cash flow

 
 

Taliworks to start Sungai Selangor water treatment plant ops

PETALING JAYA: Taliworks Corp Bhd’s wholly owned-subsidiary Sungai Harmoni Sdn Bhd has received the Individual License pursuant to Section 9 of the Water Services Industry Act 2006 from the Minister of Water, Land and Natural Resources.

The group said the agreement entered on matters relating to the operations and maintenance of the Sungai Selangor Water Treatment Plant Works Phase 1 (SSP1) have become unconditional and been completed.

With the completion of the agreement, Sungai Harmoni will commence operating and maintaining the SSP1 under the Bulk Water Supply Agreement (BWSA) from Sept 13, 2019 onwards.

Under the termination and settlement agreement (TSA), Taliworks will receive an upfront sum equal to 10% of the settlement sum within 14 days from Sept 12, 2019, while the balance settlement sum with interest of 5.25% per annum will be payable in nine annual instalments.

Taliworks executive director Datuk Ronnie Lim said the group is delighted to be able to finally draw down the curtains to this long-standing water restructuring exercise.

“The repayment of the outstanding receivables under the TSA and the stable recurring income under the BWSA will further strengthen our cash flow position, allowing us to continue to grow our strong business foundation and deliver good long-term growth prospects,” he said in a statement.

He said the group remains strong in its commitment to reward shareholders, in line with its dividend policy.


Astro shares rise 4pc after Q2 results

KUALA LUMPUR, Sept 13 — Astro Malaysia Holdings Bhd’s stocks rose 3.7 per cent or five sen to RM1.39 at 11 am after announcing a surge of 920 per cent in its net profit to RM169.34 million in the second quarter ended July 31, 2019. About 2.3…


Mah Sing hopes for fillip from Budget 2020

PETALING JAYA: As Budget 2020 looms, Mah Sing Group Bhd is calling for the government to stimulate the property sector, including more relaxed lending guidelines for housing loans.

In a statement issued today, its founder and group managing director Tan Sri Leong Hoy Kum said loan eligibility has been one of the main challenges in the property market over the past few years.

He recommended the government to allow for a higher debt service ratio of 70% to 80% from the current ratio of 60% for lower income group, and a higher margin of financing of up to 110% for first property, 90% for second property and 70% for third property.

Furthermore, he suggested that income from part time jobs should be taken into consideration in loan application review, as well as the introduction of a longer loan tenure of up to 45 years and lower interest rates for first-time home buyers.

He also hopes for the termination of real property gains tax (RPGT) on properties sold after five years as the move is affecting the higher-priced residential property segment.

“We hope the government could consider terminating the tax as an impetus to boost the secondary market as perpetual RPGT is currently affecting those who are considering to upgrade their homes.”

Meanwhile, Leong urged the government to continue the incentives under the Home Ownership Campaign to exempt stamp duty expenses.

“We hope that the incentives could be continued, especially for the first-time home buyers to lessen their financial burden,” he said.

With that, he took the opportunity to commend the government’s incentive to exempt memorandum of transfer (MOT) stamp duty for residential properties between RM300,001 and RM1 million as a good move to stimulate the industry and reduce property overhang.

In addition to the exemption, Leong recommended the reduction of minimum floor price for foreigners from RM1 million to RM600,000 to reduce the overhang.

Leong hopes that the government could consider reducing the waiting period for bumiputra quota release from one year to six months – capped for residential properties over RM600,000, whilst cutting down on the stages of approval from three to two.

The group also called for a reduction in compliance cost as it remains as the most significant factor affecting developers’ cash flow taking up 20% of the total cost based on findings from Malaysia’s Real Estate & Housing Developers’ Association.

He elaborated that apart from land conversion premiums and development charges, the capital outlay for private utilities companies is very high and such contribution could be shared by the respective asset owners.

“Savings from the reduction of compliance cost can be passed on to the home buyers with a more affordable price point,” he added.


