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Economic News
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Challenging outlook looms over property market
Posted on December 28, 2013 | 947 Views | Topic : Featured, Property News.
BY ANGIE NG
Various groups with vested interests in the property sector are still dissecting the multi-faced measures announced a few months ago in Budget 2014. They are concerned about the impact it will have on the market and are trying to make the best of the situation.
The measures to cool the market underscore the Government’s resolve to curb property speculation and promote a more healthy and sustainable market. A focused policy on affordable housing is also one of the main thrusts of the Government initiatives. The new budget measures apply to all property projects nationwide except those in the Medini enclave in Iskandar, Johor, which has been declared a special economic zone.
Property consultants concur the unveiling of the budget measures have jolted both developers and buyers, especially speculators, and there is bound to be a short-term consolidation as they wait out to see the impact of those measures on the market.
Needless to say, developers are feeling the heat. Many are concerned the imposition of the full real property gains tax (RPGT) regiment may stall buying interest and impact sales.
The hike in pricing threshold for properties that foreigners can buy from RM500,000 to RM1mil is also a cause of concern for developers with projects targeting foreigners.
Meanwhile, potential buyers and investors are keeping their fingers crossed for better deals in the form of more innovative product offerings at more competitive pricing as the new year unfolds.
Real Estate and Housing Developers’ Association president Datuk Seri Michael Yamsounded the alarm when he said that “Budget 2014 has an adverse impact on the property market and will cause negative sentiment to permeate in the market place.”
“The industry and the consumers would take a more conservative approach in respect of sales launches or a buying decision. Going forward, developers would need to be more careful with its market research to ensure there is high probability of take-up in their project launches. Buyers are also expected to adopt a wait-and-see attitude with the hope of a fall in prices, while sellers are holding on to their prices waiting for an opportune time to sell,” he surmised.
Yam suggests developers do more indepth research and test the market before deciding to sell, or if necessary defer launches. He notes that this will likely lead to further imbalances in the supply and demand.
Despite envisaging a slight negative impact on the market, executive director of property consultancy CB Richard Ellis Malaysia, Paul Khong expects a fair and stable outlook for the property market next year.
He says investors hoping to flip their properties for short term gains will now be compromised if they do not dispose off their properties by this year due to the latest RPGT guidelines. The new RPGT regime is effective from Jan 1, 2014.
“Buyers will now have to revisit their investment criteria carefully. As for developers, they also have to work much harder to conclude more sales in 2014.
“With the abolishment of developer interest bearing schemes, the number of pure speculators and short term investors will drop in tandem,” Khong observes.
He says project launches will continue in 2014 as developers still need to develop as property development is their core business.
“But the project launches will be targeted more towards the mass market and will be at more reasonable price levels.”
Khong says in a more competitive environment, developers may need to provide higher quality products and more trendy developments to entice buyers, and buyers can look forward to better deals and hopefully greater value for their money.
On the average market, players will take three to six months to digest the impact although they will continue to invest with different objectives in mind.
The RPGT basically follows the principle of “No gain, No tax”, so it lessens the quantum of gain in the overall picture and does not penalise actual buyers, Khong says.
“The budget measures basically eliminate short term investors who are looking for high and quick gains in the local property market and force the market to stabilise and investors to take a longer term view on their investments,” Khong concludes.
DTZ Nawawi Tie Leung executive director Brian Koh says the tapering of bond purchase by the US Federal Reserve may result in a more challenging market outlook for the local property market.
“The market is likely to be more challenging given the related effects of rising interest and a tighter credit environment. It is likely to take a breather with new supply and launches likely to be delayed in the first few months of the year as developers tread cautiously to test the impact from the cooling measures of Budget 2014,” he explains.
Koh says it will be “a sort of reset for the market, so that the various parties are brought back to review their basic assumptions and expectations on more fundamental issues such as sustainability of trend, affordability and potential risks/returns going forward.”
“Developers are likely to launch less projects, downgrade specifications, reduce sizing, squeeze on construction costs, and accept lower margins.
“As for buyers, speculators who are caught in the new changes will have the most to lose, if they do not have the holding power,” Koh points out.
So what type of projects will be popular in this new environment?
Rehda’s Yam says the perenially popular types of housing would be guarded and gated landed houses, double-storey terraced housing, semi-detached and detached houses, small size condominiums in prime locations including those on top of or in the vicinity of MRT stations.
“For retirees and lifestyle living, properties on the island of Penang, beach resort and parts of Iskandar will be sought after,” Yam concludes.
Khong says inner city integrated developments like Pavilion and Tropicana Mall or the newly launched Damansara City and Damansara Uptown Phase 2 will lead the pack on the strata residences sector, followed by the ever green landed terrace houses (guarded and gated concept) in good locations.
He believes branded residences with good amenities such as MRT stations nearby and fully fitted/furnished units will also go far with buyers.
“As for projects targeted at the foreign buyers, they will now have to be more high-end driven following the higher price threshold of RM1mil imposed on foreign buyers from January 1,” Khong adds.
Koh says the market can expect more projects that cater to the family and for owner-occupation.
http://www.starproperty.my/index.ph...allenging-outlook-looms-over-property-market/
Posted on December 28, 2013 | 947 Views | Topic : Featured, Property News.
BY ANGIE NG
Various groups with vested interests in the property sector are still dissecting the multi-faced measures announced a few months ago in Budget 2014. They are concerned about the impact it will have on the market and are trying to make the best of the situation.
The measures to cool the market underscore the Government’s resolve to curb property speculation and promote a more healthy and sustainable market. A focused policy on affordable housing is also one of the main thrusts of the Government initiatives. The new budget measures apply to all property projects nationwide except those in the Medini enclave in Iskandar, Johor, which has been declared a special economic zone.
Property consultants concur the unveiling of the budget measures have jolted both developers and buyers, especially speculators, and there is bound to be a short-term consolidation as they wait out to see the impact of those measures on the market.
Needless to say, developers are feeling the heat. Many are concerned the imposition of the full real property gains tax (RPGT) regiment may stall buying interest and impact sales.
The hike in pricing threshold for properties that foreigners can buy from RM500,000 to RM1mil is also a cause of concern for developers with projects targeting foreigners.
Meanwhile, potential buyers and investors are keeping their fingers crossed for better deals in the form of more innovative product offerings at more competitive pricing as the new year unfolds.
Real Estate and Housing Developers’ Association president Datuk Seri Michael Yamsounded the alarm when he said that “Budget 2014 has an adverse impact on the property market and will cause negative sentiment to permeate in the market place.”
“The industry and the consumers would take a more conservative approach in respect of sales launches or a buying decision. Going forward, developers would need to be more careful with its market research to ensure there is high probability of take-up in their project launches. Buyers are also expected to adopt a wait-and-see attitude with the hope of a fall in prices, while sellers are holding on to their prices waiting for an opportune time to sell,” he surmised.
Yam suggests developers do more indepth research and test the market before deciding to sell, or if necessary defer launches. He notes that this will likely lead to further imbalances in the supply and demand.
Despite envisaging a slight negative impact on the market, executive director of property consultancy CB Richard Ellis Malaysia, Paul Khong expects a fair and stable outlook for the property market next year.
