Tuesday, February 13th, 2018

 

Wall Street dips as caution sets in ahead of inflation data

NEW YORK, Feb 13 — Wall Street’s main indexes were down about a third of a per cent today, falling for the first time in three sessions as caution crept in ahead of crucial data on inflation, which has been the root cause of the recent…


Singapore poised for first Goods & Services Tax hike since 2007

SINGAPORE: Singapore, a city-state famed for the low-tax model that helped transform it from a gritty port town to an Asian Manhattan, is expected to put something unusual in this year’s government budget announcement: a tax increase.

Nine of 10 economists polled by Reuters think authorities on Monday will unveil the first rise in the Goods and Services Tax (GST) since 2007. Policymakers have flagged the need to increase revenue to meet future social spending needs of a rapidly ageing population.

Economists say Finance Minister Heng Swee Keat might also make tweaks to taxes on e-commerce retailers such as Amazon.com. Inc, wealth and sugar when he presents the budget on Monday for the year starting April 1.

Any tax measures would come after Singapore in 2017 had its fastest economic growth in three years, estimated at 3.5%.

“Strong economic growth is a good pull factor supporting the tax hike,” said Francis Tan, an economist for Singapore’s United Overseas Bank.

He expects GST to be increased by 1 percentage point this year to 8%, followed by another 1 percentage point hike next year.

Tan added that there’s an “urgent need” to shift more towards indirect taxes as the tax base for personal income tax could become smaller over the longer term given Singapore’s demographic challenge.

While the rate for Singapore’s consumption tax is one of the world’s lowest, GST is still the government’s second largest source of tax revenue, behind corporate tax.

Singapore introduced its GST in 1994, with a 3% rate. This was raised to 4% in 2003 and 5% in 2004, then to 7% in 2007.

Some economists including HSBC’s Jingyang Chen, who expects a 2 percentage point increase to be announced on Monday, said a higher GST could be accompanied by measures to ease the burden for lower-income families, such as cash transfers and vouchers.

Eight of the 10 economists polled expect the government to widen the net on e-commerce transactions subject to the GST.

Currently, Singapore consumers pay 7% GST on their purchases from Singapore-based online retailers. In contrast, they pay no GST on goods purchased from overseas suppliers if the value of the imported goods is below S$400 (RM1,200).

Several economists also suggested there could additional taxes on wealth, such as an increase in annual property taxes, as well as higher rates on alcohol and tobacco products or even a new tax on sugar consumption.

Michael Wan, an economist at Credit Suisse, estimates that a 2 percentage point increase to the GST would add around 0.6% of GDP to net government revenues annually, after taking into account possible offsetting measures to cushion the impact on lower income households.

Economists estimate a 2 percentage point rise in GST could boost Singapore’s headline inflation rate by 1.0-1.5 percentage points and core inflation – the measure closely watched by policymakers – by even more.

“If the MAS (Monetary Authority of Singapore) sees longer-term inflation risks after GST is implemented, then it would factor that into its policy decisions,” said HSBC’s Chen. – Reuters


Bitcoin halts longest rally since December after 24pc increase

LONDON, Feb 13 — Bitcoin is snapping its longest rally since December and retreating before a trendline set from its record high that month. The largest digital currency dropped 2.9 per cent to US$8,579 (RM33,815) as of 12:48pm in London,…


Borneo Oil acquires quarry for RM47m via 30-year sublease

PETALING JAYA: Borneo Oil Bhd’s wholly owned subsidiary Borneo Oil & Gas Corporation Sdn Bhd is acquiring a quarry measuring 5.378ha in Lahad Datu, Sabah, for RM47 million as part of an on-going expansion plan into limestone mining and related activities as well as to export marble blocks.

The group’s board of directors said in a Bursa Malaysia filing, the acquisition which will be financed with internal funds, was done in the form of a sublease for a lease period of 30 years.

The parcel of land located in Ulu Segama, in Lahad Datu District has a reserve of 6.27 million metric tons (MT).

Marble blocks extracted from the quarry will be exported while the balance of resources to be used for limestone aggregates and related products.

