Tuesday, 31 October 2017

(NST) Closure of 5 Giant outlets not linked to country's economic status: Trade Ministry

PUTRAJAYA: The closure of five Giant outlets has nothing to do with the country’s economy as claimed by certain parties.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainudin said the decision was made by the supermarket owner GCH Retail (M) Sdn Bhd, following problems with the leases of premises and that it was also part of the company’s downsizing business strategy.

“They have to downsize their outlets and look for other smaller premises.

“They are still negotiating and this has nothing to do with the country’s economy,” he said after the ministry’s monthly gathering here.

News of the closure of five Giant supermarkets, in Sri Manjung, Perak; Sungai Petani, Kedah; Shah Alam City Centre and Selayang Lama in Selangor; and Sibu, Sarawak on Nov 5 went viral on social media recently, with many people linking it to the state of the country’s economy.

Hamzah said people should understand that businessmen take risks in business, including facing competition from other shops and supermarkets.

Besides, he said, the current trend which saw an increase in online shopping had also made it necessary for businesses to be more competitive in attracting customers.

“Tesco has sold their hypermarkets in South Korea, does that mean Korea is going bankrupt? It is a business strategy by the company’s own shareholders to ensure the sustainability of their businesses,” he said.

Asked to comment on the fate of small and medium-sized businesses which supply goods to the five Giant hypermarkets concerned, Hamzah said their business is with the company and not the outlets.

“For instance, if he (the usinessman) has an agreement to supply 1,000 bottles a month, if Giant closes one outlet, the agreement remains the same,” he said.

He added that at present Giant has a chain of 51 hypermarkets and 71 superstores throughout the country, while there are 119 hypermarkets owned by foreign companies in the country. - BERNAMA

(NST) Sunway REIT Q1 net profit up 23 pct

KUALA LUMPUR: Sunway REIT started its financial year ending June 30 2018 with an encouraging set of numbers in the first quarter (Q1).

Its net profit for the quarter grew 23.5 per cent year-on-year due to higher net property income.

Its net profit stood at RM79.23 million (US$18.72 million) against RM64.14 million, the company said in a filing to Bursa Malaysia yesterday.

Group revenue grew nearly 10 per cent, mainly contributed by higher revenue across all segments, it added.

Sunway REIT's flagship portfolio includes Sunway Pyramid Shopping Mall in Subang Jaya in Selangor.

Its quarterly revenue gained 9.5 per cent to RM141.17 million from RM128.88 million a year earlier, while net property income grew 15.5 per cent to RM110.99 million against RM96.07 million a year ago.

The company proposed an interim income distribution of RM78.63 million or RM0.0267 per unit for the quarter, payable on November 29.

Sunway REIT expects distribution per unit or DPU to grow moderately in fiscal year 2018 supported by moderate growth in the retail segment, resumption in income contribution from Sunway Pyramid Hotel and gradual improvement in the overall occupancy of the office segment.

(NST) Benalec sells Melaka land for over RM100mil

KUALA LUMPUR: Benalec Holdings Bhd is selling seven plots of leasehold land measuring 216,427 sqm at Klebang in Melaka for RM100.17 million cash.

In a filing with Bursa Malaysia today, Benalec said its three indirect wholly-owned subsidiaries — Sentosacove Development Sdn Bhd, Oceanview Realty Sdn Bhd and Strategic Cove Sdn Bhd — entered into a sale and purchase agreement with the purchaser Titanium Hallmark Sdn Bhd for the disposal.

Benalec is expected to realise a net gain of RM24.7 million representing earnings per share of about three sen.

Proceeds from the land sale, Benalec said, will be used to finance its ongoing reclamation projects and to meet its working capital requirements.

"The disposal is in the ordinary course of business of Benalec. The disposal provides an avenue for Benalec to monetise and crystallise the value of its landbank while at the same time, improve the cash flow of the company," it added.

(NST) Malaysia's E-commerce has grown by 47 per cent from 2015 - Facebook

KUALA LUMPUR: Malaysia’s e-commerce sector has grown by 47 per cent from 2015 and is now worth US$2.41 billion (US$1=RM4.23), said Facebook Malaysia Country Manager, Nicole Tan.

She said on average, Malaysians spent 187 minutes daily on their mobile phones, and businesses as such should take the opportunity to implement the right e-commerce strategy to promote products and services.

“With Southeast Asia being pegged as the new frontier for e-commerce, it is critical for consumer goods businesses to implement the right strategy for their brand,” she said at the launch of Facebook’s Discover Growth campaign here, today.

The Discover Growth campaign is aimed at helping businesses unlock growth opportunities via a global business-to-business ad campaign

(The Star) More e-commerce programmes for farmers in Sarawak

SIBU: The Sarawak Agriculture Department will continue to organise IT courses for farmers in line with its digital economy and e-commerce vision.

Agriculture Minister Datuk Amar Douglas Uggah Embas said the courses were to encourage farmers to use e-commerce to market their produce faster.

“With the digital economy approaching, I believe Sarawak can produce world-class and far-sighted entrepreneurs.

“This is so entrepreneurs can promote their produce and share knowledge on how to improve the quality of their products among themselves,” he said in a speech read out by his deputy Dr Abdul Rahman Ismail at Sarawak’s Agro-based Industry gathering here.

He said the state government implemented the Low-Hanging Fruit programme, which entailed the formation of collecting, processing and packaging centres to uplift the farmers’ standard of living.

“The agro-based industry division is very important and needs to infuse more activities so the state’s downstream agricultral industry is always vibrant and will develop rapidly,” he added.

Department deputy director Dr Alvin Chai Lian Kuet said 146 entrepreneurs in Samarahan, Sibu, Bintulu and Miri divisions would participate in a programme called Agri-Business in Digital Economy under the department’s mentorship.

Another programme, which was successfully organised this year for the farmers, was the Human Capital Development under the Special Bumiputra Cluster Programme involving 1,472 people, Douglas said.

“All programmes and activities are in line with the department’s mission of modernising and commercialising the agricultural sector to boost the income of the farming community,” he added.

