Friday, October 21st, 2016

 

U.S. warship challenges China’s claims in South China Sea -officials

U.S. warship challenges China's claims in South China Sea -officials

WASHINGTON (Oct 21): A U.S. navy warship sailed near islands claimed by China in the South China Sea on Friday, the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters, U.S. officials said.

The guided-missile destroyer USS Decatur challenged “excessive maritime claims” near the Paracel Islands, among a string of islets, reefs and shoals over which China has territorial disputes with its neighbors, the officials said, speaking on condition of anonymity.

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Source: The Edge Markets


BUDGET 2017 COMMENT Microsoft Malaysia Managing Director K Raman

We are thrilled that the Budget for next year recognizes the contribution of the digital economy to the country’s GDP. Initiatives such as the Malaysia Digital Hub and the creation of the world’s first Digital Free Zone are steps in the right direction to bolster the country’s strategic ICT thrust.

This is clearly in line with our mission to empower every person and every organization in Malaysia to achieve more, and we remain fully committed to working closely with the Government and businesses to digitally transform. We’ve worked hard over the past 25 years to become a trusted advisor to the Government, providing over RM17 million in grants and skills training, and will continue to do so for the future.

Accelerating The Digital Economy
The announcement of the first ever Digital Free Zone in the world, is set to stimulate growth and drive efficiency in the digital world by merging physical and virtual zones to facilitate international eCommerce. This is a very exciting time for Malaysia, as a growing digital economy needs a strong support structure and ecosystem to thrive. Initiatives such as the Digital Free Zone will set the country apart as a key differentiator amongst other competing nations.
Microsoft Malaysia also lauds the announcement of the Digital Maker Movement and the Malaysia Digital Hub, which will help
nurture talents and create innovators, while enabling the country to be a fully sustainable digital economy.

Inclusive Education and Empowering Human Capital
Prime Minister Dato’ Sri Mohd. Najib Tun Razak also underscored the need for every rakyat in this country to have complete access to education – indicating that RM4.7 billion will be allocated for 20 public universities to ensure higher education will be on par with global standards. Additional funds were also allocated for scholarships and to foster a stronger research culture in the country.
This continued drive for quality education is commended. Education is the bedrock of today’s society. At Microsoft, we’ve always been committed to transforming education with technology. This year, we’ve accelerated our support by working with the Government to reach out to underserved communities – for instance, we’ve forged a three-year partnership with the Malaysian Prisons Department to provide juvenile inmates with digital literacy and upskilling opportunities.

Not forgetting educators, the Budget also tabled that 430,000 teachers will get free tablets to aid in their profession. While we’re equipping students with the skills to compete globally, we’re also looking at creating new innovative experiences and scenarios for our teachers in today’s 21st century classrooms. This is in line with the Government’s initiatives to provide the tools necessary for this to take place.

Enabling Small and Medium Enterprises (SMEs) through Innovative Partnerships
Realizing the significant contribution of the SMEs in the nation's growth and labor market, the Government has also declared 2017 to be the Startup and SME Promotion Year, allocating a total of RM75 million to implement programs under the overall SME Master Plan.

Microsoft Malaysia praises the Government’s support in implementing these programs, which would enable the growth and advancement of SMEs. Some 97% of business establishments in Malaysia are SMEs, and at Microsoft, we understand the value they lend to the nation. They account for 57% of the country’s total employment, we are committed to ensuring that their transformational journey is complete via initiatives like the Cloud Solution Providers (CSP) Program[ Microsoft’s Cloud Solution Provider (CSP) program helps organizations to build and grow profitable cloud service businesses.]. The allocations will provide the necessary innovation and advance solutions for SMEs to improve their competitiveness within the industry.

Ensuring Unity and Economic Growth, Inclusive Prudent Spending, Wellbeing of the Rakyat
Microsoft Malaysia supports the initiatives under the 2017 National Budget, geared towards accelerating a digital economy, providing an inclusive education for all, and enabling businesses to achieve more.

