Thursday, May 31st, 2018

 

US levies steel, aluminum tariffs on allies, risks trade war

WASHINGTON, March 31 — Washington will impose tariffs on steel and aluminum imports from the European Union, Canada and Mexico from midnight today, ending months of uncertainty over potential exemptions and sharply escalating the risk of a trade…


Trade conflict weighs on stock markets

NEW YORK, May 31 — Equity indexes on Wall Street and around the world fell today as trade concerns weighed on investors, taking the pep out of a recovery in many markets earlier in the day. Washington is set to announce plans to slap tariffs on…


Germany’s Maas says our response to America First is ‘Europe United’

BERLIN, May 31 — Germany regards as “unlawful” a US decision to move ahead with tariffs on aluminum and steel imports from Canada, Mexico and the European Union, Foreign Minister Heiko Maas said. “Our response to ‘America First’ can only…


First tax holiday for Malaysian consumers in 40 years begins tomorrow

PETALING JAYA: For the first time in four decades, Malaysians will be taking a breather from taxes levied upon products and services for a period of three months starting tomorrow, as zero-rated Goods and Services Tax (GST) comes into effect and the Sales and Services Tax (SST) is only to be implemented from Sept 1.

“For the first time after 40 over years, Malaysia's public consumer is not paying any taxes on goods and services in respect of no sales tax, no services tax and no GST. All these taxes will not be charged, so we call this three months, a tax holiday,” K-Konsult Taxation Sdn Bhd managing partner Koong Lin Loong told SunBiz.

On what this tax holiday could mean for consumers, Koong explained that while they may be expecting at least a 6% decrease in prices across the board because of the zero-rating of GST, it may not be the case for items sold in supermarkets for example, which currently do not state the breakdown for GST. He said for these items, prices may not go down as much, at most by 5.66%.

Koong did however opine that the “feel good” factor brought about by the zero-rating of GST could lead to increased demand for goods and services by consumers.

Thenesh Kannaa, Partner at Thenesh, Renga & Associates (Tratax) noted though that for businesses, the three months will be more of a breather before it goes back to the SST regime, where manufacturers and importers will be the tax bearers.

He said businesses should bear in mind that GST has been zero-rated but not abolished, thus they still have to ensure that records are maintained and are in adherence with the GST Act 2014, which is yet to be repealed in a parliamentary sitting. This includes the submission of GST returns as per routine until further notice, and the prescription of tax invoices with the correct GST rate and date of purchase.

While the three-month window may not have an immediate impact on production cost since GST is borne by end users, going by the previous SST yardstick, there is likely to be an increase in production cost once SST is enforced.

As the government is still firming up details on the new SST and a rate is yet to be announced, Koong opines that both sales and services tax would be standardised at 6% to avoid a spike in inflation.

The previous SST stipulated a sales tax of 10% on local manufacturers and importers, while the services tax stood at 6%.


OSK Group records RM94.8m pre-tax profit for Q2018

KUALA LUMPUR, May 31 — The board of OSK Holdings Berhad is confident the group will continue to perform satisfactorily throughout 2018, as it posted RM94.8 million in pre-tax profits during the first quarter of the year. In a statement today OSK…


AMMB says it’s open to further 1MDB-linked probe

KUALA LUMPUR: AMMB Holdings Bhd, which posted 14.5% lower earnings in the financial year ended March 31, 2018 (FY18) versus FY17, is open to further probe on its past links to 1Malaysia Development Bhd (1MDB) but noted that it has been cooperating with the authorities for the last two years.

AmBank group CEO Datuk Sulaiman Mohd Tahir said the bank has not been called up by the 1MDB task force formed by Prime Minister Tun Dr Mahathir Mohamad to investigate 1MDB.

He said the bank paid a RM53.7 million fine and went through an improvement process, spending RM100 million on systems and processes, adding that it now has a more robust system going forward.

“We were the first bank in Malaysia that has been fined. For the last two years, we’ve been working closely with the regulators. If there’s anything that they want to find, it would have been found, that’s how we look at it,” he told a press conference after announcing its FY18 financial results here today.

“The names (of those involved in the case) reported… they’re no longer with the bank as of now. For us, it’s about building the new bank and how can we go forward.

“For us, this (1MDB case) was two years ago. If they (task force) want to (call up on us), we’re open. We’ve been with them for the last two years,” said Sulaiman.

