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Saturday, 30 November 2019

(NST) 50 per cent of Kg Baru landowners respond to survey on redevelopment


KUALA LUMPUR: More than 2,000 or close to 50 per cent Kampung Baru landowners whose plots are earmarked for redevelopment have given their feedback to the government.

Federal Territories Minister Khalid Samad said this was gathered hours before the deadline for the feedback forms to be submitted to the Kampung Baru Development Corporation office.

He said some of them with sizeable individually-owned lots have expressed their willingness to accept the government’s offer.

Khalid said there would not be an extension to the Nov 30 deadline for the 5,000-odd landowners to give their feedback on whether or not they agreed to selling their lots at the rate of RM1,000 per sq ft.

He said following this, the corporation would approach the landowners separately to explain the Federal Territories Ministry’s objectives for the redevelopment.

Asked if the Land Acquisition Act would be invoked, Khalid said there was no reason to do so if everyone understood that this was the best offer for them.

The rate offered by the government, which fetches RM43.6 million per acre, was unsurpassed in the history of Malay reserve land in Malaysia.

The new rate comes with a cash cap of RM850 and a mandatory RM150 pay out in shares, which is to be parked under a special purpose vehicle (SPV) for the redevelopment.

The 120-year-old Kampung Baru covers six villages and a 120ha land, which sits in the prime area of the city.

Of the 80ha land earmarked for redevelopment, 62ha or 77.5 per cent is privately-owned.

The issue of redeveloping the enclave has been bandied about for the past few decades.

The sheer number of landowners and the fact that some are unregistered have died or are embroiled in small estate disputes, have further complicated matters.

Khalid said this while launching the Ujana Municipal park in Sungai Petani earlier today.

On a separate matter, he said until October 2019, the National Landscape Department had set up 71 parks with the allocation of RM266 million.

“Five of them are in Kedah with an allocation of RM20 million,” he said, adding that the parks were in Jitra, Langkawi, Bandar Baharu, Alor Setar and Sungai Petani.

(NST) Sabah opens door to investments from Japan


KOTA KINABALU: Chief Minister Datuk Seri Mohd Shafie Apdal has assured that the state government would provide easy access to Japanese companies interested to invest in Sabah.

He said the state government would reduce red tape, provided that the application submitted was in accordance with standard operating procedures.

“Sabah is a prime location for investors because it is strategically placed for the halal industry, halal cargo consolidation and redistribution activities and has an abundance of resources.

“Among them include as palm oil, aquaculture, fisheries, seaweed as well other by-products from palm oil and bio-refineries both within Sabah and the broader BIMP-Eaga region,” he said in a statement.

Mohd Shafie was addressing 200 investors and businessmen from 140 companies in Kobe as the first leg of the state's trade mission to spell out investment opportunities in Japan yesterday.

He also delivered keynote address at a business seminar and spent three hours explaining at length the many business potentials in Sabah due to its strategic location as a gateway for Japan to expand their trade to the Asean countries.

“Japanese companies can take advantage of the new port facilities at the Lahad Datu Palm Oil Industrial Cluster, which is located in the trade path of the Lombok-Makassar Straits.

“With 1.5 million hectares of oil palm, Sabah produces six million tonnes of Crude Palm Oil and 30 million tonnes of Crude Palm Kernel Oil per annum for the biomass industry, which is popular in Japan,” he said.

Mohd Shafie explained that the state government has banned the export of round logs in order to support the growth of the furniture industry.

“Sabah has some of the world’s oldest rainforest, and our timber industry is being developed on a sustainable basis in compliance with global standards.”

(The Star) Grand opening of ninth restaurant

Grand Imperial Restaurant’s ninth branch at Pavilion Kuala Lumpur is giving prominence to high-end imported seafood and fresh ingredients.

Each Grand Imperial restaurant features different appetisers and the newest eatery is known for its cold dishes made from quality ingredients such as Australian Cuttlefish with Tartar Sauce and Dried Scallop with XO Sauce.

The restaurant, which covers an area of ​​about 1,115sq m, has seven luxurious rooms that can accommodate up to 450 people.

Grand Imperial Restaurant group managing director Rand Cheung said that goals set by the company two years ago — to open a branch in Genting Highlands and another in Pavilion KL — had been achieved.

“Another new restaurant is expected to open in June next year at The Club@Bukit Utama in Bandar Utama with a ballroom that can accommodate up to 1,000, ” he said at the opening of the latest Grand Imperial venue.

On future plans, Cheung said there were plans to set up restaurants in Hong Kong and Singapore.

A prominent company in the food and beverage industry, Grand Imperial Restaurant takes its role in corporate social responsibility seriously. To make its opening even more meaningful, a charity dinner was held after the opening.

In cooperation with Yayasan Nanyang Press, Grand Imperial Restaurant donated RM130,000 to St John’s Institution and a child who needs ear surgery.

Grand Imperial Restaurant business development manager Maggie Chow said the price of a table at the charity event was RM3,988. — By MINNOW YANG


(The Star) Pos Malaysia locks deal for more secure parcel delivery

Pos Malaysia has announced its partnership with Sunway PopBox in extending the national courier’s parcel delivery services across all the latter’s locations.

Sunway PopBox is the first integrated smart locker service provider to officially partner with Pos Malaysia.

Sunway PopBox offers a secure, self-service kiosk acting as delivery destinations for parcels instead of home or office addresses.

Beginning Dec 1, Pos Malaysia customers can deliver parcels to their recipient’s preferred PopBox locker address at no additional cost.

Once the parcel arrives at the PopBox locker, recipients will receive an SMS notification with a unique PIN code.

They can then proceed to the locker and enter the unique and secure PIN code to collect their parcels at their convenience.

This new delivery option provides Pos Malaysia users in the Klang Valley the convenience of picking up their packages at one of the 100 PopBox lockers at their preferred time.

Each locker has 43 compartments.

Compared to traditional locker services, PopBox smart lockers are placed at strategic areas and offer 24-hour access to users.

Pos Malaysia Bhd group chief executive officer Syed Md Najib Syed Md Noor said it was committed to delivering the best services and solutions to customers, catering to the demands of the country’s booming e-commerce market.

“Our partnership with Sunway PopBox enhances our reach to new and existing Pos Malaysia customers, complementing our Pos Laju EziBox services which are currently available at any time of the day, across 170 locations nationwide.

“We are actively seeking suitable business partners and expanding our touch points to boost our presence, elevate customer experience and growing our revenue by widening our customer base, ” he added.

Pos Malaysia users are not subjected to service charges for delivery to PopBox location.

