Gross exports dropped 5.8% yoy in May (-3.3% in Apr) while gross imports declined 2.3% (+9% in Apr), leaving a trade surplus of RM2.5bn (+RM1bn in Apr). Economists had projected exports would contract 3% in May. In Jan-May, exports fell 3.3% and imports rose 5%, resulting in a cumulative trade surplus of RM19.8bn. (Department of Statistics)
Bank Negara Malaysia (BNM) is implementing a set of measures, effective immediately, to curb the rising trend of household indebtedness and to reinforce responsible lending practices by key credit providers. Governor Tan Sri Dr Zeti Akhtar Aziz said the measures were limiting maximum tenure of personal loans to 10 years and properties financing to 35 years, and prohibition on the offering of pre-approved personal financing products.
- Also included was the setting of prudent debt service ratio that allowed sufficient buffer to deal with income volatility and other costs, she said.
- As of Mar this year, the ratio of household debt to GDP in Malaysia grew by 13% to 83% from 70% in 2009, the highest level for developing countries in Asia.
- "Given that the economy is now growing in the range of 4-6%, we believe this level of indebtedness is not sustainable and that is why we are introducing these measures," she said. (Bernama)
Bank Negara Malaysia's (BNM) new rules restricting personal and property loans to a maximum loan period, will not impede domestic growth, as it has a primary basis supported by various sectors. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the country's economic growth was also dependent on consumption (spending) and private sector investment alongside government spending.
- The new move by BNM, is expected to see a reduction in loans, but it will not impact overall spending and the private sector, as well as government spending which had its own overall basis, he said.
- When asked if there would be any more new proposals to be tabled in the Budget 2014 following BNM's announcement on the new initiatives, he said what had been mooted was sufficient.
- But he added that there would new initiatives to be undertaken such as that for the Bantuan Rakyat 1Malaysia (BR1M).
- "We see no problems in enhancing the BR1M level. It is the basis for the government to review the subsidy rationalisation policy," he said. (Bernama)
Bank Negara Malaysia's (BNM) international reserves amounted to RM432.8bn (US$136.1bn) as at 28 Jun, down from RM435bn (US$140.8bn) as at 14 Jun. The reserves position is sufficient to finance 9.5 months of retained imports and is 4.3 times the short-term external debt. (BNM)
1Malaysia Development Bhd (1MDB) has entered into a conditional share agreement to acquire Jimah Teknik Sdn Bhd and Jimah O&M Sdn Bhd for RM1.2bn. In a statement on 5 July, 1MDB said it had completed a comprehensive due diligence exercise on the assets and reached an agreement with the vendors on a willing buyer and seller basis. Through this purchase, IMDB will acquire a 75% stake in Jimah Energy Ventures Holdings Sdn Bhd, the principle asset being the 1,400 MW coal-fired Jimah power plant in Negeri Sembilan. (Bernama)
The Malaysian Investment Development Authority (MIDA) is focusing on attracting investments related to high technology, while being business centric. This is to strengthen the business ecosystem, including the supply chain and talent. Its CEO, Datuk Noharuddin Nordin said Malaysia will promote investments for manufacturing and services by looking at high technology, alongside the ecosystem, rather than focus on countries alone. (Bernama)
The government and private sector have been urged to work together to ensure projects under the Economic Transformation Programme (ETP) and other projects under the five corridors, the greater Kuala Lumpur/Klang Valley and the Urban Transformation Programme (UTP) initiatives are implemented in a timely manner. "As we all know, construction is an important enabler to the National Key Economic Areas, as well as the engine of the growth under the ETP," Deputy Minister of International Trade and Industry (Miti) Datuk Hamim Samuri said.
- The Malaysian construction industry and the services sector are expected to play a vital role by contributing 11.2% to the GDP this year, and this can only be achieved when both government and the private sector work together, he said. (Bernama)
Johor will map out 5,000km of village roads throughout the state to improve their management and update its network digitally, the first of such effort in Malaysia. Menteri Besar Datuk Seri Mohamed Khaled Nordin said in this respect, the state government via Infra Desa Johor Sdn Bhd (IDJSB) would cooperate with Universiti Teknologi Malaysia (UTM) to come up with the application based on the geoinformation technology. (Bernama)
A total of 100,000 houses will be built under the 1Malaysia Civil Servants' Housing Programme (PPA1M) nationwide, said Chief Secretary to the Government Tan Sri Dr Ali Hamsa. Besides Putrajaya, the government would identify strategic locations in the capital and major centres, including in Sabah and Sarawak, to expand the programme, he said. The project will be implemented once it is approved by relevant authorities, he added.
