Sunday, May 29, 2011
Wednesday, May 11, 2011
Govt Likely to Keep Price of RON 95 Petrol Stable
Wednesday May 11, 2011
By JAGDEV SINGH SIDHU
jagdev@thestar.com.my
KUALA LUMPUR: The increase in the price of sugar signalled the resumption of the subsidy rationalisation programme many thought was put on hold given the inflationary pressures felt by countries globally.
Economists said although prices for selected goods might rise, they expected the key determinant of inflation - the price of RON 95 petrol - to remain stable as efforts to keep a lid on inflation.
“It will be on a gradual basis,” said CIMB Investment Bank Bhd head of economics Lee Heng Guie on the subsidy rationalisation programme.
The price of coarse and fine sugar increased by 20 sen to RM2.30 per kilo yesterday, reducing the Government's subsidy for sugar to RM116.6mil from RM400mil per year.
If the Government maintains the price of RON 95, it will mean it is concerned about inflationary pressure, according to an economist
The increase yesterday was the first for this year but the fourth overall since the Government's subsidy rationalisation programme was put into effect. Sugar prices saw three increases last year of 20 sen in January, 25 sen in July and 20 sen in December.
Economists feel the move to cut subsidies was still needed given the use of such interventionist policy to keep prices and cost low during a time when inflation has become a thorn in the flesh for many countries.
Inflation in Malaysia hit 3% in March but was among the lowest in Asia where it had been the focus of many central banks. Interest rates have been raised in a number of Asian countries in recent months to stave off inflationary pressures.
For Malaysia, the consequence of cutting the subsidy on sugar and letting prices go up is not expected to have a direct impact on inflation.
Sugar is a constituent in the basket of goods which inflation is calculated from but does not have a big weightage.
Economists, however, wondered if the secondary effect from the higher price of sugar would filter through to a larger food segment should retailers and restaurants push up the price of drinks.
Economists said the willingness of the Government to keep RON 95 prices constant was commendable as fuel and energy costs will have a bigger impact on the rate of inflation.
“If the Government maintains the price of RON 95, it will mean it is concerned about inflationary pressure,” said Affin Investment Bank Bhd economist Alan Tan.
The price of RON 95 petrol, which is the preferred choice of fuel among motorists, have been kept steady at RM1.90 a litre in recent months despite global crude oil prices punching well above US$100 per barrel.
The Government has nonetheless matched the price of RON 97 petrol with that of international crude oil prices. The Government raised the price of RON 97 petrol by 20 sen a litre to RM2.90 a litre on May 5
http://biz.thestar.com.my/news/story.asp?file=/2011/5/11/business/8657461&sec=business
By JAGDEV SINGH SIDHU
jagdev@thestar.com.my
KUALA LUMPUR: The increase in the price of sugar signalled the resumption of the subsidy rationalisation programme many thought was put on hold given the inflationary pressures felt by countries globally.
Economists said although prices for selected goods might rise, they expected the key determinant of inflation - the price of RON 95 petrol - to remain stable as efforts to keep a lid on inflation.
“It will be on a gradual basis,” said CIMB Investment Bank Bhd head of economics Lee Heng Guie on the subsidy rationalisation programme.
The price of coarse and fine sugar increased by 20 sen to RM2.30 per kilo yesterday, reducing the Government's subsidy for sugar to RM116.6mil from RM400mil per year.
If the Government maintains the price of RON 95, it will mean it is concerned about inflationary pressure, according to an economist
The increase yesterday was the first for this year but the fourth overall since the Government's subsidy rationalisation programme was put into effect. Sugar prices saw three increases last year of 20 sen in January, 25 sen in July and 20 sen in December.
Economists feel the move to cut subsidies was still needed given the use of such interventionist policy to keep prices and cost low during a time when inflation has become a thorn in the flesh for many countries.
Inflation in Malaysia hit 3% in March but was among the lowest in Asia where it had been the focus of many central banks. Interest rates have been raised in a number of Asian countries in recent months to stave off inflationary pressures.
For Malaysia, the consequence of cutting the subsidy on sugar and letting prices go up is not expected to have a direct impact on inflation.
Sugar is a constituent in the basket of goods which inflation is calculated from but does not have a big weightage.
Economists, however, wondered if the secondary effect from the higher price of sugar would filter through to a larger food segment should retailers and restaurants push up the price of drinks.
Economists said the willingness of the Government to keep RON 95 prices constant was commendable as fuel and energy costs will have a bigger impact on the rate of inflation.
“If the Government maintains the price of RON 95, it will mean it is concerned about inflationary pressure,” said Affin Investment Bank Bhd economist Alan Tan.
The price of RON 95 petrol, which is the preferred choice of fuel among motorists, have been kept steady at RM1.90 a litre in recent months despite global crude oil prices punching well above US$100 per barrel.
The Government has nonetheless matched the price of RON 97 petrol with that of international crude oil prices. The Government raised the price of RON 97 petrol by 20 sen a litre to RM2.90 a litre on May 5
http://biz.thestar.com.my/news/story.asp?file=/2011/5/11/business/8657461&sec=business
Ringgit Higher on Strong Buying Interest
Published: 2011/05/11
The ringgit was traded higher against the US dollar in the early session today on strong buying interest for the domestic currency, dealers said.
At 9.04am, the ringgit was quoted at 2.9780/9811 per US dollar compared with 2.9880/9911 at yesterday's close.
The uptrend was in line with other Asian currencies as sentiments in the region were boosted by some positive earnings report from Japan and firming commodity prices, he said.
One dealer said the ringgit was also riding on the weakening of the greenback across the board.
Against other major currencies, the ringgit was traded higher.
The ringgit appreciated against the Singapore dollar to 2.4204/4248 from 2.4230/4274 yesterday, was higher against the British pound to 4.8741/8801 from 4.8899/8958 on Tuesday and rose against the euro to 4.2886/2934 from 4.2893/2949 yesterday.
However, the ringgit weakened against the Japanese yen to 3.6815/6863 from 3.7031/7083 yesterday. - Bernama
Read more: Ringgit higher on strong buying interest http://www.btimes.com.my/Current_News/BTIMES/articles/20110511102114/Article/index_html#ixzz1M19KWcP1
The ringgit was traded higher against the US dollar in the early session today on strong buying interest for the domestic currency, dealers said.
At 9.04am, the ringgit was quoted at 2.9780/9811 per US dollar compared with 2.9880/9911 at yesterday's close.
The uptrend was in line with other Asian currencies as sentiments in the region were boosted by some positive earnings report from Japan and firming commodity prices, he said.
One dealer said the ringgit was also riding on the weakening of the greenback across the board.
Against other major currencies, the ringgit was traded higher.
The ringgit appreciated against the Singapore dollar to 2.4204/4248 from 2.4230/4274 yesterday, was higher against the British pound to 4.8741/8801 from 4.8899/8958 on Tuesday and rose against the euro to 4.2886/2934 from 4.2893/2949 yesterday.
However, the ringgit weakened against the Japanese yen to 3.6815/6863 from 3.7031/7083 yesterday. - Bernama
Read more: Ringgit higher on strong buying interest http://www.btimes.com.my/Current_News/BTIMES/articles/20110511102114/Article/index_html#ixzz1M19KWcP1
Saturday, May 7, 2011
Takaful optimistic of sustaining 12pc growth
By Zurinna Raja Adam
Published: 2011/05/06
KUALA LUMPUR: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is optimistic of sustaining its average growth of between 12 per cent and 15 per cent this year, despite increased competition due to Bank Negara Malaysia issuing new takaful licences to four financial institutions in September last year.
