Wednesday, August 22nd, 2018


Trump, a currency manipulator? Wall Street isn’t ruling it out

NEW YORK, Aug 22 — The United States of America, a currency manipulator? It’s a label more frequently slapped on developing export economies and one that President Donald Trump took up just this week to browbeat China and Europe in his…

Nike stores closed in South Africa amid outcry over racist web post

JOHANNESBURG, Aug 22 — Some Nike stores were closed in South Africa today after public outcry over a racist comment by a man that local media said had links to the sportswear company. Nike declined to comment on the store closures, but issued a…

Going digital – rural SMEs face funding, knowledge, manpower issues

KUALA LUMPUR: Funding, digitalisation knowledge, manpower shortage and insufficient product variety are among the challenges faced by Malaysian small and medium enterprises (SMEs) in embracing digitalisation, says the SME Association of Malaysia.

Association national president Datuk Michael Kang Hua Keong said to address these challenges, the government should conduct basic e-commerce talks, provide good and affordable infrastructure including for companies in rural areas and conduct seminars on how to leverage on the new media for digital marketing, which has lower costs.

“The government can also assist SMEs in providing lower cost in e-commerce on-boarding and digital advertising and promotion to promote the branding of SMEs especially for Made-in-Malaysia products.

“This will enable local SMEs to better promote their brands and products,” he told Bernama.

In terms of infrastructure needed to support digitalisation, such as internet connectivity, Tan said while the existing infrastructure is sufficient in major cities or urban areas, it is still lacking in the rural areas.

“High availability of internet connection and e-commerce adoption with social media digital marketing will help SMEs in rural area adopt e-commerce, social media and digital marketing,” he said.

Meanwhile, SME Corporation Malaysia said digitalisation has changed the way of doing business for rural SMEs, especially in the areas of global market access, improved business transactions, time saving, minimise business cost, marketing and networking.

“There have also been numerous marketing and promotion initiatives by various (government) agencies to encourage e-commerce such as e-Perolehan, which is an electronic procurement system for goods and services required by the government,” it said in an email interview.

HeiTech looking to rightsize ops

KUALA LUMPUR: IT services management company HeiTech Padu Bhd is looking at rightsizing its operations to streamline its business amid the challenging environment, says chairman Datuk Seri Mohd Hilmey Mohd Taib.

“We are open to the possibility of selling some shares in our units and partnering up with other companies that have the technologies, capital, market connection and ability to take the business to the next level.

“We are already in talks with a few parties but it is too early to mention,” he said in an interview with Bernama, New Straits Times and Berita Harian recently.

Mohd Hilmey said this would alleviate HeiTech Padu’s load in terms of expenses without ever needing to look at retrenchment.

HeiTech Padu, a company that is an offshoot from Permodalan Nasional Bhd’s IT department, started operations 20 years ago when the Multimedia Super Corridor programme was first introduced.

“IT companies were mushrooming at the time and we are proud to be one of the few that is still around today. We had 1,000 staff then and we have 1,000 staff now,” he said.

Commenting on prospects, Mohd Hilmey said the new ruling government has started coming out with tenders since early this month and he believed next year would be better in terms of contracts.

In 2017, the company managed to secure contracts worth RM222.1 million, of which, about RM127.7 million were IT-related and the remaining RM94.4 million were engineering-related works for the energy sector.

He said among the significant contracts that were secured from the public sector were for the maintenance of the Immigration Department’s passport renewal application, MyIMMS system, worth RM42.4 million, and for the development of clinical documentation module for the Ministry of Health’s patient management system, worth RM10.1 million.

In the private sector, the group managed to secure a RM33.3 million four-year contract for security infrastructure services for Companies Commission of Malaysia and, maintenance of managed wide area network infrastructure services contract of RM41.9 million from Malaysia’s largest unit trust house. – Bernama

Research firm cuts Maxis’ earnings forecasts

PETALING JAYA: AmInvestment Bank has lowered its financial year 2018-2020 earnings forecasts for Maxis Bhd by 6-7%, from a 5% cut in the group’s home fibre revenue assumptions.

This stems from Maxis repricing its fibre broadband plans for both consumers and businesses with unlimited data quotas and offering speeds of up to 100 Mbps at prices 36-65% lower than previous similar plans beginning from Sept 13, it said in a note.

AmInvestment said the telco’s 100 Mbps plan comes with unlimited voice calls and a free DECT phone, while customers who take up the 30 Mbps plan can choose to add this feature.

For consumers, the price of the 100 Mbps plan will be lowered to RM129 per month at RM1.29 per Mbps, and 30 Mbps for RM89 a month at RM2.97 per Mbps.

Currently, it said the 100Mbps plan is priced at RM299 a month and 30 Mbps plan at RM139 a month, while the more affordable package at RM119 a month, provides speeds of up to 10Mbps.

