Tuesday, July 10th, 2018


Finance Ministry wants cost of LRT3 to be reduced by ‘much more than RM6 billion’

PETALING JAYA: The Finance Ministry said it will not support additional funding for the 37km Light Rail Transit Line 3 (LRT3) unless Prasarana Malaysia Bhd cuts the cost of the project which, it is forecast, could soar to as high as RM31.45 billion.

According to previous news reports, the cost of LRT3 was to have been capped at RM9 billion.

On March 30, 2018, Prasarana requested an additional RM22 billion in government guarantee to ensure funding for the construction and completion of LRT3. This was on top of a RM10 billion bond facility guaranteed by the government in 2015.

“The projected total cost of LRT3 of RM31.45 billion due to poor management by Prasarana requires drastic cost reductions to make the LRT3 feasible and cost effective. Certain news reports have indicated that the LRT3 can be reduced by RM6 billion.
“The Ministry of Finance wishes to state that much more than RM6 billion must be reduced if the LRT3 project is to proceed,” MoF said in a statement Tuesday.

A local daily reported on Monday that Prasarana might consider taking over the construction of LRT3 from its project delivery partner Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd after the project's bill increased to more than RM15 billion.

The two companies were appointed as PDP for the project in 2015 at an approved construction budget of RM9 billion.

As at August 2017, a total of 11 out of 59 LRT3 work packages had been awarded, with the largest work package worth RM1.56 billion bagged by a consortium comprising CRRC Zhuzhou Locomotive Co Ltd, Siemens Ltd China and Tegap Dinamik Sdn Bhd.

The consortium was tasked with the design, manufacture, supply, delivery, installation, testing and commissioning of 42 six-car light rail vehicles for the project. The project has reportedly seen 10% progress thus far.

LRT3, which is expected to serve a population of two million people with the capacity to transport 36,700 passengers per hour each way, is deemed as crucial in alleviating traffic congestion along one of the most important and densely populated economic development corridors in the Klang Valley, from Klang to Petaling Jaya. LRT3 will run from Bandar Utama to Johan Setia, Klang, with 26 stations overall.

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Bitcoin heads for its biggest drop in more than two weeks

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Bank Muamalat targets 20% growth in gold business this year

KUALA LUMPUR: Bank Muamalat Malaysia Bhd is targeting 20% growth in its gold business this year with sales of RM110 million, said CEO Datuk Mohd Redza Shah Abdul Wahid.

Since offering gold in its physical form two years ago and a gold account last year, the bank has sold 500kg of the precious metal worth RM90 million to date. Of this, half is physical gold and half is via the gold account. The bank has about 32,000 gold account customers.

“Gold is a popular form of investment that the public is looking at. We continue to have campaigns in terms of gold. Our gold business is not only in deposits but also in ar-rahnu (pawn). If you buy physical gold, you can pawn it when you need the money,” he told reporters at the Bank Muamalat Corporate Raya 2018 event here yesterday.

“There’s no reason for people to be going into the various gold schemes because a bank is providing this service to you. You can do so via your account with various banks, especially Islamic banks as well. Gold is part of our business plan and part of us in terms of educating the public in terms of alternative investments,” said Redza.

He said during times of market volatility, one should diversify investments and consider gold as an alternative form of investments.

Earlier, Bank Muamalat held a prize-giving ceremony for the Oh Yeah! Hartawan Emas Deposit Campaign, which offered gold bars worth over RM1 million in the form of 10g gold minted bar for 308 monthly winners and 1kg gold bar (worth RM180,000 per gold bar) for three grand prize winners, during the seven-month campaign period. The campaign attracted 12,107 new customers to open accounts totalling RM43.14 million.

Redza said the deposit-taking business is more challenging, and it aims for a 5%-10% growth this year.

Both conventional and Islamic banks have been aggressively wooing deposits. Retail, being the key target market, enjoys attractive propositions such as higher profit rates, campaigns with lucrative prizes, loyalty rewards, and account-opening freebies.

Redza said: “We (banks) are fighting for deposits to garner more financing. We’ve various deposits campaigns and one of it is to give a high return to customers and we raised RM1.2 billion in fixed deposits last year.”

He said the bank wants to see the new government support the financial industry in terms of providing various incentives in the coming Budget, which will spur economic growth.

“The new governor will continue with existing policies and we believe all the policies are stable for the financial services market. We don’t believe there will be major changes. Even if there are, it would be for good corporate governance,” he added.

MoF Inc appoints new exco for Suria Strategic Energy Resources

PETALING JAYA: Minister of Finance Inc (MoF Inc) has appointed a new executive committee (exco) which includes newly appointed 1Malaysia Development Bhd (1MDB) chairman Datuk Asri Hamidon, for its subsidiary Suria Strategic Energy Resources Sdn Bhd (SSER).

