Wednesday, January 17th, 2018


GDP growth to moderate to 5.1% this year: SERC

KUALA LUMPUR: The Malaysian economy is expected to moderate to 5.1% this year due to the high base effect from 2017, the Socio-Economic Research Centre (SERC) projected, noting that the current pre-election sentiment on the local bourse is positive with the stronger ringgit boosting optimism.

SERC executive director Lee Heng Guie estimates that gross domestic product growth in 2017 will be between 5.8% and 6%, the strongest in two years.

He expects economic growth outlook for 2018 to be led by domestic demand, albeit at a slower pace. Lee said the strong double-digit export growth and export levels will normalise and grow at a slower pace (estimated 7.5% in 2018 compared with 19.8% projected in 2017) as the high base effect kicks in, and the waning effect of favourable exchange rate valuation due to the gradual strengthening of the ringgit.

“If there is no major pullback in consumer spending, we should be able to see a growth of 5.1%,” he told a media briefing on the quarterly economy tracker today, adding that there is upside potential to its forecast if export growth turns out to be stronger.

He also expects a 25bps rate hike by Bank Negara Malaysia (BNM) in its Monetary Policy Committee meeting next week.

“Our baseline call is 25bps for a start. The market must prepare for further rise in rates if (three) conditions are met throughout the year,” he said.

These conditions include global growth and domestic economy continuing to sustain at strong levels; the need to anchor inflation expectations should inflation continue to remain at elevated levels as oil prices remain a wild card; and balance yield gaps should the Fed hike rates aggressively.

Lee said Malaysia’s current economic condition is ready for a review of monetary policy and can absorb a small 25bps rate hike, which would bring it back to levels before the rate cut during Brexit.

“At the moment, export and consumer spending are growing, there’s no significant signs of pullback. A small step of 25bps will not discourage consumption and investments. If you keep rates at this level too long, eventually it will create risks, although we see an improvement in household debt,” said Lee.

On whether a rate hike may temper sentiments with the coming election, Lee said BNM will look at the total picture.

“I believe that the growth is strong, so they can go ahead (to raise rates). It’s a tough call, whether you want to take into account these sentiments or political (election), the central bank will know how best to move.”

At the moment, he said, foreigners are coming back to the local bourse in a big way in anticipation of the imminent election, specifically those who invest in stocks with an election-play, thanks to the stronger ringgit and a better economic outlook.

“At the moment, the sentiment is still positive. With the oil price firming up, it creates optimism. When Parliament dissolves, investors will turn sidelines and closer to election, they will be more careful to see the outcome,” said Lee.

Meanwhile, the impending general election could provide the ringgit with headwinds in the first half of the year, but good economic and financial fundamentals are expected to be supportive of the ringgit, which is fundamentally undervalued. Lee expects the ringgit to trade between RM3.80 and RM3.90 against the US dollar by end-2018.

Ekuinas sells stake in Tenby

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas), the government linked private equity fund management company, has divested its entire 100% interest in the Tenby Education Group to International Schools Partnership (ISP).

Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said after eight years in operation, its divestment initiatives are progressing rapidly to accelerate the realisation of its investments.

Tenby, established in Ipoh in 1960, is a leading education group in Malaysia offering private national and international curricular across six campuses in Ipoh, Penang, Miri, Setia Alam, Johor Baru and Semenyih.

“The time and economic climate are right for us to exit Tenby as the divestment enables Ekuinas to generate positive returns to maintain the funds’ performances.

“Through this divestment, Ekuinas will substantially cover its original cost of investment and generate a positive internal rate of return of 45.7% and money multiples of 2.5 times the capital invested, including dividends received,” said Syed Yasir in a statement.

The sale marks Ekuinas’ eighth divestment, which brings the company’s total realisation proceeds to more than RM1 billion, including the partial divestment of Icon Offshore Bhd.

ISP was founded by a team of experienced school operators with both educational and commercial expertise, managing and providing education to 16,000 students in Pre-K-13 schools across Europe, North America, Central America and the Middle East.

Tenby presents an opportunity for ISP to expand into the Asean market, complementing the existing strengths of Tenby and adding a new dimension brought on by their educational and commercial expertise as well as their experiences from schools in other countries under its portfolio. With Tenby, ISP’s portfolio of schools will increase to 25.

Throughout the life of Ekuinas’ investment in Tenby, it has undertaken a few initiatives to aggressively grow revenue and earnings of the group, such as increasing student numbers from about 4,600 to over 5,000, and driving expansion through the opening of Tenby Ecohill in 2016 and Tenby Tropicana Aman, which is scheduled for 2018.

ISP CEO Steve Brown said the acquisition of Tenby marks its first acquisition in Southeast Asia.