Group managing director Datuk Hassan Kamil said Takaful Malaysia is a pioneer in the business and its objective has always been clear - to promote Islamic insurance.
"The new licences were given to players that are focused on conventional side. We have always been dedicated to takaful and that is our competitive edge," he said after the group's annual general meeting here yesterday.
Hassan said he is confident that its 15 per cent Mudharabah payment rate for group family takaful product will continue to propel the country's oldest takaful group to make further inroads in the industry.
Malaysia's takaful industry still lags behind its conventional peers in terms of total insurance market penetration and share. It is understood that the penetration rate for takaful industry in Malaysia is around 10 per cent, compared with 40 per cent for conventional insurance.
"We will launch at least two new products this year, namely investment-linked and retirement scheme products. We also aim to increase our agents to 2,000 by end of the year from about 1,000 now," he added.
Takaful Malaysia currently has about one million policy holders and it aims to increase its customer base by another 25 per cent by end of the year.
The group's assets stand at RM4.9 billion at group level against RM4.4 billion as at June 2009.
Hassan said Takaful Malaysia is currently not in talks with any foreign parties for a strategic tie-up but will gauge if potential partners are able to provide value added services to the company.
For the 18 months ended December 31 2010, the company posted RM57.7 million in net profit or a 42.7 per cent jump against RM40.5 million during the same period the year before.
Read more: Takaful optimistic of sustaining 12pc growth http://www.btimes.com.my/Current_News/BTIMES/articles/takiy/Article/#ixzz1LYlSLTQc
Published: 2011/05/06
KUALA LUMPUR: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is optimistic of sustaining its average growth of between 12 per cent and 15 per cent this year, despite increased competition due to Bank Negara Malaysia issuing new takaful licences to four financial institutions in September last year.
Group managing director Datuk Hassan Kamil said Takaful Malaysia is a pioneer in the business and its objective has always been clear - to promote Islamic insurance.
"The new licences were given to players that are focused on conventional side. We have always been dedicated to takaful and that is our competitive edge," he said after the group's annual general meeting here yesterday.
Hassan said he is confident that its 15 per cent Mudharabah payment rate for group family takaful product will continue to propel the country's oldest takaful group to make further inroads in the industry.
Malaysia's takaful industry still lags behind its conventional peers in terms of total insurance market penetration and share. It is understood that the penetration rate for takaful industry in Malaysia is around 10 per cent, compared with 40 per cent for conventional insurance.
"We will launch at least two new products this year, namely investment-linked and retirement scheme products. We also aim to increase our agents to 2,000 by end of the year from about 1,000 now," he added.
Takaful Malaysia currently has about one million policy holders and it aims to increase its customer base by another 25 per cent by end of the year.
The group's assets stand at RM4.9 billion at group level against RM4.4 billion as at June 2009.
Hassan said Takaful Malaysia is currently not in talks with any foreign parties for a strategic tie-up but will gauge if potential partners are able to provide value added services to the company.
For the 18 months ended December 31 2010, the company posted RM57.7 million in net profit or a 42.7 per cent jump against RM40.5 million during the same period the year before.
Read more: Takaful optimistic of sustaining 12pc growth http://www.btimes.com.my/Current_News/BTIMES/articles/takiy/Article/#ixzz1LYlSLTQc
Need for a refocus of transformation agenda
Friday May 6, 2011
KUALA LUMPUR: Budget 2012 may see a shift in emphasis to reforms under the New Economic Model (NEM) as opposed to the emphasis given to the National Key Economic Areas (NKEAs) projects under the current budget.
RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said there would be some finetuning in the transformation agenda as results from the implementation of the Economic Transformation Programme (ETP) became clearer.
“We should expect a shift to more foundation-building, especially transformational, measures and incentives that are fiscal and financial in nature,” he told a media briefing yesterday following a pre-Budget 2012 roundtable discussion among members of the Economic Council working group.
Yeah said the country’s economy was underperforming and stepping up implementation of NEM measures would ensure the economy move in the right direction, especially in luring more private-sector investments from locals and foreigners, which was a key strategy in lifting growth.
The ETP incorporates the NEM, which was announced by Prime Minister Datuk Seri Najib Razak last year, and the NKEAs, which included entry point projects identified for quicker implementation.
“There’s increasing consensus that we need to refocus the transformation agenda on the real stuff, which is to rebuild our competitive foundations,” Yeah said, adding that this was also the sentiment of the working group whose members included senior officials from both the public and private sectors.
On Wednesday, the Asian Development Bank said in a report titled “Asia 2050” that Malaysia had the potential to become one of seven economies that would drive growth in the region in the next 40 years but faced challenges if the country along with peers did not upgrade human capital as well as strengthen governance and institutional capacity.
“I think the Government does have a good sense of what the current concerns are over the implementation (of the NEM) measures,” Yeah said.
Investors, which had been sceptical of the pace of cross-cutting reforms under the NEM so far, could expect a more concerted budget that would help accelerate the transformation process, he said.
Yeah said if these concerns were addressed, then it would go a long way in building and reaffirming confidence in the public sector as the facilitator of the reforms. “We need to shift to a new business-friendly environment that actually leverages on all the key findings and challenges that have been covered in both the World Bank as well as other studies that have highlighted these concerns.”
Yeah said the gradual lowering of subsidies for fuel were some of the structural reforms that investors were looking for as spending could be directed at activities with greater multiplier effects while the remaining subsidies could be finetuned to target those who needed it.
“However, these kind of reforms will be more difficult to implement and we do expect a more gradual rolling-back of subsidies,” he said.
Meanwhile, Deputy Finance Minister Datuk Donald Lim Siang Chai said in Pasir Gudang that further reductions in the corporate and individual taxes would be included Budget 2012, which is expected to be tabled at Parliament on Oct 7. He said the reductions could be made once the implementation of the long-awaited goods and service tax (GST) took place in the country.
“There are more than 225 countries in the world that have already implemented the GST and Malaysia will have to do it sooner or later,’’ he told a press conference yesterday.
Lim said with the GST in place, the Government was hoping to reduce the country’s deficit level at 5% currently to between 2.8% and 3% by 2015.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8616841&sec=business
KUALA LUMPUR: Budget 2012 may see a shift in emphasis to reforms under the New Economic Model (NEM) as opposed to the emphasis given to the National Key Economic Areas (NKEAs) projects under the current budget.
RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said there would be some finetuning in the transformation agenda as results from the implementation of the Economic Transformation Programme (ETP) became clearer.
“We should expect a shift to more foundation-building, especially transformational, measures and incentives that are fiscal and financial in nature,” he told a media briefing yesterday following a pre-Budget 2012 roundtable discussion among members of the Economic Council working group.
Yeah said the country’s economy was underperforming and stepping up implementation of NEM measures would ensure the economy move in the right direction, especially in luring more private-sector investments from locals and foreigners, which was a key strategy in lifting growth.
The ETP incorporates the NEM, which was announced by Prime Minister Datuk Seri Najib Razak last year, and the NKEAs, which included entry point projects identified for quicker implementation.
“There’s increasing consensus that we need to refocus the transformation agenda on the real stuff, which is to rebuild our competitive foundations,” Yeah said, adding that this was also the sentiment of the working group whose members included senior officials from both the public and private sectors.
