Monday, August 7th, 2017


ECB job can’t be bargaining chip in euro talks, says France

PARIS, Aug 7 — Euro-area governments should avoid horse-trading over Mario Draghi’s job at the European Central Bank and focus this year on deepening integration of the currency union, French Finance Minister Bruno Le Maire said. With…

Dow on track for 10th straight day of gains

NEW YORK, Aug 7 — The Dow was little changed in late morning trading today after eking out another record high at open, while the Nasdaq was boosted by gains in tech stocks. The rise in Dow put the index on track to close higher for the 10th…

Workers at Jakarta port ends strike early, citing national interests

JAKARTA, Aug 7 — Workers at one of the operators of Indonesia’s busiest ports ended their strike today, sooner than planned, out of consideration for the “national interests”, the chairman of the labour union said. More than 600 workers…

Prosma, SKPM to rebrand, relaunch Rent-To-Own Scheme by October

PETALING JAYA: Prosma Bhd is rebranding and relaunching its Rent-To-Own (RTO) scheme by October, following a fresh mandate from the government, said its CEO Zamri Abdullah.

“Sekretariat Komuniti Prefer Malaysia (SKPM) is working on the rebranding now. We may change the name of the scheme, but it has not been finalised yet. SKPM is deciding on the details now,” he told SunBiz.

SKPM is a community created on the back of a private initiative to assist the government in providing residences to Malaysians and has been appointed to manage 50,000 houses under the RTO scheme.

SKPM is the scheme owner, while Prosma is the holding company tasked with acquiring assets for the scheme.

According to Zamri, SKPM and Prosma are working with the Finance Ministry and the Domestic Trade, Cooperatives and Consumerism Ministry (Domestic Trade Ministry) to refresh a mandate issued to SKPM under the previous administration.

This news comes after SunBiz tried to get confirmation from both ministries of their involvement in the scheme. The two ministries are yet to respond to SunBiz’s queries.

Zamri said the current mandate was given in 2012 under the National Blue Ocean Strategy to SKPM chairman Datuk Paduka Ab Malek Ranting. The mandate, he said, comes with a letter of support from the Domestic Trade Ministry to obtain financing for up to RM200,000 per house.

The mandate was given by Datuk Ahmad Maslan, who was then deputy finance minister, and Datuk Seri Hasan Malek, who was then domestic trade, cooperatives and consumerism minister.

“The mandate was issued under different administrations at both ministries, so Prosma and SKPM are getting the mandate refreshed and updated with the current administration. The mandate is still valid and, so far, there have been no changes to the mandate,” he added.

Zamri, who is also SKPM chief secretariat, said he had a meeting with the Domestic Trade Ministry last month and is now waiting for the official document of the refreshed mandate.

He said the ministry also advised him to obtain consent from the Urban Wellbeing, Housing and Local Government Ministry, as the RTO scheme is related to the housing industry.

“We have already informed the ministry and they have acknowledged our RTO scheme and given their consent. They will monitor our scheme,” Zamri added.

SKPM and Prosma have also approached the Finance Ministry as part of the process of refreshing the mandate.

However, they have yet to meet with the ministry and are still waiting for a meeting to be set up.

Prosma began signing contracts for the scheme with eligible tenants last month and has signed 70 contracts valued at RM10 million in total as of Aug 1. It aims to sign 500 contracts in total this year.

Asked to comment on the refreshed mandate, Tiger Synergy Bhd managing director Shirley Tan said it will be carrying out a due diligence before signing the sale and purchase agreement (SPA) with Prosma.

“We were shown copies of the letters of support from the government before signing the memorandum of understanding. We expect to sign the SPA some time next month and will carry out our due diligence before that,” she said.

Tiger Synergy is developing the Telaris Gombak affordable condominium project, which has a gross development value of RM100 million. It will be sold en bloc to Prosma for the RTO scheme.

Business confidence for Q3 and Q4 still broadly positive: RAM

PETALING JAYA: Firms continued to be optimistic about business prospects for the third and fourth quarters of 2017, the third successive positive sentiment reading of the survey-based RAM Business Confidence Index.

Of the sectors surveyed for the index, the retail sector remains the most cautious about its performance in the next six months, given prudent consumer spending on discretionary items.

SME sentiment rose to 54.0 from 52.1, while corporate sentiment likewise stayed positive at 55.3, albeit dipping from 55.8.

“Across the board, export-oriented businesses continued to register higher index values, in contrast with domestic-oriented firms. This is consistent with the strong momentum in trade activity, evidenced by seven consecutive months of double-digit export growth between December 2016 and June 2017,” RAM said.

