MISC expects to secure more projects this year

KUALA LUMPUR: MISC Bhd expects to secure more projects this year, given the company’s capability to take up to US$2-3 billion (RM8.3-12.4 billon) worth of new jobs, compared to the US$1 billion projects clinched in 2018, said president and CEO Yee Yang Chien.

He said as of the first quarter of 2019, the shipping company had bid for jobs worth US$6 billion versus the similar value of bids for the whole of last year.

“We had a success rate of 20% from the US$6 billion worth of projects that we bid for last year, and this was an improvement from the 14% (success rate) recorded in 2017.

“So we hope the number will improve in 2019,” he told reporters after MISC’s annual general meeting today.

Yee said the company was not short of opportunities but needed to be picky, as every single project involved a handsome investment.

Therefore, a stringent assessment to choose the right jobs was crucial to ensure the company could execute them and deliver the numbers, he said.

MISC, he noted, was currently working on three to four bids.

In February, it was reported that MISC and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) were the frontrunners for two major contracts from Petronas Carigali’s Limbayong oil and gas field development off Sabah.

When asked for an update, Yee said: “The tender is still open and it will be closed at end of this month.”

A research house said it expected MISC to win the project for the floating production, storage and offloading vessel charter job, while its 66.5%-owned MMHE was likely to secure the engineering, procurement, construction, installation and commissioning contract.

Last year, MISC, which is 62.7% owned by Petronas, derived 35% of its revenue from Petronas-related projects.

On prospects, Yee said 2019 would be another challenging year for the tanker market.

“Growth in seaborne oil demand is expected to be impacted by the recently announced Organisation of the Petroleum Exporting Countries-led production cuts and geopolitical uncertainty,” he said.

On the liquefied natural gas (LNG) segment, he said the company expected to continue to benefit from the strengths seen in 2018, supported by demand in Asia, additional supply from new liquefaction projects and slower LNG fleet growth in 2019.

“While the LNG spot rates reached a multi-year peak in late 2018, the sustainability of such rates remains uncertain in 2019,” he said.

The offshore segment would see healthy activities in oil and gas exploration and production and the company would be adding two new assets in 2018, providing positive income growth, he added.


World Bank keeps M’sia 2019 growth forecast at 4.7%

KUALA LUMPUR: The World Bank Group has maintained Malaysia’s 2019 gross domestic product (GDP) growth forecast at 4.7%, driven by private consumption.

Lead economist for Malaysia Richard Record said private consumption would continue to be the main driver of growth, albeit expanding at a more measured pace.

“Household spending will be buoyed by stable labour market conditions and income support measures such as the Cost of Living Aid (Bantuan Sara Hidup),“ he told reporters at the East Asia and Pacific (EAP) Economic Update briefing today.

He said gross fixed capital formation was expected to increase slightly, driven by the private sector, while public investment was expected to remain subdued in the near term.

“The external sector may be negatively affected by heightened uncertainty surrounding the global environment, particularly the possible escalation of US-China trade tensions,“ he said.

Record said monetary poverty was expected to continue its downward trend in 2019, with a projected decline to 1.4% based on the upper middle-income countries (UMIC) poverty line of US$5.50 (RM22.70) per person per day in 2011.

“Several initiatives for low-income households, including the national B40 Health Protection Fund, an insurance scheme for the B40 group, and affordable housing initiatives are in the pipeline to improve both monetary and non-monetary wellbeing,“ he said.

Going into 2020, he said Malaysia’s economy was projected to expand at 4.6%, and the country was expected to achieve high-income country status by 2024.

He said the country’s fiscal deficit was expected to narrow to 3.4% of GDP in 2019 and subsequently to 3% in 2020.

“Near-term fiscal consolidation efforts are expected to be achieved primarily through rigorous expenditure rationalisation, with broad-based declines (in percentage of GDP) projected across major components of operating and economic development outlays.

In terms of risks and challenges, Record said the ongoing uncertainties surrounding the US-China trade tensions and shifts in global financial market sentiment would pose downside risks to Malaysia’s economy in the near term, due to the country’s high degree of trade and financial integration.

“On the domestic front, the relatively high levels of government liabilities and increased dependency on oil-related proceeds could potentially constrain the flexibility of fiscal adjustment against future macroeconomic shocks,“ he said.

He said in the private sector, the relatively high level of household debt remained a source of macro-financial stability risk and would act as a constraint on household spending.

Record said the principal challenge to more rapid and inclusive economic growth lies in increasing labour productivity, which in turn depends on stronger human capital development.

“Malaysia’s score on the Human Capital Index (HCI) is 0.62, which is about as expected compared to other UMICs but well below that of its aspirational comparators,“ he said.

He said Malaysia performed well on the child survival and years of schooling components of the HCI but did poorly relative to its economic peers in child nutrition and the quality of education.

“Key priorities are thus enhancing learning outcomes, reducing child under-nutrition and strengthening social protection systems to enable households to both invest in and protect human capital,“ he said.