On Wednesday, the Asian Development Bank said in a report titled “Asia 2050” that Malaysia had the potential to become one of seven economies that would drive growth in the region in the next 40 years but faced challenges if the country along with peers did not upgrade human capital as well as strengthen governance and institutional capacity.
“I think the Government does have a good sense of what the current concerns are over the implementation (of the NEM) measures,” Yeah said.
Investors, which had been sceptical of the pace of cross-cutting reforms under the NEM so far, could expect a more concerted budget that would help accelerate the transformation process, he said.
Yeah said if these concerns were addressed, then it would go a long way in building and reaffirming confidence in the public sector as the facilitator of the reforms. “We need to shift to a new business-friendly environment that actually leverages on all the key findings and challenges that have been covered in both the World Bank as well as other studies that have highlighted these concerns.”
Yeah said the gradual lowering of subsidies for fuel were some of the structural reforms that investors were looking for as spending could be directed at activities with greater multiplier effects while the remaining subsidies could be finetuned to target those who needed it.
“However, these kind of reforms will be more difficult to implement and we do expect a more gradual rolling-back of subsidies,” he said.
Meanwhile, Deputy Finance Minister Datuk Donald Lim Siang Chai said in Pasir Gudang that further reductions in the corporate and individual taxes would be included Budget 2012, which is expected to be tabled at Parliament on Oct 7. He said the reductions could be made once the implementation of the long-awaited goods and service tax (GST) took place in the country.
“There are more than 225 countries in the world that have already implemented the GST and Malaysia will have to do it sooner or later,’’ he told a press conference yesterday.
Lim said with the GST in place, the Government was hoping to reduce the country’s deficit level at 5% currently to between 2.8% and 3% by 2015.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8616841&sec=business
Bank Negara Raises Key Interest Rate
Friday May 6, 2011
By FINTAN NG
fintan@thestar.com.my
PETALING JAYA: Bank Negara raised the overnight policy rate (OPR) by 25 basis points to 3% and increased the statutory reserve requirement (SRR) by 1 percentage point to 3%, a move that took most by surprise.
The OPR, the benchmark interest rate commercial banks use to calculate their base lending rates for loans, was last raised in July last year.
The central bank hiked the SRR by 100 basis points to 3% effective May 16 as a pre-emptive measure following the build-up of liquidity in the financial system.
“With the economy firmly on a steady growth path, the monetary policy committee decided to adjust the degree of monetary accommodation,” said the central bank in a statement yesterday.
“At the current OPR level, the stance of monetary policy remains supportive of growth. The future stance of monetary policy will depend on the assessment of the risk to growth and inflation prospects.”
Bank Negara acknowledged inflation, which has increased globally on account of higher energy and food prices, has inched up too in Malaysia and has now hit 3% in March to average 2.8% for the first quarter of 2011.
“Global commodity and energy prices are projected to remain elevated during the year, with inflation in major trading partners also expected to rise further. There are also some signs that domestic demand factors could exert upward pressure on prices in the second half of the year,” the central bank said.
However, it noted that despite higher inflationary pressure, latest indicators pointed towards continued strengthening of private investment and sustained private consumption expenditure in the first quarter.
“Growth will be underpinned by the firm expansion of domestic demand. Sustained employment conditions and income growth is expected to provide support to private consumption, while private investment is projected to strengthen amid the improved investment environment,” it added.
In a separate statement, the central bank said the decision to raise the SRR was undertaken as a pre-emptive measure to manage the significant build-up of liquidity, which could result in financial imbalances and create risks to financial stability.
Economists, who were divided over whether the OPR would be raised, told StarBiz that the central bank was sending out a message that inflation was now the concern instead of growth.
AmResearch Sdn Bhd senior economist Manokaran Mottain said policymakers were sending out the message that they were vigilant.
“They're acknowledging that inflation is putting pressure on the economy,” he said, adding that market consensus was for the OPR to remain unchanged with a Bloomberg survey showing that seven out of 16 economists expected the hike, with the rest expecting the OPR to remain the same.
Nevertheless, economists agreed with the central bank that the rate hikes were still supportive of growth with domestic demand now the focus.
CIMB Investment Bank Bhd head of economics Lee Heng Guie said there was likely to be another 25-basis point hike in the OPR in July but this, judging from the language of the Monetary Policy Committee statement, “will depend on risks to growth and inflationary prospects”.
Meanwhile Affin Investment Bank Bhd economist Alan Tan said the decision to raise the OPR was “a close call” as a lot of brokers expected interest rates to remain unchanged due to the strengthening ringgit.
“Going forward, the central bank is signalling that rising inflation will be of concern and that growth will come from domestic demand as external demand weakens,” he said.
Tan expects another 25-basis point hike before year-end as the central bank moved in tandem with regional peers in normalising interest rates and managing capital flows.
“The normalisation of the rates is important because the US Federal Reserve has indicated that there may be a hike in rates next year and if policymakers here keep rates low for a prolonged period, there's a risk of a capital outflow,” he said.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8618523&sec=business
By FINTAN NG
fintan@thestar.com.my
PETALING JAYA: Bank Negara raised the overnight policy rate (OPR) by 25 basis points to 3% and increased the statutory reserve requirement (SRR) by 1 percentage point to 3%, a move that took most by surprise.
The OPR, the benchmark interest rate commercial banks use to calculate their base lending rates for loans, was last raised in July last year.
The central bank hiked the SRR by 100 basis points to 3% effective May 16 as a pre-emptive measure following the build-up of liquidity in the financial system.
“With the economy firmly on a steady growth path, the monetary policy committee decided to adjust the degree of monetary accommodation,” said the central bank in a statement yesterday.
“At the current OPR level, the stance of monetary policy remains supportive of growth. The future stance of monetary policy will depend on the assessment of the risk to growth and inflation prospects.”
Bank Negara acknowledged inflation, which has increased globally on account of higher energy and food prices, has inched up too in Malaysia and has now hit 3% in March to average 2.8% for the first quarter of 2011.
“Global commodity and energy prices are projected to remain elevated during the year, with inflation in major trading partners also expected to rise further. There are also some signs that domestic demand factors could exert upward pressure on prices in the second half of the year,” the central bank said.
However, it noted that despite higher inflationary pressure, latest indicators pointed towards continued strengthening of private investment and sustained private consumption expenditure in the first quarter.
“Growth will be underpinned by the firm expansion of domestic demand. Sustained employment conditions and income growth is expected to provide support to private consumption, while private investment is projected to strengthen amid the improved investment environment,” it added.
In a separate statement, the central bank said the decision to raise the SRR was undertaken as a pre-emptive measure to manage the significant build-up of liquidity, which could result in financial imbalances and create risks to financial stability.
Economists, who were divided over whether the OPR would be raised, told StarBiz that the central bank was sending out a message that inflation was now the concern instead of growth.
AmResearch Sdn Bhd senior economist Manokaran Mottain said policymakers were sending out the message that they were vigilant.
“They're acknowledging that inflation is putting pressure on the economy,” he said, adding that market consensus was for the OPR to remain unchanged with a Bloomberg survey showing that seven out of 16 economists expected the hike, with the rest expecting the OPR to remain the same.
Nevertheless, economists agreed with the central bank that the rate hikes were still supportive of growth with domestic demand now the focus.
CIMB Investment Bank Bhd head of economics Lee Heng Guie said there was likely to be another 25-basis point hike in the OPR in July but this, judging from the language of the Monetary Policy Committee statement, “will depend on risks to growth and inflationary prospects”.
