.

“Should there be more hawkish rhetoric or strong economic data that increases expectations of a second hike, bond yield will increase accordingly,” he said.

The next monetary policy committee meeting is scheduled to take place on Jan 25 next year. BNM has left interest rates unchanged since a surprise reduction by 25bps to 3% in July last year.

Sunday, 19 November 2017

(The Star) New ways needed to measure impact of digital economy

KUALA LUMPUR: The impact of the digital economy on Gross Domestic Product has to be measured in new ways as conventional methods do not really take into account how the Internet has changed conventional thinking surrounding economics.

Tencent chairman of advertising SY Lau, a Malaysian, said recent discussions at the International Monetary Fund Fifth Statistical Forum showed that the potential conclusion with the digitalisation of modern economic activity, the validity of various classical arguments over the shortcoming in capturing the impact of the digital world was now magnified – with even greater implications than ever.

“Economists have to realise that the real value behind the concept of the digital economy has to do with the dawning era of digital civilisation that potentially might alter the way people communicate with one another, trade with one another, and even choose to define what and how humanity should value,” he said during his presentation at the forum in Washington DC on Thursday.

China-based Tencent is one of the world’s largest Internet companies.

“Official statisticians have a lot of work to do,” he said on the tweaks in calculations that need to take place in the future.

With the digital economy challenging traditional concepts of economic theory, Lau said perhaps there was an opportunity presented by the digital civilisation to fine-tune a better economic measurement for GDP.

“If there was any consolation, I would like to bring to the table for your consideration that GDP is not, and was never, designed to be a measure of a nation’s well-being.

“To sum up, for the paradox we face of GDP’s validity in the Digital Civilization, we may choose to address the issues from a developmental perspective and solve the problems through social development,” he said.


Saturday, 18 November 2017

(NST) Johor wants Rapid Transit System (RTS) project to proceed immediately


PASIR GUDANG: The Johor government wants the Rapid Transit System (RTS) project to be carried out as soon as possible following the Sultan of Johor, Sultan Ibrahim Sultan Iskandar's consent of the revised design of its alignment.

Menteri Besar Datuk Seri Mohamed Khaled Nordin said the ruler's agreement should be the basis to commence the project immediately as the new design would mean better connection between Bukit Chagar in Johor Baru and Woodlands in Singapore.

"The Sultan of Johor opined that if the (RTS alignment) followed the previous design, it will affect Johor Baru's skyline.

"His Majesty was of the opinion that the initial design should be revised; and this resulted in the federal government revising the design before it was agreed upon.

"That was all. The (revision) was not due to any material matters," Khaled told reporters after a ground-breaking ceremony for Phase 5 of the Johor Government Religious Schools project at SK Taman Bukit Dahlia here today.

He was commenting on Sultan Ibrahim agreement on the revised RTS Link alignment design as proposed by SPAD.

Among other things, the revised design of the rail alignment includes a 25m high bridge that will cross the Straits of Johor in a straight line.

The ruler had conveyed his agreement after granting an audience with SPAD chief executive officer Mohd Azharuddin Mat Sah and his senior management team at Istana Bukit Pelangi here on Tuesday, where they presented the ruler with several options for the project.

The alignment options took into account the suggestions made by Sultan Ibrahim during an earlier audience that the ruler granted on Sept 19.

In August, Sultan Ibrahim expressed his reservations on the previous design that was proposed for the RTS rail track, including an elevated bridge, linking Woodlands in Singapore and Bukit Chagar, Johor Baru.

Speaking during an exclusive interview with the New Straits Times Press group, Sultan Ibrahim said while he welcomed the project, he disagreed with the overall curve-shaped design of the track, as well as the plan to build the bridge as high as 30m above water in the middle section.

He was reported as saying that the bridge would disrupt the city skyline along the Johor Straits, adding the proposed curved design of the rail link, as well as the elevated bridge, was impractical, unsustainable and potentially costly.

In September, Minister in the Prime Minister's Department Datuk Seri Abdul Rahman Dahlan met Sultan Ibrahim to provide details on the RTS project and the ruler had expressed his views.

