Author name: admin

Investment & Market Trends, News

Targeted Diesel Subsidy Could Strengthen Govt Fiscal Position

KUALA LUMPUR: The implementation of a targeted diesel subsidy for consumers in Peninsular Malaysia, which is expected to save RM4 billion annually, will strengthen the government’s fiscal position and improve resource allocation while reducing fossil fuel consumption and carbon footprint.   Sunway University Economics Professor Yeah Kim Leng said the rationalisation is anticipated to benefit both the economy and the government by demonstrating a commitment to necessary reforms for fiscal sustainability and economic efficiency. “The government’s move to rationalise fuel subsidies, starting with diesel, is being carefully executed with various targeted groups shielded from price increases through fleet cards and card transfers. “These targeted subsidies will mitigate the adverse impact on inflation while generating substantial savings, particularly by reducing leakages and cross-border smuggling,” he said. Previously, Prime Minister Datuk Seri Anwar Ibrahim announced that the Cabinet had agreed to implement a targeted diesel subsidy for consumers in Peninsular Malaysia. To curb drastic increases in the prices of goods and services, the government will provide subsidies for traders using commercial diesel vehicles. Anwar also mentioned that the subsidy would involve 10 types of public transport vehicles and 23 types of goods transportation vehicles under the diesel subsidy control system. Additionally, the government has agreed to provide cash assistance to eligible private diesel vehicle owners, including smallholders, farmers and traders. Yeah opined that transport costs should not rise as most operators are provided with targeted subsidies. “Likewise, consumer inflation will be directly affected, but monitoring and enforcement by the relevant authorities need to be stepped up to prevent unjustified price increases by businesses, especially in the transport sector,” he added. Meanwhile, Bank Muamalat Malaysia Bhd’s chief economist Mohd Afzanizam Abdul Rashid said that the potential RM4 billion savings would enable the government to invest in initiatives that increase national productivity in the medium and long term. “Diesel subsidy savings will be channelled into the cash payment programme and used to enhance the competitiveness of the education, health and infrastructure sectors,” he said. He added that credit rating agencies might re-evaluate Malaysia’s rating outlook to positive if these economic reforms yield results. “An improved credit rating could attract foreign investors, particularly in portfolio investments. “This would increase foreign holdings in fixed-income instruments such as Malaysian Government Securities, Government Investment Issues (GII) and corporate bonds, potentially boosting the boosting the value of the ringgit,” he said. — BERNAMA

News

CIMB Forecasts Mid-June Kickoff for Fuel Subsidy Rationalisation

KUALA LUMPUR: CIMB Treasury and Markets Research anticipates the rollout of fuel subsidy rationalisation to commence in mid-June 2024 at the earliest. This projection aligns with the government’s recent indication that the rationalisation will begin with diesel, it said in a note today. “The implementation date was not stated, though we understand that registrations for the diesel fleet card system are due to be in the next month, putting June as the earliest start date. “Considering the application process for the fleet card, we expect the rollout to take place in mid-June at the earliest,” it said. Prime Minister Datuk Seri Anwar Ibrahim, in a national address last night, announced the Cabinet’s decision to initiate fuel subsidy rationalisation, starting with diesel. However, specific timelines have not been disclosed, pending announcements from the relevant ministries. To recap, Domestic Trade and Cost of Living (KPDN) Minister Datuk Armizan Mohd Ali stated in February plans to implement targeted diesel subsidies by June 2024. The expected savings from diesel subsidies are estimated at RM4 billion, equivalent to 0.2 per cent of gross domestic product (GDP) per annum. CIMB outlined the two application levels under the subsidised diesel control system (SKDS) 2.0. These include an application to KPDN for authorisation, with approvals taking up to two days, and an application to oil companies for fleet card issuance, estimated to require up to four weeks. The SKDS 2.0 application process for companies operating nine types of goods transport vehicles commenced on March 7 and has since expanded to an additional 14 types of commercial vehicles as of May 13. “At this stage, it remains unclear whether eligible individuals owning diesel-powered vehicles will need to apply for cash aids, or if the government will utilise information from the PADU database,” the note added. The National Utility Database, or PADU, serves as a computerised repository for storing and managing information on utilities and related details. – BERNAMA

