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Thursday, 23 January 2020

(The Star) Air France-KLM not involved in MAS sale talks

DUBLIN: Air France-KLM said it had previously held talks with the owners of Malaysia Airlines Bhd (MAS), but was not engaged in current efforts to find new investors for the carrier.

“Air France-KLM continues to study global investment opportunities per its strategic goal to be an active yet pragmatic participant in industry consolidation, as presented at its Investors Day in November 2019, ” the Franco-Dutch airline group said.

“Air France-KLM had previously been in contact with Malaysia Airlines’ shareholders, but at this stage Air France-KLM is not a current party to the sales process of Malaysia Airlines.” — Reuters


(The Star) Inflation up 1% in Dec, within forecast

KUALA LUMPUR: Malaysia’s inflation rose by 1% in December last year, in line with a Bloomberg forecast, underpinned by higher food prices, with Kuala Lumpur exceeding the national average.

According to the Statistics Department, the consumer price index (CPI) increased by 1% in December to 122.3 compared with 121.1 a year ago.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said that of the 552 items covered in the CPI, 360 items showed an increase in December 2019 from a year ago.

He added that 137 items declined while 55 items were unchanged.

“The increase in the overall index was driven by the index of miscellaneous goods and services (2.4%); food and non-alcoholic beverages (1.7%); housing, water, electricity, gas and other fuels (1.7%); education (1.7%); communication (1.5%); furnishings, household equipment and routine household maintenance (1.4%) and health (1.4%), ” he said in a statement.

On a monthly basis, the CPI rose 0.2% from November 2019, mainly due to food and non-alcoholic beverages (0.5%) as well as restaurants and hotels (0.2%).

CPI in the fourth quarter of 2019 increased by 1% to 122.1 as compared to 120.9 a year ago. On a quarterly basis, the CPI rose by 0.3% from the third quarter.

The CPI for 2019 rose by 0.7% from 2018.

The department also said Kuala Lumpur recorded a 1.5% increase in the CPI in December, with Selangor and Putrajaya at 1.4% and Johor 1.1%.

All states registered an increase in the index of food and non-alcoholic beverages.

The highest increase was recorded by Johor (2.5%) followed by Kuala Lumpur (2.1%) and Selangor and Putrajaya (2.1%), surpassing the national index of 1.7% in December 2019.

(The Star) Comintel signs MoU to explore railway jobs

PETALING JAYA: Practice Note 17 status company, Comintel Corp Bhd, has entered into a memorandum of understanding (MoU) with two parties to explore railway construction-related communications, system integration and support services jobs worth no less than RM115mil.

The MoU, which is between Comintel, Dhaya Maju Infrastructure (Asia) Sdn Bhd and the latter’s executive director, Datuk Seri Subramaniam Pillai Sankaran Pillai, is intended to form part of Comintel’s regularisation plan that needs to be submitted to the regulatory authorities by tomorrow.

After taking cognisance of the expertise and experience of Comintel in providing communication, system integration and maintenance services to the rail industry, the parties are desirous to explore the proposed award by Dhaya Maju and other third parties, Comintel said in a filing with Bursa Malaysia.

Comintel said the proposed regularisation plan would also consist of a proposed private placement to raise funding for its operations at a fixed issue price of 7.5 sen per subscription share, which has been arrived at based on the 30 days volume weighted average price of the existing ordinary shares of Comintel.

It said the proposed regularisation plan would also comprise the repayment by Comintel of the existing debts owed by its wholly-owned subsidiary, Comintel Green Technologies Sdn Bhd.

The company added that the regularisation plan would also involve the proposed disposal of Comintel’s entire shareholdings in three of its loss-making subsidiaries for no less than RM1mil, namely Comintel Sdn Bhd, Comintel System Technologies Sdn Bhd and Comintel Green Technologies.

Comintel also said its regularisation plan may include such additional or other proposals as may be mutually agreed upon in writing by the company or Subramaniam from time to time.

Comintel said it would be submitting an application to Bursa Securities to seek an extension of time for no less than six months for the submission of its regularisation plan.

Comintel is a system integrator providing IT and communication solutions. For its third quarter ended Oct 31,2019, the company reported a net loss of RM1.05mil compared with a net loss of RM2.46mil in the previous corresponding period.

Revenue during the quarter dropped to RM339,000 compared with RM1.39mil a year earlier.

In its notes accompanying its financial results, the company said the losses during the quarter was due to no contracts being secured by the subsidiary replacing Comintel Sdn Bhd (CSB) as operations had just commenced in mid-April 2019 following the winding up order on CSB in April 2019.

On its prospects, Comintel said it would continue its efforts to develop new opportunities to strengthen its business segments.


(The Star) Bank Negara surprises dropping interest rate to lowest in 9 years

PETALING JAYA: The surprise move by Bank Negara to reduce the overnight policy rate (OPR) to 2.75% – the lowest level in nearly nine years – has rattled banking stocks as margin compression fears kick in.

Major banking counters such as PUBLIC BANK BHD (-2.36%), HONG LEONG BANK BHD (-3.56%), CIMB GROUP HOLDINGS BHD (-1.95%) and MALAYAN BANKING BHD (-0.58%) yesterday saw selldowns, which as a result dragged down the FBM KLCI by 9.35 points or 0.59% to 1,577.98 points.

The Financial Services Index was the worst performing indice among other indices as it dropped by 1.37%, particularly after 3pm when the decision by Bank Negara’s Monetary Policy Committee (MPC) on the OPR was announced.

The investor jitters post-rate cut is not surprising.

While a cut in OPR lowers loan repayment costs for borrowers such as households and businesses, lenders or financial institutions generally take a hit on their profitability as they make less interest income on loans.

For context, banks make a profit through the difference between the interest income generated by banks and the interest paid out to depositors.

This is referred to as net interest margin (NIM).

MIDF Research analyst Imran Yassin Yusof believes that the latest round of OPR cut could likely have a muted impact on the Malaysian banking sector.

Imran told StarBiz that banks were largely prepared for rate cuts as they expected two OPR cuts last year.