He says investors hoping to flip their properties for short term gains will now be compromised if they do not dispose off their properties by this year due to the latest RPGT guidelines. The new RPGT regime is effective from Jan 1, 2014.
“Buyers will now have to revisit their investment criteria carefully. As for developers, they also have to work much harder to conclude more sales in 2014.
“With the abolishment of developer interest bearing schemes, the number of pure speculators and short term investors will drop in tandem,” Khong observes.
He says project launches will continue in 2014 as developers still need to develop as property development is their core business.
“But the project launches will be targeted more towards the mass market and will be at more reasonable price levels.”
Khong says in a more competitive environment, developers may need to provide higher quality products and more trendy developments to entice buyers, and buyers can look forward to better deals and hopefully greater value for their money.
On the average market, players will take three to six months to digest the impact although they will continue to invest with different objectives in mind.
The RPGT basically follows the principle of “No gain, No tax”, so it lessens the quantum of gain in the overall picture and does not penalise actual buyers, Khong says.
“The budget measures basically eliminate short term investors who are looking for high and quick gains in the local property market and force the market to stabilise and investors to take a longer term view on their investments,” Khong concludes.
DTZ Nawawi Tie Leung executive director Brian Koh says the tapering of bond purchase by the US Federal Reserve may result in a more challenging market outlook for the local property market.
“The market is likely to be more challenging given the related effects of rising interest and a tighter credit environment. It is likely to take a breather with new supply and launches likely to be delayed in the first few months of the year as developers tread cautiously to test the impact from the cooling measures of Budget 2014,” he explains.
Koh says it will be “a sort of reset for the market, so that the various parties are brought back to review their basic assumptions and expectations on more fundamental issues such as sustainability of trend, affordability and potential risks/returns going forward.”
“Developers are likely to launch less projects, downgrade specifications, reduce sizing, squeeze on construction costs, and accept lower margins.
“As for buyers, speculators who are caught in the new changes will have the most to lose, if they do not have the holding power,” Koh points out.
So what type of projects will be popular in this new environment?
Rehda’s Yam says the perenially popular types of housing would be guarded and gated landed houses, double-storey terraced housing, semi-detached and detached houses, small size condominiums in prime locations including those on top of or in the vicinity of MRT stations.
“For retirees and lifestyle living, properties on the island of Penang, beach resort and parts of Iskandar will be sought after,” Yam concludes.
Khong says inner city integrated developments like Pavilion and Tropicana Mall or the newly launched Damansara City and Damansara Uptown Phase 2 will lead the pack on the strata residences sector, followed by the ever green landed terrace houses (guarded and gated concept) in good locations.
He believes branded residences with good amenities such as MRT stations nearby and fully fitted/furnished units will also go far with buyers.
“As for projects targeted at the foreign buyers, they will now have to be more high-end driven following the higher price threshold of RM1mil imposed on foreign buyers from January 1,” Khong adds.
Koh says the market can expect more projects that cater to the family and for owner-occupation.
http://www.starproperty.my/index.ph...allenging-outlook-looms-over-property-market/
Watch them in 2014
Published: Saturday December 28, 2013 MYT 12:00:00 AM
Updated: Saturday December 28, 2013 MYT 1:13:07 PM
IT is generally going to be a challenging 2014 as the Government undertakes fiscal reforms to rein in on its budget deficit and address the shrinking trade surplus.
Under this scenario, Malaysia's corporate captains may need to re-look and up their game plans to ride out the tough times.
We present personalities we think are the likely movers and shakers of Malaysia's corporate scene. Some of them have made headlines this year and will continue to be watched. We also present the outlook of key sectors of the economy in this special edition.
A pro-business Sultan
EVEN before the Sultan of Johor pulled off the RM4.5bil property deal with the Chinese this month, he had been displaying a certain business savvy.
At a chance meeting with the Sultan early this year, this writer learnt about how he was taking an interest in ensuring Johor Corp (JCorp) – the asset-rich but debt-laden state investment arm – had the right checks and balances in place.
Although proud of JCorp’s achievements in owning assets like KFC Holdings Bhd, plantation giant Kulim (M) Bhd and hospital chain KPJ Healthcare Bhd, it was under his leadership that JCorp refinanced its huge debt and bought back from Johorians the investment units of Dana Johor at RM1 apiece.
This was an old failed investment scheme by JCorp for Johorians that had seen its value significantly shrink over the years.
In that short meeting, the Sultan, who declined the request for a full interview, talked generally about how Johor should be looking to draw more foreign direct investment into the state, which, in turn, would bring about positive economic spin-offs for Johorians, such as jobs and contracts for small and medium enterprises or SMEs.
He was agreeable to be quoted on this: that he is “pro-business” and hopes to see Johor and Johorians prosper.
Clearly though, the Sultan is also keen to participate in business.
In 2012, it was reported that Singapore billionaire Peter Lim had teamed up with the Sultan of Johor to build a S$2bil (US$1.55bil) complex that would include a hospital, hotels, flats and entertainment outlets in Johor Baru.
This year, the pace of deals in Johor is gathering steam. And the Sultan made the headlines when it was disclosed that he had sold a parcel of prime land in Johor Baru to China-based Guangzhou R&F Properties Co Ltd for RM4.5bil.The price paid was a new record for Johor at RM890 per sq ft for the 47ha believed to be in the vicinity of the old Customs, Immigration and Quarantine Complex, which faces Singapore and hence holds much potential.
Aside from Singapore’s Peter, the Sultan is also working on ventures with Tan Sri Vincent Tan and Tan Sri Lim Kang Hoo.
The Sultan acquired a 20% stake in Berjaya Times Square Sdn Bhd.
In explaining the deal, the vendor - Berjaya Assets Bhd - made reference to the Sultan’s “stature and business acumen” as part of the justification for the discounted price.
Kang Hoo is already well-known as the man behind master developer Iskandar Waterfront Holdings Sdn Bhd (IWH), which, in turn, is a partnership between himself and the Johor state government.
Just this week, Kang Hoo’s IWH sold another piece of land to a Singapore party at a price that even topped what Guangzhou R&F Properties had paid.
Insiders say that the Sultan has a few able trusted advisers in the various sectors of business he is interested in.
Aside from property, the Sultan is also said to be very keen on oil and gas, power, shipping and transport.
The Sultan is evidently passionate about the transport sector and trains, in particular. Notably, the Sultan of Johor commandeered the last train out from the Tanjong Pagar railway station in Singapore before the historical station was closed.
He holds the record as the first ruler to obtain a Class 26 locomotive driving licence a few years ago.
It’s no surprise then that observers reckon that transport could be an area in which the Sultan of Johor would make headlines in 2014. The state is at the centre of two major rail projects – the last leg of the nationwide Electrified Double-Tracking Project (EDTP) from Gemas to Johor Baru and the high-speed rail link from Kuala Lumpur to Singapore. Johor constitutes the largest part of the latter.
Observers say the Sultan has already linked up with top Japanese companies that are keen to provide the technology for the high-speed train. Similarly, on the EDTP, the Sultan had reportedly travelled to China in 2012 to team up with a top player, namely, the state-owned China Railway 18th Construction Bureau Co Ltd (CR18G).