To keep parcels secure, PopBox lockers are built to withstand harsh weather conditions and resist break-ins, and are equipped with CCTV surveillance cameras, providing each parcel safe storage until pick-up.

Sunway Group executive vice-president Evan Cheah said Sunway Popbox had expanded to 100 lockers and was easily available around strategic Klang Valley areas, including malls, office buildings, apartments, and universities.

“The lockers operate on a 24-7-365 basis and recipients can collect their parcel anytime and anywhere.

“This milestone of partnering with another long-term player

like Pos Malaysia will certainly enhance Sunway PopBox’s aggressive expansion plans to provide Klang Valley, Seremban and Nilai residents with even more convenience, ” he said.

Cheah added that in the next two years, there were plans to expand the service to major cities such as Johor and Penang.

PopBox lockers in malls are available to the public, whereas those in private residential buildings, offices and universities are limited to occupants and students only.

Property managers who are interested to place PopBox lockers at their premises can queries to info@popbox.asia.

For details, visit www.popbox.asia.


(The Star) Steps transformed from dull to Instagrammable

Award-winning Alamanda Steps in Putrajaya proves the potential of a staircase for placemaking.

Originally just a passage between Alamanda shopping centre and the riverside, it has become a place where people gather to create memories.

Putrajaya Holdings Sdn Bhd (PjH) corporate communications head Sabariah Mahmood said the steps used to be underutilised, barely seeing more than 50 people passing through in a day but now the number had tripled.

“The concept comes from four core principles which are quality spaces, diversity, equality and connectivity.

“In order to be successful, it also has to be sustainable and vibrant.

“It needed to be a place that can appeal to people of all ages, with activities and magnificent views, ” she said.

“Putrajaya Corporation (PjC) initiated the project with PjH, Urban Scale and the local community to rejuvenate the dull space into a colourful, cheerful, dynamic and Insta-worthy place.

“The response from the people was overwhelming. Everyone including PjH and PjC staff, schoolchildren, the disabled community and young planners volunteered to finish the project

“Pictures of the completed steps went viral after its launch by Federal Territories Minister Khalid Abdul Samad in January, ” she added.

Alamanda Steps were announced as the Platinum winner for Outdoor Public Park (On The Move) category in the MyPlace Awards Night 2019 held by Malaysian Institute of Planners,

PjH legal and corporate services division general manager Aminah Baba said it was one of the most successful placemaking projects in Putrajaya, which breathed new life into the otherwise plain and boring staircase.

“The project fulfilled two of the elements in PjH’s corporate brand promise of breathing life into ideas and vibrancy.”

“The rejuvenation of Alamanda Steps has brought along many joy, functionalities and opportunities for the public.

“It has become a multi-purpose space for the public, it is a place for people to socialise or just hanging out and relax at a recreational spot.

“It is loved by many and ‘Instagrammable’ due to its vibrant and youthful features, ” she said.

“This place is also sustainable and useful to the public as it conveys various functionality and serves as a connection for people in the area.

“Now, it is a place for recreation like silat performance and jogging besides being a venue for celebrations like banquets and birthdays!

“With that, it also creates opportunities for small vendors to set up business along the lakeside of Alamanda Steps, ” added Aminah.

PjH has also received various other awards for its development, namely The BrandLaureate World Best Brands Award for property developer category this year and The BrandLaureate Industry Champion Brand Icon Award last year.


(The Star) More homes for civil servants

More government servants in Putrajaya will be moving into their own homes, following the completion of Putrajaya Holdings Sdn Bhd’s (PjH) second Malaysia Civil Servants Housing Programme (PPAM) Seruling.

Located in Precinct 5, PPAM Seruling comprises three-blocks with 1,062 units in total, which comes in three sizes --- 1,000sq ft, 1,200sq ft and 1,500sq ft; and 1,275 parking lots.

PjH’s first such project was PPAM Palma in Precinct 11 comprising 263 units, completed in 2017.

PjH development senior general manager Hassan Ramadi said 90% of buyers who had collected their keys for PPAM Seruling, rated their units as “good” and “excellent.”

“The project was completed on April 30, which was 11 months ahead of schedule. Vacant possession in the first batch of 692 units were delivered on Oct 9.

“To-date, 95 owners have collected their keys and are happy with their purchases.

“The second batch of vacant possession will be delivered soon, ” he said at the key handover ceremony.

Hassan said this housing development was among PjH’s many initiatives under their corporate social responsibility, which was to provide affordable housing to civil servants.

“PjH is living up to its corporate brand promise which is ‘Oxygenation: Breathing Life into the Nation’.

“The five elements to it are breathing life into ideas, living, vibrancy, community and the environment.

“We wanted to offer comfortable living in the aspects of size, design, quality, location and price.

“I hope this project enable those in the middle-income bracket to own quality homes at affordable prices that are lower than the market rate.

“Among the facilities available are two multi-level carparks,

shoplots, kindergarten, nursery, surau and a multipurpose hall.

For sporting activities, there are futsal, sepak takraw and badminton courts as well as a children’s playground, ” he added.

There is no swimming pool in the development but that will not be a problem, because there are two watersport facilities less than 3km away --- Marina Putrajaya and Putrajaya Water Sports Complex.

At Marina Putrajaya, the most popular facility is the indoor swimming pool. Families crowd the pool area especially on weekends and school holidays.

Besides that, there are other sporting facilities here such as gym, aerobics area, squash courts as well as snooker and pool tables. Visitors can also indulge in steam bath and sauna. The karaoke joint is currently being upgraded.

Over at the sports complex, there is an outdoor Olympic-size swimming pool that is also popular among families.

Next to it is Putrajaya RC Park, which will soon provide radio controlled cars for rent, so everyone can enjoy the sport.

All these activities can be enjoyed for a small fee.

Both these places of interest also have tenants offering a variety of watersports activities such as kayaking and dragon boat, in addition to more specialised water sports like waterski, wakeboarding, flyboards and sailing.

Retiree Rosmah Latiff, 64, was full of smiles after receiving her keys.

“It has always been my dream to have a house in my name and I finally did it. No words can describe my happiness.

“My unit is a special one built for the disabled. I managed to get it as I have an autistic son who is wheelchair-bound. He is 34 years old, quite independent and loves the outdoors.

“My unit is on the ground floor, has handles in the toilet and low switches, which is perfect for him.

“I am very happy that the unit was also sold to me at a special rate.

“I worked as a receptionist and my salary was mostly spent on household needs and expenses for my autistic son. I could not afford any house in Putrajaya until this project came along, ” she added.

