Love of cash hinders India’s move to digital economy

SATARA (India), Nov 14 — India’s dependency on cash may slow the country’s transition to digital payments despite large numbers of internet and mobile phone users. For many citizens living in rural areas, cash is still the bedrock of daily…

Urusharta Jamaah completed transfer of Tabung Haji assets on Dec 28 last year

PETALING JAYA: Urusharta Jamaah Sdn Bhd, a wholly owned subsidiary of the Ministry of Finance said it completed the transfer of non-performing assets held by Lembaga Tabung Haji (LTH) on Dec 28, 2018.

In a statement released today, Urusharta Jamaah said the transfer was done as part of LTH’s rescue and restructuring plan.

“This was done as a result of previous financial mismanagement and wrongdoings. The transaction above involved the transfer of assets with a market value of RM9.63 billion from LTH to Urusharta Jamaah in exchange for RM19.90 billion, consisting of 2 tranches of Sukuk totalling RM19.60 billion and RM300 million in cash payable to LTH,” it said.

“The difference of RM10.3 billion between the consideration of RM19.90 billion and RM9.63 billion market value of assets is to be borne by the government to ensure that the financial health of LTH is restored,” it added.

In the event the value of the assets depreciates further, then the losses for the government are estimated to be higher than RM10.3 billion.

Urusharta Jamaah further explained that the assets transferred to it consisted of a mixture of listed equity holdings, properties and one unlisted plantation asset.

The property assets transferred to Urusharta Jamaah include a 1.568-acre parcel of land at Tun Razak Exchange, which was purchased by LTH at RM188.5 million or RM2,760 per square foot (psf), significantly higher than that paid for by 1Malaysia Development Berhad (1MDB) at only RM75 psf or RM5.1 million.

“Urusharta Jamaah then purchased the TRX land from LTH at RM400 million or RM5,856 psf, which does not reflect the actual market value of the said land. The purchase consideration was done at a significant premium (112.2%) to what LTH paid in April 2015 (RM188.5 million or RM2,760 psf),” the statement said.

In a recent valuation exercise conducted in March 2019, the market value of the said TRX land stood at only RM205 million.

Urusharta Jamaah further noted that the huge difference between the market value and the purchase value of the land together with all the other assets it acquired was needed to ensure the successful rescue and restructuring plan of LTH.

“Overall, Urusharta Jamaah will bear significant losses as a result of impairment charges estimated at more than RM10 billion for the assets acquired from LTH. The TRX land transaction itself will result in an impairment charge of RM195 million.

“With the transfer of assets now completed, Urusharta Jamaah will continue with its mandate and purpose, which are to carry out the rehabilitation and restructuring of assets under its care; to maximise asset recovery value; and to redeem all monetary instruments issued by Urusharta Jamaah and subscribed by LTH in a timely manner,” it said.

US consumer prices increase more than expected in October

WASHINGTON, Nov 13 — US consumer prices rebounded more than expected in October and underlying inflation picked up, which together with abating trade tensions and fears of a recession, support the Federal Reserve’s signal for no further interest…

Govt to establish more cooperatives to help oil palm smallholders

KUALA LUMPUR, Nov 13 — The Primary Industries Ministry, through the Malaysian Palm Oil Board (MPOB), plans to establish more cooperatives for oil palm smallholders. Minister Teresa Kok Suh Sim said the idea is to encourage them to work together in…

Petronas Chemicals Q3 net profit drops to RM553m

KUALA LUMPUR, Nov 13 — Petronas Chemicals Group Bhd’s net profit for the third quarter ended September 30, 2019 dropped to RM553 million from RM1.21 billion recorded in the same period last year. Revenue fell to RM3.67 billion from RM4.83…

Malaysia’s Q3 GDP growth seen slowing to 4.4%

KUALA LUMPUR: Malaysia’s economic growth likely slowed in the third quarter as sluggish demand at home and abroad began to drag on activity after a solid first half, a Reuters poll showed.

The median forecast from the poll of 14 economists was for growth of 4.4% in July-September compared with a year earlier, slowing from 4.9% in the second quarter and 4.5% expansion in January-March.