It has been reported that CR18G’s Malaysian partner is Dacing Engineering & Equipment Sdn Bhd, and checks show that it is owned by the Johor crown prince, Tunku Ismail Sultan Ibrahim, Datuk Seri Shafiq Abdullah and the late Datuk Seri Raja Ashman Shah Sultan Azlan Shah.
CR18G is part of China Railway Construction Company (CRCC), which, in turn, is one of the three short-listed Chinese companies that will be chosen as the main contractor for the Gemas to Johor Baru portion of the EDTP. CR18G’s projects under its belt include constructing what was known as the world’s highest railway system, which runs from China’s Xinjiang city to Lhasa in Tibet.
In 2012, CR18G was also awarded the prestigious fast-train project between Mecca and Madinah by King Abdullah of Saudi Arabia.
Johor will continue to be in the limelight in 2014 and don’t rule out the Sultan featuring in some of the state’s development. – By Risen Jayaseelan
http://www.thestar.com.my/Business/Business-News/2013/12/28/Watch-them-in-2014/
Published: Saturday December 28, 2013 MYT 12:00:00 AM
Updated: Saturday December 28, 2013 MYT 1:13:07 PM
IT is generally going to be a challenging 2014 as the Government undertakes fiscal reforms to rein in on its budget deficit and address the shrinking trade surplus.
Under this scenario, Malaysia's corporate captains may need to re-look and up their game plans to ride out the tough times.
We present personalities we think are the likely movers and shakers of Malaysia's corporate scene. Some of them have made headlines this year and will continue to be watched. We also present the outlook of key sectors of the economy in this special edition.
A pro-business Sultan
EVEN before the Sultan of Johor pulled off the RM4.5bil property deal with the Chinese this month, he had been displaying a certain business savvy.
At a chance meeting with the Sultan early this year, this writer learnt about how he was taking an interest in ensuring Johor Corp (JCorp) – the asset-rich but debt-laden state investment arm – had the right checks and balances in place.
Although proud of JCorp’s achievements in owning assets like KFC Holdings Bhd, plantation giant Kulim (M) Bhd and hospital chain KPJ Healthcare Bhd, it was under his leadership that JCorp refinanced its huge debt and bought back from Johorians the investment units of Dana Johor at RM1 apiece.
This was an old failed investment scheme by JCorp for Johorians that had seen its value significantly shrink over the years.
In that short meeting, the Sultan, who declined the request for a full interview, talked generally about how Johor should be looking to draw more foreign direct investment into the state, which, in turn, would bring about positive economic spin-offs for Johorians, such as jobs and contracts for small and medium enterprises or SMEs.
He was agreeable to be quoted on this: that he is “pro-business” and hopes to see Johor and Johorians prosper.
Clearly though, the Sultan is also keen to participate in business.
In 2012, it was reported that Singapore billionaire Peter Lim had teamed up with the Sultan of Johor to build a S$2bil (US$1.55bil) complex that would include a hospital, hotels, flats and entertainment outlets in Johor Baru.
This year, the pace of deals in Johor is gathering steam. And the Sultan made the headlines when it was disclosed that he had sold a parcel of prime land in Johor Baru to China-based Guangzhou R&F Properties Co Ltd for RM4.5bil.The price paid was a new record for Johor at RM890 per sq ft for the 47ha believed to be in the vicinity of the old Customs, Immigration and Quarantine Complex, which faces Singapore and hence holds much potential.
Aside from Singapore’s Peter, the Sultan is also working on ventures with Tan Sri Vincent Tan and Tan Sri Lim Kang Hoo.
The Sultan acquired a 20% stake in Berjaya Times Square Sdn Bhd.
In explaining the deal, the vendor - Berjaya Assets Bhd - made reference to the Sultan’s “stature and business acumen” as part of the justification for the discounted price.
Kang Hoo is already well-known as the man behind master developer Iskandar Waterfront Holdings Sdn Bhd (IWH), which, in turn, is a partnership between himself and the Johor state government.
Just this week, Kang Hoo’s IWH sold another piece of land to a Singapore party at a price that even topped what Guangzhou R&F Properties had paid.
Insiders say that the Sultan has a few able trusted advisers in the various sectors of business he is interested in.
Aside from property, the Sultan is also said to be very keen on oil and gas, power, shipping and transport.
The Sultan is evidently passionate about the transport sector and trains, in particular. Notably, the Sultan of Johor commandeered the last train out from the Tanjong Pagar railway station in Singapore before the historical station was closed.
He holds the record as the first ruler to obtain a Class 26 locomotive driving licence a few years ago.
It’s no surprise then that observers reckon that transport could be an area in which the Sultan of Johor would make headlines in 2014. The state is at the centre of two major rail projects – the last leg of the nationwide Electrified Double-Tracking Project (EDTP) from Gemas to Johor Baru and the high-speed rail link from Kuala Lumpur to Singapore. Johor constitutes the largest part of the latter.
Observers say the Sultan has already linked up with top Japanese companies that are keen to provide the technology for the high-speed train. Similarly, on the EDTP, the Sultan had reportedly travelled to China in 2012 to team up with a top player, namely, the state-owned China Railway 18th Construction Bureau Co Ltd (CR18G).
It has been reported that CR18G’s Malaysian partner is Dacing Engineering & Equipment Sdn Bhd, and checks show that it is owned by the Johor crown prince, Tunku Ismail Sultan Ibrahim, Datuk Seri Shafiq Abdullah and the late Datuk Seri Raja Ashman Shah Sultan Azlan Shah.
CR18G is part of China Railway Construction Company (CRCC), which, in turn, is one of the three short-listed Chinese companies that will be chosen as the main contractor for the Gemas to Johor Baru portion of the EDTP. CR18G’s projects under its belt include constructing what was known as the world’s highest railway system, which runs from China’s Xinjiang city to Lhasa in Tibet.
In 2012, CR18G was also awarded the prestigious fast-train project between Mecca and Madinah by King Abdullah of Saudi Arabia.
Johor will continue to be in the limelight in 2014 and don’t rule out the Sultan featuring in some of the state’s development. – By Risen Jayaseelan
http://www.thestar.com.my/Business/Business-News/2013/12/28/Watch-them-in-2014/
Inflation the only certainty with GST, claims Rafizi
BY JOSEPH SIPALAN
DECEMBER 30, 2013 UPDATED: DECEMBER 30, 2013 06:39 PM
KUALA LUMPUR, Dec 30 — Putrajaya is misleading Malaysians into believing the prices of goods and services will fall when the consumption tax rolls out in April 2015, PKR’s Rafizi Ramli said today.
The first-term opposition lawmaker claimed the federal government is prescribing a simplistic view that does not consider the overall inflation that will come with the cost of doing business.
In singling out Deputy Finance Minister Datuk Ahmad Maslan for perpetrating the claim, the Pandan MP argued that retailers and manufacturers would have no choice but to raise their prices as the controversial good and services tax (GST) would affect every stage in doing business, thereby ending with consumers picking up the tab.