We will continue to support the Government and deliver on our commitment to driving economic growth, innovation and societal impact in Malaysia.  Source: The Sun Daily


Central banks to hear initial verdict on sterling’s Oct 7 crash in November – sources

Central banks to hear initial verdict on sterling's Oct 7 crash in November - sources

LONDON (Oct 20): Officials looking into the factors behind the dramatic fall in sterling on Oct 7 will issue an initial report to a group of global central banks in early November, sources with knowledge of the investigation said.

It is two weeks since the pound dived and rebounded by about 10% in a few minutes at the start of Asian trading, an unprecedented swing for a major currency at an hour when the US$5-trillion-a-day market is at its lowest ebb.

Source: The Edge Markets


Bombardier to cut another 7,500 jobs through 2018, most in rail

Bombardier to cut another 7,500 jobs through 2018, most in rail

MONTREAL (Oct 21): Canadian plane and train maker Bombardier Inc will shed jobs for the second time this year, cutting about 7,500 positions over two years in a continued push to turn around its rail division.

The Montreal-based company, which has struggled in recent years with cost overruns in its aerospace unit, said on Friday about two-thirds of the cuts will be in Bombardier Transportation, the Berlin, Germany-based rail unit. The rest will be in aerospace.

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Source: The Edge Markets


Dollar hits 8-month high, stocks set for weekly rise

Dollar hits 8-month high, stocks set for weekly rise

NEW YORK/LONDON (Oct 21): The dollar rose to its highest since February against a basket of currencies on Friday, as investors weighed the likelihood of higher U.S. interest rates, while a measure of world stocks dipped but looked set for its first weekly gain in four weeks.

The euro hit a seven-month low against the dollar after the European Central Bank left its ultra-loose policy unchanged on Thursday but kept the door open to more stimulus in December.

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Source: The Edge Markets


BUDGET 2017 COMMENT The National House Buyers Association (HBA) secretary general Chang Kim Loong

acknowledge the challenges faced by our honourable Prime Minister (PM) in tabling Budget 2017 on Friday, 21st October, 2016 in view of the slowdown in the global and regional economies and also the steep drop of the Ringgit.

We are grateful that out PM did not heed the advice from business groups with vested interest to relax some of the cooling measures announced previously to stem excessive speculation such as lowering the Real Property Gains Tax or re-introducing the Developer Interest Bearing Scheme for first time house buyers. We are indeed glad that a ‘status quo’ (an existing state of affair) was retained through the wisdom of our PM.

The positive take from Budget 2017 in relation to property, in particular Affordable Home are as follows:

(a)The government will build more PR1MA homes, SPNB, PPA1M houses and also PPR homes (“Affordable Homes by the Government”)

(b)Exemption of stamping fees on Transfer instruments and Loan facilities for first time buyers of houses not exceeding RM300,000

(c)Levy of stamping duties of 4% on properties in excess of RM1 million;

(d)Maximum special loan scheme of between 90% – 100% from participating Banks for first time house buyers

(e)Building 10,000 housing units in the town/ city for rental to eligible youths with permanent job including young graduates entering labour market, which duration should not exceeding 5 years

(a)Affordable Homes by the Government

HBA is grateful that the Government has taken the initiative to build more affordable housing. However, HBA cautions that the right implementation to ensure that the said Affordable Housing reaches the right target market.
“They must build the right product at the right place with the right pricing and the right numbers” – National House Buyers Association (HBA)
The Affordable Housing must be build at the right place and priced reasonably (between RM150,000 to RM300,000 and not more than RM300,000 for prime locations) and only for first time house buyers and not to be made available for second time house buyers which PR1MA is allowing with certain conditions.
PR1MA must also ensure that all the allocated land is used to build Affordable Housing and not to partner with Private Developers whereby only 40% of the lands (from what we understand from the market) is for Affordable Properties with the balance used for Lifestyle Properties to build Commercial and High-end Properties.