However, the central bank only slashed the benchmark interest rate once by 25 basis points (bps) to 3% in May 2019, down from 3.25%.

He pointed out that the competition for fixed deposits towards the end of 2019 was not as intense as compared to before, likely due to expectations of further OPR cuts.

“Fixed deposits mean higher costs for the banks. The fact that they have not loaded a lot of fixed deposits last year indicates that they are looking at further rate cuts and to lower costs, ” he said.

Imran said banks would see a NIM compression in the first quarter of 2020, although the situation would recover in the following quarter as banks adjusted the rates for loans and deposits.

“Banks with regional exposure such as Maybank and to a certain extent, CIMB, as well as those with lower variable rate loans as a portion of their loan books will be least affected by the OPR cut.

“However, Alliance Bank Malaysia Bhd would likely be mostly affected as about 90% of its loans are at variable rates, ” he said.

The move by the MPC yesterday to lower the OPR by 25 bps was against market consensus, which predicted the rate to remain at 3%.

An earlier poll by Bloomberg showed that 24 out of 26 economists expected the OPR to remain unchanged. Only MIDF Research’s Muhammad Zafri Zulkeffeli and Nomura Singapore Ltd’s Euben Paracuelles had forecast a rate of 2.75%.

The central bank remains cautious on the economic outlook, as evident in its MPC statement yesterday, and said the OPR adjustment “is a pre-emptive measure to secure the improving growth trajectory amid price stability”.

“At this current level of the OPR, the MPC considers the stance of monetary policy to be appropriate in sustaining economic growth with price stability.

“For 2019, growth will be within the projected range. For 2020, growth is expected to gradually improve, with continued support from household spending and better export performance, ” it said.

“Overall investment activity is expected to record a modest recovery, underpinned by ongoing and new projects, both in the public and private sectors. However, downside risks to growth remain.

“These include uncertainty from various trade negotiations, geopolitical risks, weaker-than-expected growth of major trade partners, heightened volatility in the financial markets, and domestic factors that include weakness in commodity-related sectors and delays in the implementation of projects, ” it added.

The central bank expects headline inflation this year to remain modest but average higher than last year’s 0.7%. This is subject to global oil and commodity price developments and the timing of the lifting of the domestic retail fuel price ceilings.

Socio-Economic Research Centre executive director Lee Heng Guie said the think-tank had expected a rate cut in the MPC’s March meeting, but not as soon as the Jan 21-22 meeting.

“I see the drop in OPR as a move by Bank Negara to address the weakness in the gross domestic product figures for the fourth quarter of 2020, which has been signalled in the export and industrial production index data.

“The lower OPR will provide monetary policy support to the economy but this must also be complemented by the government’s more efficient fiscal spending to stimulate the economy.

“I don’t see the need for more OPR cuts this year, ” he said.

On the other hand, AmBank Group chief economist Anthony Dass said there is room for another 50 bps cuts in 2020.

This, if executed, will lower OPR to 2.25%.

“Room for more rate cuts cannot be ruled out. Much will depend on the performance of business activities, non-performing loan direction, external environment as well as the ringgit outlook, ” he said.

When asked whether the OPR cut will increase loan growth in Malaysia, he said he expected loan growth to be around 4% to 5% on the basis that the GDP grew around 4.6%.

“It will depend on whether corporate loans will pick up, as household loans are likely to remain soft. The approval for household loans still depends on credit record quality, ” he added.

In a statement yesterday, CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz described the OPR cut as “timely”, in view of benign inflation and other modest key economic indicators.

“We hope the 0.25% reduction in applicable rates will not only ease the burden of borrowers but also spur further lending, investments and consumption to support the country’s economic growth, ” he said.

The bank will reduce its base rate and other rates for fixed deposit and loans by 25 bps, beginning Jan 30.

Bank Negara reduced the benchmark OPR on May 7,2019 by 25 bps to 3%, the first downward revision since July 2016.

The MPC had then avoided a rate cut at its subsequent meetings in July, September and November. However, on Nov 8, Bank Negara lowered the Statutory Reserve Requirement ratio to 3% from 3.5% effective Nov 16.

The last time OPR ranged below 3% was in 2011 at 2.75% before it was raised to 3% in May 2011.


(The Star) M’sia ‘14th most photogenic place’

PETALING JAYA: Malaysia ranked among the top 20 global cities when it comes to shining on Instagram, declared a travel channel.

The country came in with a respectable 14th placing when compared to 50 other travel hotspots, declared Big Seven Travel, which claims an audience of 1.5 million.

Icons of Malaysia that were most commonly photographed or put on video were Petronas’ Twin Towers and Putrajaya’s Putra Mosque.

“KL is home to the Petronas Towers, also known as the Petronas Twin Towers, which is currently the tallest twin tower in the world.

“Other iconic photo spots include the pink-domed Putra Mosque in Putrajaya, and the Jalan Alor market for food shots, ” said the site in its description of Kuala Lumpur.

Batu Caves’ colourful temples also drew mention on the channel, which showcased pictures and videos of the most exciting places globally shared on social media platforms.

Other neighbouring places that made the list include Indonesia’s Bali, with Indonesia at eighth place, while Singapore came in fifth.

Sydney was ranked number one, followed by Hong Kong and Dubai.

Other cities which made it to the top 20 include Croatia’s Dubrovnik, and Paris, according to Big Seven Travel.

At the same time, a survey by the portal found that 67% of people visited a new destination while 61% of people booked a hotel after seeing them on Instagram.

It also said that 33% of the respondents said that they do research about their upcoming holiday destinations on Instagram.


(The Star) Perak looking to boost people’s income to resolve housing issue

BATU GAJAH: The Perak government is trying to bring in more investments to boost the income of the people so that they can afford to buy homes, says Paul Yong.

The state local government and housing committee chairman said low household income was one of the reasons why some could not afford the average price for residential units in Perak, leading to an overhang.

“We are trying to bring in more investors with hopes that it could lead to more job opportunities, ” he told reporters after a Chinese New Year celebration at SJKC Yit Chee in Pusing here yesterday.

Yong was asked to comment on a news report saying that Perak had the second highest unsold residential units in the nation at 5,126 units.

