Financial Times hails Malaysia’s economic boom

KUALA LUMPUR: It is not always that emerging economies get favourable remarks from hard-boiled foreign media practitioners but Malaysia is getting more laudatory remarks from foreign journalists these days.

Take Jeremy Grant's article on Kuala Lumpur's soon-to-be-developed new financial centre, the Tun Razak Exchange, and the state of the Malaysian economy in the Financial Times Friday, for example.

He wrote: “With much of the world economy experiencing anaemic growth at best, it is hard to believe that any country would contemplate a project on this scale.

“Yet Malaysia's economy is enjoying a gravity-defying boom that is confounding sceptics. Second-quarter gross domestic product figures out this week showed the economy grew by 5.4%, way above consensus expectations of 4.6%, and the 4.9% recorded - after an upward revision - for the previous quarter.”

Grant attributed this development to big-ticket government spending, lending to business by well-capitalised banks, and robust consumer demand, fuelled by pay rises for civil servants and cash handouts that have even seen taxi drivers receive vouchers for free replacement tyres.

“Malaysia's stock market has been among the best performers in the world, buoyed by big flotations including Felda, a state-controlled palm oil producer, which was the second-largest initial public offering after Facebook when it raised over USD2bil last month. Bankers are cashing in with a parade of further IPOs expected within months,” he added.

“Much of the impetus behind the growth comes from the “economic transformation programme” initiated by Prime Minister Datuk Seri Najib Tun Razak when he came to power in 2009.

This involves dozens of government-backed projects designed to boost per capita income to USD15,500 by 2020, from USD9,600 last year and lift Malaysia out of its “middle-income trap”, Grant wrote.

Over spending: Analysts say one nagging concern for Malaysia is the rising household debt caused by the rapid growth in credit card usage.

The Financial Times also quoted Christian de Guzman, an analyst at Moody's, a rating agency, who admitted he was sceptical about the programme's ability to spur private sector development when it was launched. De Guzman is more convinced now, adding that “The proof of the pudding is in the eating but so far they are on track. In aggregate there are just so many things going on [in the economy].”

Grant wrote that “Not only has Malaysia experienced strong domestic demand offsetting its vulnerability to weakening demand for its exports - much of them electronics destined for Europe; it has also benefited from deeper ties with economies in Asia.

Moody's says that in 2006 the United States was Malaysia's largest trading partner, absorbing 18.8 per cent of its exports, while Asia Pacific accounted for 60 per cent. By last year the US share had dwindled to 8.3 per cent while Asia Pacific jumped to 69 per cent.

Malaysia's healthy economy - and the resulting “feel good” factor - stands in contrast to growing anxiety among Malaysia's neighbours in south-east Asia as the global downturn has tarnished their economies.

Analysts point out one nagging concern for Malaysia: rising household debt, caused by rapid growth in credit card usage.

As the transformation programme's projects take root, Grant wrote that Bank Negara Malaysia is forecasting full-year growth at the upper end of its 4-5 per cent.

Amidst this scenario, the Financial Times also quoted Rahul Bajoria, an anaylst at Barclays, as saying that: “We expect momentum to remain underpinned as the project-based nature of these investments means that it is unlikely to be halted abruptly.” - Bernama

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House price hike likely

Penang properties said to increase 5%-10% due to more costly cement

GEORGE TOWN: The selling price of properties in Penang will soon surge by 5%-10% following the recent move by Lafarge Malayan Cement to raise cement prices by about 6%, according to housing developers here.

Following Lafarge's announcement, a 50kg bag of cement is now priced at RM17.50, compared to RM16.50 before the hike.

Penang Master Builders & Building Materials Dealers Association president Lim Kai Seng said 60% to 80% of the materials used for a building comprised cement and cement-related materials.

“This is why an increase in cement price will have a significant impact on property prices.

Lim: ‘The price of sand is now RM40- RM43 per cu yard.’

“The other cement manufacturers in the country have sent signals that they will raise prices very soon,” Lim said.