The RTS, which was announced by the Malaysian and Singaporean governments seven years ago, is expected to accommodate up to 10,000 passengers an hour in each direction between its terminus stations at Bukit Chagar and Woodlands.

On the Singapore side, the rail link will join the republic's Mass Rapid Transit at its upcoming Thomson East Coast Line (TEL), which will open in phases from 2019 to 2024.

Khaled said he welcomed the agreement for the design and wanted the project to be expedited for the benefit of Johoreans.

"The important thing is that we welcome the project. This (latest development) means that there is surety with its design and this should become the basis when both countries discuss the matter.

"We want the project to start soon so that it could help to ease the congestion at the Johor Causeway as it could cater to thousands of passengers when they travel either way.

"Johor Baru needs this. We have discussed it for a very long time, so we ask for it to start soon," said Khaled.

In this regard, Khaled hoped the people and all quarters will understand and be fair in their opinions towards the goverment because every project could not be simply expedited as issues such as design needed to be ironed out before contruction can begin.

(NST) New Pan Borneo Highway link to connect 700,000 people in KK


KOTA KINABALU: The sixth Pan Borneo Highway Sabah package will bring better connectivity to 700,000 residents here, reducing traffic congestion at rapidly progressing areas.

Launched by Prime Minister Datuk Seri Najib Razak, the RM900 million Package 6 dubbed the “Kota Kinabalu Outer Ring Road” will stretch from Putatan to Inanam, passing through the city.

"I was told Putatan and Inanam are progressing rapidly and congested. So, once this is completed in three years, it will help solve problems as the state continues to developed.

"This is what we called national transformation. When we want the nation to progress, we need to focus on people-centric infrastructure development like connectivity.

"This is to ensure smooth and safe movement of people and goods with no traffic congestion," he told a large crowd at the launching of Sixth Pan Borneo Sabah Package at the Putatan district council near here.

Present were Chief Minister Tan Sri Musa Aman, deputy chief minister Tan Sri Joseph Pairin Kitingan, Works Minister Datuk Seri Fadillah Yusof and Borneo Highway Project Delivery Partner Sdn Bhd (BHP) chief executive officer and managing director Shahelmy Yahya among others.

Describing himself as a Prime Minister for all, Najib said he had made sure to implement inclusive development concept so no states are left behind.

"We are not only a government that has vision towards the country and states but a political will to turn a vision into reality.

"Part of the visions is to ensure Sabah continues to develop because Sabah people have the right to enjoy a more meaningful development," he said to resounding cheers from the floor.

Najib stressed it was his responsibility as the country's top leader to step up and close any development gap between the peninsula, Sabah and Sarawak so everyone could enjoy a balance progress together.

"We can do projects but if we simply implement just for the sake of making projects, then there will be no significant transformation to Sabah.

"In many projects implemented, there is no bigger impact than the Pan Borneo Highway and I want allocations to reach the grassroots," he added.

He also noted on the strong cooperation between Federal and Sabah government, adding a faster development growth can be achieved when both parties share similar vision.

The Package 6 project, featuring a 19.1km stretch, will see upgrading work from single carriageway to dual carriageway on new alignment and bypass.

It also involves the construction of three new bridges (Sungai Moyog Bridge 1, 2, and 3), two overhead pedestrian bridges, 10 U-turn junctions and four bus stops.

The federal and state government have appointed BHP as the Project Delivery Partner to design, implement, supervise and manage the development and upgrading of the Pan Borneo Highway Sabah project, within the agreed schedule and costs.

In his speech, Musa said the Putatan stretch, being the main road to city center, was always congested and the government had in 2013 implemented project to upgrade and expand Putatan stretch to Petagas for smooth traffic.

"However, the people are still facing traffic congestion due to development in surrounding areas. The solution to this problem is Pan Borneo Highway as it guarantees effective, safe, and comfortable land connectivity system," he said.

He stressed Najib has proven himself to be a realistic leader, who works towards keeping his promises since the first launching of Pan Borneo Highway project until its implementation.

(The Star) E-ticket system at Larkin Sentral bus terminal

JOHOR BARU: Beginning next month, passengers taking express buses from the Larkin Sentral bus terminal can buy their tickets via an electronic ticketing system.