Barakah secures white knight, has creditors’ support

PETALING JAYA: Barakah Offshore Petroleum Bhd is looking for a fresh start after the completion of its restructuring exercise by year-end.

Acting group CEO Abdul Rahim Awang said the integrated oil and gas (O&G) solutions provider was in the advanced stage of its restructuring process, while talks with major large creditors were in favour of its revamp scheme.

“We have secured a white knight. We are under a non-disclosure agreement, we can’t reveal who the white knight is. That is the first we need as we require fresh capital injection, so the white knight is important,“ he told reporters after announcing the signing of a memorandum of understanding (MoU) with Singapore-based Vallianz Holdings Ltd today.

As at Dec 31, 2018, Barakah Offshore’s total liabilities stood at RM335.6 million.

Abdul Rahim expects the company to finalise its restructuring scheme by next month and resolved its issues with creditors in the next two to three months.

“We need to get at least 75% of creditors to support and approve the scheme for us to move forward. We are fairly confident that we can get that 75%,“ he added.

Abdul Rahim said with the completion of the restructuring scheme, Barakah would be cash flow positive at the project level and also its bottom line.

Meanwhile, the group and Vallianz will form a strategic alliance to explore business opportunities in Malaysia and the Middle East.

By joining forces, both parties are able to leverage on each other’s strengths to expand their scope of services, technical capabilities and geographical reach along the O&G value chain.

Under the MoU, Barakah Offshore will offer its established engineering and operational capabilities to support Vallianz’s existing and future projects, including technical consultations and feasibility studies.

“The MoU with Vallianz will open up new markets for us and also allow us to have access to assets that they have.

“These assets will allow us to bid more competitively because a lot of time when we bid for projects especially for offshore operations, we bid as a package as it comes with varying spread that include other vessels as well,“ said Abdul Rahim.

Barakah Offshore has identified one project in the Middle East and will come up with a proposal.


MRCA: Retail industry to grow 4.5% this year

KUALA LUMPUR: The Malaysian retail industry is expected to grow by 4.5% this year compared with 3.9% last year, due to the better business sentiment with China.

Malaysia Retail Chain Association (MRCA) president Datuk Seri Garry Chua said the good relations between Malaysia and China after the revival of the East Coast Rail Line project could also result in a boost in the tourism sector.

“The expectation is also in line with the gross domestic product’s growth projection of between 4.3% and 4.8%,” he said at the sidelines of the Retail Industry Forum today.

However, he said the food and beverages (F&B) sector is expected to experience a slowdown due to financial constraints among Malaysians, leading to lower spending power.

The F&B sector grew 2.6% in 2018 – a performance which is expected to be maintained this year.

Chua added that with the boost in the tourism sector, the retail industry could experience a double-digit growth, otherwise, the market sentiment would remain sluggish.

“By 2020, Malaysia will have about 600 to 700 malls, and Malaysia only has 32 million people, which is relatively low.

“If tourism does not increase, business would not be performing. This will lead to shop closures and thus a glut in retail space,“ he said.

He added that the retail segment recorded a slow growth of between 2% and 5% in the last six years, compared with the double-digit growth before that.

According to Tourism Malaysia’s statistics, the number of tourist arrivals has been almost stagnant over the past four years, with 25.72 million arrivals in 2015, 26.76 million in 2016, 25.95 million in 2017 and 25.83 million in 2018.


Orion IXL to bring fintech solutions to Indonesian market

KUALA LUMPUR: Financial technology and business solutions provider, Orion IXL Bhd is embarking on the first overseas roll-out of its financial technology (Fintech) solutions for Indonesia’s market, in a partnership with PT Kirana Investima Nusantara.

Group CEO Mohamad Shaharul Mohamad Shariff said a memorandum of understanding (MoU) between both parties had been signed to set up the framework for the collaborations.

“The collaboration is to provide our technology for loans management system as well as credit scoring and also analytical together with artificial intelligence to process micro-financing for 75,000 provinces in Indonesia.

“They will be using micro-financing to develop all these provinces and the loans are to be disbursed through cooperatives,“ he told reporters after the group’s extraordinary general meeting today.

He said a discussion on the contract and business structure will be held next month.

“We have already started talks on the technicals because we will be doing technical customisation due to the different language and regulatory.

“So we will be doing technology development in the next couple of months and discuss phases of jobs and timeline based on their requirement,“ he added.

Mohamad Shaharul said the Indonesian market will be tapped in stages.

“I foresee that in a couple of years, the Indonesian market will further expand and overtake Malaysia in terms of market capitalisation.“

He said the group is also looking at securing recurring-based revenue through long term contracts, either in the local or foreign market such as its 15-year agreement with MyAngkasa Holdings Sdn Bhd.

The agreement was inked by its affiliate company Sukaniaga Sdn Bhd to develop MyAzZahra system.