Meanwhile Affin Investment Bank Bhd economist Alan Tan said the decision to raise the OPR was “a close call” as a lot of brokers expected interest rates to remain unchanged due to the strengthening ringgit.
“Going forward, the central bank is signalling that rising inflation will be of concern and that growth will come from domestic demand as external demand weakens,” he said.
Tan expects another 25-basis point hike before year-end as the central bank moved in tandem with regional peers in normalising interest rates and managing capital flows.
“The normalisation of the rates is important because the US Federal Reserve has indicated that there may be a hike in rates next year and if policymakers here keep rates low for a prolonged period, there's a risk of a capital outflow,” he said.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8618523&sec=business
Oil price improves slightly to US$100.23 in Asia Friday(update)
Published: Friday May 6, 2011 MYT 7:34:00 AM
Updated: Friday May 6, 2011 MYT 2:59:03 PM
SINGAPORE: Oil prices inched above $100 a barrel Friday in Asia, consolidating after a sharp drop in the previous session amid investor concern a weak U.S. jobs market may undermine crude demand.
Benchmark crude for June delivery was up 43 cents at $100.23 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for June delivery was up $1.10 to $111.90 a barrel on the ICE Futures exchange.
The contract plunged $9.44 to settle at $99.80 on Thursday because of signs U.S. economic growth is slowing. The Labor Department said that first-time claims for unemployment benefits rose to 474,000 last week, the highest level in eight months.
Investors will be closely watching the government's non-farm payroll numbers scheduled to be released later Friday. Economists forecast that employers added 185,000 workers in April and the unemployment rate is expected to remain unchanged at 8.8 percent.
Oil has retreated after gaining 35 percent from February to reach $114 last week. Other commodities that had jumped in recent months, such as gold and silver, have also seen steep declines this week.
"Downward momentum has accelerated during the past couple of days due to disappointing economic releases," Ritterbusch and Associates said in a report.
A stronger dollar, which makes oil more expensive for investors with other currencies, also helped push crude prices down.
Some analysts expect oil to resume its rise as political unrest in the Middle East and North Africa could spread and threaten to disrupt crude supplies in the oil-rich region.
"Those geopolitical risks have not disappeared," said Victor Shum, an analyst with energy consultancy Purvin & Gertz in Singapore. "I think the up trend over the long term is still in tact, and what we saw yesterday was a big bump in the road."
In other Nymex trading in June contracts, heating oil rose 3.3 cents to $2.92 a gallon and gasoline gained 3.4 cents to $3.13 a gallon. Natural gas futures were down 0.3 cent at $4.26 per 1,000 cubic feet. - AP
Earlier report
Oil plunges 9% to US$100 per barrel
NEW YORK: Oil plunged nearly 9 percent to settle below US$100 per barrel. Investors who had ridden a months-long rally fled the market Thursday because of concerns about weakening demand for fuel in the U.S.
The decline of $9.44 per barrel, or 8.6 percent, brings the week's loss for oil to $14.13, or 12.4 percent. Other commodities like silver and cotton have plunged as well.
Oil rose 35 percent from mid-February through the end of April. As it climbed above $100, economists warned that high fuel prices were taking a toll on the U.S. economy. Gasoline demand starting falling in March as motorists paid more at the pump; that trend was reinforced by industry and government studies released this week. On Thursday, worries about the job market ahead of Friday's key employment report added to concerns about fuel demand.
"More and more people were saying that oil was just too high," said Michael Lynch, president of Strategic Energy & Economic Research. "That got a lot of investors ready to run for the door. That's what they're doing now."
A higher dollar also contributed to Thursday's sell-off. Benchmark West Texas Intermediate crude for June settled at $99.80 per barrel on the New York Mercantile Exchange. That's the lowest settlement since March 16. Oil last had a one-day percentage decline this big on April 20, 2009. Back then a barrel of oil cost less than half as much as it does now.
Analysts also said the lack of any terrorist retaliation of the killing of Osama bin Laden eased concerns about the safety of the world's oil fields.
Oil and other commodities have been on a roll since around Labor Day, when the Federal Reserve indicated it would take more steps to boost the U.S. economy. The Fed's announced a plan to buy back $600 billion in Treasury bonds. The move effectively lowered interest rates but also weakened the dollar and unleashed inflation fears. Investors poured that extra money into oil, precious and base metals and grains.
This year, uprisings in Libya and the Middle East gave a further lift to energy markets.
This week investors have reversed those bets on commodities and locked in profits.
The plunge in oil may be enough to keep pump prices from reaching a national average of $4 per gallon. Retail gasoline has surged 30 percent this year. It's risen for 44 consecutive days to $3.985 per gallon.
Fred Rozell, retail pricing director at Oil Price Information Service, a private research and consulting firm, said the national average probably won't get to $4 per gallon.
"I wouldn't be surprised if we dropped to about $3.50 by the middle of June," Rozell said.
Expensive fuel bills can crimp customers' spending habits. Earlier in the week, reports from MasterCard SpendingPulse and the Energy Department showed that Americans bought less gas in the final week of April.
On Thursday, some retailers warned that soaring gasoline prices are starting to cut into the spending power of lower-income customers who were already on tight budgets. Also, the government said that the number of people applying for unemployment benefits reached an eight-month high. Distress in the job market depresses gasoline demand, analysts say, because large numbers of Americans drive to work.
"Commuters are the bedrock of gasoline demand," Cameron Hanover analyst Peter Beutel said. When people lose jobs, "you're killing the best part of that demand - the part that will always be there as long as someone has a job."
Companies feel the squeeze of high oil prices as well. Four of the nation's top airlines combined to lose $1 billion in the first quarter, largely because of the high price of jet fuel.
Other energy futures fell sharply as well. Heating oil fell 25.61 cents to settle at $2.8869 per gallon and gasoline futures lost 22.71 cents to settle at $3.0954 per gallon. Natural gas gave up 31.3 cents to settle at $4.331 per 1,000 cubic feet.
In London, Brent crude lost $10.39 to settle at $110.80 per barrel on the ICE Futures exchange.
The U.S. dollar rose strongly against the euro Thursday after the European Central Bank's president declined to signal that interest rates would rise again next month. Oil, which is traded in dollars, tends to fall as the greenback rises and makes crude barrels more expensive for investors holding foreign money. - AP
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/20110506074431&sec=business
Updated: Friday May 6, 2011 MYT 2:59:03 PM
SINGAPORE: Oil prices inched above $100 a barrel Friday in Asia, consolidating after a sharp drop in the previous session amid investor concern a weak U.S. jobs market may undermine crude demand.
Benchmark crude for June delivery was up 43 cents at $100.23 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for June delivery was up $1.10 to $111.90 a barrel on the ICE Futures exchange.
The contract plunged $9.44 to settle at $99.80 on Thursday because of signs U.S. economic growth is slowing. The Labor Department said that first-time claims for unemployment benefits rose to 474,000 last week, the highest level in eight months.
Investors will be closely watching the government's non-farm payroll numbers scheduled to be released later Friday. Economists forecast that employers added 185,000 workers in April and the unemployment rate is expected to remain unchanged at 8.8 percent.
Oil has retreated after gaining 35 percent from February to reach $114 last week. Other commodities that had jumped in recent months, such as gold and silver, have also seen steep declines this week.
"Downward momentum has accelerated during the past couple of days due to disappointing economic releases," Ritterbusch and Associates said in a report.
A stronger dollar, which makes oil more expensive for investors with other currencies, also helped push crude prices down.