The central ticketing system (CTS), similar to that at Terminal Bersepadu Selatan (TBS) in Kuala Lumpur, allows passengers to make the purchase via kiosks.

While it would be convenient for passengers, bus operators are unhappy that they have to pay the Larkin Sentral management RM2 for each ticket purchased.

Johor Bus Operators Association president Datuk Suchdav Jotisroop said the 85 bus operators in Larkin Sentral had voiced out their dissatisfaction over the charges, which they were informed of two months ago.

“Operators are already paying between RM10,000 and RM15,000 monthly for each counter and we estimate that the operational costs can go up to RM30,000 each month after the RM2 charge comes into effect,” he said, adding that the charge would apply to all tickets purchased, regardless of the destination.

In addition to the ticket surcharge, Suchdav said bus operators would be charged RM7 per bus per entry into the bus terminal from December onwards.

“We do not mind paying the RM7 fee but we are proposing to the state government to intervene and allow the RM2 to be borne by passengers as they are the ones enjoying the services,” he said, adding that it would be better if the charge per ticket could be scrapped.


(The Star) Tourist monorail in Melaka to resume operations soon

MELAKA: The only tourist monorail in the country that circles Sungai Melaka here will resume operations in a month’s time after lying idle for four years.


Chief Minister Datuk Seri Idris Haron said the state government was making efforts to revive operations.

“The tourist monorail is a project that we cannot afford to ignore as a lot of money has been spent on it.

“The service will resume once engineers checking on the monorail give us the green light,” he said.

A year later, 18 tourists from Hong Kong, their tour leader and guide were also left stranded 300m from the Hang Jebat station.

This led to Land Public Transport Commission’s move to discontinue the service.

The China-made monorail line, spanning 1.6km from Taman Rempah in Pengkalan Rama to Kampung Bunga Raya Pantai along the Melaka River, was part of the state’s aim to draw more tourists.

The project is a joint venture between Melaka Historic City Council, state subsidiary Kumpulan Melaka Bhd and Agibs Engineering and Construction Sdn Bhd.


(The Star) Melaka announces plans for its first green city

MELAKA: The state will have its first full-fledged green city with the debut of Hang Tuah Jaya Green City project soon.

Chief Minister Datuk Seri Idris Haron unveiled the ambitious project in his speech to delegates at the International Union for Conservation of Nature (IUCN) in Bonn, Germany.

Idris said the state government launched the project in line with its aim to become a Green Technology state by 2020.

Among the state’s plans include concrete actions on waste and water management, energy efficiency as well as green transportation.

“Our efforts include increasing the number of energy efficient buildings through energy performance contracts (EPC) and installing over 300,000 smart meters under the Smart Grid Melaka Project in addition to the two existing solar farms with a total capacity of 13 megawatt.

“I also would like to extend my invitation to stakeholders in European cities and companies to become involved in Melaka’s electric buses fleet expansion plans,” he told the international audience comprising over 50 delegates.

The event was opened by European Commission’s Service for Foreign Policy Instruments director Hilde Hardeman and Global Issues at the European External Action Service managing director Lotee Knusden.

Idris said the state was not introducing new sustainable technology or systems, but instead, there would be a reconfiguration in governance to implement the changes.

He said fresh environmental policies were vital as Melaka moved towards becoming a Green Technology state and plans must be outlined for a better quality of life and that adequate resources apart from water and energy must be identified.

“Melaka has been taking solar energy initiatives and over the past few years we have seen a rapid growth in the usage of solar power.

“It is also imperative to have efficient water and waste water management systems in place to limit water leakages and minimise operational cost,” he said.

Idris also explained how Melaka converted from using High Pressure Sodium (HPS) to Light Emitting Diodes (LEDs) for its street lights.

He said the state also realised the importance for locals to adopt a sustainability mindset.

“We are continuously organising programmes to inculcate the need to adopt eco-friendly practices and products,” he added.

The event was closed Directorate General for Regional and Urban Policy chief adviser Dr Ronald Hall.


(The Star) Klang‘s third bridge a time-saving reality

It has been almost six months since Klang’s third bridge was opened to the public.

Despite wide media coverage on the opening of the RM199mil bridge, it seems that many people from the royal town are still unaware of the new facility.

