Economic News

[FHBH12]

PM Lee urges SMEs to consider Iskandar for expansion
BY TAN WEIZHEN
PUBLISHED: MAY 8, 4:14 AM

SINGAPORE — Small and medium enterprises (SMEs) seeking to venture overseas should seriously consider Iskandar Malaysia as an option, Prime Minister Lee Hsien Loong said yesterday.

Faced with a deluge of challenges including manpower woes, the special economic zone in Johor Baru offers the advantages of lower costs and more land, Mr Lee said at a Malay Muslim Business Conference yesterday.

Acknowledging staffing challenges SMEs face as Singapore reduces its inflow of foreign workers, he stressed that the best way to attract good people is to offer higher wages and exciting jobs. But it is possible only if companies raise their productivity and “climb up the value chain”, he said. When they do that, they will also be in a better position to venture overseas.

“All SMEs want more foreign workers … But we cannot ease up on the foreign worker limits,” Mr Lee said in a prepared speech. “We are still allowing in more foreign workers, so the number of foreign workers here is still growing, although not as fast as before. We know that even this is still not enough, and that SMEs have to turn away business because they cannot find workers,” he said.

By raising productivity and hiring better workers, though, SMEs will be in a stronger position to venture overseas.

Suggesting Iskandar as an option, Mr Lee said: “(SMEs) can take advantage of lower costs, and greater supply of land, while staying close to Singapore … I encourage companies to consider this seriously.”

Mr Lee pointed out various government schemes SMEs can tap to help with their expansion plans or to improve productivity.

He also noted that as Singapore moves to integrate more closely with its Asian neighbours, there will be opportunities for the “bold and enterprising”. TAN WEIZHEN

http://www.todayonline.com/business/pm-lee-urges-smes-consider-iskandar-expansion

 

[FHBH12]

Najib: Bankruptcy an option being considered to restructure MAS
Airline widens Q1 loss to RM443m, from RM279m in Q1 2013
BY PAULINE NG
[email protected]
PUBLISHED MAY 17, 2014

Kuala Lumpur

FOR financially ailing Malaysia Airlines (MAS), the tragic loss of the MH370 jetliner could well prove to be the final straw since it is likely too far gone to be salvaged in the usual ways.

Bankruptcy is one of several options being considered to restructure the national carrier, Prime Minister Najib Razak told The Wall Street Journal in an interview published on Thursday.

This is the first time Mr Najib has hinted that the government is prepared to consider such a move after only limited success with three previous "business turnaround programmes".

MAS continues to bleed, its losses for the first quarter ended March ballooning to RM443 million (S$172 million), from RM279 million in the same period last year.

Owned 69 per cent by state investment agency Khazanah Nasional, the airline has lost billions over the past three fiscal years, including RM2.5 billion in FY 2011 and RM1.17 billion last year.

Much to the chagrin of minority shareholders and taxpayers, MAS cannot keep a steady course even as shareholders pump billions of ringgit during cash calls.

The option of bankruptcy as adopted by Japan Airlines, which established a new entity without the legacy problems, is preferred by the public, if online comments are anything to go by.

One netizen observed: "It is a bottomless pit. No amount of government funds will re-float MAS without a fundamental change in its structure, practices and corporate culture."

Mr Najib warned that there might be resistance to the bankruptcy option. "We have to look at it from all angles, bearing in mind that Malaysia Airlines is a government-linked company. It's not a private company, so there are certain repercussions in what you want to do in terms of how it is received by the employees and the public in general."

Indeed, towards the end of 2012, he had backed off from a proposed equity exchange between the controlling shareholders of MAS and AirAsia and a strategic alliance between the two airlines after MAS's unions threatened to vote for the Opposition in last May's general election.

That most of the staff are Malays is a major consideration, since they form the main support base for Mr Najib's coalition government.

While competition in the sector is intense, MAS's task has been made more difficult at its home base by having to compete with AirAsia, which has grown to become Asia's largest - and arguably the most competitive globally - budget carrier.

