Sunday, July 21st, 2019
BEIJING, July 21 — Some Chinese companies are seeking new purchases of US agricultural products, China’s official Xinhua news agency said today, citing authorities, as Beijing and Washington look for ways to end a protracted trade war. US…
KUALA LUMPUR: With investors from China showing strong interest in properties in Southeast Asia, Chinese investments in Malaysia’s residential real estate are expected to double by 2025.
According to Juwai.com chairman Georg Chmiel, about US$4 trillion (RM16.4 trillion) worth of properties were advertised on the site while some RM9.5 billion worth of properties across key locations in Malaysia were transacted through the online platform last year.
“Historically, the most popular markets for Chinese buyers have been the US, Australia and the UK. Due to political reasons, Brexit, trade war, legislation in Australia which puts a higher stamp duty on foreign buyers, there have been some shifts and new markets have emerged, such as Malaysia, Thailand and Vietnam, or in general, Southeast Asia,” he told SunBiz.
Chmiel said Juwai.com, which is a platform that markets properties worldwide to Chinese investors with about three million listings in a month, has seen a strong increase in Chinese appetite for properties in Malaysia, Thailand and Vietnam.
“We’ve also seen that there was a connection between big trends like the Belt and Road Initiative, investments into Malaysia and investments into real estate,” he said.
Based on data from Juwai.com, demand from Chinese buyers for Malaysian real estate has been growing consistently, soaring 600% since 2017, indicating growing demand for quality projects.
As for incoming enquiries on Juwai.com, 80% are within the RM1 million to RM2 million price range, 10% within RM2 million to RM4 million and 8% for properties priced above RM4 million.
“One of the big themes in Malaysia is affordable housing, which is for local buyers, but I think it is very important for the developers that there is always a fair mix of different categories for them to also make money, to earn money, to also sell higher-end type of properties,” Chmiel said.
He said most of the properties acquired by Chinese investors are located in Kuala Lumpur, Penang, Johor, Malacca and Sabah, with the majority being residential properties and one-fifth comprising industrial, commercial and retail properties.
Realising this growing demand, Malaysian digital real estate marketplace MHub has teamed up with Juwai.com to attract and assist more Chinese investors in their property purchases here.
MHub co-founder and CEO Quek Wee Siong said there are several Malaysian property developers on its platform who are building projects around areas that Chinese investors are interested in, namely Kuala Lumpur, Penang, Johor and Malacca.
“Currently it makes up close to 20% of our entire stock inventory and we intend to grow this with Juwai.com. That’s why we inked this agreement. The idea of this partnership is to help property developers here to streamline the process, to get better leads and better conversion,” he said.
Under the partnership, MHub will provide the inventory of properties while Juwai.com will provide services in China including lead qualifying and identifying the type or properties that Chinese investors want, before passing on the leads to agents in Malaysia and MHub will provide a suite of services to complete the acquisition process.
“In the database, we have about 10% transactions from overseas buyers. With this of course our goal is basically to help property developers in Malaysia, those with high price tag targeting foreign buyers, to increase the conversion rate. At the moment, they are marketing it themselves but if they have the right partners like Juwai.com, I’m sure we can easily double these enquiries and transactions within the platform,” said Quek.
Chmiel said the US-China trade war has, in some ways, diverted Chinese investors to Southeast Asian properties and he believes that the shift is sustainable as investors are now forging strong connections here.
“I think the trade war will shift the dynamics on a global scale more permanently. Growth will obviously resolve but so far Thailand, Vietnam and Malaysia are benefiting to a certain extent from the trade war, for the automotive supply industry as well as supplies for technology and telecommunications which are being produced here,” he said.
Chmiel said the trade war has resulted in many companies looking for partners elsewhere and are unlikely to return to the US once strong relationships are formed and substantial investments made.
PETALING JAYA: Maju Holdings Sdn Bhd’s subsidiary Bright Focus Bhd is proposing a sukuk-restructuring exercise to improve the weak structure of the Islamic debt issue.
It involves a sukuk-to-sukuk swap and the issuance of a new sukuk.
Bright Focus, which holds the concession for Maju Expressway (MEX), is also planning to buy back the current sukuk of RM1.225 billion at full nominal or par value.
