News

PETALING JAYA: As anticipated, Bank Negara has kept its overnight policy rate (OPR) unchanged at 3% after its fifth Monetary Policy Committee or MPC of 2024 meeting yesterday, pointing out that its policy stance remains supportive of the economy. On top of that, the central bank emphasised that the OPR level is also consistent with the current assessment of inflation and growth prospects, as it continues to keep its eye on ongoing developments relating to domestic inflation and growth trajectories going into 2025. Looking ahead, Bank Negara commented that the latest indicators pointed towards sustained strength in economic activity, driven by resilient domestic expenditure and higher export activity. “Going forward, exports are expected to be further lifted by the global technology upcycle, given Malaysia’s position in the semiconductor supply chain, as well as continued strength in non-electrical and electronic (E&E) goods,” it said. Besides that, it said tourist spending is expected to continue to increase, and employment and wage growth as well as policy measures remain supportive of household spending. At the same time, the regulator predicted that robust expansion in investment activity would be sustained by the progress of multi-year projects in both the private and public sectors, the implementation of catalytic initiatives under the national master plans, as well as the higher realisation of approved investments. Explaining matters from a bigger picture perspective, Bank Muamalat (M) Bhd chief economist Mohd Afzanizam Abdul Rashid believes that keeping the OPR steady is the correct move at the current juncture. He mentioned that this was because the central bank’s decision was primarily driven by domestic factors, outlining inflation dynamics as a component to keep an eye on. With subsidy rationalisation of the RON95 fuel still being held back, Afzanizam said: “Since petroleum accounts for 5.5% of the total consumer price index (CPI) weight as compared to diesel’s 0.2%, the changes in RON95 is expected to have greater impact on inflation.” Given that Malaysia has continued to chart strong growth in the second quarter of 2024 (2Q24) and the trend is likely to continue into the latter half of the year, he cautioned that the impression is that the balance of risks for inflation is tilted to the upside. “For now, the domestic factors have been quite favourable and the inflows of foreign funds into our capital market suggest that market confidence would translate into an appreciation of the ringgit as well as improved sentiment among businesses and households,” said the economist. Earlier in the week, economists Julia Goh of UOB Global Economics and Markets Research and Prof Geoffrey Williams had both voiced their support for Bank Negara’s “balanced” policy, with the former believing the OPR rate would provide further support for the local currency. Williams, meanwhile, had advocated for a steady monetary policy in the present environment, saying it was unnecessary at this point in time to effect a change in rates. He said inflation was hovering within the expected range in the midst of a growing economy, while the financial sector has also remained sound, before cautioning that a lowering of the OPR may rewiden the interest rate differentials to the detriment of the ringgit’s recent strengthening. Concurrently, Bank Negara reported that the higher intermediate and capital imports will further support export and investment activity. Elaborating on inflation, it said spillover effects from the diesel price adjustment to broader prices have been contained, given effective mitigation and enforcement measures to minimise the cost impact on businesses. “For the year as a whole, average headline and core inflation are expected to remain within the earlier projected ranges and are unlikely to exceed 3%,” it added. Externally, the central bank said global growth is expected to be sustained by positive labour market conditions, moderating inflation and less restrictive monetary policy. Global trade recovery is expected to continue, supported by both E&E as well as non-E&E products, although it remains subject to downside risks, mainly from further escalation of geopolitical tensions, volatility in global financial markets, and slower growth momentum in major economies, said Bank Negara.–THE STAR