(The Star) Grooming students for digital economy

KUCHING: The state government is taking steps to improve education in Sarawak in order to produce graduates for the digital economy.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said this included setting up the state’s own Education, Science and Technological Research Ministry in May this year to complement the Federal Education Ministry.

“Although education is a Federal matter, the state wants to step in where education involves Sarawakian students.

“We follow the core policies of our education system, but we intervene to provide assistance to our students to enter university after they leave school,” he said when opening the new SK Landeh in Padawan near here.

He said this would enable Yayasan Sarawak to offer more scholarships and loans to Sarawakian students.

“For the first time this year, we gave scholarships to 40 medical students at Universiti Malaysia Sarawak.

“We also gave 39 scholarships for new courses related to the digital economy, such as cyber security and molecular engineering,” he said.

In addition, Abang Johari said the state’s education ministry would use the RM1bil allocation from Budget 2018 to rebuild critically dilapidated schools.

It will also look into merging low-enrolment schools into centralised schools and ensure that Sarawakian students are proficient in both Bahasa Malaysia and English.

“If our children are given a good education, our future will be guaranteed. We want to produce well-educated graduates who are employable,” Abang Johari said.

Education, Science and Technological Research Minister Datuk Seri Michael Manyin said the ministry had been tasked, among others, to improve English proficiency in Sarawak.

“We have heard that one reason why university graduates are unemployed is because they are not proficient in English.

“We want every Sarawakian to prioritise English so that our children are fluent in the language and can find jobs in the private sector,” he said.

Manyin also said efforts were needed to increase interest in science, technology, engineering and mathematics (STEM) subjects among Sarawakians.

He said only 23% of Sarawakian students were eligible for the science stream in Form Four compared to the national target of 60%.

“I urge parents and teachers to encourage their children to take up science and mathematics from young,” he said.

The new SK Landeh was completed last November at a cost of RM19.6mil. It was rebuilt at a new site after its former premises were damaged by floods in 2003 and 2004.

Construction commenced in 2013 and the school began operating at the new building this January.

(The Edge Financial Daily) HSR to pass through green spaces to cut land acquisition cost


KUALA LUMPUR: A large portion of the Kuala Lumpur-Singapore high-speed rail (HSR) project alignment would cut through green spaces to reduce land acquisition cost, said MyHSR Corp Sdn Bhd.

“Compared with the mass rapid rail and light rail transit alignments which are highly urbanised, displacement [of people] is higher,” said MyHSR commercial directorTony Yeap. “In our case, they are ‘passing through’ cities but a large part of the alignment is in green areas.”

MyHSR, the developer and asset owner of the Malaysian side of the HSR, has started the process of freezing land within a 500m corridor where stations would be located and where the alignment would run to lock the land price fixed by the government for the next 12 months.

At a media briefing on the rail project’s public inspection, Yeap said he expects the state authorities to give their approval on the process to freeze the land by the end of this year. Following that, affected landowners would be personally informed of the alignment.

According to the alignment, 159.4km of rail line would run at grade (above ground), 153.4km would be elevated while 14.9km would traverse underground.

“The alignment has gone through a lot of stress testing both internally and from a technical standpoint so that we can build something that can go at high speed but there are a lot of constraints,” said Yeap. “At the same time, we are working with local authorities to make sure that the alignment, at the very best, avoids major urban areas. The result we have today is a fairly optimised alignment that minimises social displacement and cost,” he said.

On public inspection, Yeap said the gathering of public input for the HSR project will take place from tomorrow to Jan 31 next year at 43 locations in Kuala Lumpur, Putrajaya, Selangor,Negeri Sembilan, Melaka and Johor.

“The public inspection would help us gather feedback on what is on the ground, and see how we can tweak it while looking from technical and cost perspectives,” he said.

Upon completion of the public inspection, MyHSR would consolidate responses and submit them to the Land Public Transport Commission (SPAD). “We aim to get [the] final approval from SPAD on the alignment by April next year,” said MyHSR project delivery group director Mark Loader. “Once the railway scheme is approved, it allows us to start construction and land acquisition.” The rail project is targeted for completion in 2026.

(The Edge Financial Daily) Lower rental from Da Men affects Pavilion REIT’s earnings

Pavilion REIT(Oct 30, RM1.70) Maintain hold call with a lower target price of RM1.70: Pavilion Real Estate Investment Trust’s (REIT) third quarter of financial year 2017 (3QFY17) net profit was RM55.4 million (-7% year-on-year [y-o-y]; +2% quarter-no-quarter [q-o-q]), totalling RM166.8 million for nine months (9M) of FY17 (-8% y-o-y), 70%/66% of our and consensus’ full-year estimates.

3QFY17 y-o-y earnings growth was encouraged by: i) improvement in Pavilion KL’s occupancy rate (96%; 3QFY16: 92%), in line with gradual completion of its tenant remixing exercise (started in mid-FY16) towards the end of FY17; and ii) a higher occupancy rate at Intermark Mall (87%; 3QFY16: 67%). However, this was offset by: i) lower rental income from Da Men USJ (-26% y-o-y) due to lower rental rates to entice new tenants (occupancy was 87% versus 84% in 3QFY16); and ii) higher operating expenditure (opex) at Pavilion KL from maintenance costs (air conditioning system improvements, upgrading works and replacement expenses) and sponsorship of the 29th South-east Asian Games. Q-o-q earnings growth was mainly supported by some improvements in tenancies at Pavilion KL and Intermark Mall.

We lower our FY17 to FY19 earnings forecasts by about 5% per annum. Our estimates have factored in the injection of Pavilion Elite and completion of the proposed placement of up to 218 million new units in FY18.

