KUALA LUMPUR: Property prices in Malaysia are forecast to increase by 5% to 10% this year against last year in line with the recovering economy. Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong said the market did not expect a big jump in property prices this year as the economy was not fully recovered yet. The economic recovery will largely influence the property market performance and Malaysia’s gross domestic product (GDP) growth rate this year is forecast at 2% to 3% from the estimated contraction of 3% last year.

“Condominiums and apartments are currently selling well and landed property prices, which had held through the economic crisis last year, are expected to grow this year,” Wong said after the opening of the Malaysian Property Summit 2010 yesterday. Citing examples, Wong said the St Mary’s serviced apartments were 80% taken up within five days of their launch, Sky Residences recorded a 70% take-up rate and the 50-unit Verticas Residensi in Bukit Ceylon achieved a 60% take-up rate during soft launch. “This shows that condos and apartments are not short of buyers. And developers that postponed property launches last year are not expected to do so this year,” he said, adding that property prices last year were estimated to have dropped by 5%. However, Wong raised some concerns about tenancy of condominiums and apartments. “A lot of new developments are facing a hard time in getting tenants,” he said. Another area of concern would be the office market that saw the supply of four billion sq ft of space last year, according to Wong. “Thus, there is a slight concern on the take-up rate, especially for tenants that will occupy huge space of 20,000 sq ft and above as well as the effect of the new supply on rental rates,” he said. Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani said this would be a good year for the property sector as key economic indicators that related to the growth of the industry were expected to perform better than last year. The expected recovery in the GDP of Malaysia’s main trading partners – the United States, Japan and Singapore – and improved prices for crude oil, crude palm oil and rubber would augur well for the country, he said. In fact, the property market, which had slumped in the first half of last year, had improved since the second half-year, he added.

(THE STAR ONLINE)

Valuers expect burst of launches held back during crisis KUALA LUMPUR: The property sector may experience an oversupply next year due to a burst of launches from developers that have been held back since the start of the global economic crisis. Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) president James Wong said developers would need to come up with “creative ways” to maximise sales. “Because there will be a lot of launches next year, there will be a lot of supply, and the success of the take-up rates will depend on the marketing strategies of the developers,” he told a press conference on the 3rd

Malaysian Property Summit 2010 yesterday. Ho Chin Soon Research Sdn Bhd director Ho Chin Soon concurred, adding that there would be a pent-up from buyers that had been eager to get into the housing market. From left: Ho Chin Soon, Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani and Raine & Horne International Zaki and Partners Sdn Bhd executive director Lim Lian Hong at the press conference “A lot of developers I have spoken to are preparing to launch in 2010. After over a year of waiting (since the global economic downturn hit), the public is hungry!” he said. Wong said property transactions for 2010 were expected to be better than 2009, adding that the residential sector would see the biggest growth.

“With the recovery of the economy in 2010, the property market will also experience a slow, steady recovery. The residential sector has been quite resilient and should experience faster growth next year.” Wong added that the secondary market for upmarket condominiums would remain soft until the second half of 2010 because of existing oversupply and new launches. “However, the secondary market for landed residential property remains firm,” he said, adding that the average occupancy of high-end condominiums within the KLCC area was about 60%, with yields hovering at 5% to 6%. Wong also said the shopping complex and office building sectors would face “some oversupply.” “Many office building projects started two to three years ago are nearing completion and therefore are facing occupancy problems as companies are postponing decisions to relocate to bigger and more expensive premises. “Hence the take-up rate of new Grade A office buildings in Kuala lumpur remains slow. Office rents will come down as more supplies (completed units) come in (to the market) by end-2010,” he said, adding that the hotels and industrial sectors should remain flat next year. Wong said the hotel occupancy rate in Kuala Lumpur in the third quarter of 2009 was 66%, with average room rates reported at RM277. “Owing to competition, many hotels are undergoing rebranding and refurbishment exercises,” he said. PEPS will be organising the 3rd Malaysian Property Summit 2010 on Jan 26, 2010 at the Sime Darby Convention Centre.

Some banks have raised their rates to BLR minus 1.8%

PETALING JAYA: New home buyers are expected to make higher payments for their loans with some banks increasing their mortgage rates early this month.

A check on the websites of some banks and information collected from customer service consultants at various banks showed lenders like Maybank, Public Bank, Standard Chartered Bank, Alliance Bank and EON Bank had revised upward their mortgage rates.

Some have even scrapped the moving-cost element – legal fees, stamp duties and other disbursement fees for loan documentation by the banks – from their home-loan offerings. It is learnt that existing home loans would still be maintained at previous rates depending on the terms and conditions of the contract.

Some analysts contacted by StarBiz were caught offguard and were not even aware of the new rates.