The bridge which links Jalan Goh Hock (North Klang) to Jalan Sungai Bertih (South Klang) across the Sungai Kelang is the latest addition to the existing Jambatan Kota and Jambatan Musaeddin bridges.

Unlike the two earlier bridges that are situated in the middle of town and within 500m from one another, the still-unnamed third bridge is located a few kilometres away from the two bridges.

Likewise, Kapar, Meru, Shah Alam and Kuala Lumpur-bound motorists from Persiaran Raja Muda Musa and Port Klang can head to their respective destina-tions faster, especially during peak hours and weekends, which is often the case at Jambatan Kota and Jambatan Musaeddin.

Jambatan Kota is directly linked to the Federal Highway for motorists commuting from Persiaran Tengku Ampuan Rahi-mah (formerly known as Jalan Langat) and Persiaran Raja Muda Musa.

Traffic congestion at the Simpang Lima roundabout from Port Klang and Banting to Federal Highway continues to be a major issue, while Jambatan Kota until the flyover over the Berkeley roundabout in North Klang is another spot with chronic traffic congestion.

I have been caught in a traffic crawl in the city on several occasions and wondered whether the third bridge had helped reduce traffic congestion in the area.

Earlier reports claimed that the new bridge could reduce traffic by at least 30% from the two existing bridges. But based on my experience, the third bridge had failed to offer a solution to this prevailing problem in Klang.

Although statistics are not available, I was informed that the number of vehicles commuting on the third bridge had increased in recent months.

However, there is reason to believe that a substantial number of motorists in Klang are still unaware of the bridge’s existence.

Two months ago, I met a contact and asked him if he commuted on the third bridge to go to work in Port Klang from his house in Kapar.

To my surpise, he asked me if such a bridge existed as he had only heard about it being built in the near future.

Three weeks later when we met again, he told me that he was using the bridge daily to work and back.

“My travelling time has been cut by an hour daily as I save 30 minutes to and fro work. I do not have to get stuck in congestion anymore,” he said

Another friend, who stays in Jalan Kapar in Klang North, said he would use the third bridge whenever he was required to go to Port Klang, Pandamaran, Taman Gembira or Taman Chi Liung.

“I love to drive on the third bridge because there is no congestion,” he said.

The relevant authorities should put in more effort to promote the new bridge by distributing flyers and putting up billboards and signage to inform motorist that they have a good alternative route.

If not, the bridge may lose its significance while Klangites continue to get caught in traffic congestion that could have been avoided.


(The Star) Real estate agency still sees strong interest and confidence

Penang's residential property transactions is expected to experience more than 5% contraction this year compared to 2016.

Raine & Horne Malaysia senior partner Michael Geh tells StarBizWeek he is projecting a more-than-five-percentage dip in residential transactions in 2018 although there is “still strong interest and confidence” in Penang.

The first half of 2017 saw residential volume of 5,697, compared to 6,698 in 2016, a drop of 15%.

“The value of transactions for residential homes in the first half of 2017 was around RM2.45bil, compared with RM2.65bil in 2016’s first half,” Geh says.

“The contraction is slight, which shows that there is confidence still in the local property market,” he adds.

Following the recent Penang floods, he expects fewer projects to be launched in 2018 as developers redraw strategies while awaiting new housing guidelines from the state. This is particularly for those areas near hills and in flood prone zones.

“All this could slow down property transactions over the next 12 months. We may even prices drop below market price near hill slopes and in flood prone areas. This could happen if sellers are determined to let go of their properties,” Geh adds.

Depending on the stringency of the guidelines, he says the cost of developing projects near the hills could be very high as a result of new safety measures imposed.

“Demand for properties on flat grounds would rise, pushing up prices for such properties. Buyers would be extra cautious with hill slope/flood prone areas. This is another factor that could contribute to slower and lower transactions.

The sub-sale price of high-rise properties on the island has either stagnated or contracted slightly since 2014.

In Tanjung Bungah, current prices are between RM720,000 and about RM1mil, depending on the size and location.

In Batu Ferringhi, it is between RM620,000 and RM820,000 for a high-rise unit, while the selling price of a detached landed property could range from RM2mil to RM2.7mil, depending on size and location of the properties.