We remain positive on Pavilion KL’s resiliency and long-term outlook, attributed to its prime location. However, there are downside earnings risks from Da Men Mall USJ due to the oversupply of retail space and malls in the Klang Valley, which raises occupancy risks. Rerating catalysts are the injection of yield-enhancing assets in the near future. — Maybank IB Research, Oct 27

(The Edge Financial Daily) Property market seen on marginal recovery

Property sector        
Maintain positive stance on the property sector: In the Budget 2018 announcement last Friday, the government announced that the “step-up” end financing scheme will be extended to private property developers to encourage more affordable property projects. The “step-up” end financing scheme was implemented on Jan 1, 2017 for the PR1MA programme with the aim of making financing easier to buyers with a total loan up to 90% to 100%.

Under the “step-up” end financing scheme, homebuyers pay interest only for the first five years and pay interest plus principal in the subsequent years, making a reduction in monthly home-loan instalments for the first five years with an increase to a higher amount in the consecutive years. The scheme is expected to lead to a lower loan rejection rate and provides opportunities for homebuyers to get a higher loan.

While the criteria for affordable property projects to qualify for the “step-up” end financing scheme is yet to be determined, it is positive to the property market as the scheme will help address the issue of home-buyers in securing home loans.

The government has outlined seven measures with a RM2.2 billion allocation for affordable housing measures. The long list of measures to address the issue of first-home buyers’ affordability is largely expected as the government has been looking into the issue of affordable housing. Notably, we view the reintroduction of the “MyDeposit” scheme positively as it will help more young Malaysians own homes by assisting in down payments.

Post-Budget 2018 announcement, we are maintaining our “positive” view on the sector as we view that the property market is on a marginal recovery. Property developers with affordable home projects, such as Mah Sing Group Bhd and UOA Development Bhd, are the key beneficiaries of the measures outlined in Budget 2018 as they are expected to benefit from the extension of the “step-up” end-financing scheme to private property developers.

We have a “buy” call for S P Setia Bhd Group, IOI Properties Group Bhd, Eastern & Oriental Bhd (E&O) and Magna Prima Bhd. We like S P Setia (target price [TP]: RM4.13) for: i) its plan to achieve FBM KLCI status is now on a fast track to 2018 (from 2020); ii) the attractive price for its I&P Group deal; and iii) good dividend yield.

We like IOI Properties Group Bhd (TP: RM2.41) due to improving prospects for its property develop-ment in Singapore following the rise of Singapore’s private home prices for the first time in four years in the third quarter of 2017. Besides, we also expect establishment of a joint venture with Hongkong Land for the development of a Central Boulevard site to remove overhang and improve its balance sheet.

For E&O (TP: RM2.37), its long-term prospects remain positive with the Retirement Fund Inc (KWAP) entered as strategic investor of the Seri Tanjung Pinang (STP) 2A project. Reclamation works are on track and the first launch of its project in the STP2A project is expected to be in 2019. E&O is also looking to further improve its balance sheet by disposing of non-core assets with the latest being Lone Pine Hotel in Penang. Its latest net gearing declined to 0.59 times in June 2017,
from 0.72 times in March 2017.

For Magna Prima (TP: RM1.59), we are turning positive on its sales outlook following a visit to The View Residence sales gallery. We expect new property sales to improve in FY17 and this should underpin its earnings in FY18. Another potential catalyst for Magna Prima is the value of unlocking its land in Jalan Ampang. — MIDF Research, Oct 30

(The Edge Financial Daily) No major landbanking activity seen from Hua Yang

Hua Yang Bhd (Oct 30, 79.5 sen) Downgrade to underperform with a lower target price of 65 sen: Hua Yang Bhd’s earnings for the first six months of financial year 2018 (1HFY18) came in sharply below expectations, accounting for 5% of both our and the streets’ full-year estimates. The disappointment in earnings was driven by lower-than-expected billings and higher-than-expected interest expense for the acquisition of the 30.9% stake in Magna Prima Bhd. Its 1HFY18 property sales of RM102 million also fell short of our full-year target of RM253 million. Its earnings and sales performance are currently at record lows. No dividends were declared as expected.

Hua Yang’s 1HFY18 core net profit (CNP) saw a drastic decline of 94% year-on-year (y-o-y) as revenue came offby 63%, while pre-tax margins compressed by 19 percentage points (ppts) to 5%, coupled with a higher effective tax rate of 53% (+27ppts y-o-y). The sharp decline in revenue was due to timing of recognition since its newly launched projects had yet to reach a meaningful billing stage, while these projects also suffered from weak sales. Compression in pre-tax margin was due to the loss of economies of scale due to the slump in revenue, coupled with high fixed overhead cost and interest expense (up by more than 600%) incurred for the acquisition of the 30.9% stake in Magna. Subsequently, its net gearing increased to 0.7 times from 0.4 times. Quarter-on-quarter, Hua Yang’s CNP for the second quarter of FY18 (2QFY18) declined 66% due to a higher effective rate of 72% vis-à-vis 39% in 1QFY18 due to non-deductible expenses.

Going forward, we would not expect any major landbanking activity as we believe Hua Yang needs to focus on realising its pipelines and also future plans with Magna. Considering its unbilled sales, which have fallen to historical lows of RM209 million, which are only sufficient for another one to two quarters, we opine that Hua Yang should be more aggressive driving its sales for launched projects, which have received slow response from the market albeit its positioning as an affordable housing player (more than 50% of products priced around RM550,000 per unit) in the Klang Valley, Penang and Johor. We also believe the recent Budget 2018 measures (step-up financing scheme) would increase the odds of better sales for Hua Yang. Nonetheless, we do not rule out a potential cash call exercise if Hua Yang acquires the remaining 70% stake in Magna in the future.

Following its weak results, we slash our FY18-FY19 estimated CNPs by 88%/77% respectively, after factoring in a higher operating cost and rescheduling of our billing progress. That said, we also reduce our FY18-FY19 estimated sales targets by 13%/23% to RM219 million/RM249.7 million respectively. — Kenanga Research, Oct 30

(The Star) Move benefits Malaysians the most

GELANG PATAH: Malaysians will benefit the most from the abolition of toll at the Eastern Dispersal Link (EDL) and not Singaporeans said Mentri Besar Datuk Seri Mohamed Khaled Nordin.