There are six cement producers in Malaysia, namely YTL Cement Bhd, Tasek Corp Bhd, Cement Industries of Malaysia Bhd, Lafarge, CMS Cement Sdn Bhd, and Holcim (M) Sdn Bhd.

Only Sarawak-based CMS Cement has confirmed it would keep prices at the current level.

Lim said the price of other essential building materials such as sand and aggregate had also increased.

“The price of sand is now between RM40 and RM43 per cu yard, depending on the grade, compared to RM38-RM40 earlier this year.

“The price of aggregates is now at RM21 per tonne, compared to RM20 per tonne earlier this year,” he said.

House prices on the island are expected to rise by 10%, while in Seberang Prai, housing prices are expected rise by 5%, following the hike in cement price.

Kuala Lumpur-based developers such as Mah Sing Group Bhd and SP Setia Bhd with projects in Penang will continue to absorb the cost of the cement price increase.

Ideal Property Development Sdn Bhd managing director Datuk Alex Ooi said the company was now revising the selling prices of its new projects upwards, due to the hike in cement price.

Ooi: ‘There will be a 10% hike in the selling price of properties in Penang.’

“There will be at least a 10% hike in the selling price of properties on the island.

“A hike in cement price means the price of all cement-related products such as concrete and bricks will rise. Construction cost will go up by between 15% and 20%.

“We expect the rest of the cement manufacturers in the country to adjust the price of cement upwards in the next one to two months,” he said.

In addition to the rise in cement prices, the cost of labour and transportation charges have also increased this year.

Tambun Indah Land Bhd managing director K.S. Teh said the cost of labour had increased to RM45 per day this year, compared to RM35 a year ago.

Transportation charges for sand have increased to RM450 per truck load this year from RM400 a year ago.

“There is also a labour shortage, as many Indonesian workers have gone back to Indonesia, which is booming currently.

“The selling price of properties will be impacted by the hike in raw materials and labour costs.

“However, Tambun Indah will absorb the increase in the price of raw materials until year-end.

“We will revise our pricing next year,” he added.

Teh said the selling price of properties on the island would increase more because of the additional transportation charges to ferry the raw materials to the island.

“This is why the increase in property prices on the island will be around 10%, compared to about 5% in Seberang Prai,” he said.

Tambun Indah will be launching next month the Straits Garden@Jelutong on the island, the Pearl Residence@Pearl City and Pearl Indah@Pearl City projects in Simpang Ampat.

The Straits Garden is a high-rise project comprising 183 condominiums priced from RM688,000 onwards, while the Pearl Residence@Pearl City and Pearl Indah@Pearl City schemes comprise landed properties priced between RM353,000 and RM508,000.

Mah Sing managing director and chief executive Tan Sri Leong Hoy Kum said the cement price hike would have less than a 1% impact on construction cost.

“Most of our projects have been tendered out and the construction costs are already locked in,” he added.

SP Setia property (north) general manager Khoo Teck Chong said the group would absorb this impact for now to be competitive.

”If other raw material prices such as bricks, rebar and tiles were to increase drastically, we may then have to review and adjust our property selling price accordingly,” Khoo added.

Meanwhile, the Malaysian Competition Commission (MyCC) chief executive officer Shila Dorai Raj had said the price hike by cement manufacturers did not at this juncture warrant a formal investigation.

“Price increases are by themselves not anti-competitive in nature. However, if there is evidence of collusion among the competitors to increase prices, this would be of concern to MyCC and may merit an investigation,” she said.

By DAVID TAN davidtan@thestar.com.my

Malaysia's growth forecasts raised after the actual 5.4% in Q2, 2012

 Malaysia's economy up 5.4% in Q2, manufacturing, demand support growth 

KUALA LUMPUR: Malaysia's economic growth, as measured by gross domestic product (GDP), for the second quarter ended June 30 rose by an unexpected 5.4% year-on-year, underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago. Compared with the first quarter, GDP expanded by 3%.