Some analysts expect oil to resume its rise as political unrest in the Middle East and North Africa could spread and threaten to disrupt crude supplies in the oil-rich region.
"Those geopolitical risks have not disappeared," said Victor Shum, an analyst with energy consultancy Purvin & Gertz in Singapore. "I think the up trend over the long term is still in tact, and what we saw yesterday was a big bump in the road."
In other Nymex trading in June contracts, heating oil rose 3.3 cents to $2.92 a gallon and gasoline gained 3.4 cents to $3.13 a gallon. Natural gas futures were down 0.3 cent at $4.26 per 1,000 cubic feet. - AP
Earlier report
Oil plunges 9% to US$100 per barrel
NEW YORK: Oil plunged nearly 9 percent to settle below US$100 per barrel. Investors who had ridden a months-long rally fled the market Thursday because of concerns about weakening demand for fuel in the U.S.
The decline of $9.44 per barrel, or 8.6 percent, brings the week's loss for oil to $14.13, or 12.4 percent. Other commodities like silver and cotton have plunged as well.
Oil rose 35 percent from mid-February through the end of April. As it climbed above $100, economists warned that high fuel prices were taking a toll on the U.S. economy. Gasoline demand starting falling in March as motorists paid more at the pump; that trend was reinforced by industry and government studies released this week. On Thursday, worries about the job market ahead of Friday's key employment report added to concerns about fuel demand.
"More and more people were saying that oil was just too high," said Michael Lynch, president of Strategic Energy & Economic Research. "That got a lot of investors ready to run for the door. That's what they're doing now."
A higher dollar also contributed to Thursday's sell-off. Benchmark West Texas Intermediate crude for June settled at $99.80 per barrel on the New York Mercantile Exchange. That's the lowest settlement since March 16. Oil last had a one-day percentage decline this big on April 20, 2009. Back then a barrel of oil cost less than half as much as it does now.
Analysts also said the lack of any terrorist retaliation of the killing of Osama bin Laden eased concerns about the safety of the world's oil fields.
Oil and other commodities have been on a roll since around Labor Day, when the Federal Reserve indicated it would take more steps to boost the U.S. economy. The Fed's announced a plan to buy back $600 billion in Treasury bonds. The move effectively lowered interest rates but also weakened the dollar and unleashed inflation fears. Investors poured that extra money into oil, precious and base metals and grains.
This year, uprisings in Libya and the Middle East gave a further lift to energy markets.
This week investors have reversed those bets on commodities and locked in profits.
The plunge in oil may be enough to keep pump prices from reaching a national average of $4 per gallon. Retail gasoline has surged 30 percent this year. It's risen for 44 consecutive days to $3.985 per gallon.
Fred Rozell, retail pricing director at Oil Price Information Service, a private research and consulting firm, said the national average probably won't get to $4 per gallon.
"I wouldn't be surprised if we dropped to about $3.50 by the middle of June," Rozell said.
Expensive fuel bills can crimp customers' spending habits. Earlier in the week, reports from MasterCard SpendingPulse and the Energy Department showed that Americans bought less gas in the final week of April.
On Thursday, some retailers warned that soaring gasoline prices are starting to cut into the spending power of lower-income customers who were already on tight budgets. Also, the government said that the number of people applying for unemployment benefits reached an eight-month high. Distress in the job market depresses gasoline demand, analysts say, because large numbers of Americans drive to work.
"Commuters are the bedrock of gasoline demand," Cameron Hanover analyst Peter Beutel said. When people lose jobs, "you're killing the best part of that demand - the part that will always be there as long as someone has a job."
Companies feel the squeeze of high oil prices as well. Four of the nation's top airlines combined to lose $1 billion in the first quarter, largely because of the high price of jet fuel.
Other energy futures fell sharply as well. Heating oil fell 25.61 cents to settle at $2.8869 per gallon and gasoline futures lost 22.71 cents to settle at $3.0954 per gallon. Natural gas gave up 31.3 cents to settle at $4.331 per 1,000 cubic feet.
In London, Brent crude lost $10.39 to settle at $110.80 per barrel on the ICE Futures exchange.
The U.S. dollar rose strongly against the euro Thursday after the European Central Bank's president declined to signal that interest rates would rise again next month. Oil, which is traded in dollars, tends to fall as the greenback rises and makes crude barrels more expensive for investors holding foreign money. - AP
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/20110506074431&sec=business
EPF to buy Rubber Research Institute land for RM3bil
Friday May 6, 2011
By YAP LENG KUEN
lengkuen@thestar.com.my
PETALING JAYA: The acquisition of the 3,000 acres of Rubber Research Institute Malaysia (RRIM) land in Sungai Buloh is expected to cost RM3bil, sources said.
The signing between the purchaser, the Employees Provident Fund (EPF), and the Government is expected to be held in the near future, the sources said, adding that the development project would be carried out for the next 10 to 15 years.
“It will be a mixed development with commercial and a focus on affordable housing,'' a source told StarBiz.
According to the sources, the EPF will have a master plan where it will allocate a few parcels and allow property developers to bid for those parcels; some parcels will be operated on a joint-venture basis while others may be sold outright via bids.
“It will be systematically and properly done,'' said the source.
The EPF has formed a company under Kwasa Land Sdn Bhd to be the master developer for the RRIM land in Sungai Buloh.
The former head of property investment at the EPF, Mohamad Lotfy Mohamad Noh, has been appointed the managing director of Kwasa.
The development, which is estimated at RM10bil, is likely to feature a big linear park, green lungs, open spaces, walkways and water bodies. It will incorporate information technology and data infrastructure (MSC city status) and urban transportation integration.
This development will also house the depot for the upcoming mass rapid transit system. Dubbed the new hub of the Klang Valley, the development is expected to attract RM5bil in investments.
The EPF aims to increase the contribution from property to 5% from 2% currently. Under its gross investment income, property and miscellaneous income last year rose to RM103.18mil from RM87.85mil the previous year. Total gross investment income last year reached RM24.06bil from RM17.22bil previously.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8620011&sec=business
By YAP LENG KUEN
lengkuen@thestar.com.my
PETALING JAYA: The acquisition of the 3,000 acres of Rubber Research Institute Malaysia (RRIM) land in Sungai Buloh is expected to cost RM3bil, sources said.
The signing between the purchaser, the Employees Provident Fund (EPF), and the Government is expected to be held in the near future, the sources said, adding that the development project would be carried out for the next 10 to 15 years.
“It will be a mixed development with commercial and a focus on affordable housing,'' a source told StarBiz.
According to the sources, the EPF will have a master plan where it will allocate a few parcels and allow property developers to bid for those parcels; some parcels will be operated on a joint-venture basis while others may be sold outright via bids.
“It will be systematically and properly done,'' said the source.
The EPF has formed a company under Kwasa Land Sdn Bhd to be the master developer for the RRIM land in Sungai Buloh.
The former head of property investment at the EPF, Mohamad Lotfy Mohamad Noh, has been appointed the managing director of Kwasa.
The development, which is estimated at RM10bil, is likely to feature a big linear park, green lungs, open spaces, walkways and water bodies. It will incorporate information technology and data infrastructure (MSC city status) and urban transportation integration.
This development will also house the depot for the upcoming mass rapid transit system. Dubbed the new hub of the Klang Valley, the development is expected to attract RM5bil in investments.
