Saturday, 30 September 2017

(NST) Eco World launches 5 projects at once - in Penang and Klang Valley

SETIA ALAM: Eco World Development Group Bhd (EWDG) today, simultaneously unveiled five projects in Penang and the Klang Valley.

They are Eco Forest and Whitten @ Eco Majestic in Semenyih, Eco Business Park V in Puncak Alam, Dremien @ Eco Ardence in Setia Alam and Eco Horizon in Batu Kawan, Penang.

EWDG president and chief executive officer Datuk Chang Khim Wah, together with the company’s divisional general managers Datuk Hoe Mee Ling, Ho Kwee Hong, Evon Yap and Liew Tian Xiong, officiated at the nationwide launches today in their respective show galleries within the Klang Valley.

“We’ve received positive feedback and strong support from homebuyers and property investors,” said Chang.

“We’re confident that we will do well again. Detailed sales including total units sold across these five projects will be announced in the current year results ending October 2017,” he told reporters at the sidelines of Dremien @ Eco Ardence launch here today.

The second residential phase at Eco Ardence in Setia Alam called Dremien comprises 259 units of garden homes, semi-detached houses and bungalows with a gross development value of RM290 million.

The garden homes have built-up area of 2,401 sq ft to 2,411 sq ft, the semi-detached houses occupy 2,530 sq ft to 2,724 sq ft and the bungalows are being built in plots measuring 3,101 sq ft to 4,917 sq ft.

Prices of the garden homes start from RM1.4 million while the semi-detached houses and bungalows are from RM1.6 million and RM2.4 million, respectively.

The 533-acre freehold Eco Ardence, which has a gross development value of RM8.5 billion, is being developed over the next 10 to 15 years.

In Semenyih, EWDG debut its first phase in Eco Forest within the Ebonylane precinct. It features 685 units of 2-storey terraced homes in two designs, namely Artisan and Garden, starting from RM600,000.

Artisan homes are available in three sizes — 20ft by 65ft, 20ft by 70ft and 22ft by 70ft — while the Garden homes are all 30ft by 62ft. Phase 1 comprise 300 units.

Eco Forest spans across the 515-acre freehold tract and has a gross development value of RM3.5 billion.

EWDG also unveiled its first business park in the Klang Valley, named Eco Business Park V, which carries a gross development value of RM3 billion.

This is the fourth Eco World Business Park project in Malaysia. This 518-acre leasehold development is a joint venture with the Employees Provident Fund Board.

It offers around 100 cluster or semi-detached factories to business owners with an indicative selling price starting from RM1.88 million and RM3.33 million, respectively.

Up north, EWDG will be launching the first phase of landed homes in its 300-acre Eco Horizon township in Batu Kawan, Penang. Eco Horizon will be the first gated-and-guarded development in Batu Kawan.

Named Ashton, the first phase will comprises 2-storey terraced homes, super-linked homes and garden homes.

With built-up area ranging from 2,290 sq ft to 2,601 sq ft, the average price of units in phase 1 is RM940,000. Ashton consists of 704 units, of which about half is open for sale starting today.

In total, EWDG has about 8,052.7 acres of landbank in Malaysia with a total gross development value of RM87.5 billion.

This housing developer, which is fast popularising stratified living in its gated and guarded townships has 20 ongoing projects in the Klang Valley, Iskandar Malaysia and Penang.

(The Star) Sarawak keen on Estonia’s digital infrastructure

KUCHING: Estonia’s digital infrastructure is a good model for Sarawak’s statewide multimedia and communication infrastructure development, said Datuk Patinggi Abang Johari Tun Openg.

The Chief Minister, who is in Estonia for a study visit, said the Baltic country’s model offered a workable solution for Sarawak in providing the fast Internet speed and penetration crucial for the development of a digital economy.

He said this after being briefed on various e-government initiatives at the Estonian E-Government Academy (eGA) in Tallinn.

Of particular interest to Abang Johari was the service made available by three main service providers, supported by 23 smaller local providers throughout Estonia. He noted that this had triggered Estonia’s drastic rise as a digital economic power in Europe.

Another aspect he found worth considering was the provision of underground fibre optic network ducts along public roads in Estonia which made 4G Internet services easily available in all parts of the country, where an increasing number of businesses were migrating to a digital transaction platform.

Abang Johari also paid a courtesy call on Estonia’s deputy foreign affairs minister Vaino Reinart.

Abang Johari as accompanied by Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan, State Secretary Tan Sri Morshidi Abdul Ghani, Assistant Urban Planning, Land Administration and Environment Minister Datuk Len Talif Salleh and Malaysian Ambassador to Finland Puan Sri Blanche Olbery.

In the meeting, Abang Johari said his visit to eGA had aroused the state government’s interest to collaborate with Estonia in many areas vital for transforming Sarawak into a digital economy.

He said he was particularly impressed with Estonia’s e-payment system that was widely used in commercial, business and public service transactions.

“We hope we can collaborate with Estonia in developing a similar e-payment platform to be launched in Sarawak, called Sarawakpay,” the Chief Minister said.

He also expressed the state government’s interest to cooperate with Estonia in biodiversity research and development.

(The Star) Bike-sharing not catching on yet

Many people may not be aware that Kajang Municipal Council (MPKj) has been having a trial run of oBike’s bicycle-sharing system in Bandar Sungai Long.
The discussion of oBike’s trial run in Bandar Sungai Long came up at the council’s monthly fullboard meeting yesterday.
According to MPKj president Mohd Sayuthi Bakar, the council had been testing the waters with oBike over the past two to three months but response from the public was disappointing.
Bandar Sungai Long was chosen for the trial run because of its bigger population of university students living there, but Mohd Sayuthi said most students already owned vehicles.
“We have not officially launched oBike here, but we have had discussions with the company,” he said, adding that MPKj had plans to develop bicycle lanes in the future.
He also commented that Malaysians were always eager to have modern amenities such as those in countries like the United States and Japan, but many lacked the civic-mindedness to use these amenities responsibly.
“People need to be disciplined. If they take an oBike, they need to return it to the proper place,” he said.
Mohd Sayuthi also announced that MPKj had appointed a new specialised enforcement team of 25 attendants, whose duty was to carry out enforcement operations in paid parking zones.
Clad in white and blue uniforms, they will begin their rounds on Oct 2, covering 19,527 paid car parking spaces across Kajang.
These parking attendants will have the power to issue summonses to owners of improperly parked vehicles. However, they lack the authority to tow vehicles away and will be working closely with the council’s main enforcement team for such scenarios.
To make things convenient for motorists in Kajang, they can choose to invest in a monthly parking pass (RM74.20, inclusive of 6% GST) instead of purchasing parking coupons each time.