The first was Johor with 5,470 units, followed by Selangor in third place with 4,872 units.

Yong said many of the unsold properties were high-rise units and expensive landed homes.

“In Perak, properties like bungalows or semi-detached houses could go from RM600,000 to RM700,000 and above, but the average income for Perakians is estimated to be around RM3,000 per household.

“There is also the mentality of getting landed properties instead of high-rise units, ” he said.

“This is why we have the Perak Housing and Property Board to control the prices and build more affordable homes.” he added.

Separately, Yong said the state had found new locations for landfills in the Matang and Kerian districts.

“Work on the piping has already started at both sites, ” he said.

It was reported on Nov 26 last year that the state was looking for two new landfills due to the growing amount of daily waste.

(The Star) Perak to build jetty complex in Pangkor

IPOH: Perak plans to build a jetty complex at Pangkor to resolve the congestion issue at the current main jetty.

State Tourism Committee chairman Tan Kar Hing said there were proposals from the private sector to build such a complex and the state government wants to bring the plan forward.

“There is a lack of space at the current jetty. We are also planning to upgrade it through a private partnership, ” he told reporters here yesterday.

Tan was asked about the demand by the island folk to reopen the smaller Sungai Pinang jetty after it was closed earlier this year in conjunction with the start of the Pangkor Duty Free initiative.

The closure of the smaller jetty has forced locals to put up with tourists at the congested main jetty.

Tan said the Sungai Pinang jetty was closed as there needed to be control over the entry and exit point for tourists.

“It is a standard operation procedure for the Customs Department. It’s the same elsewhere and it needs to be done.

“We have predicted these issues to arise in the next two to three months, ” he said.

On the islanders’ demand for the Sungai Pinang jetty to be reopened, Tan said it was not at the sole discretion of the state as the Federal Government’s input was needed.

“We are constantly meeting with the Federal Government and will bring up the issues as brought up by the islanders.

“There is a lack of manpower at the Customs checkpoint, with parking issues too. We also need to consider the traffic flow from Sungai Pinang to the main town area, ” he said.

Earlier, a group of islanders called the “Pangkor Local Chinese Duty Free Issues Negotiation Committee” submitted a memorandum to Perak Mentri Besar’s special adviser Datuk Zainol Fadzi Paharuddin, demanding for the Sungai Pinang jetty to be reopened.

Its representative Tan Chin Kee said the smaller jetty has been their preferred point of entry and exit to travel between Pangkor and the mainland.


Wednesday, 22 January 2020

(The Star) Move to have e-ticketing system for express boats

SIBU: The public welcome the introduction of the e-ticketing system to buy tickets for express boats.

Sarawak Transport Minister Datuk Lee Kim Shin said the system would be implemented by the second half of this year after getting approval from the Sarawak Multimedia Board (SMA).

Lee said that in the first phase, e-tickets would cover express boat routes in the central regions of Sibu, Kapit, Song and Kuching.

The initiative, he said was part of the ministry’s programme to upgrade public services in line with Sarawak’s march towards digital economy.

A regular express boat commuter, Michael Joseph said: “With this e-ticket system, we can buy tickets online similar to buying air tickets.

People no longer have to rush to the ticket counters at the express boat terminal, ” he said.

UiTM Sabah student Dayan Liyana said the e-system was more convenient.

“Those who are busy can buy the tickets easily with the new system, especially during festive seasons where demand for tickets is high, ” she said.

Sarawak Central Region Hotel Association chairman Johnny Wong is also all for the new system.

“But those in rural areas who do not own a computer or smartphone will still have to buy tickets at the counter, ” he said. – By ANDY CHUA


(The Star) Boost for arts and culture

JOHOR BARU: The Permaisuri Zarith Sofiah Opera House, officially opened to the public, is the city’s newest attraction. It is especially a boon to arts and culture enthusiasts.

Designed with a unique architecture inspired by the diamond shape, the theatre, tagged as the “Jewel Of South”, is 114,430 sqf and can accommodate more than 500 people.

Johor Ruler Sultan Ibrahim ibni Almarhum Sultan Iskandar opened the theatre.

Permaisuri Johor Raja Zarith Sofiah Almarhum Sultan Idris Shah, Tunku Temenggong Johor Tunku Idris Iskandar Sultan Ibrahim; Tunku Panglima Johor Tunku Abdul Rahman Sultan Ibrahim and Tunku Putera Johor Tunku Abu Bakar Sultan Ibrahim also graced the event.

Other guests present were Johor Mentri Besar Datuk Dr Sahruddin Jamal, state secretary Datuk Azmi Rohani and state executive council members.

The opening was a grand affair with dazzling fireworks, electrifying light shows, mesmerising live performances as well as a royal reception.

There were also traditional Chinese dances with a Malaysian twist, acrobatic ballet, Chinese folk singing and Peking opera.

Several local acts were showcased during the night, such as a concert by Yayasan Warisan Johor Band which performed zapin accompanied by live music.

Muar-born piano virtuoso Claudia Yang performed a piece titled Getaran Jiwa which received thunderous applause from the audience.

Singer Datuk Yusni Hamid belted out songs such as Kisah Cinta and Frank Sinatra’s The way you look tonight.

Notable foreign acts included Cantopop legend Hacken Lee as well as Ding Yi, a world renowned opera singer from China.

The opera house plans to host a wide variety of shows in the near future, such as dances, plays, musicals and concerts.

(The Star) Double cheer for developer

Eco World Development Group Berhad (EcoWorld Malaysia) hosted an early Chinese New Year open house together with the opening of the Brydon collection show houses.

At the event held at EcoWorld Gallery @ Eco Horizon in Lebuhraya Bandar Cassia, Batu Kawan, guests enjoyed tasty food and activities like clown acts, lion and dragon dances, live band performances, face-painting, fortune-telling and a God of Prosperity walkabout.

The highlight of the event was a lucky draw session which saw happy guests walking away with a Dyson hairdryer, Samsung sound bar, Sharp microwave oven, Samsung vacuum cleaner, Nescafe Dolce Gusto coffee machine and Tupperware festive gift sets.

