WELLINGTON: A landmark 11-country deal that will slash tariffs across much of the Asia-Pacific will come into force at the end of December, New Zealand said today, a rare bright spot for global commerce as the US-China trade war intensifies.
The deal moved forward after Australia become the sixth nation to formally ratify the deal, alongside Canada, Japan, Mexico, New Zealand and Singapore.
“This triggers the 60-day countdown to entry into force of the Agreement and the first round of tariff cuts,” said New Zealand Trade and Export Growth Minister David Parker. His country is responsible for official tasks such as receiving and circulating notifications made by members of the pact.
The five member countries still to ratify the deal are Brunei, Chile, Malaysia, Peru and Vietnam.
While most of the remaining parties to the agreement have vowed to ratify the deal, Malaysian Prime Minister Tun Dr Mahathir Mohamad said he was still weighing its benefits.
Peru's deputy trade minister Edgar Vasquez told Reuters he expects Lima will ratify the agreement before 2019. “One of the countries that will benefit the most is Peru,” he said.
The original 12-member deal was thrown into limbo early last year when US President Donald Trump withdrew from the agreement to prioritise protecting US jobs.
The remaining nations, led by Japan, finalised a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The deal will reduce tariffs in economies that together amount to more than 13% of global gross domestic product (GDP) – a total of US$10 trillion (RM41.8 trillion). With the United States, it would have represented 40%.
“As protectionist moves strengthen across the world, the importance of free and fair rules is growing more and more,” Japanese Economy Minister Toshimitsu Motegi told a news conference in Tokyo.
He added that Japan would continue be “a flag-bearer for free trade”.
The success of the deal has been touted by officials in Japan and other memberc ountries as an antidote to counter growing US protectionism. They hope that Washington would eventually recommit to the pact.
Trump's economic agenda, however, remains focused on China as a trade war between the world's two largest economies shows little sign of abating.
Trump on Tuesday warned he is ready to impose additional tariffs on Chinese goods if an agreement with Beijing could not be reached.
The United States has already imposed tariffs on US$250 billion worth of Chinese goods, and China has responded with retaliatory duties on US$110 billion worth of US goods.
The trade war threatens to check global economic growth, though signatories to CPTPP said the deal would be a boon for several sectors.
Australia said the agreement will boost agricultural exports, set to be worth more than A$52 billion (RM154 billion) this year despite a crippling drought. – Reuters
Bank Negara: Internal review of RM2 billion land deal ongoing, relevant officers opted to go on leave of absence
PETALING JAYA: Bank Negara Malaysia (BNM) said an internal review of its RM2 billion land purchase is under way and the relevant officers are on leave of absence pending the outcome.
In a brief statement today, the central bank said that it had in August commissioned a review by an independent party in relation to the purchase of the government land known as Lot 41, which is earmarked for development of a financial education hub.
“The review is still ongoing. To facilitate the internal review, relevant officers of BNM have opted to take a leave of absence,” BNM added.
Last May, Finance Minister Lim Guan Eng confirmed that proceeds from the land sale and a RM1.199 billion redemption of redeemable
cumulative convertible preference shares of the remaining RM1.2 billion owed to the Ministry of Finance by Khazanah Nasional Bhd were used to make interest payments for 1Malaysia Development Bhd's (1MDB) debts.
Calling it an arms-length transaction with fair value as determined by an independent private sector valuer, then BNM governor Tan Sri Muhammad Ibrahim denied that political pressure had led to the land deal. However, the issue continued to gain traction, culminating in his offer to resign.
When met at Sime Darby Property Bhd's AGM yesterday, former BNM governor Tan Sri Zeti Akhtar Aziz said she had no knowledge of the land purchase as it did not occur during her tenure with the bank.
“I know nothing about it at all and I have left the bank coming up to three years now. It's not during my time,” she said.
“Furthermore, to give the bank space after I left, I wasn't in touch with the bank at all. I see hardly anyone from the bank and I've moved on with my own life,” she added while declining to comment further.
PETALING JAYA: PRG Holdings Bhd's 63%-owned subsidiary Furniweb Holdings Ltd warned that there was a substantial 86.5% decline in its net profit for the third quarter ended Sept 30, 2018 compared with the previous corresponding period.
Furniweb, which was listed on the Growth Enterprise Market of the Hong Kong Exchange in 2017, issued the profit warning today.
It said the group's profitability for the period was affected mainly by the lower revenue, higher cost of sales resulted from the rise in crude oil prices and lower production volume.
However, it said the actual financial results of the group for the period may be different from the announcement, as it is yet to be finalised, audited and reviewed by the company's auditor.
Shareholders and potential investors are advised to read carefully the third quarterly results announcement of the company for the period, which are expected to be published sometime this month.
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PETALING JAYA: Newly appointed Sime Darby Property Bhd chairman Tan Sri Zeti Akhtar Aziz said while the property market is softening, property prices will adjust to market dynamics.