Another proud owner is administrative assistance Azizah Hashim, 35 who cannot wait to move in.

Azizah said her family of six live in a rented house in Bandar Baru Bangi because of the cheaper rental rate, although she and her husband worked in Putrajaya.

“Even my son who is in Year Two is studying in a school in Putrajaya. We decided to enrol him in a school near our workplace so that it is easier on us.

“The three of us have to leave home by 6.30am to travel 25km to Putrajaya. I pity my son who has to wake up at 5.30am to get ready for school.

“But that will not be the case from next year onwards.

“My husband and I also travel separately because of work commitments. But this will all change after we move into our new house.

“From one hour of daily commute, it will be reduced to just minutes. Less time on the road means more time for the family, ” Azizah added.

Also from Bandar Baru Bangi, credit officer Mohd Salimi Mustafa, 27 is looking forward to greater saving in fuel costs.

He said the daily drive to work was what made him buy a house closer to his workplace.

“I take between 45 minutes to one hour 30 minutes to reach my workplace. Every day I am constantly checking my traffic app for the estimated travel time to ensure that I will not be late for work. The traffic stresses me a lot.

“I am glad that I will be moving closer to my workplace, ” said the bachelor.

Hassan said PjH had launched a mobile application called i-PjH to improve their services.

“We have started using i-PjH to facilitate the handing over of keys and defects liability period.

“Homeowners can also lodge complaints and provide feedback about their units through this application, and our customer relationship management team will look into the matter.

“We welcome all feedback to improve our level of service, ” he said.


(The Star) More developers to build based on need

As 2020 draws near, cautious sentiment within the property sector is anticipated to remain, with more developers expected to conduct thorough studies before green-lighting a project.


Not so fast: More developers are expected to conduct thorough studies before green-lighting a project in 2020.

Knight Frank Malaysia managing director Sarkunan Subramaniam says many developers will build according to need instead of “ego”.

“Developers will be more cautious with their launches. Many will have small launches in phases,” he says in a paper titled Peering into 2020: Market Outlook.

He adds that more studies and research will be done before a project is developed.

Citing a survey on housing developers, Sarkunan reveals that just 8% of respondents expect the property sector in 2020 to perform better than this year.

“About 25% expect the market in 2020 to perform worse than this year, while the remaining 67% anticipate the sector to be the same as 2019.”

Sarkunan adds that more township developments will incorporate neighbourhood satellites, co-working spaces and Grab car stands.

“Transit-oriented developments (TODS) with the right pricing will continue to be sought after by the purchasers,” he says.

A TOD is often defined as a mixed development typically within a 400m radius of a transit station or any public transport network.

Meanwhile, property consultancy Raine & Horne International Zaki & Partners Sdn Bhd says a total of 204,840 residential property transactions valued at Rm71.03bil are estimated in Malaysia for 2019.

“This is an increase of 7,455 transactions compared with a total of 197,385 transactions recorded for residential property last year. The value of residential property transactions will also increase from Rm68.75bil in 2018 to the estimated Rm71.03bil this year,” it says in a slide presentation.

The property consultancy adds that the total residential property transactions in 2017 and 2016 were also lower at 194,684 units valued at Rm68.64bil and 203,064 units valued at Rm65.57bil respectively.

“A large number of the transactions are in the secondary residential property market but the increase in transactions are noted in both the primary and secondary residential property market.

“Growth in the primary residential property market in terms of number and value of transactions is expected to grow between 10% and 11% for 2019 while in the secondary residential property market it’s between 2% and 3%.”

Raine & Horne International Zaki & Partners managing director Ho Sek Chuen says continued local demand will be seen in smaller and affordable units in the primary market, fuelled by positive government policies and various incentives given by developers.

“The impact on the primary market of residential properties above RM600,000 from purchasers from foreign buyers will only be detected in 2020,” he adds.

Meanwhile, property consultancy Nawawi Tie Leung Property Consultants Sdn Bhd says the residential market is expected to remain gloomy in the last quarter of 2019, as all players are likely to adopt a wait-and-see attitude, given concerns over the weak domestic economy.

“Various efforts have been put in place since early 2019 to revitalise the subdued residential market, such as the launch of National Housing Policy 2.0 and Homeownership Campaign (HOC 2019).

“The extension of HOC 2019 till the end of the year is expected to stimulate and encourage home-ownership among Malaysians,” it says.

The property consultancy adds that developers continued to rejuvenate their marketing strategies to clear unsold stocks, by offering attractive discounts, incentives and freebies.

“The government, on the other hand, continued to review and introduce policies that could help boost the soft residential market.”

Separately, Sarkunan says the biggest cause for the overhang in the country to subsist is affordability and mismatch.

He says the other factors, in descending order, are end financing, less-than desirable locations, oversupply of residential units, bumiputra quota and product mismatch.

According to the National Property Information Centre’s figures in property overhang as at the second quarter of 2019, the ringgit value of unsold completed housing, including serviced apartments and small offices home offices is Rm35.1bil.

Meanwhile, Sarkunan says the bulk of the overhang units (or 26%) comprised units between RM500,000 and RM700,000 as at September 2019. This was followed by units between RM700,000 and Rm1mil at 22%.

“The percentage of overhang units ranging between RM300,000 and RM500,000 stood at 20%,” he says.

In terms of property type, landed residential comprised the highest number of overhang units at 41%, followed be condominiums (28%), serviced apartments (21%) and small office home office (Soho) units (10%).

“Loan approved to loan applied ratio for the purchase of residential property improved from 40.4% a year ago to 44.7% as of August 2019,” says Sarkunan, adding that non-performing loans for the purchase of residential property grew 9.5% year-on-year during the same period.

Meanwhile, as at the third quarter of 2019, Nawawi Tie Leung Property Consultants says three high-rise projects were completed, with a total of 2,514 units added to the stock.

“The bulk of the supply, comprising 1,516 units, was from three towers of serviced apartments at Ekocheras, located outside the KL city centre at Jalan Cheras’ Mile 5. The other two completed projects were Stonor 3 with 400 units and Aria KLCC with 598 units.

“About 1,510 units are expected to enter the market in the fourth quarter of 2019 and all will be in the city centre. Both prices and rents for high-end condominiums respectively eased marginally by 0.8% and 2% quarter-on-quarter at RM1,028 per sq ft and RM3.78 per sq ft per month respectively.”

(The Star) The making of a RM150bil GDV company

Late last week, there was again renewed market rumour of yet another attempt to merge UEM Sunrise (UEMS) and ECO WORLD Development Group (ECW).

