Monday, 15 July 2013

CIMB Malaysian Economic News - 15 July 2013

Malaysia wants more international market access for its exports under the Trans-Pacific Partnership Agreement (TPPA) initiated by the US, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. He said it was important for Malaysia to be part of the TPPA to reduce bureaucracy and increase delivery system which would indirectly reduce the incidence of corruption.
  • Mustapa also said joining the TPPA would not necessarily increase foreign investments in the country but it would help make Malaysia a favourite investment destination among foreign investors. 
  • With the TPPA in place, it would also protect the interest of government-linked conglomerates like Petronas and Sime Darby Bhd which have invested heavily overseas, he added. (Bernama) 
  • This is in line with comments made by US embassy Economic Affairs counsellor Paul Brow who said that it is in Malaysia's interest to be part of the treaty to gain access to new markets, notably in North America. He pointed out that Malaysia has no bilateral free trade agreement (FTA) with the US, Canada or Mexico, which makes gaining access to these markets more difficult, especially if manufacturing shifts out of China to Mexico to service the North American markets. (The Edge financial daily)

Consumer confidence remains positive in Malaysia given the optimistic economic prospects, employment prospects and encouraging local stock market and quality of life, according to the findings of the MasterCard Worldwide Index. The MasterCard Index of Consumer Confidence is based on a survey conducted between Apr 2013 and May 2013 on 12,205 respondents aged 18-64 in 27 countries within the Asia-Pacific, the Middle East and Africa. (Malaysian Reserve) 

The country cannot remain a commodity producer if it wishes to advance, said PM Datuk Seri Najib Tun Razak. The cause of low income for a nation and an individual was when it did not get involved in value-added economic activities, he said.
  • “I propose that besides producing commodities, smallholders learn good governance and how to manage. That is the way forward if we do not want to be stuck in a rut,” he added. 
  • He said that to ensure the younger generation takes part in the industry, smallholders had to show it was productive, competitive and dynamic. 
  • He announced that the government was prepared to allocate RM10m through Risda to implement the young generation of smallholders programme in next year’s budget. 
  • The government, through Risda, will set up a Smallholders’ Children Scholarship Scheme to give financial aid to children with potential for success from low-income families, he said. (The Star)

The allocation of RM10m announced by the government on Saturday for the Young Generation of Smallholders programme is seen as a new initiative to encourage young people to be involved in various economic activities, said Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal. He said this year alone, the ministry had given a grant of RM2m as a reward for rural entrepreneurs in various fields including livestock farming who won in the competition. (Bernama) 

The government is expected to spend RM30m every year to provide social insurance coverage under the Pertubuhan Keselamatan Sosial (Perkeso) to about 63,000 contract and temporary staff in the civil service. Deputy Human Resource minister, Datuk Ismail Muttalib said civil servants on contract or temporary employment can now contribute to Perkeso starting 1 Jun and enjoy the protection and benefits provided. (Bernama) 

The National Entrepreneurial Group Economic Fund (Tekun Nasional) aims to disburse up to RM600m in loans to cottage industry entrepreneurs this year. Last year, the agency gave out RM508m.
  • Managing Director and CEO Datuk Abdul Rahim Hassan said RM330m were dished out in loans to 25,324 small-time traders in the first six months of this year. 
  • He said the government has allocated RM350m this year to provide small loans for entrepreneurs to start cottage industries. 
  • Money received from loan repayments will also be ploughed back into the loan fund, bringing to RM600m the loan fund available for this year, he said. 
  • He said the loan repayment rate was 85%. 
  • The agency has disbursed RM2.7bn to 252,497 small-time entrepreneurs between 1998 and until June this year. (Bernama)

Government-Linked Companies (GLCs) under the GLC Transformation (GLCT) Programme have implemented the new minimum retirement age (MRA) of 60 years for their employees. The Secretariat to the Putrajaya Committee on GLC High Performance (PCG) said the implementation is in accordance with the Minimum Retirement Age Act 2012 which came into effect on 1 July 2013.
  • The move to implement the MRA by the 17 GLCs under the GLCT Programme (collectively known as the G20) will benefit a total of 353,020 general employees on permanent employment. 
  • This amounts to more than 98% of the total G20 workforce of 359,744 employees, it added. (Bernama)

Consumer confidence remains positive in Malaysia given the optimistic economic outlook, employment prospects and encouraging local stock market and quality of life, according to the findings of the MasterCard Worldwide Index. The improved confidence would build through 2013 with good prospects for continued support and growth, said Matthew Driver, president, South-East Asia, MasterCard Worldwide. (Starbiz) 

The Health Ministry plans to add another 20 1Malaysia Clinics (K1M) throughout the country to ensure that health services were enjoyed by all Malaysians, particularly the lower income group. Deputy Health Minister Datuk Seri Dr Hilmi Yahya said the proposal was in line with the ministry's aspiration to ensure the delivery of the best services to the rakyat through the 1Malaysia product.
  • The ministry would endeavour to station at least one doctor at each K1M whereby currently there were only 22 such clinics with a doctor each.
  • To date, there are 230 K1M throughout the country providing service to more than 1.5m Malaysians who were charged only RM1 while foreigners were charged RM15 each. (Bernama)

Ekuiti Nasional Bhd (Ekuinas) plans to undertake one more regional investment for its offshore supply vessel (OSV) entity, Icon Offshore Bhd, before the latter¡¦s planned initial public offering (IPO) next year. CEO Datuk Abdul Rahman Ahmad said the regional investment would make Icon Offshore a larger company with international presence.
  • Icon Offshore, Malaysia's third-largest OSV provider, has 36 vessels operating in the waters of Malaysia, Vietnam and Qatar. Icon Offshore's current asset value is more than RM1bn. 
  • The oil and gas portfolio represents Ekuinas' biggest investment sector with RM483.8m, or 34.3% of its total portfolio. 
  • The education sector is its second-largest portfolio with an investment of RM406.5m, or 28.8% of its total portfolio. Ekuinas is also considering listing its education group in early 2015. 
  • A third portfolio, the food and beverage business, is also in the IPO plan. To date, Ekuinas has committed RM24.1m to the food and beverage sector, representing 17.1% of its total investment.
  • On its targeted RM600m investment this year, he said only RM50m has been spent. (BT)

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