MARCH 2018 EXPORTS HIT RECORD RM84.5 BILLION
With a Y-o-Y growth of 2.2%, Malaysia’s exports hit a record high of RM84.5 billion in March, 2018, as reinforced by higher shipments of manufactured goods. Trade surplus widened to RM14.7 billion, the highest level since September 2008, when it stood at RM15.42 billion and March 2018 imports declined by 9.6% Y-o-Y. For 1Q18, total trade stood at RM441.89 billion, a 2.6% increase from RM430.5 billion in 1Q17. Exports rose 5.8% to RM237.63 billion and imports declined 0.8% to RM204.26 billion, thus translating into a trade surplus of RM33.37 billion in 1Q18. Such sustained growth was principally driven by increased shipments of manufactured goods (contributes to more than 80% of Malaysia’s exports), with particularly high demand for electrical and electronic products. Additional contributors include palm oil and palm oil-based agriculture products, and crude petroleum, which exhibited Y-o-Y double digit growth rates.
MALAYSIA’S MEDIAN MONTHLY SALARIES RISE 7.7% IN 2017
The Statistics Department of Malaysia has ascertained a 7.7% augmentation in median monthly salaries and wages in 2017. Median monthly salaries and wages increased to RM2,160 from RM2,000 in 2016 and mean monthly salaries and wages expanded from RM2,657 to RM2,880 in 2017. Median monthly salaries and wages of employees in urban areas increased by 6.6% per year to RM2,260 and by 3.6% per year to RM1,400 for employees in rural areas. The growth of mean monthly salaries and wages in urban and rural areas were higher at 7.7% (RM3,038) and 6.3% (RM2,040), respectively.
BNM KEEPS OPR UNCHANGED AT 3.25% AS ECONOMY’S PROSPECTS STAY STRONG
Bank Negara Malaysia’s Monetary Policy Committee (MPC) is maintaining the overnight policy rate (OPR) at 3.25%, due to “sustained robustness of the Malaysian economy”. At the current OPR level, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation. The MPC will persist with monitoring and gauging the balance of risks surrounding the outlook for domestic growth and inflation.
(The Edge Property, 10/05/2018 & NST, 10/05/2018)
TERENGGANU DRAWBRIDGE TAKING SHAPE
Construction works on a drawbridge in Terengganu’s city centre is progressing rapidly and is optimistically expected to be completed by September 2018. Running across the Sungai Terengganu estuary, the drawbridge will connect the city centre in the south, to Seberang Takir in the north. The RM248 million facility will be complemented by a highway between the city centre and the Sultan Mahmud Airport, which will reduce travel time to approximately 10 minutes. Areas surrounding the drawbridge will additionally be developed with boat docking facilities; a 30-storey Kuala Terengganu City Council tower; and a Kuala Terengganu City Centre Mall with 200 shops, a 10-screen Cineplex and a 48-lane bowling centre.
18 NEW PROGRAMMES TO HELP PROMOTE LANGKAWI
Within the next five years, eighteen initiatives will be prospectively implemented in Pulau Langkawi in order to invigorate tourism and augment benefits to residents. The programmes include the following:
- An Urban Transformation Centre (UTC) will be provided for fast business licence approvals and for permit applications.
- The Malaysian Government will allocate RM100 million to the SME Bank, who will then distribute it in the form of loans ranging between RM25,000 and RM250,000. At an annual interest rate of 5%, whereby 2% is subsidised by the Government, the provision of loans will be granted to Langkawi business operators who run chalets, motels and sundry shops.
- Small businesses will attain a RM5,000 grant commencing June 1, 2018.
- The Bumiputera Agenda Steering Unit (Teraju) will provide grants for 200 small-scale bumiputra Langkawi businesses, worth up to RM10,000 each.
- The Langkawi Tourism Academy is to be upgraded and a hostel will be built to accommodate an elevated influx of students.
