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MoF: Increase in Fitch GDP growth projection due to steady rise in FDI

KUALA LUMPUR, Aug 20 — International Fitch Rating Agency has revised its 2019 gross domestic product (GDP) growth projection for Malaysia from 4.2 per cent to 4.6 per cent due to the steady rise in total foreign direct investment (FDI) in the…

Malaysia to set up ‘special channel’ to facilitate investments from China

KUALA LUMPUR: Malaysia plans to set up a “special channel” led by the Finance Ministry to facilitate more investments from China, said Finance Minister Lim Guan Eng.

The special channel, he said, will be able to double approved foreign direct investments (FDIs) in manufacturing from China to about RM8.8 billion from RM4.4 billion in the first quarter of this year.

“We should be able to use the existing institutions (to set up the channel).

“I think when I go to China for the investment mission, we will be fleshing out the details for the Chinese investors,” he said while confirming of his upcoming visit to Shenzhen later this month.

Lim met reporters after officiating at the Malaysia-China Belt and Road Economic Cooperation Forum 2019 here today.

On the Shenzhen’s investment mission, Lim said he is confident that Malaysia could offer itself as a safe haven for Chinese companies, particularly amid the intensifying trade war between the US and China.

“When we talk about the trade war, that is basically between the US and Shenzhen, a manufacturing and export market in China. Since the Chinese manufacturing investors are looking for a safe haven, I think we are able to offer it to them,” he said.

Lim also believes that Malaysia will be able to offer a more compatible mix in manufacturing as well as expertise to the Chinese investors.

“They are not very familiar with what Malaysia has to offer; in fact, what we can offer is the compatible mix. So we want to promote Malaysia and let the Chinese investors be aware that we are much better, not only in terms of manufacturing mix but also cost, compared to other countries,” he said.

Asked on updates surrounding issuance of Panda bonds, Lim said at the moment, the pricing is still not attractive enough for Malaysia to raise money from the bonds, but discussions on the matter are continuing.

“If there is any further announcement, we will make it later,” he added.

Govt bullish on Malaysia’s Q2 GDP prospects, says finance minister

KUALA LUMPUR, July 26 — The government is optimistic about the prospects of a sustainable gross domestic product (GDP) growth in the second quarter of this year (Q2 2019), said Finance Minister Lim Guan Eng. In a statement…

January-May fiscal deficit slashed by 39% to RM21.4b

PETALING JAYA: Malaysia has successfully cut its fiscal deficit by 39% to RM21.4 billion for the first five months of 2019, from a RM35 billion deficit recorded in the same period last year, according to Finance Minister Lim Guan Eng (pix).

The current account deficit saw a 94% or RM16 billion reduction to RM1.1 billion for the January-May period of 2019, against a large RM17.1 billion deficit in the same period last year.

With that, he said, the government is confident of achieving the fiscal deficit target of 3.4% of gross domestic product (GDP) this year while keeping the current account balance in surplus.

He believes that the 3% fiscal deficit target for next year is achievable, if not for the trade war between two of Malaysia’s largest trade partners, China and the US.

“The government is confident that the economy will expand sustainably this year and in 2020. The World Bank projects Malaysia to grow 4.6% for this year, and this is particularly so as Malaysia’s GDP growth remains robust despite the external challenges arising from the China-US trade war,” he said in a statement today.

Meanwhile, the government’s development expenditure has increased 13% or RM2.4 billion for the January-May period as a result of open competitive tenders and zero-based budgeting.

Lim said the government is mindful of its subsidy bill and will continue to manage its expenses prudently.

He said the successful fiscal consolidation were among the reasons for Fitch Ratings’ affirmation of Malaysia’s sovereign credit rating at “A-” with a stable outlook last Thursday, following S&P Global Ratings’ similar confirmation earlier this month.

He said fiscal discipline has been instituted through a combination of tighter controls over operating expenditure in the form of wider application of open competitive tender, and implementation of zero-based budgeting.

In addition, revenue and spending measures as outlined in Budget 2019 have enabled the government to improve its financial health.

As announced in Budget 2019, the government will spend RM259.9 billion on operational purposes this year. From January till May, the government has spent RM106.5 billion or 41% of the total operating expenditure budget.