“Ahmad Maslan and the Barisan Nasional simplistically believe that just because retailers and manufacturers can claim a refund on GST paid on their costs, that this will automatically lower their production costs and allow them to lower prices,” Rafizi told a news conference at the PKR headquarters here.
“It’s a given that inflation will rise with the implementation of GST. The costs borne by businesses will go up because inflation goes up, and when the cost of doing business goes up, that means profits will go down.
“Even if businesses can claim on the cost of GST, the refund won’t be enough to offset that due to the overall hike in costs of goods,” he said.
Last week, Ahmad Maslan was reported to have claimed that the contentious new tax regime — which is scheduled implementation in April 2015 — is a cost-cutting measure by the government.
The deputy minister was quoted by news portal The Malaysian Insider as saying that the opposition Pakatan Rakyat coalition are merely using the planned GST as fodder to attack the government.
“Why don’t they want GST? Because when prices of goods and services fall, the opposition will not have any fodder to hit out at the government,” he was quoted as saying.
Rafizi, who is also PKR's strategic director, said there is no basis for Ahmad Maslan's claim that prices will go down as there is no way the government can compel businesses to cut down on their prices.
The opposition leader said as it is, the GST bill that will be tabled in Parliament next year does not have any provision to compel businesses that have claimed their GST refund to lower their prices.
“But Ahmad Maslan and the BN also know that once GST is implemented, prices will go up across the board and because prices go up, it would be unfair to impose such a provision on businesses.
“The government has to stop misleading the public. If you know prices are going up, stop going around telling the people that prices will go down because of the new tax mechanism.
“It is as if it is meant to mislead the public into believing that when prices go up, they will turn their anger on the retailers and manufacturers instead of holding the BN government accountable for pushing GST at a time when the country is not ready,” he said.
Public anger has been brewing against the government over the raft of hikes in rates, and plans to broaden the country's tax base through the GST.
An anti-price hike movement is planning to stage a rally at Dataran Merdeka tomorrow, where the annual New Year's Eve celebration is held, though police have since arrested the group's leader and another person running a Facebook page on suspicion of plotting to overthrow the government.
Since September, Putrajaya has embarked on aggressive cost-cutting measures after pressure grew for it to rein in a chronic budget deficit that traces back to the Asian Financial Crisis of 1997 and which has left Malaysia’s national debt at just below a critical legal ceiling.
It has pledged to bring its overspending down from around 5 per cent of gross domestic product now to 3 per cent by 2015.
Among others, it has reduced fuel subsidies, removed price control for sugar, allowed an increase in electricity tariffs and confirmed the introduction of the GST all within the space of four months.
- See more at: http://www.themalaymailonline.com/m...y-with-gst-claims-rafizi#sthash.KxvLTOP3.dpuf
BY JOSEPH SIPALAN
DECEMBER 30, 2013 UPDATED: DECEMBER 30, 2013 06:39 PM
KUALA LUMPUR, Dec 30 — Putrajaya is misleading Malaysians into believing the prices of goods and services will fall when the consumption tax rolls out in April 2015, PKR’s Rafizi Ramli said today.
The first-term opposition lawmaker claimed the federal government is prescribing a simplistic view that does not consider the overall inflation that will come with the cost of doing business.
In singling out Deputy Finance Minister Datuk Ahmad Maslan for perpetrating the claim, the Pandan MP argued that retailers and manufacturers would have no choice but to raise their prices as the controversial good and services tax (GST) would affect every stage in doing business, thereby ending with consumers picking up the tab.
“Ahmad Maslan and the Barisan Nasional simplistically believe that just because retailers and manufacturers can claim a refund on GST paid on their costs, that this will automatically lower their production costs and allow them to lower prices,” Rafizi told a news conference at the PKR headquarters here.
“It’s a given that inflation will rise with the implementation of GST. The costs borne by businesses will go up because inflation goes up, and when the cost of doing business goes up, that means profits will go down.
“Even if businesses can claim on the cost of GST, the refund won’t be enough to offset that due to the overall hike in costs of goods,” he said.
Last week, Ahmad Maslan was reported to have claimed that the contentious new tax regime — which is scheduled implementation in April 2015 — is a cost-cutting measure by the government.
The deputy minister was quoted by news portal The Malaysian Insider as saying that the opposition Pakatan Rakyat coalition are merely using the planned GST as fodder to attack the government.
“Why don’t they want GST? Because when prices of goods and services fall, the opposition will not have any fodder to hit out at the government,” he was quoted as saying.
Rafizi, who is also PKR's strategic director, said there is no basis for Ahmad Maslan's claim that prices will go down as there is no way the government can compel businesses to cut down on their prices.
The opposition leader said as it is, the GST bill that will be tabled in Parliament next year does not have any provision to compel businesses that have claimed their GST refund to lower their prices.
“But Ahmad Maslan and the BN also know that once GST is implemented, prices will go up across the board and because prices go up, it would be unfair to impose such a provision on businesses.
“The government has to stop misleading the public. If you know prices are going up, stop going around telling the people that prices will go down because of the new tax mechanism.
“It is as if it is meant to mislead the public into believing that when prices go up, they will turn their anger on the retailers and manufacturers instead of holding the BN government accountable for pushing GST at a time when the country is not ready,” he said.
Public anger has been brewing against the government over the raft of hikes in rates, and plans to broaden the country's tax base through the GST.
An anti-price hike movement is planning to stage a rally at Dataran Merdeka tomorrow, where the annual New Year's Eve celebration is held, though police have since arrested the group's leader and another person running a Facebook page on suspicion of plotting to overthrow the government.
Since September, Putrajaya has embarked on aggressive cost-cutting measures after pressure grew for it to rein in a chronic budget deficit that traces back to the Asian Financial Crisis of 1997 and which has left Malaysia’s national debt at just below a critical legal ceiling.
It has pledged to bring its overspending down from around 5 per cent of gross domestic product now to 3 per cent by 2015.
Among others, it has reduced fuel subsidies, removed price control for sugar, allowed an increase in electricity tariffs and confirmed the introduction of the GST all within the space of four months.
- See more at: http://www.themalaymailonline.com/m...y-with-gst-claims-rafizi#sthash.KxvLTOP3.dpuf
What’s going up in 2014?
JANUARY 1, 2014
KUALA LUMPUR, Jan 1 — The year 2014 has been dubbed as the year of price hikes as Malaysians prepare to tighten their belts for leaner days ahead.
Over the final few months of 2013, Putrajaya doled out numerous cost-cutting measures after pressure grew for it to rein in a chronic budget deficit, tracing as far back as the Asian Financial Crisis.
Here is a round-up of these measures. While some are still pending further review, few are expected to kick off from today.
1. Paying more to drive
Government cuts fuel subsidies with expected savings of RM3.3 billion annually, RON95 petrol and diesel goes up by 20 sen per litre to RM2.10 and RM2.00 respectively.
2. Sin tax
After excise tax for tobacco went up by 14 per cent from September 27, 2013, tobacco companies increased cigarettes’ prices by RM1.50-RM1.60 per pack.