- A business hub will be set up in Pantai Cenang, which is to be modelled after the famous Chatuchak Market in Bangkok.
- Resulting from a private sector investment of RM200 million, a Langkawi Premium Outlet project will be developed
- A private hospital will be constructed via a collaborative endeavour between the Langkawi Development Authority and the KPJ Hospital under JCorp.
- Contingent on the completion of the Langkawi International Airport extension in September, 2018, passenger capacity is projected to expand from 1.5 million a year to up to 3 million a year.
- The Malaysian Government is in discussions with several airlines in order to draw-in foreign airlines to provide direct flights to Langkawi.
- Wi-Fi services will be provided at public areas such as on ferry services and at the airport.
- Tourism Malaysia will collaborate with China’s Tencent Holdings to produce 40 promotional videos, which will be viewed by 980 million Chinese and 10 million Malaysians.
- Tourism TV will be reconfigured to promote Langkawi’s tourism scene, with a daily two-hour slot exclusively allocated to Langkawi.
- Entrepreneurs on the island will be provided with licensing assistance, which can be applied for within the next six months and tourism industry operators, such as tour agencies, tour drivers and boat operators, will be exempted from licensing fees for one year.
- The Malaysian Digital Economy Corporation (MDEC) and the Malay Chambers of Commerce will collaborate in training up to 1,000 digital entrepreneurs in Langkawi
- RM9.1 million has been allocated for solid waste management and cleaning works in nearby islands and the Kilim Geoforest Park.
- The development of a motocross circuit to nurture talent in motor sports.
- The Government intends on simultaneously declaring 2020 as “Visit Malaysia Year” and “Langkawi Visit Year”.
(NST & The Star, 05/05/2018)
PARAMOUNT AIMS FOR RM1.2 BILLION WORTH OF LAUNCHES
In 2018, Paramount Corp Bhd has planned for new launches with a combined gross development value of RM1.2 billion and a particular emphasis on affordably priced products. Launched in February 2018, one of the phases within the “Atwater” project in Section 13, Petaling Jaya features a senior-friendly living concept with ample walkway spaces for wheelchair access, larger rooms and bathrooms equipped with a seat in the shower area and lower positioned switches. Two commercial blocks in Atwater will be launched by the end of 2018 and in either 4Q18 or early-2019, Paramount intends on launching Berkeley Uptown, a 33.3-acre integrated development in Klang, which will include a new Sri KDU International School campus.
(The Star, 05/05/2018)
SENDAYAN PROJECT LAUNCHES
A total of 60 single-storey terraced houses within the “Sendayan Second Generation Housing Project” in Taman Bukit Sendayan are available to eligible buyers, along with a government subsidy of RM7 million. The three-bedroom housing project was carried out by Matrix Concepts Holdings Berhad, with each unit having a built-up area of 882.6 sq. ft. and an approximate price of RM80,000.
PROTASCO TO BEGIN FOURTH PHASE OF HOUSING SCHEME BY 4Q18
Protasco Bhd optimistically expects to begin construction of the fourth phase of the “1Malaysia Civil Servants Housing Programme” (PPA1M) by 4Q18. The 1,681 unit project, known as “PPA1M Kenanga”, is due for completion in approximately 36 months. Phase 4 will be built on 11.2 acres of land and has a projected gross development value of RM356 million.
(The Star, 05/05/2018)
GALLERY BOOKSTORE TO CONSOLIDATE OPERATIONS
Gallery Bookstore, which recently opened its tenth outlet in Taiping, Perak, is on a “consolidation drive” to bolster its brand positioning. Contingent on appropriate value propositioning, the company is open to prospective opportunities and may introduce additional branches in 2018. The company will re-strategise its operations for the next six months, prior to embarking on an expansion drive. Five additional outlets are expected to be opened by 2020.