Mah Sing hopes for fillip from Budget 2020

PETALING JAYA: As Budget 2020 looms, Mah Sing Group Bhd is calling for the government to stimulate the property sector, including more relaxed lending guidelines for housing loans.

In a statement issued today, its founder and group managing director Tan Sri Leong Hoy Kum said loan eligibility has been one of the main challenges in the property market over the past few years.

He recommended the government to allow for a higher debt service ratio of 70% to 80% from the current ratio of 60% for lower income group, and a higher margin of financing of up to 110% for first property, 90% for second property and 70% for third property.

Furthermore, he suggested that income from part time jobs should be taken into consideration in loan application review, as well as the introduction of a longer loan tenure of up to 45 years and lower interest rates for first-time home buyers.

He also hopes for the termination of real property gains tax (RPGT) on properties sold after five years as the move is affecting the higher-priced residential property segment.

“We hope the government could consider terminating the tax as an impetus to boost the secondary market as perpetual RPGT is currently affecting those who are considering to upgrade their homes.”

Meanwhile, Leong urged the government to continue the incentives under the Home Ownership Campaign to exempt stamp duty expenses.

“We hope that the incentives could be continued, especially for the first-time home buyers to lessen their financial burden,” he said.

With that, he took the opportunity to commend the government’s incentive to exempt memorandum of transfer (MOT) stamp duty for residential properties between RM300,001 and RM1 million as a good move to stimulate the industry and reduce property overhang.

In addition to the exemption, Leong recommended the reduction of minimum floor price for foreigners from RM1 million to RM600,000 to reduce the overhang.

Leong hopes that the government could consider reducing the waiting period for bumiputra quota release from one year to six months – capped for residential properties over RM600,000, whilst cutting down on the stages of approval from three to two.

The group also called for a reduction in compliance cost as it remains as the most significant factor affecting developers’ cash flow taking up 20% of the total cost based on findings from Malaysia’s Real Estate & Housing Developers’ Association.

He elaborated that apart from land conversion premiums and development charges, the capital outlay for private utilities companies is very high and such contribution could be shared by the respective asset owners.

“Savings from the reduction of compliance cost can be passed on to the home buyers with a more affordable price point,” he added.


Moody’s downgrades Ford to ‘junk’ status on weak outlook

NEW YORK, Sept 10 — Moody’s downgraded Ford’s credit rating to speculative or “junk” status yeserday, citing the company’s weak financial outlook as it embarks on an ambitious restructuring. Characterising the auto giant’s current…


In China,P2P insiders say regulatory shortcomings have choked industry

BEIJING/SHANGHAI: Overburdened Chinese regulators have left the peer-to-peer lending industry to poorly staffed local governments, according to ex-regulators, threatening the survival of an important credit mechanism once seen as crucial for the country’s economy.

The resulting difficulties, as the industry tries to grapple with pyramid scheme scandals and runaway bosses, underline the struggles China will face as it tries to balance financial risk and innovation.

Although P2P lenders elsewhere in the world have been viewed sceptically because of how they mix mom-and-pop investors and higher-risk loans, in China the sector was seen as helping plug a gap left by larger lenders.

In 2016, P2P platforms in China loaned $61.5 billion, versus a total 12.65 trillion yuan ($1.78 trillion) in loans made by commercial banks, according to central bank data.

But the number of P2P firms in China has shrunk from 6,000 at their 2015 peak to 708 at the end of August, according to P2P-tracking portal Waidaizhijia, as regulators have struggled to implement new rules.

Lufax, once an industry leader and the best-known name internationally, plans to quit the business entirely after struggling to meet regulators’ requirements.

The People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) – already struggling to oversee an expanding finance industry – passed the responsibility to provincial governments in 2015, those sources said.

Without the expertise or numbers to confidently set standards, provincial regulators essentially froze, they said.

P2P firms and regulatory sources say that the resulting lack of resources, and standards that differ from province to province, have made it hard to plan.

“An industry that should have been regulated more was not, and now we’re seeing that implode with even the stronger players like Lufax pulling out of the industry,” said Zennon Kapron, director at financial technology consultancy Kapronasia.

