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Wednesday, November 5, 2008

Malaysia unveils RM7b stimulus plan

The government has unveiled a RM7 billion stimulus package to reinforce and stimulate the economy, and at the same time, bring relief to the public at an economically challenging time.

Announcing the stimulus package in Parliament, Deputy Prime Minister Datuk Seri Najib Razak, who is also finance minister, said the measures were proof of the governments concern for the people's well-being and to stimulate private sector confidence.

Najib said the RM7 billion was from the savings derived from cuts in the fuel subsidy.

The government will adopt an expansionary policy as is the current practice in other countries.

He said the government had the flexibility to implement value added high impact projects.

Najib said the gross domestic product would be revised downwards to 3.5 per cent for 2009, but the fiscal deficit would remain at 4.8 per cent.

The reason for the deficit is that the government chooses to continue with Budget 2009, as announced, to maintain the growth momentum.

Najib told the Dewan Rakyat that to ensure more people could own houses, RM1.2 billion has been allocated to build 25,000 units of low- and medium-cost houses.

He said RM500 million has been set aside to upgrade, repair and maintain police stations, living quarters, army camps and quarters.

Najib also said RM600 million would be channelled to minor projects, including village roads, community halls and small bridges.

The deputy prime minister said the jobs would go to small-time contractors.

Public amenities such as roads, schools and hospitals will be allocated RM500 million, while a similar amount will be used to build and upgrade roads in rural areas, villages and agriculture roads, including in Sabah and Sarawak.

Najib said RM200 million had been set aside to improve school facilities, with the funds given evenly to religious, mission, Chinese and Tamil schools.

He said RM300 million would be allocated for a fund to implement a skills programme catering to the needs of employers and industry, particularly in the development corridors.

He said RM1.5 billion would be used to set up a special fund to attract private sector investment and would be disbursed as grants, cheap loans or as equity.

Another RM100 million has been allocated to set up new business premises to increase the number of small- and medium-scale entrepreneurs.

Youth programmes will receive RM100 million.

Najib said the packages were aimed at alleviating hardship and encourage spending.

Civil servants also received some good news with the extension of all housing loans from 25 years to 30 years, while the quantum of loan to buy cars has been increased.

Najib said Bank Negara would encourage local banks to introduce a similar measure for its housing loan customers.

To encourage the development of retail business and domestic tourism industry, hyper markets can open till 11pm on weekdays and 1am on weekends. Those in shopping complexes could seek to operate round the clock.

To stimulate activity in the private sector, import duties for cement, long iron and steel products for the construction and manufacturing sectors have been abolished.

The government will also allow individuals or foreign entities to buy commercial real estate worth RM500,000 and above without any Foreign Investment Committee approval, for their own use.

By Business Times

140 construction-related industries to benefit

Contractors lauded the governments move to allocate a big chunk of the RM7 billion stimulus package to the construction and housing sector, but stressed the need for timely and coordinated execution.

By removing import duties and approval permits on more building materials, the government is further liberalising the local steel and cement markets.

"We're appreciative of the government lifting import duties on more steel products and cement," said Master Builders Association of Malaysia (MBAM) president Ng Kee Leen.
"This should facilitate more steel products and cement from regional producers at competitive pricing if there is not enough supply in the domestic market.

"Such pump-priming moves should ensure continued growth in the construction sector, thus benefiting more than 140 related industries.

"We hope to see timely and coordinated rollout of these jobs," he said.

Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak yesterday announced a stimulus package to boost the economy, most of which would go towards building and upgrading of low-cost housing units, schools, roads and public amenities.

The Real Estate and Housing Developer s Association Malaysia (Rehda) is pleased that the government would be building more low-cost and low-medium cost homes.

"Such a move will relieve private sector developers from social obligations and allow us to focus on meeting the demand for market-driven products, especially during these trying times," said Rehda president Datuk Ng Seing Liong.

He said the removal of the need for Foreign Investment Committee approval for purchases of commercial properties worth RM500,000 and above would encourage more foreign investment in Malaysia's property sector.

"Property investment is still one of the most viable options, considering the high yields in the longer term."

Rehda also hopes to see more competitively priced local building materials with the lifting of duties and approval permits on imported steel bars and cement.

Crest Builder Holdings Bhd, which specialises in constructing police and army quarters, is happy with the governments move to channel funds to projects that will directly benefit small and medium-sized contractors. Currently, 40 per cent of its RM1.3 billion order book are government projects.

Executive director Eric Yong said: "This is good news because these are high-multiplier projects, benefiting large groups of engineers, architects, surveyors, contractors, sub-contractors,
building material suppliers, freight forwarders and property

Mah Sing Group Bhd group managing director Datuk Seri Leong Hoy Kum, expressed optimism the stimulus package would have far-reaching and positive implications.

"Another key point is the creation of jobs, as historical statistics have shown that job security and sentiments are the most important factors in property investment decisions.

"The move will certainly attract more investments and generate more employment in the country.

"Mah Sing Group, in particular, is very upbeat about the far-reaching, positive effects that the incentives will bring about."

By Business Times

Builders hail open tender

PETALING JAYA: Property developers hail the plan to invite open tenders for the development of government land in strategic locations as an excellent initiative to ensure better planned developments that will optimise the potential value of the land.

