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Monday, June 4, 2012

Mutiara Burau Bay Resort to stop ops?

HOTEL DEVELOPMENT: New owners said to be planning four- and five-star resorts on existing site and adjoining plot of land

The three-star Mutiara Burau Bay Resort (MBBR) in Langkawi is said to be closing down, as part of efforts by its new owners to build a new resort in its place.

Business Times has learnt that the 150-room resort, which commands a stunning beachfront, is expected to cease operations by the end of this year.

This is following a reported sale by its old owners the Langkawi Development Authority (LADA) to Langkawi Tradewinds Corp Bhd (TCB), a company controlled by businessman Tan Sri Syed Mokhtar Al-Bukhary.

It is also learnt that two resorts - one four-star and another five-star - will be constructed on the land where MBBR is sited, along with an adjoining plot of land.

LADA chief executive officer Tan Sri Khalid Ramli did not respond to emailed questions from Business Times on this development.

TCB has been operating and managing the resort for LADA.

On March 12, TCB announced that its indirect wholly-owned subsidiary, Benua Mahsuri Sdn Bhd (BMSB), had entered into a lease agreement with LADA for a cash consideration of RM34.7 million.

The lease agreement stated that over 14 hectares of Malay reserved land (also referred to as leasehold land) located in Mukim Padang Matsirat, Langkawi, will be leased out by LADA for 81 years from January 2013 to 2093.

TCB stated on its website that the lease agreement is subject to BMSB obtaining declaration from the relevant state authority and that the leasehold land would be handed over to BMSB on January 1 2013 and the company is set to start constructing a new hotel within three years from the date of the lease agreement.

Without stating the costs involved, TCB stated that construction costs will be in line with acceptable industry standards. The construction of the hotel will be funded from a combination of internally generated funds and external borrowings.

TCB now owns luxury hotel The Danna and adjoining Perdana Quay development where the Telaga Harbour marina is located.

Sources say that the empty plot of land between The Danna and MBBR is likely to see the construction of one of the two new resorts being planned by TCB.

By Business Times

TA raises Glomac’s target price

TA Research raised the target price of Glomac Bhd to RM1.10 per share from RM1.08 as it viewed positively the property developer’s move to expand its landbank in Sepang, the southern part of Selangor state.

“Given the rising property prices and land scarcity in the first tier locations in the Klang Valley, we expect property demand to be decentralized from the first tier locations to areas like Cyberjaya, Kajang, Puchong and Seri Kembangan,” TA said in a research note on Monday.

Glomac announced on Friday it was buying a piece of agricultural land in Sepang measuring 191.75 acres for RM66.8 million. It said it intended to develop the land into a mixed residential property.

Maintaining a "buy" on Glomac, TA said it raised the property developer’s financial year ending April 30, 2014 (FY2014) earnings by 2.9 percent, as it expected the progress billing from the project to begin in that financial period.

By 10.38am, Glomac shares were down 1.78 percent, in line with the Malaysian benchmark stock index’s 1 percent fall.

By Reuters

HLIB: Glomac land buy part of key strategy

Hong Leong Investment Bank Research has described the land acquisition by Glomac Bhd as a continuation of its key strategy to acquire sizeable tracts of land in the outskirts of Klang Valley.

The company acquired 77.59 hectares of agricultural land in Dengkil, Selangor, from Lee Chin Cheng Dengkil Oil Palm Plantations Sdn Bhd for RM66.589 million.

The research house said the land's exact mix and gross development value was yet to be determined but it expected Glomac to roll out affordable housing projects.

"However we do not expect any launches before 2014 due to Glomac's ample land bank in Puchong and Kuala Selangor.

"And, the low acquisition price of only RM8 per square feet removes the urgency for a quick turnaround launch," it added.

Following the land acquisition, the research firm maintained a "hold" call on Glomac Bhd with an unchanged target price of 87 sen.

By Bernama

Raub to become a tourism hub

RAUB: The Tourism Ministry is preparing a blueprint to promote Raub as a tourism destination.

Minister Datuk Seri Dr Ng Yen Yen said the Raub Integrated Tourism Development Blueprint would improve the livelihood and employment opportunities for the locals.

“It is my mission to develop Raub as an integrated tourism district because of its abundant natural resources and good accessibility.

“Moreover, there are two well-known home-stays in Sungai Pasu and Gali Hilir,” she said when opening the East Coast Economic Region Development Council empowering programme for Raub district here yesterday.

Also present was ECERDC chief executive officer Datuk Jebasingam Issace John.

Dr Ng said Raub district would also have 27 projects to develop tourism and upgrade facilities worth RM15.87mil under the Ninth and 10th Malaysia Plan.