The news item that originated from down south suggested that ECW owners are insisting on management control should the planned merger go through. It was also suggested that the planned merger would be on a share-swap basis.

In a share swap, there could potentially be two scenarios. One would be whereby a Special Purpose Vehicle (SPV) is formed which would act as the merged entity of the two companies and the SPV will issue shares to the current shareholders on a certain fixed ratio basis.

The second scenario would be that one of the companies would act as an anchor whereby the anchor company would than issue shares of the company to acquire the target company, also on a certain swap ratio basis. Of course, the second scenario sounds more like an acquisition rather than a merger.

Bottomline to any merger or acquisition is the valuation. For property companies, the benchmark used for valuation is normally what is referred to as revalued (or revised) net asset value (RNAV) basis.

In this method, profits derived from the company’s current projects are discounted at an appropriate discount rate and market values of undeveloped landbank are applied to arrive at the total amount.



The RNAV figure is than derived by subtracting the company’s net debt. The RNAV figure gives investors what is the appropriate value of the company and of course the current market price of the company not only reflects the amount of discount that the market perceives but also due to the weak market sentiment towards property based companies.

From the first table, we can make a general summary that indeed UEMS is larger than ECW on all counts and critically, UEMS’ RNAV (which is derived from analysts’ average estimates) is about 1.77x the size of ECW.

Granted the higher acreage of landbank that UEMS has (mainly in Nusajaya), its landbank is less valuable than that of ECW in terms of future development value.

Is this merger in the best interest of both companies’ shareholders?

While at the moment, the news flow seems to suggests that the major shareholders of the companies may be on some talking terms and exploring the idea of the merger and its merits.

The question is would the merger create synergistic benefits where one plus one is greater than two or would it result in diminishing returns to shareholders? While on paper it does suggest that the SPV would be a significant market player within the property sector with total GDV of about RM150bil and total undeveloped land of more than 10,000 acres, the issue is all about chemistry between the two companies.

ECW is known to be a strong township developer as well as an integrated commercial development and high-rise condominiums while UEMS’ specialty is also similar to that of ECW.




However, other than what is left at Mont Kiara as well as its new RM15bil Kiara Bay development, UEMS is primarily focused in Nusajaya, where 75% of its future GDV is located. Hence, both developers basically have a similar forte and hence they could perhaps be in-tune when it comes to understanding the ropes of the business in a merged entity.

Financially, due to the ECW’s larger net gearing level, the SPV would see its net gearing level to be lower but still significant at 55% of shareholders’ funds while in terms of revenue and profits, the merger between ECW and UEMS will see potential revenue of about RM4.5bil and net profit of about RM360mil.

This is based on the annualised figures using the nine months cumulative normalised earnings of UEMS and ECW respectively year-to-date.

The plus point for ECW is the market’s perceived higher brand value for ECW rather than UEMS as ECW is seen to have a superior marketing and branding strategy while UEMS lacks the push for its brand.

As we know, UEMS’ brand value was derived when UEM bought over Sunrise, which helped it to reposition itself in the market, especially on projects located in Mont Kiara. ECW on the other hand built its brand from scratch.

The negative point in any merger is the time it takes and the merger integration process, which typically leads to some form of right sizing the entire organisation in terms of human capital. But, in the longer term, if done right, a merger does provide synergistic benefits in terms of overhead costs and economies of scale.

Based on the current market capitalisation of the two companies, the combined value of the SPV is approximately RM5.39bil. As explained earlier, the right formula to value property companies is the RNAV method and that method values the SPV at a huge valuation of RM17.83bil. Of course, the market is not pricing this and at the moment, the two companies are trading at a price to RNAV ratio of 0.3x and 0.29x for ECW and UEMS respectively.


Assuming the fair P/RNAV ratio is at 0.5x for both, which is the current appropriate value of listed property companies in the market, the SPV should have a value of RM8.914bil as highlighted in the second table.

With the higher weighting on UEMS and with UEMS’ largest shareholder being UEM Group, which is an indirect wholly owned subsidiary of Khazanah Nasional, it is likely that UEM Group will end-up as the largest shareholder of the SPV. Table 3 provides the impact of a share-swap between shareholders of ECW and UEMS into the new merged SPV.

UEM Group presently has 66.1% stake in UEMS and based on the 64% weighting of UEMS on SPV, UEM Group’s shareholding in the SPV would be about 42.2%. Meanwhile, ECW’s largest shareholder is Sinarmas Harta SB, which has a 32.9% stake in ECW, will emerged as the second largest shareholder in the merged entity with 11.9% shareholding as ECW’s weighting in the SPV is 36%. On an indirect basis, Dato’ Leong Kok Wah, who has some 40.1% stake in ECW, will emerged as the 2nd largest shareholder in the SPV with a combined holding off 14.5% as he is a deemed shareholder of both Sinarmas Harta SB and EcoWorld Development SB.

From the above analysis, it is clear that because UEMS is a larger company in terms of market capitalisation, shareholders’ funds and RNAV, shareholders of UEMS will be bigger shareholders in the merged entity and not shareholders of ECW. With that, it would be interesting to see how ECW would enable to gain management control as suggested by last week’s news report. Watch this space!

With the higher weighting on UEMS and with UEMS’ largest shareholder being UEM Group, which is an indirect wholly owned subsidiary of Khazanah Nasional, it is likely that UEM Group will end up as the largest shareholder of the SPV. The table provides the impact of a share-swap between shareholders of ECW and UEMS into the new merged SPV.

UEM Group presently has 66.1% stake in UEMS and based on the 64% weighting of UEMS on SPV, UEM Group’s shareholding in the SPV would be about 42.2%. Meanwhile, ECW’s largest shareholder is Sinarmas Harta SB, which has a 32.9% stake in ECW, will emerged as the second largest shareholder in the merged entity with 11.9% shareholding as ECW’s weighting in the SPV is 36%. On an indirect basis, Dato’ Leong Kok Wah, who has some 40.1% stake in ECW, will emerged as the second largest shareholder in the SPV with a combined holding off 14.5% as he is a deemed shareholder of both Sinarmas Harta SB and EcoWorld Development SB.

From the above analysis, it is clear that because UEMS is a larger company in terms of market capitalisation, shareholders’ funds and RNAV, shareholders of UEMS will be bigger shareholders in the merged entity and not shareholders of ECW.

With that, it would be interesting to see how ECW would enable to gain management control as suggested by last week’s news report. Watch this space!

The views expressed here are the writer’s own.


(The Star) Getting the property planning policies right

As at the end of the third quarter (3Q19), the amount of retail space in decentralised areas of the Klang Valley, defined as “Outside Kuala Lumpur City” (OKLC), has grown to 38.1 million sq ft.

