Bank Negara likely to keep key Interest rate at 2.75%

Tuesday August 17, 2010




By FINTAN NG

fintan@thestar.com.my





Economists say Bank Negara is more concerned over economic activities than inflation



PETALING JAYA: Bank Negara is likely to keep the country’s benchmark overnight policy rate (OPR) at 2.75% when its monetary policy committee meets on Sept 2 as focus shifts to stimulating economic activities rather than price pressures.



The central bank has raised the OPR by 75 basis points this year as the pace of economic recovery accelerated in the first half of the year.



Economists told StarBiz that the consumer price index (CPI) would still see a gradual upward trend for the month of July with the median in a Bloomberg survey showing a 2% rise year-on-year.

The statistics department is scheduled to release the CPI data on Wednesday while Bank Negara will be releasing second quarter (Q2) gross domestic product (GDP) data on the same day.





According to a separate Bloomberg survey, the median for Q2 GDP is 8.4% year-on-year versus the 10.1% achieved in Q1.



“At this point, the central bank will be more concerned about economic activities rather than price pressures, so there’ll be less compulsion to reset rates,” AmResearch Sdn Bhd senior economist Manokaran Mottain said.



He acknowledged that prices in the Klang Valley and other urban areas were rising higher than the rest of the country but this would not show in the aggregate data, which included prices from across the country.



Manokaran, along with other economists, said a double-dip recession would not happen this year in the region.



“Yes, growth is moderating but the eurozone just saw the fastest pace of economic growth in four years while Germany’s is the fastest in 23 years,” he noted.



Singapore-based United Overseas Bank Ltd economist Ho Woei Chen said Bank Negara would likely keep the OPR at 2.75% until the end of next year as growth has moderated.



“Growth will moderate but generally it’ll be within expectations, external factors will have more of an impact on Malaysia due to the economy’s export-oriented nature,” she said, adding that the near term outlook was positive and that there would be no double-dip recession this year and next year. “Growth will certainly not be exciting but the economies in the region will continue to expand.”



Kenanga Investment Bank Bhd economist Wan Suhaimie Saidi said the base effects for the CPI was wearing off with inflation likely to see a higher month-on-month rise although year-on-year it would still be gradual.



He said the income gap was of more concern for ordinary wage earners than any rise or fall in the GDP.



“Likewise any increase in the OPR will not help much too as it will only help those in the higher income brackets,” Wan Suhaimie said.


http://biz.thestar.com.my/news/story.asp?file=/2010/8/17/business/6865711&sec=business

Proton-Perodua merger move a tricky affair

By Zuraimi Abdullah
Published: 2010/08/16




Such a union boils down to the will of two key stakeholders: the Malaysian government and Toyota, the world's number one carmaker from Japan




Let's just face it: there will be no merger between Proton Holdings Bhd (5304) and Perusahaan Otomobil Kedua Sdn Bhd (Perodua) this year or next. But other forms of alliances are probable.



It is not that such a union is too complex to deal with in terms of business culture or managing people integration. It boils down to the will of two key stakeholders: the Malaysian government and Toyota, the world's number one carmaker from Japan.



Also, Proton needs a global partner more than a local partner at this stage if it does not want to be just a "jaguh kampung" and aims to take itself up another level on the international stage (although a successful merger with Perodua will ultimately mean securing Toyota's help to move towards its international goal).



Proton's management can offer many reasons to support a merger, both for the two national carmakers and the domestic automotive industry. Perodua, on its part, can try to thwart the latest merger attempt by stressing (and it has already stressed) that it is not feasible and compatible.

But the management aren't the owners. Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir and his Perodua counterpart, Aminar Rashid Salleh, do not have the final say on a merger although they do have some powers in forming other kinds of consolidation.



As the parties with majority stakes in Proton and Perodua, the government and Toyota (via Daihatsu owns the controlling stakes in Perodua's two manufacturing arms) hold the push button to reinvent the automotive industry in the country.



Looking at things now, it is very unlikely that they will seriously make the push. For one, Proton and Perodua are government-linked companies, so they carry great political baggage.



Is the government willing to make every effort to ensure a merger will work by exorcising the ghost of the past? We are talking about the politically-linked vendors of Proton and Perodua.



Some quarters said the equity deal with Volkswagen AG talked about not so long ago failed because of, among other reasons, fears that many Proton vendors would go bust if the German carmaker took over. Volkswagen would probably cut down the number of vendors substantially or replace some with more credible ones to streamline and maximise Proton's production.