(b)Exemption of stamping fees on Transfer instruments and Loan facilities for first time buyers of houses not exceeding RM300,000

This is an excellent formula to assist the first time house buyers in buying their first home. The ‘first timers would not be burden too much with the stamping fees from the onset. In a situation where the sales price is RM300,000 the savings would be as follows:

Stamping fees payable to LHDN
Transfer instrument – RM5000.00
Loan facility – RM1500.00

(c)Levy of stamping duties of 4% on properties in excess of RM1 million;

Current Stamp Duty on Transfer of Properties is considered to be low to encourage easy ownership of Properties amongst the Rakyat and is based on a scale rate as follows:

Value of Property Stamp Duty Payable

First RM100,000.00 1%
RM100,000.01 to RM500,000 2%
RM500,000.01 to RM1,000,000 3%
RM1,000,001 and thereafter 4%

Weakness

Stamp Duty is the same regardless of number or Properties held. As a result of low entry cost to acquire a Property, speculators have taken advantage of low Stamp Duty regime and able to acquire multiple Properties at the same time, this depriving genuine house buyers the opportunity to acquire those houses

HBA’s Recommendation

Current Stamp Duty regime can be maintained for the first 2-properties held, one being for own stay and one for long term investment. However, Stamp Duty must be increased for the third and subsequent property held. Our recommendation for Stamp Duty is as follows:

(a)First Two Properties, based on current scale rate
(b)Third Property – Flat 5% of Value of Property
(c)Fourth Property – Flat 7.5% of Value of Property
(d)Fifth Property – Flat 7.5% of Value of Property

We are glad that our PM has instead adopted another approach to our recommendation. Our PM just announced an increase of 4% stamping fees levy for properties exceeding RM1 million and above. HBA support the initiatives. At least the rich are taxed more and should contribute more towards our country’s revenue.

(d)Maximum special loan scheme of between 90% – 100% from participating Banks for first time house buyers

Although this proposal will assist first time house buyers to buy their property, HBA urges some caution that such a proposal cannot be implemented across the board. This is because some first time house buyers may have existing loan obligations and if they were given a 90% to 100% loan, the combined loan repayments could be too burdensome leading to an imminent default in a matter of time.

As such, HBA feels that the decision of how much financing to extend must rest with the respective Banks and this proposal should only be a general advisory and cannot be made mandatory.

(e)Building 10,000 housing units in the town/ city for rental to eligible youths with permanent job including young graduates entering labour market, which duration should not exceeding 5 years

The building of such housing units to allow eligible youths with permanent jobs to rent is also a good move. These youths may not be eligible for housing loans and this move will allow them to have a stable roof over their head until their income levels improve. Source: The Sun Daily


Large civil servant outlay will hamper balancing of Budget, says Penang think tank

Large civil servant outlay will hamper balancing of Budget, says Penang think tank

KUALA LUMPUR (Oct 21): Penang Institute, the Penang government’s think tank, said a balanced Budget is unlikely to be achieved in the foreseeable future due to the large civil service expenditure.

Budget 2017 has a total allocation of RM260.8 million, up 3.4% from the Recalibrated Budget 2016. Of that, RM214.8 billion is earmarked for operating expenditure, with the remainder RM46 billion for development.

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Source: The Edge Markets


Palm closes the week higher as low stocks hold market

Palm closes the week higher as low stocks hold market

KUALA LUMPUR (Oct 21): Malaysian palm oil closed higher on Friday, reversing earlier losses, as traders squared positions ahead of the weekend and as low stock levels supported the market.

Benchmark palm oil futures for January on the Bursa Malaysia Derivatives Exchange rose 0.2% to 2,724 ringgit (US$651.21) a tonne. They had dropped earlier to a three-week low.

Traded volumes stood at 42,198 lots of 25 tonnes each.  

Prices gained 2.4% for the week — the second straight week of gains.