The guests also witnessed the opening of the Brydon collection show houses which kicked off with an insightful feng shui talk by Master Tham Kuen Wei.

The show houses comprise two semi-detached houses and two bungalows.

Brydon, the second phase of the 300-acre Eco Horizon, offers four types of semi-detached houses sized 34ft x 75ft and priced from RM1.25mil.

The phase also has bungalow houses of 50ft x 80ft and 56ft x 85ft, priced from RM1.94mil.

The units enjoy close proximity to Eco Horizon’s twin Flamingo Lakes, a 13.6-acre flamingo-shaped water body and landscaped park located at the centre of the township.

Another unique feature of the development is a centralised clubhouse built on three acres. It offers various amenities including an Olympic-sized swimming pool, community hall, lounge and a dedicated BBQ area.

Eco Horizon has a gross development value of RM7bil and is strategically situated just off the primary interchange linking the second Penang bridge to the North-South Highway with landmarks in the immediate vicinity such as Ikea, the Batu Kawan Stadium, Batu Kawan Industrial Park and several educational institutions.

Also present at the event were EcoWorld divisional general manager (northern region) Chan Soo How, its divisional general manager (central and northern region) Ho Kwee Hong, head of sales and marketing (northern region) Eunice Lee Lay Wah, senior manager of project, planning and development (northern region) Albert Wu and senior manager of health, safety, security and environment (northern region) S. Paranitharan.


(The Star) New interactive centre for Gombak

Libraries are normally misconstrued as a place solely for intellectuals and bookworms.

This is because its environment has always been traditional and one that lacked facilities.

Selangor Public Library Corporation (PPAS) with the help of Gombak Public Works Department (JKR) embarked on a project to rebrand the Gombak district library and turned it into a more conducive and user-friendly place.

PPAS director Mastura Muhammad said the rebranding concept focused on making the library a recreational and human development centre, and a meeting point.

Among the new facilities at the library are meeting and discussion rooms, high speed wireless Internet (WiFi) and cafe that provided affordable food and beverage.

“We also provided new mothers with reading material to monitor their babies’ growth, ” Mastura added.

The renovation project started in November 2017 and the library was reopened to public in September last year, she said.

Among other ongoing similar rebranding projects are in Sabak Bernam, Hulu Langat, Tanjung Karang and Klang.

Mastura thanked Gombak JKR for its support in making the rebranding effort a success.

She said in just three months since the library reopened, the number of visitors increased from about 30 to over 150.

Selangor Mentri Besar Amirudin Shari, who launched the upgraded library, said the state’s aim was to prepare visitors for future technology called industrial revolution (IR) 4.0.

“We offered a space for coding and programming classes with hopes to achieve our smart state aspiration by 2025, ” he said.

Amirudin said the concept of the library being a second home was not just a place for visitors to read but a comprehensive place for families.

“In order to attract the young generation, libraries should have books that suit their interest, ” he added in his speech.

My Conceptual Robotics (MyCro) electronic engineer Ridgwan Welfred, who was present at the launch, said IR 4.0 could be achieved through robotics and additive manufacturing.

“We focused more on spreading awareness and to inform visitors on how technology can be part of education and we include a demonstration.

“This initiative is intended to support the IR 4.0 and give exposure to young people especially students through classes, ” he said.

Welfred added that they were working on establishing a syllabus regarding robotics that varies from programming, designing and electronics.

(The Star) Investment growth in Asia not in tandem with improving profitability

PETALING JAYA: While investments in Asia have grown rapidly, the scale is not in tandem with improving profitability as Asian companies drag global economic profit down, according to McKinsey Global Institute.

In a report on Corporate Asia: A Capital Paradox, it said Asia accounted for half of the global deterioration in economic profit (minus the cost of capital) from US$726bil to an economic loss of US$34bil between 2005-2007 and 2015-2017.

Almost 43% of the world’s largest 5,000 companies are in Asia.

The report said the flood of capital in Asia and the decline in economic profit in Asia and beyond is inextricably linked.

Reduced economic profit reflects lower returns on invested capital (ROIC) globally.

The vast majority of a decline in ROIC, at an overwhelming 87%, could be attributed to an increase in capital intensity, with the remainder to a decrease in margins, it said.

Worldwide, more capital is now needed to generate the same amount of revenue, which then generated lower profits, it added.

McKinsey senior partner and McKinsey Global Institute director Jonathan Woetzel said Asia is clearly a region that is in transition.

“Many of its companies are riding on economic development to grow scale rapidly but they are simply not returning their cost of capital.

“Nevertheless, there is a huge potential and Asian companies could take the largest share of both the world’s revenues and of its profit, ” he said in a statement.

The report noted that pockets of economic-profit-generating excellence could be found in different sectors across Asia, such as Japan’s capital goods sector, which created the most value in Asia.

Additionally, financial services are highly profitable in China and Australia.

Technology-driven sectors, especially IT, create a great deal of value in China, Japan and South Korea, and are improving as a source of value creation in India.

Furthermore, South-East Asia’s energy and materials sector generates substantial value despite the sector’s overall underperformance globally.

The report said the major sources for the global decline in economic profit stemmed from the cyclical energy and materials sector, European financial institutions and China.

The energy and materials sector accounted for about US$500bil of lost economic profit in the past 10 years, reflecting the decline in oil and commodity prices.

European financial institutions accounted for US$158bil of lost economic profit, while China contributed economic profit losses of US$137bil, reflecting a tendency to allocate capital into value-destroying sectors.

Almost US$10 trillion of capital has been invested in China over the past 10 years, of which 80% was channeled to sectors that earned below their cost of capital.

McKinsey senior partner Chris Bradley said corporate Asia’s rising scale but sinking profits is not sustainable in the long term.

“The challenge ahead for Asia is to unleash the latent potential of its top performers and elevate the performance of companies that are destroying value, ” he said.

Going forward, the report said Asia needed to turn around troubled companies and capture the latent potential of top-performing companies.

Over the past 10 years, only 54% of the bottom 200 Asian generators of economic profit have lifted themselves out of the bottom quintile of all companies, as compared to 61% of firms in North America.