Announcing the economic stabilisation plan yesterday, Deputy Prime Minister Datuk Seri Najib Razak said to maximise the returns of the Government’s undeveloped landbank, it would adopt an open tender system to invite the private sector and government-linked companies to develop the land.

The Government will determine the criteria and scope of the plans that will be spelt out clearly in the terms of offer.

Real Estate and Housing Developers Association (Rehda) president Datuk Ng Seing Liong said the system would ensure greater participation from industry players with the expertise to add value to the land.

“If the open tender system is transparent and above board, it will benefit all Malaysians and the country through more well-planned developments and greater earnings to the Government for development purposes,” Ng said.

IJM Land Bhd managing director Datuk Soam Heng Choon said some of the government land, including the more than 400ha of Rubber Research Institute land in Sungei Buloh and former government quarters in Jalan Cochrane and Jalan Ampang Hilir, were prime assets.

“With their strategic locations, these landbank have very high development value potential and will attract much interest from industry players to submit their proposals for development and the best will be selected,” he said.

SP Setia Bhd group managing director Tan Sri Liew Kee Sin expressed delight that the system would help optimise the land value for the benefit of the Government and the people.

“In Hong Kong and Singapore, all the government land are up for open tenders and the practice has ensured developments were undertaken in a well-planned and orderly manner.

“Any government initiative that is done in a fair and transparent manner will help to instil stronger confidence and participation among industry players,” Liew said.

Meanwhile, developers can also look forward to more foreign participation in the commercial property sector as foreigners buying commercial property priced above RM500,000 are now exempted from Foreign Investment Committee approval.

International Real Estate Federation Malaysia president Datuk Richard Fong said the latest measure would further liberalise the country’s property sector and raise its attractiveness as a property investment hub.

“In the past, developers did not even want to attempt to market commercial property to foreigners as these efforts had been futile due to the strict restrictions imposed. There are many interested investors from the Middle East, Japan, South Korea and Singapore looking for quality commercial property,” Fong said.

Rehda’s Ng urged state governments to comply with the directive to relax rulings on foreign purchases to ensure the success of the measure as the states were in charge of issuance of property titles.

By The Star (by Angie Ng)

Construction gets much-needed lift

PETALING JAYA: The removal of import duty for cement and long iron and steel products, and abolishment of approved permit (AP) for long iron and steel products will give the construction industry a much-needed boost.

Master Builders Association Malaysia president Ng Kee Leen welcomed the Government’s latest move as a way to promote competitive material pricing and lower construction costs.

“The Government’s reiteration on the waiver of import duty and AP for steel helped clarify the import process, which was not fully understood by all parties earlier.

“The lifting of cement import duty, meanwhile, will lower the domestic cement price which is now 15% to 20% more expensive than imported cement.

“However, it may take months to feel the impact,” he told StarBiz yesterday.

Previously, a 10% import duty was imposed on cement from non-Asean countries.

Cement and Concrete Association of Malaysia executive director Grace Okuda was surprised by the announcement, as the association was not consulted on the waiver of cement import duty.

Lafarge Malayan Cement Bhd president and chief executive officer Bi Yong Chungunco said the company needed to verify the reported statement before giving any comments.

OSK Research analyst Ng Sem Guan said the latest move covered long steel products compared with only billets and certain grade of long bars announced by the Government on May 12.

“While the step may address the contractors’ complaint of the shortage of certain steel products and create a competitive pricing environment, the impact to local steel millers remains nominal, given that local millers benefit from their logistic advantage that allow prompt and small quantity delivery with competitive pricing.

“We also think that the Government may introduce local standard or testing requirement on imported steel products to safeguard public interest and safety hence non-tariff barrier to import,” he said.

By The Star

Extended hours likely to push up retail sales

PETALING JAYA: The Government’s move to extend the business hours of hypermarkets and supermarkets should help boost retail sales, industry players said.

The move, which is part of the economic stimulus package, allows hypermarkets to extend their operating hours to 11pm on weekdays and 1am on weekends.

Supermarkets located in shopping malls can open up to 24 hours, subject to approval from the local government.

“It allows consumers more convenience in planning their buying activities and this may translate into better sales,” said Poh Ying Loo, senior general manager at Aeon Co (M) Bhd.

“Operators who can respond and adjust to the shift will benefit.”

Poh said Aeon would need to look into its business operational capacity and resources before deciding on any change in its operating hours.

Aeon currently has 19 Jusco stores and employs about 10,000 staff.

Its operating hours are from 10am to 10.30pm from Mondays to Thursdays and 10am to 11pm on Fridays to Sundays.

Carrefour Malaysia marketing and communications director Sivakumar Haridas said the move liberalised the retail industry to a certain extent as it offered working adults flexible time to shop and a place to spend quality time with their family after working hours.

“The longer opening hours will also create more opportunities for employment.

“In line with this, we are pleased to announce our price cut campaign within a week, to further provide consumers value for money for essential everyday items,” he said.

Carrefour hypermarkets currently open from 9am to 10pm on weekdays and 8am to 11pm on weekends.

There are currently 15 Carrefour hypermarkets nationwide.

By The Star