Wednesday, September 20th, 2017

 

S&P, Dow flat ahead of Fed decision; Apple weighs on Nasdaq

NEW YORK, Sept 20 — The S&P and the Dow were little changed on Wednesday but hovered near record levels as investors waited to hear from the Federal Reserve on future interest rate hikes this year while the tech-heavy Nasdaq was pulled lower by…


Entrepreneurs need to embrace industry 4.0, says Ahmad Maslan

PUTRAJAYA, Sept 20 — Entrepreneurs need to think about the future of their business in line with the fourth industrial revolution (Industry 4.0), Deputy International Trade and Industry Minister Datuk Ahmad Maslan said. He said this would…


Rehda urges govt to cut GST on construction materials, stamp duty on residential units

PETALING JAYA: The Real Estate and Housing Developers’ Association Malaysia (Rehda) has called on the government to reduce the Goods and Services Tax (GST) on construction materials and stamp duty for residential houses to help tackle the affordability issue.

Rehda past president Datuk Ng Seing Liong said the 6% GST introduced in April 2015 has resulted in higher construction cost, which has been passed on to house buyers. Although residential properties are exempted, they are not zero-rated meaning developers cannot claim back the input tax, thus passing on the cost to buyers.

“Over and above that, construction services also attract that 6%. We all know that components of construction materials are very big item materials like steel bars, sand aggregates cement and that 6% has been passed on,” he told reporters at a briefing on Rehda’s property survey yesterday.

“Rehda has been telling the government that you can introduce GST but for construction materials you can actually lower it. In many countries, there are many types of GST rates, it’s what they call differential rates. This is an area where the government, if they want to help the construction industry, they should lower the GST,” he said, adding that a 1-2% GST for construction materials would be more palatable.

Ng said another component of affordability is stamp duty, which should have been reduced after the introduction of GST.

“But now, they are looking at increasing stamp duty for property above RM1 million at 4%. Now stamp duty for the first RM100,000 is at 1%, RM100,000 to RM500,000 is at 2%, RM500,000 and above is at 3%. But they want to go another tier above RM1 million at 4%,” he added.

Ng said the 6% GST and stamp duty are among the reasons for the marked increase in property prices over the last few years.

Although material costs are subject to market forces, things like levies, for example on steel, could be lifted to reduce construction cost, said Rehda president Datuk Seri FD Iskandar. He noted that steel prices in Malaysia and Thailand are similar at about RM1,700 per tonne but due to the levy imposed by the government, Malaysian contractors are paying up to RM2,800 per tonne.

“We understand that every manufacturer has a cost. We are not asking them to sell below cost and make losses … but the moment you put an element such as a levy, it unnecessarily increases the cost,” he said.

“When we say we want to build affordable homes in suitable areas, give us the incentives. For those who build affordable homes, lower the tax, give higher density, don’t charge development charges, lower conversion premium – a lot can be done,” he added.

FD Iskandar said state governments should allow developers to pay a contribution in lieu of building affordable homes in unsuitable areas where there is no demand, which has been enforced by Kuala Lumpur City Hall.

“Instead of forcing developers to build where there is no demand, let’s sit down and discuss. Maybe you take RM4,000 or RM5,000 for every unit the developer doesn’t build … the money can be used to build in places where there is demand,” he said.


Metronic Global: No financial impact from recent special audit

PETALING JAYA: Metronic Global Bhd announced that the findings of a recently-completed special audit report will have no financial or operational impact on its business.

In a filing with Bursa Malaysia today, the intelligent building management systems specialist said these irregularities took place in the past and appropriate provisions of the same were sufficiently made in the previous audited accounts.

“In the event of any recovery pertaining to the aforementioned matters, the group’s earnings would be adjusted accordingly during that period of recovery,” it added.