The EPF aims to increase the contribution from property to 5% from 2% currently. Under its gross investment income, property and miscellaneous income last year rose to RM103.18mil from RM87.85mil the previous year. Total gross investment income last year reached RM24.06bil from RM17.22bil previously.
http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8620011&sec=business
Nod unlikely for private firm in RHB
Monday April 25, 2011
By YAP LENG KUEN
lengkuen@thestar.com.my
Lack of synergy, EON Bank-Primus affair likely to influence Bank Negara decision
PETALING JAYA: Bank Negara is believed not likely to approve the entry of a private equity firm into RHB Capital Bhd, the fourth largest banking group, following the troubled history of Hong-Kong based Primus Pacific Partners at EON Bank.
“There is no synergy between private equity and banks,'' said a source.
Reuters reported last week that the Carlyle group and TPG Capital were making a joint-bid for a US$1.5bil stake in RHB Capital.
Primus is currently embroiled in a court battle in which Ng Wing Fai of Primus, which owns 20.2% of EON Capital Bhd, is challenging the other directors on their decision to table the takeover bid (which Primus considers undervalued) from Hong Leong Bank to shareholders.
The court judgement will be made known by the end of this month.
EON Capital has been rocked by a series of disgreements among shareholders with Ng and Rin Kei Mei ending on opposing sides and issues with Bank Negara such as non-subscription of bonds by Primus.
Abu Dhabi Commercial Bank (ADCB), the 25% investor in RHB Capital, has engaged Goldman Sachs and Bank of America-Merrill Lynch to run the action for the sale of its stake.
TPG has an Indonesian arm, TP Nusantara which currently owns 59.7% of Bank Tabungan Pensiun Nasional; TPG plays an active role in the management of the bank which has done well since the purchase in 2008, said HwangDBS Vickers Research senior analyst Lim Sue Lin.
“If that is true, TPG may like RHB for its value and sustainable business model,'' she said, noting that over the last three to four years, the banking group had been able to grow on its own with a proven business model.
Analysts will not discount the possibility that CIMB may be interested in the stake in RHB although they see duplication within the two banking groups.
“Any consolidation will be more for size,'' said a senior analyst, adding that a merger between CIMB and RHB would create the fourth largest bank in Asean by assets.
However, analysts caution that there could be another round of voluntary separation scheme (VSS) should CIMB merge with RHB.
CIMB has voiced its ambition of being among the top three banks in South-East Asia by market capitalisation, positions currently held by Singapore banks DBS, OCBC and UOB.
“If it happens, the benefits are likely at the consumer banking level,'' said another senior analyst, adding that RHB has higher retail deposits and CIMB will be able to leverage on the “Easy'' banking concept based on lower costs, speed of approval and convenience.
RHB has hired 500 new staff for its 150 Easy outlets, targeted to reach 270 by year-end.
Some analysts recall that Maybank was said to be keen on RHB a few years back but are unsure of its interest now,
However, one analyst opined that Maybank might need more time to digest its expensive acquisition of Bank Internasional Indonesia which has yet to contribute strongly to group results.
Analysts are keenly watching for developments in the reported interests of DBS owned by Singapore's Temasek which, in turn, holds 14.8% of Alliance Financial Group (AFG) and Australia and New Zealand Banking Group (ANZ) which owns 24% of AMMB.
So far, foreign banks like ADCB and Bank of East Asia are holding 25% each in RHB Capital and Affin respectively while ANZ's investment is up to 25% in AMMB.
While the limit on foreign shareholding in local banking groups is 30%, there has yet to be a precedent, an analyst observed.
“If ANZ were to acquire a stake in RHB, it would need to merge AMMB with RHB,'' said Lim in a research note last Friday.
Noting that ANZ has expressed its interest to take a larger stake in AMMB, “even though the threshold for foreign shareholding remains capped at 30%, total returns as a shareholder would be larger for ANZ in an enlarged AMMB-RHB Capital scenario,'' said Lim.
Should DBS buy the RHB stake, it is unclear if AFG will be merged with RHB or Temasek will sell off its stake in AFG, as investors can only hold one banking licence.
Hwang DBS said in its regional industry focus that Malaysian banks were currently preferred over those in Thailand and Indonesia, with excitement driven by mergers and acquisitions.
“The target banks will benefit from input the potential stakeholders could bring to the table to improve standalone value propositions,'' said Lim in the report dated April 14.
According to Hwang DBS, the AMMB-ANZ alliance has proven to be the most successful foreign strategic shareholding tie-up to date.
It noted that the new management had implemented new risk management and risk scoring systems; made AMMB more flexible to adjust to interest rate hikes; improved its deposit franchise (particularly low cost deposits) and created additional sources of revenue flows from treasury and derivatives.
“These initiatives led AMMB's net profit to grow from RM670mil in financial year (FY) 2008 (when ANZ became shareholder) to RM1.1bil in FY10,” the report said.
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8541425&sec=business
By YAP LENG KUEN
lengkuen@thestar.com.my
Lack of synergy, EON Bank-Primus affair likely to influence Bank Negara decision
PETALING JAYA: Bank Negara is believed not likely to approve the entry of a private equity firm into RHB Capital Bhd, the fourth largest banking group, following the troubled history of Hong-Kong based Primus Pacific Partners at EON Bank.
“There is no synergy between private equity and banks,'' said a source.
Reuters reported last week that the Carlyle group and TPG Capital were making a joint-bid for a US$1.5bil stake in RHB Capital.
Primus is currently embroiled in a court battle in which Ng Wing Fai of Primus, which owns 20.2% of EON Capital Bhd, is challenging the other directors on their decision to table the takeover bid (which Primus considers undervalued) from Hong Leong Bank to shareholders.
The court judgement will be made known by the end of this month.
EON Capital has been rocked by a series of disgreements among shareholders with Ng and Rin Kei Mei ending on opposing sides and issues with Bank Negara such as non-subscription of bonds by Primus.
Abu Dhabi Commercial Bank (ADCB), the 25% investor in RHB Capital, has engaged Goldman Sachs and Bank of America-Merrill Lynch to run the action for the sale of its stake.
TPG has an Indonesian arm, TP Nusantara which currently owns 59.7% of Bank Tabungan Pensiun Nasional; TPG plays an active role in the management of the bank which has done well since the purchase in 2008, said HwangDBS Vickers Research senior analyst Lim Sue Lin.
“If that is true, TPG may like RHB for its value and sustainable business model,'' she said, noting that over the last three to four years, the banking group had been able to grow on its own with a proven business model.
Analysts will not discount the possibility that CIMB may be interested in the stake in RHB although they see duplication within the two banking groups.
“Any consolidation will be more for size,'' said a senior analyst, adding that a merger between CIMB and RHB would create the fourth largest bank in Asean by assets.
However, analysts caution that there could be another round of voluntary separation scheme (VSS) should CIMB merge with RHB.
CIMB has voiced its ambition of being among the top three banks in South-East Asia by market capitalisation, positions currently held by Singapore banks DBS, OCBC and UOB.
“If it happens, the benefits are likely at the consumer banking level,'' said another senior analyst, adding that RHB has higher retail deposits and CIMB will be able to leverage on the “Easy'' banking concept based on lower costs, speed of approval and convenience.
RHB has hired 500 new staff for its 150 Easy outlets, targeted to reach 270 by year-end.
Some analysts recall that Maybank was said to be keen on RHB a few years back but are unsure of its interest now,
However, one analyst opined that Maybank might need more time to digest its expensive acquisition of Bank Internasional Indonesia which has yet to contribute strongly to group results.