He said the move would lessen the burden of thousands of Malaysians, especially those who drive into Singapore daily from Johor Baru to work in the republic.

“They (the Opposition) should get their facts right before making accusations that the abolishment of the toll will only benefit Singaporeans,” he said after presenting land titles to villagers here.

Khaled said prior to the introduction of the toll at EDL in August 2014, some 60,000 motorists used the highway daily into Singapore but the figure declined to about 40,000 now.

“By driving Singapore-registered cars, they are not subjected to the vehicle entry permit (VEP) imposed by Singapore on foreign-registered cards entering the city-state from Malaysia,” said Khaled.

He said although toll charges at the EDL would no longer apply effective Jan 1, Singapore-registered vehicles entering Malaysia via the Causeway in Johor Baru still have to pay the RM20 road charge each time they entered the country.

“The move by the Federal Government to abolish the toll is not an election ploy but one of the initiatives to help lessen the burden of the people,” he added.

The EDL is an elevated highway built to disperse traffic heading into Johor Baru city centre.

It has various entry and exit points and leads to Bangunan Sultan Iskandar Customs, Immigration and Quarantine complex which means motorists have to pay RM16.50 whether or not they use the EDL.

The introduction of the toll at the highway three years ago caused an uproar among road-users and lawmakers.

Among them were Johor Baru MP Tan Sri Shahrir Abdul Samad, Pulai MP Datuk Nur Jazlan Mohamed and Skudai assemblyman Dr Boo Cheng Hao who said it was an unnecessary burden.

(The Star) Third Solaris project already 80% taken up

Location, size and the property value are some of the aspects that both investors and homeowners take into considerations when buying a property.

Tapping into that, UEM Sunrise Bhd’s Residensi Solaris Parq in Mont’ Kiara met these demands and offered buyers their desired property in terms of its location and value.

Launched in early October, the residential project has already garnered a take-up rate of 80%.

Residensi Solaris Parq marks the first phase of Solaris Parq, the third instalment of the Solaris development series by UEM Sunrise after Solaris Mont’ Kiara and Solaris Dutamas.

With a GDV of RM3bil, the mixed development consists of four components, with its Residensi serviced apartments being the first phase while the retail, suites and office components are expected to launch in the second phase in 2019.

“We set out to develop Solaris Parq as a project that will transform the scene at Mont’ Kiara and Dutamas.

“We want the area to not only be a desirable place where people want to live in but also be the preferred destination for work and play.

“These components are essential to placemaking which will ensure the overall health, happiness and well-being of communities within the vicinity,” said UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib.

Slated for completion in 2022, Residensi Solaris Parq consists of two residential blocks and has a GDV of RM755mil.

The serviced apartment towers offer 288 units with built-up areas ranging from 721sq ft to 2,469sq ft, priced ranging from RM873,800 to RM2,968,800.

Future residents of Residensi Solaris Parq will enjoy more than 30 lifestyle amenities and facilities along with a two-acre urban park that comprises four thematically-landscaped zones.

It is easily accessible from Sprint Highway, Penchala Link, New Klang Valley Expressway (NKVE) and Duta Ulu-Klang Expressway (DUKE).

Speaking about the importance of a development’s location, self-employed Evelyn Wong said it played a huge role in property investment.

Wong, 45, who bought a 1,022sq ft-unit in Residensi Solaris Parq for investment purpose, emphasised on the convenience of future tenants to the surrounding amenities.

“Being just a stone’s throw from Publika allows easy access to the mall while the two-acre park next to it is a rare gem within the Mont’ Kiara area,” she said, adding that units facing parks in other countries usually come with sky-high price tags.

Senior advertising sales specialist Yap Pooi Ming echoed that Residensi Solaris Parq was strategically located.

Yap, 58, who lives in MK28 along Jalan Kiara in Mont’ Kiara, also a project by UEM Sunrise, has secured a unit for investment.

“I love this area after moving here a few years ago. It is right in the middle of Kuala Lumpur and Petaling Jaya where I can commute with ease, thanks to the connectivity of major highways.

“Apart from that, I have much confidence in UEM Sunrise’s finished products as I am staying in one myself, and truly appreciate the developer’s after-sale service in doing a great job for maintaining their developments even after I moved in,” she said, adding that the management took the initiative to change all units’ balcony glass panels recently at her current place to ensure safety of the residents.

For Queenie Tan, Residensi Solaris Parq will be her future home sweet home.

Together with her husband, the 33-year-old investment consultant bought a three-room unit with a built-up area of 1,423 sq ft for their own stay.

“I frequent Publika for leisure and catching up with friends so it was one of my decision-making factor to buy a unit, not forgetting the green park right next to the residence,” she said, adding that security is also a factor especially when the couple goes on a vacation.

Purchasers who sign the Sale and Purchase Agreement before year end will stand a chance to win lucky draw prizes including a return trip to Moscow, Russia, to watch the biggest football event in 2018.

(The Star) Popular ‘poke’ restaurant opens third branch in heart of KL

The Fish Bowl opened in 2016 with the goal of introducing healthy fast food for Malaysians on the go.

It claims to be one of the first authentic premium poké restaurants in Malaysia.

Having successfully introduced the poké bowl craze to Bandar Sunway and Bandar Utama folk, the restaurant is now ready to take Kuala Lumpur by storm.

The Fish Bowl opened its doors in Pavilion Kuala Lumpur, allowing city folk to finally be exposed to the poké bowl experience.

Due to the fast-paced environment within the area, The Fish Bowl kiosk in Pavilion KL allows for convenient takeaways so that city folk can easily enjoy their poké bowl on the go.

The restaurant offers an extensive range of items on its menu so customers can easily customise their poké bowls.

Those looking for quick alternatives can select from the bestseller list, which provides preselected combinations.

Lim said the best-selling item on the menu was the Salmon Shoyu. He also recommended the Baby-Racha or Monster-Racha sauces for foodies who prefer a dash of spiciness with their meals.

There are on-going promotions for office-goers and students

On the 30th of every month, office-goers need only show their working ID or corporate card to the cashiers to enjoy two standard poké bowls at RM30.