In Paya Terubong, a high-rise unit was transacted between RM230,000 and RM435,000. In Jalan P. Ramlee, the selling price of a high-rise unit may have a wide range of between RM125,000 and RM405,000.

Henry Butcher Malaysia (Seberang Prai) Sdn Bhd associate director Fook Tone Huat says the floods affected some of the more popular locations.

“The demand for properties in these areas is likely to be impacted during this transitional period as Penangites try to get back to routine.

“However, after a period of time, coupled with the remedial actions taken against the floods, buying interest will normalise,” Fook says.

These include locations in central Seberang Prai such as Sungai Rambai and Padang Lallang, Juru and part of the Alma areas. In north Seberang Prai, the popular area of Sungai Dua has also been affected.

Landed terraces in Taman Pauh, Taman Sejahtera and Taman Bayu Mutiara have risen by between 26% and 29% since 2014, when the slowdown started.

In north Seberang Prai, the pricing of landed terraces has risen by 11% to 33% since 2014.

Land prices in central and north Seberang Prai are now priced between RM50 per sq ft and RM130 per sq ft, about 5% to 10% higher than in 2014. The increase in land costs has translated into higher prices.

“New double-storey terraced units in south Seberang Prai are now priced between RM400,000 and RM500,000, which is 5% to 10% higher than in 2014.

“Double-storey terraced houses in prime locations of central and northern Seberang Prai have also increased by 5% to 10% to RM450,000 to RM650,000,” he adds.


(The Star) Economist looks at housing as more than just a roof and a floor

Housing and the other segments of the property sector make up an important part of the economy.

Its influence goes beyond just a share of the national economic pie or how much loans the sector is generating for financial and lending institutions.

Amid the current issue about affordability, ironically there is today the issue of completed but unsold units.

Socio Economic Research Centre executive director Lee Heng Guie looks at housing, which has gone beyond just a roof and a floor:

Napic has just announced overhang units to the tune of RM12.26bil, up from more than RM8.5bil as at the first half of 2016 and RM4.9bil for 1H2015. Besides the Napic explanation of a mismatch of price, location and type of property, is there any other issues why the overhang continues to grow even among prices less than RM500,000, although RM500,000-RM1mil segment form the bulk of the overhang.

It’s also about income-price affordability. For households with monthly income of between RM6,000 and RM7,999 and between RM8,000 and RM9,999 respectively, the affordable house price ceiling is RM408,500 and RM493,500 (based on Housing Cost Burden approach which deems it is affordable if housing costs are within 30% of net monthly income).

In 2016, the mean income of middle 40 (M40) household was RM6,502 per month, meaning that the household can only afford to buy houses costing between RM350,000 and RM400,000.





Buyers remain cautious, and sentiments are weak on concerns about the employment and income stability as well as economic prospects.

Buying property is a long-term commitment, and hence, the buyer must have good financial planning before committing to a big ticket item.

While the economy has performed better than expected this year, the “feel good” sentiment was not fully felt as rising prices of goods and services as well as higher cost of living had dampened income growth.

We are still lacking a sense of confidence that the economy is really gaining ground.

Perhaps, it takes some time for consumers to convince themselves that the weak economic environment has stabilised and gained momentum. The ringgit is stabilising.

Why is there this huge difference of opinion between a property crash after Chinese New Year 2018 and the other bullish view that China’s Belt Road initiative will help to drive more investments, and more need for top grade office space and residentials in Malaysia?

Everyone is entitled to his own opinion, based on rational assessment and fundamental analysis.

Malaysia’s residential property sector has been consolidating for a couple of years since late 2014. Overall house price index, which measures aggregated price indices for all types of residential properties have moderated for four consecutive years to 6.9% in 2016 from 11.0% in 2012.

The house price index remained stable at 6.9% in the first half of this year.





Residential property transactions volume continued to decline by 7.0% year-on-year (y-o-y)-to 94,992 units in the first half of 2017, albeit slower when compared to a sharp drop of 13.9% in 2016 and -4.6% in 2015.