The growth is partly due to a planning policy which steer developers of serviced residences – a residential product built on land with commercial title – to include retail space and amenities, for example, a coffee shop, mini-market, hair salon and laundrette within their projects.

In some cases, developers used this as an excuse to maximise plot ratio by building substantial and unjustified retail space in non-viable locations, as opposed to catering to residents within the development.

Although the intention may have been good in the sense of providing convenience “on the door-step” retail outlets and amenities for residents, the popularity of building serviced residences has, in part, resulted in too much retail space and overlapping retail catchments in certain areas.

Jones Lang Wootton (JLW) studied selected serviced residences/SoHos/SoFos with retail podiums to assess the gravity of the issue.

The graph shows the amount of space completed between 2010 and 3Q19, with podiums of two to five levels, located in Shah Alam, Sungai Buloh, Puchong and Kajang.

These less prime and smaller projects averaging 154,000 sq ft, which may not have been fully supported by extensive research or feasibility studies, are now facing low occupancies.

The pie chart shows the percentage representation of various ranges of occupancies, by net lettable area (NLA), of the monitored integrated podiums totalling 2.3 million sq ft. The majority (60%) is less than 50% occupied.

Thus, it is imperative that planning guidelines and policies should be based on advisory/views from the relevant industry stakeholders, including views of developers and consultants, and on property market fundamentals, trends and forecasts.

The overall objective is to ensure a balanced and sustainable property market with no “white elephant” developments. Furthermore, trends and changes should be anticipated with policy-makers being more reactive, from a macro perspective.

Poor occupancies

Because of poor occupancies, some owners, according to our research of selectively monitored stock have introduced unconventional retail use for the space, such as service-related businesses, co-working offices and entertainment. Multi-purpose function space are being used for promotion events, exhibitions, weddings and small conferences.

Although the average rental achieved is lower than the conventional retail use, these types of users generally have a positive spillover effect.

JLW’s monitoring of the market has indicated that these users can occupy up to 40% of the total NLA, although the majority occupy 10% or less.

Moving forward, changes in the retail landscape are likely to see more owners of shopping centre embarking on asset enhancement initiatives by seeking to attract more unconventional retail users.

This has been made necessary due to the over provision of space. However, retrofitting can often be counter-productive with huge economic disadvantages.

Another well-established policy which has impacted the market is allowing serviced residences and small offices home offices (SOHOs), usually marketed as residential properties and used as condominiums, to be built on commercial land.

The size of a building on commercial title is based on a plot ratio, versus density, the conventional mode for a residential development.

Density refers to the number of persons per acre. Plot ratio refers to a building’s total floor area to the size of the land on which it is built.

In 2010, when the commercial sector was already experiencing some overbuilding and the average occupancy of offices was declining, some developers with the approval of the planning authorities resorted to building residential accommodation on commercial land.

This was also partly due to stricter condominium (residential) regulations on density; more units per project were able to be built in a serviced residences on commercial title.

Moreover, in the Kuala Lumpur city centre and its surroundings, plot ratios were increased resulting in higher land prices, and subsequently, much higher density developments.

Planning for residential and for “high density” projects can range between 121 and 400 persons per acre with high density developments translating to about 100 units per acre.

However, based on a commercial plot ratio of about 10, some KL serviced residences, including studio units, can comprise about 400 units per acre.

With as many as 400 units per acre and smaller sized units – led by affordability – people are living in more dense conditions.

KL’s planning authority recognised this and capped the number of units measuring 450 sq ft to 649 sq ft to 30% of the total units in a development.

Growing traffic congestion

However, the authority appears to have failed to address the growing traffic congestion. They have not considered whether the existing and planned surrounding infrastructure is, or will be, sufficient to support such high density developments to ensure a quality, sustainable living environment.

Today, we are faced with an oversupply of high-end serviced residences in the city centre with average property prices for certain projects having declined by between 10% and 15% from the peak in 2014.

Moreover, city living has attracted locals and expatriates although in recent years their numbers have been dwindling.

When one talks about attaining a “better liveable city status” for KL, one needs to assess factors such as quality of life, infrastructure, accessibility and maintenance.

While the city has succeeded in attracting investment, the criteria of a “liveable” city, which help attract multinational corporations and their employees in the first place, should be scrutinised.

The emphasis by Economist Intelligence Unit’s Livability Ranking Index and Mercer Quality of Living Survey include political and economic stability, healthcare, education, climate, safety, culture, road network, public transportation options/ infrastructure and environment (stemming from planning policies).

Therefore, planning policies must assess micro-level issues and transcend this into macro level to achieve a collective goal.

KL is well positioned to establish a sustainable, high quality living to compete with Singapore and Tokyo. Well planned policies are, however, necessary if the city is to attract and retain investors and to nurture a larger skilled and professional work force.

To this end, planning policies need to be supported and underpinned by sturdy research and evidence. Policy-makers must maintain clear and focused objectives.

They must acknowledge the importance of relevant property market information, collaboration and engagement with whole communities and stakeholders in the property industry, before their implementation.

Note: Malathi Thevendran is executive director (research and consultancy) and David Jarnell is senior vice-president and head of research at Jones Lang Wootton. They can be reached at consulting@jlwmalaysia.com


(The Star) Govt should support local OEMs achieve higher exports

As the local automotive industry braces for the National Automotive Policy 2019, which is slated to be launched by year-end, Proton Holdings Bhd chief executive officer Li Chunrong is hopeful that the policy will help pave the way for the sector to fast track its presence globally.

“I wish the government can support local original equipment manufacturers to achieve higher exports. Ideally, for every six people in Malaysia, we’d like to see one person related to the automotive industry, ” he says.

“This would be good synergy. This is why many countries consider the auto sector as a pilot industry.”

Proton’s main export markets include Brunei, Mauritius, Jordan, Pakistan, Iraq, Zimbabwe and Egypt. In the past, the national car company used to export up to 20,000 vehicles annually.

However, poor demand for Proton cars saw exports drop to just 248 units in 2017. Last year, foreign sales pushed past the 1,000-unit mark, a level Li hopes to maintain this year as well.

With demand for the company’s cars driven by its X70 sport-utility vehicle as well as its core models such as the Saga and the Persona, Li is optimistic exports will be higher next year.

Although he does not provide a specific timeline, Li says Proton aspires to be the third-biggest player within Asean.