KUALA LUMPUR: Renting a place to stay or a house could become more mainstream among the population, moving forward, in line with developments that are seen in other parts of the world. This could happen following several macro developments in Malaysia on falling birth rates, a present level of high home ownership, the trend towards smaller families among married individuals, increased number of adults choosing to stay single or marry later and affordability. These recent developments were heard at the real estate forum titled “Form to Future” organised by UEM Sunrise in Kuala Lumpur yesterday. But Knight Frank Malaysia’s executive director for research and consultancy Amy Wong said while renting can become more popular among people in the main cities such as Kuala Lumpur, she believes owning a home will still be the main choice for people in the smaller second-tier cities such as Ipoh, Kuantan or Melaka. “Home ownership is at an all-time high at 76% but the other 24% may be waiting to inherit. But then also what is critical if it is about inheritance is to develop homes that can sustain through the generations. “So this means developing good quality homes and not disposable homes,” Wong told StarBiz on the sidelines of the forum yesterday. “I think the trend towards renting will be in the main cities such as Kuala Lumpur. But in the other second-tier cities, it will still be very much about home ownership. “But because we are living in the city, we may feel it is a rental market but this is also because we have so many investors who own units. If there is no robust rental market, then it would leave us with empty units which is another problem,” she added. Earlier in the forum, Urbanmetry’s founder and chief executive officer Koh Cha-Ly said this is a pertinent question to grasp following the ageing population trend society is moving towards. “One thing about the ageing population in Malaysia is that of the 76% or so home ownership levels, what will happen to these (owned) houses when these people are not around anymore? “We are looking at the largest generation in Malaysia that will inherit a home in the next 10 to 20 years and it is going to be the largest number of people who will be born with a house,” Koh said. “They will either inherit it from their parents or inherit land. And honing in further, what will happen to these homes if everybody buys a new house or vice versa? “This is one question that the industry should start thinking of. It is not unprecedented. If you look at other ageing countries such as Japan, Europe or South Korea, they all have this problem and solutions have already been found,” Koh added. She also highlighted that the people who would inherit a home will likely refurbish or renovate it themselves and with the advent of artificial intelligence, the barriers of entry to home development in terms of knowledge of knowing what to do or where to get the approvals or source the relevant materials will be lowered. “To a certain extent, it is no longer a competition about if I can build a house at a cheaper price per sq ft. “This is not enough for the tech-savvy younger buyer because the generation which will inherit land or a house has a chance of outcompeting in terms of price per sq ft construction,” Koh said. Commenting on this, executive director of Socio-Economic Research Centre and veteran economist Lee Heng Guie said with the high home ownership rates, it is likely the younger generation may already not feel a need to own a home anymore. “They may think otherwise since they can’t afford it. So they might opt to rent a house or room instead. “Malaysia’s population growth is 1.1% and with declining fertility rates, there are concerns that this will have an impact on productivity and labour force participation which will impact housing demand along with the ageing population. Aged-care facilities and community living will be in demand here moving forward,” Lee said. Meanwhile, Bursa Malaysia’s director of the origination and listing division Leong See Meng suggested that given these developments, property developers should not just rely on incomes from property development as it can be quite lumpy. “To iron out the lumpiness, perhaps for the overhang units, they can be converted to rental housing or rental housing with an exit such as rent-to-own programmes. “There is no harm in doing this, and if you come to Bursa Malaysia you can always do a secondary issuance, rights issue or private placement to fund this to take up the overhang units,” Leong said at the forum. “Over time, this can also be a robust business to be translated to a rental housing real estate investment trust or REIT, for example. “And if it happens, it will be the first in the country – not only for the sponsoring developer but also for Bursa Malaysia. This can potentially be replicated and is sustainable as well, moving forward,” Leong added. Commenting further on this, Pelaburan Hartanah Bhd’s chief investment officer Norani Mustapha said at the forum that this was a global megatrend that had not reached Malaysian shores. In Tokyo, New York City and London, people can’t afford to buy houses or flats and they’re mostly renting. “And institutional investors are actually going in where they actually own the block and get a property manager to let out the space to whoever is interested,” Noraini said.–THE STAR

