Sunday, May 20th, 2018
PETALING JAYA: Malaysia's first quarter (1Q18) gross domestic product (GDP) growth came in at 5.4% year on year, lower than the consensus projection but AmBank Research is maintaining its 5.5% GDP growth for this year as it expects private consumption and the services sectors to continue to support growth together with other areas of business activities.
“Apart from private consumption and services, we noticed that most of the other economic segments showed some loss of growth momentum. Still, our current 5.5% GDP growth for the full year remains, as we expect private consumption and services sectors will continue to support growth together with other areas of business activities,” it said in a report.
“With the announcement of the Goods & Services Tax removal, added with the potential reintroduction of fuel and electricity subsidies as well as the review of toll roads, these suggest that the underlying inflation will pick up gradually.
“While our base case for OPR (Overnight Policy Rate) remains with a total of one rate hike by Bank Negara Malaysia (BNM) that took place in January with the OPR now at 3.25%, the probability for a second rate hike in September 2018 remains at a low 45%,” said AmBank.
However, Kenanga Research has revised its 2018 GDP growth forecast to 5.1% in 2018 from 5.5% (2017: 5.9%), as it said the change in government will likely put a damper on private investment due to policy uncertainty and disrupted public spending, which pose downside risks to its GDP forecast going forward.
“The only upside to growth could possibly be derives from higher private consumption following the government's decision to scrap the Goods and Services Tax (setting its rate at zero from June 1) and take its time to implement the sales and services tax. External factors may also weigh on growth mainly the expectation that exports would continue to slow on the back of the slowing global demand for consumer electronics especially mobile devices.”
Nonetheless, it said there could be offsetting factors if the government takes an aggressive approach to review major infrastructure projects. It then can prioritise or strategically delay projects that have high import content as it did in the 1990s. Less import could help boost net exports and support GDP growth.
Kenanga expects monetary policy to remain accommodative. It said although the central bank has left interest rates unchanged since it raised the OPR in January, the outlook for monetary policy may have turned considerably uncertain following the change in government.
“The biggest risk to the monetary policy outlook is that a post-election sharp decline in investment would exacerbate an economic slowdown. This may prompt BNM to loosen its monetary policy and cut interest rates. For now we are maintaining our view that the OPR will remain on hold until the end of the year.”
WASHINGTON: The US trade war with China is “on hold” after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said today.
Mnuchin and US President Donald Trump's top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future.
“We are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said in a television interview on “Fox News Sunday.”
On Saturday, Beijing and Washington said they would keep talking about measures under which China would import more energy and agricultural commodities from the US to close the US$335 billion (RM1.33 trillion) annual US goods and services trade deficit with China.
During an initial round of talks earlier this month in Beijing, Washington demanded that China reduce its trade surplus by US$200 billion. No dollar figure was cited in the countries' joint statement on Saturday.
Commerce Secretary Wilbur Ross planned to go to China, Mnuchin and Kudlow said.
“He's going to be looking into a number of areas where we're going to have greatly significant increases,” including energy, liquefied natural gas, agriculture and manufacturing, Kudlow said in an interview with ABC's “This Week.”
Mnuchin said the US expects to see a big increase of between 35% and 40% in agricultural exports to China and a doubling of energy purchases over the next three to five years. “We have specific targets. I am not going to publicly disclose what they are. They go industry by industry.” – Reuters
WASHINGTON, May 20 — The US trade war with China is “on hold” after the world’s largest economies agreed to drop their tariff threats while they work on a wider trade agreement, US Treasury Secretary Steven Mnuchin said today. Mnuchin and US…
SEOUL, May 20 — The chairman of LG Group, Koo Bon-moo, who helped transform South Korea’s fourth-largest conglomerate into a global brand, passed away today after a battle with a brain disease. Koo, 73, had been ill for a year, LG Group said in…
PETALING JAYA: Practice Note 17 Perisai Petroleum Teknologi Bhd (PPTB) on Friday announced that its plans to cancel off accumulated losses, issue shares and irredeemable and redeemable unsecured loan stocks to settle debt and a rights issue to raise funds to focus its business on the oil drilling rig of the group and the FPSO (floating production storage and offloading) unit, namely Perisai Kamelia, as part of its business rationalisation exercise.
PPTB listed a capital reduction and share consolidation to eliminate its accumulated losses; issuance of shares, irredeemable and redeemable unsecured loan stocks to settle RM1.67 billion in debt; proposed bilateral settlements for another RM627.8 million of inter-company debt; proposed bilateral settlements for operating subsidiaries’ lenders of RM1.4 billion, liquidation of subsidiaries and a rights issue to raise up to RM22.34 million funds for part of its debt settlement and working capital of the regularised group.