Analysts are keenly watching for developments in the reported interests of DBS owned by Singapore's Temasek which, in turn, holds 14.8% of Alliance Financial Group (AFG) and Australia and New Zealand Banking Group (ANZ) which owns 24% of AMMB.
So far, foreign banks like ADCB and Bank of East Asia are holding 25% each in RHB Capital and Affin respectively while ANZ's investment is up to 25% in AMMB.
While the limit on foreign shareholding in local banking groups is 30%, there has yet to be a precedent, an analyst observed.
“If ANZ were to acquire a stake in RHB, it would need to merge AMMB with RHB,'' said Lim in a research note last Friday.
Noting that ANZ has expressed its interest to take a larger stake in AMMB, “even though the threshold for foreign shareholding remains capped at 30%, total returns as a shareholder would be larger for ANZ in an enlarged AMMB-RHB Capital scenario,'' said Lim.
Should DBS buy the RHB stake, it is unclear if AFG will be merged with RHB or Temasek will sell off its stake in AFG, as investors can only hold one banking licence.
Hwang DBS said in its regional industry focus that Malaysian banks were currently preferred over those in Thailand and Indonesia, with excitement driven by mergers and acquisitions.
“The target banks will benefit from input the potential stakeholders could bring to the table to improve standalone value propositions,'' said Lim in the report dated April 14.
According to Hwang DBS, the AMMB-ANZ alliance has proven to be the most successful foreign strategic shareholding tie-up to date.
It noted that the new management had implemented new risk management and risk scoring systems; made AMMB more flexible to adjust to interest rate hikes; improved its deposit franchise (particularly low cost deposits) and created additional sources of revenue flows from treasury and derivatives.
“These initiatives led AMMB's net profit to grow from RM670mil in financial year (FY) 2008 (when ANZ became shareholder) to RM1.1bil in FY10,” the report said.
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8541425&sec=business
Stronger-ringgit winners
Monday April 25, 2011
By DAVID TAN
davidtan@thestar.com.my
Consumer goods retailers, manufacturers are benefiting from the impact
GEORGE TOWN: The strong ringgit has positive impact on local consumer products retailers and brand-name manufacturers' earnings and sales both directly and indirectly.
Pensonic managing director Dixon Chew told StarBiz that a strong ringgit meant that the cost of importing raw materials was reduced, which helped offset the rising price of raw materials.
“Thus, we are able to manufacture more cost effectively and at the same time maintain the competitive pricing of our products without adversely affecting our margins.
Chew said this could be one of the reasons why its electronic and electrical kitchen appliances' sales continued to be strong after the Chinese New Year.
Star Electronics managing director Joseph Hon said the company's margins had improved due to the promotions and incentives given by the manufacturers of consumer electronic and electrical products.
“Since they are now able to lower their production cost due to stronger ringgit, we also have been getting more attractive incentives and promotions which translate into improved margins. For the first three months of this year, our net profit improved by about 15% compared with same corresponding period a year ago.
Hon said the company would establish three more outlets in the northern region to strengthen its market share in the second half of 2011, which would increase the number of outlets in the north to 22 from 19 at present.
The recently released Business Monitor International Malaysia Retail Report forecasts that total retail sales will grow from RM168.72bil (US$47.90bil) in 2011 to RM284bil (US$80.63bil) by 2015. In 2010, the total retail sales in Malaysia was RM153.76bil.
Courts MalaysiaSdn Bhd country director Chris Yong said the company planned to spend about RM11mil this year on store expansion and refurbishment.
The Germany-based GFK report had forecast a 7% growth for the Malaysia retail segment this year, but Courts anticipated a much faster rate.
OCBC Bank (Malaysia) Bhd emerging business head Wong Chee Seng said for the first quarter of 2011, the bank achieved a high double-digit percentage growth in small and medium enterprises (SMEs) loans against the previous corresponding period.
“Retail businesses are more likely to be affected by domestic market developmentssuch as the gradual uplifting ofgovernment subsidies onoil pricesand other commodities, and costlier financing due torising interest ratesduring the course of 2011,” he said.
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8525839&sec=business
By DAVID TAN
davidtan@thestar.com.my
Consumer goods retailers, manufacturers are benefiting from the impact
GEORGE TOWN: The strong ringgit has positive impact on local consumer products retailers and brand-name manufacturers' earnings and sales both directly and indirectly.
Pensonic managing director Dixon Chew told StarBiz that a strong ringgit meant that the cost of importing raw materials was reduced, which helped offset the rising price of raw materials.
“Thus, we are able to manufacture more cost effectively and at the same time maintain the competitive pricing of our products without adversely affecting our margins.
Chew said this could be one of the reasons why its electronic and electrical kitchen appliances' sales continued to be strong after the Chinese New Year.
Star Electronics managing director Joseph Hon said the company's margins had improved due to the promotions and incentives given by the manufacturers of consumer electronic and electrical products.
“Since they are now able to lower their production cost due to stronger ringgit, we also have been getting more attractive incentives and promotions which translate into improved margins. For the first three months of this year, our net profit improved by about 15% compared with same corresponding period a year ago.
Hon said the company would establish three more outlets in the northern region to strengthen its market share in the second half of 2011, which would increase the number of outlets in the north to 22 from 19 at present.
The recently released Business Monitor International Malaysia Retail Report forecasts that total retail sales will grow from RM168.72bil (US$47.90bil) in 2011 to RM284bil (US$80.63bil) by 2015. In 2010, the total retail sales in Malaysia was RM153.76bil.
Courts MalaysiaSdn Bhd country director Chris Yong said the company planned to spend about RM11mil this year on store expansion and refurbishment.
The Germany-based GFK report had forecast a 7% growth for the Malaysia retail segment this year, but Courts anticipated a much faster rate.
OCBC Bank (Malaysia) Bhd emerging business head Wong Chee Seng said for the first quarter of 2011, the bank achieved a high double-digit percentage growth in small and medium enterprises (SMEs) loans against the previous corresponding period.
“Retail businesses are more likely to be affected by domestic market developmentssuch as the gradual uplifting ofgovernment subsidies onoil pricesand other commodities, and costlier financing due torising interest ratesduring the course of 2011,” he said.
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8525839&sec=business
Govt targets more domestic investments
Monday April 25, 2011
By DAVID TAN
davidtan@thestar.com.my
It will make up 50% of spending for manufacturing sector
GEORGE TOWN: The Government is targeting some 50% of the total investment for the manufacturing sector this year to come from within the country, compared with 38.3% in 2010.
“The contribution from domestic investment cannot be ignored, although foreign investment is crucial,” International Trade and Industry Minister Datuk Seri Mustapa Mohamed told StarBiz in an interview.
Earlier, Mustapa officiated the ground-breaking ceremony for Aviatron (M) Sdn Bhd, a subsidiary of Singapore Aerospace Manufacturing.
Mustapa said key domestic investments this year include Pensonic Holdings Bhd's RM250mil manufacturing hub and international distribution network of electrical home appliances, QAV Technologies Sdn Bhd's RM130mil light-emitting diode (LED) testing and validation centre, and Asia Media's RM500mil development of the first digital live-transit broadcasting infrastructure in Malaysia.
As for non-manufacturing sector, the key domestic investment is the RM9.6bil by a consortium of companies comprising Prism Crystal Enterprises Ltd, Karambunai Corp Bhd and Petaling Tin Bhd for Karambunai Integrated Resort City.
“Last year, the domestic investment was 38.3% of the total RM47.2bil registered for the manufacturing sector.