BOOM AND BUST

China’s P2P firms have dabbled in all manner of misdemeanours, including misallocating funds and mass criminal enterprises such as Ezubao – a 50 billion yuan fraud – where convictions ranged from illegal possession of weapons to undocumented border crossings.

In the initial years of the P2P surge, regulators in China took a hands-off approach. But once fraud erupted and victims took to the streets, what was then called the China Banking Regulatory Commission drafted regulation that passed oversight to local authorities.

“It was a mission impossible … as the number of P2P platforms was so large at the time,” said a person at a northern branch of the CBIRC, who was not authorised to speak to the media.

Finance bureaus operating under local government authorities then passed the work down to district bureaus, who relied on P2P firms for data and disclosure.

P2P firms in each district had to submit accounts monthly, quarterly and yearly to the bureaus. They also had to submit a database with details such as cash flow to the city Commission of Economy and Information, which reports to the central bank.

“The problem was, there was no time to do the analysis,” said a person who worked for more than a decade at the banking regulator and then at a P2P firm, who declined to be identified as she is not authorised to speak to the media.

“The authorities had no toolbox to supervise the firms; there was no offsite surveillance,” the person said. “This is why it all went wrong.”

Local agencies had tiny staffs compared with the CBIRC and the PBOC, according to one ex-regulator and a person at an internet regulatory body that oversees P2P. Both declined to be identified as they are not authorised to speak to the media.

The Shanghai CBIRC, for example, has about 300 people, sources familiar with the regulatory power said, while the local finance bureau had 16 to 39 at end of 2016, according to a 2017 study by Wang Chong, a central banker at PBOC’s Jinan branch.

The ex-regulator said some districts were completely unstaffed.

Hebei province – population 75 million – surrounds Beijing, but officials in the finance bureau there failed to respond to 200 reports and requests from Fincera, once the province’s largest P2P firm by loans, Fincera said in a statement to Reuters. The company has since left P2P lending.

The Hebei finance bureau did not respond to requests for comment.

In June and July, the province’s authorities asked all P2P firms to close, according to two notices seen by Reuters.

But in other provinces, and cities such as Beijing, P2P companies are still operating.

LACK OF TOOLS

In other countries, P2P has thrived as an alternative to bank lending.

The U.S., UK and Japan all have active P2P companies. According to an analysis by the Asian Development Bank Institute (ADBI), the UK regulatory framework has been the most successful at encouraging the industry.

In the U.S., P2P platforms loaned $1.5 billion in 2016, while UK firms loaned $1.8 billion. Japanese P2P lenders had $1.2 billion of outstanding loans in 2017, according to the report.

In the UK, P2P firms are assessed by the country’s top financial regulator, which focuses on engagement with the platforms, according to the 2019 ADBI paper. It provides feedback on their plans and runs a sandbox for testing new models, said the paper.

Ultimately, Chinese regulators are more concerned with social stability than the survival of P2Ps, industry insiders said.

“Top regulators don’t necessarily see the bigger picture,” said the banking regulator based in a northern city.

Mass protests, such as one in Beijing last year, are “likely to lead to the cutting-off of the whole industry,” the person said.

The CBIRC and PBOC didn’t respond to requests for comment. – Reuters


In China, P2P insiders say regulatory shortcomings have choked industry

BEIJING, Sept 6 — Overburdened Chinese regulators have left the peer-to-peer lending industry to poorly staffed local governments, according to ex-regulators, threatening the survival of an important credit mechanism once seen as crucial for the…


Utusan Melayu likely to be delisted tomorrow

PETALING JAYA: Utusan Melayu (Malaysia) Bhd is likely to be delisted tomorrow as it has not made an appeal to Bursa Securities.

The group had to make the appeal on or before August 27 to avert delisting following its Practice Note 17 (PN 17) status.

However, it said in a filing with the stock exchange that no appeal had been made.

Trading in its shares was suspended yesterday with last traded price of 5.5 sen.