Group CFO Jamie Ling said with the change in government and policies, it is more vigilant around the second-order effect of its clients as contracts may not be awarded.

“Our GLCs’ exposure is not as big as the other large banks but it’s just more of a credit vigilance perspective on our model and our portfolios, making sure we’re anticipating what could potentially occur and how we can assist our clients if they’re in a tight cash flow situation.”

However, Ling noted that at the moment the banks do not see stress in its current books and it has already stress-tested scenarios revolving around the election on what could happen.

Speaking on the priorities for FY19, Sulaiman said the bank remains committed to its aspiration to be among the top four banks in the country, with FY18 being a year of rebasing to provide the bank with a solid platform to grow in FY19.

For FY19, AMMB’s financial priorities will be centred on revenue growth. It will focus on current and savings account growth as one of our key priorities. The bank is also maintaining its 6% loan growth and wants to grow the SME and mid corps segments.

BET300, a three-year efficiency initiative will help AMMB achieve its cost-to-income target of 55% in FY19. It will continue to keep a tight rein on cost, pacing investments while continuing to look for operational efficiencies.

For the fourth quarter ended March 31, 2018, AMMB’s net profit fell 24.5% to RM253.41 million from RM335.81 million a year ago mainly due to a one-off cost of RM146 million from its mutual separation scheme (MSS).

But its revenue rose 3.1% to RM2.21 billion compared with RM2.15 billion in the previous year’s corresponding quarter underpinned by its net interest income from loan growth.

For the whole of FY18, net profit fell 14.5% to RM1.13 billion from RM1.32 billion in FY17 due to a one-off cost of RM146 million from its MSS, retail operational loss of RM47 million and loan impairment reversal.

Revenue jumped 3.5% to RM8.58 billion compared with RM8.29 billion in the preceding year driven by net interest income.


AMMB open to 1MDB-linked probe

KUALA LUMPUR: AMMB Holdings Bhd, which posted 14.5% lower earnings in the financial year ended March 31, 2018 (FY18) versus FY17, is open to further probe on its past links to 1Malaysia Development Bhd (1MDB) but noted that it has been cooperating with the authorities for the last two years.

AmBank group CEO Datuk Sulaiman Mohd Tahir said the bank has not been called up by the 1MDB taskforce formed by Prime Minister Tun Dr Mahathir Mohamad to investigate 1MDB.

He said the bank paid a RM53.7 million fine and went through an improvement process, spending RM100 million on systems and processes, adding that it now has a more robust system going forward.

“We were the first bank in Malaysia that has been fined. For the last two years, we’ve been working closely with the regulators. If there’s anything that they want to find, it would have been found, that’s how we look at it,” he told a press conference after announcing its FY18 financial results here yesterday.

“The names (of those involved in the case) reported… they’re no longer with the bank as of now. For us, it’s about building the new bank and how can we go forward.

“For us, this (1MDB case) was two years ago. If they (taskforce) want to (call up on us), we’re open. We’ve been with them for the last two years,” said Sulaiman.

Group CFO Jamie Ling said with the change in government and policies, it is more vigilant around the second-order effect of its clients as contracts may not be awarded.

“Our GLCs’ exposure is not as big as the other large banks but it’s just more of a credit vigilance perspective on our model and our portfolios, making sure we’re anticipating what could potentially occur and how we can assist our clients if they’re in a tight cashflow situation.”

However, Ling noted that at the moment the banks do not see stress in its current books and it has already stress-tested scenarios revolving around the election on what could happen.

Speaking on the priorities for FY19, Sulaiman said the bank remains committed to its aspiration to be among the top four banks in the country, with FY18 being a year of rebasing to provide the bank with a solid platform to grow in FY19.

For FY19, AMMB’s financial priorities will be centred on revenue growth. It will focus on current and savings account growth as one of our key priorities. The bank is also maintaining its 6% loan growth and wants to grow the SME and mid corps segments.

BET300, a three-year efficiency initiative will help AMMB achieve its cost-to-income target of 55% in FY19. It will continue to keep a tight rein on cost, pacing investments while continuing to look for operational efficiencies.

For the fourth quarter ended March 31, 2018, AMMB’s net profit fell 24.5% to RM253.41 million from RM335.81 million a year ago mainly due to a one-off cost of RM146 million from its mutual separation scheme (MSS).