She said the ministry had also picked Kampung Sungai Pasu as a 21st century village with access to WiFi connection while still maintaining its traditional values and culture.

On the ECERDC programme, Dr Ng said it would provide training in academic and entrepreneurship skills to local youths.

“The programme will help bridge the gap between urban and rural areas.”

Dr Ng said everyone in the tourism industry had the responsibility to maintain their services and products.

“Failure to do so could mean a loss of financial resources,” she said, adding that besides tourism operators, local leaders and local government officers, even the ordinary people shared the responsibility of selling the country’s tourism products.

“However, what normally happens when these efforts fail is that there will be parties blaming each other for not giving support.”

By The Star

Debt, property risks curb China stimulus firepower

BEIJING: Investors counting on China to repeat its huge 2008-09 stimulus to backstop global economic growth are failing to recognise Beijing's limited scope to deliver another major spending surge.

The 4 trillion yuan ($628 billion) stimulus package launched to counter the post-Lehman global crisis won worldwide applause but left a stellar bill - a 10.7 trillion yuan ($1.7 trillion) mountain of local government debt, the risk of sour loans as growth slows and a super-heated property market.

Add in a naturally declining growth rate and China's ability and willingness to deliver a forceful response to mitigate the global impact from Europe's deepening debt crisis are seriously curtailed, analysts say.

"Not only is the policy room smaller, but the incentives for the government to produce a large stimulus package are smaller," Qinwei Wang, China economist at Capital Economics in London, told Reuters.

The National Development and Reform Commission (NDRC), China's top economic planning agency, is fast tracking investment projects to support economic growth, expected by economists to slide this year to its weakest pace since 1999.

Premier Wen Jiabao's had pledged to make the task of supporting growth more prominent, although the latest spending push is more cautious and selective than the 2008-09 stimulus, focusing on infrastructure, steel and green energy projects.

"The size of the stimulus this time round will be much smaller judging by both the needs and the constraints," Lu Feng, an economist at Peking University, said.

Few analysts can give an exact tally on the "mini" stimulus, which also includes tax cuts and subsidies for consumers.

Beijing has pledged to stabilise growth with policy fine-tuning. So far that has also included three cuts in banks' reserve ratios since November. There is little sign that Beijing will loosen its grip soon on the property sector, as it did in 2008.

Back in 2008-09, Beijing sought to stimulate growth in what it described as a "fast and heavy-handed" way. The central bank shifted policy gears to complement the pump-priming, as the economy sank into deflation. "INVESTMENT ADDICTION"

In the dark days of the financial crisis, Beijing won international praise for turning the economy around and bolstering global growth.

But the unfettered spending fuelled economic distortions, ranging from over-investment to a come-back of state-owned monopolies.

The new investment push has already drawn fire from some Chinese academics, who argue that the short-term gain in economic growth could further worsen the economy's structure. For example, investment accounted for half of GDP growth.

"This will deepen the economic imbalances and make the further adjustments even more difficult," said Zhao Xijun, an economist at Renmin University in Beijing.

"It's like taking drugs. It's difficult to give up once you get such investment addiction. It's time to give up the addiction and reform economic structures to help long-term growth."

Although billed as a 4 trillion yuan package, only a quarter of that came from the central government. The rest was largely financed by banks that lent heavily to local governments, resulting in a staggering 10.7 trillion yuan in debt.

Standard Chartered Bank estimates that the total spending as a result of the two-year stimulus could be 10 trillion yuan.

Chinese banks have been told to roll over such loans as local governments face a revenue crunch due to falling land sales. But they are unlikely to open their purse strings again.

"The key constraints are policymakers' hesitation to repeat the mistakes of the 2008 stimulus and banks' reticence to lend on such a grand scale," Stephen Green, chief China economist at Standard Chartered Bank, said in a research report.

Beijing still has formidable fiscal firepower backed by huge revenues, but it also faces a big debt burden and obligations to shore up social security systems.

Various China government agencies have different estimates of the total size of local government debt. Yang Kaisheng, head of the Industrial and Commercial Bank of China, has put total central and local government debt at 43 percent of GDP.

Some analysts put total public debt, including implicit liabilities such as bond issues by the railway ministry, policy banks, and bad loans in the banking system, at 80-90 percent of GDP - higher than the international standard of 60 percent.

Shi Xiaomin, vice president of China Society of Economic Reform, a think-tank under the NDRC, said the new stimulus may not be effective due to the problem of overcapacity.

"Banks are having difficulty lending even though they have money because companies don't want to borrow," he said.

The central bank is widely expected to cut bank reserves further and may even cut bank lending rates to spur growth. REFORMS With China's underlying potential rate of growth falling in line with the country's demographic shifts and the diminishing dividends from entry into the World Trade Organisation and market-based reforms, Chinese leaders feel less urgency to stimulate growth, analysts say.