Utusan Melayu became a PN 17 company in August last year after it defaulted on loan payments to Maybank Islamic and Bank Mualamat totaling RM1.18 million.

Due to cash flow constraints and the losses incurred in the first two quarters of the year, the group has not been able to meet the requirement to uplift the status.

In addition, it also failed to secure an investor to revive its business due to its huge debt burden amouting to RM139.19 million as at June 30, 2019.

In an effort to remain in operations, the group has increased the cover price for its Utusan Malaysia and Kosmo! by 50 sen, after nearly ceasing publications due to a strike by its employees over unpaid wages.

For the first half of 2019, Utusan Melayu reported a net loss of RM12.09 million against RM52.66 million in revenue.


TM among most active traded stocks as investors take profit

KUALA LUMPUR, Aug 29 — Telekom Malaysia Bhd's (TM) shares were among the most actively traded in the morning session today as investors booked profit from the recent rally in share prices and the company posting stronger second quarter financial…


India operations drag down AirAsia’s Q2 earnings

PETALING JAYA: AirAsia Group Bhd’s net profit for the second quarter ended June 30, 2019 fell 95% to RM17.94 million from RM361.81 million a year ago, primarily due to share of prior years’ losses at AirAsia India previously not recognised amounting to RM147 million.

In addition, there was an additional cost related to building up RedBeat Ventures entities, 105% higher maintenance and overhaul expenses due to higher maintenance provisions of RM160 million on the back of higher number of leased aircraft following the recent aircraft monetisation exercise as well as a RM10 million fine from the competition watchdog.

Its revenue was at RM3.14 billion, up 19.7% from RM2.62 billion, driven by an 18% increase in passengers carried to 12.8 million.

For the six-month period, AirAsia’s net profit plunged 92.7% to RM110.2 million from RM1.50 billion, while revenue rose 16.3% to RM6.02 billion from RM5.18 billion.

The low-cost carrier said positive operating cash flow (excluding operating lease) was generated in the first half of the year amounting to RM267 million.

AirAsia president (airlines) Bo Lingam said despite expanding capacity by 19%, load factor remained strong at 85%.

“In terms of profitability, we are excited to see the turnaround of AirAsia Indonesia and the improved performance of AirAsia Philippines. In Q219, AirAsia Indonesia returned to profitability, demonstrating strong operational results, including a 58% increase in passengers carried, a 6% increase in revenue per available seat kilometre (rask) and 16% decline in cost per available seat kilometre (cask).

“For AirAsia Philippines, profit after taxation in the second quarter increased more than eight fold following a 4ppts increase in load factor to 91%, a 22% increase in passengers carried and a 5% increase in rask. With our performance so far this year, we are positive on our target for all our Asean air operator’s certificate (AOCs) to be profitable this year,” he said in a statement.

AirAsia’s cask including fuel increased to 15.77 sen in Q2 19, 15% higher than 13.77 sen in Q2 18, mainly due to higher maintenance and overhaul provisions. Its costs were further put under pressure due to the depreciation of the ringgit and rupiah, which fell 4.5% and 1.3% against the greenback, respectively.

Speaking of the airline’s outlook, Lingam said the group has planned for a net fleet growth of 20 aircraft across six AOCs this year, with nine aircraft expected to be delivered to AirAsia India.

“We expect to receive in November our first A321neo, which is more fuel efficient, has a longer flight range range and holds an additional 50 seats worth of capacity. We are also working on driving down costs through our investments in digitalisation, which we believe will help reduce overall costs in the long run.”

He expects all Asean AOCs to be profitable for 2019, with a target group load factor of 85%.

To reduce risk to fuel price volatility, he said AirAsia has hedged a considerable amount of its fuel requirements.

“We have hedged 70-85% of 2H2019 requirements at US$60-62/bbl Brent prices and 69-82% of FY2020 requirements at US$60/bbl. We are also focused to recuperate AirAsia Thailand, which reported a loss in Q2 19 as it was negatively impacted by the sluggish growth of tourism and the baht appreciating, by recreating demand with more marketing.”