SP SETIA & TRADEWINDS TO DEVELOP HOUSING PROJECT FOR KL CITY HALL IN RETURN FOR LAND
SP Setia Bhd’s 50% jointly controlled entity, Retro Highland, has entered into a privatisation agreement with Kuala Lumpur City Hall (DBKL) for the construction of a “Quality Sustainable People Housing” (QSPH) project in Cheras. In return, Retro Highland will be awarded with 52.25 acres of leasehold land in Cheras valued at RM1.19 billion, which will be developed as a mixed use project with an approximated gross development value of RM11.03 billion and a development period spanning 11 years. The RM1.19 billion agreed value for the land exchange comprises construction costs for Phase 1 and Phase 2 of up to RM344.79 million and RM835.12 million, respectively and a cash consideration of RM14.99 million. Under the circumstance that definite construction costs of the QSPH development is lower than estimated costs, an additional cash consideration for the difference will be remunerated to DBKL accordingly. Scheduled for completion by 2028, the QSPH project comprises 3,971 residential units, 112 shops and stalls, a market and other public facilities.
(The Edge Property, 07/05/2018; The Sun, NST & The Star, 08/05/2018)
BAGAN DATUK, PERAK SET TO BECOME “AUTOMOTIVE HUB”
With a RM500 million influx of investments, Bagan Datuk in Perak is set to become an automotive hub, which will correspondingly generate 4,000 jobs. Spanning 342.7 acres of land, the “Tan Chong Automotive and Commercial Vehicle Hub” is scheduled to commence construction in May 2018 and will be operational in 2021. For Phase 1, Tan Chong Motor Holdings Bhd will pay a total of RM100 million for the project, which will be utilised for the acquisition of land and construction of a bus and truck plant. Once completed, this new plant will cater to the production needs of both local and export markets.
INDUSTRIAL PRODUCTION INDEX GROWTH AT 3.1% IN MARCH 2018
In March 2018, the Industrial Production Index exhibited a 3.1% surge compared with March 2017. The Department of Statistics Malaysia denoted that the increase was supported by expansion in the manufacturing and electricity indexes, which exhibited growth rates of 4.1% and 4.4%, respectively.
MORE INBOUND TOURISTS EXPECTED
Malaysian airports are poised to encounter heightened levels of inbound tourists, as the expansion of air traffic rights agreements and the relaxation of visa requirements encourage airlines to launch further flights. Positive economic growth will additionally encourage greater passenger volume in the leisure and business segments. In 1Q18, Malaysia Airports Holdings Bhd’s (MAHB) local airports registered a 3.6% growth in passenger volume to 24.4 million passengers, international traffic expanded by 10.8% and domestic traffic dwindled by 3.5% as aircraft movements grew by 1.2%.
Two months into 2018, the growth of MAHB airports was driven by robust travel demand from China, India and Southeast Asia, whereby China and Hong Kong airlines significantly increased their number of flights to Malaysia. Shanghai Airlines, Cathay Dragon and Xiamen Airlines increased flights to Malaysia by 110%, 90% and 50% respectively. Such growth was principally fuelled by “origin and destination” passengers on international routes rather than transit traffic.
CONNECTIVITY STILL AN ISSUE FOR EUROPEAN TOURISTS
Tourism Malaysia aspires to revive the local tourism market by targeting approximately 1.5 million tourists from Europe. European tourists visiting Malaysia have declined over the last five years, chiefly attributable to “connectivity issues”. In 2017, the country welcomed 25.9 million tourists, which was a 3% decrease Y-o-Y, with RM82.2 billion in tourism receipts. Out of the 25.9 million, 1.1 million hailed from Europe, which was a 1.7% decline compared with 2016.
(The Malaysian Reserve, 10/05/2018)
REHDA’S DEFINITION OF AFFORDABLE HOUSE PRICE IS INACCURATE, SAYS BNM
Bank Negara Malaysia (BNM) professes that the definition of affordable houses quoted by the Real Estate and Housing Developers’ Association (Rehda) is inaccurate. It was rationalised that housing within the RM300,000 to RM500,000 price range is beyond what is “affordable” to median income households in Malaysia. BNM indicated that based on international standards deploying the Housing Cost Burden approach, the maximum price of an affordable home is estimated to be merely RM282,000. This price was paralleled with a median household income of RM5,228 in 2016, as published in the Household Income and Expenditure Survey by the Department of Statistics, Malaysia.