“This demonstrates our ambition to grow our partnerships across different regions all over the world. Tenby schools are well respected within their community. We look forward to making further investments and continuing to grow the schools.”

Mah Sing signs deal with EduCity to provide student accommodation

PETALING JAYA: Mah Sing Group Bhd and EduCity Iskandar Malaysia signed a memorandum of understanding (MoU) which will see 183 units in [email protected] designated as student accommodations from March 2018 onwards.

Starting at RM850 per student, the units will cater to 370 students.

A MoU signing ceremony was held at Mah Sing’s Academy in Southgate, which was attended by Mah Sing’s CEO Datuk Ho Hon Sang, senior general manager (Southern) Benjamin Ong, EduCity chairman Datuk Ir. Khairil Anwar Ahmad and COO Sugu Maran today. Mah Sing’s [email protected] is located 3.6km (5 minutes drive) from EduCity.

The first phase of [email protected]’s residential component, comprising of 756 units of residential suites, were successfully handed over in June 2017.

The second phase will begin handing over Vacant Possession from Q1 2018 onwards and comprises 583 units of Meridin Executive Suites, Meridin Walk Lifestyle Mall comprising 188 retail units and two blocks of hotel suites, Ramada Meridin and Ramada Encore Meridin, comprising 644 hotel suites.

Ramada Meridin and Ramada Encore Meridin are scheduled to have its soft launch in April 2018 and will both be managed by leading hotel management company, Topotel.

Sunsuria proposes diversification into construction

PETALING JAYA: Sunsuria Bhd, which is involved in property development and investment, is proposing to diversify its existing principal activities of property development to include construction and related businesses.

“The board anticipates the construction and related businesses may in the future contribute 25% or more of the net profits of Sunsuria group and/or result in a diversion of more than 25% of the net assets of Sunsuria group. The board proposes to seek the approval of shareholders of Sunsuria for the exercise, at an AGM to be convened,” Sunsuria said.

It intends to secure construction projects to provide for greater business expansion and sound financial growth for the group.

The exercise will be undertaken through its 51% indirect subsidiary Sunsuria Asas Sdn Bhd (SASB) and joint venture company Citic Sunsuria Sdn Bhd (CSSB), wherein Sunsuria will be able to leverage on the proven track record, engineering expertise, technical sophistication and resources of the strategic partners – Spanway Construction Sdn Bhd and Citicc International Investment Ltd (CITIC).

The investment in SASB and the joint venture with CITIC through CSSB by Sunsuria group serve as the entry point and is part of the group’s expansion efforts into the construction and related businesses.

After obtaining approval from the company’s shareholders for the exercise, Sunsuria group will strive to identify and assess new opportunities to secure more contracts.

“The board is positive on the outlook of the construction and related businesses, which is expected to enhance Sunsuria group’s financial performance and shareholders’ value. The diversification into the new businesses augurs well for the group. It is the intention of the group to expand and bolster the construction and related businesses including potential listing of the construction division of the group when appropriate,” it added.

Ringgit ends marginally higher versus greenback

KUALA LUMPUR: The ringgit broke out of its recent range-bound trading to close higher against the US dollar today on renewed buying interest, supported by the positive performance in crude oil prices.

At 6pm, the local note finished at 3.9520/9560 against the greenback from 3.9540/9590 on Tuesday.

A dealer said the ringgit bucked the trend of emerging currencies, which mostly slipped as the dollar rebounded, mainly due to the country's status as an oil producing country.

Oil prices remained well supported Wednesday on the back of tightening supply and strong global demand.

Towards the closing of Asian trading hour, the benchmark Brent crude futures advanced 8% to US$69.23 a barrel from its previous close.

“Both Brent and US West Texas Intermediate (WTI) crude futures hit three-year highs or the highest since December 2014 early this week and have not shown a downward correction signal.

“The ringgit may get better and test its next support at 3.90 amid positive oil price outlook and as market will soon shift on trading idea based on Bank Negara Malaysia's policy normalisation, which is again ringgit positive,” he added.

The domestic note however traded mixed against a basket of major currencies.

It was almost unchanged against the Singapore dollar at 2.9867/9906 from Tuesday's 2.9864/9909, and advanced against the Japanese yen to 3.5674/5720 from 3.5715/5770 yesterday.