In the supply side of the economy, only the agricultural sector saw a contraction due to lower crude palm oil production. Manufacturing, services, construction and mining all posted growth. Domestic demand jumped 13.8% for the quarter and rose 11.8% for the first-half.

The country's second-quarter GDP numbers came as a surprise to many economists, whose median forecast was for a 4.6% expansion. Growth for the quarter even exceeded the most optimistic forecast of 5.2%.

Zeti (far right) attending the briefing. With her are other Bank Negara officials

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said at a briefing following the release of the GDP data that the surge in private investment was the most encouraging aspect of the economy.

“Private investment has made a strong return because the investment climate has improved tremendously, with Malaysia moving up the rankings of various surveys in terms of competitiveness, costs and ease of doing business,” she said.

Zeti said the improvement was underscored by the higher implementation of investments by domestic and foreign investors. She added that civil engineering projects in the oil and gas, transport, utilities and services industries had helped spur growth in the construction sector.

By numbers, investments from the public and private sectors jumped 26.1% year-on-year for the quarter under review, with the first half rising 21.3%.


By sector, private investments rose 24.6% while public investments surged 28.9%. For the first half, private sector investments grew 22.4% while public sector investments expanded 19.5%.

Consumption rose 8.9% for the quarter and 11.8% in the first half. By sector, private consumption increased 8.8% for the quarter and 8.1% for the first half while public consumption expanded 9.4% for the quarter and 8.4% in the first half.

Zeti said monetary policy continued to be supportive of growth and that for the rest of the year, risks weighed on growth rather than on inflation with external headwinds still overshadowing the outlook.

She said it would take time for the global economy to recover and this would need action from various stakeholders.

“At this point, we're maintaining our forecast of 4% to 5% GDP growth for the year but this may change when the budget is announced (on Sept 28). This will come in at the upper range of the forecast if growth is robust,” Zeti added.

Alliance Investment Bank Bhd chief economist Manokaran Mottain has revised GDP growth for the year to 4.7% from 4.5% previously, with the second half to record growth of 4.5%.

He told StarBiz the third quarter would see expansion at its slowest.

Manokaran said despite the surprising growth figures, the global and domestic economy's outlook for the rest of the year would still be dampened by the eurozone debt crisis, slower expansion in China and tepid growth in the United States.

“We believe the eurozone crisis will continue to have an impact on trade and this will show itself in slower exports growth,” he said.

He added that with a drop in manufacturing activity, sentiments would be affected, leading to slower growth in the domestic-oriented services sector as consumption slowed.

Manokaran said Purchasing Managers Index (PMI) for July indicated that exports would slow as demand dropped in developed markets.

CIMB Investment Bank Bhd economic research head Lee Heng Guie said in a report that the leading index for June suggested that the economy could weaken in the second half.

“We caution that a sharply high base in the second half of last year poses a hurdle to year-on-year growth,” he said.

He pointed out that the global Organisation for Economic Co-operation and Development composite leading together with regional high-frequency indicators, including trade and PMI, were still under external pressures.

Meanwhile, the Statistics Department released data showing that July prices as measured by the Consumer Price Index gained 1.4% year-on-year to 104.8 and remained unchanged compared with the previous month.

By FINTAN NG fintan@thestar.com.my The Star/Asia News Network

Economists turn bullish following better-than-expected growth in Q2

 
PETALING JAYA: Several economists have raised their gross domestic product (GDP) forecasts for Malaysia following better-than-expected growth for the second quarter ended June 30.

Malaysia's economic growth for the second quarter rose by an unexpected 5.4% year-on-year underpinned by an expansion in manufacturing and robust domestic demand.

GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago.

Compared with the first quarter, GDP expanded by 3%.

Hong Leong Investment Bank's (HLIB) research unit said that following the strong-than-expected second quarter data, it had raised its full-year 2012 GDP forecast to 5% (previously: 4.5%).

