Tuesday, December 19th, 2017

 

US stocks retreat from records ahead of tax bill vote

NEW YORK, Dec 19 — Wall Street stocks declined early today, pulling back from two days of consecutive records ahead of the final congressional votes on a long-awaited US tax cut plan. About 20 minutes into trading, the Dow Jones Industrial…


Stocks in Focus (20-12-2017)

KUALA LUMPUR (Dec 19): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Dec 20) may include the following:…


Youth Housing Scheme eligibility criteria relaxed

PETALING JAYA: The government’s Youth Housing Scheme (YHS), which is solely offered by Bank Simpanan Nasional (BSN), has been extended to Malaysian citizens aged 21 to 45 years old and single or married youths with household income of no more than RM10,000 per month.

The scheme, which expires at the end of this year, was previously targeted at married youths aged between 25 and 40 with a combined household income of no more than RM10,000, who are buying their first home. A check on BSN’s website showed that all other features of the scheme remain the same.

Announced under Budget 2015, YHS is a partnership between the government, BSN, Cagamas Bhd and the Employees Provident Fund. It was launched in July 2015 and offers 100% financing for first-time home buyers.

As of October 2016, BSN had approved only 1,600 loans with a total value of RM400 million. Earlier in August, it was reported that BSN had approved over 3,000 housing loans from over 6,000 applicants; a far cry from the 20,000 loans envisioned by the government.

It is understood that BSN is in talks with the government to extend the scheme beyond Dec 31, 2017. It has also been teaming up with property developers to further promote the scheme. As at press time, the bank had not responded to SunBiz’s queries.

Under the scheme, the bank provides home loans, both conventional and Islamic, ranging from RM100,000 to RM500,000 with a tenure of up to 35 years or the age of 65, whichever is earlier.

Successful applicants also receive additional financing of up to 5% of the purchase price for the cost of Mortgage Reducing Term Assurance or Mortgage Reducing Term Takaful. In addition, the government provides RM200 per month to aid monthly instalments, which will be credited to the borrower’s financing account for two years.

The scheme is offered for financing the purchase of completed, under construction or subsale properties with 100% stamp duty exemption on transfer of ownership and facility documents for properties priced up to RM300,000.


Study: 57% of M’sian parents with grown-up children still helping them out financially

KUALA LUMPUR: Parents in Malaysia are not cutting the financial umbilical cord, with 57% of people with children over the age of 18 still giving them regular financial support, according to HSBC’s new the Power of Protection study, Facing The Future.

The study highlights parents’ ongoing commitment to their children, as well as the financial pressures faced by younger generations. The Power of Protection is an independent consumer research study into global protection needs and trends, commissioned by HSBC. It provides authoritative insights into people’s concerns about the future and how they are protecting themselves financially, around the world.

The survey was conducted on a sample of 1,000 Malaysians aged 25 and more.

The study is the third in the series and represents the views of 13,122 people in 13 countries and territories namely Argentina, China, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, the United Arab Emirates (UAE), the UK and the US.

The study uncovered that parents in Malaysia are ranked fourth globally in financially supporting children into adulthood. The UAE tops the global table of the highest proportion of parents still supporting grown-up children.

The study in Malaysia shows it is very common for parents to support children well into adulthood. Almost half (50%) of those supporting an adult child have been doing so despite most parents (64%) believing that their children should stand on their own two feet financially.

Education is the area where most parents (69%) are providing financial support, while 41% are helping with everyday living costs such as utility bills, groceries and home repairs. They are also helping with medical and dental care (38%) and rent/accommodation costs (27%). Over one in four (29%) are even helping to paying for holidays.

Most parents supporting grown-up children feel good about helping their family, with 62% feeling appreciated for the support they give and 63% feeling they are a good provider for their family.

Providing this ongoing financial support comes at a cost, but it appears to be one that most parents prioritise. Parents are spending an average 33% of their disposable income on supporting grownup children and 49% are spending less on themselves in order to have more for their families.