Asri who is also the deputy secretary-general overseeing government investment at the Treasury, will chair the exco which will oversee two RM9.4 billion pipeline projects under SSER, after checks found that 88% of the contract sum was paid out even before land rights for the pipeline projects were secured.

The newly formed Exco comprises of former CEO of Agrobank Datuk Wan Mohd Fadzmi Wan Othman, Senior Partner of Grant Thornton Malaysia Hooi Kok Mun and Faisal Abdul Ghani of the Finance Ministry.

Effective June 25, 2018, daily operations of SSER are managed by Grant Thornton Malaysia, led by the firm’s partner Kishan Jasani.

SSER was set up to undertake the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline projects.

The MoF Inc which is the sole shareholder of the company, took control of SSER’s offices on June 5, after which SSER’s offices were raided by the Malaysian Anti-Corruption Commission (MACC) and staff were put on garden leave.

Its president Datuk Mohammed Azhar Osman Khairuddin was removed, as the government intensified probes into the scandal involving two pipeline projects.

In a separate statement, 1Malaysia Development Bhd (1MDB) clarified that the appointment of Datuk Mohammad Faiz Azmi as the chairman of the executive committee (Exco) is part of the scope and services provided by PricewaterhouseCoopers Advisory Services Sdn Bhd (PwC) to 1MDB.

“PwC is assisting the board and the Exco in recovering 1MDB’s assets and in managing the company’s debt,” said 1MDB in a statement.

Asian forex hobbled by absence of catalysts

BENGALURU: Most Asian currencies struggled for traction today as the backdrop of an US-driven international trade war and the absence of positive catalysts kept investor sentiment largely in check.

The Philippine peso, which has been hovering around 12-year lows, came under more strain as the nation’s trade deficit widened further in May.

“Trade war risk is likely to linger in the background as countries start to introduce measures to prepare for tariffs staying for a potentially longer-than-expected period,” Mizuho said in a note.

The dollar’s index against a basket of six major currencies hovered around June’s lows, up just a touch on the day at 94.181, mainly capped by disappointing wages growth in an otherwise solid US payrolls report on Friday.

The Chinese yuan pushed higher for the second day, up 0.1% to 6.605 on the dollar, helped by the combination of a firmer official yuan fixing, a broadly softer greenback and some easing of Sino-US trade tensions.

While both China and the United States hit each other’s goods with tariffs on Friday, the focus now is on whether the dispute would ratchet up further or if officials in Beijing and Washington will find a way to ease off the tense trade relations.

Data earlier in the day showed China’s producer inflation, a gauge of industrial profitability, rose by a stronger-than-expected 4.7% in June. The worry is that an uptick in factory-gate prices could put more pressure on the country’s exporters as trade dispute with the US prolongs.

The Indian rupee eased 0.1% to 68.790.

A Reuters poll showed inflation is likely to rise to a near two-year high in June, a development that would strengthen calls for more monetary tightening by the central bank.

The Malaysian ringgit rose to 4.009 per dollar, a day ahead of Bank Negara Malaysia’s (BNM) policy meeting, where interest rates are expected to remain unchanged.

As a net oil exporter, rising prices “will benefit exports for Malaysia and hence that’s helped to provide an additional kick for the ringgit today,” said Khoon Goh, ANZ’s head of Asia research.

Analysts say that with the abolishment of the Goods and Services Tax, there’s little inflationary pressure to trouble BNM Governor Datuk Nor Shamsiah Mohd Yunus in her first policy meeting, even as other regional central banks hiked rates to bolster their respective currencies.

The ringgit has outperformed its Southeast Asian peers in the region, amid an exodus from emerging markets as rising trade tensions have turned investors risk-averse. – Reuters

10/07/2018 20:44:45

Selangor identifies Port Klang as ideal location for next DFTZ

SHAH ALAM: The Selangor state government has identified Port Klang as an ideal location for the next Digital Free Trade Zone (DFTZ), which could improve the ranking of the second largest container port in Asean, said State senior executive councillor Datuk Teng Chang Kim.

Teng said the DFTZ would boost Port Klang’s ranking to become the 10th largest container port in the world from the current 12th position, as it would provide local small and medium enterprises (SMEs) with the opportunity to export their products globally via e-commerce.

“The DFTZ will increase the capacity of twenty-foot equivalent units and thus attract more investments from global players, making Selangor a regional logistics hub,” he added.

He told reporters this after launching the inaugural Investment Forum on Logistics Industry, themed, “Deepening Logistics Supply Chain in Selangor”, organised by the Malaysian Investment Development Authority (Mida) and Invest Selangor today.

Also present were Mida deputy CEO Arham Abdul Rahman and Invest Selangor CEO Datuk Hasan Azhari Idris. – Bernama

Revenue Group’s IPO shares oversubscribed by over 11 times

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Tesla plans China plant with 500,000 vehicle capacity

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