(The Star) What drives Socso

When one thinks about the Social Security Organisation or Socso, what comes to most people’s mind is the monthly cut from between RM10 and RM69 in their payslips.

But there is more to that. While the fund is not a big name in the investment scene today, Socso is changing its image under the current management.

Chief executive officer Datuk Dr Mohammed Azman Aziz Mohammed and chief investment officer Dr Suzana Idayu Wati Osman are reshaping Socso’s investment strategies and roles.

Socso has close to RM26bil in its coffers, and this figure is growing every year, basically from members’ contributions and investments.

When StarBizWeek caught up with them at the Socso headquarters in Jalan Ampang, both Azman and Suzana were eloquent and enthusiastic in explaining the details that will map Socso over the next five years.

Here are excerpts of the exclusive interview:

Socso was set up in 1971 to provide social security protection for the Malaysian workforce. What has changed since then, and what are the challenges faced by Socso?

Azman: After 46 years of providing employees and their dependants with social security protection, Socso had undergone a lot of changes especially in terms of improvement in social security coverage and benefits as well as human capital development to provide better social safety net to employees and their dependants.

For example, in 2016, Socso Prihatin Squad was established in all Socso offices throughout the country to intensify efforts to help eligible contributors facing contingencies with their claims for Socso benefits.

Meanwhile in June 2017, Socso expanded its coverage with the introduction of Self-Employment Social Security Act 2017 to provide a social safety net for the self-employed.

Currently, the scheme is for self-employed taxi drivers or those providing similar services such as Grab and Uber drivers. The Government has the intention to extend the scheme to workers in other informal sectors in the future.

Suzana: Socso’s payout increased gradually with the provision of more benefits to the insured persons and their dependants. However, the contribution rate remains unchanged since 1971.

One of the main challenges is to match the growing payout requirements in a low-yield environment.

Why does Socso want to take on a more aggressive stance for its investment activities?

Azman: Socso does not engage in a more aggressive investment strategy as perceived by the public. In fact, we are actively diversifying our portfolio in order to achieve optimal asset allocation that can sustain our investment performance over the long long term. We diversify our investments not just based on asset classes, but also on regional exposure.

But we can’t just rely on the contributions alone. The fund is growing, but our compensation payment to our members are increasing at a faster rate compared with 10 years ago. Hence, we need to improve our returns so that it is sustainable over the long-term

Suzana: Our focus previously was more on the operations, not so much on investment strategy. We also follow the footsteps of the other big institutional investors in diversifying their portfolio to increase returns.

The rate of benefits payout is gradually outpacing the contributions. Hence, the investments part is now getting higher attention in ensuring reserves are built-up over time, without taking unnecessarily high risks in its portfolio management.

Dr Azman, you started your career as a medical doctor. What made you change your career?

Azman: I did not change my career. I have been a doctor and I will always be a doctor. I still remember the oath I have taken as a young doctor, ‘I will prevent disease whenever I can, for prevention is preferable to cure.’

So as an occupational health physician, I am still practising what I have learnt and applying it to Socso. The principles are the same; as Socso is about protecting people, and by nature that is the doctor’s job.

I am now in a position where I can place prevention policies to protect the workers from diseases as well as traumatic injuries caused by accidents.

What is Socso’s outsourcing programme to external fund managers?

Suzana: Socso has both global and domestic mandates for both equity and fixed income. Currently, fixed income external fund managers only apply for domestic mandates.

Where do you think the local market is heading to for this year?

Suzana: Stock picking is key in this market and we believe there is still growth in the equity market. But of course, at the end of the day, the equity market needs to be supported by corporate earnings,

Although the market has done very well since January this year, the FBM KLCI still has some upside from current levels. We see limited downside risk despite the disappointing second-quarter corporate results.

Among the factors that will continue driving the local market will be the resilient economic growth and the boom in infrastructure projects.

It has been reported that almost half of the workforce is in the informal sector, and they are not entitled to many perks like companies’ employees, including monthly contribution to Socso. What are some of the initiatives in the pipeline to capture this fast-growing workforce?

Azman: To become a high-income developed nation, among others it is imperative for Malaysia to extend and expand its Social Security programmes. Hence, the Self-Employment Social Security Act or Act 789 was passed by Parliament on August 27, 2017.

The new Act demonstrates the Government’s commitment to extend social security coverage to the informal sectors.

As a start, the Act, through the Self-Employed Employment Injury Scheme provides coverage for taxi drivers and individuals offering services of similar nature including e-hailing services such as Uber and Grab.

The informal sectors are huge and it is loosely regulated. There are close to 2.4 million workers in the informal sectors of Malaysia covering a wide breath of economic activities such as entertainment services, agricultural services, petty and night market traders, coastal fishing services, professional services and others.

(The Star) Socso to improve investment returns

Social security fund needs to keep up with growing liability

A unique feature of the Malaysian capital market is the strong presence of local government-linked investment funds.

There are seven major government-linked investment companies (GLICs) with total assets under management worth more than RM1 trillion and this is still growing.

GLICs, which in recent times have been known for their prowess in money management, have been upping the ante in their investment strategies by taking on alternative assets such as private equity (PE), infrastructure assets and even taking part in property development projects.

One name that is rarely heard of is Social Security Organisation or Socso, a fund with a considerable size close to RM26bil.