Individual forecasts ranged from 4.1% to 4.7%.

Malaysia was the only Southeast Asian nation to report an acceleration in growth in the April-June period from the previous quarter, as the region grappled with softening global demand and the escalating U.S.-China trade war.

But weaker exports and domestic consumption started to drag on Southeast Asia’s third-largest economy in the last few months, according to economic research consultancy Capital Economics.

“The Malaysian economy has outperformed the rest of the region for most of this year but recent data suggest that it is coming to an end,” the firm said in a research note on Friday.

“The latest activity data have been poor… Our GDP Tracker, which is based on this monthly data, points to a fairly sharp slowdown in Q3,” said Capital Economics, which sees Q3 growth at 4.2%.

Malaysia’s exports fell 6.8% in September, the biggest decline in nearly three years and widening from a 0.8% contraction the previous month.

Factory output grew 1.7% in September, performing below expectations for a fourth straight month.

Domestic consumption has also cooled. Wholesale and retail activities grew 5.7% annually in the third quarter, down from 6.1% pace over April-June, according to data from the Malaysian Department of Statistics.

“High frequency indicators like business sentiment, consumer sentiment and motor vehicle sales slowed during the quarter indicating subdued domestic demand,” HSBC said in a note.

Malaysia’s central bank made a preemptive cut to its key interest rate in May in a bid to boost growth, but has since stood pat as it expects private spending to remain resilient and sufficient to offset pressure from weaker exports. – Reuters

Nissan slashes full-year forecast as first-half profit falls

YOKOHAMA, Nov 12 — Crisis-hit Japanese automaker Nissan today slashed its full-year sales and profit forecast as it struggles with weak demand in Japan, the US and Europe, as well as the arrest of former boss Carlos Ghosn. Nissan downgraded its…

Nissan reports 70% Q2 profit slump, misses estimates

YOKOHAMA: Nissan Motor Co Ltd on Tuesday reported a 70.4% fall in operating profit in the second quarter as the Japanese automaker continued to struggle with falling sales as it tries to recover from a scandal surrounding ousted Chairman Carlos Ghosn.

Profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($274.98 million) during the July-September period versus 101.2 billion yen a year earlier. The result compared with a mean forecast of 47.48 billion yen from nine analyst estimates compiled by Refinitiv.

Nissan, whose financial performance has been in the doldrums for nearly two years, cut its forecast for operating profit to tumble to 150 billion yen in the year through March 2020, from a previous forecast for 230 billion yen. – Reuters

Qantas to drop Sydney-Beijing route due to competition from Chinese carriers

SYDNEY: Qantas Airways Ltd said on Tuesday it is axing its underperforming Sydney-Beijing route from March due to stiff competition from Chinese airlines and weak business class demand.

The Australian carrier had relaunched the route in 2017 in its third attempt in 35 years to make it viable and had already lowered the number of weekly flights to five from seven in 2018.

It will maintain daily flights from Sydney to Shanghai, where it partners with hub carrier China Eastern Airlines Corp Ltd.

Qantas said since it had reintroduced the direct Sydney-Beijing services in 2017, capacity from Beijing to Australia on Chinese airlines had grown by around 20% and was expected to grow even further in 2020 at a time when broader international capacity to Australia was declining.

“Our flights to Beijing have been underperforming for some time due to weaker demand as well as a big increase in capacity from other airlines,” Qantas International Chief Executive Tino La Spina said in a statement.

“China is a significant market for Qantas and our direct services from and to Shanghai are performing well. With Beijing, we’re responding to what the market is telling us,” La Spina said.

Qantas said it would redeploy the Airbus SE A330 capacity it had been using on the route to elsewhere in Asia. – Reuters

Hong Kong officials fine UBS for overcharging clients

HONG KONG, Nov 12 ­— Swiss banking titan UBS has been fined US$51 million (RM211.3 million) by Hong Kong authorities for overcharging global customers for almost a decade, saying it had failed to “act in its clients’ best interests”. The…