“We hope the government can support Proton, especially our vendors, because Malaysia’s scale is not big enough. The local total industry volume is around 600,000 vehicles; in China, it’s 30 million. So over here, the economies of scale is small.“There is also the issue of efficiency. I’d like to ask the government to support our local vendors when it comes to tooling. Even if not just Proton, then the entire Malaysian vendor community.”

Li believes if the tooling capacities can be improved, so too can the efficiency of the vendors.

“If they can produce components for the X70, I believe they can produce many components. With the correct support, we could produce world-class products.”

Proton has revised upwards its sales target for 2019 to 100,000 units from 93,000 units previously, due to the rising popularity of its vehicles. This, says RHB Research in a recent report, is a good sign that the national car company is capable of growing its presence in Asean.

“Proton also will be the platform for China’s Zhejiang Geely Automotive Co Ltd (Geely) to penetrate the Asean right-hand-drive markets. Proton has been awarded the licence to sell, market and distribute three Geely models (Geely Boyue, VF11 and SX11/Geely Binyue) in Brunei, Indonesia, Malaysia, Singapore and Thailand. “Indonesia and Thailand especially offer much potential, given the sheer size of the markets. This should give Proton the opportunity to grow beyond the domestic market and fuel earnings growth in the future.”

The research house adds that cheaper brands like Proton also should benefit from the macro-economic uncertainties currently in effect, as a result of decelerating global economic growth and the US-China trade war.

“This is because consumers would be more cautious in purchasing big-ticket items. Note that Proton has grown its market share to 15.8%, according to year-to-date September data from the Malaysian Automotive Association. This is compared with the 10.8% recorded in the same period last year, ” it says.


(The Star) Using EPF funds to address affordable housing woes

The rise in cost of living has led to a significant erosion of take-home income and is becoming an increasing cause for concern. This has resulted in more Malaysian youths and job entrants being unable to afford to purchase homes in urban and sub-urban areas.

The situation is further aggravated as the country struggles to find a solution to keep real estate prices in check. Many governmental agencies have been set up but affordability remains a problem.

Recent data showed that the house price index increase had moderated to 0.9% year-on-year (y-o-y) with the average price at RM420,345 during the second quarter (1Q19: 2.5% y-o-y, RM422,860).

However, house prices in some states are above national average with Kuala Lumpur registering a high RM780,564. Selangor’s price ranked second at RM480,863 followed by Sabah, Sarawak and Penang at RM458,774, RM440,645 and RM437,632 respectively (Source: National Property Information Centre – Napic)


Although the housing prices are sustaining an upward trend, demand continues to focus on affordable houses priced between RM150,000 and RM300,000. This phenomenon highlights a decline in affordability, driven by relatively slow growth in income and wage compared to house prices.

Home ownership becoming more unrealistic

Most Malaysians cannot afford to buy newly launched houses. The average price of new properties is nearly 48% higher than the maximum price of affordable houses in Malaysia. According to Bank Negara, the maximum affordable house price is RM282,000 based on the household median income.

Housing affordability in Malaysia has not improved significantly since 2002. The median multiple has been hovering between 4.0 and 5.0 since 2002, exceeding the 3.0 threshold for housing affordability.

Median multiple is an approach recognised by Bank Negara to evaluate housing affordability in Malaysia. Under this approach, a house is deemed to be affordable if it is priced not more than three times the household’s median annual income.

From 2002-2016, the median house price in Malaysia has increased at a compounded annual growth rate (CAGR) of 26.5% from RM175,000 to RM280,000. Nevertheless, median household income grew significantly slower at a CAGR of 11.7%, less than half the rate of increase in house prices.

According to Napic, the median price for a house in Kuala Lumpur was around RM480,000 during the first quarter this year. Assume a 10% downpayment, taking a 35-year tenure loan at 4.5% interest rate per annum. This leads to a RM2,044 monthly mortgage repayment – higher than most youths’ maximum loan eligibility, which basically stood at 65% to 70% of an individual’s debt service ratio.

Note that high house prices at unaffordable levels – particularly post-2011 have been a key reason for the elevated household debt level in Malaysia. According to Bank Negara, house price-to-household annual income was 3.9 times in 2012. Nonetheless, the ratio increased to 4.8 times as of 2016.

As at end-June 2019, Malaysia’s household debt reached 82.2% of gross domestic product (GDP) compared to its peak of 86.9% in 2015. It is among the highest in Asia and has even exceeded that of several high income nations such as the United States (75.0%) and Japan (58.2%).

Singapore case study: Buying houses using CPF

The Singapore Housing and Development Board (HDB) is often cited as a success story in providing affordable and quality homes, which leverages on the Central Provident Fund (CPF) as a financing means.

Under the CPF scheme, Additional CPF Housing Grant (AHG) and Special CPF Housing Grant (SHG) were initiated for eligible first-time buyers of government-subsidised flats of HDB. Buyers could afford to buy a house only after several years of working.

For instance, at the age of 24, an individual earning S$2,500 per month could accumulate 37% (17% from employers and 20% from the wages) of his/her monthly income in CPF savings. In the breakdown, 23% (equivalent to S$575 per month) is accrued in the Ordinary Account (OA), while 8% and 6% are appropriated into Medisave Account (MA) and Special Account (SA) respectively.

While the MA and SA are specifically designed for medical expenses and retirement-related financial products respectively, the OA is allocated for housing, insurance, investment, and education purposes.

In a year, assuming there are no income adjustments or bonuses, there should be at least S$6,900 in OA, accruing to a sum of S$34,500 at the end of fifth year. For simplicity’s sake, we assume his/her spouse also earns S$2,500 per month.

Although, they earn only S$2,500 each per month, they would already have a combined total of S$69,000 in their CPF OA after working for five years. This means that they have more than enough for a HDB flat downpayment, at a starting selling price of S$267,000.

Getting a HDB concessionary loan means that besides making the downpayment, the couple is also required by HDB to use the balance of their OA savings towards the purchase.

Although this could wipe out their OA savings initially, they end up borrowing less and paying less for their monthly repayments with a mortgage servicing ratio of not more than 30%.

Thus, an effective solution using EPF funds could be a viable solution

Generally, for Malaysian youths, the first five years of employment is the most challenging and toughest period, having insufficient savings to acquire a property.

At the moment, the withdrawal limit to purchase a home is 30% of total Employees Provident Fund (EPF) savings or all savings in Account 2.

Let us assume the scenario of a 25-year- old fresh graduate who aspires to own a home after working for five years, with a starting salary of RM2,800. Taking into account Malaysia’s average wage growth of above 5% for the past few years, we assume a conservative 5% annual salary increase in the next five years.