“Usually it is based on supply and demand, when there is excess supply and demand softens, prices have to adjust,” she said when asked of Finance Minister Lim Guan Eng’s statement that house prices could be reduced by 5% to 10% with the exemption of sales and service tax (SST) on construction services and building materials.
However, she said the degree of price adjustment is dependent on the property types.
She added that there is sufficient time to “manage” the property market as it has just softened and not collapsed.
For Sime Darby Property, Zeti believes the group will have the capability and resources to manage itself amid the challenging backdrop.
Meanwhile, she said the group is hoping to conclude the London Battersea Power Station (BPS) Phase 2 deal by the first quarter of 2019 and its progress has been positive.
Early this month, SP Setia Bhd and Sime Darby Property announced that Battersea Phase 2 Holding Co, Permodalan Nasional Bhd (PNB) and Employees Provident Fund (EPF) had mutually agreed to extend the exclusivity period in the proposed transaction until the end of the year from Sept 30.
PNB and EPF had proposed to acquire the commercial assets worth about £1.61 billion (RM8.58 billion) in Battersea Phase 2 Holding Co, a unit of Battersea Project Holding Co Ltd which is the vehicle undertaking the BPS project in London.
SP Setia and Sime Darby Property hold 40% stake each in Battersea Project Holding Co Ltd, while EPF holds the remaining 20%.
On the impact of Brexit on the project, Zeti said while the UK’s exit from the European Union is definitely going to affect the country in the immediate term, Sime Darby Property’s investments are long term and medium term.
She said given the many phases of the project, the group will pace it accordingly to “come out of it positively”.
On the upcoming Budget 2019, Zeti, who is also the member of the Council of the Eminent Person, said the council had put forward some recommendations to the government, but is yet to know which of these were carried.
As the first budget by the Pakatan Harapan government, it will serve as an opportunity for Malaysia to demonstrate its direction forward through the period of transition in stabilising conditions and providing a platform to regain growth momentum.
PETALING JAYA: Heineken Malaysia Bhd’s net profit for the third quarter ended Sept 30 increased 19.7% to RM78.87 million from RM65.87 million a year ago, mainly due to over provision of prior year taxation and deferred taxation recognised in the current quarter.
Revenue grew 3.3% to RM512.01 million compared to RM495.49 million in the same quarter in 2017 underpinned by an increase in sales volume prior to the implementation of sales and service tax (SST) 2018.
For the cumulative nine months period, its net profit jumped 3.5% to RM182.52 million compared with RM176.42 million in the previous year, while revenue increased 6.5% to RM1.37 billion compared to RM1.28 billion in the same period in 2017.
Commenting on the results, Heineken Malaysia managing director Roland Bala said its performance in the third quarter of 2018 reflects improved consumer sentiment in the market.
“The reintroduction of SST and subsequent price adjustment resulted in higher sales volume ahead of Sept 17. In the nine-month period, we steadily improved our performance through effective execution of commercial strategies, supported by a sharper focus on cost management initiatives within the group,” he said in a statement.
On outlook, Heineken Malaysia expects the business environment to remain challenging given the intense competition, the implementation of SST on Sept 1 and the continued presence of contraband beer in the market.
“We commend the extensive efforts of the government and its agencies, in particular the Royal Malaysian Customs Department, for stepping up enforcement against contraband alcohol and illicit trade, which represent a significant loss of revenue to both government and industry. We urge no increase in excise duties on beer to ensure the price gap between duty-paid products and contraband is not widened further,” said Roland.
Leveraging on its portfolio of iconic brands, the group will continue to strengthen its commercial strategies and execution to drive performance with a focus on improving operational efficiencies across the business to achieve a commendable performance for the financial year 2018.
PETALING JAYA: Perusahaan Sadur Timah Bhd (Perstima), which saw its net profit more than tripled for the second quarter ended Sept 30, is planning to set up a new plant to manufacture and supply tinplate and tin free steel in the Philippines.
Its new subsidiary, however, is subject to the approval of the local authorities.
Perstima sees a potential market in the Philippines, where currently tinplate and tin free steel in the country are being sourced from other countries.
The annual domestic demand is about 220,000 metric tonnes (MT) comprising 170,000MT and 50,000MT of tinplate and tin free steel respectively.
“In addition, there would be incentives for tinplate and tin free steel manufacturers as a base industry to be provided by the government of the Philippines to support the Philippines economy if the proposed investment meets the criteria set,” it added.
Perstima’s net earnings stood at RM12.24 million for the July-Sept period against RM3.54 million in the same quarter a year ago, due to higher sales and profit margin.
Revenue for the quarter under review grew 15.9% to RM271.52 million from RM234.34 million.
Its six-month net profit almost quadrupled to RM24.38 million from RM6.35 million, with revenue expanding 8.2% to RM510.36 million from RM471.84 million.
The stock gained 2.88% to close at RM4.65 with 23,100 shares done.