Monday, June 4th, 2018

 

Technology stocks lead Wall Street rally

NEW YORK, June 4 — US stocks rose today led by gains in technology shares and Friday’s robust jobs data, which gave investors heightened confidence that the US economy remained strong. Apple rose 1 per cent, providing the biggest boost to the…


‘Private land leasing for housing’ idea first mooted by Iskandar Investment for Medini project

PETALING JAYA: The idea of a scheme that would allow private corporations to lease out freehold land that they own for housing development was first mooted in 2012 by Iskandar Investment Bhd (IIB), a strategic developer of Medini in Johor.

National House Buyers Association (HBA) secretary-general Chang Kim Loong said IIB approached HBA back in 2012 to talk about a land lease structure in Medini but HBA rejected the idea.

The issue did not crop up again until last year, when the Department of Lands and Mines under the Natural Resources and Environment Ministry hosted a session in November to brief industry stakeholders.

“In November last year, they presented the paper to us. They invited quite a lot of stakeholders; we were not the only ones there but we were the only ones to bring up issues,” he told SunBiz.

The public session was chaired by Department of Lands and Mines director-general Datuk Seri Dr Sallehuddin Ishak. Besides HBA, stakeholders who were invited included the Urban Wellbeing, Housing and Local Government Ministry, Perbadanan PR1MA, Malaysia, Land Surveyors Board and Malaysian Institute of Architects.

According to a lawyer with knowledge of the issue, the proposals were already drafted by then. The proposals were to introduce a new chapter in the National Land Code 1965 and an amendment to the Strata Title Act 1985.

“All the amendments were already drafted. They already had plans to push them through before Parliament was dissolved,” said the lawyer, who declined to be named.

“This all started with the notion that the properties to be sold are all special properties; in other words they are meant to be sold to foreigners for purposes of investment. At the end of the day, they said they don't want these properties to end up in the hands of foreigners,” Chang said.

However, both the lawyer and Chang are concerned about the impact of such changes in the national law on the housing market and the future of house buyers.

“Already in the market, there are big-time developers now buying up freehold land. As soon as this is passed, freehold land is going to be like gold. They will sell it to our children and grandchildren on leases of 99 years whereas they (developers) become the perpetual owners,” said Chang.

“After the lease expires, they can take it back. Whether to renew or not is the prerogative of the landowners … we are very worried as this will open up a new can of worms,” he added.

According to the lawyer, some parties see this proposed scheme as a progressive step, as Hong Kong and Singapore also have this concept.
“However, they don't have land like what we have here in Malaysia. So do we want to take this step?” he asked.

At present, projects in Medini are being developed under a private lease scheme. Some of the stratified residential projects in Medini as listed on IIB's website are Iskandar Residences, The Meridin, 1Medini and Paradiso Nuova.

“If ever the private lease scheme is to be adopted, the government could consider passing a new law strictly for the Medini/Iskandar/Forest City, JB projects similar to the Kampung Baru Development Corporation Act. 2011 (Act 733) and its land ownership restrictions,” said Chang.

He said the Council of Eminent Persons has been notified about the proposed scheme and the association hopes to meet with the new Urban Wellbeing, Housing and Local Government Minister to share its concerns about the proposal.


‘Leasing of private freehold land for housing’ idea first mooted by Iskandar Investment for Medini project

PETALING JAYA: The idea of a scheme that would allow private corporations to lease out freehold land that they own for housing development was first mooted in 2012 by Iskandar Investment Bhd (IIB), a strategic developer of Medini in Johor.

National House Buyers Association (HBA) secretary-general Chang Kim Loong said IIB approached HBA back in 2012 to talk about a land lease structure in Medini but HBA rejected the idea.

The issue did not crop up again until last year, when the Department of Lands and Mines under the Natural Resources and Environment Ministry hosted a session in November to brief industry stakeholders.

“In November last year, they presented the paper to us. They invited quite a lot of stakeholders; we were not the only ones there but we were the only ones to bring up issues,” he told SunBiz.

