Monday, 22 July 2013

CIMB Malaysian Economic News - 22 July 2013

Prices remained stable in Jun with consumer price index (CPI) up 1.8% yoy due to increases in the prices of food and non-alcoholic beverages as well as non-food items. Jun¡¯s inflation rate was marginally lower than the median expectations of economists (+1.9%). On a mom basis, CPI rose 0.1% (+0.3% in May). 6M13 inflation stood at 1.6%. (Starbiz, Department of Statistics) 

The ceiling prices for chicken in conjunction with the Hari Raya celebration have been set between RM6.40 and RM8.50 per kilo. The prices were for live chicken (RM6.40); standard chicken (RM7.70) and super/dressed chicken (RM8.50). Domestic Trade, Cooperative and Consumerism Minister Datuk Hasan Malek said chicken was among the 20 food items placed under the price control scheme for Hari Raya Aidilfitri. The price control scheme will be implemented for 17 days, starting from 26 July until 11 Aug, he said. (The Star) 

PM Datuk Seri Najib Tun Razak announced that 40 to 50 more 1Malaysia Clinics (K1M) will be opened nationwide beginning next year. Currently, there are more than 200 K1M nationwide, serving about 1.5m people. The fee is RM1 for Malaysians and RM15 for foreigners. (Bernama)

The RM3bn petroleum integrated project under the Economic Transformation Programme (ETP) off Pulau Daat, Labuan is likely to be shifted to Pulau Kurahman due to the unexpected depths of the ocean floor circumstances. However, the proposed project will not be similar in terms of costing, scope of development and its roles.
  • Minister of Federal Territories Datuk Seri Tengku Adnan Tengku Mansor said although he had yet to get the latest development on the high-profile project, Kurahman Island was another alternative spot to be considered. 
  • The Pulau Daat project, jointly undertaken by Sabah-based RG Gas and Chemicals and China-owned Zhuhai Winbase International Chemical Tank Terminal Co Ltd, is said to create some 3,000 jobs for the locals during the construction phase. (Bernama)

The Inland Revenue Board Malaysia (IRB) managed to solve nearly 1.9m tax evasion cases last year to recoup an additional RM2.94bn in revenue. IRB CEO Tan Sri Dr Mohd Shukor Mahfar said the number of such cases solved last year had also tripled from the 636,000 in 2011. Last year, the IRB collected RM124bn in tax revenue, an increase of 13.8% from RM109.6bn in 2011. (Bernama) 

Iskandar Malaysia is poised to receive more foreign investments, especially from Indonesia and Singapore, following the aggressive promotions undertaken by the Iskandar Region Development Authority (IRDA). Chief Executive Datuk Ismail Ibrahim said IRDA has, of late, been mounting visits to Surabaya, Semarang and Jakarta to lure investors to the special economic zone.
  • He said IRDA was promoting Indonesia investments in the manufacturing and services sectors like tourism, education and health. 
  • Besides these countries, focus would also be placed on attracting investors from Japan and South Korea who have already shown initial interest to invest in Iskandar Malaysia. 
  • Iskandar Malaysia has attracted new investments of RM7.56bn in 2Q13 against RM5.06bn in 1Q13. This brings the committed cumulative investments to more than RM118.93bn between 2006 and Jun 2013. (Bernama)

The government will implement the new model of the Village Development and Security Committee (JKKK) beginning next year to strengthen grassroots leadership, said PM Datuk Seri Najib Tun Razak Sunday. The new model would place the age limit for the JKKK chairman at 65 years which was felt to be more reasonable.
  • He said that among other things that would be implemented in the new model was to add knowledge gathering and effectiveness for JKKK leadership. 
  • "We leave it to Datuk Seri Mohd Shafie Apdal, Rural and Regional Development Minister to announce at the national level," he said. 
  • The government had also decided to extend the duration of service for all JKKK which should have ended in Jun this year to the end of the year before the introduction of the new model. (Bernama)

The secretive Malaysian government guaranteed fund 1MDB, which has in a short four years accumulated debts of RM38bn, is a potential financial time bomb for the Malaysian government. Regional news weekly, The Edge Review, in its latest issue has a cover story on 1MDB that traces its roots to an investment fund originally proposed by well-connected 30-something businessman Low Taek Jho to the Terengganu government.
  • The articles argues that the fund has poor cash flow and is emerging as a rising contingent liability on a government that is already heavily burdened with debts. 
  • The Edge Review also touched on the controversial dealings between 1MDB and privately owned Petro-Saudi International and the special ties with Goldman Sachs which saw the US investment bank handling much of the debt papers issued. (Financial Daily)

Malaysia has made significant improvement across all index factors of financial literacy, garnering sixth spot in the Asia-Pacific region in the latest MasterCard Index of Financial Literacy survey. According to the survey, the country demonstrated an overall increase, accumulating 70 index points, in three major components - basic money management, financial planning and investment. (Financial Daily) 

The government will not trade off Malaysia's dignity and lead it to bankruptcy with regard to the Trans-Pacific Partnership Agreement (TPPA) negotiations held in Kota Kinabalu last week. International Trade and Industry Deputy Minister Datuk Hamim Samuri said the government would not ink any agreement without considering the views of all concerned parties and safeguarding the people's rights.
  • He said the people had no cause to be anxious about the TPPA negotiations as they had not been finalised. 
  • As a developing country that depends on international trade, Malaysia cannot isolate itself but must participate in such negotiations, he said. (Financial Daily)

A Chinese-Malaysian agribusiness group is seeking to kick-start a US$2bn (RM6.4bn) rice plantation and integrated processing project by Nov in an attempt to tap into Indonesia's growing market. Liaoning Wufeng Agricultural, a Chinese plantation company, was to sign a memorandum of understanding with Malaysian Amarak Group and local company Tri Indah Mandiri yesterday.
  • Wufeng is the major financier of the plan to grow and process rice and soyabean in Subang, West Java, with Amarak contributing up to 20% of the initial investment in Indonesia, which reports say may eventually reach US$5bn. 
  • Wufeng and Amarak have set up a special purpose vehicle, Ratu Indah Mandiri, to handle preliminary local works. (BT)

Source: CIMB Daybreak - 22 July 2013

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