This is compared to only 49% of the top 200 Asian companies which have maintained their position in the top quintile, versus 61% of firms in North America, it said.

The report said should Asia match the performance of North America in top companies maintaining their position and bottom companies improving theirs, the region could unlock US$440bil of economic profit.

Asia accounted for over US$1 of every US$2 in new investment in the past decade, of which US$1 of every US$3 was invested in China.

It said that in the past 10 years alone, Asian companies have increased their share of the G5000 (the world’s 5,000 largest firms) by six percentage points to stand at 43% today.

In comparison, Europe has 25% of the G5000, while North America (Canada and the US) has 24%.


(The Star) Mudajaya wins RM32mil job

PETALING JAYA: MUDAJAYA GROUP BHD’s unit has been awarded a RM31.99mil contract for works at the Project Sungai Besi – Ulu Kelang Elevated Expressway.

In its filings with Bursa Malaysia, the construction group said its wholly-owned subsidiary Mudajaya Corp Bhd accepted the letter of award from Turnpike Synergy Sdn Bhd yesterday to undertake the supply, delivery, installation, testing, commissioning and maintenance of street lighting, high mast and traffic light system for Project Sungai Besi – Ulu Kelang Elevated Expressway (Section B).

“The project is targeted to be completed by July 2020 with a construction period of six months from the date of site possession, ” Mudajaya said.

“Upon the award of the project, the outstanding order book of Mudajaya as of to-date stands at RM1.4bil, ” it added.

(The Star) Axis REIT acquiring seven properties worth RM288mil

PETALING JAYA: Axis Real Estate Investment Trust’s (Axis REIT) is in the midst of acquiring seven new properties worth RM288mil, with RM140mil worth of properties in the pipeline so far this year.

Its CEO and executive director Leong Kit May told reporters that the seven properties, located across Peninsula Malaysia as well as one in Kota Kinabalu, were mainly focused on industrial-type assets, in the manufacturing and warehousing sectors.

She said the group had already signed sale purchase agreements, or accepted a letter of offers for these properties, which were all expected to be completed by the middle of this year.

As for the other RM140mil in assets, she said that they were still at preliminary stages of acquisition.

“We are very optimistic about these acquisitions, and we hope to be able to share more details soon.

“On top of this, we are also actively looking around for more investment-grade assets to be added to our portfolio, ” she said during a press conference yesterday.

Leong noted that the group had been heavily-focused on on industrial-type assets, particularly in the manufacturing and warehousing sector over the past two years.

She said the reason for the focus on this asset-type was largely the strong growth in the industrial space, aside from it being syariah-compliant.

“We are very optimistic, especially in the warehousing segment, given the growth in e-commerce, ” she said.

Leong added that the group’s exposure to the office segment, which remains under pressure owing to an oversupply situation, was limited to only 5% of its entire portfolio.

Of this, she said, three assets were fronting the federal highway, and continued to enjoy good occupancy rates.

Leong also noted that the group expects to spend about RM10mil to enhance its existing assets this year, including upgrading electrical systems and improving carpark areas with better lighting and CCTV systems.

For the fourth quarter ended December 31,2019, Axis REIT had recorded an increase in net property and investment income, which rose to RM148.68mil from RM87.85mil a year ago.

This was mainly on the back of RM101.55mil in fair value gains on its investment properties.

For the full-year, the group’s net property and investment income rose 27.62% to RM283.93mil.

HLIB Research, in a report yesterday, noted that Axis REIT was still actively pursuing quality acquisitions with focus on Grade A logistics and manufacturing facilities as its prime focus.

“We expect better FY20 with full year contribution from newly acquired properties (property in Batu Kawan and facilities in Nusajaya) which were completed during Q3’19, ” it said.

The research house, maintained its “buy” call and target price of RM2.03.

(The Star) Ideal United, PR1MA in RM828m property project on Penang island

KUALA LUMPUR: Ideal United Bintang International Bhd has teamed up with PR1MA Corporation Malaysia to jointly undertake a property development project in Bandar Gelugor, Penang.

Ideal United said on Tuesday its unit Ideal Capital Venture Sdn Bhd had signed a head of terms with PR1MA to jointly develop the land with the total size of land of 65,720 square metres or 16.24 acres.

The gross development value for the project which is on Penang island is RM828.6mil.

“This development is expected to contribute positively towards the revenue and earnings of Ideal in accordance with the stage of progress to be recognised over the next three to five financial years, ” it said.

(The Star) Valuer: No reason to bail out developers

KUALA LUMPUR: The property sector is like any other economic sectors and should be subject to market forces of demand and supply, so there is no reason why the government should bail out developers in the current slum when they run into trouble.

Property consultancy Rahim & Co executive chairman Tan Sri Abdul Rahim Abdul Rahman said at a press conference on the company’s Property Market Review 2019/2020 that property development is a business and all businesses come with risks.

So when developers run into trouble, “the government has no business saving them”, he said.

Rahim said that before embarking on any projects, developers should do proper feasibility and market studies which would indicate demand and price that can be absorbed by the market. The current overhang of about 50,000 units may take five years to be resolved based on the country’s population of about 35 million and the disparity between income and property prices.The Singapore government will fine a developer if they do not sell all their units within a certain period. In other words, Singapore is saying to the developer, before you embark on your development, do a proper study, Rahim said.

Bank Negara provided guidelines for project financing and this required developers to submit independent feasibility/market studies. But this was relaxed after developers lobbied against these guidelines because developers wanted to save the fees. At the end of three years, they are unable to sell, Rahim said.

He said these studies are important and valuers will say it as it is.

“We call a spade a spade and we lose a lot of friends this way, ” he said.

The period that was most crucial was between 2011 and 2013 when the property prices spike.

Rahim said credit was easy especially during that period when developers sold their units using interest-bearing schemes.

”So, yes, they (the developers) brought this on themselves, ” he said.

While the government should not bail out developers, Rahim said Malaysians should also not have the mentality that property prices will always go up.

“If a property was purchased a few years ago, chances are the buyer would have lost money. So there is such a thing as a cycle, ” he said.