Socso was formed as a government department of the Labour and Manpower Ministry on Jan 1, 1971.

It is entrusted with the administration of two social security schemes, namely the Employment Injury Scheme and the Invalidity Scheme.

Good returns: Dr Suzana and Dr Azman spell out Socso’s strategies to generate steady investment returns.

The Employment Injury Scheme provides protection for employees against contingencies, including occupational diseases and accidents that occur while travelling in the course of employment.

The Invalidity Scheme, on the other hand, provides 24 hours coverage against invalidity or death due to any cause.

The objective of both schemes is to guarantee cash payment and benefits in kinds to employees and their dependants in the event of a contingency.

Meanwhile, GLICs such as the Employees Provident Fund (EPF) and Retirement Inc Fund (KWAP) cater for retirement and pension.

Both funds have since last year set aside more money for riskier investments, including increasing their allocation to the PE sector and infrastructure assets. This is a worldwide trend, where even conservative portfolio managers are now embracing bigger risks to bolster performance.

Socso has so far invested about 20% in equities, 56% in fixed income instruments and 3% in real estate.

Its plan is to bring the equities portion up to 28% by 2020 as well as diversify into property and PE, under its new investment strategy blueprint.

The need to improve its investment returns is very much to keep up with its growing liability, which is more than RM3.5bil annually.

“We are building up our reserves more effectively to meet the increasing payout requirements, contributions alone is not enough to sustain,” says Socso chief executive officer Datuk Dr Mohammed Azman Aziz Mohammed.

Not all eggs in one basket

To keep up with the growing bill, Azman reckons that Socso must generate steady investment returns.

“We can’t just rely on the contributions alone. The fund is growing, but our compensation payment to our members are increasing at a faster rate compared with 10 years ago.

“Hence, we need to improve our returns to ensure that it is sustainable a long term period,” he says.

Under the five-year investment strategy blueprint, Socso aims to achieve returns of between 5% and 6% annually until 2022.

In 2015, Socso generated a 4.5% yield from its investment of which almost 82% of its funds were in bonds and the money market, while the remaining 18% were in equities.

Socso chief investment officer Dr Suzana Idayu Wati Osman says the main focus of the investment strategy is to achieve better and sustainable returns.

“We are deploying what we have in the money market into equities, fixed income, and other assets. We could generate higher income, by diversifying our portfolio across different asset classes and global exposure,” she tells StarBizWeek.

“Our focus previously was more on the operations, not so much on investment strategy,” she says. “On the investment side, we are also following the footsteps of other big institutional investors in diversifying their portfolio to increase returns.”

In 2015, almost 12% of Socso’s fund was in the money market, which yields approximately above 3%.

Suzana says the investment blueprint, which was launched earlier this year, has shown some positive results for this year’s fund performance.

After a lull of more than three years, the FBM KLCI has gained as much as 9% so far this year, which is a boon for local institutional investors.

The bull run since the beginning of the year has recently subsided due to the increasing trend of geopolitical risks as investors seek safe haven assets such as gold.

Malaysia had the strongest foreign equity inflows this year with almost RM11bil invested in local equities.

“Stock picking is key in this market and we believe there are still growth in the equity market,” Suzana says.

“At the end of the day, the equity market needs to be supported by corporate earnings,” Suzana says.

She expects there potential upside in the FBM KLCI from current levels, with limited downside risk despite the disappointing second-quarter corporate results.

Among the factors that will continue driving the local market will be the resilient economic growth and the booming infrastructure projects, she adds.

Meanwhile, to take on the task of increasing returns, Socso has been beefing up its investment team since last year.

Suzana says Socso is also looking to increase its allocation on its external fund managers and overseas exposure.

“The external fund manager programme is not only restricted to equity and fixed-income investments, but also to PE and property investments,” she says.

Socso completed its first real estate investment last year with the purchase of Menara NU2, located within the KL Sentral vicinity.

Suzana says the office building is currently fully occupied, yielding between 5% and 6% annually.

On its equity investment, she says Socso currently has less than 5% stake in its investee companies and mainly invested in the financial and plantation sectors.

Suzana says Socso is likely to take any controlling interests in any companies, and would hold stakes of a maximum of 10%.

Growing liabilities

Over the past 46 years, Sosco has grown its funds mainly from generating net income from its members’ contribution. Today, a total of 6.4 million employees are covered by Socso.

The contribution to Socso schemes are compulsory, where employees and employers have to pay a certain rate of their monthly salaries into the fund.

Socso’s concept is to pool its resources and share the risks among its members.

Between 2011 and 2015, its financial statements showed that Socso generated between RM2.5bil and RM3.2bil annually from its members excluding investment income, and disbursed between RM2.3bil and RM3.2bil.

Lifestyle diseases, such as diabetes and stroke, among the Malaysian workforce have bumped up Socso’s annual liabilities. It is worth noting that Socso has never increased its members’ contribution rates since its inception in 1971.

According to an old saying, “an ounce of prevention is worth a pound of cure.”

Azman points out that cases of lifestyle-related diseases among Malaysian workers have almost doubled over the last 10 years.

“Social security does not only focusing on compensation. Socso is looking at its role in preventing work-related accidents and fostering healthy lifestyle in the Malaysian workforce,” he says.

Azman, who started his career as a medical doctor and healthy lifestyle evangelist, says that prevention is better than cure.

“Socso is about protecting people, and by nature that is the doctor’s job. I am now in a position which could place prevention policies to protect workers from diseases as well as traumatic injuries caused by accidents,” he says.

Socso has been collaborating with relevant agencies and non-governmental organisations for occupational safety and health (OSH) in organising various prevention and advocacy programmes to enhance safety and health awareness among employees and employers in the country.

So far this year, Socso conducted a total of 448 OSH and 405 advocacy programmes.

“It is crucial to instil the culture of prevention among Malaysians because the financial burden of accidents in terms of compensation, healthcare, and rehabilitation is huge,” Azman says.