In the case of Toyota, there are strong push factors why it would want to merge its lucrative and virtually trouble-free Perodua business with Proton's.



Would the government, through Khazanah Nasional Bhd, be willing to offer Toyota a substantial stake in Proton to make the merger work? Would Toyota be happy if the government only gave it control over the manufacturing aspects and not the whole group?



The push from the government and Toyota aside, a Proton-Perodua merger may be good after all. The rhetoric of any merger has largely to do with cost-savings and synergies. This could happen to Proton and Perodua once they merge. But it still may not address Proton's spare capacity problem.



The two companies do not have much to offer each other. Perodua may offer the merged entity its work culture and quality control; and Proton, its more expansive research and development (R&D) and Lotus technical departments for parts and engineering.



The two may be able to save money and time on product R&D and assembly. In the long run, they can complement each other by producing models uniquely theirs. In other words, both can retain their existing identities. They can also keep their production, sales and distribution networks, which will help avert significant job cuts and closing of outlets.

http://www.btimes.com.my/Current_News/BTIMES/articles/mond15/Article/

Khazanah kuasai lebih 95% kepentingan dalam Parkway

17/08/2010 11:30am





KUALA LUMPUR 17 Ogos – Khazanah Nasional Bhd. (Khazanah) melalui Integrated Healthcare kini menguasai lebih 95 peratus kepentingan dalam Parkway Holdings.



Khazanah pada Mei lalu, menawarkan untuk mengambil alih 51 peratus ekuiti kepentingan dalam Parkway milik Singapura pada harga RM2.78 bilion (S$1.18 bilion).



Pada masa itu, Integrated Healthcare hanya menguasai 23.9 peratus kepentingan dalam Parkway yang mengendalikan sebanyak 16 buah hospital di Asia dan kejayaan dalam penguasaan itu akan merealisasikan usaha Khazanah menjadi pemain utama di peringkat serantau. – Utusan

http://www.utusan.com.my/utusan/info.asp?y=2010&dt=0817&pub=Utusan_Malaysia&sec=Terkini&pg=bt_05.htm

Khazanah said to have agreed to S$1.85b loan for Parkway bid

Published: 2010/08/05


Australia & New Zealand Banking, CIMB, DBS, OCBC, UOB, Maybank, HSBC and BNP Paribas will lend to the company, sources say




Khazanah Nasional Bhd, Malaysia's sovereign wealth fund, agreed to S$1.85 billion (RM4.33 billion) in loans to part-finance its offer for Parkway Holdings Ltd, according to three people with knowledge of the matter.



Australia & New Zealand Banking Group Ltd, CIMB Group Holdings Bhd, DBS Group Holdings Ltd, Oversea-Chinese Banking Corp, United Overseas Bank Ltd, Malayan Banking Bhd, HSBC Holdings plc and BNP Paribas SA will lend to the company, the people said, asking not to be named because the deal is private.



The facility has a three-year maturity, two of the people said. It pays interest of 125 basis points more than the Singapore dollar swap offer rate, one of the people said. A basis point is 0.01 percentage point.



Khazanah said on July 26 that it offered S$3.5 billion (RM9 billion) for the shares in Singapore-based Parkway that it doesn't already own, topping a bid from India's Fortis Healthcare Ltd. It raised S$1.5 billion (RM3.5 billion on Tuesday from five- and 10-year Islamic bonds in the city state's largest sale of the securities.









Asuki Mohd Abas, a spokesman for Khazanah, declined to comment on the company's financing arrangements.



Khazanah's non-recourse loan is through Integrated Healthcare Holdings Ltd, the unit that's making the Parkway bid, one of the people said yesterday. Integrated Healthcare





Read more: Khazanah said to have agreed to S$1.85b loan for Parkway bid http://www.btimes.com.my/Current_News/BTIMES/articles/khaz4-2/Article/#ixzz0vpBLAoR2

Malaysia must tap oil palm biomass potential

Published: Monday August 2, 2010 MYT 2:27:00 PM

KUALA LUMPUR: MALAYSIA needs to tap the full potential of oil palm biomass such as empty fruit bunches, palm fibre, palm kernel shells and palm oil mill effluent which can be developed into high-income generating renewable resource products for export, said Plantation Industries and Commodities secretary-general Datuk Wira Ismail Salleh.
Of the total output from the oil palm tree, about 10% is palm oil while the remaining 90% is in the form of oil palm biomass which has yet to be exploited.