As for the overhang of about 50,000 units valued at about RM34bil comprising residential sector plus serviced apartments and small offices home offices, that is a huge concern.

It may not be an economic calamity but it is a major concern, Rahim said.Rahim & Co research director Sulaiman Akhmady Mohd Saheh said what is of even greater concern other than the current overhang numbers is the fact that the numbers are rising.

“It (the overhang) is consistently on the rise, ” he said.

“What we are seeing today is the completed unsold units of about 50,000 units. There are also units which are currently under construction which are unsold, and which will enter the market, ” he said.

Sulaiman said the various government measures like reducing the threshold price for foreign buyers from RM1mil to RM600,000 and the recently concluded Home Ownership Campaign (HOC), which though are important, are not expected to have a significant impact on reducing the overhang.

The government threw its support behind the HOC by giving stamp duty exemptions with the objective of reducing the huge overhang figures but developers took the opportunity to launch new units.

“The HOC was basically the primary market sales, so developers saw an uptick in sales, ” said Sulaiman.

He said close to half of the overhang comprised units priced RM1mil and above and those between RM200,000 and RM400,000.


(The Star) Concessionaires hope govt will finalise takeover of 4 highways by March

KUALA LANGAT: The concessionaires of four highways in the Klang Valley hope the government will be able to make a decision on the takeover of the highway concessions latest by end-March this year.

Chief executive officer of Lingkaran Trans Kota Sdn Bhd (Litrak) and Sistem Penyuraian Trafik KL Barat Sdn Bhd (Sprint) Sazally Saidi said this was because the discussions on the takeover are still ongoing without a final decision from the government.

“For the takeover process, discussions between the shareholders of the highway concessions and the government are still ongoing, however, there’s no answer yet (from the government) until now.We hope all the discussions would be finalised by end-March this year, ” he said to reporters after presenting contributions in the form of necessities in conjunction with the Chinese New Year (CNY) this Saturday to the senior citizens of Rumah Sejahtera, Jenjarom here.

Present were Shah Alam Expressway (Kesas) chief operating officer (COO) Mohammed Shah Samin and Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (Smart) acting COO Mohd Noor Mohd Ali

Sazally said this when asked to comment on the developments relating to the takeover of the four highway concessions, namely Kesas, Smart, Damansara-Puchong Expressway (LDP) and Sprint announced by the government last year. The government through the Minister of Finance Incorporated (MoF Inc) last year presented takeover offers to the four concessionaires of the highways for RM6.2bil in an effort to lighten the burden of the people via toll reduction.

The breakdown of the offer prices are LDP for RM2.47bil, Sprint (RM1.984bil); Kesas (RM1.377bil) and Smart for RM369mil.

In another development, Sazally said the management of Sprint, Kesas and Smart highways will deploy patrol officers at their respective routes to assist and facilitate highway users’ travel during the run-up to the CNY celebrations this weekend.

“Usually two and three days before a festive season there will be congestion on the highways as vehicles leave the cities for the villages. Hence, patrol officers will be deployed at certain locations to help keep the traffic smooth and facilitate the users’ journey back home.Sprint will deploy 68 patrol officers, Kesas 45 while Smart will have 16 officers, ” he said.— Bernama


(The Star) Air France-KLM eyes 49% of MAS

KUALA LUMPUR: Proposals to invest in ailing Malaysia Airlines include one from Air France-KLM which wants as much as 49% while Japan Airlines is looking at a 25% stake, sources with knowledge of the matter said.Domestic carrier AIRASIA Group Bhd and Malindo Air, the Malaysian arm of Indonesia’s Lion Air, have also submitted proposals, the sources said.

“The bids from the foreign carriers are more comprehensive and strategic as both plan to capitalise on the strategic location of Malaysia for their operations, ” said one of the sources.

The Malaysian government has been seeking a strategic partner for its national airline, which has struggled to recover from two tragedies - the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.

In 2014, it was taken private by sovereign wealth fund Khazanah Nasional Bhd, which paid RM1.4bil for the 30% of shares it did not already own.

The sources declined to be identified as the discussions are confidential. Representatives for Air France-KLM, Japan Airlines (JAL), AirAsia and Malindo did not immediately respond to requests for comment.

Malaysian Prime Minister Tun Dr Mahathir Mohamad said on Monday five proposals had been received as part of a review that started last year but declined to name the suitors.

Malaysia Airlines last year signed a joint venture agreement with JAL covering flights between Malaysia and Japan, which the Japanese airline said could be expanded in the future to cover US flights.Malaysia Airlines and JAL are both members of the oneworld airline alliance, while Air France-KLM is part of the rival SkyTeam alliance

Khazanah, which appointed Morgan Stanley last year to advise on potential options for the airline, said it was working closely with the government.

“While there have been several proposals in this regard, a review of the options available to us is still ongoing, ” Khazanah said in a statement.

Sources said Air France-KLM had proposed setting up a hub for maintenance, repair and overhaul services in Malaysia, while Japan Airlines had offered to make the Southeast Asian country its regional hub, including for low cost flights.

Business news website Focus Malaysia said on Monday, citing an official document, that Khazanah had been pushing for AirAsia’s long haul unit AIRASIA X to merge with Malaysia Airlines.

“An international solution is probably better in this situation as AirAsia would have competition concerns, ” one of the sources said.

“This is still a work in progress but the story is around the potential for a massive hub in Southeast Asia and it’s clear that international airlines see value in Malaysia Airlines because of this, ” the source said. — Reuters


(The Star) Free eco-friendly bus service to start in Kuching

KUCHING: A free hydrogen bus service will start running on two routes in and around Kuching as part of Sarawak’s efforts to develop an eco-friendly public transport system.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the service was a joint initiative by the state’s Transport Ministry and Sarawak Economic Development Corporation (SEDC) to promote “reliable, affordable, safe and eco-friendly” public transport in Sarawak.

“This is a pilot project to promote our tourism and public transport. The Transport Ministry is monitoring it and we may have to add additional hydrogen buses in our efforts to promote our public transport system,” he said when launching the service here yesterday.

The service currently has three hydrogen-powered buses supplied by China’s Foshan Feichi Automobile Manufacturing Co Ltd and operated by SEDC.