In terms of value, residential property transacted value rose marginally by 0.5% y-o-y to RM32.85bil in the first half of 2017 after contracting by double-digit rates of -10.5% and -10.7% in 2015 and 2016.

Looking at current and forward market and economic conditions, the probability of a crash in the property market is small. Intervention policies have already been introduced to reduce financial stability risks associated with high household debt (at least 50% for the purchase of residential property).

Property prices are still growing but at a more moderate pace, thanks to the macro-prudential and property cooling measures. The well-contained property overheating risk market environment would shelter the sector from the negative spillover if there is economic or financial shock.

On the economy, the global economy is expected to continue growing, underpinned by a broadening recovery in advanced and emerging economies.

Our domestic economy is expected to grow decently by 5.1% in 2018, supported by the 2018 Budget’s pro-growth, investment and consumption measures and initiatives.

The unemployment rate is estimated at 3.3%-3.4% in 2018. Retrenchments totalled 18,539 persons in the first half of 2017 and retrenchments are expected to be milder compared to high retrenchment of 38,499 persons in 2015 and 37,699 in 2016.

The risk factors that would dampen buyers’ sentiment is the expected small rise in interest rate, rising cost of living, lower income growth and job loss.






(The Star) Rentals expected to grow moderately with lower demand

There seems to be a great divide among property professionals as to the state of the market.

Early this week, a valuer commented on a news portal that a crash is imminent “after the Chinese New Year in February or later”.

More than a week ago, property consultancy JLL Property Services (M) Sdn Bhd, which only focuses on top grade office space and residentials, said in a breakfast talk “Malaysia Real Estate Market – A bright future ahead?” that Malaysia remains the most attractive residential market in South-East Asia.

JLL Malaysia country head Y.Y. Lau said: “The residential market is set to stabilise and improve. The decrease in supply in Kuala Lumpur’s prime area and improvement in the economy is expected to pull capital values up for residential properties in prime areas.”

Early this week, valuer Ernest Cheong suggested Malaysian consumers should not commit themselves to buying a house because “prices will fall from RM500,000 to RM300,000”.

So there is Cheong who is telling buyers to hold their horses, and JLL’s team, who is brimming with optimism.

The divergence of views came at about the same time as the launch of the Property Market Report First Half 2017 by the Valuation and Property Services Department on Nov 13.

Granted that these figures are a few months late, they give concrete evidence as to the state of the market five months ago.

Although the Malaysian economy posted a better than expected growth of 5.6% in the first quarter of 2017 and a higher growth of 5.8% in the second quarter, these positive numbers have not filtered down to the property market.

According to the latest report, the property market “has yet to make a comeback”.

There is a relationship between these economic indicators and the property sector. If the economy is good, generally the property sector should be also. This does not seem to be the case however.

According to an industrial source, the third quarter numbers are “not that good” either.


(The Star) The retirement conundrum

Govt may need to look at measures to mitigate the impact of the sudden influx of retirees

Next year, about 100,000 workers who should have retired at 55 in the second-half of 2013 will finally leave the workforce at 60 years old.

In other words, after a period of five years where zero mandatory retirement took place – within the private sector at least – we will have some 100,000 workers leaving their jobs.

Recall, within the private sector, the retirement age was upped to 60 from 55 in 2013, when the Minimum Retirement Age Act kicked in.


Exactly, what kind of implications can be expected from the sudden influx of retirees? Equally important, what are some of the measures that can be taken to mitigate the negative impact, if any?

Malaysian Employers Federation executive director Datuk Shamsuddin Bardan says firstly, this will result in the re-opening of the replacement market, which has not been available in the last five years – but only to a certain extent.




The increase in Malaysia’s official retirement age is viewed as a reflection of the longer lives that Malaysians are experiencing compared to years ago.



“Every year, there are about 200,000 new graduates entering the job market with another 300,000 school leavers also entering the workforce, but this (retirees leaving their jobs) may not necessarily translate into increasing chances of these graduates getting jobs.

“Companies have become very careful in hiring now, and they may not fill up the positions (that the retirees will leave vacant) due to the prevailing weak economic conditions,” Shamsuddin tells StarBizWeek.

Will this affect productivity?

