Author: Pei Ling

Kuala Lumpur High Court Sets Genting Malaysia Vs Finance Ministry Trial On May 30

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© Nikkei Markets

KUALA LUMPUR (Feb 14) — The Kuala Lumpur High Court on Thursday set May 30 as the trial date for Genting Malaysia Bhd versus the federal finance ministry case. 

Judge Hajah Azizah Nawawi had granted Genting Malaysia leave on Jan. 24 to review the finance ministry’s decision to amend a provision under which Genting enjoyed a 10-year tax holiday for capital expenditure on Genting Integrated Tourism Plan.

The court had also granted a stay on the ministry’s decision until the case is resolved.

In 2014, the finance ministry had granted a 10-year tax exemption to Genting Malaysia on its capital spending on a $2.5 billion revamp plan for its hilltop casino, recreational amenities and a 20th Century Fox-branded theme park.

In December 2017, the finance ministry amended the tax incentive pact, which Genting Malaysia challenged. The ministry rejected Genting Malaysia’s appeal against the revision in September 2018. 

– By Gan Pei Ling
– Edited by Abhrajit Gangopadhyay

Malaysia Bets On Biodiesel Projects To Lift Local Palm Oil Use By 2020

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© Nikkei Markets

KUALA LUMPUR (Feb 12) — Malaysia is aiming for domestic annual demand of crude palm oil to rise by 1.3 million metric tons in 2020 as it presses ahead with biodiesel programs in the transport and industrial sectors, the federal plantation minister said Tuesday.

“By increasing the blending percentage from B10 to B20, and also rolling out the B10 for industrial diesel use, we anticipate that the uptake of CPO to increase to 1.3 million tons per annum,” Teresa Kok said at a palm oil forum in the administrative capital Putrajaya.

Malaysia already trails Indonesia, which introduced B20 – a blend of 20% palm oil and 80% fossil fuel – to its transport sector in 2016. The move will help stabilize palm oil prices and reduce stock, Kok said.

Shares of palm oil producers rose further following the minister’s remarks. Sime Darby Plantation rose 0.4%, while the Bursa Malaysia Plantation Index climbed 1% and outperformed the broader market decline.

The gain also comes as stockpile in Malaysia, the world’s second-largest palm oil producer after Indonesia, eased off record-high levels as exports surged. Malaysia’s palm oil inventory dropped 6.7% to 3 million tons in January from a month earlier, official data released Monday showed.

Exports of the widely-used edible oil surged 21.2% to 1.68 million tons in January, in part due to changes in Indonesia’s export tax structure and cut in India’s palm oil import duties. The mammoth palm oil inventory fell for the first time in seven months.

Palm oil is a key export commodity of the trade-reliant nation and makes up the second-largest shipment after electrical and electronics items. Weakness in overseas demand typically swells stockpile of the commodity that is used in everything from ice creams to lipsticks. Hefty inventory also weighs on the palm oil’s prices and potentially pressures earnings of plantation companies.

Malaysia’s Prime Minister Mahathir Mohamad had said in December the country should move towards adopting B20 biodiesel program by 2020. Malaysia rolled out B10 biodiesel, a blend of 10% palm oil and 90% petroleum diesel, for the transport sector on Feb 1.

The industrial sector is expected to start using B7 biodiesel from Jul. 1.

“We still need to monitor for few months to see how much CPO is being consumed for the biodiesel program,” said Public Investment Bank Analyst Chong Hoe Leong. “Our domestic consumption is weak.”

In the near term, analysts said production will likely weaken seasonally in the months ahead, helping to prop up crude palm oil prices at least in the first quarter.

“We expect further moderation of stock levels in the coming months, as output continues to dwindle,” said RHB Research Institute Analyst Henry Wibowo. That could help crude palm oil prices to stay buoyant for the rest of the quarter and stabilize in the second quarter, he said.

The most-traded palm oil futures for April delivery was last traded at 2,249 ringgit a ton on Bursa Malaysia Derivatives. Palm oil prices have risen close to 7% so far this year.

– By Gan Pei Ling and Gho Chee Yuan
– Edited By Abhrajit Gangopadhyay

Malaysia Institute Of Economic Research Forecasts Economy To Grow 4.5% In 2019

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© Nikkei Markets

KUALA LUMPUR (Jan 30) — Malaysia Institute of Economic Research Wednesday forecast the country’s economy to grow 4.5% in 2019 and between 4.5% and 5.5% next year.

“We are on track to be a high-income economy. No doubt about it,” said MIER Executive Director Zakariah Abdul Rashid.

Meanwhile, Malaysia’s consumer sentiment index fell to 96.8 points in the final quarter of 2018 from 107.4 points in the preceding quarter, MIER said. 

– By Gan Pei Ling
– Edited By Abhrajit Gangopadhyay

Malaysia Finance Minister Hopes Developers Can Offer Up To 20% Discount On Home Prices

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© Nikkei Markets

KUALA LUMPUR (Jan 31) — Malaysia’s finance minister Thursday said he hopes that property developers can offer up to 15%-to-20% discount on home prices during the first six months of 2019.

“I hope they can offer a discount of 15%-20%. We will let the market forces decide,”Lim Guan Eng said at a news conference in Selangor.

He also hopes developers could sell as many units as possible of 19.50 billion ringgit ($4.77 billion) worth of unsold units.

Malaysian banks have ample funds to lend to prospective buyers, and the government will also offer stamp duty exemption for first-time home buyers between January and June this year for units priced between 300,000 ringgit to 1 million ringgit, Lim said.

In November, the state announced that developers have agreed to offer at least a 10% discount on unsold units to boost sales.

– By Gan Pei Ling
– Edited by Sayantika Bhowal

Malaysia Fraser & Neave To Invest MYR30 Mln To Expand Capacity, Sugar Tax Looms-CEO

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© Nikkei Markets

KUALA LUMPUR (Jan 23) — Malaysia’s Fraser & Neave Holdings will invest 30 million ringgit ($7.3 million) to expand production capacity as part of its capital expenditure program for this fiscal year that started Oct. 1, even as the beverage maker seeks to absorb higher cost due to a proposed sugar tax, its chief executive said Wednesday. 

“More than 90% of the existing products will be affected by the sugar tax,” Lim Yew Hoe said at a news conference. “Raising product prices will be our last resort.”

The company is exploring alternatives to sugar after Malaysia announced move to tax sugary drinks from April, Lim said. 

The company may offer its products in smaller pack size or reformulate some of its products to reduce the sugar content, he added. 

– By Gan Pei Ling
– Edited By Abhrajit Gangopadhyay

Malaysia Automotive Parts Exports Forecast To Grow To MYR13.03 Bln This Year-Govt Body

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© Nikkei Markets

KUALA LUMPUR (Jan 18) — Malaysia’s exports of automotive parts are forecast to grow to 13.03 billion ringgit ($3.17 billion) this year after rising 4.3% to 12.1 billion ringgit in 2018, a government agency said Friday.

Exports of automotive parts and components have grown consistently from 4.7 billion ringgit in 2014 and remain on the uptrend, said Madani Sahari, chief executive of Malaysia Automotive Robotics and IoT Institute.

The export value of completely built units is also forecast to grow to 2.5 billion ringgit this year from 2.08 billion ringgit in 2018, Madani said. The automotive industry accounts for about 4.2% of Malaysia’s GDP in 2018, he added. 

– By Gan Pei Ling
– Edited By Abhrajit Gangopadhyay