Wednesday, October 9th, 2019
NEW YORK, Oct 9 — Wall Street stocks jumped early today following reports that a limited US-China trade deal is possible ahead of this week’s negotiations. Major indices had lost more than one per cent yesterday after new US sanctions on Chinese…
PETALING JAYA: Maju Holdings Sdn Bhd has made a revised offer to the government to acquire PLUS Malaysia Bhd for RM34.9 billion, following Prime Minister Tun Dr Mahathir Mohamad’s comments saying the government would be willing to sell the toll highway operator if the offer received was suitable.
In a media statement today, Maju Holdings said that as part of the acquisition proposal, it would offer a 25% to 36% reduction in toll charges.
“We are proposing to bear the toll reduction in full and are in no way seeking financial compensation from the government for this.
In addition, Maju Holdings said it will absorb the RM2.7 billion toll compensation owed by the government to PLUS.
“If Maju Holdings takes over PLUS, we are pleased to inform that we will no longer hold the government responsible for these debts,” it said.
The spokesperson added that with this latest offer, existing PLUS shareholders would benefit from an estimated total equity internal rate of return of about 16%.
“This represents a return that far surpasses the cost of equity for a majority of other toll road concessions, both globally as well as across Southeast Asia.
“As part of our proposal and as we have reiterated on multiple occasions, we are committed to investing approximately RM5.3 billion which will include lighting up the entire length of the highway along with other much needed enhancements.”
Maju Holdings, controlled by businessman Tan Sri Abu Sahid Mohamed, made its first offer of RM36 billion to take over PLUS in 2017.
However, at that time, the Finance Ministry said the government had no plans to release its interests in PLUS to Maju Holdings and was concerned with the financial standing and capability of a private entity like Maju Holdings to pay for the acquisition.
In July this year, Works Minister Baru Bian confirmed it received a fresh offer from Maju Holdings, but this was ultimately rejected after Khazanah Nasional Bhd and the Employees Provident Fund (EPF) objected to the sale.
However, last week, EPF CEO Tunku Alizakri Alias echoed Mahathir’s comments saying that if there was a sensible takeover offer which would benefit its members in terms of returns and dividends, the fund would definitely study and consider the offer.
In its statement yesterday, Maju Holdings said it was confident that its offer this time was a compelling one and one that would help alleviate the government’s debt situation.
“Our operational track record in managing toll roads speaks for itself. We have successfully operated the MEX highway in a highly cost-effective manner compared with PLUS toll roads that should benefit from economies of scale.
“In fact, we have one of the lowest costs per kilometre in the country. As such, we are confident we will be able to reduce maintenance costs for PLUS.”
PETALING JAYA: Standard Chartered Global Research said the expected higher fiscal deficit of 3.2% of gross domestic product (GDP) in 2020 is unlikely to raise concerns about the ratings for Malaysia.
“The 2019 budget targeted narrowing the 2020 fiscal deficit to 3.0% of GDP from 3.4% in 2019. We project the 2020 deficit at 3.2%. Nevertheless, we do not expect this to raise rating concerns given the challenging economic outlook, as long as the medium-term fiscal consolidation target is adhered to,“ it said in a report today.
It noted that the pace of fiscal consolidation is expected to moderate amid weaker growth outlook.
“We expect a moderation in the pace of fiscal consolidation, given the soft economic outlook. This should not come as a surprise, as the government has hinted at a more gradual fiscal consolidation path.”
It added that a significant fiscal stimulus package is unlikely given still-resilient growth in Malaysia and the fall in non-oil-related revenue, which can be largely attributed to the goods and services to sales and service tax (GST-SST) shortfall.
Furthermore, the government has said that there are no plans for new tax measures in the 2020 budget.
“We expect the government to focus on rationalising expenditure, such as tax incentives, and tightening the administration of revenue collection.”
Excluding the one-off GST and income tax refunds of 3.5% of GDP, operating expenditure fell in the first half of 2019, reflecting the government’s commitment to expenditure rationalisation thus far. Development expenditure remained stable at 3.2% of GDP in first-half 2019.
GENEVA: The United States fell to second place behind Singapore in the World Economic Forum’s flagship Global Competitiveness Report, with the slippage linked in part to US President Donald Trump’s trade wars.
The Forum, organisers of the glitzy annual gathering of business and political elite in Davos, have released an annual competitiveness report since 1979 that assesses which economies are well placed to see productivity and long-term growth.
While the report noted that the US “remains an innovation powerhouse” and the world’s second most competitive economy, some trouble signs have emerged, the Forum said.
“There are no two ways (about) it. It is important to ensure the countries are being open to trade,” said Saadia Zahidi, a Forum managing director, when asked to comment on the impact of the tariffs imposed by the Trump administration.
She noted the lack of “hard data” on the impact of US tariffs imposed on several of its main economic partners, as the set of products impacted remains limited compared to overall trade.
But, she said, “the sentiment” surrounding investing in the US “has been going down”, she told reporters in Geneva.
“That will end up impacting long-term investment; that will end up impacting how decision makers are thinking; that will end up impacting the view of non-American business leaders (of) the United States. So it does matter in the long-term,” she added.
The Forum’s competitiveness report relies in part of executive surveys, in addition to hard economic data.
Zahidi said that the US had also fallen in the rankings because healthy life expectancy in the country was now lower than in China.
In data published last year, the World Health Organisation said a newborn in China could expect 68.7 years of healthy living, compared to 68.5 for American newborns.
The report measures competitiveness on a scale of zero to 100 based on factors that include infrastructure, health, the labour market, the financial system, quality of public institutions and economic openness.
Singapore scored 84.8 out of 100, but the Forum noted that the country had benefited from trade diversion through its ports triggered by the tariff battles between the world’s top economies.