The company also hopes to secure a 10-year deal with SME Bank, following their recent MoU to provide fintech solutions by creating a framework for traditional and alternative credit scores for the bank’s customers.

About RM10 million of the proceeds would be used to acquire 10% equity in Sukaniaga, RM16 million to develop MyAzzahra system while the remaining RM950,000 would be utilised to fund the exercise.


Revised NAP to be unveiled in Q2: Miti

CYBERJAYA: The government is expected to unveil its revised National Automotive Policy (NAP) in the second quarter of this year, which will include measures to enhance the competitiveness of the industry through future technological trends.

International Trade and Industry Deputy Minister Dr Ong Kian Ming (pix) said the new NAP would include the Next Generation Vehicles, Mobility-as-a-Service and Industry 4.0, as well as artificial intelligence.

“The review will focus on new mobility pathways and trends in driving patterns, and it will also be adjusted with improvements in public transport as well as explore vendor development within the ecosystem,” he said at the Urban Development and E-Mobility Workshop organised by the Malaysia Automotive, Robotics and IoT Institute today.

The programme was sponsored by Germany’s Federal Ministry for Environment, Nature Conservation and Nuclear Safety, in cooperation with Malaysia-German Chamber of Commerce.

Also present was Germany’s ambassador to Malaysia, Nikolaus Graf Lambsdorff.

Ong said there are about 30 million registered vehicles in Malaysia, and the number is expected to double by 2030.

He said Malaysia aimed to reduce carbon emissions from vehicles by improving the fuel economy level in Malaysia by 2025, in line with the Asean Fuel Economy Roadmap of 5.3 litres per 100km.

The reduction in emissions was in line with the development of the e-mobility ecosystem in Malaysia.


iFAST opens local bond market to retail investors

KUALA LUMPUR: iFAST Capital Sdn Bhd, a wholly owned subsidiary of Singapore based iFAST Corporation Ltd (iFAST Corp), has opened the bond market to retail investors using its online portal, FSMOne.

iFAST Corp CEO Lim Chung Chun said this is in line with the revolution of financial technology and in conjunction with the Securities Commission’s initiative to liberalise the regulatory framework to facilitate greater access into the RM1.3 trillion Malaysian bond and sukuk market.

“Under our platform, investors will be able to transact retail-qualified bonds and sukuk from as low as RM1,000,” he said at a press conference after unveiling the new product today.

He added that under this new segment, iFAST expects 20% of the RM470 billion fixed deposit market to shift into retail bonds in five to 10 years’ time.

Lim also said the new regulation has allowed bond issues that have met the seasoning criteria to be offered to non-sophisticated retail investors through a product highlight sheet without the need for issuers to make disclosure via a full-fledged prospectus.

“Under this framework, corporate bonds and sukuk that are eligible must have been in the market for at least 12 months, and must have a minimum credit rating of A, among other requirements.

“The range of corporate bonds and sukuk that can be offered to retail investors has also expanded to include more than just its normal products,” he said.

He also said that currently, bonds denominated in the ringgit, US dollar, Singapore dollar and Chinese yuan are offered via the platform.

“Our targets are the retail investors as well as fixed deposit customers looking for medium to long-term investment as bonds offer higher yields than fixed deposits,” he said.


Rehda expects better HOC-Mapex 2019 in Penang

GEORGE TOWN: The Real Estate and Housing Developers Association (Rehda) – Penang branch anticipates the upcoming Home Ownership Campaign – Malaysia Property Expo (HOC-Mapex), to be held from April 12-14, will be more successful than the previous edition.

Its chairman, Datuk Toh Chin Leong (pix) said during the last Mapex Penang, which was held from Feb 7-10 this year, many were still unclear about the stamp duty exemption for residential properties sold between Jan 1 and June 30, 2019.

He said residential properties priced between RM300,001 and RM1 million (before discount) were eligible for stamp duty exemption, while those priced above RM1 million would be charged a stamp duty of 3%.

“However, with the stamp duty exemptions being clearly announced, we now have more developers coming in to take part in the upcoming HOC-Mapex Penang to showcase their properties and offer attractive incentives,” he told a press conference yesterday.

Aside from the stamp duty exemption for residential units, Toh said the incentives include a minimum of 10% discounts for all properties, extra rebates, renovation packages and special packages by individual property developers.

Meanwhile, Mapex organising chairman Ng Chin U said 20 property developers would be participating in the upcoming event, showcasing more than 3,000 units of properties worth over RM3 billion in total.

He said that properties such as double-storey bungalows, double-storey semi-detached houses, larger double-storey terraces and condominiums on the island and mainland would be featured during the event.

“On the island’s side, the properties to be showcased are located in Balik Pulau, Teluk Kumbar, Georgetown and Jelutong.

“On the mainland, we have interesting projects such as the SP Setia’s integrated township in Seberang Perai, and some projects in Bukit Tambun, Batu Kawan, Sungai Bakap and Nibong Tebal,” added Ng.