The public session was chaired by Department of Lands and Mines director-general Datuk Seri Dr Sallehuddin Ishak. Besides HBA, stakeholders who were invited included the Urban Wellbeing, Housing and Local Government Ministry, Perbadanan PR1MA, Malaysia, Land Surveyors Board and Malaysian Institute of Architects.

According to a lawyer with knowledge of the issue, the proposals were already drafted by then. The proposals were to introduce a new chapter in the National Land Code 1965 and an amendment to the Strata Title Act 1985.

“All the amendments were already drafted. They already had plans to push them through before Parliament was dissolved,” said the lawyer, who declined to be named.

“This all started with the notion that the properties to be sold are all special properties; in other words they are meant to be sold to foreigners for purposes of investment. At the end of the day, they said they don't want these properties to end up in the hands of foreigners,” Chang said.

However, both the lawyer and Chang are concerned about the impact of such changes in the national law on the housing market and the future of house buyers.

“Already in the market, there are big-time developers now buying up freehold land. As soon as this is passed, freehold land is going to be like gold. They will sell it to our children and grandchildren on leases of 99 years whereas they (developers) become the perpetual owners,” said Chang.

“After the lease expires, they can take it back. Whether to renew or not is the prerogative of the landowners … we are very worried as this will open up a new can of worms,” he added.

According to the lawyer, some parties see this proposed scheme as a progressive step, as Hong Kong and Singapore also have this concept.
“However, they don't have land like what we have here in Malaysia. So do we want to take this step?” he asked.

At present, projects in Medini are being developed under a private lease scheme. Some of the stratified residential projects in Medini as listed on IIB's website are Iskandar Residences, The Meridin, 1Medini and Paradiso Nuova.

“If ever the private lease scheme is to be adopted, the government could consider passing a new law strictly for the Medini/Iskandar/Forest City, JB projects similar to the Kampung Baru Development Corporation Act. 2011 (Act 733) and its land ownership restrictions,” said Chang.

He said the Council of Eminent Persons has been notified about the proposed scheme and the association hopes to meet with the new Urban Wellbeing, Housing and Local Government Minister to share its concerns about the proposal.


Year-end target for FBM KLCI lowered on weak earnings picture

PETALING JAYA: PublicInvest Research said ongoing weakness in corporate earnings is dragging the performance of the already-battered FBM KLCI, cutting its year-end target for the local stock market's benchmark index to 1,790 points from 1,860 points, even as it maintains its 16 times multiple to earnings valuation.

The index fell 1.21 points or 0.07% to close at 1,755.17 Monday on 2.77 billion shares traded worth RM2.82 billion.

The commodities-related sectors of oil and gas and plantations provided the bulk of misses this time round, with manufacturing also disappointing, indicating that the misses are not isolated cases.

“The current quarter's earnings hits (above and/or in-line) are at 60:40%, similar to the 60:40% as at Q4 17 though the make-up is markedly different,” the research house said in a note Monday.

While it was the larger-capitalised stocks which managed to hold fort on the earnings front in the previous reporting period, the current instalment saw weakness from big and small stocks alike.

“Index-based names like IOI Corporation, KL Kepong, Axiata Group and Telekom Malaysia, just to name a few, missed our and consensus estimates, with earnings of some correspondingly lowered.”

PublicInvest Research said the broader market is currently more preoccupied with a post-general election reboot of the country.

“Sentiment has taken a recent knock, in part due to regional weakness on geopolitical and trade-related concerns, but just as likely due to the relatively negative news flows with regard to the nation's finances which may or may not have spooked foreign-based investors that sparked a sell-down.”

PublicInvest Research continues to see value in the small- and mid-cap space, and retain AMMB Holdings, Hibiscus Petroleum, SKP Resources, Mega First, N2N Connect, Yong Tai and Perak Transit as core holdings in its 2018 suggested portfolio.

“Chin Hin Group and TRC Synergy are dropped given the less sanguine outlook on construction-related stocks. Also, Johore Tin is removed due to its inability to manage and fully pass on rising feedstock costs. In their places, we include CIMB Group, Telekom and Tenaga Nasional given recently pronounced share price weaknesses which has made valuations attractive.”