- The first phase of the PPA1M programme involving the construction of 10,366 houses was launched in Putrajaya by PM Datuk Seri Najib Tun Razak in Apr.
- The PPA1M provides public housing with a minimum floor area of between 1,000 and 1,500 sq ft at a price of between RM150,000 and RM300,000.
- The housing projects planned for civil servants should be completed between three and five years' time, he added. (Bernama)
The Ministry of Tourism and Culture has called on owners of vacant and abandoned houses in rural areas to turn them into homestay accommodation to supplement their income. Its minister, Datuk Seri Mohamed Nazri Abdul Aziz said many houses in the rural areas were abandoned because some parents chose to live with their children in the capital. The RM5m project entails the upgrading of stalls, toilet, children playground, the gateway, training centre, exhibition space and mini theatre. (Bernama)
The Agriculture and Agrobased Industry Ministry has immediately opened import permits for whole chicken to stabilise its price in the market and meet increasing demand during the festive season. Its minister, Datuk Seri Ismail Sabri Yaakob said, the ministry encouraged imports of whole chicken from other countries such as Australia and Europe to reduce dependency on local supplies.
- He also said poultry farmers should increase production of whole chicken from between 1.4m and 1.5m on normal days to between 2.2m and 2.4m daily during the festive season.
- In additon, the price of chicken has increased up to RM9/kg in several areas due to the high demand, especially from fast food companies which usually import chicken parts from countries like China. (Bernama)
The government, through the human resources ministry, targets to reduce workplace-related accidents to three in 1,000 workers by 2015, as compared to 3.31 in every 1,000 workers last year. Minister Datuk Richard Riot said the government's commitment in occupational health and safety would improve Malaysia's image and international trade as foreign and local companies become confident with the government's concern on labour. This is in line with the 2013 Budget presented by PM Datuk Seri Najib Tun Razak to stimulate investment in Malaysia which is expected to increase to RM148.4bn this year, he said. (Bernama)
FAMA has assured that 4m coconuts, including those imported from a neighbouring country, would be enough to meet the increase in demand for Ramadan and Aidilfitri. Its director-general Datuk Ahmad Ishak said about 3m coconuts would be needed by consumers during Ramadan and another 1m to prepare for the Aidilfitri celebration. (Bernama)
Effective this month, the recent Sabah state cabinet meeting has approved a RM200 increase in monthly allowance for district chiefs, native chiefs and native deputy chiefs, said state local government and housing minister Datuk Hajiji Noor. Before 1 July, districts chiefs bearing the prefix OKK (Orang Kaya-Kaya), were paid RM2,500 monthly, native chiefs RM1,500 and their deputies, RM700. (Bernama)
The Asean Plus Three (China, Japan and South Korea) village head exchange programme proposed by Malaysia has brought positive benefits in strengthening ties between the people of participating countries. Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal said the programme, which was accepted by the Asean +3 Ministerial Meeting in Bangkok in 2011, was activated in April with the first visit conducted by village heads from Asean countries to Chengdu, China.
- He believed the programme would make a lasting impact on people-to-people relations in the region and it would be a permanent feature and not a one-off affair.
- The village head exchange programme, which was funded by China, Japan and South Korea, entailed participants from Asean countries visiting the donor countries. (Bernama)
The government is targeting to develop and raise the economy in 39 villages nationwide under the 21st Century Village Programme. Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal said such efforts would be carried out through the development of cooperatives under the Sustainable Rural programme for two years, beginning in 2014. He said these villages would be developed with wireless internet facilities (Wifi) while retaining the traditional village features and the beauty of the natural environment. (Bernama)
Parents with a household per capita income of RM500 and below per month and who send their children (aged 4 and below) to nurseries registered with the Welfare Department (JKM) are entitled to get up to RM250 for each child, said Women, Family and Community Development Minister Datuk Rohani Karim. The subsidy was an initiative introduced by the government under the National Key Results Area and Government Transformation Programme 2.0 to ease the burden of low-income families.
- The subsidies will be given as a one-off payment to the parents through the nursery operators.
- The household per capita income can be calculated by combining the household income and dividing it by the number of children in the family. To date, 359 applications have been received from 45 nurseries, of which 209 have been approved. (NST)
Source: CIMB Daybreak - 08 July 2013