The ringgit eased against the British pound to 5.4506/4577 from 5.4415/4496 and was lower against the euro at 4.8388/8441 from 4.8369/8446. — Bernama

Singaporeans beginning to buy less ringgit as currency strengthens

ringgit dollar

SINGAPORE: The rise in the ringgit against the Singdollar has sent demand for the Malaysian currency plunging at some money changers in Singapore. Mohamed Rafeeq, the owner of Clifford Gems and Money Exchange at Raffles City mall, told The Straits Times that sales of the ringgit are down about 30 per cent from three months ago. “The ringgit is getting stronger, so people don’t want to buy it… I’m hoping that it will get better,” said Rafeeq. Malaysia’s stronger trade performance and higher oil prices have helped lift the currencyRead More

Bursa Malaysia approves the transfer of TRIplc’s listing status

PETALING JAYA: TRIplc Bhd has received the approval of Bursa Malaysia Securities Bhd to transfer its listing status to Pimpinan Ehsan Bhd.

The group said in a Bursa Malaysia filing that the stock market regulator has given the nod to Pimpinan Ehsan to assume TRIplc's listing status and the listing of and quotation for the entire issued share capital of Pimpinan Ehsan comprising up to 69.12million shares.

Following the completion of the exercise, TRIplc will become a subsidiary of investment holding company Pimpinan Ehsan Bhd.

TRIplc's shares remained unchanged at RM2.25.

Meda Inc unit faces new lawsuit over guaranteed rental return scheme 

CYBERJAYA: Another group of The Arc @ Cyberjaya project owners is initiating a legal suit against Meda Inc Bhd’s wholly owned subsidiary Maju Puncakbumi Sdn Bhd claiming RM1.8 million in outstanding rentals under a guaranteed rental return (GRR) scheme.

This follows the success of 137 owners of the same project last month, in getting the Shah Alam High Court to rule in their favour.

The court awarded the owners RM3.97 million being the outstanding rentals up till May 2017, 8% interest on the outstanding rentals, among others.

Speaking at a press conference today, Vincent Lim Chang, the lawyer representing the owners said Maju Puncakbumi is appealing to the Court of Appeal and a hearing on stay application is set for Jan 29 for the earlier case.

Meanwhile, for the latest legal action, Vincent said the 55 owners have no other avenue but to file a suit claiming lack of response from the developer, which was served a notice of demand on Dec 11, 2017.

“The notice was received by the developer on Dec 12, 2017 but yet there was no response from the developer.”

The Arc @ Cyberjaya is a RM700 million freehold development, which was launched in 2011, comprising four blocks of serviced apartments with a total 1,001 units.

The owners claimed that they were given an option to sign up for a GRR scheme, which promised a fixed rental income for up to 25 years with an annual return rate of 8%. Over 80% of the buyers opted for the scheme.

However, Meda denied the promise of a fixed rental income of up to 25 years.

Meda has been in the red since 2014. For nine months ended Sept 30, 2017, it reported a narrowed net loss of RM4.2 million against RM7.06 million in the previous corresponding period, due to operating losses and RM2.87 million of loss on disposal of land in Sg Siput.

According to owners’ representative Patricia Lim, the rental payments only lasted for one-and-a-half years until mid-2016.

“We wouldn’t have bought the units if GRR was not offered. However, we’ve not been receiving any payment since mid-2016 despite the units were tenanted, therefore we’ve to take out our money for monthly instalments.”

She said what’s more frustrated was that the developer issued notice of termination of the tenancy agreement about six months ago. “The letter states that the termination was due to the cease of Maju Puncakbumi as the property manager.”

Another 55 owners of The [email protected] units to sue Meda Inc’s Maju Puncakbumi over GRR scheme 

CYBERJAYA: Another group of The Arc @ Cyberjaya project owners is initiating a legal suit against Meda Inc Bhd's wholly owned subsidiary Maju Puncakbumi Sdn Bhd claiming RM1.8 million in outstanding rentals under a guaranteed rental return scheme (GRR).

This follows the success of a suit by 137 owners of the same project last month, after the Shah Alam High Court ruled in favour of their class-action lawsuit.

Speaking at a press conference here today, Vincent Lim Chang, the lawyer representing the owners said Maju Puncakbumi is appealing to the Court of Appeal and a hearing on stay application is set for January 29.

Meanwhile, for the latest legal action, Lim said the 55 owners have no other avenue but to file a suit claiming lack of response from the developer, which was served a notice of demand on Dec 11, 2017.

Ringgit higher against US dollar in early session


(File pix) The ringgit strengthened against the US dollar this morning on renewed buying interest. Pix by Amran Hamid KUALA LUMPUR: The ringgit strengthened against the US dollar this morning on renewed buying interest. At 9.07 am, the ringgit stood at 3.9450/9500 against the greenback from Tuesday’s close 3.9540/9590. Oanda Corp Head of Trading for Asia Pacific, Stephen Innes, said with the market’s focus shifting to Bank Negara Malaysia’s policy normalisation, it should favour the ringgit, given the anticipated policy shift at the end of the month. However, the ringgitRead More