KUALA LUMPUR: Johor Corporation (JCorp) Group has appointed Najmie Noordin as its first chief learning officer (CLO). In a statement, JCorp said the new CLO role highlights its commitment to innovation and meeting evolving corporate learning needs as part of its transformation journey. The division includes JCorp Academy (JCA), Johor Skills Development Centre (JSkills), and CEREBRUM, JCorp’s innovative think-and-do tank. Najmie holds an MBA from the University of Manchester and a Bachelor’s Degree in Law (Hons) from Universiti Teknologi MARA (UiTM). His expertise spans people management, sales planning, branding and marketing. Prior to joining JCorp, Najmie served as chief executive officer (Group) at Cosmopoint Sdn Bhd, where he also held the position of chief operating officer (Group).–THE STAR

KUALA LUMPUR: Communications Minister Fahmi Fadzil announced that the Malaysian Communications and Muia Commission (MCMC) is in the final stages of evaluating tenders for the country’s second 5G rollout. “We expect an announcement within the next few weeks on the operators selected to develop the second 5G network,” he told reporters after the launch of CIMB’s Kita Bagi Jadi initiative here. Last month, it was reported that four major mobile network operators (MNOs) had submitted bids to develop the second 5G network: CelcomDigi Bhd, Maxis Bhd, UMobile, and Telekom Malaysia Bhd. Fahmi reiterated that the telecommunications companies involved had agreed on several key principles before acquiring shares in Digital Nasional Berhad (DNB), originally set up as the national 5G wholesaler, which is a prerequisite for bidding on the second rollout. These principles include ensuring that the services offered in the second network will not cost more than those currently offered by DNB. In May last year, Putrajaya agreed to introduce a second 5G service provider to move towards a two-network model. Meanwhile, Fahmi highlighted that the ministry’s focus under the 2025 budget includes improving internet access in schools and higher education institutions. “We are prioritising the telecommunications sector to ensure that schools and higher learning institutions receive the best possible internet access.” He also noted the ministry’s commitment to the creative industry, citing the success of initiatives like the Film in Malaysia Incentive, which he believes has laid a strong foundation for growth in the creative sector. Deputy Communications Minister Teo Nie Ching previously stated on August 20 that the programme has attracted significant foreign investment and boosted film production activities within the country.–FMT

TikTok-owner ByteDance is tapping banks for a $9.5 billion loan that would be the biggest dollar-denominated corporate facility in Asia ex-Japan, two sources with knowledge of the matter said on Monday. Citigroup, Goldman Sachs and JPMorgan are the financing coordinators, which carry a tenor of three years and can be extended to up to five years, the sources, who did not want to be named because the discussions are confidential, said. Bloomberg News reported that the loan will be partly used to refinance an existing $5 billion dual-tranche facility.–REUTERS

HONG KONG: The private investment vehicle of Hong Kong billionaire Henry Cheng’s family has appointed one of his sons as co-chief executive officer, the latest development in the family’s closely-watched succession saga. Christopher Cheng Christopher Cheng will be in charge of North Asia investment for Chow Tai Fook Enterprises, according to a statement on Friday (Aug 30). The office also appointed Patrick Tsang – an in-law to the family – as the head of Americas, Australia and Europe. Gilbert Ho, co-CEO of infrastructure-to-insurance conglomerate NWS Holdings, will look after corporate functions and operations. Four of the elder Cheng’s children now lead key parts of the family’s sprawling business empire. Adrian is the CEO of real estate developer New World Development Co, Sonia serves as a joint vice-chairman for Chow Tai Fook Jewellery Group and Brian is co-CEO of NWS. Henry Cheng remains in charge of the family office and chairman of all three companies. The family has been embroiled in a succession saga following Henry Cheng’s public statement that he is still looking for an heir and that he may bring in outside talent. That has put Adrian in the spotlight, who was widely seen as the strongest candidate to take over the family’s business group. The elder Cheng said he has closely worked with the three new leaders of Chow Tai Fook Enterprises in different parts of the family business, and that the office strives to create a positive impact and drive results for its stakeholders and wider communities, according to the statement. –Bloomberg