Though MAS slashed its fares to compete better, leading to improved loads, this has been at the expense of its yields, which continue to shrink even as its operating costs increase.

Take staff costs: MAS flies to fewer destinations than AirAsia but its workforce of around 21,000 is about three times as large as the budget carrier's.
With its reputation in tatters after the loss of MH370 and suffering a sharp drop in the number of passengers from China (two-thirds of the plane's passengers were from that country) - MAS's China sales fell 60 per cent in March alone - its prospects are cloudy.

To make matters worse, MAS shares have sunk to 21-22 sen, and analysts reckon they are worth only about 15 sen.

Two ministers had previously maintained that the government would not be injecting more funds into the airline. This means MAS will need to look at other options, which reportedly include privatisation of the airline or spinning off its profitable units such as engineering, or its short-haul arm, Firefly.

http://www.businesstimes.com.sg/pre...ion-being-considered-restructure-mas-20140517

 

[FHBH12]

Prepare for more taxes/subsidy cuts.

 

[cow138]

That should be the right way. Tough love. Stop hiring so many cronies.
But I suspect that Malaysia Govt probably don't have enough money to bail them out. Seems to be like a bottomless pit.

 

[potter]

PENGERANG: Johor has barred locals from selling land to foreigners.*

Mentri Besar Datuk Mohamed Khaled Nordin, who disclosed this, said locals were selling off their plots to foreigners due to its rising value.*

He said there were at least three recent cases of locals trying to sell land meant for agricultural use.*

&ldquo Major development is taking place, especially after the initiation of the Rapid (Refinery and Petrochemicals Integrated Development) project.

*



&ldquo There is no doubt that many (foreigners) will be interested to acquire land here,&rdquo he told reporters after launching the ground-breaking ceremony for the construction of affordable homes in Taman Penawar Harmoni here yesterday.*

Stressing that the state government would not approve the sale of land to foreigners, Mohamed Khaled said those who wanted to put their land up for lease should consult the state government.*

&ldquo We are willing to negotiate on this,&rdquo he said.*

The Mentri Besar also said the state government was studying the possibility of introducing a hire-purchase scheme to make it easier for Johoreans to buy affordable homes.*

&ldquo We will work with the Southeast Johor Development Authority (Kejora) on this and on those who will be eligible to participate,&rdquo he added.

 

[FHBH12]

Malaysia-China ties will flourish further, says PM Najib
POSTED: 01 Jun 2014 00:08

Malaysia’s Prime Minister Najib Razak is confident the strong Malaysia-China relationship developed over the past 40 years would grow even closer in the future.


BEIJING: Malaysia’s Prime Minister Najib Razak is confident the strong Malaysia-China relationship developed over the past 40 years would grow even closer in the future.

Speaking at the 40th anniversary to commemorate the establishment of diplomatic ties between the two nations on Saturday, he said good relations are easy when times are good, but true friendship was forged in difficult times.

Citing the historic event 40 years ago, Najib said his father and Malaysia’s second prime minister Abdul Razak set out on what he called a journey of goodwill to sow the seeds of mutual understanding and trust.

"That journey led him here, to Beijing, and to this very hall. It was here that he signed an agreement with Premier Zhou Enlai, formally establishing diplomatic ties between our countries. It was here that we began a new chapter in our relations.

"And it is here today that I feel not just the responsibility of the government, but the responsibility to my father to continue his legacy and ensure the deepening of Malaysia-China ties," he said.

Present at the event were Chinese Premier Li Keqiang and over 300 guests.

Despite the good times, challenges do occur like in all friendships, Najib said, citing the Malaysia Airlines flight MH370 that went missing on March 8 with 50 Malaysian passengers and crew and 154 Chinese passengers on board.

"Malaysia was deeply saddened by the tragic disappearance of Flight MH370. Facing a mystery without precedent, we were grateful for the support of the Chinese government, which has spared no expense in the search effort. We will not rest until the plane is found,” he said.

Meanwhile, Chinese Premier Li said the strong bond and progress enjoyed by Malaysia and China in their diplomatic ties in the last four decades shows that both nations can work together even closer for a better future.