The proposed capital reduction will work to offset its accumulated losses, which figures at RM962.83 million as at June 30, 2017.
Perisai said its rights issue will involve the issuance of 223.39 million rights shares at an issue price of 10 sen per rights share on the basis of one rights share for every 2.94 existing Perisai shares held on an entitlement date to be determined later.
In the event of under-subscription of the proposed rights issue, Perisai Petroleum will place out up to 85.88 million placement shares at an issue price of 10 sen per placement share to Sage 3 Capital Sdn Bhd and third party investors to be identified, which is expected to raise at least another RM8.59 million.
It involves a proposed bilateral settlement to settle the outstanding liabilities owed by Perisai to the inter-company creditors namely Perisai Capital (L) Ltd, Garuda Energy (L) Ltd and Intan Offshore (L) Ltd.
With the completion of the proposed bilateral settlements for Garuda Energy, Intan Offshore and Perisai Capital, all three companies are to be wound up. The winding-up of the subsidiaries is in line with the plans of PPTB Group to focus its business on PP101 Rig, being the oil drilling rig of the group and Perisai Kamelia.
BEIJING, May 20 — China will “significantly increase purchases” of US goods, the White House said as Beijing’s special envoy at talks in Washington declared a trade war has been averted between the world’s two largest economies. A joint…
TOKYO: Rental platforms like Airbnb are hoping for a boost from a new law coming into force next month in Japan ahead of an expected surge in demand for the 2020 Olympics, but experts warn it could actually hamper business in the short term.
Currently anyone renting out a room risks falling foul of the law but short-term rentals will be legalised on June 15, clearing up a legal grey area.
But the new law also introduces fresh restrictions, dismaying many who rent out rooms to tourists via Airbnb or similar platforms.
Would-be renters will have to register their lodgings with the authorities and the new law limits total overnight stays to 180 days per year.
The new legislation allows local authorities to impose their own restrictions too.
The tourist-magnet of Kyoto, for example, has said it will only permit rentals in residential areas between mid-January and mid-March, the low season for tourist arrivals.
Jake Wilczynski, Airbnb spokesman for Asia-Pacific, told AFP the new laws are a “clear sign that Japan is buying in to the idea of short-term rentals for individuals”.
But many have cancelled reservations or simply taken their lodgings off the platform.
“Under the new law, Airbnb hosts will not be able to accommodate guests as easily as before. I hope this doesn’t put the bar too high for us,” 41-year-old Nobuhide Kaneda, who rents out a room in Tokyo, told AFP.
On an Airbnb discussion forum, an Australian host identifying herself as Narelle wrote: “I am … becoming frustrated that no one knows what is required. I also feel the three-month time frame to organise a notification number is unrealistic.”
Airbnb does not say how many properties on its platform already comply with the new laws but does not deny there have been some teething problems.
Wilczynski said the firm was “in the process of discussing the issue with the Japanese Tourism Agency”.
“We are waiting for instructions,” said the spokesman for Airbnb, which has informed its members of the legal changes.
Despite the new restrictions, there is a huge potential market for short-term rentals as the country gears up for Tokyo 2020 and the Rugby World Cup the previous year.
Airbnb rentals have boomed in recent years, driven by an increase in tourism and a surprising lack of hotel infrastructure.
With around 60,000 listings, Airbnb dominates the Japanese vacation rental market, even though it lags far behind many countries in Europe – France, for example, has 450,000 listings.
And demand is poised to rise as Japan targets an influx of 40 million visitors in 2020 when it hosts the Summer Olympics – up from 29 million last year.
Yasuhiro Kamiyama, CEO of Hyakusenrenma, a local firm that manages 2,000 private rentals, said the new law will begin to “normalise Japan’s Airbnb market”.
He hopes to have 30,000 rental properties on his books by 2020.
PARIS, May 20 — France is looking to see if the European Union could compensate European companies that might be facing sanctions by the United States for doing business with Iran, said French finance minister Bruno Le Maire today. Le Maire…
KUALA LUMPUR, May 20 — Regional banking group, CIMB Bank Bhd and its sister company in Indonesia, PT Bank CIMB Niaga Tbk, bagged six awards at The Asset Triple A Treasury, Trade, Supply Chain and Risk Management Awards 2018. The annual…