At 83.7 the US slipped from a score of 85.6 in 2018.
Hong Kong rose four spots to claim third place with a score of 83.1, but the Forum said the data used in the report was collected before waves of pro-democracy protests began shaking the financial hub.
The Netherlands finished fourth – up two slots from last year – while Switzerland came in fifth place. – AFP
Singapore has benefited from trade diversion, says the World Economic Forum. – AFPPIX
KUALA LUMPUR, Oct 9 — The 10th International Greentech and Eco Products Exhibition and Conference Malaysia (IGEM) will see the signing of 16 Memorandums of Understanding (MoUs) to strengthen the country’s green technology strategy. Energy,…
PETALING JAYA: Advancecon Holdings Bhd’s wholly owned subsidiary Advancecon Infra Sdn Bhd (AISB) received a RM49.38 million sub-contract from its associate company Advancecon (Sarawak) Sdn Bhd.
Advancecon told Bursa Malaysia that it had received a letter of award for the appointment of AISB as the sub-contractor for the Upper Rajang Development Agency (URDA) Package 2: road infrastructure projects in Pelagus/Baleh, Sarawak.
PETALING JAYA: Minetech Construction Sdn Bhd, a wholly owned subsidiary of Minetech Resources Bhd was awarded a sub-contracting job worth RM17.9 million.
In a filing with Bursa Malaysia, Minetech said the package was awarded by Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd, appointing Minetech Construction to undertake and complete the Section 4 Bridge Works – Package 3 of the Electrified Double Track from Gemas to Johor Baru.
The sub-contract works will commence in October 2019 and is expected to be completed by the third quarter of 2020.
GEORGE TOWN: GUH Holdings Bhd is optimistic that the property market would gradually rebound despite concerns among developers over the global economy and the persistent sluggish performance in real estate.
GUH CEO and managing director Datuk Seri Kenneth H’ng Bak Tee said that they were targeting for recovery to be felt some three years later in the market so, for now, it is about consolidation.
As for incentives under Budget 2020, H’ng urged the Finance Ministry to consider allowing more leeway for expatriates under the Malaysia My Second Home retirement scheme to invest in properties and to relax banking guidelines, so more loans can be approved, particularly in the affordable housing segment.
H’ng said this as GUH has began to develop a model township project in Simpang Ampat with the aim of transforming it into a modern suburb to cater for the future development pace on the mainland.
GUH has acquired 46 acres of prime land in the old Simpang Ampat township with interim plans for a mixed development package of commercial shop lots, condominiums, landed property and affordable housing schemes.
Adding value to its project was GUH’s sign-up with QSR Brands (M) Holdings Bhd – the Malaysian franchise holder of Kentucky Fried Chicken (KFC), Pizza Hut, Aymas and Life brands – to open up a drive-through KFC outlet in Simpang Ampat by next year.
The memorandum of agreement was sealed at the GUH corporate office on Tuesday in the presence of state executive councillor Datuk Abdul Halim Hussein. GUH was represented by H’ng and QSR by group managing director Datuk Seri Mohamed Azahari Mohamed Kamil.
Azahari spoke of plans to open 30 more KFC outlets by next year while Pizza Hut has plans for 15 more outlets in the country.
GUH’s property division is developing townships in Taman Bukit Kepayang, Seremban, Sungai Bakap, Simpang Ampat (Penang) and Sungai Petani (Kedah).
KUALA LUMPUR: The Malaysia External Trade Development Corporation (Matrade) today launched the Sustainability Action Values for Exporter (SAVE) Programme to boost com-petitiveness of Malaysian exports amid slowing external demand.
The programme is aimed to encourage the adoption of sustainability practices based on United Nation’s Sustainable Development Goals.
Speaking to the media at the launch, Matrade CEO Datuk Wan Latiff Wan Musa said the rise in the number of conscious consumers is a compelling factor for businesses to adopt sustainable business practices as a corporate social responsibility study by Cone Comms and Ebiquity Global found that 91% of consumers would switch brands associated with a good social or environmental cause.
Wan Latiff said Matrade does not have any target or benchmark for the SAVE programme, instead it will formulate an action plan for the next five years.
“First, awareness on the importance of sustainability among the exporters must be there. The global marketplace has now placed the sustainability agenda and responsible business as a key benchmark for trade transactions,” he said.
This view is echoed by the Ministry of Trade and Industry deputy secretary-general Hairil Yahri Yaacob who pointed out the principles of sustainability are already embedded in the 11th Malaysia Plan.
He said the 12th Malaysia Plan is expected to expand the sustainability agenda when it is released next year.
“Compliance to sustainability will greatly ensure our exporters gain added market access, failing which they are at risk of being excluded from certain markets. As such, the SAVE campaign introduced today by Matrade is very timely and must be actively embraced by all Malaysian exporters,” said Hairil.
Meanwhile, revised export figures showed that Malaysia’s exports for 2018 hit the RM1 trillion mark.
“The goal for this year is to maintain exports at RM1 trillion and we still have four months to go to achieve that,” said Wan Latiff.
The latest trade statistics indicated that Malaysia’s exports fell 0.8% year-on-year in August 2019 to RM81.4 billion, while the first eight months saw a drop of 0.4%.
Commenting on the decline in exports performance, Wan Latiff explained that Malaysia is not spared from the US-China trade war, which affects the entire global economy.
However, he noted that Malaysia has benefited from the trade diversion as exports to the US increased 10% in the first eight months of the year.
KUALA LUMPUR, Oct 9 — The ringgit continued its downtrend against the US dollar at the close today as market traders remained on the sidelines to await developments on the US-China trade talks which begins tomorrow, said a dealer….