The group is also of view that there is a great demand for aggregates and other construction material in Sabah with the ongoing construction of the Pan Borneo highway.

“With the acquisition, the company together with its existing land bank of limestone reserves held for long term investment shall become a substantial player in the supply of high grade limestone resources in Sabah,” its board of directors said.

While the acquisition will not impact its earnings, it is expected to contribute positively for future earnings.

The company’s share price closed unchanged at eight sen with some 14.5 million shares changing hands.


Borneo Oil acquires quarry for RM47m via sublease

PETALING JAYA: Borneo Oil Bhd’s wholly owned subsidiary Borneo Oil & Gas Corporation Sdn Bhd is acquiring a quarry measuring 5.378ha in Lahad Datu, Sabah, for RM47 million as part of an on-going expansion plan into limestone mining and related activities as well as to export marble blocks.

The group’s board of directors said in a Bursa Malaysia filing, the acquisition which will be financed with internal funds, was done in the form of a sublease for a lease period of 30 years.

The parcel of land located in Ulu Segama, in Lahad Datu District has a reserve of 6.27 million metric tons (MT).

Marble blocks extracted from the quarry will be exported while the balance of resources to be used for limestone aggregates and related products.

The group is also of view that there is a great demand for aggregates and other construction material in Sabah with the ongoing construction of the Pan Borneo highway.

“With the acquisition, the company together with its existing land bank of limestone reserves held for long term investment shall become a substantial player in the supply of high grade limestone resources in Sabah,” its board of directors said.

While the acquisition will not impact its earnings, it is expected to contribute positively for future earnings.

The company’s share price closed unchanged at eight sen with some 14.5 million shares changing hands.


E&O’s Q3 net profit dips on higher taxes

PETALING JAYA: Premier lifestyle property developer, Eastern & Oriental Bhd(E&O) saw its net profit for the third quarter ended Dec 31, 2017, dip by 29.27% to RM21.97 million from RM31.07 million due to high taxation.

Revenue, on the other hand, increased by 36.40% to RM331.89 million in the quarter under review against the RM243.31 million registered in the previous year’s corresponding quarter supported by higher contributions from the property segment on higher sales of completed properties.

The group was subjected to taxes amounting to RM33.70 million in the quarter as compared with the RM16.33 million in the same quarter last year.

“Nevertheless, we are encouraged by the recent sale of properties, especially in our Penang projects. For the remainder of FY18 and for the next financial year we continue to focus selling down our inventory with more innovative pricing packages,” the group said in a Bursa Malaysia filing.


Tanco posts wider net loss in second quarter

PETALING JAYA: Tanco Holdings Bhd’s net loss for the second quarter ended Dec 31, 2017 widened to RM2.53 million from RM2.41 million a year ago mainly due to higher operating and administrative expenses incurred in the current quarter.

Its revenue however jumped over four folds to RM2.39 million compared with RM535,000 in the previous year’s corresponding quarter.

With the current economic outlook, Tanco said the overall sentiment is expected to remain challenging for FY2017/2018.

The board is cautiously optimistic that the prospects of the group will be satisfactory following the financial year ending June 30, 2018, with the development of the Splash Park project progressing well and the other resort development phases in Dickson Bay attracting keen interest both from prospective investors and operators, coupled with the group’s ongoing endeavours for more strategic tie-ups and joint-ventures with branded local and foreign labels.

For the six months period, Tanco saw a net profit of RM1.27 million from a net loss of RM4.98 million a year ago as the profit was mainly attributed to higher revenue generated from the property development and resort division.

Its revenue rose over five folds to RM13.07 million compared with RM2.36 million in the previous year’s six months.

Tanco’s share price was down half a sen to close at 11.5 sen, with some 500 shares changing hands.


Weida Q3 earnings double

PETALING JAYA: Weida (M) Bhd’s net profit for the third quarter ended Dec 31, 2017 doubled to RM8.61 million from RM4.30 million a year ago mainly due to higher revenue contribution with lower overheads incurred from all segments, except for property development segment.

Revenue also jumped 10% to RM66.45 million compared with RM60.40 million in the previous year’s corresponding quarter.