For the second half of 2012, HLIB Research expected GDP growth to dip to 4.5% year-on-year in the third quarter (dragged by subdued trade and manufacturing and higher base in the third quarter of 2011) before improving to 5.1% year-on-year in the fourth quarter, yielding an average of 4.8% year-on-year (first half: 5.1% year-on-year).

“We are still positive that line-up of the Economic Transformation Programme projects for the second-half and 2013 could still provide a strong support to GDP growth despite external uncertainty,” said HLIB Research.

According to Bloomberg, Goldman Sachs also raised Malaysia's GDP growth predictions to 4.6% from 3.8% for 2012, and to 5.3% from 5.2% for 2013.

Meanwhile, CIMB Investment Bank Bhd economic research head Lee Heng Guie said given the steady performance in the first half, he had raised the 2012 growth estimate to 5%, from 3.8% previously.

“However, this still implies a slower growth of 4.5% to 5% in the second half versus 5.1% in the first half,” said Lee in a report.

Lee warned that external headwinds still warranted caution as they remained hurdles to Malaysia's export growth.

Meanwhile, Maybank Investment Bank (IB) Research said its 2012 and 2013 growth forecasts of 4.4% and 5.1% respectively were under review.

“Provisionally, we expect 2012 growth to be around 5%, which implies a slightly slower growth of 4.8% in the second half as the global purchasing managers index in July signals that the global economy hence external demand will remain soft in the third quarter.”

Maybank IB Research said domestic demand would continue to be well supported by initiatives to sustain consumer spending, policies and measures to spur investments, and the roll-out and progress of big ticket infrastructure projects and capital expenditures in industries like oil, gas and energy.

By THOMAS HUONG huong@thestar.com.my The Star/Asia News Network

Honey, I spoiled the kids!

We raise our children with the best of intentions but somehow end up mollycoddling them, to their detriment.

THE shortage of domestic servants in Malaysia gets worse every year, driving people urgently needing their services crazy with exasperation.”

That was the opening sentence in a report in The Star published on March 4, 1976. As the song goes, “The more things change, the more they stay the same.” Uh huh.

Thirty-six years on, we are still facing a shortage, although “domestic servants” have morphed into “domestic workers” a.k.a. “maids” of foreign origin.

Let’s see, in 1976, I was in secondary school and sharing household and cooking chores with my sisters. We had long dispensed with the services of a servant/maid. When the last local woman who did our laundry became unreliable, my parents bought our first washing machine and that was it.

Going further back, we had a mother-and-daughter team who did the laundry and cleaned house as well. Actually the daughter, Bedah, was more our playmate. We had fun playing hide-and-seek and masak-masak in the wooden doll-house my dad built.

And when I was a very little girl living in Penang, my mum had a young live-in servant. Poor Ah Hong had a hard time managing my unruly brother, who slashed her arm with a butter knife after a nasty spat. After we moved to Kuala Lumpur, we lost touch with her.

For most of my growing years, my family was fortunate enough to have domestic help who did the heavy-duty stuff. But we kids still had our chores: washing our school shoes, taking out the garbage, weeding the garden and mowing the lawn. One chore which I really hated was peeling and cleaning prawns as I would always end up with bleeding fingers.

When we were in-between servants (we never called them maids in those days), we did the sweeping, mopping, windows, fans, bathrooms and, the most back-breaking of all, the laundry by hand.

I also learned how to hammer nails, saw wood, change light bulbs, use an electric drill, paint walls and fences, build chicken coops, dig wells and even mix cement from my extremely clever handyman dad.

So where did I go so wrong with my own kids?

Do I blame it on the fact that both my husband and I work and we had no time nor the energy to mend and clean on the weekends, leaving it all to the maid, thereby setting a poor example to my kids?

Do I excuse myself that middle class families mollycoddle their children in these prosperous times?

Whatever the reason, I stand guilty of raising children who are inadequately skilled in a lot of things my generation took for granted or were expected to know.