He said the prospects look good for another fruitful 40 years of friendship that can generate greater maturity, mutual trust, stability and prosperity, as well as in foreign policy.

Najib also said it was not a surprise that Malaysia was the first Southeast Asian country to establish relations with China, despite some allies advising Abdul Razak against the decision.

Over the past four decades, both nations have developed and have grown closer together, he said, pointing out that the world's second largest economy is Malaysia’s largest trading partner while Malaysia is China’s largest trading partner in ASEAN.

Both countries have formed a Comprehensive Strategic Partnership for prosperity and growth, and last year signed a Five Year Development Programme for Economic and Trade Cooperation.

Najib said perhaps, there is no better symbol of their friendship than the recent arrival from China of two giant pandas, who have become an instant hit with the Malaysian people.

He also said the joint communique that he signed with his Chinese counterpart further broadens and deepens cooperation in all areas of mutual benefit -- economic, tourism, financial services and cultural.

Both countries have also agreed to exchange more students, to work closely on disaster relief, and to preserve stability and security in the region.

- BERNAMA/nd

http://www.channelnewsasia.com/news/asiapacific/malaysia-china-ties-will/1131190.html

 

[FHBH12]

Fuel subsidy for RON95 will be cut again end of this year. Inflation will go up again.

 

[cow138]

Still waiting for the ringgit to fall further.

 

[The_Hypocrite]

With the rising prices and lack of security and all.these anti foreigner policy. Stay JB fr what?

 

[jasonjst]

With the rising prices and lack of security and all.these anti foreigner policy. Stay JB fr what?

We to do we have a country that is anti- citizen , so where to stay?

 

[FHBH12]

Fuel subsidy for RON95 will be cut again end of this year. Inflation will go up again.

New system for sale of subsidised fuel – motorists with monthly incomes of RM5,000 and below, and sub-2.0 litre-engined cars, to qualify for full subsidies?
By Jonathan James Tan / 3 June 2014 9:58 am

A Sin Chew Daily exclusive has revealed some details on the new system for the sale of subsidised diesel and petrol to eligible motorists that’s set to begin in September for commercial vehicles and October or November for private vehicles.

Citing Domestic Trade and Consumer Affairs ministry (KPDNKK) sources, the report indicates that under the new system, motorists with a monthly income of RM5,000 and below – and having cars with engines displacing under 2.0 litres – will qualify for the full fuel subsidy allowance.

Those with a monthly income of RM5,000-10,000 will be entitled to 300 litres’ worth of petrol and diesel subsidies, and those with monthly incomes of over RM10,000 may not be able to enjoy any fuel subsidies at all. Also, foreign motorists and foreign cars will no longer be entitled to buy subsidised fuel.

The source told Sin Chew Daily that the government is considering whether to upgrade the MyKad to include information on the bearer’s eligibility to purchase subsidised fuel, or issue a special fuel card.

Motorists will likely have to register with JPJ and provide relevant details, such as personal or corporate tax information, to collect this fuel card.

According to the source, the card will contain information such as the bearer’s name, address and monthly fuel quota. It will need to be swiped at petrol stations before filling up.

If a motorist has exceeded his/her fuel allowance for the month, he/she will have to purchase the (additional) fuel at market price, the source said, adding that the cards will also help the government trace motorists’ fuel spending.

However, all this has yet to be finalised, and KPDNKK is still exploring recommendations from relevant industries, the report states.

http://paultan.org/2014/06/03/new-system-rm5000-full-fuel-subsidies/

 

[Jetstream]

http://www.bloombergview.com/articles/2014-06-05/is-malaysia-asia-s-weakest-link

Is Malaysia Asia's Weakest Link?

14 JUN 5, 2014 2:24 AM EDT
By William Pesek

From missing airplanes to jail-bound opposition leaders, Malaysia has recently made international headlines for all the wrong reasons. Will the nation's economy be next?