Metronic said the findings reported seven irregularities, including loan worth RM4.86 million taken by former director (allegedly taken to fully subscribe to the group’s entitlement to MNC Wireless Bhd’s right issue); unsold fertilizer stocks valued RM1.5 million was sold back to the supplier at a 50-60% discount; an equal share purchase of US$150,000 (RM628,000) in Gaharu fossil business with a third party without appropriate internal approvals: payments for units sold to a former director and parties related in Kuala Krai project paid directly to contractor instead of the group; an initial deposit of RM6.4 million paid for land in Cheras cannot be substantiated with a sale and purchase agreement; antiques and paintings worth RM511,898 purchased without appropriate internal approvals; and purchases of 3,400 units of healthcare foot massage machines despite stock being relatively slow.

Metronic said the group intends to take some measures to safeguard its assets and interests, including seeking legal advice in relation to the material findings, lodge police reports and other relevant authorities, and review the current internal control process to ensure that similar transactions will not recur.

Recall that following the engagement with Bursa Malaysia, the group had on May 2 appointed Ferrier Hodgson as its special auditor to conduct a thorough review of its projects and transactions to identify any irregularity in the company’s transactions.

On July 11, Metronic announced that it has terminated its CFO Eric Boon Chuan Kit for “his deemed obstruction and compromising the independency” of the special audit.

Metronic gained 9.09% to close at six sen today with a total of 172,000 shares traded. It has a market capitalisation of RM52.2 million.


Bank Negara refutes Bloomberg report, says Malaysia still resilient to external shocks

PETALING JAYA: Bank Negara Malaysia (BNM) stressed that the nation remains resilient and international reserves are not the only means to meet external obligations.

The central bank was responding to an article published by Bloomberg entitled “Malaysia Reserve Buffer Seen by Moody’s as Among Weakest in Asia”.

BNM said Malaysia’s net international investment position of 3.3% of gross national income (GNI) strengthens Malaysia’s resilience to a variety of shocks, including potential outflows.

It noted that the progressive liberalisation of foreign exchange administration rules also resulted in greater decentralisation of reserves, which is reflected in the increasing acquisition of assets abroad by resident banks and corporates.

“In particular, banks and corporates hold three-quarters of Malaysia’s external assets (as at end-Q2’2017: RM1.3 trillion), which can also be drawn upon to meet their external debt obligations (as at end-Q2’2017: RM673.8 billion), without creating a claim on BNM’s reserves, it said, adding that Malaysia’s external assets have exceeded the external liabilities since 2015.

Citing Bloomberg’s recent report on the country’s reserves presenting an unbalanced and simplistic assessment, BNM said it is only focusing on a rigid interpretation of two economic indicators, which is a reflection of a lack of understanding of the Malaysian economy, external position, financial system and its economic policies that led to an erroneous judgment of the country’s economy and its external resilience.

The central bank reiterated that Moody’s External Vulnerability Indicator, which measures short-term external debt by remaining maturity over reserves, are not a material risk.

“Most of it is accounted for by the banking sector, reflecting banks’ operations. This includes centralised liquidity management practices and deposit placement and interbank funding. Correspondingly, banks have placements abroad to mitigate currency and maturity mismatches,” it said.

On the International Monetary Fund (IMF)’s Reserve Adequacy Metric, the central bank said Moody’s failed to acknowledge the IMF’s overall assessment that Malaysia’s reserves are deemed adequate, given the flexible ringgit exchange rate and availability of external assets for borrowers to meet external obligations.

“In fact, the IMF’s July 2017 External Sector Report had concluded that Malaysia’s international reserves is adequate, at 115% of the IMF’s ARA metric, under a floating exchange rate regime,” it added.


BNM: Bloomberg report unbalanced

PETALING JAYA: Bank Negara Malaysia (BNM) stressed that the nation remains resilient and international reserves are not the only means to meet external obligations.

The central bank was responding to an article published by Bloomberg entitled “Malaysia Reserve Buffer Seen by Moody’s as Among Weakest in Asia”.