Meanwhile, students may enjoy a standard poké bowl at RM13 upon flashing their student card to the cashiers on the 13th of every month.

“We believe in providing the best experience for our customers. I believe customers will come to us when they feel our sincerity through our service,” Lim said.

The Fish Bowl is also planning to expand to three other locations soon – Desa Park City, KL Eco City and Mont Kiara.

There are also plans to open outside the Klang Valley.

Lim said they were in the process of opening a different restaurant with cooked items to cater to customers who might not be agreeable with the raw food served at The Fish Bowl.

(The Star) UEM Sunrise to buy more land in Klang Valley

KUALA LUMPUR: Property developer UEM Sunrise Bhd intends to beef up its presence as a national developer by increase its landbank within the Klang Valley.

The company, which has disposed of 163.9 acres in Johor to Country View Bhd for RM310mil, intends to utilise part of the proceeds to buy new land, its managing director and chief executive officer Anwar Syahrin Abdul Ajib said.

“It (the RM310mil) is for a combination of things. It will help with our gearing levels and with our infrastructure investments in Puteri Harbour, Johor. We’re putting in quite a sizeable amount of money there,” he told reporters following a signing ceremony between UEM Sunrise and Country View yesterday.

“It will also give us the flexibility to do some landbanking in the Klang Valley. It’s a good opportunity for us to look for land outside of Johor.”

“People look at UEM Sunrise and feel that we’re very much concentrated in Johor – Iskandar in particular. We would like to send a message that we are a national developer.

“One of the areas that we are looking at greatly is to increase our gross development value within Klang Valley.

“We have 10,000 acres in Johor, around 2,400 acres in Perak and a few hundred within the Klang Valley.”

As at June 30, 2017, UEM Sunrise’s gearing ratio stood at 0.56-times.

UEM Sunrise, via its wholly-owned subsidiary Bandar Nusajaya Development Sdn Bhd, signed a sales and purchase agreement with Country View Resources Sdn Bhd, a wholly-owned subsidiary of developer Country View Bhd, for land in Iskandar Puteri, Johor.

The land will be developed into a mixed commercial development.

Country View Bhd executive director Law Kit Tat said it was still to early to divulge details of the development that Country View will embark.

Last week, UEM Sunrise inked a deal with building materials company, the Luxx Newhouse Group, for the sale of 100,000 sq ft of land in Johor for RM13mil.

Under the agreement, the latter will also have an option to purchase another 100,000 sq ft of land.

The investment will involve furniture production, housing over 200 skilled employees. The Luxx Newhouse Group, which will be investing RM80mil over the next five years in UEM Sunrise’s Southern Industrial and Logistics Clusters (SILC) phase 3, has operations in Singapore, Malaysia, Hong Kong and China.

SILC phase 3, located in Iskandar Puteri, Johor, offers levelled industrial land with ready infrastructure, build-to-suit packages and limited ready-built facilities.

Development of the land is scheduled to be completed by the first quarter of next year.

(The Star) Panel discusses reduction in income tax

KUALA LUMPUR: The reduction in income tax, the fiscal deficit and the incentives announced for small and medium enterprises (SMEs) were among the highlights of the discussion at a 2018 Post-Budget Dialogue.

Among the panelists at the dialogue, Axcelasia Taxand Sdn Bhd group executive chairman Dr Veerinderjit Singh said the fiscal deficit target should be even lower than the 2.8% announced.

“The targeted fiscal deficit is good, at 2.8% but my question always is – could it not have been even lower?

“If the good times are coming then we should be bringing down our fiscal deficit even lower,” Dr Veerinderjit said in reference to the increased revenue expected from the higher oil prices compared to last year.

“We have talked to SMEs on the ground and many of them still say that they don’t know that there are such grants and funds available.

“A lot more needs to be done in this aspect, to guide the SMEs and ensure they benefit from all these measures,” he said at the 2018 Post-Budget Dialogue organised by the Malaysian Economic Association here yesterday.

He also disagreed with the move to lower income taxes for households earning less than RM9,000 a month, which will mean over 260,000 people will no longer pay taxes.

“If a certain group needs assistance, it can be done in a more targeted way, by providing a relief for a year.

“Otherwise we are seeing a shrinking of the personal tax base, and this is not advisable,” he said.

In the long term, he said, the goal should be to lower corporate taxes instead.

Economist Prof Dr Jomo Kwame Sundaram questioned the significant increase in the operating budget for next year, in view of the targeted reduction in the fiscal deficit to 2.8% from 3.0%.

“Looking the numbers, the revenue for next year will be about RM240bil and the expenditure is RM280bil.

“So there is a gap of about RM40bil which is about 17% so one wonders how the gap will be filled.

“Of course the government has other sources of revenue, but the people would appreciate greater transparency about where this money is coming from,” Dr Jomo said.

On the increased operating expenditure for the year, he added that it was unclear what accounted for the bulk of the increase.

“The increase is quite significant, over RM2bil – more transparency is needed on this as well,” he said.

He also questioned the country’s inflation figures remaining low despite the implementation of the GST, fall in exchanges rates and rising prices.

“We need a credible explanation with regards to the government data on the inflation - how has the rate remained low despite these changes,” he said.

(The Star) BNM: Current insurance business models are “broken”, need fixing

KUALA LUMPUR: The insurance industry’s current business models are “broken” and need to be fixed so that more Malaysians can afford coverage, says Bank Negara governor Tan Sri Muhammad Ibrahim.

He pointed out that most insurance products in the market are too expensive for the general public with the industry focusing on a narrow segment of the population.

“From the perspective of the population that remain under-served, the existing business models are essentially broken,” said during his keynote address at the Malaysian Insurance Summit 2017 yesterday.

He also said the industry needed strong domestic players.

“The industry needs domestic shareholders that have a long-term outlook and can support the deepening of our market,” Muhammad said.

He chided recent opportunistic shareholding transactions that have destabilised market players.