3. Curing that sweet tooth
Sugar subsidies slashed by 34 sen per kilogramme, government points out 2.6 million Malaysians aged 30 and above have diabetes.
4. Powering the economy and lighting up homes
Electricity tariff in Peninsula Malaysia up by 4.99 sen/kWh (14.89 per cent) and in Sabah and Labuan by 5 sen/kWh (16.9 per cent), expected to save Petronas RM4 billion in subsidies annually and contribute to greater dividends to the government.
5. Spare a thought for public transport
Ahead of the electricity tariff hike, Land Public Transport Commission (SPAD) to review Light Rail Transit (LRT), monorail, KTM fares upon request by rail operators.
6. Costly to drive taxis around and sit in them
SPAD, collecting feedback and studying new taxi fare mechanism, cites higher expenses in taxi maintenance and annual rise in cost of living at around 2.5 per cent.
7. Pay more to skip jams
Toll rates for nine highways could be reviewed by government after operators complained of losses due to inadequate traffic volume
8. Giving your property its actual annual rental value
Local councils scaling down assessment rate, but bumping up assessment value of Kuala Lumpur and Johor Baru residential properties, last hike for Kuala Lumpur 21 years ago. Assessment rate goes up for Johor Baru’s commercial and industrial properties by 0.01 per cent and 0.02 per cent, last hike in 1995.
9. Sending your children to school
Federation of Malaysian School Bus Operators Association pushes for 40 per cent hike in fares in 2014, SPAD tells operators to wait until it decides on new fare mechanism. (Last review in 2009)
10. Be thankful there’s no item listed under 10
Allow self a duty-free indulgence with an intake of haze-free air that smells heavily of rain. (There’s always the six per cent Goods and Services Tax (GST) to look out for in April 2015, but does this fall under price increases?).
- See more at: http://www.themalaymailonline.com/malaysia/article/whats-going-up-in-2014#sthash.GfOhOMUq.dpuf
JANUARY 1, 2014
KUALA LUMPUR, Jan 1 — The year 2014 has been dubbed as the year of price hikes as Malaysians prepare to tighten their belts for leaner days ahead.
Over the final few months of 2013, Putrajaya doled out numerous cost-cutting measures after pressure grew for it to rein in a chronic budget deficit, tracing as far back as the Asian Financial Crisis.
Here is a round-up of these measures. While some are still pending further review, few are expected to kick off from today.
1. Paying more to drive
Government cuts fuel subsidies with expected savings of RM3.3 billion annually, RON95 petrol and diesel goes up by 20 sen per litre to RM2.10 and RM2.00 respectively.
2. Sin tax
After excise tax for tobacco went up by 14 per cent from September 27, 2013, tobacco companies increased cigarettes’ prices by RM1.50-RM1.60 per pack.
3. Curing that sweet tooth
Sugar subsidies slashed by 34 sen per kilogramme, government points out 2.6 million Malaysians aged 30 and above have diabetes.
4. Powering the economy and lighting up homes
Electricity tariff in Peninsula Malaysia up by 4.99 sen/kWh (14.89 per cent) and in Sabah and Labuan by 5 sen/kWh (16.9 per cent), expected to save Petronas RM4 billion in subsidies annually and contribute to greater dividends to the government.
5. Spare a thought for public transport
Ahead of the electricity tariff hike, Land Public Transport Commission (SPAD) to review Light Rail Transit (LRT), monorail, KTM fares upon request by rail operators.
6. Costly to drive taxis around and sit in them
SPAD, collecting feedback and studying new taxi fare mechanism, cites higher expenses in taxi maintenance and annual rise in cost of living at around 2.5 per cent.
7. Pay more to skip jams
Toll rates for nine highways could be reviewed by government after operators complained of losses due to inadequate traffic volume
8. Giving your property its actual annual rental value
Local councils scaling down assessment rate, but bumping up assessment value of Kuala Lumpur and Johor Baru residential properties, last hike for Kuala Lumpur 21 years ago. Assessment rate goes up for Johor Baru’s commercial and industrial properties by 0.01 per cent and 0.02 per cent, last hike in 1995.
9. Sending your children to school
Federation of Malaysian School Bus Operators Association pushes for 40 per cent hike in fares in 2014, SPAD tells operators to wait until it decides on new fare mechanism. (Last review in 2009)
10. Be thankful there’s no item listed under 10
Allow self a duty-free indulgence with an intake of haze-free air that smells heavily of rain. (There’s always the six per cent Goods and Services Tax (GST) to look out for in April 2015, but does this fall under price increases?).
- See more at: http://www.themalaymailonline.com/malaysia/article/whats-going-up-in-2014#sthash.GfOhOMUq.dpuf
Rising costs, a headache for developers
Get Daily Property News in Malaysia, News Powered by PropertyGuru Malaysia
Dec 31, 2013 - PropertyGuru.com.my
The most serious challenge that property developers will face in 2014 is the mounting cost of projects, according to Guocoland (M) Bhd Managing Director Tan Lee Koon.
“The external market factors and Bank Negara’s stringent lending guidelines aside, the biggest factor will be the current rising cost of development,” he said, adding that the prices of construction materials are also expected to increase again due to the looming electricity tariff hike next January.
Workers may also ask for higher wages due to higher expenses, added Tan. “There are also perennial problems like labour shortage and inconsistent supply of materials that the industry faces from time to time.”
Regarding the new real property gains tax (RPGT), he believes that the property sector will feel its impact in the near term.
Under Budget 2014, the tax for properties sold within three years is 30 percent, those disposed within four to five years is at 20 percent, while those sold after six years are exempt from the RPGT.
Moving forward, Kuala Lumpur and Petaling Jaya will likely remain as property hot spots due to the scarcity of land in these areas, especially in suburban locales like Rawang, Semenyih and Puchong South, he predicted.
“As a matter of fact, we have received quite a number of enquiries about our upcoming launches in Emerald, Rawang and we are optimistic the market will pick up after the year-end holidays.”
“And this explains why we are enthusiastic with our upcoming launches – the integrated Damansara City development in Damansara Heights and Emerald in Rawang,” Tan added.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]
http://www.propertyguru.com.my/property-news/2013/12/11567/rising-costs-a-headache-for-developers
Get Daily Property News in Malaysia, News Powered by PropertyGuru Malaysia
Dec 31, 2013 - PropertyGuru.com.my
The most serious challenge that property developers will face in 2014 is the mounting cost of projects, according to Guocoland (M) Bhd Managing Director Tan Lee Koon.
“The external market factors and Bank Negara’s stringent lending guidelines aside, the biggest factor will be the current rising cost of development,” he said, adding that the prices of construction materials are also expected to increase again due to the looming electricity tariff hike next January.
Workers may also ask for higher wages due to higher expenses, added Tan. “There are also perennial problems like labour shortage and inconsistent supply of materials that the industry faces from time to time.”
Regarding the new real property gains tax (RPGT), he believes that the property sector will feel its impact in the near term.
Under Budget 2014, the tax for properties sold within three years is 30 percent, those disposed within four to five years is at 20 percent, while those sold after six years are exempt from the RPGT.