Malaysian manufacturers cut payroll numbers for first time in 7 months

PETALING JAYA: Malaysian manufacturing companies reduced their payroll numbers in May for the first time in seven months amid a continued deterioration in the operating conditions, according to a IHS Markit survey.

The reduction in payroll numbers was attributed to cost-cutting measures and poor demand conditions.

“At the same time, backlogs continued to reduce in May. Lower volumes of new work enabled a timely completion of unfinished business, according to anecdotal evidence.”

Malaysia's manufacturing sector deteriorated in May for the fourth consecutive month, mainly due to the sharpest fall in new business since December 2016 due to lacklustre demand.

The headline Nikkei Malaysia Manufacturing Purchasing Managers' Index, a composite single-figure indicator of manufacturing performance, fell from 48.6 in April to 47.6 in May, which indicated the strongest deterioration in operating conditions since June 2017.

New export orders also fell for the fourth successive month in May. On the price front, input cost and output charge inflation eased to the slowest since October 2016 and February respectively.

Despite easing slightly from April's recent high, Malaysian manufacturers retained strong projections for output in the year ahead, with business sentiment staying above the historical average.

“Optimism was rooted in hopes that the new government will spur business activity and improve demand conditions.”

IHS Markit economist Aashna Dodhia said the latest survey data suggested that weak demand emanated from both domestic and foreign markets.

“In response to lower output requirements, firms were discouraged from engaging in input buying and job recruitment. However, on the price front, manufacturers felt some respite around inflationary pressures with input cost inflation easing to the weakest since October 2016.”

FXTM's global head of currency Strategy & Market Research Jameel Ahmad said the news that new orders fell the most since late 2016 suggests that the manufacturing sector could struggle for some time.

However, he said it is too early to say whether the manufacturing woes could weigh on the gross domestic product potential and investors will be waiting for the key trade data to be announced today for guidance on how the Malaysian economy did in the second quarter of 2018.


Malaysian manufacturers cut payroll numbers for first time in 7 years

PETALING JAYA: Malaysian manufacturing companies reduced their payroll numbers in May for the first time in seven months amid a continued deterioration in the operating conditions, according to a IHS Markit survey.

The reduction in payroll numbers was attributed to cost-cutting measures and poor demand conditions.

“At the same time, backlogs continued to reduce in May. Lower volumes of new work enabled a timely completion of unfinished business, according to anecdotal evidence.”

Malaysia's manufacturing sector deteriorated in May for the fourth consecutive month, mainly due to the sharpest fall in new business since December 2016 due to lacklustre demand.

The headline Nikkei Malaysia Manufacturing Purchasing Managers' Index, a composite single-figure indicator of manufacturing performance, fell from 48.6 in April to 47.6 in May, which indicated the strongest deterioration in operating conditions since June 2017.

New export orders also fell for the fourth successive month in May. On the price front, input cost and output charge inflation eased to the slowest since October 2016 and February respectively.

Despite easing slightly from April's recent high, Malaysian manufacturers retained strong projections for output in the year ahead, with business sentiment staying above the historical average.

“Optimism was rooted in hopes that the new government will spur business activity and improve demand conditions.”

IHS Markit economist Aashna Dodhia said the latest survey data suggested that weak demand emanated from both domestic and foreign markets.

“In response to lower output requirements, firms were discouraged from engaging in input buying and job recruitment. However, on the price front, manufacturers felt some respite around inflationary pressures with input cost inflation easing to the weakest since October 2016.”

FXTM's global head of currency Strategy & Market Research Jameel Ahmad said the news that new orders fell the most since late 2016 suggests that the manufacturing sector could struggle for some time.

However, he said it is too early to say whether the manufacturing woes could weigh on the gross domestic product potential and investors will be waiting for the key trade data to be announced today for guidance on how the Malaysian economy did in the second quarter of 2018.


KL City Hall to scrap 10 projects worth RM1b

KUALA LUMPUR: Kuala Lumpur City Hall (DBKL) will terminate 10 projects worth RM1 billion, said Mayor Tan Sri Mhd Amin Nordin Abd Aziz.