That's the thrust of new report from Sarah Fowler of U.K.-based Oxford Economics, which ranks Malaysia the "riskiest country in Asia of those we consider," more so than India, Indonesia and even coup-happy Thailand. On the surface, she points out, all's well: Growth is zooming along at 6.2 percent, the external balance is reasonably sound and political stability reigns. But all's not what it seems. "Prompted by its high levels of public debt, rising external debt and shrinking current account surplus, there has been a shift in the perception of risks towards Malaysia and away from Indonesia," Fowler explains.

Malaysia wasn't included in Morgan Stanley's "fragile five" list of shaky emerging economies last year, as were India and Indonesia. But Fowler scratches at a number of Malaysian vulnerabilities that deserve more attention: external debt levels that in recent years have risen to close to 40 percent of gross domestic product; a higher public debt ratio than India; the biggest short-term capital flows among the 13 major emerging markets Oxford tracks, including Indonesia; and a shrinking current-account surplus.

This last point is still somewhat of a positive. As the mini-crises in developing nations last year demonstrated, a balance-of-payments surplus is a very good thing to have. Also, Malaysia's use of so-called macroprudential policies has succeeded in preventing huge property bubbles of the kind afflicting Singapore and Hong Kong. But Malaysia's current-account surplus is dwindling, from 16 percent of GDP in 2008 to 3.7 percent last year. And household debt is, to use Fowler's words, "worryingly high" at more than 80 percent of GDP compared to less than 60 percent in 2008.

What really concerns Oxford, and myself, is the complacency factor in Putrajaya. Malaysia is effectively a one-party state, having effectively been ruled by the same party for six decades. Its 40-year-old, pro-Malay affirmative-action program chips away at the country's competitiveness more and more each passing year. The scheme, which disenfranchises Malaysia's Chinese and Indian minorities, is a productivity and innovation killer. It also has a corrupting influence on the political and business culture.

"A climate of entitlement amongst the Malay community limits entrepreneurialism and vested interests within the United Malays National Organization still resist change," Fowler argues.

The need for change is becoming acute, though, as China's dominance grows and neighbors like the Philippines get their acts together. Indians just elected the party of reform-minded Narendra Modi and Indonesians will soon choose a successor for Susilo Bambang Yudhoyono in a contest that's all about reducing corruption and improving governmental efficiency. And Malaysia? Well, Prime Minister Najib Razak's lackluster party is clinging to power. Meanwhile, opposition leader Anwar Ibrahim may soon be in jail again on sodomy charges many see as politically motivated.

The government's handling of Malaysian Air Flight 370 said it all. Its deer-in-the-headlights response to the plane's disappearance was the product of an insular political culture. The trouble is, that insularity is holding back a resource-rich economy that should be among Asia's superstars, not its weakest links.

 

[FHBH12]

1MDB holds board meeting in Lucerne
Issues discussed include 500 MV solar photovoltaic project across Malaysia
BY ANITA GABRIEL
[email protected] @AnitaGabrielBT
PUBLISHED JUNE 14, 2014

Singapore

MALAYSIA'S state-owned fund 1Malaysia Development Bhd (1MDB) held a three-day board meeting this week in Lucerne, central Switzerland, to discuss several issues including a lofty solar power plan for the country.

A curious choice of venue, perhaps even extravagant, some may say for a sovereign wealth fund with largely home-based assets and given its highly indebted status - based on latest accounts, it has debts of over RM35 billion (S$13.6 billion).

But of much wider implication, as The Business Times understands, is a key agenda at the meeting - the state-backed fund's ultra-ambitious solar photovoltaic (PV) project that will generate up to 500 MW of electricity which it plans to build in various parts of the country over the next five to six years.

First off the bat under the ambitious plan is a RM350 million 50 MW solar PV pilot project that 1MDB has described as a "government to government initiative", not unlike several other pacts with 1MDB's Middle Eastern partners, some of which had failed.

It was hoped that the project would be launched with much pomp and fanfare by Malaysian Prime Minister Najib Razak, who also is chair of 1MDB's board of advisers, and US President Barack Obama during his official visit to Malaysia in April but that did not happen.