Moving forward, Kuala Lumpur and Petaling Jaya will likely remain as property hot spots due to the scarcity of land in these areas, especially in suburban locales like Rawang, Semenyih and Puchong South, he predicted.
“As a matter of fact, we have received quite a number of enquiries about our upcoming launches in Emerald, Rawang and we are optimistic the market will pick up after the year-end holidays.”
“And this explains why we are enthusiastic with our upcoming launches – the integrated Damansara City development in Damansara Heights and Emerald in Rawang,” Tan added.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]
http://www.propertyguru.com.my/property-news/2013/12/11567/rising-costs-a-headache-for-developers
Iskandar likened to yummy honey
Dec 31, 2013 - PropertyGuru.com.my
Local and international investors are flocking to Iskandar Malaysia’s property sector like bees drawn by the smell of honey, according to a report by Bernama.
“Johor Baharu and Iskandar Malaysia are now likened to sugar or ‘bee buzzed honey’, with companies from both within and outside the country, racing to enter the real estate market in it,” noted Tan Sri Kok Onn, CEO and Managing Director of Gadang Holdings Bhd.
This economic corridor has also emerged as Malaysia’s second most vital growth area after Kuala Lumpur, he said during the launch of the RM2.2 billion Capital City project in Johor Bahru.
To be undertaken by Hatten Group, Sunbuild Development and Kumpulan Gadang, the massive development comprises two hotel blocks, three SOHO blocks and Capital 21, a 1 million sq ft retail mall.
Kok Onn pointed out that Iskandar’s property sector received the lion’s share of investments since it was launched in 2006, with total investment amounting to RM130 billion.
As such, Iskandar Malaysia’s real estate industry is now booming, with developers eager to acquire land despite a hefty increase in prices.
In fact, Mah Sing Group recently bought a 540ha plot in Pasir Gudang for RM429 million, while China-based R&F Properties Co Ltd has invested RM4.5 billion for six land parcels in Johor Bahru.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]
http://www.propertyguru.com.my/property-news/2013/12/11570/iskandar-likened-to-yummy-honey
Dec 31, 2013 - PropertyGuru.com.my
Local and international investors are flocking to Iskandar Malaysia’s property sector like bees drawn by the smell of honey, according to a report by Bernama.
“Johor Baharu and Iskandar Malaysia are now likened to sugar or ‘bee buzzed honey’, with companies from both within and outside the country, racing to enter the real estate market in it,” noted Tan Sri Kok Onn, CEO and Managing Director of Gadang Holdings Bhd.
This economic corridor has also emerged as Malaysia’s second most vital growth area after Kuala Lumpur, he said during the launch of the RM2.2 billion Capital City project in Johor Bahru.
To be undertaken by Hatten Group, Sunbuild Development and Kumpulan Gadang, the massive development comprises two hotel blocks, three SOHO blocks and Capital 21, a 1 million sq ft retail mall.
Kok Onn pointed out that Iskandar’s property sector received the lion’s share of investments since it was launched in 2006, with total investment amounting to RM130 billion.
As such, Iskandar Malaysia’s real estate industry is now booming, with developers eager to acquire land despite a hefty increase in prices.
In fact, Mah Sing Group recently bought a 540ha plot in Pasir Gudang for RM429 million, while China-based R&F Properties Co Ltd has invested RM4.5 billion for six land parcels in Johor Bahru.
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email [email protected]
http://www.propertyguru.com.my/property-news/2013/12/11570/iskandar-likened-to-yummy-honey
Rawang and Semenyih??? Is he high?
More like Bangsar, KLCC, Ampang.
There's a lot of land in Rawang and Semenyih.
YEAR IN REVIEW: ISKANDAR MALAYSIA
2013 a big year for investments
Mega project has drawn RM129.4b in committed investments at end-October
By Lee U-Wen [email protected]
Published January 06, 2014
[SINGAPORE] One could well surmise that the year 2013 was when Iskandar Malaysia - the country's first economic growth corridor - finally came of age in a big way.
The mega-project, which turned seven last November, reported some encouraging numbers as far as its investments were concerned, although some investors are treading with caution after the government announced measures to cool speculation in the region's red-hot property market.
Iskandar Malaysia, a 2,217 sq km region in southern Johor, is three times the size of neighbouring Singapore.
As at Oct 31 last year, Iskandar Malaysia had attracted RM129.4 billion (S$49.8 billion) in committed investments - 44 per cent of which has been realised so far - putting it on track to meet its lofty targets of RM383 billion by 2025 and GDP of US$93.3 billion.
This goal, said Malaysian Prime Minister Najib Razak in a recent speech, must be achieved in order to transform Iskandar into an international metropolis.
Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), expects Iskandar Malaysia to secure RM22 billion in investments this year, beating the RM21 billion in 2013.
Singapore is still by far the biggest investor in Iskandar Malaysia, accounting for 16 per cent of its total foreign investment as at June last year.
Singaporeans from all walks of life are sitting up and taking notice of developments up north, their curiosity piqued after several household names in the Singapore corporate scene pumped big money into Iskandar Malaysia - a telling sign of the level of confidence in the project's staying power and viability.
Last February, Temasek Holdings and CapitaLand signed a deal with Iskandar Waterfront Holdings to build a S$3.2 billion township in Danga Bay, featuring luxury condominiums, shopping malls and bungalows.
Temasek and its Malaysian counterpart, Khazanah Nasional, are also jointly developing two wellness projects in Medini with a total development gross value of RM5.2 billion.
Medini is a mixed-use urban development that will feature a lifestyle and leisure cluster, a logistics village, a creative park and an international financial district, among others.
Many other Singapore firms are also striking while the iron is still hot. Last month, Iskandar Waterfront Holdings sold 15 ha of seafront land in Danga Bay for RM1.6 billion to Hao Yuan Investment, which is planning a RM8 billion development featuring, among others, peninsula Malaysia's tallest tower.
In October 2013, Singapore billionaire and former remisier king Peter Lim unveiled plans for his RM5.5 billion Vantage Bay project that will include twin towers and is set to become one of the tallest condominiums in Malaysia.
But it is Iskandar's property market that is getting the most attention, especially from Singapore-based investors.
According to developer UEM Sunrise, Singaporeans make up a hefty 74 per cent of foreigners who have snapped up its properties - a figure that surpasses all the other foreign buyers combined.
Most of these Singaporeans are people who either travel to Johor often for business or those who want a weekend home, according to UEM Sunrise CEO Wan Abdullah Wan Ibrahim.
UEM Sunrise is the master developer of Nusajaya, which is Iskandar Malaysia's administrative capital and billed as the region's crown jewel.
Overall, the greater number of investors flocking to Iskandar Malaysia has helped push home prices up considerably. The cost of bungalows at UEM's East Ledang development, for instance, has surged 44 per cent on average in the resale market since 2011.
But Malaysia is taking steps to prevent its own real estate inflation from emerging as well as appeasing locals who complain that they can barely afford to own a home.
In his Budget speech last October, Mr Najib - who is also the co-chairman of IRDA - doubled the minimum amount foreigners must spend on property and raised the capital gains tax to 30 per cent on homes they sell within five years.