Moving forward, the directors will ensure continuous efforts to implement measures to improve operating efficiency in achieving sustainable results for the group for the financial year ending March 31, 2018 on the strength of the diversified base of the group which has helped to offset the adverse impacts to the group.

However, the group’s cost of operation will be affected by the recently raised overnight policy rate, which increased Malaysian commercial lending rates. The strengthening of US dollar against the ringgit will also affect its raw material cost.

For the nine months period, net profit fell 11% to RM17.88 million from RM20.01 million a year ago, while revenue decreased 23% to RM183.72 million compared with RM239.92 million in the previous year’s corresponding period mainly due to lower contribution from both works segment and property development segment as the projects were at tail end of completion but the impact has softened by higher revenue contributed from manufacturing segment.

Despite lower revenue, the group’s profit margin improved due to contribution from both manufacturing and works segments for the current financial period.


Court dismisses action against Layang FPSO novation to Yinson

PETALING JAYA: Globalmariner Offshore Services Sdn Bhd’s (GMOS) appeal against the High Court’s validation order in relation to the proposed novation of the leasing for Layang FPSO facilities made between TH Heavy Engineering Bhd (THHE) and JX Nippon Oil & Gas Exploration (Malaysia) Ltd to Yinson Holdings Bhd’s associate company Yinson Energy Sdn Bhd has been dismissed by the Appellate Court.

In a filing with the stock exchange, Yinson’s board of directors said that the court in its ruling on Feb 12, has also refused GMOS’ oral application for an ad interim stay on the Appellate Court’s order on the dismissal of GMOS’ appeals.

Meanwhile in a separate filing, TH Heavy Engineering Bhd said the Appellate Court dismissed GMOS application to “intervene in the High Court proceedings of the scheme of arrangement of the scheme companies as well as against the validation order granted by the High Court on Dec 21, 2017 pursuant to Section 368 (4) of the Companies Act, 2016 which allowed its 80% owned subsidiary Floatech (L) Ltd to novate the JX Nippon contract to Yinson Energy Sdn Bhd.

Floatech owns Layang FPSO, a company in which GMOS holds the remaining 20% stake.

TH Heavy’s share price was down one sen to 8.5 sen, while Yinson closed unchanged at RM4.10 today.


Next RCEP meeting will be crucial, says Mustapa

KUALA LUMPUR: The next Regional Comprehensive Economic Partnership (RCEP) meeting, which will be held at the ministerial level on March 2, will be a crucial one to discuss the progress of the trade deal.

International Trade and Industry Datuk Seri Mustapa Mohamed said today he is confident the meeting, to be held in Singapore, will serve as a platform to bridge the gap between Asean and other countries.

“We are confident that with the commitment from all parties, we can reduce the gap between Asean members and other countries,” he told reporters at the launch of SME Bank Y-Biz Challenge 2018 and MySMEBank Online Application system.

Mustapa said Malaysia still hopes for the proposed trade deal to be sealed this year.

It was reported the Philippines has demanded its RCEP fellow negotiating countries to work towards a speedy conclusion of the agreement.

It said there were complications coming from Australia, China, India, Japan, New Zealand and South Korea.

Meanwhile, the 21st round RCEP meeting was held in Yogyakarta, Indonesia, from Feb 2 to 9. It was attended by the RCEP’s 16 negotiating member countries. At this round the discussions included topics such as trade of goods and services, investments, issues regarding legalities and institutions, as well as the rules of origin.

RCEP is free trade agreement between Asean’s 10-member states and six other countries, namely Australia, China, India, Japan, South Korea and New Zealand. Once sealed, the RCEP will become the largest trade bloc in the world that could boost economic growth of its members.

Also at the launch, Mustapa told reports that the government is concerned about the challenges faced by Proton Holdings Bhd’s dealers and vendors.

“The ministry is currently gathering information and I plan to meet them soon for discussions,” he said in response to a question whether a special incentive would be provided to help Proton dealers upgrade their businesses.

On Monday, Proton encouraged its dealers to upgrade their sales-only centres to integrate sales, service and spare parts to, among others, improve the dealership network and increase customer satisfaction. – Bernama