“A number of domestic shareholders who after being given a licence and the opportunity to participate in the insurance sector sold off their shareholding and made quick profits,” he said without mentioning any names.

“These types of shareholders are a cause of instability to the insurers’ operations and not the kind of shareholders that would be viewed favourably for future participation in the financial industry,” Muhammad said.

The governor also said the industry should promote greater transparency and prudence in its business.

On premiums collections, Muhammad said the current practice where agents collected premiums from customers in cash and made payment to insurance and takaful companies using the agencies’ own cheque or credit card should cease.

He added that the industry facilitated customers to make direct payments to the insurance and takaful companies.

Another issue raised by Muhammad was underinvestment in domestic talent in the insurance industry.

He said that between 2014 and 2016, about RM1.3bil of payments made by insurers in Malaysia to foreign affiliates.

“Among a large number of foreign insurers, significant reliance on group level support has limited the investments in core functions needed to develop strong domestic capabilities,” he said.

To address the issue of unaffordable insurance products, Muhammad said the central bank is partnering with the industry to roll out Perlindungan Tenang, a national branding and communication platform next month in Kuching.

“Perlindungan Tenang is intended to reach 8 million working-age Malaysians and over 700,000 micro-enterprises that currently need insurance and takaful protection against key risks.

“To date, four insurers and two takaful operators have developed products that will be introduced under this initiative and we should expect much more will come on board,” Muhammad said.

Products that meet the criteria of being affordable, accessible and easy to understand will carry the Perlindungan Tenang logo and will benefit from regulatory flexibilities and co-branding and promotional initiatives.

By 2020, Muhammad hoped that about 75% of the population would have some sort of insurance coverage, from 56% of insurance penetration at present.

(The Star) Move to turn Ekovest into construction outfit

PETALING JAYA: Tan Sri Lim Kang Hoo’s plan to rationalise the property assets of the companies under his control is expected to turn Ekovest Bhd into a pure construction and infrastructure outfit, while enlarging Iskandar Waterfront City Bhd’s (IWC) land bank for immediate development.

Sources said IWC and Ekovest are expected to unveil the proposed corporate exercise today, following a meeting between the boards of both companies yesterday on the matter.

Trading in the shares of IWC and Ekovest have been suspended from yesterday, “pending the release of a material announcement”, both companies said in their separate filings with Bursa Malaysia.

IWC shares were last traded at RM1.40, while that of Ekovest were last traded at RM1.16.

Sources said this time, the restructuring would involve Ekovest – the property development, construction and highway infrastructure arm of companies under Lim – as the tycoon was likely aiming to rationalise the property assets of his companies.

According to sources, the exercise would likely involve Ekovest selling its entire land bank to IWC, which would likely be satisfied by the issuance of shares in IWC to Ekovest.

In explaining the rationale of the exercise, a source said: “At the moment, IWC’s property assets are in Johor while Ekovest properties are located largely in Kuala Lumpur. It makes sense to rationalise the assets because the Johor property play is long term in nature, while the properties in Kuala Lumpur have a faster turnaround.”

He noted that what IWC lacked at present was land for immediate development, while Ekovest already owned pockets of land for immediate development.

IWC’s major attraction is the 6,773 acres of waterfront land in Johor Baru, while Ekovest has a pocket of prime land in Kuala Lumpur that it received in return for the River of Life project.

Under the project, Ekovest was paid in land for rehabilitating sections of Sungai Gombak.

“By disposing of its entire land bank, Ekovest would be turned into a pure construction and infrastructure company,” the source said.

Ekovest, which recently completed the construction of the Duta-Ulu Klang Expressway (Duke) Phase 2 project, announced yesterday that it had received the balance payment of about RM209mil from the Employees Provident Fund (EPF) for the 40% stake in Duke.

Under an agreement signed last September, the EPF would pay a total of RM921mil in cash to Ekovest upon completion of Duke 2.

In May this year, Lim announced a major restructuring to consolidate all his property assets into Iskandar Waterfront Holdings Sdn Bhd (IWH), which is the parent company of IWC.

Under the proposed deal, which did not take off, IWH would take over the remaining 61.7% stake in IWC through a share swap.

However, there was poor sentiment on IWH and stocks related to Lim when the Government took back the Bandar Malaysia project from it in August this year.

Last year, IWH, together with China Railway Engineering Corp (CREC), was awarded the job to develop the 485 acres of land in Bandar Malaysia. The Finance Ministry has a 40% stake in the joint venture, while IWH and CREC hold a combined 60%.

(The Star) EPF ups stake in Signature

PETALING JAYA: The Employees Provident Fund (EPF) has emerged as a substantial shareholder in Signature International Bhd with a 5.07% stake or 11.61 million shares in the company.

According to a Bursa Malaysia filing, the biggest fund in the country has taken a substantial stake in the company that designs and manufactures kitchen systems on Oct 11. The following day, the EPF bought a further 80,000 shares in Signature.

The fund‘s entry into Signature comes as the company seeks to expand its business outside Malaysia, especially in UK.

Towards this end, Signature has been bidding for overseas jobs, and has put in a bid for phase two of the Battersea Power Station Restoration Project in London. The EPF holds a 20% interest in this project.

When contacted, Signature’s co-founder and group executive director Datuk Michael Chooi said the company was very pleasantly surprised with the EPF’s emergence as a substantial shareholder.

He confirmed that Signature had put in a bid for phase two of the Battersea project earlier this year.

“The size for phase two is relatively small, about RM30mil. The calls for tender interviews should be happening soon. We are, however, definitely preparing to bid for Battersea phase three which is a lot bigger – as there are more than 1,000 units to be constructed. We will tender for some RM100mil worth of jobs then,” said Chooi.

There are 254 apartments in phase two, while phase three will see the construction of some 1,300 apartments.

“We are serious about having a presence in the UK, and that is why we formed our UK company, Signature UK Pte Ltd, in May 2016,” said Chooi.

Some of the bigger Malaysian developers in the UK include SP Setia, Eco World International Bhd and Eastern & Oriental Bhd.