Last year, the local oil palm sector generated an estimated 80 million tonnes of biomass, Wira said at the opening of the two-day Second International Conference on Oil Palm Biomass today.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/2/business/20100802143416&sec=business

Tanjong jumps to record on buyout offer

Published: 2010/08/02


Tanjong Plc, a Malaysian power and gaming company, surged to a record in Kuala Lumpur trading after a group led by billionaire T. Ananda Krishnan offered RM4.7 billion (US$1.5 billion) for full control.



The stock jumped 20.4 per cent to RM21.26 at 9:02 am local time, set for a record close.



Krishnan and associated parties bid RM21.80 a share for the 53 per cent of Tanjong they don’t already own, according to a company statement. -- Bloomberg


http://www.btimes.com.my/Current_News/BTIMES/articles/20100802091253/Article/index_html

Pelabur asing tidak ada wang untuk melabur - Dr. Mahathir

KUALA LUMPUR 1 Ogos - Tun Dr. Mahathir Mohamad berkata, kemerosotan pelaburan langsung asing (FDI) ke negara ini disebabkan pelabur asing seperti dari Amerika Syarikat (AS) dan Eropah tidak mempunyai wang untuk dilaburkan.



Bekas Perdana Menteri memberitahu, pelabur terbabit juga memerlukan wang yang mereka ada untuk dilaburkan di dalam negara sendiri berikutan keadaan ekonomi yang semakin teruk terutama di Eropah dan AS.



''Keadaan ekonomi Eropah dan AS amat terjejas berikutan krisis kewangan yang melanda negara terbabit sehingga ramai rakyatnya tidak mempunyai pekerjaan.



''Kebanyakan pelabur terpaksa menumpukan kepada pelaburan di dalam negara masing-masing kerana ia amat diperlukan di sana, ini bermakna mereka tidak akan membuat pelaburan besar di negara lain,'' katanya.



Beliau yang merupakan Pengerusi The Loaf berkata demikian kepada pemberita selepas melancarkan cawangan keempat The Loaf di IOI Boulevard di Puchong dekat sini hari ini.



Turut hadir isteri beliau, Tun Dr. Siti Hasmah Mohd. Ali dan Pengarah Urusan The Loaf, Jiro Suzuki.



Dr. Mahathir mengulas mengenai Malaysia mencatat kejatuhan FDI sebanyak 81 peratus tahun lalu kepada AS$1.38 bilion (RM4.22 bilion) berbanding AS$7.31 bilion (RM23.39 bilion) pada 2008 yang merupakan rekod terburuk dialami negara sejak 15 tahun lalu.



Sehubungan itu, beliau meminta kerajaan mengkaji bagi meningkatkan pelaburan dalam negeri seperti yang dilakukan oleh negara-negara lain.



Sementara itu, mengenai The Loaf, Dr. Mahathir memberitahu, kedai roti premium berasaskan resipi Jepun itu menerima banyak permohonan untuk memfrancais jenama kedai tersebut termasuk dari Singapura dan Indonesia.



''Memang menjadi hasrat The Loaf untuk memfrancais perniagaan tetapi masanya belum tiba, memandangkan pihak pengurusan perlu mendapatkan data yang tertentu bagi memastikan ia akan memberi keuntungan mencukupi.



''The Loaf perlu memastikan bahawa jenama ini mampu menarik pelanggan setiap masa dan dapat mencatatkan keuntungan yang maksimum, bagi memastikan setiap kedai francais yang dibuka akan dapat keuntungan sewajarnya,'' katanya.



Beliau memberitahu, usaha untuk memfrancais The Loaf akan dibuat secepat mungkin selepas semua data dan jenama itu mendapat pengiktirafan sewajarnya daripada pelanggan.



Dr. Mahathir memberitahu, adalah tidak rasional untuk The Loaf mengendalikan semua cawangannya dan cara terbaik ialah melalui francais yang dilakukan pada masa yang sesuai.



The Loaf juga akan membuka cawangan kelima di Bangsar sebelum akhir tahun ini.
http://www.utusan.com.my/utusan/info.asp?y=2010&dt=0802&pub=Utusan_Malaysia&sec=Muka_Hadapan&pg=mh_04.htm