BNM additionally implied that there was a mismatch between profiles of new housing supply and demand by households. According to 4Q17 data by the National Property Information Centre (Napic), only 39% of new housing launches were priced up to RM300,000 between 2016 and 2017. This is insufficient to meet the demand exhibited by 50% of households in Malaysia earning up to the median income. Napic data advocates that the issue of unsold affordable homes priced below RM300,000 is diminutively severe compared with other price ranges. As of 4Q17, unsold residential units priced below RM300,000 constitute the lowest share (20%) of total unsold residential properties under construction in Malaysia (RM300,000 to RM500,000 at 35% and beyond RM500,000 at 45%).
(The Edge Property & The Star, 05/05/2018; The Sun, 07/05/2018)
BANK NEGARA: LIVING WAGE IS NOT MEDIAN INCOME
The monthly income of RM2,700 published in Bank Negara Malaysia’s (BNM) 2017 Annual Report is a provisional living wage estimate for single adults in Kuala Lumpur, which does not concur with generalised median incomes. The FactWatch.my initiative by BNM postulated that the concept of living wages distinctly differs from minimum wages and therefore did not supersede the relevance of current minimum wages (between RM920 and RM1,000). The living wage is a guide on incomes necessitated in attaining a “minimum acceptable living standard” and providing the opportunity for personal and family development, meaningful societal participation and the mitigation of “severe financial distress”.
SP SETIA TO SELL HOMES BELOW RM400,000 AT SETIA FONTAINES
SP Setia Bhd plans to launch the initial phase of its development at “Setia Fontaines” in Bertam, on the mainland of Penang, by the end of 2018. The single and double-storey houses are set to be priced below RM400,000 a unit. The “Setia Fontaines” mixed development project is to be erected on 1,675 acres of land, over a 15 to 20 year period.
(The Star, 05/05/2018)
DAMANSARA REALTY TO JOINTLY BID FOR JOHOR BARU – SINGAPORE RAPID TRANSIT SYSTEM
Damansara Realty Bhd has teamed up with China State Construction Engineering (M) Sdn Bhd (CSCEM) to bid for the 4km Johor Baru – Singapore Rapid Transit System (RTS) railway project. Slated for completion by the end of 2024, the RTS project will connect the Bukit Chagar station in Johor Baru, and Woodlands in Singapore.
(The Edge Property, 08/05/2018; NST, 09/05/2018)
THUMBS UP FOR AFFORDABLE SINGLE-STOREY HOMES
Located on a 36.7 acre plot of land off Jalan Yong Peng – Paloh and adjacent to SJK(C) Yong Peng 2, the proposed state-wide “Johor Affordable Housing” (RMMJ) project is an affordable single-storey housing scheme. Priced at RM140,000 per unit, 153 homes with three bedrooms and two bathrooms are to be provided.
BOUSTEAD PLANTATIONS TO ACQUIRE RM433 MILLION PLANTATION ASSETS
Boustead Plantations Bhd (BPB) intends on purchasing 13,668 acres of plantation land and a 60 tonne per hour palm oil mill, both in Sandakan, Sabah. With an overall worth of RM433 million, BPB plans on purchasing these assets from Sit Seng & Sons Realty Sdn Bhd, as part of its overall strategy to expand its landbank. BPB’s proposed acquisition exercise involves the acquisition of the entire equity interest in Lubah Plantations (S) Sdn Bhd and Ever-Yield Sdn Bhd, both wholly owned subsidiaries of Sit Seng & Sons.
(NST, 09/05/2018 & The Malaysian Reserve, 10/05/2018)