Mind you, they are great kids. They never did drugs nor partied excessively; never got me summoned to school over their grades or discipline problems. As adults, they are articulate and interesting individuals. They are respectful and caring towards their grandparents who live with us.

Yet, they have never toiled at anything in the house and won’t even wash their own cups simply because they grew up with maids who did everything for them.

But to be fair to them, the rot started earlier. By “rot”, I mean the diminishing ability to be self-reliant in keeping one’s house in order without external help.

Because Dad could build, mend and repair just about anything and Mum was an excellent cook and extremely house-proud, between them, my siblings and I were taught a lot of skills.

My husband, on the other hand, isn’t as handy. His answer to fixing anything is super glue. Despite my childhood training, I haven’t applied my skills much either. I quite happily gave up gardening when my lawn-mower broke down,

Fortunately, we can enlist the services of a gardener, plumber or electrician to fix whatever stuff that goes on the blink because they are affordable.

And for now, a maid.

With all these support services, our lives are really easy and comfortable. The downside is today’s convenient ways have made us soft, lazy and wasteful.

Yet, things are changing. If 36 years ago, we moaned the extinction of local servants, now we moan about the availability of foreign maids.

The news isn’t good. No matter how hard our Government is trying to re-establish the supply line from Indonesia, the fact remains that Malaysia is not the first choice for such workers.

What’s more, the countries that have long supplied us with cheap labour are enjoying economic growth and with it better job opportunities for their people.

For now, we can take pride that almost any middle class family can hire a maid. In the not-too-distant future, it may not be the case any more. Already, the agency fees and the salaries are getting painfully high.

Ironically, the richer and more developed a country, the more expensive hired help is. So in countries like Australia, the United States and Britain, DIY stores are huge business because there they don’t call in the plumber or electrician at the slightest trouble. Live-in maids are only for the wealthy.

In all likelihood, the time my daughters marry, they will have to figure out how to keep house and raise kids without a live-in maid.

My son? He sheepishly admitted he didn’t know how to sew a loose button or a tear in his pants. For the sake of my future daughter-in-law and grandchildren, I have decided he’s going to start becoming a bit more like grandpa.

It starts this Saturday when my Indonesian maid goes on home leave for Hari Raya. As they say, “Necessity is the mother of invention” so this mother who has been terribly remiss with her children’s basic life skills, is going to invent some necessity on the home front.

More importantly, better late than never, especially when we still have clever grandpa to teach the kids a handy tip or two. No super glue for them.

So Aunty, So What? By JUNE H.L. WONG

 > The writer, if she could turn back time, would certainly have done some things differently in the way she raised her kids. On a more cheerful note, Selamat Hari Raya Aidil Fitri!

Mom: 'I didn't know my son was in NFC' Cowgate scandal

KUALA LUMPUR, Aug 10 (Bernama) -- Former Women, Family and Community Development minister Datuk Seri Shahrizat Abdul Jalil told the High Court here that she did not know her second son was involved in the National Feedlot Centre project until informed about it in 2007.

In today's hearing of a defamation suit against Parti Keadilan Rakyat Wanita chief Zuraida Kamaruddin and the party's strategic director, Mohd Rafizi Ramli, Shahrizat said she had been unaware of Wan Shahinur Izran Mohd Salleh's appointment as a director of National Feedlot Corporation Sdn Bhd in December 2006.

"I didn't know about the bidding of the project. I only knew around 2007 after my husband (Datuk Seri Dr Mohd Salleh Ismail) said he intended to have our children return from abroad to help with it.
"It was after he had won the project," she said during cross-examination by Ranjit Singh who represented both the defendants.

To a contention that Wan Shahinur Izran was too young to be a director of the company as he was only 22 years old at the time, Shahrizat said it was not wrong as her son had graduated when he was 19 in the United States and was a top student.

She said Wan Shahinur Izran lived with her since 2004 and the other two children, Wan Shahinur Izmir, 32, and Wan Izzana Fatimah Zabedah, 26, returned home from abroad to join NFC in 2007.