News, Property

Govt to Introduce New Property Act Next Year for Peninsular Malaysia

KUALA LUMPUR: The Real Property Development Bill for Peninsular Malaysia is expected to be tabled in Parliament in 2025. Housing and Local Government Minister Nga Kor Ming mooted the idea of establishing the Act and said that considering the modern trend of living in a mixed development of retail, commercial, small office home office (SOHO) and medical residence, it is timely for the government to look into establishing the Act which would be more comprehensive, transparent and accountable. “Since 1966, there has been the Housing Development Licensing Act, which only covers residential properties. With the new Act, the interests of purchasers, developers and landowners will be protected. “This can drive the local economy and create job opportunities, even buyers of units at TRX Residences come from more than 25 countries including Dubai, China, Hong Kong, Singapore and so on,” he added. Nga also pointed out that the TRX Residences project developer managed to obtain the strata titles 2 months ahead of its Certificate of Completion and Compliance (CCC). Commenting on the idea of exploring rental housing options for people who can’t afford to buy a home, the minister said the government needs to take a fair and balanced approach on the matter where all parties, including developers have a role to play for the nation. “While making profits, developers must also have a sense of corporate social responsibility to the people. Through strategic collaborations with the private sector, we hope the government will be able to provide 500,00 affordable homes by the end of the 12th Malaysian Plan,” Nga added. — BERNAMA

Investment & Market Trends, News

Global Investors Putting Their Wealth in Assets to Protect Against Volatile Markets

KUALA LUMPUR: Global investors are positioning in tangible assets such as real estate, gold, silver, art and agriculture to safeguard their wealth amid turbulent financial markets. Juwai IQI Global Chief Economist Shan Saeed said tangible asset classes are poised to outperform many other asset categories. “Gold prices are reaching all-time highs due to geopolitical risks, a positive macroeconomic outlook and stubborn inflation. “The commodities supercycle has reemerged in the macro equation, prompting global investors to adopt long-term positions,” he said. According to the latest Juwai IQI market intelligence report tracking commodity price movements over the past year, copper surged by 31%, silver by 22%, gold by 18%, zinc by 17%, aluminium by 16%, West Texas Intermediate crude by 11% and Brent crude by 9%. Coffee saw a rise of 6% while gasoline, natural gas, heating oil and wheat experienced increases of 3%, 2% and 1% respectively. “We have now adjusted our forecast in line with market expectations, anticipating gold prices to trade between US$2,600 (RM12,197) and US$3,000 (RM14,073) per ounce by December 2024. “Tangible assets such as real estate, gold and silver are making a comeback in asset portfolios, reminiscent of the 1970s era,” Saeed added. He recalled that during that time, amid stagflation characterised by higher inflation and lower growth, sophisticated investors positioned themselves in gold, silver, oil, gas and real estate. Additionally, he added that real estate has emerged as the new global currency for savvy global investors. — BERNAMA

Investment & Market Trends, Property

MIDF Amanah Stays Positive on Malaysia’s Construction Sector Due to Upcoming Projects