“Bright Focus Berhad has engaged several international banks to implement the proposed restructuring scheme within the next 90 days, subject to the necessary due diligence by the banks,” said Bright Focus in a statement today.
The sukuk-restructuring exercise comes after the downgrade of Bright Focus’ rating to ‘BB1’ recently. It explained that the downgrade is not reflective of the expressway itself, but the weak structure of the terms of the sukuk.
“The downgrade is due solely to reduced cash reserves due to unscheduled advances to Maju Holdings.”
RAM Ratings had said that the downgrade was premised on the severe impairment in Bright Focus’ debt-servicing metrics following further unanticipated advances by its 96.8%-held subsidiary, Maju Expressway Sdn Bhd (MESB), to the ultimate parent company Maju Holdings Sdn Bhd, in addition to a deterioration in MESB’s projected annual cash flow.
Bright Focus said on a standalone basis, MEX is a performing highway from a perspective of its ability to meet all its obligations under the current sukuk in a timely manner.
“Bright Focus, and by virtue of that Maju Holdings Sdn Bhd, is in a solid financial position to undertake this restructuring programme, which will address the weakness in the current terms of the sukuk. The group is committed to good corporate governance practices and will ensure that sukuk holders’ interests are protected and all obligations are repaid in full in a timely manner.”
Once the proposed restructuring is completed, it expects to see an improvement in its rating for the sukuk.
KUALA LUMPUR: AmBank group chairman Tan Sri Azman Hashim celebrated his 80th birthday last week with a grand birthday bash featuring The Big Band from the University of Malaya.
How does it feel to be 80?
“Syukur alhamdulillah, I feel the same. No change, no impact. I can do all the things that I’m used to doing, I feel the same as I was in my 50s and 60s. It’s true that age is just a number. You’re as young or as old as you feel. I keep myself busy with lots of things to do, but of course most things that I want to do and love to do,” said Azman in his speech.
PETALING JAYA: The recovery in the technology sector is expected to be soft in the second half of the year, judging from the 14% decline in global semiconductor sales for the first five months of the year to US$162 billion (RM666 billion).
“From the initial expectation of 3% growth for 2019, the industry is now seeing an average of 4% decline with lower demand from all regions in all products except discretes. The plunge of memory price was a major contributor albeit the recent reversion. The only silver lining is the industry is projected to return to expansionary mode in 2020 with an average of 6% growth,” said HLIB Research in a note last Friday.
The research house said the technology sector is also affected by input cost with major raw material prices including gold, aluminium and copper remain elevated.
“Compounded by stronger US dollar projection, pricier commodities will exert pressures on margins for traditional packaging.”
HLIB Research expects high-performance computing to be the major growth driver for the global technology industry on the back of robust cloud investments and potentially cryptocurrency mining.
Although Internet of Thing device generally has lower IC content, it said this market is too big to ignore.
With regard to the ongoing trade war, the research house takes comfort that the US and China are going back to the negotiation table while sanction on Huawei is lifted for now.
However, it notes that Japan is waging another trade war on South Korea.
“While this may eventually benefit Taiwan, we opine that trade tensions among any of the tech leading nations is a bane due to their strong interdependence in the supply chain.”
HLIB Research maintained its conservatism for the technology sector in the absence of near term catalyst and remain selective, with Frontken Corp Bhd being the top pick.
Meanwhile, Kenanga Research gathered that electronic manufacturing services (EMS) players are more likely the beneficiaries of the trade diversion.
Among the technology companies we visited, while most of them have received enquiries from businesses looking to relocate out of US and China, only PIE (an EMS player) has seen those enquiries crystallising into new orders. This is also the case for technology companies under our coverage.”
The research house also noted that there has been more meaningful positive impact on 5G from the general view, but clarity should only be seen in 4Q19-1Q20.
Going into the third quarter of the year, there has been an increasing number of companies preparing for the adoption of 5G, with the likes of FoundPac Group Bhd observing higher demand for its products with specifications that could be used for 5G.
“We remain upbeat on the prospects for the sector as developments for 5G picks up speed and trade war-motivated enquiries materialise into orders and new customers,” Kenanga said.
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