Yeah Kim Leng, a professor of economics at Sunway University Business School, says whether or not productivity will be affected is more company-specific than anything else.

“Companies will need to weigh out the cost versus benefit in their hiring decisions,” he says.

Having said that, it is difficult to quantify intangible costs and benefits.

The current unemployment rate in Malaysia stands at about 3.5%, translating to about 600,000 people being unemployed.

'The issue is whether or not the young ones have the skill sets required. If yes, they can be easily absorbed into the job market.' - Manokaran Mottain





At 3.5%, Malaysia is ahead of the Philippines and Indonesia, which have unemployment rates of about 5.5%, but behind Singapore, Thailand, Cambodia and Brunei, which are at about 2%.

The move to increase Malaysia’s official retirement age to 60 for the private sector some four years ago was seen as timely and in line with the retirement trend in the other countries within the region.

In Singapore, for instance, the minimum retirement age according to the Retirement and Re-Employment Act is 62 years.

The increase in Malaysia’s official retirement age was also viewed as a reflection of the longer lives that Malaysians are experiencing compared to years ago.

According to latest available data, life expectancy at birth for Malaysians is 72.5 years for males and 77.5 years for females. This is an improvement from 2010 when male life expectancy was 71.9 years while for females, it was 76.6 years.

Ageing population

Even so, this has brought about another emerging issue – an ageing population, exacerbated by a decreasing fertility rate.

According to Yeah, who is also an external member of Bank Negara’s Monetary Policy Committee, Malaysia already has a sizeable group of individuals aged 65 and above who make up 7% to 8% of the entire population.

By 2020, he reckons the number will hit 9% and by 2030, Malaysia could be an aged country with some 15% of people aged 60 and above.



'The retirees leaving their jobs may not necessarily translate into increasing chances of the graduates getting jobs.' - Datuk Shamsuddin Bardan





“The question is whether the retirees have enough retirement savings,” Yeah says.

To be sure, although the mandatory retirement is at 60, the Employees Provident Fund (EPF) withdrawal is still maintained at 55.

“What this (ageing population) could also mean is that the dependency ratio, which measures the number of dependants one has, will start to increase and on a macro level, this could pose a greater burden on the overall economy.”

According to Yeah’s back of the envelope calculations, to retire comfortably in the Klang Valley, one would need about RM5,000 a month, RM60,000 year or a total of RM1.2mil just for living expenses, assuming one lives to about 80 years old. This is also on the assumption that there are no more debts to be serviced.

“If the lower-income people under the B40 category can move toward the middle-income group (M40), the financial burden of those who are being depended on will lessen as time goes by.”

According to Socio Economic Research Centre executive director Lee Heng Guie, the demographic shift towards a higher proportion of ageing population which he describes as “unprecedented”, threatens to impact productivity, economic output and economic welfare which requires social, political and economic change at all levels.

Firstly, the vast numbers of experienced workers who retire from the labour force will cause capital to become scarce and result in reduced savings in pension funds, Lee says.

However, Sunway’s Yeah says that pension funds like the EPF already have surplus savings, which means that this is hardly an issue.




'While the EPF and private pension scheme provide retirement income buffers, are they sufficient?' - Lee Heng Guie





Neverthless, Lee concurs with Yeah, saying that low birth rates and an aged society mean a higher dependency ratio where the younger generation will need to support the aged society.

“This, coupled with rising healthcare costs and other related aged-care expenses, will divert resources for consumption and spending,” Lee says.

AllianceDBS Research chief economist Manokaran Mottain says from a company’s perspective, the ones that are over-staffed may take the opportunity to stop hiring or hire selectively once the retirees leave.

“The issue is whether or not the young ones have the skill sets required. If yes, they can be easily absorbed into the job market,” he says.

AmBank group chief economist Anthony Dass thinks that the current retirement age of 60 should be increased further, given the increasing life expectancy and the issue of the lack of skilled workers.

“I feel raising the retirement age is very beneficial, as it leads to higher tax revenue and consumer spending. The main problem with this policy is that it will be highly unpopular, especially with those who are nearing retirement age,” he says.

Anthony says there should be a focus on staggered retirement by having a scheme that allows older workers to work fewer hours but remain in the labour force.