1MDB's chosen partner for the project, Washington-based DuSable Capital Management - a money-management firm which, according to its website, is focused on energy and infrastructure - has piqued interest among insiders. Its other partner in the project is Malaysia's national utility, Tenaga Nasional.

DuSable, co-founded by Frank White, Jr - a top individual fund raiser for Mr Obama, according to reports - and another of the president's backers, Shomik Dutta, describes itself as a private equity firm which "blends a unique understanding of government and regulatory dynamics" in the renewable energy and infrastructure investments.

"It's an in-country project so why would 1MDB need a foreign firm like DuSable to advise Tenaga, Malaysia's national utility, to navigate the power industry in its own country?" asked an observer.

Recently, in mid-April, Tenaga said that it signed a power purchase pact that will last for 25 years with 1MDB for Malaysia's biggest solar power project. It is understood that the plant will be built on a 300 acre site in Kuala Ketil in Malaysia's northern state, Kedah. If things work according to plan, it will start commercial operations in October 2016, said a source. If the pilot project is viable, then more such plants that power up to 500 MW will be built.

BT contacted 1MDB and DuSable for comments but none were forthcoming.

The mega solar project was awarded to 1MDB - not too long after the state-owned fund snagged another sizeable RM11 billion 2,000 MW coal-fired power plant project - on a direct negotiated basis.

http://www.businesstimes.com.sg/premium/top-stories/1mdb-holds-board-meeting-lucerne-20140614

 

[FHBH12]

It appears that the 1MDB sovereign wealth fund is draining lots of national $. I expect more subsidies to be cut and taxes to be raised further to patch up the financial hole.

 

[cow138]

It appears that the 1MDB sovereign wealth fund is draining lots of national $. I expect more subsidies to be cut and taxes to be raised further to patch up the financial hole.

The value of the currency will drop. Good for those invested and owing malaysian ringgit .

 

[malpaso]

The value of the currency will drop. Good for those invested and owing malaysian ringgit .

yes true if not selling. on the flip side, if sell, profit (if any) will be less after conversion back to sgd.

 

[malpaso]

Minister: Malaysia’s audit report thicker, so better than Singapore’s

KUALA LUMPUR, June 17 — Malaysia’s audit of federal agencies demonstrates exceeding accountability vis-a-vis Singapore, whose national audit report was “only 70 pages” long, a federal minister asserted today.

Datuk Paul Low, the minister in the Prime Minister’s Department in charge of integrity, said the Auditor-General’s Reports in Malaysia that consisted of thick volumes, were very detailed in comparison.

“Look at Singapore’s audit report, it’s only 70 pages, so in that sense, the practice we have today exceeds the norm of accountability for the public sector,” Low told a press briefing on the AG 2013 Report (second series) here today.

- See more at: http://www.themalaymailonline.com/m...o-better-than-singapores#sthash.NcVJWkR2.dpuf

http://www.themalaymailonline.com/m...udit-report-thicker-so-better-than-singapores

 

[FHBH12]

Malaysia's Minister level calibre is very unique n outstanding.

 

[Frodo]

Minister: Malaysia’s audit report thicker, so better than Singapore’s

KUALA LUMPUR, June 17 — Malaysia’s audit of federal agencies demonstrates exceeding accountability vis-a-vis Singapore, whose national audit report was “only 70 pages” long, a federal minister asserted today.

Datuk Paul Low, the minister in the Prime Minister’s Department in charge of integrity, said the Auditor-General’s Reports in Malaysia that consisted of thick volumes, were very detailed in comparison.

“Look at Singapore’s audit report, it’s only 70 pages, so in that sense, the practice we have today exceeds the norm of accountability for the public sector,” Low told a press briefing on the AG 2013 Report (second series) here today.

- See more at: http://www.themalaymailonline.com/m...o-better-than-singapores#sthash.NcVJWkR2.dpuf

http://www.themalaymailonline.com/m...udit-report-thicker-so-better-than-singapores

Funny that someone can be so happy with a thick book that highlight problems in public money accountability.

 

[FHBH12]

Expect more expats in JB

http://m.thesundaily.my/news/1087580