KUALA LUMPUR: MIDF Amanah Investment Bank Bhd has maintained a ‘positive’ call on the construction sector in view of an expected strong pipeline of civil and private jobs in the second half of 2024 (2H24). The investment bank said the industry would see the expected implementation of government projects in 2H24 in tandem with the allocation under Budget 2024, which allocated RM90 billion for development expenditure (DE). “From 24 January to 24 April, RM54.22 billion worth of projects have been awarded a 33,1% increase over the same period last year,” it said. MIDF Amanah said Deputy Works Minister Datuk Seri Ahmad Maslan’s expectations of more civil job flows starting the middle of this year further reinforced its conviction that contractors would be kept busy over the next few years, with rising demand for industrial buildings, such as data centres, warehouses and semiconductor foundries, further boosting sentiments. “The deputy minister estimated that about 40% (RM36 billion) of the DE is expected to be rolled out by mid-2024. “He also said there were an estimated RM180 billion worth of jobs in the pipeline, comprising RM90 billion from the government’s DE and RM90 billion from the private sector,” it stated. Citing his statement, MIDF said that among the expected projects in 2H24 is the Kuala Lumpur Sentral redevelopment, estimated to cost over RM1 billion and be undertaken by Malaysian Resources Corporation Bhd. Another project, the Mutiara Light Transit Line in Penang with RM10 billion allocation under Budget 2024 is anticipated to begin in 4Q24 and to be completed by 2030. The bank said that other notable projects include the Sabah-Sarawak Link Road (Phase 2) project with RM7.4 billion allocation under Budget 2024 and the Mass Rapid Transit 3 Circle Line project with tenders likely to be awarded by end-2024. MIDF Amanah posited that its top picks are Gamuda with a ‘buy’ call and a target price (TP) of RM5.98, IJM Corp (‘buy’, TP RM2.57) and Malayan Cement (‘buy’, TP RM5.33) “The construction sector had been among the best performing year-to-date which has seen the Bursa’s construction index rising 18.2%,” it added. — BERNAMA

Energy & Technology, News

SPM, Tesdec Services Ink Green Energy Purchase Agreement for Solar PV Projects

KUALA LUMPUR: System Protection & Maintenance Sdn Bhd (SPM) signed a memorandum of purchase agreement for green energy with Tesdec Services Sdn Bhd (TSSB) to develop several rooftop solar photovoltaic (PV) projects. According to SPM, this collaboration with TSSB enabled 8 PV installation projects to be implemented with a total capacity of 1,332 megawatt (MW) peak. “All the projects are under the Net Energy Metering (NEM) 3.0, government ministries and entities as well as Net Offset Virtual Aggregation (Nova) programme implemented through the solar power purchase agreement (SPPA) with the Terengganu government agency. The first SPPA was signed on 6 December 2022 for a Pesaka Terengganu Bhd project, followed by the Terengganu Skills Development Centre or Tesdec College project. Being an engineering and construction company that specialises in power plants and substations, SPM also informed that the 2 PV projects for Pesaka and Tesdec College were fully completed last year. “Both projects commenced or were operational on 3 September 2023 and 17 January 2024. The projects have generated around 270MW-hours since their commencement,” SPM said.

Events

HARTA Pays Homage to Malaysia’s Living, Life-Giving Rivers with ‘Sacred Currents’ by SC Shekar

KUALA LUMPUR: HARTA (HABIB: Action for the Revival of our Traditions and Arts) is proud to present its inaugural photographic exhibition, “Sacred Currents” by SC Shekar, one of Malaysia’s most esteemed and award-winning photographers. Running until June 2, 2024, at HARTA, “Sacred Currents” is a long-awaited documentation of Malaysia’s numerous rivers and riverine habitats, which have sustained countless generations. The exhibition features 30 breathtaking black-and-white photographs taken from a helicopter, showcasing the stunning beauty and intricate ecosystems of Malaysia’s rivers. Spanning the entire Peninsular Malaysia, as well as Sabah and Sarawak, these images powerfully highlight the fragile existence of our rivers amid the nation’s pursuit of progress. The stories behind these works warn of a bleak future for our children and future generations unless we act now to change our attitudes and decisions regarding these vital waterways. “’Sacred Currents’ captures beautiful yet fleeting moments of Malaysia’s winding rivers, now threatened by pollution and our unsustainable lifestyles,” said Mirsham Meer, the Director of HARTA. “These photographs underscore the urgent and deliberate efforts needed to protect our ecosystem for the future. We hope these mesmerizing yet meaningful images resonate deeply with viewers,” Mirsham added. SC Shekar’s “Sacred Currents” is both a tribute to the majesty of these sacred rivers and a clarion call for a shift in our values towards a harmonious and symbiotic relationship with nature. The exhibition was inaugurated by His Highness Tunku Ali Redhauddin ibni Tuanku Muhriz, Tunku Besar Seri Menanti of Negeri Sembilan, in the presence of international diplomats, special guests, and media representatives.   In conjunction with the exhibition, an outreach program invites schools in the Klang Valley to bring students on educational explorations of Malaysia’s rivers. This initiative aims to raise awareness, educate, and inspire the next generation to understand the importance of protecting our waterways and to rekindle the connection between people and their rivers.  