For business customers, AmInvestment said, Maxis will lower the price of the 100 Mbps plan to RM139 a month at RM1.39 per Mbps, and 30Mbps for RM99 a month at RM3.30 per Mbps.

Currently, the 100Mbps business package is priced at RM398 a month or RM3.98 per Mbps.

“As a comparison, Unifi aims to raise the speed of its RM139 a month package from 30 Mbps to 300 Mbps at RM0.46 per Mbps while the more affordable proposition at RM79 a month (with a quota of 60GB) at 30 Mbps for households earning below RM4,500 a month.

“Unifi meanwhile is raising its RM329 a month plan from 100 Mbps to 800 Mbps at RM0.41 per Mbps. As such, it appears that Unifi offers more attractive packages when its new plans come into effect,” it said.

Meanwhile, it said Time dotCom offers its 100Mbps package for RM149 a month or RM1.49 per Mbps for high-rise, commercial and dense population.

AmInvestment also noted that Maxis is offering this new deal even though the Mandatory Standard on Access Pricing structure, which will reduce the wholesale prices for third-party operators to access its high speed broadband network, has yet to be finalised.

“However, we understand that the negotiations are in the final stages and the parties have clarity on the final pricing, which should still be value accretive for Maxis’ home fibre segment, complementing the group’s core cellular business.

“Meanwhile, we expect higher down-trading activities as customers opt for the lower priced packages at these new higher speeds amid an increasingly competitive fixed broadband market,” it added.

Currently, the stock’s FY18F EV/ebitda of 11 times is almost at parity to its three-year average, while dividend yields are decent at 3%.

The research house maintained its “hold” recommendation on Maxis with a discounted cash flow derived fair value of RM5.65 per share from RM5.76 previously.

This was based on a weighted average cost of capital discount rate of 7% and a terminal growth rate assumption of 2%, implying an FY18F enterprise value (EV)/earnings before interest, taxes, depreciation and amortisation of 11 times.

Migration to SST won’t be a hassle: Expert

KUALA LUMPUR: The sales and services tax (SST) can be implemented as scheduled on Sept 1 as the conversion from the goods and services tax (GST) regime will not be time consuming.

Sage Asia Startups and Small Businesses head Kamlesh Mahtani said although it is only nine days to the deadline, businesses do not need to implement any new Customs and accounting system for the conversion to SST.

“The system is already in place and the tax percentage imposed is clear. Although the SST takes force on Sept 1, companies still have until the end of September to register with the Customs Department,” he told Bernama.

When asked if the GST was a more comprehensive tax and more effective in curbing tax leakages, Mahtani agreed that it was more structured, but heavier penalties await those who attempt to evade the SST.

“There are higher penalties for tax evasion by way of filing false claims and the government will not hesitate to act against companies which attempt to do so,” he said.

According to the Sales Tax Bill 2018, any person who evades the tax or assists in fraudulent tax evasion can be fined between 10 times and 20 times the amount of sales tax avoided or imprisoned for up to five years, or both.

Repeat offenders can be fined no less than 20 times and not more than 40 times the amount of sales tax, or jailed up to seven years, or both.

Mahtani said the SST is much more accommodative for businesses, especially for small and medium enterprises while the GST had too much rules and caused disruptions in cash flows.

He said under the new tax to be imposed, the 10% sales tax will only be implemented at a single level, especially at the import phase, while the GST was applied at every level, adding that businesses will only be taxed after receiving the goods.

“During the GST era, companies had to pay the input tax even before the purchase took place and the claiming process and refund took a long time, taking a heavy toll on businesses,” he said.

On Tuesday, the Dewan Negara passed the Sales Tax Bill 2018, Service Tax Bill 2018, Goods and Services Tax (Repeal) Bill 2018, Customs (Amendment) Bill 2018 and Free Zones (Amendment) Bill 2018.

Bringing home the bacon: China pork braces for trade war blues

BAIYANG, Aug 22 — Twice a day, Chinese pig farmer Jia Tiechui’s workers flip levers to deliver plops of soybean-based feed to 18,000 hogs, whose appetite is getting costlier as the US trade war bites. The price of the powdery grain mixture,…

Chinese phone giant Xiaomi delivers growth in first results

BEIJING, Aug 22 — Xiaomi Corp delivered a 68 per cent revenue jump and quarterly profit in its maiden financial results, as the Chinese smartphone giant made strides overseas while fending off a challenge from local rivals such as Oppo. The…

Volvo owner’s China unit beats Nissan as sales to top target

BEIJING, Aug 22 — Geely Automobile Holdings Ltd surpassed its top three Japanese rivals to become the third-largest carmaker in China, helped by models that appeal to the nation’s young consumers. Reporting a 54 per cent jump in net income for…

Musk has disrupted the car business. Now can he change himself?

NEW YORK, Aug 22 — For five days this summer, Tesla Inc survived without Elon Musk on the factory floor. He attended his brother’s wedding in Spain and took his kids to Belfast so they could see the set of Game of Thrones. When the wedding came…