“DBKL has decided to reduce the number of projects, which include roads and parking projects, and will also scrap the sports club projects,” he told reporters after attending a meeting with the Council of Eminent Persons (CEP) at Menara Ilham today.

He said some of these projects were still in the tendering stage while some had not been tendered out. The decision was taken by DBKL’s top management and his attendance at the CEP’s meeting was to brief the council on the decision.

“First of all, this decision (cancellation of projects) was made due to the allocation of budgets that we have in hand … we have reviewed (the projects) because we want to reduce DBKL’s expenses,” he said.

Previously, the city council has temporarily halted the process of granting approvals to all proposed projects, as well as terminating the RM180 million repainting project at the People’s Housing Projects and Public Housing Projects. – Bernama


Cymao sells parcels of Sandakan industrial land for RM12m

PETALING JAYA: Cymao Holdings Bhd’s subsidiary Cymao Plywood Sdn Bhd has entered into a sale and purchase agreement with South Pacific Fish Processing Sdn Bhd for the disposal of two parcels of industrial land in Sandakan, Sabah, for RM12 million.

The group said the disposal of land would enable it to unlock the value of land and make available additional funds for working capital requirements, following the closure of one of its mills in Sandakan.

Cymao Holdings had merged the operations of two mills into one in Sandakan in January 2017 due to reduced logs supply and with the production level of combined mills into one to maximise the usage of logs, resources and manpower. The move was to save costs and improve operations efficiency.


WCT withdraws resolutions on directors’ share options

PETALING JAYA: WCT Holdings Bhd has decided to withdraw four resolutions in relation to the granting of share options to its independent non-executive directors from being put forward at its AGM to be held on Wednesday.

The decision was made after taking into consideration feedback received from its shareholders and stakeholders as well as in consultation with the independent non-executive directors.

The proposed shares options were intended to grant to Tan Sri Marzuki Mohd Noor, Datuk Ab Wahab Khalil, Datuk Ng Sooi Lin and Ng Soon Lai @ Ng Siek Chuan.

On Bursa Malaysia today, WCT closed 3% higher at 84.5 sen on volume of 6.74 million shares.


Foreign selling on Bursa continues into 5th week

PETALING JAYA: Foreign investors sold RM1.27 billion net on Bursa last week, stretching foreign selling to five weeks, the longest selling binge recorded so far this year, said MIDF Research.

Preliminary data from Bursa, which excludes off market deals, showed that the net amount sold by foreign investors last week was higher than the RM892.4 million net disposed in the week before.

“With foreign selling on every single day of the week, the selling streak has extended to 19 days, the longest since the 21-day binge in May to June 2015.

“Monday’s attrition stood at RM216.5 million, a level which is normal at this juncture. However, foreign funds pulled out RM609.2 million net on Wednesday, the highest in a day since May 15 after Tuesday’s break following the cancellation of the MRT3 project,” it said in its fund flow report today.

It added that the heavy sell-off was also in conformity with other Asian peers namely, Korea, the Philippines and Taiwan amid the political upheaval in Italy and Spain.

The FBM KLCI settled at 1,719 points on the same day after plunging by 3.18%, the biggest daily drop since 2008.

On Thursday, the attrition shrank to RM217.9 million net following efforts to form a coalition government in Italy, coinciding with the FBM KLCI’s 1.24% gain.

“Attrition levels were little changed on Friday at RM225.2 million net as investors waited for the next round of trade talks between the US and China over the weekend,” it said.

MIDF Research said foreigners withdrew RM5.83 billion net in the month of May, which is the highest monthly outflow in 2018 thus far.

“Meanwhile, the year-to-date outflow from Malaysia is RM2.12 billion or US$530.7 million net, which is still the lowest among the four Asean markets that we track,” it said.

Foreign participation spiked as the foreign average daily trade value surged by 174% to an all-time high of RM4.25 billion, mainly due to the MSCI rebalancing on Thursday which boosted the total trading value on Bursa to a record high of RM9 billion.