“Of the total RM6.8bil approved investments for the manufacturing sector from January to February 2011, about 64.7% or RM4.4bil were domestic investments while the remaining 35.3% of RM2.4bil was foreign,” Mustapa said.
This year, the Government expects to approve about RM55bil worth of investment for the manufacturing sector, up from RM47.2bil in 2010.
The total investment the Government is targeting this year is around RM83bil.
Mustapa said the RM130mil investment by QAV Technologies in Penang, for example, would spur Penang transformation into a light-emitting diode (LED) certification and testing hub.
“With the investment by QAV, multinational corporations and local companies involved in solid state lighting business would no longer need to send their products abroad for testing and validation.
“As such services would be available in Penang, this would save foreign and local LED companies here in operational costs. It will also attract more LED investments into Penang,” he said.
Formed in 2002, QAV specialises in environmental testing, test equipment customisation and test technology development. It is the first company outside the United States to be certified by American National Standards Institute to perform such testing and certification.
QAV's investment comes under the Government's Economic Transformation Programme (ETP).
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8533849&sec=business
By DAVID TAN
davidtan@thestar.com.my
It will make up 50% of spending for manufacturing sector
GEORGE TOWN: The Government is targeting some 50% of the total investment for the manufacturing sector this year to come from within the country, compared with 38.3% in 2010.
“The contribution from domestic investment cannot be ignored, although foreign investment is crucial,” International Trade and Industry Minister Datuk Seri Mustapa Mohamed told StarBiz in an interview.
Earlier, Mustapa officiated the ground-breaking ceremony for Aviatron (M) Sdn Bhd, a subsidiary of Singapore Aerospace Manufacturing.
Mustapa said key domestic investments this year include Pensonic Holdings Bhd's RM250mil manufacturing hub and international distribution network of electrical home appliances, QAV Technologies Sdn Bhd's RM130mil light-emitting diode (LED) testing and validation centre, and Asia Media's RM500mil development of the first digital live-transit broadcasting infrastructure in Malaysia.
As for non-manufacturing sector, the key domestic investment is the RM9.6bil by a consortium of companies comprising Prism Crystal Enterprises Ltd, Karambunai Corp Bhd and Petaling Tin Bhd for Karambunai Integrated Resort City.
“Last year, the domestic investment was 38.3% of the total RM47.2bil registered for the manufacturing sector.
“Of the total RM6.8bil approved investments for the manufacturing sector from January to February 2011, about 64.7% or RM4.4bil were domestic investments while the remaining 35.3% of RM2.4bil was foreign,” Mustapa said.
This year, the Government expects to approve about RM55bil worth of investment for the manufacturing sector, up from RM47.2bil in 2010.
The total investment the Government is targeting this year is around RM83bil.
Mustapa said the RM130mil investment by QAV Technologies in Penang, for example, would spur Penang transformation into a light-emitting diode (LED) certification and testing hub.
“With the investment by QAV, multinational corporations and local companies involved in solid state lighting business would no longer need to send their products abroad for testing and validation.
“As such services would be available in Penang, this would save foreign and local LED companies here in operational costs. It will also attract more LED investments into Penang,” he said.
Formed in 2002, QAV specialises in environmental testing, test equipment customisation and test technology development. It is the first company outside the United States to be certified by American National Standards Institute to perform such testing and certification.
QAV's investment comes under the Government's Economic Transformation Programme (ETP).
http://biz.thestar.com.my/news/story.asp?file=/2011/4/25/business/8533849&sec=business
Good News For Consumers As Currency Hits 13-year High
Monday April 25, 2011
By ISABELLE LAI
isabellelai@thestar.com.my
PETALING JAYA: Malaysians can look forward to paying less for imported goods with the ringgit strengthening to its highest level in 13 years.
Economists expect the ringgit to steadily appreciate against the US dollar with several predicting the local currency would strengthen to between 2.95 and 2.90 against the greenback in the coming months.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the ringgit was projected to hit 2.93 against US$1.
As of the last trading day, the exchange rate stood at RM3.01 to US$1. It reached a 13-year high of 3.0290 on Feb 4.
This is the strongest level the ringgit has been at since the 1997/98 Asian financial crisis, when it was pegged to the US dollar. Dr Yeah said the strengthening of the ringgit went hand-in-hand with the weakening US dollar.
A stronger ringgit, he said, meant imported goods would be cheaper while boosting overseas purchasing power and savings on overseas education and travelling.
However, he said the strength of the ringgit should also be measured against other currencies such as the euro, British pound and Australian dollar.
While the ringgit had strengthened against the euro and pound, it remains weaker to the Australian dollar.
“European countries have suffered from the global financial crisis and their recovery is still weak.
“Australia's economy has experienced strong growth from its strong rise in commodity exports.
“Therefore, the strengthening ringgit is not as alarming when compared to the basket of currencies,” he said.
Although a strong ringgit will benefit many Malaysians, he cautioned that exporters and manufacturers would face strong pressure to adjust.
“They will need to improve productivity and efficiency in order to maintain their competitiveness.
“If they are able to adjust and upgrade themselves, then it will be very healthy for the country,” he said.
MIDF Research economics head Anthony Dass said the coming months would see more flow of funds into Malaysia as well as a strengthening ringgit.
“It will help contain the inflation of imported prices. Food prices won't go up so much, so that gives us some comfort,” he said.
The ringgit was valued at RM2.50 per US$1 prior to the Asian financial crisis.
http://thestar.com.my/news/story.asp?file=/2011/4/25/nation/8547049&sec=nation
By ISABELLE LAI
isabellelai@thestar.com.my
PETALING JAYA: Malaysians can look forward to paying less for imported goods with the ringgit strengthening to its highest level in 13 years.
Economists expect the ringgit to steadily appreciate against the US dollar with several predicting the local currency would strengthen to between 2.95 and 2.90 against the greenback in the coming months.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the ringgit was projected to hit 2.93 against US$1.
As of the last trading day, the exchange rate stood at RM3.01 to US$1. It reached a 13-year high of 3.0290 on Feb 4.
This is the strongest level the ringgit has been at since the 1997/98 Asian financial crisis, when it was pegged to the US dollar. Dr Yeah said the strengthening of the ringgit went hand-in-hand with the weakening US dollar.
A stronger ringgit, he said, meant imported goods would be cheaper while boosting overseas purchasing power and savings on overseas education and travelling.
However, he said the strength of the ringgit should also be measured against other currencies such as the euro, British pound and Australian dollar.
While the ringgit had strengthened against the euro and pound, it remains weaker to the Australian dollar.
“European countries have suffered from the global financial crisis and their recovery is still weak.
“Australia's economy has experienced strong growth from its strong rise in commodity exports.
“Therefore, the strengthening ringgit is not as alarming when compared to the basket of currencies,” he said.
Although a strong ringgit will benefit many Malaysians, he cautioned that exporters and manufacturers would face strong pressure to adjust.
“They will need to improve productivity and efficiency in order to maintain their competitiveness.
“If they are able to adjust and upgrade themselves, then it will be very healthy for the country,” he said.
MIDF Research economics head Anthony Dass said the coming months would see more flow of funds into Malaysia as well as a strengthening ringgit.
“It will help contain the inflation of imported prices. Food prices won't go up so much, so that gives us some comfort,” he said.
The ringgit was valued at RM2.50 per US$1 prior to the Asian financial crisis.
http://thestar.com.my/news/story.asp?file=/2011/4/25/nation/8547049&sec=nation
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