Based on the table above, the accumulated amount in EPF Account 2 after five years is about RM13,368, which means that the individual at most will be able to afford a People’s Housing Project (PPR) unit downpayment.

Moreover, despite the maximum eligible household monthly income for applications of PPR houses was raised from RM2,500 to RM3,000, earning a monthly income of RM3,403, the 30-year-old individual had just surpassed the eligibility limit set by the Ministry of Urban Wellbeing, Housing and Local Government to purchase a PPR home. That’s a double whammy for the aspiring first home buyer!

To make matters worse, the individual may already have other loan commitments such as personal loans and hire purchase loans, which could reduce the chances of owning a home due to lower debt serviceability and credit source.

Full withdrawal

Therefore, I would suggest due consideration to be given on the possibility of full withdrawal of total EPF savings for a first-home purchase, accompanied with certain conditions.

Referring to the table above, at the age of 30, the individual would have collected approximately RM58,000 – more than enough to pay for at least a PPR unit, or a 10% downpayment for any of the following affordable housing unit as shown in the table below.

This proposal of allowing full EPF withdrawal may face some objections from the authorities as it may deviate from the basic principal of “saving for the old age”. In my view, a house is a better form of saving and investment than having cash in the EPF account, especially when it is hedged against inflation.

Historically, other than serving as shelter, this type of investment also provides capital appreciation. It is a much better financial proposition for a contributor than having basic savings in his or her EPF account.

The housing withdrawals should be attached with specific conditions. The amount withdrawn should be returned to the EPF should the home buyer decide to sell the property. In fact, this condition is currently practised in unit trust investments.

Another condition is for the withdrawal to also include a lock-in-period, of perhaps five years. The individual will have to refund the principal amount withdrawn from the EPF plus the accrued interest upon sale.

The excess of the sale proceeds can also be used to purchase the next property. In the long term, housing issues are resolved and affordable housing becomes a reality!

Essentially, policy makers should focus more on sustainable policies to ease the burden and lower the cost of owning residential estates, especially for first-time home buyers. After all, the affordable housing agenda is of national interest.

Manokaran Mottain is the chief economist at Alliance Bank Malaysia Bhd. The views expressed are the writer’s own.


(The Star) IHH swings back to profit in third quarter

PETALING JAYA: IHH HEALTHCARE BHD swung back to profit in the third quarter, driven by capacity expansion from its existing operations and new hospital acquisitions overseas.

In a filing with Bursa Malaysia yesterday, the healthcare provider said for the third quarter ended Sept 30, it posted a net profit of RM236.34mil, compared with a loss of RM104.07mil a year earlier.

Its revenue for the quarter rose 33% to RM3.79bil from RM2.84bil previously.

The group said the jump in its revenue and earnings before interest, tax, depreciation and amortisation (ebitda) was due to “the result of sustained organic growth from existing operations and the continuous ramp-up of Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital, which both opened in March 2017, as well as contribution from the increased capacity at Acibadem Maslak Hospital (expansion completed in Oct 2018).

“The acquisition of Amanjaya (acquired in October 2018), and Fortis (acquired in November 2018) also contributed to the increase.”

IHH, which operates over 15,000 beds in 80 hospitals across 10 countries, said it will continue to ramp up its existing operations, while opening new operations in phases.

It added that the group will further consolidate its multi-country portfolio strategy to diversify its earnings base in cash-generating markets such as Singapore and Malaysia, capture medium-term growth momentum from Turkey and long term growth opportunities from India and Greater China.

“The group expects that the expansion projects in Malaysia and China will provide sufficient capacity to meet demand, ” it said.

Cumulatively, for the first nine-month ended Sept 30, IHH’s net profit surged more than four times to RM510.85mil compared with RM118.27mil a year earlier.

Its revenue for the period climbed to RM11.08bil from RM8.36bil previously.

Shares of IHH closed lower to RM5.37 a piece, giving it a market capitalisation of RM47bil.

Notably, IHH recently announced the acquisition of Prince Court Medical Centre for RM1.02bil to tap further into the medical tourism market. IHH chief executive officer (designate) and executive director Dr Kelvin Loh said proposed acquisition of Prince Court Medical Centre was set to enhance its leadership position in Malaysia and the group’s proactive stance to recalibrate non-lira loans in Acibadem had also reduced its exposure to currency volatility.

“In India, Fortis delivered another impressive performance as we continue to see healthy momentum with an improvement to its operational profitability in both the hospital and diagnostics business.

“We’re also excited with our progress in Greater China, where we have just opened Gleneagles Chengdu, ” Loh said in a statement.

IHH said while the group expects the pre-operating costs and start-up costs of new operations to partially erode its profitability during the initial stages, the group seeks to mitigate the effects by ramping up patient volumes in tandem with phasing in opening of wards at these new facilities to achieve optimal operating leverage.

“The group expects higher costs of operations arising from wage inflation as a result of increased competition for trained healthcare personnel in its home markets.

“Further, there is a potential tendency for authorities to consider new pricing controls which would impact margins.

“While such pressures may potentially reduce the group’s ebitda and margins, the group expects to mitigate these effects through improvements in case mix and tight cost control, ” it said.


Friday, 29 November 2019

(NST) Genting and listed unit Genting Malaysia return to the black in 3Q19


KUALA LUMPUR: Genting Bhd and its listed unit Genting Malaysia Bhd returned to the black in the third quarter ended September 2019.

Genting posted a net profit of RM305.68 million for the quarter against a net loss of RM275.8 billion in the same period last year.

Genting Malaysia, on the other hand, registered a net profit of RM410.83 million, a major improvement from a net loss of RM1.49 billion last year.

The higher earnings for both firms were primarily due to an impairment loss on the group’s investment in promissory notes issued by the Mashpee Wampanoag Tribe of RM1.83 billion that was recognised in the third quarter of last year.

Genting, the holding company, said it remained cautious on the opportunities and growth potential of the leisure and hospitality industry.

"In Malaysia, the ongoing development of the outdoor theme park is progressing well and the group remains focused on its timely completion," it said.

The firm said it would focus on its strategy of growing market share in the mass market segment to strengthen its position in the UK.

(NST) I-Bhd's Q3 net profit and revenue drop, resulting from lower property development contribution


KUALA LUMPUR: I-Bhd’s net profit slipped 11.6 per cent to RM5.03 million in the third quarter (Q3) ended September 30, 2019 from RM5.69 million recorded in the same quarter a year ago, due to lower profit contribution from its property development business.

Its revenue decreased 30.4 per cent to RM42.25 million from RM60.66 million.