Last year, Socso disbursed RM3.5bil to its beneficiaries, 11% higher than the RM3.1bil a year earlier.

Its total income from contributions and investments, on the other hand, grew 8.6% to RM4.3bil from RM3.97bil a year earlier.

There is also another section in the workforce that has yet to be tapped by Socso, which is the informal sector.

According to Azman, there are 2.4 million workers in the informal sector in industries such as entertainment services, agricultural services, night market traders and coastal fishing services.

To address the issue, Socso has introduced coverage for self-employed taxi drivers and ride-hailing service providers such as Grab and Uber under the Self-Employment Social Security Act 2017.

There is also another law in the pipeline – Employment Insurance System Bill (EIS) – to provide protection for loss of employment.

It was reported that the EIS will come into force by January next year, and the rate is 0.4%, of which 0.2% contribution are by employers and 0.2% by employees.

(The Star) Cagamas' 30 years of housing the nation

Affordable housing continues to be a challenge in Malaysia as prices of private homes continue to increase while supply of units in the affordable category remains inadequate to meet the demand of the low to middle income group.

Based on Bank Negara Malaysia 2016 annual report, the housing affordability ratio in 2014 in Malaysia was 4.4, indicating that houses in Malaysia as a whole, were “seriously unaffordable”.

“It is crucial to note that the key underlying issue in enhancing accessibility and affordability of home ownership in Malaysia is attributed by escalating house prices and shortage of supply in affordable housing,” Cagamas Bhd CEO Datuk Chung Chee Leong explains.

Despite the challenges, Chung, who has been with Cagamas since April 2012, says the national mortgage corporation will continue to play its role in promoting the broader spread of house ownership and growth of the secondary mortgage market in the country.

“Cagamas has indirectly contributed to the ‘accessibility’ of financing by house borrowers and other costs by providing competitive, long-term and ready financing to financial institutions for financing of house mortgages,” he says.

As at-end July 2017, Cagamas had cumulatively refinanced housing loans in the secondary market worth up to RM134bil, or about 1.9 million houses.

Chung: Cagamas will continue to play its role in promoting the broader spread of house ownership.

As one of the strategic directions for the company, Chung says, Cagamas is also consistently looking to play a role in government-initiated housing programmes. For instance, it will continue to participate in the Skim Rumah Pertamaku (SRP) and Skim Perumahan Belia (SPB), the two schemes initiated by the government and launched in 2011 and 2015 respectively.

Its sister company Cagamas SRP Bhd acts as guarantor for these programmes that allow young individuals or households to obtain 100% financing, enabling them to own their first home without the need to make the 10% downpayment.

As at July 31, 2017, Cagamas has provided guarantees for housing loans totalling RM1.6bil, enabling 7,413 individuals/households to own their first homes, Chung says.

The group is also actively engaged in dialogues on affordable housing.

For instance, Cagamas’ parent company, Cagamas Holdings Bhd, in July organised a “Dialogue on Sustainable Development of Affordable Housing” aimed at creating a platform for an exchange of views by industry experts to deliberate on issues relating to affordable housing both locally and internationally. Arising from the dialogue, Cagamas is further exploring opportunities to assist the government in the area of affordable housing.

Multiple milestones

Established in 1986, Cagamas has since evolved from its first mandate as the national mortgage corporation to promote the broader spread of home ownership and act as the catalyst for growth of secondary mortgage market as well as the fixed income market.

Today Cagamas is a full-fledged mortgage corporation, providing competitive funding to financial institutions to grow their housing loan portfolio and to hedge interest-rate risk exposure for their housing loans, provide financial institutions with the solutions to manage their balance sheet and capital through securitisation, and promoting home ownership through the provision of guarantee.

It is the second largest issuer of bonds and sukuk after the government. It is the largest non-government issuer of debt in Malaysia and also pioneered the Islamic capital market which serves as a role model for other Islamic countries.

Cagamas continues to maintain its strong credit ratings of A3 by Moody’s and AAA by RAM Rating Services Bhd and Malaysian Rating Corp Bhd, attributed by the company’s track record of strong capitalisation, robust asset quality, stable profitability, prudent risk management and sound corporate governance.

As at Aug 31, 2017, the cumulative amount of bonds and sukuk issued by Cagamas group of companies stood at RM304.2bil.

“Over the years, Cagamas has developed various bond structures (conventional and Islamic) to meet the demands of a broad spectrum of investors,” Chung says.

In 2014, spearheaded by Chung, Cagamas has successfully entered the international markets via the establishment of US$5bil Conventional and Sukuk Multi-Currency Euro Medium Term Note Programme (EMTN) following which the company had successfully raised competitive funding via issuances in offshore Renminbi, Hong Kong dollar, US dollar and Singapore dollar bonds from its conventional and sukuk programmes. This includes its inaugural CNH1.5 billion issuance and benchmark US$500mil issuance in 2014, as well as the inaugural Singapore dollar sukuk in 2015.

“We have witnessed positive results from diversification of our current geographic and institutional pool of investors, which further enhanced and strengthened our funding base.” he adds.

Since the establishment of the EMTN Programmes, to date Cagamas has successfully concluded 17 foreign currency issuances amounting to ringgit equivalent of RM8.5bil.

“Moving forward, Cagamas is in a strong position to continue to transform itself to meet the challenges ahead, including proactively identifying opportunities, provide innovative solutions and develop more diverse financial products to meet investors’ demands and be an active partner to the financial institutions to build breadth and depth to the financial market and system in Malaysia,” Chung says.

“Key success factors such as engagement of technology to drive efficiency in operations supported by the strong talent, prudent risk management and good corporate governance will ensure the sustained growth and success of Cagamas,” he notes.

Among other things, Cagamas will continue to focus on developing risk and capital management solutions to assist financial institutions, especially in light of Basel III and MFRS 9; enhancing product offering to financial institutions to further spur the growth of SME and infrastructure financing; and cooperating with secondary mortgage corporations in the region via the Asian Secondary Mortgage Market Association.