Saying that the family lived together but did not concern themselves with each other's work, she added that she only paid attention to the matter after it was reported in the media and asked her husband for an explanation.

Questioned as to which parts of the defendants' statements during the press conference damaged her reputation, Shahrizat responded, "Their words made the public blame me."

Earlier in the proceedings, the court was shown a video recording of the press conference at Parliament building.

Zuraida and Mohd Rafizi were seen uttering the allegedly defamatory statements before several reporters and photographers.

On Jan 19, Shahrizat filed a defamation suit against Zuraida and Mohd Rafizi claiming they made defamatory statements about her in relation to the NFC issue.

She sought RM50 million in general damages and an additional RM50 million in exemplary and aggravated damages.

She also applied for an injunction to prevent the defendants from making the same statements, either written or verbal, on the matter.

The hearing resumes on Sept 18 before Judicial Commissioner Vazeer Alam Mydin Meera.

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Malaysian lawyer/former golf president in Olympic Court of Arbitration

KUALA LUMPUR: Even before the London Olympics began on Saturday, the Court of Arbitration for Sport was already operational – with a Malaysian on board.

The Lausanne-based CAS has had an ad-hoc division in London from July 17. The London tribunal is presided over by Judge Juan Torruella of Puerto Rico and Gunnar Werner of Sweden.

The tribunal consists of 12 arbitrators from 12 countries, all of whom are lawyers or professors specialising in sports law and arbitration.

Among them is Malaysian Datuk Thomas Lee, a senior partner at law firm Lee Hishammuddin Allen & Gledhill.

Lee has also served as an arbitrator during the 2000 Sydney and 2008 Beijing Olympics as well as the Kuala Lumpur and Melbourne Commonwealth Games.

“All arbitrators must be lawyers with a background in sport.

“In my case, I have been in involved with golf internationally and nationally for a long time as well as tennis,” said the former president of the Malaysian Golf Association in an e-mail interview from London.

At the Sydney Olympics, Lee arbitrated in two appeals that involved drugs.

“In Beijing, I had a case involving nationality and another involved a wrestler who lost a silver medal bout.”

As for the difference between sports and international commercial arbitration, Lee said arbitrations at the Olympics “are usually concluded in a day and decisions rendered within 24 hours”.

“Commercial arbitrations can last much longer,” said Lee who likes watching athletics, swimming, gymnastics and tennis.

“If (Datuk) Lee Chong Wei gets to the final (in badminton), I hope to be able to support (him).”

By SHAILA KOSHY The Star/Asia News Network

Related Medals Tally

Total

1 China 9 5 3 17 2 United States 5 7 5 17 3 France 3 1 3 7 4 DPR Korea 3 - 1 4 5 Italy 2 4 2 8 6 Korea 2 2 2 6 7 Russia 2 - 3 5 8 Kazakhstan 2 - - 2 9 Japan 1 4 6 11 10 Australia 1 2 1 4 11 Romania 1 2 - 3 12 Brazil 1 1 1 3 12 Hungary 1 1 1 3 14 Netherlands 1 1 - 2 15 Ukraine 1 - 2 3 16 Georgia 1 - - 1 16 Lithuania 1 - - 1 16 South Africa 1 - - 1 19 Colombia - 2 - 2 20 United Kingdom - 1 2 3 21 Cuba - 1 - 1 21 Germany - 1 - 1 21 Mexico - 1 - 1 21 Poland - 1 - 1 21 Thailand - 1 - 1 21 Chinese Taipei - 1 - 1 27 Azerbaijan - - 1 1 27 Belgium - - 1 1 27 Canada - - 1 1 27 Indonesia - - 1 1 27 India - - 1 1 27 Moldova - - 1 1 27 Mongolia - - 1 1 27 Norway - - 1 1 27 Serbia - - 1 1 27 Slovakia - - 1 1 27 Uzbekistan - - 1 1 ✳ Malaysia - - - -

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Malaysia

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