“The performance for the current quarter had been impacted by lower unbilled sales as there was no new project launched in 2018. Hence, the revenue of this quarter came mainly from the sales of the remaining completed units.

“In contrast in Q3 2018, the Liberty, Parisien and Hyde (Phase 4) developments in i-City were still ongoing,” it said in a filing to Bursa Malaysia today.

For the nine months, I-Bhd’s net profit plunged 57.5 per cent to RM22.29 million from RM52.49 million, while revenue dropped 61.8 per cent to RM124.86 million from RM327.18 million.

I-Bhd said while preparing for new project launches within i-City, the group remains focused on enhancing and extracting the value of i-City development.

The group is focusing on on-going development of its investment properties and leisure assets namely GBI-rated Corporate Office Tower (expected completion by Q4 2019), Double Tree by Hilton hotel (expected to open its door in first half of 2021) and second Convention Centre which will contribute strong recurring income stream to the group in the near future.

“With the rapid development, i-City is poised to become the heart of Selangor’s ‘Golden Triangle’ with new business opportunities and investments,” it said.

I-Bhd said the property market particularly the residential and commercial sub-sectors, was expected to remain soft for the rest of 2019 due to the continued weak market and consumer sentiments.

It said the group will continue with its prudent strategy for any new property development launches next year.

“Barring unforeseen circumstances, the group believes that growing the property investment and hospitality portfolio would enable the group to enjoy recurring revenue stream and less fluctuation income in the long run notwithstanding that the gestation period for Investment and Hospitality properties may be long,” it said.

I-Bhd’s unbilled sales as at September 30 stood at RM112.9 million compared to RM123.5 million as at June 30 this year.

“Under the foregoing circumstances, the board is of view that the operating performance of the group will remain challenging for the financial year ending December 31, 2019 despite the group’s continuous strategic efforts,” it said.

(NST) Malaysia registers RM149b worth of approved investments in Jan-Sept


KUALA LUMPUR: Malaysia has registered RM149 billion worth of approved investments in the services, manufacturing and primary sectors in first nine months this year.

This was 4.4 per cent higher than the RM142.6 billion approved in the same period last year.

International Trade and Industry Minister Datuk Darrel Leiking said these investments involved 4,025 projects and will create an additional of 93,841 job opportunities.

"The majority of the investments came from domestic sources, which contributed RM82.7 billion or 55.5 per cent of the total investments," he said in a statement.

Darrell said foreign direct investments (FDI) represented 44.5 per cent or RM66.3 billion.

Total approved FDI in these three main sectors increased by 6.5 per cent to RM66.3 billion in January-September 2019 from RM62.2 billion in the same period last year, he added.

“Malaysia is true to its ambition to become a preferred investment destination for innovation-based, knowledge-intensive investments within high-growth, high-value sectors.

"Despite ongoing trade tensions pointing to slower growth, we will stick to the course and continue attracting strategic partners to invest in Malaysia," Darrel said.

This will generate more spillover impact on the economy through the growth of the local supply chain ecosystems and improvement of the Malaysian workforce, he added.

As of September 2019, Darrell said the Malaysian Investment Development Authority (MIDA) is actively negotiating 682 projects with proposed investments of RM37.6 billion.

These include 242 projects within the manufacturing sector (RM26.6 billion) and 440 projects in the services sector (RM11.0 billion).

(NST) IHH Healthcare posts net profit of RM236.34m in Q3


KUALA LUMPUR: IHH Healthcare Bhd posted a net profit of RM236.34 million for the third quarter ended Sept 30, 2019 (Q3) compared with a net loss of RM104.07 million in the same quarter last year.

In a filing to the stock exchange, the global healthcare provider said revenue rose 33 per cent to RM3.79 billion from RM2.84 billion previously.

It said revenue improved on sustained organic growth at existing operations and contributions from Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital in Turkey, both opened in March 2017.

For the first nine-month period, net profit jumped to RM510.85 million from RM118.27 million, while revenue increased 33 per cent to RM11.08 billion from RM8.35 billion.

IHH said the group’s balance sheet remained strong as of end-September, with net cash generated from operating activities for the nine months at RM1.7 billion and an overall cash balance of RM4.6 billion.

Net gearing edged up to 0.15 times versus 0.10 times as at Dec 31, 2018, on strategic investments including Fortis in India.

IHH chief executive officer (designate) and executive director Dr Kelvin Loh said prioritising operational synergies and integration produced a strong set of third-quarter results.

He pointed out that the proposed acquisition of Prince Court Medical Centre was set to enhance its leadership position in Malaysia.

Moreover, IHH’s proactive stance to recalibrate non-lira loans in Acibadem had also reduced its exposure to currency volatility.

“In India, Fortis delivered another impressive performance as we continue to see healthy momentum with an improvement to its operational profitability in both the hospital and diagnostics business.

“We’re also excited with our progress in Greater China, where we have just opened Gleneagles Chengdu,” Loh said in a statement, adding that IHH would continue to ramp up operations at Gleneagles Hong Kong amidst steady demand.

Moving forward, IHH plans to further consolidate its multi-country portfolio strategy to diversify its earnings base in cashflow-generative markets such as Singapore and Malaysia, capture medium-term growth momentum from Turkey and long-term growth opportunities from India and Greater China.

– BERNAMA

(NST) Chinese investments in Msia halve, but US inflow soars


KUALA LUMPUR: Chinese investments into Malaysia halved to US$1.7 billion (RM7.1 billion) in the first nine months of the year from a year ago, though US investments soared seven times to US$5.9 billion - reflecting a diversion of funds due to the Beijing-Washington trade clashes.

Data provided by the Malaysian Investment Development Authority (MIDA) to Reuters on Friday showed that China, traditionally the country’s biggest investor, has now slipped to third position behind the United States and Japan.

Foreign direct investment (FDI) from Japan, with whom Prime Minister Tun Dr Mahathir Mohamad is trying to strengthen ties, jumped more than four times to RM11.81 billion (US$2.83 billion) in the January-September period.

Total approved FDI into Malaysia rose 6.5 per cent to RM66.3 billion, MIDA said, adding it was “actively negotiating” on 682 other projects with proposed investments of RM37.6 billion.

Trade hostilities between the world’s biggest two economies have pushed mostly US companies to look for factories outside China to escape tit-for-tat tariffs.

For Malaysia, the biggest investments have come in the electrical and electronics industry, with one of the driving factors being that many semiconductor and other electronics products from the country do not attract US tariffs, unlike the 25 per cent rate for China.

US companies such as chipmaker Micron Technology and iPhone supplier Jabil Inc are already building new factories in Malaysia. - Reuters