Cagamas will also explore regional opportunities to replicate its business model in South-East Asia as well as complementing Malaysian financial institutions as they expand abroad, and intensify its efforts to diversify its geographic and institutional pool of investors.

“This will further increase our flexibility to raise competitive funds in different currencies other than ringgit, our visibility and strengthen our position as a global issuer,” Chung says, adding that Cagamas will also explore new markets for its bonds and sukuk, specifically targeting the issuance of Panda bonds in China, Pro-Bond in Japan, Kangaroo bonds in Australia and Formosa bonds in Taiwan.

Undeniably, Cagamas plays a crucial role in Malaysia’s financial sector.

“Cagamas plays a systemically important role in the domestic financial system, underpinned by its dual function as liquidity provider and as a leading issuer of corporate bonds and sukuk,” Chung points out.

“Cagamas also acts as a conduit to reduce systemic risk in the financial sector and functions as an intermediary in the Malaysian financial system between primary lenders and investors of long term funds, as well as facilitate in policy formulations and working closely with Bank Negara,” he adds.

For instance, during the 1997/98 Asian Financial Crisis and 2007/08 Global Financial Crisis, Cagamas helped sustain the domestic financial system by continuing to supply liquidity and interest rate management tools to mortgage originators. These were evidenced by the largest annual issuances by the company during the crisis.

Unique policy role

Cagamas helped to avert a residential mortgage credit crunch at a time when housing prices declined during the Asian financial crisis.

“Cagamas is viewed as systematically important in the Malaysian financial sector with its unique policy role, given its significant linkages with other financial institutions and its prominent role in the domestic debt capital market. It is often seen as the lender of second last resort,” he explains.

To further support the stability of financial system, especially when a bank has been declared non-viable by Bank Negara, Cagamas has entered into an agreement with Perbadanan Insurans Deposit Malaysia, or PIDM, to participate in its Intervention and Failure Resolution Framework.

In addition, Cagamas has contributed to greater financial stability by reducing the maturity mismatch inherent in the financial system by enabling originators of housing finance to better match the maturity structure of their housing loans/financing to the source of funds. It also provides financial institutions with a channel to hedge their interest rate risk and to reduce negative carry via asset swapping.

“Cagamas has also fulfilled its mandate as catalyst for the development of the fixed income market in Malaysia through regular and large issuances of bonds and sukuk with multiple tenures to form a benchmark yield curve.”

(The Star) PNB Q3 net income higher at RM10bil

PETALING JAYA: Permodalan Nasional Bhd’s (PNB) net income grew 8.8% to RM10.05bil for the third quarter ending Aug 31, 2017 while its assets under management (AUM) rose 4.2% to RM268.6bil.

The fund manager attributed improved third quarter results to better economic and market conditions.

“The increase in aggregate market value of PNB’s strategic companies sustained at RM29bil year-to-date, representing a weighted growth of 19.4% while their total shareholders’ return (TSR) year-to-date was 21.3%, virtually double that of FBM KLCI’s,” PNB said in a press statement yesterday.

The fund’s strategic initiatives continue to deliver meaningful impact. The transformation of PNB companies resulted in their total market value increasing by some RM29bil in the year-to-date.

Gains from private investment and property are expected to be realised in the final quarter of 2017.

“We are pleased that we are still able to maintain PNB’s strong financial performance year-to-date amidst an environment of positive Malaysian economic growth but a rather flat equity market during the third quarter,” group chairman Tan Sri Abdul Wahid Omar said.

“We are also heartened by the sustained impact of our transformational plan for PNB’s companies and look forward to seeing the strategic initiatives come to fruition,” Abdul Wahid added.

PNB said its Sime Darby de-merger exercise is expected to be completed by early December, while the proposed acquisition of I&P Bhd by SP Setia to create Malaysia’s largest property company is expected to be finished by the end of the year.

The fund manager also said that the de-merger between CCM Bhd and CCM Duopharma is expected to create a more nimble and focused group while the ongoing recapitalisation exercise of UMW Oil & Gas Corp Bhd is targeted to be completed by mid-October.

PNB also announced Amanah Saham 1Malaysia’s (AS 1Malaysia) income distribution of 6 sen per unit, with a total payout of RM724.10mil, which will benefit more than 390,000 account holders.

PNB said AS 1Malaysia recorded a net income of RM600.47mil, which represents a 16% growth from RM517.28mil in 2016 due to a stronger domestic equity market performance, particularly in the financial and services counters.

AS 1Malaysia’s income distribution payment will be re-invested into additional units and will automatically be credited into the unit holders’ accounts on Oct 1, 2017.

Subscribers for AS 1Malaysia via the Employees Provident Fund (EPF) will have the income distribution credited directly into their respective EPF accounts.

“We are pleased to have sustained the dividend level of AS 1Malaysia and the fund’s stronger financial performance would allow us to build additional reserves to support future distribution,” Abdul Wahid said.

(The Star) What lies ahead for Goh Ban Huat?

Questions abound as new major shareholder takes an interest

It is puzzling that a little known property company called Paragon Adventure Sdn Bhd is forking out RM145.7mil for a 51% stake in ceramic products company Goh Ban Huat Bhd (GBH).

In fact, Paragon Adventure may soon have to spend even more than that if some minority shareholders accept the general offer that was triggered by its purchase of the 95.18 million shares at RM1.40 each from business tycoon Tan Sri Robert Tan Hua Choon (pic).

So what is it about GBH that attracted the interest of a property player?

For its first quarter ended June 30, 2017, its profit stood at a mere RM445,000.

The company is known mostly for its bathroom products, clay pipes and trading ceramic goods, and has a 20.25% stake in watch retailer Time Galerie (M) Sdn Bhd, which it acquired in 2015.

According to its most recent annual report, the company exited its clay pipes manufacturing business in the first quarter of FY2017, leading to revenue for the year tumbling 29.6%.

The company cited the expiry and termination of the tenancies of the premises on which the plants were located as one of the reasons for exiting the business.