But its revenue rose 3.1% to RM2.21 billion compared with RM2.15 billion in the previous year’s corresponding quarter underpinned by its net interest income from loan growth.

For the full year period of FY18, net profit fell 14.5% to RM1.13 billion from RM1.32 billion in FY17 due to a one-off cost of RM146 million from its MSS, retail operational loss of RM47 million and loan impairment reversal.

Revenue jumped 3.5% to RM8.58 billion compared with RM8.29 billion in the preceding year driven by net interest income.


RM1,500 minimum wage will hurt sector, says Sime Darby Plantation

PETALING JAYA: The world's largest oil palm company by planted area, Sime Darby Plantation Bhd, expects the proposed increase of minimum wage to RM1,500 will have adverse financial consequences for the plantation industry.

Executive deputy chairman and managing director Tan Sri Mohd Bakke Salleh said the proposal, if implemented, would raise labour cost's contribution to total production cost to 35% from 26%.

“This translates into an additional cost of RM185 per tonne,” he told a media briefing on the company's third-quarter financial performance here today.

He said Sime Darby Plantation and other players in the industry are currently working on an application to submit to the government to address the concern on minimum wage.

“(If implemented) I hope this (RM1,500 minimum wage) will not be made compulsory or it could have adverse financial consequences,” he added.

Pakatan Harapan in its 14th general election manifesto pledged to increase minimum wage to RM1,500.

Mohd Bakke said another area of concern for Sime Darby was the pledge to reduce foreign workers.

He said plantation is a labour intensive industry and foreign workers made up 70% of the total workforce in the industry.

Therefore, any disruption to the labour force would have a significant impact on the industry, he said.

“Even though Sime Darby Plantation has achieved 85% progress on automation but you can only do so much with mechanisation,” he added. – Bernama


Minimum wage will hurt plantation industry, says Sime Darby

PETALING JAYA: The world’s largest oil palm company by planted area, Sime Darby Plantation Bhd, expects the proposed increase of minimum wage to RM1,500 will have adverse financial consequences for the plantation industry.

Executive deputy chairman and managing director Tan Sri Mohd Bakke Salleh said the proposal, if implemented, would raise labour cost’s contribution to total production cost to 35% from 26%.

“This translates into an additional cost of RM185 per tonne,” he told a media briefing on the company’s third-quarter financial performance here yesterday.

He said Sime Darby Plantation and other players in the industry are currently working on an application to submit to the government to address the concern on minimum wage.

“(If implemented) I hope this (RM1,500 minimum wage) will not be made compulsory or it could have adverse financial consequences,” he added.

Pakatan Harapan in its 14th general election manifesto pledged to increase minimum wage to RM1,500.

Mohd Bakke said another area of concern for Sime Darby was the pledge to reduce foreign workers.

He said plantation is a labour intensive industry and foreign workers made up 70% of the total workforce in the industry.

Therefore, any disruption to the labour force would have a significant impact on the industry, he said.

“Even though Sime Darby Plantation has achieved 85% progress on automation but you can only do so much with mechanisation,” he added. – Bernama


Affin Bank posts 57% jump in Q1 net profit

PETALING JAYA: Affin Bank Bhd reported a 56.8% jump in net profit to RM141.47 million for the first quarter ended March 31, 2018 against RM90.23 million in the previous corresponding period, underpinned by the increase in net fee and commission income, net gain on financial instruments, Islamic banking income and net interest income.

In addition, there was a write-back of credit impairment losses of RM15.7 million as compared with a charge of RM6.7 million in the previous year.

Revenue expanded 48% to RM476.62 million from RM322.03 million for the quarter under review.

Affin Bank said for commercial banking, competition and challenges for the retail market and fixed deposits will stir up in the remaining period of the year due to the changes in the financial environment, financial reforms not only from the existing players but also from the non-financial services competitors.

“The bank is expected to maintain its market position by focusing on opportunities in the retail, small and medium enterprises, corporates as well as transactional banking segment.”

On the investment banking side, Affin Bank said it will continue with its efforts to expand its present market leading positions in the securities and asset management businesses.

“The increasing domestic equity capital markets and mergers and acquisition activities in 2017 are expected to continue into 2018 and this will augur well for the investment banking business of the group.”

Afffin Bank shares closed 1 sen or 0.4% higher at RM2.46 yesterday on some 414,200 shares traded.