BNM said Malaysia’s net international investment position of 3.3% of gross national income (GNI) strengthens Malaysia’s resilience to a variety of shocks, including potential outflows.

It noted that the progressive liberalisation of foreign exchange administration rules also resulted in greater decentralisation of reserves, which is reflected in the increasing acquisition of assets abroad by resident banks and corporates.

“In particular, banks and corporates hold three-quarters of Malaysia’s external assets (as at end-Q2’2017: RM1.3 trillion), which can also be drawn upon to meet their external debt obligations (as at end-Q2’2017: RM673.8 billion), without creating a claim on BNM’s reserves, it said, adding that Malaysia’s external assets have exceeded the external liabilities since 2015.

Citing Bloomberg’s recent report on the country’s reserves presenting an unbalanced and simplistic assessment, BNM said it is only focusing on a rigid interpretation of two economic indicators, which is a reflection of a lack of understanding of the Malaysian economy, external position, financial system and its economic policies that led to an erroneous judgment of the country’s economy and its external resilience.

The central bank reiterated that Moody’s External Vulnerability Indicator, which measures short-term external debt by remaining maturity over reserves, are not a material risk.

“Most of it is accounted for by the banking sector, reflecting banks’ operations. This includes centralised liquidity management practices and deposit placement and interbank funding. Correspondingly, banks have placements abroad to mitigate currency and maturity mismatches,” it said.

On the International Monetary Fund (IMF)’s Reserve Adequacy Metric, the central bank said Moody’s failed to acknowledge the IMF’s overall assessment that Malaysia’s reserves are deemed adequate, given the flexible ringgit exchange rate and availability of external assets for borrowers to meet external obligations.

“In fact, the IMF’s July 2017 External Sector Report had concluded that Malaysia’s international reserves is adequate, at 115% of the IMF’s ARA metric, under a floating exchange rate regime,” it added.




Berjaya Sports Toto Q1 net profit jumps 26.5%

PETALING JAYA: Berjaya Sports Toto Bhd’s (BToto) net profit in the first quarter (Q1) ended July 31, 2017 jumped 26.5% to RM74.31 million, from RM58.74 million in the previous corresponding quarter.

The group told the stock exchange today, this was mainly attributed to the improved results of HR Owen Plc as well as the foreign exchange gain recognised by a foreign subsidiary company in the current quarter.

Its first-quarter revenue rose slightly by 2.5% to RM1.47 billion, compared with RM1.44 billion in the same period last year.

BToto has proposed to declare an interim dividend of 4 sen per share for the quarter under review amounting to RM53.9 million, representing about 72.5% of the attributable profit of the group for Q1. The entitlement date for the dividend has been fixed on Oct 10.

On prospects, the group said it expects the number forecast operation (NFO) business to be challenging for the remaining quarters of the financial year ending April 30, 2018 (FY18), in view of the intense competition from illegal gaming activities coupled with rising costs and weak consumer sentiments.

“Notwithstanding these challenges, the directors are confident that the group will continue to maintain its market share in the NFO business for the remaining quarters of the financial year ending April 30, 2018.”

BToto shares closed unchanged at RM2.32 today with a total of 421,500 shares traded.


Sapura Industrial posts net loss in Q2

PETALING JAYA: Sapura Industrial Bhd has registered a net loss of RM1.03 million in the second quarter (Q2) ended July 31, 2017, against a net profit of RM873,000 in the previous corresponding quarter.

In Bursa Malaysia filing today, the group said net loss was due to lower revenue and higher operating costs, mainly from imported materials, as well as labour and production related expenses in preparation for new parts to be launched in the third quarter.

Revenue declined 11.7% to RM43.08 million, compared with RM48.8 million in the same period last year, mostly due to lower demand from original equipment manufacturers.

For the six months period, Sapura Industrial recorded a net loss of RM894,000, from a net profit of RM993,000 a year ago, while revenue slightly increased by 3.4% to RM98 million, from RM94.8 million previously.