It also said that it decided not to invest in a new plant due to the high capital expenditure involved, and as profit margins were expected to remain under pressure due to rising utilities costs.

This leaves the company with its trading and investment segments, as well as its share of profit in Time Galerie.

In the most recent quarter, the trading segment was hit with a 50% decline in revenue, on the back of lower sales from sanitaryware due to the softening property market.

Income for the investment segment, meanwhile, is derived mainly from rental of an investment property.

The company was also gloomy on its prospects for the year, with the outlook for the sanitaryware business expected to be challenging due to the weak ringgit eating into its costs and the slow property market.

At its current share price of RM1.46, GBH is trading at an unusually high price earnings multiple of more than 100 times.

Based on this, it is likely that Paragon Adventure isn’t after the existing business of GBH.

Looking into the balance sheet of GBH, another picture emerges.

The company is in a net cash position of RM152.7mil. It has no debt.

So how did this cash hoard come about, considering the company does not make that much money?

It is from the 2015 sale of its prized 13.9 acres of nine adjoining parcels of land in Segambut, Kuala Lumpur to property developer Keladi Maju Bhd for RM192mil.

GBH had initially intended to use the proceeds from the land sale to venture into the oil and gas industry by buying oil and gas services company Dynac Sdn Bhd.

Dynac provides cooling systems and various services such as cable support and engineering for the O&G and other industries. Its main products include heat ventilation and air-conditioning systems, known in industry jargon as HVAC systems.

That planned acquisition, however, did not materialise after an EGM in which GBH shareholders approved the sale of the valuable real estate, but cancelled at the last-minute the plan to turn GBH into an oil and gas company.

Interestingly, Keladi Maju, the buyer of the land, is also controlled by the businessman who just sold the 51% stake in GBH, Robert Tan.

It is clear that the major owner and non-executive chairman of GBH has been looking to dispose of this company for same time.

Robert Tan, once dubbed the “Casio King” for being the only distributor of the brand’s watches and calculators, was first appointed to the board of GBH on July 8, 2008 as a non-independent non-executive director.

He then famously launched an unfriendly takeover of the ceramic maker from the company’s founding Goh family in 2009, winning control of the company in August 2009 after raising the offer to RM1.50 per share from the original offer of RM1.25 per share.

He was then re-designated as managing director, and later as chairman in April 2010.

Besides the 51% stake in GBH which he plans to sell to Paragon Adventure, Robert Tan still owns another 12.8% in the company.

Back to the buyers of the stake, Paragon Adventure is an investment holding company owned by Datuk Seri Edwin Tan (65%) and Datuk Seri Godwin Tan (35%), both of whom are active in property development in Johor.

The company is linked to property player Joland Group, which is known to use the brand name “Paragon” in its projects.

According to recent reports, Edwin Tan is also MD of Joland Group, in which his father, Datuk Tan Eng Boon is founder and chairman and his brother Godwin Tan is a director.

In Johor, Joland group developed the Grand Paragon Hotel and Kukup Golf Resort, and according to its website, currently has five ongoing projects in Johor, namely the Paragon Residences @ Straits View, Paragon Suites @ CIQ, Skudai Bizhub, the Paragon Square, a shopping neighbourhood mall at Jalan Tampoi, Johor and Pekan Nenas Industrial Park-Phase II.

It also owns the Paragon Private and International schools in the state.

It will be interesting to see what lies ahead for GBH, in the hands of a property player as its significant shareholder.

When contacted about its plans for the company, Paragon Adventure declined to reply, saying they were “unable to comment as the transaction is ongoing”.

While GBH, being in a net cash position of RM152.7mil and no debt, is clearly an attractive target, it is to be noted that Paragon Adventure is merely buying a 51% stake in the company.

However, it has gained control of a public-listed firm via the deal. Paragon Adventure has that it intends to maintain the listing status of GBH.

As one banker points out, “Paragon Adventure will now be in control of the company.

“It will be interesting to watch their next move and in what direction they will take GBH,” he says.

Since the announcement of Paragon’s proposed purchase of Robert Tan’s 51% stake in GBH, the latter’s share price has hovered above the RM1.40 price tag, hitting a high of RM1.50 a piece on Thursday and closing at RM1.46 yesterday.

Shareholders are likely to consider these facts when deciding if they wish to accept Paragon’s offer – GBH has a net asset value per share of RM1.29, a cash per share of 82 sen and trades at an extremely high PE ratio of more than 100 times.

It also doesn’t have any significant landbank left. Then again, they have the option of selling their shares in the market which seems to be holding up well after the announcement.

(The Star) Hauliers welcome Maju’s proposal to freeze toll hikes for 20 years

PETALING JAYA: The Association of Malaysian Hauliers welcomes Maju Holdings Sdn Bhd’s proposal to freeze toll hikes for 20 years should the company take over the ownership of PLUS highways.

Its president Nazari Akhbar said highway infrastructure was vital to haulage firms as well as to industrial development in the country.

“As major users of expressways, an average of 20,000 trucks utilise these highways every day. This figure is expected to grow 5% per annum,” he said in a statement.

According to Bernama, entrepreneur Tan Sri Abu Sahid Mohamad wants to buy PLUS Malaysia through Maju Holdings Sdn Bhd.

Nazari said the association’s concerns about the condition of some highways and roads in the country were addressed in the proposal.

According to the proposal, Maju Holdings plans to implement measures to boost security and improve the highways while reducing maintenance costs.

As such, Nazari said the association was “dismayed by media reports” of a proposal by UEM Edgenta Bhd to take on the long-term maintenance of all PLUS highways, and to invest in facilities for lower maintenance costs in return for that.

Nazari said that as primary users of expressways, hauliers are concerned that the contract with UEM Edgenta would increase toll rates.

(The Star) Own quality real estate for better returns, PM tells bumiputras

KUALA LUMPUR: Bumiputras are encouraged to invest in and own properties in prime and central areas nationwide to enjoy higher returns, said Prime Minister Datuk Seri Najib Tun Razak.