News

Malaysian Smokers Embrace Vaping for Healthier Lives, Tobacco Use Drops as Vape Gains Popularity

KUALA LUMPUR: An increasing number of Malaysian smokers are switching to vaping to quit smoking tobacco products, a recent carried out by the Global Adult Tobacco Survey (GATS) shows. In welcoming the findings of the survey, the Advanced Centre for Addiction Treatment Advocacy (ACATA) noted that it also revealed a significant reduction in tobacco use among Malaysians while the incidence of vape use increased. According to the report, tobacco use among Malaysians decreased from 23 per cent in 2011 to 19 per cent in 2023, while vape use increased from 0.8 per cent to 5.8 per cent over the same period. These figures highlight the smokers’ preference for a harm-reduction approach despite the lack of comprehensive regulations that facilitate tobacco harm reduction. ACATA president Dr Arifin Fii said this is the first time that Malaysia achieved a significant reduction in smoking prevalence. He said that based on National Health and Morbidity Surveys (NHMS), Malaysian adult smoking prevalence has plateaued over the past three decades, with 24.8 per cent in 1996, 21.5 per cent in 2006, 23.1 per cent in 2011, 22.8 per cent in 2015 and 21.3 per cent in 2019. “GATS showed that the accelerated reduction in smoking prevalence coincides with the rapid rise in nicotine vape use,” he said in a statement. Since there have been no major policy and regulatory changes in tobacco control in the last decade, this rapid decline in smoking prevalence strongly suggests that more smokers are moving away from tobacco and substituting it with the much less harmful vape. More importantly, this reaffirms that vaping is an effective tool for quitting smoking, which is an important step towards reducing the health risks associated with smoking. A similar trend in the decline in smoking prevalence is also seen in countries like the United Kingdom (UK), where its smoking prevalence has been significantly reduced through the use of vape. According to data from the UK’s tobacco control body, Action on Smoking and Health (ASH), the overall rate of smoking in adults in England in 2022 was 12.7 per cent, down from 13 per cent in 2021. Meanwhile, the proportion of the population using vapes stood at 9.1 per cent, compared to 7.1 per cent in 2021. Results from GATS also indicated that despite an increase in healthcare providers giving quit-smoking advice, attempts to quit tobacco have remained stagnant. Instead, the use of nicotine vaping (14 per cent) became a more popular choice for quitting smoking than medication (10 per cent) or counselling (8 per cent). This implies that the current tobacco control measures are insufficient and ineffective. A more bold and innovative measure, such as a tobacco harm reduction approach using tools like vape, is a very sensible way forward in tobacco control that will rapidly reduce the prevalence of smoking in Malaysia. ACATA advocates for more pragmatic policies that support and facilitate smokers to quit smoking by empowering them with knowledge, facts, and awareness to make informed decisions rather than imposing very restrictive and prohibitive measures. Recent proposed measures for nicotine vaping products indicated by the Ministry of Health, such as a display ban, restricting flavours and standardised packaging guidelines, will be counterproductive and will deter smokers from switching from deadly smoking to much less harmful nicotine vaping. “Smokers need education and support, not restrictive regulations,” Dr Arifin added. “By embedding harm reduction strategies into quit-smoking programmes, we can provide smokers with the tools they need to succeed in their efforts to quit,” he said.