However there can be significant knock-on effects to parents’ long-term financial planning. About 67% of parents supporting adult children would prioritise paying for their child’s university/higher education over their own retirement fund, and 30% had to withdraw from their own savings and investments to support an adult child, while 17% have incurred more debt.

A significant minority of parents say their adult children would not manage at all financially if they themselves developed a long-term illness or disability (22%), if they had to significantly reduce their financial support to them (16%) or if they were unable to work (16%).

Yet 54% of parents supporting grown-up children do not have insurance that would pay them if they had a serious illness or accident that prevented them from working, and 52% do not have life insurance.


Johari: Reserves drop during 2013-15 due to capital outflows, not loss

PETALING JAYA: The US$39.6 billion (RM161 billion) “loss” by Bank Negara Malaysia (BNM) between 2013 and 2015 as alleged by Tun Mahathir Mohamad was actually an amount that reflected the decline in international reserves due to outflows of foreign funds from Malaysia, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

“These outflows were due to concerns over weak global growth prospects, anticipation of monetary policy normalisation in the US and the sharp decline in global oil prices. During this period, capital outflows were not only unique to Malaysia but also affected other emerging markets including Indonesia, Philippines, Singapore, Thailand, India, China, South Korea and Taiwan,” he said in a statement today.

Johari said all these external factors practically pushed foreign investors to liquidate their investments in Malaysia’s stock and bond markets. This in turn led to greater demand for the US dollar vis-à-vis the ringgit when foreign investors converted such funds into the US dollar and repatriated the same to their respective countries.

“During this period, BNM provided US dollar liquidity to foreign investors in exchange for the ringgit and this was certainly different from the heavy speculative forex trading activities undertaken in the early 1990s.”

Johari said the current reserve management system by BNM has worked remarkably well and the financial markets were orderly and stable notwithstanding the large capital outflows.

“Given our solid fundamentals, the decline in reserves during the period 2013-2015 had no material impact to the functioning of the Malaysian economy as well as the financial position of the central bank. In fact, BNM continues to record healthy net profits throughout the period unlike in 1993 when a net operating loss was recorded due to speculative forex trading activities,” he added.

Johari stressed that international reserves remain as a crucial buffer against external shocks and is essential in maintaining stable operating environment in the domestic economy. Since then, Malaysia’s international reserves has been on the increase.

As at end November 2017, Malaysia's international reserves stood at US$101.9 billion and is sufficient to support 7.5 months of retained imports. The current amount of reserves is five times larger than the US$21.7 billion recorded in 1997 which can only support 3.4 months of retained imports.

“The insinuation made in the video that BNM had been negligent in managing international reserves during period 2013-2015 was not only reckless but was also an attempt to undermine BNM’s institutional mandate to safeguard the economic and financial stability of the nation by creating doubts and misperception among the general public,” said Johari.


MyIPO joins special panel on competition

PETALING JAYA: The Intellectual Property Corp of Malaysia (MyIPO) is now a member of the special committee on competition, which was initiated by the Malaysia Competition Commission (MyCC).

With the inclusion of MyIPO, the special committee on competition will now have nine members. The other eight members are MyCC, the Malaysia Communications and Multimedia Commission, the Energy Commission (ST), the National Water Services Commission, the Land Public Transport Commission, the Central Bank of Malaysia, the Securities Commission and the Malaysian Aviation Commission (Mavcom).  

MyCC said that the special committee on competition met for the second time in 2017 to discuss related issues on competition law and policy.

“The inclusion of MyIPO is a timely act. MyCC is currently working on the guidelines on Intellectual Property and Competition, and is planning to publish it sometime next year.

With the input from MyIPO, I am sure the guidelines will bode well to address issues on the conflict between competition and intellectual property,” said MyCC CEO Datuk Abu Samah Shabudin.

During the meeting, it was also highlighted that ST and Mavcom are issuing guidelines in relation to competition matters, with Mavcom expected to publish a few guidelines early next year.

MyCC is an independent body responsible for enforcing the Competition Act 2010, which was implemented to create healthy competition which works for the benefit of consumers and the public at large.