“The community should not merely own properties in rural or semi-urban areas, or in small towns,” he said.

Najib, who is also Finance Minister, said the economic empowerment of bumiputras must be more holistic and comprehensive.

This was more realistic, he said, adding that the entire ecosystem, including the social mobility of the community, must be looked at in order for the initiatives to be successful.

“That is why wealth cannot be measured just in terms of ownership, but must also be looked at in terms of (the type of) properties,” he said at the launch of Pelaburan Hartanah Bhd (PHB), which increased the fund size of Amanah Hartanah Bumiputra (AHB) by 500 million units, bringing it to four billion units.

The fund is aimed at increasing bumiputra ownership of commercial properties.

Also present were Second Finance Minister Datuk Seri Johari Abdul Ghani, PHB chairman Tan Sri Md Nor Md Yusof and PHB group managing director and chief executive officer Datuk Kamalul Arifin Othman.

Najib, who is also chairman of Yayasan Amanah Hartanah Bumi­putra, the parent company of PHB, said the prime commercial properties should be those strategically located in cities nationwide.

He said the AHB scheme was a good mechanism for bumiputras to widen their participation in the property sector and that the fund also provided good returns.

The Prime Minister also launched the Akaun Remaja scheme, targeted at those aged between three months and 18 years.

The scheme, which begins on Monday, is aimed at to encouraging people to practise the habit of saving money.

“This is a long-term goal. We should not seek instant gratification.

“There must be awareness among the people that they should save some of their income for the future, especially for their children’s education,” said Najib.

“Looks like even (the latest addition to my family) my grandson can start saving now,” he quipped.

Najib’s daughter Nooryana Naj­wa, who married Kazakh national Daniyar Nazarbayev in 2015, gave birth to a boy on Aug 26.

During the press conference, Kamalul said AHB’s theme this year was “Simpan lah” (Save) instead of “Labur lah” (Invest).

He said the youth, in particular, should be encouraged to save money.

“Yayasan AHB will contribute 50 free units for the first 200,000 newly opened accounts,” he added.

Friday, 29 September 2017

(The Star) Enhancing agrotourism

MIRI: An agriculture expo has been proposed to showcase local produce to local and foreign tourists in Miri.

Sarawak Assistant Tourism Datuk Lee Kim Shin said the Miri Agriculture Development Committee planned to gather farmers, food and vegetable growers with their produce through agrotourism events, which were common in countries such as Taiwan.

“Agrotourism is a big attraction in Taiwan.

“Fishermen can take this opportunity to promote processed fish products.

“The expo will feature all types of machinery used in farming and agriculture,” he said after chairing the Miri Agriculture Development Committee meeting here.

The committee also discussed land issue faced by some 600 active farmers here.

“Most farmers only have access to less than one hectare of land.

“Our committee has proposed to set aside land for genuine farmers to start a permanent food production farm.

“Each farmer will get 4ha of land to work with,” said Lee.

Additionally, Lee said commercial farmers requested for permits to employ foreign workers due to a shortage of labour.

“These commercial farms are family-owned and their production capacity is hampered by manpower shortage,” he said.

The committee meeting was attended by representatives from Modernisation of Agriculture, Native Land and Regional Development Ministry, Miri Planters Association and Fisheries Department.

(The Star) New alternative for late night dining in SS13

At the end of October, students and residents in Subang Jaya will bid farewell to the famous night spot, Asia Cafe.

While there are plenty of cafes in Subang Jaya, not many operate until the wee hours of the morning for those who like dining out late.

So, where will they go for decently priced meals? The answer could lie in Subang Jaya Municipal Council’s licensed food trucks and its newly opened food truck park in SS13.

StarMetro spoke to Subang Jaya residents to gauge their thoughts on the new food truck park

SS19 resident Nurul Syatirah Abu Safran said she ran a Korean food stall called Songs Dosirak at SS17/1A for five months.

“We were invited to run the food stall among other food trucks at SS17/1A.

“However, it was quite difficult for us as we sold authentic Korean meals unlike the other food trucks which offered pasta and pizza.

“We also did not get many customers as we were not in a central location.

“I think the idea for a food truck park can work but it has to be where Asia Cafe is located as this is where students go to and we will be guaranteed of business,” she said.

USJ11 resident of 20 years and accountant Darshan Kumar, 27, said a food truck park would be a suitable replacement for Asia Cafe.

“Since my students days until today, Asia Cafe has been my go-to place because it is affordable and has something for everyone.

“There are plenty of cafes in Subang Jaya but they do not provide the same experience.

“I think having a food truck park would be the best way to provide a variety of inexpensive food.

“But such parks must have proper seating for customers and there must be rules in place to ensure food trucks are kept clean,” he said.

SS18 resident Kevin Gan said he was sceptical about the cleanliness of food prepared at food trucks and was concerned about the waste generated.

“I really like the idea of having more food trucks in SS15 but I am not sure if all trucks provide clean food.

“They also create a lot of waste by using plastic cutlery and paper plates.

“I still think they should have more affordable food courts instead,” he said.

Subang Jaya resident Sharon Tan appreciates having an alternative option to budget dining after hours.

She said food trucks were an additional appeal to SS 15.

Y.Y. Goh from SS 16, Subang Jaya welcomed food trucks as long as they do not add to traffic congestion.

She said food truck parks must be in an area accessible to all.

(The Star) Food truck park takes shape in Subang Jaya

Third time may be the charm for Subang Jaya Municipal Council’s (MPSJ) designated food truck park.

Hoping to imitate “Tapak: Urban Street Dining” in Jalan Ampang, Kuala Lumpur, MPSJ has set its sights on a parking lot at 3K Complex in SS13 which has been operating as a food truck park since Sept 9.

Prior to this site, the council attempted to create food truck parks in Puchong Utama and Bandar Kinrara 5 with little success.

Following the introduction of the Selangor Food Truck Regulations in September 2016, local authorities have been tasked to find proper avenues for food truck operators to trade.