Guan Eng: Malaysia expected to see sustained GDP growth in Q2 as IPI, exports grow

PUTRAJAYA, July 13 — The continued industrial production expansion in May as well as solid expansion in exports and domestic demand point towards sustained gross domestic growth (GDP) in the second quarter (Q2) of 2019, said the Finance Ministry….

M’sian capital market to step up cross-border cooperation with China

KUALA LUMPUR, July 5 — The Securities Commission Malaysia will facilitate closer collaboration between the Malaysian and Chinese capital markets to mutually benefit both economies, following its visit on July 4 to the Shenzhen Stock Exchange…

Highway takeover won’t burden govt’s finances, say economists

PETALING JAYA: While the government has given the assurance that it does not have to fork out a single sen for the proposed buyout of four toll highways in the country, there are concerns whether the congestion charge model will be sufficient to offset the whopping takeover sum of RM6.2 billion.

In case it does not, what would be the consequences to the overall economy of the country and the government’s financial position?

Generally, economists view the takeover offer as a positive move and would not hamper the government’s target of reducing the fiscal deficit to 3.4% to gross domestic product this year.

Finance Minister Lim Guan Eng has said that the RM6.2 billion buyout sum will be financed through the issuance of bonds and a special purpose vehicle (SPV) will be set up to facilitate the move.

Sunway University Business School Professor of Economics Dr Yeah Kim Leng explained that since it will only be an indirect contingent liability on the balance sheet if the SPV fails to service its debt, it will not be a burden on the government’s balance sheet.

Last Friday, Gamuda Bhd said it has decided to approve the takeover offer by the government to acquire its stake in four toll highways, namely Damansara-Puchong Highway (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (Smart).

With the proposed takeover, Lim said the government is expected to save RM5.3 billion in compensation payment to the concessionaire holders and the toll charges will be replaced with the congestion charge model with variable rates for peak period and off-peak period.

As the proposed takeover is done on a willing seller-willing buyer basis, Yeah believes that it will be a confidence boost to the market.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew dismissed the risk of the highway takeover cost to the government’s credit ratings.

“There is no risk of a downgrade on government credit ratings. While the takeover will require an immediate capital outlay, it is intended to shield the public from a toll hike.”

He explained that the payoff could be viewed as a net positive in the longer term as the government will no longer have to contend with compensation payments.

For this year, the freeze on toll hikes for all vehicles on 21 highways and the abolition of motocycle tolls is projected to cost the government RM994.43 million.

The government’s overall debt and liabilities stood at RM1.1 trillion or 75.4% of the gross domestic product (GDP) as at end-2018, partly due to a RM54.2 billion rise in direct government debt to RM741.0 billion from RM686.8 billion in the previous year.

Despite that, Lim said the government’s fiscal consolidation remains on track as it is targeting to cut the fiscal deficit from 3.7% in 2018 to below 3% by 2021. For 2019 and 2020, the fiscal deficit is expected to be 3.4% and 3%, respectively.

Gamuda accepts offer by MOF Inc

KUALA LUMPUR: Gamuda Bhd has accepted the proposed offer by the Minister of Finance (Incorporated) (MOF Inc) to purchase all of the group’s equity stake in four companies.

In a filing with Bursa Malaysia today, it said the companies were Kesas Sdn Bhd (Kesas), Sistem Penyuraian Trafik KL Barat Sdn Bhd (Sprint), Lingkaran Trans Kota Sdn Bhd (Litrak) and Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (Smart).

“The board of Gamuda will make the appropriate announcements in due course after the going through the relevant due process with its respective associated companies and joint venture company,“ it said.

Finance Minister Lim Guan Eng had recently announced that the government had made a RM6.2 billion bid to take over four concessions of toll highways, which could save taxpayers RM5.3 billion in compensation to the concessionaires.

Gamuda has a significant stake in all four highways.

Malaysia to maintain strong business relationship with China, Guan Eng says

KUALA LUMPUR, June 25 — Malaysia will maintain its strong business relationship with China and no Chinese investor will feel left out in this regard, says Finance Minister, Lim Guan Eng. Speaking to reporters at the Malaysia SME Business Summit…

KL shares lower amid profit-taking in overbought market

KUALA LUMPUR, June 24 — Bursa Malaysia ended today’s trading in the red as investors booked profits in an overbought market after a four-day rally. At close, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) decreased 6.10 points or 0.36 per…