SC sets new guidelines on Sustainable and Responsible Investment funds

KUALA LUMPUR: The Securities Commission Malaysia (SC) today issued guidelines on Sustainable and Responsible Investment (SRI) funds to widen the range of products and attract more investors in the SRI segment.

The guidelines will be applicable for both conventional and syariah-compliant funds.

“Capital markets play a critical role in facilitating fund raising and investments for sustainable initiatives. The introduction of the SRI funds guidelines is another significant step towards further development of the SRI ecosystem in the Malaysian capital market, reinforcing our positioning in the regional SRI segment and global leadership in Islamic finance,” said SC chairman Tan Sri Ranjit Ajit Singh.

“Developing the SRI was identified as a key area of growth for the Malaysian capital market under the Capital Market Masterplan, and in 2014 the SC introduced the SRI sukuk framework, now widely acknowledged as a pioneering regulatory development that integrates the principles of syariah with those of SRI,” Ranjit added.

In July 2017, the world’s first green sukuk was issued in Malaysia under the SRI sukuk framework.

With Islamic funds being recognised as part of the SRI universe, Malaysia is currently the largest SRI funds market in Asia (excluding Japan). It has 30% share of the region’s US$52 billion (RM212 billion) fund assets. Malaysia is also the second largest Islamic funds market globally (by domicile) at 29% of the US$56 billion global total asset under management.

The SRI funds guidelines will apply to products within the SC’s oversight, such as unit trust funds, real estate investment trust funds, exchange-traded funds, and venture capital and private equity funds.

The guidelines will also introduce additional disclosure and reporting requirements that aim to encourage greater transparency in investment policies and strategies of SRI funds.

Fund managers that manage qualified SRI funds under these guidelines will be eligible for tax incentives as announced in the recent 2018 Budget.


SC sets new guidelines on SRI funds

KUALA LUMPUR: The Securities Commission Malaysia (SC) today issued guidelines on Sustainable and Responsible Investment (SRI) funds to widen the range of products and attract more investors in the SRI segment.

The guidelines will be applicable for both conventional and syariah-compliant funds.

“Capital markets play a critical role in facilitating fund raising and investments for sustainable initiatives. The introduction of the SRI funds guidelines is another significant step towards further development of the SRI ecosystem in the Malaysian capital market, reinforcing our positioning in the regional SRI segment and global leadership in Islamic finance,” said SC chairman Tan Sri Ranjit Ajit Singh.

“Developing the SRI was identified as a key area of growth for the Malaysian capital market under the Capital Market Masterplan, and in 2014 the SC introduced the SRI sukuk framework, now widely acknowledged as a pioneering regulatory development that integrates the principles of syariah with those of SRI,” Ranjit added.

In July 2017, the world’s first green sukuk was issued in Malaysia under the SRI sukuk framework.

With Islamic funds being recognised as part of the SRI universe, Malaysia is currently the largest SRI funds market in Asia (excluding Japan). It has 30% share of the region’s US$52 billion (RM212 billion) fund assets. Malaysia is also the second largest Islamic funds market globally (by domicile) at 29% of the US$56 billion global total asset under management.

The SRI funds guidelines will apply to products within the SC’s oversight, such as unit trust funds, real estate investment trust funds, exchange-traded funds, and venture capital and private equity funds.

The guidelines will also introduce additional disclosure and reporting requirements that aim to encourage greater transparency in investment policies and strategies of SRI funds.

Fund managers that manage qualified SRI funds under these guidelines will be eligible for tax incentives as announced in the recent 2018 Budget.


AirAsia X names new CFO

SEPANG, Dec 19 — AirAsia X Bhd announced today that Wong Mee Yen will be its new chief financial officer (CFO) starting Jan 1, 2018. Wong will replace the outgoing Cheok Huei Shian who has led the AirAsia X finance division since 2015. Cheok…


Monetary Authority of Singapore warns against investing in cryptocurrencies

SINGAPORE, Dec 19 — Singapore’s central bank issued a warning against investment in cryptocurrencies today, saying it considers their recent price surge to be driven by speculation and that there is a risk investors could lose all their…