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Source: The Edge Markets


Budget 2017: Bankers urge focus on SMEs, fiscal prudence

KUALA LUMPUR, Oct 21 — Focus on small and medium enterprises (SMES), the backbone of the country’s economy, fiscal prudence and at the same time supporting growth are among the key points of Budget 2017, say bankers. CIMB Group Group Chief… Source: The Malay Mail Online


BUDGET 2017 COMMENT SME Corp Malaysia

Budget 2017 themed “Ensuring Unity and Economic Growth, Inclusive Prudent Spending, Wellbeing Of The Rakyat”, is comprehensive and supportive of SMEs, with year 2017 declared as the Start-up and SME Promotion Year.

The Budget looks into both the long-term development as well as the short-term needs of SMEs to cushion the impact of the current economic challenges. A total allocation of RM6.7 billion has been allocated for SME development to be implemented by the various Ministries and agencies.

The most impactful incentive announced is the reduction in the corporate tax rate for SMEs. SMEs that will benefit the most will be those that have an expanding revenue base as besides the special rate of 18% given for the first RM500,000 of the taxable income, the incremental revenue will also be subject to a lower tax rate, which will be enjoyed by all businesses.

The specific measures related to SMEs include the following:

For the SME Masterplan, a total of RM70 million has been allocated for the implementation of the High Impact Programmes;

A total of RM350 million is allocated for export promotion of SMEs. This includes RM130 million under the National Export Promotion Funds channeled through MATRADE, SME Corp. Malaysia and MIDA, RM200 million financing and insurance credit facilities with coverage valued up to RM1 billion by EXIM Bank, as well as RM20 million (RM100 million for 5 years) in the form of 2% interest rate rebate on the guarantees provided under the “Syarikat Jaminan Pembiayaan Perniagaan” (SJPP) scheme;

Initiatives to support start-ups include RM200 million for Working Capital Guarantee Scheme (WCGS) and introduction of a new pass category Foreign Knowledge Tech Entrepreneurs to encourage investment in high technology startups;

To stimulate development of B40 entrepreneurs, a total allocation of RM290 million has been provided for Mobileprenuer Programme by GIATMARA (RM30 million), Agropreneur programme (RM100 million), eUsahawan and eRezeki programmes under MDEC (RM100 million) and RM5,000 per taxi driver to purchase new vehicles with individual taxi permits given (RM60 million);

To empower Bumiputera entrepreneurs, a total of RM1.4 billion has been allocated for programmes implemented by various agencies such as SME Bank (RM100 million), Amanah Ikhtiar Malaysia (RM100 million), TEKUN (RM300 million), PUNB (RM200 million), MARA (RM120 million) and TERAJU (RM600 million);

For Indian entrepreneurs, a total of RM200 million has been allocated for business financing programmes under TEKUN and Amanah Ikhtiar Malaysia (RM150 million) and another RM50 million for programme to increase capacity and income;

For Chinese entrepreneurs, a total of RM90 million has been allocated for SME loans through KOJADI (RM50 million), RM20 million for microcredit loans under the Malaysian Chinese Women Entrepreneurs Foundation and RM20 million for loans to Chinese hawkers through 1Malaysia Hawkers and Petty Traders Foundation;

For women entrepreneurs, a total of RM2 billion is allocated for I-KIT, I-KeuNita and Women Career Comeback programmes;

MDEC has been allocated RM162 million for implementation of E-commerce initiatives such as e-commerce ecosystem and Digital Maker Movement as well as the introduction of new location category as Malaysia Digital Hub.

Overall, the budget is broad based and inclusive, taking into consideration the various economic groups of SMEs including agriculture farmers and smallholders, women and B40 entrepreneurs, exporters, start-ups, Bumiputera entrepreneurs, etc.

On the long term development, the Government is committed to continue with the implementation of the Masterplan initiatives and other development programmes aimed towards meeting the 2020 targets.

In view of this, SME Corp. Malaysia shall continue to work closely with the relevant Ministries and agencies to reach out to more SMEs as well as to ensure that the programmes and incentives announced under Budget 2017 are expeditiously implemented to bring maximum benefit to SMEs. Source: The Sun Daily