However, the success of running a food truck business is dependent on setting up business in a good location.

To help food truck operators, MPSJ has included buskers and car boot sales as well as other mobile traders to help draw in the crowd at its food truck park.

Its acting president Mohd Zulkarnain Che Ali said having added attractions was the only way the new location would prove fruitful as there was something for everyone.

The Burger Shop food truck in SS15 is one of the more famous food trucks in the area.

“The only way for this project to be successful is for the atmosphere to be very lively. That way we can attract more customers.

“We are accepting a total of 15 food trucks and they can operate for free for two months,” he said adding that traders would be given two tables each.

“Food truck operators must also commit to the business hours we have set and they can’t abandon the location to move elsewhere if there aren’t enough customers.

“After two months and if the response is positive, we will consider setting up more food truck parks in other locations,” he said.

In June, StarMetro quoted MPSJ licensing director Muhammad Azli Miswan who said that there were about 50 registered food trucks in the municipality, operating in SS17, Bandar Bukit Puchong and MPSJ headquarters in USJ 5.

Cowboys Food Truck owner Ku Azharul Nizar Ku Abdul Rahman used to operate in SS15 Subang Jaya but is now trading elsewhere after facing a few obstacles.

Ku Azharul said the new food truck park at the 3K Complex did not meet with the concept of a food truck park but looked more like a night market. PitStop Food Truck Muhammad Izwan Kamal, who operates his truck at the SS17/1A Subang Jaya open air parking area, said the location has a good crowd especially during weekends.

The food truck park at the 3K Complex, SS 13 Subang Jaya, is the Subang Jaya Municipal Council's third attempt at opening a food truck park.

Muhammad Izwan who is licensed to operate at SS17/1A said he would not move.

“I like the location and we have regular customers,” he said.

He added that combining car boot sales with food trucks was a good plan.

“It will help the food truck operators because shoppers will also stop to buy food,” he said.

Honcho! Pizza Parlour food truck owner Kamal Shahrezal welcomed the idea of merging car boot sales with food trucks but said a proper layout plan was needed to distinguish them.

“If they are not separated, the food truck park will look like a night market.

Kamal has been operating his food truck at the SS17/1A open air carpark for 13 months and has no plans to move to SS13.

“We have regulars and our location is also easily accessible so it’ll be a shame to move and lose customers,” he said.

The food truck operators shared some of the problems faced and offered suggestions on how MPSJ could attract more food truck operators into the municipality.

Kamal said there were no issues when applying for licence but the council should support food truck owners by promoting them.

Tapak: Urban Street Dining in Jalan Ampang, Kuala Lumpur, has become a point for quality food truckers to come together and present their wares in a casual setting.

He said MPSJ’s support was important in helping promote locations unknown to the public or away from the public eye.

He added that when creating a food truck park, the local council should allow operators to set up tables and chairs.

Currently, food truck licences as per the regulation restrict operators from having tables and chairs.

There are currently four food trucks operating at the open air carpark at Jalan SS17/1A.

The operators were selected by Muhammad Izwan, who applied for MPSJ’s approval to turn the parking space into a food truck park from 6pm to 2am, daily.

Muhammad Izwan, works closely with 46 Fans Cafe along SS17/1A, and gets the tables and chairs from the restaurant for food truck customers.

He said although it was an MPSJ approved site, the traders still get visits from enforcement officers to check on complaints received.

The officers, he said, have advised them against putting tables and chairs.

“We take over the parking area at night when all the offices are closed.

“Although we play music, we are careful not to disturb residents.”

“I understand that the officers are acting on complaints but MPSJ should inform the public that we are licensed to operate here.

“We also hope that they will allow us to have chairs and tables for customers to have their meal,” he said. Those who frequent SS15 Subang Jaya, particularly near the wet market, would have noticed many mobile traders, selling soya bean, lok-lok or burger.

These mobile traders are not classified as food trucks because they cook next to the truck instead of inside the vehicle.

Ku Azharul, who has been trading for three years, said he previously operated in SS15 at the corner of Public Bank but was not permitted by the council because the area was highly congested.

He said MPSJ had offered an alternative spot at the SS15 wet market parking area but this spot was poorly lit.

There was also the issue of vehicles being parked at the bays at night, making it difficult for food trucks to operate.

“If MPSJ cordons off the wet market area for food truck operators, then it will be easy for us to trade,” said Ku Azharul.

He said there were very few areas in Subang Jaya where food trucks could operate from because of traffic congestion.

He said operating on private land was not viable due to high costs.

He added there were pros and cons to setting up a business at a food truck park as opposed to finding a location on their own.

“A food truck park is a permanent spot but we have to pay for the licence, rental of the lot and also compete with over 20 other trucks,” he said.

He said a dedicated food truck park could work if there was a variety of traders instead of two of the same.

Ku Azharul said he has, in the past, sent proposals on the setting up of food truck parks to MPSJ but has not received favourable feedback.

He said he was willing to engage with the council to set up food truck parks in future.

(The Star) Better homes for police personnel at new quarters

Personnel who had to leave the Sentul police quarters to make way for the construction of an underground rail tunnel will enjoy a more spacious area with an extra room in their new homes.

A total of 270 families vacated the two-block, 16-storey quarters in June this year for the construction of the MRT Sungai Buloh-Serdang-Putrajaya (SSP) Line.

Mass Rapid Transit Corporation SSP Line project director Datuk Amiruddin Ma’aris said the new three bedroom apartments would measure 1,200sq ft, compared to the old quarters which were 850sq ft and had only two bedrooms.

“The new police quarters will be completed by December this year,” he said at a media briefing.

Amiruddin added that the 270 families are currently staying at the Teratai Residence apartments in Setapak while waiting for the new quarters in Taman Keramat AU1 to be ready.

Meanwhile, Amiruddin said a detailed structural analysis was done to determine the safest demolition method for the old quarters.

He added that the demolition was expected to be completed by December.

Amiruddin announced progress of the SSP Line was at 13.7% and it was proceeding according to schedule.