Tuesday, August 22nd, 2017
PARIS, Aug 22 — French President Emmanuel Macron will travel to Athens next month to send a message to fellow euro zone leaders about the need to strengthen the currency union, at a time when Greece is emerging from years of economic crisis,…
PETALING JAYA: Economists are of the view that the government is on track to achieve its fiscal deficit target of 3% to gross domestic product (GDP) for the current year as government spending is offset by revenue from tax collections, royalties and dividends from several government agencies.
According to their calculations, the fiscal deficit for the first half of the year stood at 5.2% to GDP, amounting to RM34 billion.
Peck Boon Soon, head of RHB Economic Research, said the fiscal deficit for the period under review is better than the 5.6% deficit for the corresponding period in 2016.
“Given the improvement in the budget deficit, we believe the government is able to achieve its 3% budget deficit target this year. Furthermore, they have shown a good track record in achieving its budget deficit set in the last few years. In the event if revenue fell short of the government’s second half (2H17) expectations, they may have to establish the necessary interventions, which may include reduction in spending,” he added.
Peck said economic growth may slow down to around 5% in the second half from the 5.7% in the first half due to slowdown in exports.
Malaysia, according to him, is expected to achieve full-year growth of 5.3% in 2017.
Lee Heng Guie, executive director of Socio-Economic Research Centre, said as per the trends of past years there is usually a surplus to offset the deficit from the first half, in turn keeping the deficit within target.
Adding on, he said the rise in oil prices is expected to contribute higher revenue to the government. This will be coupled with the collection from the Goods and Services Tax (GST).
However, Lee said assuming the second half revenue is not forthcoming, the government might fine tune its expenditure.
Echoing the same sentiments, Sunway University Business School Professor of Economics Dr Yeah Kim Leng said the government has reasonable grounds, such as crude oil revenue, GST collection and income tax collection, for it to achieve its fiscal deficit target.
“At this juncture, pending the Budget this October, I think there is reasonable grounds to expect the government to achieve the 3% target although a slight shortfall may be possible given that the government may increase their spending towards the second half, especially if the election is around the corner,” Yeah said.
Maybank Group chief economist Suhaimi Alias said the crude oil price, which is expected to increase by US$10 (RM42.80) per barrel, could benefit the government in terms of revenue.
“For example the better than expected crude oil price average of over US$50/bbl so far this year vs Budget 2017’s US$45/bbl assumption. We estimated every US$10/bbl increase in annual average crude oil price raises government oil-related revenues (excluding Petronas’ dividend) by RM4.1 billion. The pickup in economic growth so far this year after the slowdown last two years points to prospect of better than expected income for the government. Furthermore, Inland Revenue and Royal Customs are undertaking tax audit and enforcement to boost tax compliance and collection,” he added.
Suhaimi said fiscal spending has also been on a quarterly decline from RM20.2 billion in the first quarter to RM13.8 billion in the second quarter.
According to him, it is unlikely for the government to slash its spending as the budget deficit can be reduced not only by expenditure cuts alone, but by an increase in revenue as well.
Suhaimi has a higher forecast for the entire year’s growth, which he expects to be between 5.1% and 5.5%.
“Economic growth is driven by many factors, and is not dictated by fiscal policy and budget consolidation alone. Global economic growth pickup, rebound in world trade and firmer commodity prices are boosting Malaysia’s exports.”
On the domestic front, growth is expected to be underpinned by consumer spending and major infrastructure investments.
PETALING JAYA: Handal Resources Bhd slumped into the red in the second quarter ended June 30, after recording a net loss of RM1.29 million against a net profit of RM1.65 million in the same period last year, due to lower contribution from most of its business segments in line with the difficult market condition in the oil and gas industry.
Revenue declined by 48.20% to RM11.91 million in the quarter under review against the RM22.99 million recorded in the second quarter of 2016, as a result of lower revenue from its integrated crane business, fabrication of cranes and work over project businesses.