Just how these latest rulings will impact the property market in Iskandar Malaysia remains to be seen, especially coupled with Johor's decision to impose a new tax of 4 to 5 per cent on foreigners who buy property - both commercial and residential - in the state to curb speculative fervour.
This is a big step up from the current rules which require foreigners to pay a one-off fee of RM10,000 regardless of the property's value.
Medini, meanwhile, could be seeing more investment in the coming years, with the zone exempt from the higher 30 per cent property gains tax.
In fact, Medini - home to a new Legoland theme park and hotel, and Britain's famous Pinewood Studios - has been exempt from property gains taxes since day one as part of the plan by IRDA to drive more investments there.
Looking ahead, the year 2014 could prove to be an even more monumental one for Iskandar Malaysia, should two major initial public offerings (IPO) be launched as planned.
Medini is looking to raise some RM2.5 billion when it eventually goes public. Iskandar Waterfront Holdings, meanwhile, was on track for a US$300 million IPO in the first quarter of this year, but has since delayed it to the end of 2014 to gauge the impact of the numerous property cooling measures.
From the government's perspective, it will do all it can to ensure Iskandar Malaysia remains vibrant and attractive to both local and foreign investors, Mr Najib said last month.
"The federal government is committed to ensuring the success of Iskandar Malaysia and we are working with the Johor government, the private and public sectors, and the people of Johor to ensure the economic region's growth," he said.
"It is vital to ensure that projects are successfully completed on time and within budget to build investor and public confidence in Iskandar Malaysia and attract more investments. This will generate a momentum that will bring about multiplier effects and sustainable economic activities," he said.
http://www.businesstimes.com.sg/premium/top-stories/2013-big-year-investments-20140106
2013 a big year for investments
Mega project has drawn RM129.4b in committed investments at end-October
By Lee U-Wen [email protected]
Published January 06, 2014
[SINGAPORE] One could well surmise that the year 2013 was when Iskandar Malaysia - the country's first economic growth corridor - finally came of age in a big way.
The mega-project, which turned seven last November, reported some encouraging numbers as far as its investments were concerned, although some investors are treading with caution after the government announced measures to cool speculation in the region's red-hot property market.
Iskandar Malaysia, a 2,217 sq km region in southern Johor, is three times the size of neighbouring Singapore.
As at Oct 31 last year, Iskandar Malaysia had attracted RM129.4 billion (S$49.8 billion) in committed investments - 44 per cent of which has been realised so far - putting it on track to meet its lofty targets of RM383 billion by 2025 and GDP of US$93.3 billion.
This goal, said Malaysian Prime Minister Najib Razak in a recent speech, must be achieved in order to transform Iskandar into an international metropolis.
Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), expects Iskandar Malaysia to secure RM22 billion in investments this year, beating the RM21 billion in 2013.
Singapore is still by far the biggest investor in Iskandar Malaysia, accounting for 16 per cent of its total foreign investment as at June last year.
Singaporeans from all walks of life are sitting up and taking notice of developments up north, their curiosity piqued after several household names in the Singapore corporate scene pumped big money into Iskandar Malaysia - a telling sign of the level of confidence in the project's staying power and viability.
Last February, Temasek Holdings and CapitaLand signed a deal with Iskandar Waterfront Holdings to build a S$3.2 billion township in Danga Bay, featuring luxury condominiums, shopping malls and bungalows.
Temasek and its Malaysian counterpart, Khazanah Nasional, are also jointly developing two wellness projects in Medini with a total development gross value of RM5.2 billion.
Medini is a mixed-use urban development that will feature a lifestyle and leisure cluster, a logistics village, a creative park and an international financial district, among others.
Many other Singapore firms are also striking while the iron is still hot. Last month, Iskandar Waterfront Holdings sold 15 ha of seafront land in Danga Bay for RM1.6 billion to Hao Yuan Investment, which is planning a RM8 billion development featuring, among others, peninsula Malaysia's tallest tower.
In October 2013, Singapore billionaire and former remisier king Peter Lim unveiled plans for his RM5.5 billion Vantage Bay project that will include twin towers and is set to become one of the tallest condominiums in Malaysia.
But it is Iskandar's property market that is getting the most attention, especially from Singapore-based investors.
According to developer UEM Sunrise, Singaporeans make up a hefty 74 per cent of foreigners who have snapped up its properties - a figure that surpasses all the other foreign buyers combined.
Most of these Singaporeans are people who either travel to Johor often for business or those who want a weekend home, according to UEM Sunrise CEO Wan Abdullah Wan Ibrahim.
UEM Sunrise is the master developer of Nusajaya, which is Iskandar Malaysia's administrative capital and billed as the region's crown jewel.
Overall, the greater number of investors flocking to Iskandar Malaysia has helped push home prices up considerably. The cost of bungalows at UEM's East Ledang development, for instance, has surged 44 per cent on average in the resale market since 2011.
But Malaysia is taking steps to prevent its own real estate inflation from emerging as well as appeasing locals who complain that they can barely afford to own a home.
In his Budget speech last October, Mr Najib - who is also the co-chairman of IRDA - doubled the minimum amount foreigners must spend on property and raised the capital gains tax to 30 per cent on homes they sell within five years.
Just how these latest rulings will impact the property market in Iskandar Malaysia remains to be seen, especially coupled with Johor's decision to impose a new tax of 4 to 5 per cent on foreigners who buy property - both commercial and residential - in the state to curb speculative fervour.
This is a big step up from the current rules which require foreigners to pay a one-off fee of RM10,000 regardless of the property's value.
Medini, meanwhile, could be seeing more investment in the coming years, with the zone exempt from the higher 30 per cent property gains tax.
In fact, Medini - home to a new Legoland theme park and hotel, and Britain's famous Pinewood Studios - has been exempt from property gains taxes since day one as part of the plan by IRDA to drive more investments there.
Looking ahead, the year 2014 could prove to be an even more monumental one for Iskandar Malaysia, should two major initial public offerings (IPO) be launched as planned.
Medini is looking to raise some RM2.5 billion when it eventually goes public. Iskandar Waterfront Holdings, meanwhile, was on track for a US$300 million IPO in the first quarter of this year, but has since delayed it to the end of 2014 to gauge the impact of the numerous property cooling measures.
From the government's perspective, it will do all it can to ensure Iskandar Malaysia remains vibrant and attractive to both local and foreign investors, Mr Najib said last month.
"The federal government is committed to ensuring the success of Iskandar Malaysia and we are working with the Johor government, the private and public sectors, and the people of Johor to ensure the economic region's growth," he said.
"It is vital to ensure that projects are successfully completed on time and within budget to build investor and public confidence in Iskandar Malaysia and attract more investments. This will generate a momentum that will bring about multiplier effects and sustainable economic activities," he said.
http://www.businesstimes.com.sg/premium/top-stories/2013-big-year-investments-20140106
Singaporeans will only invest in Iskandar is if the price is cheap.
With Singapore property prices softening, this will have a knock on effect on Iskandar.
Ppl will either hold back or look to offload if possible.
The way the property launches are slowing down is a significant sign.