Starting today, it will serve a 14km downtown heritage loop from Kuching Waterfront to Central Timur, Ban Hock Road, Riverside Majestic Hotel, Kubah Ria and Malay kampung heritage area and the 67km Damai loop from Riverside Majestic to Damai Central.

The service is currently offered free and will run from 7am to 7pm daily.

Abang Johari said this was the first step in the state’s efforts towards developing a public transport system.

“The next step is for us to improve our public transport using hydrogen. At the moment, research is more in favour of hydrogen compared to electric, because with electric you have to dispose of the batteries after three to five years.

“We have been studying the options and we feel this is the best option as it has zero emission,” he said.

The buses can travel about 300km or 15 round trips on the Kuching route on a single refill.

They are equipped with high-speed WiFi and the H2Sarawak app, which has features such as bus live location, Google Transit integration for commuters to find the nearest public transport station and push notifications of promotions and places of interest.


(The Star) Better career options and salaries are pull factors

PETALING JAYA: Career options and salaries are two pull factors drawing people from other states to relocate to the Klang Valley, or even abroad.

Many still choose to flock to places where they have better chances of scoring better-paid jobs that match their field of study.

A Penangite from George Town said it is impossible to find suitable jobs in his hometown that fit his experience and qualification.

“A project manager position in the construction industry in Penang is only available for fresh graduates or high-level positions, with 10 to 15 years of experience,” said the former managing consultant who only wanted to be known as Joe.

Searching for a mid-level position in Singapore has also been a struggle for the 29-year-old.

“I’ve been to four interviews in Singapore, but they would only offer an entry level salary of S$2,400 (RM7,244), which to me, is not enough for the cost of living in that country is high.

“I’ve been searching for a job ever since I was retrenched in June last year and I will continue to look for a suitable job in the Klang Valley,” said Joe, who has been living in KL over the past five years.

For Perak-born Mohd Ikbal Hafiz, his career in the aviation industry started at an aviation company based at the Subang Royal Malaysian Police Air Wing Unit.

“I started working at SAS 16 years ago and I’ve never regretted my decision to move here although it means living far away from my family,” said the Malaysian Institute of Aviation Technology (UniKL MIAT) graduate.

While his wife and three kids live in Kedah, the 37-year-old feels they are in safe hands living close to his in-laws.

He travels to see them twice a month, or at every chance he gets.

“For someone finding a job in aircraft maintenance 16 years ago, it was easier to demand a higher salary due to the shortage of skilled workers”, he said, noting the growing number of graduates in the field.

“More universities are offering courses related to Airframe and Powerplant and it has become more competitive for graduates to find jobs in the industry,” he said.

With narrowing salary and professional growth, Ikbal said most of his friends in the industry chose to pursue higher paid prospects in the Middle East.

Meanwhile, Faizal Hafzan’s move to Kajang was mainly to provide a comfortable life for him and his family.

Working as a mechanic in the city has allowed the 36-year-old to send more money back home, especially for his two girls who are in primary school.

“My family is in Kuala Kangsar but I plan to bring them here as soon as I am able to buy a house in Kajang.

“I have been working at a car servicing centre for almost three years and earn more than RM2,800 a month, which is a 50% hike from the salary I received while working in Ipoh,” he said.

The father of two currently lives in a hostel provided by his company, which enables him to save more for his family.

“On top of the higher salary, I get to expand my skills by solving more complex engine problems.

“While in Ipoh, I was only doing regular car maintenance at a small workshop,” Faizal said.

(The Star) Malaysia’s 50 shades of grey problem

PETALING JAYA: Penang, the second top greying state in the country, will overtake Perak in 20 years to become Malaysia's "oldest" state.

Figures from the Statistics Department show that Perak is currently the state with the largest proportion of people aged 60 and above (15.3%), followed by Penang (14.9%), Melaka (13.9%), Perlis (13.1%) and Kedah (12.8%).

By 2040, however, Penang will be in first place at 26.2% followed by Kuala Lumpur (24.5%) and Selangor (22.4%).

Commenting on the figures, ageing researcher Chai Sen Tyng said birth and death rates as well as the outward migration of younger segments of the population are factors that affect population ageing.

He said states must create enough jobs that meet the various skills and academic qualifications of its people to prevent the youth from migrating abroad or to other states.

“The lack of skilled jobs is driving the working age population away from these states,” said Chai, who is with the Malaysian Research Institute on Ageing at Universiti Putra Malaysia.

Malaysia officially becomes an ageing country this year with the percentage of its population aged 65 and above hitting 7.5%.

The Statistics Department data also forecasts that Malaysia will be classified an aged country in 2040, which is when 65-year olds and above make up 14% of the population.

Chai explained that a drop in the percentage of a state's working age population due to migration will lead to a higher ratio of seniors, leading to fewer workers to drive the local economy.

For Penang, outward inter-state migration as well as international migration and low fertility rates, particularly among its Chinese population, are contributing to population ageing.

“Because of this, states like Perak and Penang need to start creating more specialised jobs and upscale its economy to become less labour intensive, and to cater to the learned young generation.”

The department's figures show that ethnic Chinese currently make up 39.2% of the state's 1.8 million population.

Bumiputra meanwhile comprise 42.5%, Indians make up 9.6% while Malaysians classified as "Others" constitute 0.34%.

Non-Malaysians make up the remaining 8.36%.

Chai said Penang's approach of attracting investors to build factories in the state in order to create jobs has had mixed results.

“It worked for a while but did not stop the outward migration of the educated population.”

Most of the high-skilled jobs that were created in the state, such as in engineering, catered only to the requirements of industrial activities such as for semiconductor companies, he added.

“There are not many opportunities for the average graduate.

“Young people may come to states like Penang to pursue their tertiary education but they will then leave to find job opportunities elsewhere."

On Perak, Chai said longer lifespans and the state's appeal as haven for retirees were not the factors causing the state's ageing population.

“Perak used to be the largest and richest state in the country before independence.

“However, it had the highest outward net migration since 1980s to 1990s, when young people sought better job opportunities in Kuala Lumpur and later, Selangor.