Within the corporate segment, the agriculture/mining sector recorded the highest and most improved index reading of 57.6, largely driven by positive hiring and business expansion intentions, consistent with the recovery trend in the oil palm sector.

On the other hand, the transport/storage sector was the least bullish at 53.0, in view of a sluggish order book in some key sectors, notably oil and gas (O&G) and related support services.

In the SME segment, the business services sector was once again the most sanguine with a reading of 56.4 while the retail sector was the least positive at 51.6, primarily due to the weak outlook on retail spending which had persisted from the previous survey.

All seven component indices for both corporates and SMEs registered values of above 50, suggesting broad-based confidence about business prospects for the second half of 2017. Across the board, businesses indicated a higher likelihood of undertaking business expansion, increasing hiring and greater capacity utilisation.

These trends are in tandem with an improved economic growth momentum, as seen from the higher-than-expected Q4 2016 gross domestic product (GDP) growth of 4.5% and Q1 2017 GDP growth of 5.6%.

Nevertheless, headwinds to the pace of profitability growth in the next six months was again a key concern for all firms surveyed, as they continue to be wedged between the rising cost of production and sluggish demand conditions.

“As such, the profitability component index of both SMEs (at 50.6) and corporates (at 51.9) still lags all other components. That said, we highlight that the previously negative profitability sentiment among SMEs has rebounded for this period, as firms generally expect to chart a higher turnover in 2H 2017,” RAM said.

Meanwhile, corporates expect a build-up in inventory, which will compel firms to price their products competitively, and a higher production cost to exert pressure on margins.

Indonesia’s Q2 GDP growth disappoints

JAKARTA: Indonesia’s gross domestic product (GDP) grew more slowly than expected in the second quarter, as private consumption remained lethargic, adding to signs that Southeast Asia’s largest economy is stuck in a low gear and may need more stimulus.

The resource-rich economy grew 5.01% in April-June from a year earlier, slightly slower than forecast and unchanged from the first quarter’s pace.

Indonesia has been struggling to accelerate growth to create more jobs for its 250 million population, but analysts say a 5% growth rate, the level produced every quarter since the start of 2014, is not enough.

President Joko Widodo promised to revive growth to 7% during his five-year term, which ends in 2019. This year, he set a target of 5.2%. But some economists said even that could be hard to achieve, and authorities are already hinting at further monetary easing and spending to support the economy.

“All in all, full-year GDP growth in 2017 looks set to reach only 5-5.1%,” said Rangga Cipta, an economist with Samuel Sekuritas here.

Private consumption, which accounts for more than half of Indonesia’s GDP, expanded slightly faster in the second quarter compared to the first quarter, but grew more slowly against a year earlier.

Government and central bank policymakers have publicly stated their bewilderment at why people weren’t spending as much as expected, especially as the Muslim fasting month of Ramadan – traditionally the peak of consumption in Indonesia – fell in May-June in 2017.

During the second quarter, inflation remained comfortably in the central bank’s 3-5% target, while investment and exports improved. Some officials described the sluggish consumption as “a mystery”.

Gundy Cahyadi, DBS economist in Singapore, said for now he maintains a 5.1% GDP growth forecast for the year, but sees “more downside risks” to its 5.4% outlook for next year. – Reuters

Tesla seeks to raise US$1.5b to fund Model 3 production

NEW YORK, Aug 7 — Tesla Inc said today it would raise about US$1.5 billion (RM6.4 billion) in a bond offering as the US electric car maker ramps up production of its newest sedan, the Model 3. The debt offering marks Tesla’s debut in the…

US dollar extends gain after jobs data; crude drops

NEW YORK, Aug 7 — The dollar extended its gains in the wake of better-than-expected US jobs data, while the euro also rose following its slump on Friday. Crude dropped as major producers gathered to discuss participation in output cuts. The…

India’s Tata Steel swings to profit in first quarter

NEW DELHI, Aug 7 — Tata Steel Ltd returned to profit in the first quarter of this year after a loss a year ago, helped by the ramp up of its Kalinganagar plant in Indian state of Odisha. Revenue in the quarter jumped 19 per cent aided by…

Germany should consider electric cars quotas, says deputy minister

BERLIN, Aug 7 — Germany should consider introducing binding quotas for electric cars for an automobile sector seeking to recover from a diesel emissions scandal and keep its place as a leading producer, deputy economy minister Matthias Machnig…