“If the individual is unable to take advantage of this staggered work due to health or any other reason, then the Government should look at voluntary work.

“I feel such an avenue will benefit both the economy and the social environment, taking some pressure off the aged.”






Lower costs for companies?

At a glance, it may appear that costs for companies will go down once this group of retirees vacate the labour force.

But observers point out that while costs may come down at some companies, this may not be necessarily true for all.

New hires within the areas of e-commerce, ICT and other high-end services can cost more than the cost of hiring those who have retired.

“Take, for instance, the banking industry. While the retirees may leave, it may cost more to hire those with specialities in the newer areas of banking like fintech and so on. Costs may even go up in some cases,” Yeah says.

Still, for government-linked companies, on the whole, they should see a relatively significant reduction in overall costs, as these firms tend to have large numbers of long-serving employees, says Manakoran.

Pension bill

Within the civil service, the pension bill next year is expected to rise to RM24.55bil or 10.5% of the federal government’s operating expenditure (opex).

This figure surpasses next year’s expected petroleum revenue of RM11.45bil.

As comparison, in 2014, the pension bill stood at RM18.22bil or 8.3% of the federal government’s opex.

It goes without saying that the higher pension bill will put a strain on the government’s coffers.

Public healthcare is another issue.

With increases in private medical bills outpacing the general inflation rate each year, retirees may have no choice but to turn to public healthcare services when they are sick, especially for those who are not adequately insured.

In March this year, Health Minister Datuk Seri Dr S. Subramaniam was quoted as saying that health spending per capita in Malaysia has increased by as much as two and a half times within 17 years, that is from RM641 in 1997 to RM1,626 in 2014.

Additionally, a recent study by Swedish reinsurance company Swiss Re reveals that Malaysia could face a potential shortfall in the financing of healthcare amounting to US$4.1bil (about RM17bil) by 2020.

This suggests that additional fiscal spending may be needed, or individuals may need to fork out for the shortfall on their own.

The Socio Economic Research Centre’s Lee says that the change in demographic trends accompanied by the rising number of retirees in both public and private sectors and longer life expectancies will impinge on the future budget burden.

He notes that public servants’ retirement charges grew 12.5% per year in 2000-2017. The number of retirees, meanwhile, has increased by 3.7% per year to 765,420 persons at end-2016 from 660,907 persons at end-2012.

Because the cost associated with retirement charges has been increasing, the expenditure on pensions increased from 7.6% of the Government’s total opex and 7.2% of total revenue in 2010 to 10.8% and 10.5% of total revenue, respectively, in 2017.

“It is, therefore, fiscally unsustainable for the Government to continue on this path, given that other committed expenses such as emoluments and debt service charges also take the lion’s share of opex,” Lee says.

Lee also says that it is about time to consider a phased migration from a defined-benefit to defined-contribution pension scheme for public servants.

There is also the question of how to work out a sustainable retirement income and pension scheme for older employees.

Lee asks: “While the EPF and private pension scheme provide retirement income buffers, are they sufficient?

“The Government needs to actively support older workers and ensure that they have sufficient savings toward retirement.”

For example, he says the EPF can consider giving an additional dividend of 1% on the first RM50,000 of accumulated EPF savings for employees aged 50 years and above.

“Employers may pioneer a flexible private retirement scheme, which allows employees to reduce working hours and claim part of their pension while continuing to accrue further pension entitlements for when they fully retire.”

Other policy changes that could be considered include a higher EPF contribution by employers for older employees, which most companies at the moment have capped at a fixed rate, along with a lower EPF contribution rate by the employee.

Still other measures to address the issues include altering health insurance and critical illness policies to cover the higher risks as people age, he adds.

“The health implications of an ageing population are double-edged. Not only are Malaysians living longer but they are also getting healthier.”

Going forward, healthcare expenditure and aged-care funding will rise further, continuing to burden the Government’s fiscal finance conditions, households as well as increased out-of-pocket expenses for the elderly, Lee admits.

“As such, both public and private healthcare financing have become one of the pressing policy issues that need to be critically looked at.

“Perhaps, a private-public funded healthcare medical and insurance fund is worth exploring based on the principles of equitability and affordability,” he says.