An analyst viewed positively the EPF’s entry into Signature because the EPF is a partner in some major property development projects.

The EPF is the land owner of Kwasa Damansara and the main shareholder of Malaysian Resources Corp Bhd.

The EPF has created Kwasa Land Sdn Bhd, the master developer of the massive Kwasa Damansara township sprawling over 2,330 acres in Sungai Buloh, of what was formerly the Rubber Research Institute Malaysia’s land.

Currently, Signature is the leader of premium kitchen systems in Malaysia, with an order book of some RM280mil. While the bulk of these are local orders, Signature has started making inroads into Vietnam and Indonesia over the last four years.

It has so far completed four projects in Vietnam, with an average value of US$500,000 (RM2.1mil) per project. While the value is still small, Chooi said it was possible that the overseas segment could contribute some 5% by its next financial year.

For its financial year ended June 30, the company made a net profit of RM20.31mil from RM47.79mil previously, while revenue increased to RM205.21mil from RM196.77mil.

The better results in the previous year was due to a one-off gain from the compulsory acquisition of land from the Selangor government.

At yesterday’s close of 86.5 sen, the stock was up 6.5 sen on a year-to-date basis and had a price earnings ratio of 9.89 times. The stock now gives a dividend yield of 2.33% and has a market capitalisation of RM197mil.

Signature derives 70% of its sales from projects and the remaining is made up of retail sales. Among its clients are the country’s first-tier developers.

Signature designs, produces, markets and distributes kitchen systems under its flagship brand Signature Kitchen and mass-market brand Kubiq. The company was established in 1994 and listed in 2008.

(The Star) Tee: Initiatives will help draw more investments to Johor

ISKANDAR PUTERI: Johor is confident of attracting more domestic and foreign investments with the initiatives and policies introduced in Budget 2018.

“Johor stands to gain as we are the No. 1 destination for investment in the manufacturing sector in Malaysia,” state Tourism, Trade and Consumerism Committee chairman Datuk Tee Siew Kiong said.

The RM150mil financial allocation to the Malaysia External Trade Development Corp, Malay­sian Investment Develop­ment Authority and SME Corp would encourage more local businesses to venture into the global market, he told reporters after meeting a trade delegation from Shenzhen, China, at Kota Iskandar.

“The Government has also allocated RM1bil to help industries here automate further to boost their productivity,” he added.

“When Iskandar Malaysia was launched on Nov 4, 2006, many people were sceptical but now they can see it progressing and moving in the right direction,” he said.

Tee rubbished claims that Johor was focusing only on investments from China, adding that over the last few months, he had met trade delegations from Australia, Britain, Japan, South Korea, the United States and Vietnam.

(The Star) Ministry: Prices of 16% of goods cheaper with GST

At least 16% of goods are cheaper since the Goods and Services Tax (GST) was implemented, says the Domestic Trade, Cooperatives and Consumerism Ministry.

In a written reply to Ahmad Baihaki Atiqullah (PAS-Kubang Kerian), the ministry said 16% to 26% out of 1,396 goods cost less now.

However, the ministry did not provide the list of goods in the reply.

“There are many other factors, including foreign exchange rate and production constraints such as labour cost, weather and fuel costs,” he said.

Ahmad Baihaki had asked the ministry to state the number of goods that had become cheaper since the introduction of the GST in April 2015.

Monday, 30 October 2017

(NST) Vizione bags RM401m contract to build four office blocks

KUALA LUMPUR: Vizione Holdings Bhd’s wholly-owned Wira Syukur (M) Sdn Bhd (WSSB) has accepted a letter of award from Paragon Hemisphere Sdn Bhd (PHSB) to build four blocks of office suites in Ulu Langat, Selangor worth RM401 million.

In a filing to Bursa Malaysia today, the company said the award covers two phases.

Phase One is to build two blocks of office suites, namely Block A (40-storey) and Block B (34-storey), while Phase 2 involves another two blocks of office suites namely Block C (42-storey) and Block D (36-storey).

Phase One will take 36 months to complete, while construction work on Phase 2 will begin on May 1 next year.

Vizione said the award further enlarges the group’s order book and is expected to provide a steady stream of revenue over the next four financial years ending 2018 to 2021.

(NST) UEM Sunrise to dispose land in Johor to Country View for RM310m

KUALA LUMPUR: UEM Sunrise Bhd has proposed to dispose its 163.92-acre of freehold land located in Mukim Pulai, Johor Bahru, to Country View Bhd for RM310 million.

The disposal is expected to be completed in the third-quarter (Q3) of 2018, the company noted in an exchange filing today.

In a separate filing, Country View said the land is planned for a mixed commercial development project with a gross development value (GDV) of RM1.26 billion, comprising resort linked villas, shop offices and commercial plots of land.

The company’s wholly owned subsidiary Country View Resources Sdn Bhd entered into a conditional sale and purchase agreement with UEM Sunrise’s wholly owned subsidiary Bandar Nusajaya Development Sdn Bhd.

“The land acquisition represents a strategic purchase as it is situated in Iskandar Puteri, which is in close proximity to our existing ongoing development project of Taman Nusa Sentral.

“It will also allow us to capitalise on its already established presence in Iskandar Puteri and Johor Bahru,” it said.

Country View said the acquisition is in line with the company’s growth strategy of accumulating new suitable land to be included in the group’s landbank in order to sustain its core business as a property developer as well as enhance future earnings and revenue.

“The development plan is expected to commence after all necessary approvals from the relevant authorities have been obtained and completion will take a period of seven years,” it said.

However, the company said it is too preliminary to ascertain the total development cost including the expected commencement and completion dates, number of units in respect of each type of development, as well as the expected profits to be derived from the development plan.

“The development cost is expected to be funded via internally generated funds, bank borrowings and/or issuance of debt securities,” it added.

(The Star) Various stocks to gain from Budget 2018

PETALING JAYA: While the construction sector is an obvious beneficiary of Budget 2018, stocks related to the consumer, logistics and manufacturing businesses are also likely to benefit from the budget.