Investment & Market Trends, News

Public Bank’s 1Q24 Net Profit Falls Amid Rise in Customer Loans

KUALA LUMPUR: Public Bank Bhd’s net profit fell by 3.5% to RM1.65 billion in the first quarter ended 31 March 2024 (1Q24) from RM1.72 billion a year ago. “The positive impact of the overnight policy rate (OPR) hikes which occurred a year ago did not recur in the quarter under review,” the bank said. Nonetheless, revenue jumped to RM6.79 billion from RM6.12 billion previously. Other operating expenses rose by RM104 million mainly due to higher personnel costs while loan impairment allowance increased by RM61.9 million from a low base of RM1.5 million in the previous corresponding quarter. “However, net interest and Islamic banking income increased by RM74.3 million due to healthy loan growth achieved during the period. “Non-interest/financing income improved marginally by RM3 million, mainly due to higher income from unit trust business, but this was partially offset by lower investment income and lower foreign exchange income,” it said. The bank added that profit continued to be supported by healthy loans and customer deposits growth. Gross loans grew by RM23.7 billion (6.2%) to RM405.3 billion as of 31 March 2024 against RM381.6 billion a year ago, contributed mainly by mortgage financing growth, hire purchase financing and commercial property financing. Total deposits from customers increased by 4.1% (RM16.5 billion) to RM420.2 billion as of 31 March 2024. Public Bank Managing Director and Chief Executive Officer Tan Sri Dr Tay Ah Lek said the group continued to sustain a commendable net return on equity of 12.3%, an efficient cost-to-income ratio of 35.4% and a stable asset quality with a gross impaired loan ratio of 0.62% for 1Q24. “The group will remain vigilant in its business approach and will continue to maintain its prudent risk profile to weather ongoing risks. “The group will continue to take a proactive approach to embrace growth opportunities and will also continue to pursue digital transformation, further stepping up its environmental, social and governance (ESG) efforts,” he said. — BERNAMA

Investment & Market Trends, News

MIDF Research Expect Exports to Grow Based on Rising Trend

KUALA LUMPUR: MIDF Research has maintained its projection that Malaysia’s good exports and imports will recover this year, growing at 5.2% (-8% in 2023) and 4.4% (-6.4% in 2023). The firm expects global electrical and electronics (E&E) trade turnaround and the broad improvement in external demand from major markets to support export recovery this year. “The pick-up in investment activities and businesses stocking up on materials in anticipation of growing demand will also help imports to recover this year. “Nevertheless, we remain cautious that the ongoing geopolitical conflicts and trade could negatively derail the trade outlook,” it said in a research note. At the same time, MIDF Research is closely monitoring demand, which is constrained by high interest rates kept for an extended period and possible weaker Chinese growth prospects. The Investment, Trade and Industry Ministry (MITI) said that Malaysia’s trade continued its upward trajectory in April 2024, recording a 12.1% growth to RM221.74 billion compared to the previous year. MITI said that exports rebounded in April 2024 by 9.1% year-on-year (YoY) to RM114.72 billion after 2 consecutive months of contraction in line with global trade recovery. “Growth was contributed mainly by higher exports of machinery, equipment and parts, chemicals and chemical products, crude petroleum, palm oil and palm oil-based agriculture products and iron and steel products,” it said. MIDF Research views April’s stronger external trade as in line with regional trends and expects further pick-up in external demand to support the economy this year. “We opine that a recovery in exports to major markets signals a broad-based and general pick-up in international trade activity in April. “We are expecting exports to grow to major markets like the US, China and ASEAN to support the overall external trade recovery this year,” it added. The commodity sector will ride on the growing demand for resource-based materials with sustained global growth. The research firm oversees E&E exports to gradually improve in the coming months in line with better global semiconductor sales and global E&E market turnaround. “Manufacturing exports will also benefit from global production recovery as firms restock and rebuild inventories,” it continued. OCBC Senior ASEAN Economist Lavanya Venkateswaran said there is likely to be some normalisation in export growth in YoY terms as favourable base effects fade. “Notwithstanding that, we expect a trend improvement in export growth supported by E&E exports in the second half of 2024 (2H24) as global electronics demand improves in line with our house view. “The trade and current account surpluses should remain supported. We maintain our 2024 current account surplus forecast of 2.5% of gross domestic product (GDP),” she said. “Resilient growth prospects and solid external balances amid benign inflationary pressures will allow Bank Negara Malaysia (BNM) to keep its policy rate unchanged in 2024. “The key risk to our forecasts is from the timing and mechanism in the introduction of targeted fuel subsidies,” she added. — BERNAMA

Scroll to Top

Subscribe
FREE Newsletter