The government, which has long pledged to wean the economy off dependence on investment and exports, has set an annual GDP growth target of 7.5 percent for 2012. Between 2011 and 2015 it aims for average growth of 7 percent a year.

"China's potential growth rate is falling but it's not entirely a bad thing. If we assume potential rate is 8 percent, that means we don't need to worry too much if growth falls to 7 percent," said Lu at Peking University. China's annual economic growth is expected by analysts to fall to 7.9 percent in the second quarter, the first dip below 8 percent since 2009. They forecast 8.2 percent for 2012, the lowest level since 1999.

Xia Bin, a former adviser to the central bank, said last week that slowing growth alone does not imply a hard landing, as long as the job market and the banking sector remain stable.

In 2008-09, a sudden collapse in China's exports threw some 20 million migrant workers out of job.

Reforms will be the key to averting a sharp slowdown, analysts say. Beijing appears to be moving in the direction.

"New sources of growth need to be unleashed, and we think the government must speed up reforms to encourage more private investment, including in the service sector," Tao Wang, China economist at UBS, said in a research report.

Wang at Capital Economics expects growth to slow to 7.8 percent in the second quarter before rebounding to 8.5 percent in the third, with the full-year rate slowing to 8.5 percent from 9.2 percent in 2011.

But Shi at the think-tank sounded more bearish, expecting full-year growth to slow to around 7 percent.

By Reuters

Malaysians urged to keep house plants with health benefits

INDOOR green plants are more than decorations because many of them also have the power to make a difference to our quality of life.

From clearing cigarette smoke to repelling mosquitoes, houseplants such as peace lilies and geranium are set to feature more prominently in Malaysian houses soon.

Deputy Agriculture and Agro-based Minister Datuk Chua Tee Yong, who was captivated by the plants during a visit to the Malaysian Agricultural Research and Develop-ment Institute (Mardi) in Serdang recently, said plans were afoot to raise public awareness on such plants so more people could enjoy the benefits.

“They are also beautiful and easy to maintain. All them of them have different uses and strengths,” he said, citing peace lilies which help to clear the air of cigarette smoke as an example.

For people who are allergic to dust in the air, Chua suggested that they plant bamboo palms at home because it could reduce irritation caused by air pollution.

“One can also trade their mosquito coil or spray for geranium plants which have the ability to ward off mosquitoes,” he added.

Chua said geranium plants could also double as an insect repellent when placed on balconies of apartments or condominiums.

Meanwhile, Mardi director-general Datuk Dr Abd Shukor Abd Rahman said these plants, costing between RM5 and RM10, were God’s gifts.

He said some of the plants originated from tropical rainforests but had long been planted as decorative plants in local households.

“Mardi is trying to identify the active compound in these plants which enable them to have these special abilities.

“If we can process the compound, we can create products for commercial use,” he said. The following are some of the indoor plants and their uses.

Peace Lily

Peace lily has the ability to purify indoor air from tobacco smoke and trading it for fresh oxygen. The plant also gets rid of toxic gases such as formaldehyde found in paint, and benzene, which is found in cigarette smoke. With its dark green leaves and spade-shaped white flowers, it is also a beautiful plant that adds a fresh touch to home surroundings. Peace lilies thrive in shady areas and needs to be watered about once a week. Keeping several peace lily plants at home can help reduce stuffiness in the air.


With the citrus smell of its leaves, the geranium plant has the very practical and useful ability to repel mosquitoes. It is suitable to be placed in bedrooms and gives off a slight fragrance in the air. While it can be kept indoors, the plant needs to be brought out for some sunshine every two to three days. The plant takes about two months to grow from seed to a mature plant.

Aloe Vera

Perhaps more well known than other houseplants, the aloe vera is believed to have healing properties and can be used to treat wounds. This succulent plant is also able to clear the air from toxic gases like formaldehyde and benzene. Commercially, aloe vera gel is processed into facial products, yogurt, beverages and some desserts.

Chinese Evergreen

The Chinese evergreen plant has the ability to filter various toxic gases such as ammonia, formaldehyde, carbon monoxide and benzene. It is easily maintained and does not require much sunlight. This leafy plant grows from 20cm to 150cm in height. It is a popular ornamental plant seen in shopping malls, hotels and offices as it is easy to grow.

Spider Plant

With its leaves stretching out like spider legs, this plant is helpful in purifying the air and reduces indoor air pollution. It clears the air from pollutants such as benzene, formaldehyde, carbon monoxide and xylene. This plant thrives easily but grows best at temperatures between 18°C and 32°C.

By The Star