Analysts have pointed out that the reduction in personal income taxes and allocations targeted towards the B40 and M40 would boost private consumption and positively benefit consumer-driven counters on Bursa Malaysia.

B40 and M40 refers to the bottom 40% and middle 40% of households respectively.

TA Securities Research said that apart from construction players, consumer sector stocks under its coverage are anticipated to benefit from Budget 2018.

“Allocation for various rail projects, airports, ports, hospitals and roads in the five main economic corridors are positive for the construction players such as Gamuda Bhd, Sunway Construction Group Bhd, WCT Holdings Bhd and Gadang Holdings Bhd.

“As for consumer stocks, we think the main beneficiaries under coverage are Aeon, Padini, Johore Tin, Hup Seng Industries, F&N, QL Resources, Nestle, BAT, Heineken and Carlsberg,” said the research unit in a note.

Meanwhile, AmInvestment Bank Research indicated that logistics and manufacturing players could also benefit from measures.

In support of Industry Revolution 4.0 investments and business activities, the Government will provide a matching grant of RM245mil under the Domestic Investment Strategic Fund to upgrade smart manufacturing facilities.

“Inari Amertron has indicated that the group intends to invest in automated inspection machines, which would cost about US$1mil per unit while V.S. Industry has budgeted RM20mil for investments in automation in FY18.

“Top Glove, Hartalega and Kossan, with robust capacity expansion though automation and the impending embrace of Industry 4.0, are also expected to benefit from the measures,” said the research house.

AmInvestment Bank Research also added that proposals in Budget 2018 targeted towards refurbishment and construction of airports are positive to the local transportation and logistics sector.

Note that, Budget 2018 includes allocation for the refurbishment of existing airports in Penang, Langkawi, Kota Bharu and Sandakan.

Apart from that, a new airport will also be developed in Mukah.

“We also believe the commencement of infrastructure construction in Digital Free Trade Zone (DFTZ) as a positive sign that this project is well underway, which should enhance the long-term outlook on the local logistics sector,” it said, adding that the Government has allocated RM83.5mil in Budget 2018 for the first phase of DFTZ.

(The Star) Budget measures seen as boosting property sales

PETALING JAYA: Several measures from Budget 2018 are expected to boost the property sector, which has seen slow sales in the last few years.

Besides adding more numbers to the list of affordable housing under the different agencies, for the first time in 60 years, the Government has proposed a 50% tax exemption on rental income not exceeding RM2,000 per month from the 2018 to 2020 assessment. The Government has proposed the Residential Rental Act.

The proposed legislation and the rental tax exemption are significant. They underscore the division of the residential property sector into three areas, namely home ownership, residential investment and the speculative market.

Home ownership is highly-valued in Asia, said property consultancy group Khong & Jaafar group managing director Elvin Fernandez.

“It is not a case of because you cannot afford to buy a house therefore, you rent it,” he said.

Singapore has forwarded this concept of home ownership during the tenure of its Prime Minister the late Lee Kuan Yew and today the city-state has a home ownership rate of about 90%, according to the Singapore statistics department.

The HDB housing makes up the bulk of the market, at 80%, the remaining 20% are private housing.

The association of valuers, property managers, estate agents and property consultants in the private sector, Malaysia budget committee chairman James Wong said there is the concept of house-owning democracy and Malaysia is one of them.

“The proposed Act will promote the growth of the rental market compared with home ownership,” said Wong.

The second significant measure is the proposed extension of the financing scheme introduced by PR1MA to private sector developers, subject to certain criteria.

The extension of this scheme underscores the Government’s encouragement of having more affordable homes being constructed.

The objective of this PR1MA scheme was to help buyers who have financing issues by using some of their contribution under the Employers Provident Fund.

When this scheme was introduced in October 2016, private developers wanted to be included. Their rationale was they too were mandated by the Government to build affordable homes.

Mah Sing group, who prides itself as Malaysia’s leading developer for affordable housing, was euphoric.

The private developer held three simultaneous previews of three projects located in the Klang Valley, Penang island and Johor.

Mah Sing’s group managing director Tan Sri Leong Hoy Kum said buyers have showed interest on an average of 95% on all the projects by placing an earnest deposit.

Leong said judging from the response, the budget has “revived sentiments and confidence in the market.”

Prices begin from less than RM350,000 for M Centura in the Klang Valley and M Vista@ Southbay, Penang. Both are high-rise residential projects while Fern in Meridin East, Johor are landed units with prices starting from slightly more than RM400,000.

“We also would like to applaud the Government’s commitment in enhancing education by providing higher allocation in Budget 2018 for the education sector as well as approving the construction of 10 more schools in Johor and Selangor. In fact, one of the schools, SJK (C) Sim Mow Yu will be built in our Meridin East township,” Leong said.

The third measure aimed to open up property ownership among the civil service.

Under this proposal, the Public Sector Home Financing Board (Lembaga Pembiayaan Perumahan Sektor Awam) which is under the Finance Ministry, is allowed to finance properties constructed on waqf or land donated for Islamic religious or charitable, benevolent purposes.

The budget also allowed the Public Sector Home Financing Board to “have joint-loan for husband and wife or child with a condition that all applicants must be public servants.”

The board also “allows joint-home financing between husband and wife or child, with a condition at least one of the applicants is a public servant.”

“The non-public servant needs to secure loans from the financial institutions or agencies that provide financing facilities who agree to be the second mortgage holder,” according to the budget.

CBRE|WTW director Heng Kiang Hai said the measures proposed under the Public Sector Housing Board would help to boost home ownership among the civil service extensively.

“This will effectively lower the barrier and/or increase the loan amount eligibility of civil servants, thereby making affordable a higher range of houses for this group,” Heng said.

CBRE|WTW managing director Foo Gee Jen said the move would help the young people in the civil service because they can now depend on their father or mother to have a joint loan.

As for the party who is not in the civil service, the question is which commercial bank will agree to be the second mortgage holder. The commercial bank may impose a higher rate of interest to commensurate the risk, according to Foo.