“The trend has led to the state bleeding out its younger population, hence naturally increasing the percentage of old people."

Assuming that current migration patterns hold, Penang, Kuala Lumpur and Selangor are expected to be the “oldest” states or federal territory in the next 20 to 30 years.

Chai said this was due to declining birth rates and a continually ageing population.

Every state, he said, has to take into account their history and local needs to identify the best approach in attracting youths to work in their state.

“Districts have different patterns of demographic and development.

“Towns like Kuala Kangsar and Taiping offer limited career prospects for locals. Even the factories there have mostly employed Vietnamese and Bangladeshis for the past 20 to 40 years,” he said.

The researcher said the federal and state governments need to create new niche industries that can offer enough skilled jobs.

He cited an example of the development of the animation and creative industry picked up by Cyberjaya, after an initial plan of creating a global animation centre in Kuala Terengganu in 2007 under the East Coast Economic Region (ECER) did not materialise.

“It was not a coincidence that we have increasing expertise in animation, allowing locals to create animated films and TV shows such as Ejen Ali and Upin dan Ipin.”

“It may not be a huge industry for the country but it provides a high-income and much needed technical expertise industry for our graduates,” he said.

Bringing in foreign workers may be a policy option to boost economic development, Chai emphasised that it may not be in the best interest of the people.

“Ultimately the government needs to create new niche industries in places other than the Klang Valley and on top of that, align the education system with industry needs,” he said.

Tuesday, 21 January 2020

(The Star) Tourist arrivals to increase as more cruise liners dock at port

Cruise liners are contributing to the rise of tourist spending receipts in Melaka, state Tourism Promotion Board’s general manager Zairi Suboh said.

He said the state anticipates a further increase this year with more cruise liners docking at the Melaka Marina port.

“Cruise liners are an additional boost for the state as tourism arrival figures are projected to grow higher this year.

“We expect a number of vessels with higher capacity of passengers to arrive in Melaka with the RM7mil Federal Government funding to deepen the 500m oceanic floor fronting the port to a depth of four metres,” he said in an interview.

Zairi said the port, which started operations last October, was now the top destination for cruises with 60 cruise liners stopping over in Melaka.

He said Chief Minister Adly Zahari was also looking to attract more than 100 cruise liners plying the Strait of Malacca to stop over at the port.

“We are able to reach above the projected 20mil tourist arrivals in the state with this positive development,” he said.

Zairi said based on the global analytics reports, it showed that the world cruise tourism market was poised to grow this year.

He added that the growth was mainly due to the trend of globetrotters preferring to explore tourism destinations via the sea.

(The Star) Padini in for improved earnings

KUALA LUMPUR: PADINI HOLDINGS BHD is expected to post better earnings for the second quarter of its financial year 2020 as it benefited from year-end sales as well as its new Disney-theme apparel line, says Kenanga Research.

The research house reiterated its “outperform” call on Padini with a target price of RM4.

It noted that the second quarter is historically Padini’s second strongest quarter, accounting for 30%-35% of full-year earnings.

Since November 2019, Padini has embarked on a two-year collaboration with Disney to sell Disney-theme apparels, which is expected to improve gross profit margins due to their higher pricing as compared to other brands.

“Sales of these Disney lines have exceeded the target set by Disney itself within a short timeframe and Padini expects to secure more Disney characters to diversify the collection.

“The Disney-theme apparels for the upcoming Hari Raya are already under production and are expected to sell well, especially during the festivity promotion,” said Kenanga.

It added that the collaboration is in line with Padini’s strategy to target above its comfortable gross profit margin of 40%, while maintaining the supply diversification of 70% from China, 25% from Malaysia amd 5% from other countries.

In terms of regional expansion, Padini has been looking to increase its own-managed stores to control the stores’ value, said Kenanga.

So far, these include a Brands Outlet store and two Padini stores in Cambodia, as well as the takeover of seven Vincci stores in Thailand.

Moving forward, Kenanga expects Padini to look towards Indonesia as its next regional expansion target, as the market accounted for the most footfall for Padini.

(The Star) PLUS finalising mechanism for lower toll rates

KUALA LUMPUR: PLUS Malaysia Bhd is finalising the mechanism for reducing its toll rates in light of the government’s recent decision not to sell the country’s largest highway concessionaire to any bidders

“This is to confirms the status of the existing concession agreement and takes into account the interests of PLUS’ sukuk holders, ” said PLUS chairman Datuk Mohamad Nasir Ab Latif in a statement.

Last week, the Cabinet decided that PLUS would remain with its shareholders, Khazanah Nasional Bhd and the Employees Provident Fund, which own 51% and 49% respectively.


(The Star) Kerjaya Prospek secures RM332mil job

KUALA LUMPUR: KERJAYA PROSPEK GROUP BHD’s unit has secured a RM332mil contract for the main building works of a proposed development in Jalan Kia Peng, Kuala Lumpur.

The contract, received by Kerjaya Prospek (M) Sdn Bhd, was awarded by Patsawan Properties Sdn Bhd, an indirect joint venture between EASTERN & ORIENTAL BHD with Mitsui Fudosan Asia Pte Ltd.

According to Kerjaya Prospek, the development is a 54-storey building comprising 491 serviced apartments and a 10-storey car park with common facilities.

Construction of the project is scheduled to start on Jan 20 and will take about 35 months to complete.


(The Star) Planned buyout of 4 highways may proceed

PETALING JAYA: The planned buyout of the four highways related to GAMUDA BHD appears likely to proceed following the government’s decision not to divest PLUS Malaysia Bhd to a private entity.

In a report, Kenanga Research said the decision is positive for Gamuda.

“In particular, the government’s stance to keep PLUS will be seen as consistent with its previously announced plan to take over the four highways held by Gamuda.

“This could pave the way for Gamuda to sign the definitive agreements with the government by the Feb 29 deadline,” it said in a report.

Gamuda shares continued to trend up in early trade yesterday, rising to an intra-day high of RM4.23 on this optimism.

However, it closed one sen higher to end the day at RM4.11. A total of 8.14 million shares were traded.