Global economy strengthening but risks remain: World Bank
By Anthony Rowley
Tokyo Correspondent
Published January 15, 2014
THE global economy is projected by the World Bank to strengthen this year with growth picking up in developing countries and high-income economies finally "turning the corner" five years after the global financial crisis.
Firming growth in developing countries is being bolstered by an acceleration in high-income countries and continued strong growth in China, the bank says in its latest Global Economic Prospects report released Wednesday morning.
The report cautions, however, that growth prospects remain vulnerable to headwinds from rising global interest rates and potential volatility in capital flows as the US Federal Reserve begins tapering its massive monetary stimulus.
While a smooth adjustment process is likely, "the novelty of the unwinding process has only begun and the rapid spike in long-term interest rates during the summer of 2013 suggests that a much more abrupt rise in long-term interest rates is also a possibility, the World Bank says.
"In such a disorderly adjustment, capital flows to developing countries could decline temporarily by 50 per cent or more for a period of several months – potentially pushing one or more countries into crisis.”
"Evidence suggests that countries with large current account deficits or those that have had a rapid accumulation of credit in recent years could be most vulnerable to a precipitous tightening of international financial conditions,’’ it added.
Other risks, such as those deriving from uncertainty over US debt-ceiling discussions, crisis in the Euro Area and high borrowing and investment rates in China have become less likely but remain.
“Growth appears to be strengthening in both high-income and developing countries, but downside risks continue to threaten the recovery," World Bank Group President Jim Yong Kim said on the release of the report.
"The performance of advanced economies is gaining momentum, and this should support stronger growth in developing countries in the months ahead."
Global GDP growth is projected to firm from 2.4 per cent in 2013 to 3.2 per cent this year, stabilisng at 3.4 per cent and 3.5 per cent in 2015 and 20161 respectively, with much of the initial acceleration reflecting stronger growth in high-income economies.
http://www.businesstimes.com.sg/bre...trengthening-risks-remain-world-bank-20140115
By Anthony Rowley
Tokyo Correspondent
Published January 15, 2014
THE global economy is projected by the World Bank to strengthen this year with growth picking up in developing countries and high-income economies finally "turning the corner" five years after the global financial crisis.
Firming growth in developing countries is being bolstered by an acceleration in high-income countries and continued strong growth in China, the bank says in its latest Global Economic Prospects report released Wednesday morning.
The report cautions, however, that growth prospects remain vulnerable to headwinds from rising global interest rates and potential volatility in capital flows as the US Federal Reserve begins tapering its massive monetary stimulus.
While a smooth adjustment process is likely, "the novelty of the unwinding process has only begun and the rapid spike in long-term interest rates during the summer of 2013 suggests that a much more abrupt rise in long-term interest rates is also a possibility, the World Bank says.
"In such a disorderly adjustment, capital flows to developing countries could decline temporarily by 50 per cent or more for a period of several months – potentially pushing one or more countries into crisis.”
"Evidence suggests that countries with large current account deficits or those that have had a rapid accumulation of credit in recent years could be most vulnerable to a precipitous tightening of international financial conditions,’’ it added.
Other risks, such as those deriving from uncertainty over US debt-ceiling discussions, crisis in the Euro Area and high borrowing and investment rates in China have become less likely but remain.
“Growth appears to be strengthening in both high-income and developing countries, but downside risks continue to threaten the recovery," World Bank Group President Jim Yong Kim said on the release of the report.
"The performance of advanced economies is gaining momentum, and this should support stronger growth in developing countries in the months ahead."
Global GDP growth is projected to firm from 2.4 per cent in 2013 to 3.2 per cent this year, stabilisng at 3.4 per cent and 3.5 per cent in 2015 and 20161 respectively, with much of the initial acceleration reflecting stronger growth in high-income economies.
http://www.businesstimes.com.sg/bre...trengthening-risks-remain-world-bank-20140115
Jobless rate dips in rich countries
Published January 14, 2014
[PARIS] The unemployment rate across rich countries dipped by one-tenth of a percentage point to 7.8 per cent in November last year, the OECD said on Tuesday.
The improvement was due to drops in the unemployment rate in Israel, Korea, Mexico, and the United States.
It held steady in the eurozone, Canada and Japan, the Organisation for Economic Cooperation and Development said.
The lowest unemployment rate was in Korea, with 2.9 per cent of the active population out of work, while it was highest in Spain at 26.7 per cent.
Spain also had the highest youth unemployment rate of 57.7 per cent.
A total of 47.1 million people unemployed means that the ranks of the unemployed are still up by more than one third or 12.4 million people from when the global financial crisis struck.- AFP
http://www.businesstimes.com.sg/breaking-news/world/jobless-rate-dips-rich-countries-20140114
Published January 14, 2014
[PARIS] The unemployment rate across rich countries dipped by one-tenth of a percentage point to 7.8 per cent in November last year, the OECD said on Tuesday.
The improvement was due to drops in the unemployment rate in Israel, Korea, Mexico, and the United States.
It held steady in the eurozone, Canada and Japan, the Organisation for Economic Cooperation and Development said.
The lowest unemployment rate was in Korea, with 2.9 per cent of the active population out of work, while it was highest in Spain at 26.7 per cent.
Spain also had the highest youth unemployment rate of 57.7 per cent.
A total of 47.1 million people unemployed means that the ranks of the unemployed are still up by more than one third or 12.4 million people from when the global financial crisis struck.- AFP
http://www.businesstimes.com.sg/breaking-news/world/jobless-rate-dips-rich-countries-20140114
Interesting article yesterday. Not sure how credible but good to be aware.
http://www.forbes.com/sites/jesseco...omy-is-heading-for-an-iceland-style-meltdown/
http://www.forbes.com/sites/jesseco...omy-is-heading-for-an-iceland-style-meltdown/
MAS in damage control mode.
http://www.channelnewsasia.com/news/business/s-pore-is-not-facing-a/954240.html
http://www.channelnewsasia.com/news/business/s-pore-is-not-facing-a/954240.html
Yes, my esteemed learned friend forwarded to me as well:
An excerpt:
Like U.S. and Icelandic banks during their countries’ housing bubbles of 2003 to 2007, Singapore’s banks are experiencing good times as the bubble inflates, but are heading for a crisis when interest rates eventually rise. Singapore’s government is limited in its ability to bail out its financial institutions due to its significant public debt, which is one of the world’s highest at over 110 percent of the city-state’s GDP – a figure that is worse than the U.S.’ 106 percent public debt to GDP ratio. While most of Singapore’s public debt is owed to its own citizens as part of a mandatory savings-funded pension and healthcare plan, it still impairs the government’s ability to backstop the country’s highly-leveraged financial system.
As one of the 25 financial centers that the IMF regards as systemically important, a financial crisis centered in Singapore would put the entire global financial system in jeopardy.
If Singapore is down, Johor also goes down.
Slowdown in property launches in M’sia
http://www.starproperty.my/index.php/articles/property-news/slowdown-in-property-launches-in-msia/
http://www.starproperty.my/index.php/articles/property-news/slowdown-in-property-launches-in-msia/
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when someone is deep in debt, this person will always tend to think others around them also are in deep debt and could financially collapse anytime. it's human nature.
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