“The group performance is expected to be challenging for the current financial year in view of the global oil supply situation continuing to influence industry outlook,” its board of directors said in a Bursa Malaysia filing.
For the first half of the year, the group registered a net loss of RM636,000 against a net profit of RM1.87 million in the same period last year. Revenue for the first six months stood at RM26.23 million which is 42.19% lower than the RM45.38 million recorded in the first half of 2016.
Handal's shares dropped by 4.54% to 21 sen with some 139,000 changing hands. Its market capitalisation stood at RM33.51 million.
PETALING JAYA: Goh Ban Huat Bhd’s (GBH) wholly owned subsidiary GBH Land Sdn Bhd is acquiring a piece of freehold land measuring 9,924.814 square metres from Puncak Melati Sdn Bhd for RM39.53 million.
GBH’s board of directors said in a Bursa Malaysia filing each square metre for the property located in Mont Kiara would cost RM3,982.64, which is below the market value of RM4,600 per square metre as per Raine & Horne’s Valuation Report.
The freehold land held under Hakmilik Geran Mukim 1699 Lot 2356, Mukim Batu, Daerah Kuala Lumpur, is about 1km away from The Plaza Mont’ Kiara and 1 Mont Kiara Mall.
GBH sees the acquisition as an opportunity for it to invest in prime property at a reasonable price.
“By virtue of the property’s ideal location and close proximity to the Kuala Lumpur City Centre and within the well-known Mont Kiara developments, the board of directors of GBH believes that the proposed acquisition will benefit from future capital appreciation or an opportunity for the group to develop the land when the sentiment in the property market improves,” its board of directors said.
The acquisition will be financed with internally generated funds and is expected to be completed within three months. It will not have any impact on GBH’s earnings and gearing ratio for the financial year ending March 31 2018, but is expected to contribute positively to future earnings.
GBH’s shares gained 0.75% to close at RM1.34 yesterday with some 14,000 shares changing hands. Its market capitalisation stood at RM250.04 million.
PETALING JAYA: Ewein Bhd’s 60%-owned Ewein Zenith II Sdn Bhd has terminated the acquisition of a piece of land measuring 4.4252 acres in Tanjong Pinang, Penang, for RM162 million from Consortium Zenith Construction Sdn Bhd.
It said in a filing with Bursa Malaysia that the abortion is due to the substantial reduction in land size to only about 2 acres following a land alienation exercise.
The land was earmarked for the development of residential and commercial property projects.
Pursuant to the termination agreement, Consortium Zenith has to refund a sum of RM16.2 million, being the deposit, to Ewein Zenith II within three months. Consortium Zenith holds the remaining 40% stake in Ewein Zenith II.
Ewein is also undertaking a development known as “Wellness City of Dreams” in Tanjong Pinang.
Ewein shares fell half a sen to close at 53.5 sen yesterday, with some 108,000 traded. It has a market capitalisation of RM161.35 million.
LONDON, Aug 22 — Broad gains for the dollar pushed sterling back towards lows from early July today, the British currency weighed down by an uncertain economic outlook that has quashed expectations of a rise in Bank of England interest rates….
PETALING JAYA: IGB Corp Bhd’s net profit soared 41.1% to RM76.3 million for the second quarter ended June 30, 2017 versus RM54.08 million in the previous corresponding period, thanks to higher contributions from the property investment and hotel divisions.
However, its revenue dropped 6.1% from RM262.52 million to RM246.59 million, mainly due to lower contribution from the hotel division.
The group has proposed to declare an interim dividend of 5 sen per share for the quarter under review.
IGB’s first-half net profit jumped 80.9% from RM105.89 million to RM191.55 million, while revenue fell 7.6% from RM542.73 million to RM501.37 million.
Th group told Bursa Malaysia that based on the results achieved for the six months to June 30, 2017, the board is cautiously optimistic that the performance for FY17 will be satisfactory.
The counter was unchanged at RM2.83 yesterday on some 3,700 shares traded, giving IGB a market capitalisation of RM3.86 billion.