Others attributed the move to the current thin margins of banks owing to the low base lending rates (BLR) now.

Malaysian Rating Corp Bhd vice-president and head of financial institution ratings, Anandakumar Jegarasasingam, told StarBiz that one possible reason for the revised rates by the banks was to boost profitability.

“Loan growth for the commercial banking sector has been subdue during the first nine months at an annualised rate of 6.9%, compared to the growth rate of 13.4% in 2008.

“However, deposits have been growing at a faster annualised rate of 20.5% during the same period. This invariably exerts pressure on the banks’ interest margins and eventually profitability,” he said.

A banking analyst with a local research house concurred that the reason banks were increasing mortgage rates was due to thin margins.

“With the price war for mortgage products, it was taking the banks at least three years to break even. That’s why they have the five-year lock-in period in order to reap some profit,” she said.

Malayan Banking Bhd president and chief executive officer Datuk Seri Abdul Wahid Omar said the bank had already revised its mortgage loan because he said the current rate of mortgage loan in the country was too low.

“We are revising our mortgage rates accordingly. If we increase the rate, we may reduce the rates for other loans such as SME loans,” he said yesterday after the 6th Annual Kuala Lumpur Islamic Finance Forum.

He said Malaysia currently had one of the lowest rates in and around the region.

“We can’t speak for other banks but from our own perspective, there was a time when we were looking at BLR minus 2.2%. We adjust based on competition.

“If we are able to get sufficient number of mortgages at a slightly higher pricing, obviously that’s something which we would look at,” Wahid said.

In the current financial year, Maybank recorded a 7% growth in mortgage loans.

EON Bank Bhd group chief executive officer Michael Lor also said that housing loan rates “have started to creep up slightly and this was unavoidable.”

He said as banks began to move into risk-based pricing as well as the implementation of the FRS 139 framework, they would begin to measure the risk and funding cost of their products.

“Banks are becoming more cautious about how they fund their housing loans and the potential risk-reward returns,” Lor said.

The above banks have revised their rates to BLR minus 1.8% from BLR minus 2%–2.3%.

A mortgage consultant at Standard Chartered Bank Malaysia said the bank revised the rates early this month and expected others to do so in the coming weeks. Existing home-loan customers, the consultant said, would still enjoy the old rates subject to their contracts.

According to one of the mortgage consultants at Alliance Bank, the rates had been revised (BLR minus 1.8%) effective Monday.

TA Research economist Patricia Oh views the rise in mortgage rates to the expected increase in the overnight policy rate (OPR) by the second quarter of next year.

She said the export market had shown signs of an uptick although the current economic figures were still at contraction levels.

Oh added that the increased rates would be detrimental to the housing industry as it would discourage customers from owning homes.

MARC’s Anandakumar said the move to raise rates was not without its risks as a “significant re-pricing” may eventually increase mortgage defaults and discourage potential loan applicants.

Unless the banks tread the line carefully, this strategy could possibly backfire as well, he noted.

Meanwhile, HSBC Bank Malaysia Bhd said it was not aware of a potential increase in the average lending rate.

“I’m not aware of that,” deputy chairman and chief executive officer Irene Dorner said at a press conference before a seminar on Budget 2010 organised by the Malaysian International Chamber of Commerce and Industry yesterday.

Dorner declined to comment further, saying only that the bank’s non-performing loan (NPL) rate was at a manageable state.

“We’ve been very pleasantly surprised with our NPL rate which has held very steady and our growth rate has been respectable given what’s been happening in the economy,” she said.

A spokesperson for another foreign bank said its mortgage rates remained unchanged. “Our customers have been calling us up to see if there have been changes in the rates and we have advised them that there is none at the moment.

“It’s business as usual; we just need to wait and see at this point,’’ the spokesperson added.

Source: The Star Online

OAK BROOK, Illinois: McDonald’s Corp. said Thursday that its board has raised its quarterly dividend 10 percent to 55 cents. It will be paid on Dec. 15 to shareholders of record as of Dec. 1. The increase brings its yearly dividend to $2.20 and its total quarterly dividend payout to about $600 million.

The previous quarterly dividend was 50 cents.

The company said it has raised its dividend every year since paying its first dividend in 1976.

The most recent increase puts the company at the high end of its goal to return between $15 billion to $17 billion in cash to shareholders over a three year period that started at the beginning of 2007, the company said.

McDonald’s also said it would delist its stock from the Chicago Stock Exchange, where it had its secondary listing.

It decided to leave the Chicago exchange because of low trading volume there.

After Oct. 30, it will be listed only on the New York Stock Exchange.

McDonald’s shares rose 58 cents to close Thursday at $56.12.

The stock added another 3 cents after hours following the dividend increase. – AP

SHANGHAI: China’s industrial output, investment and retail sales strengthened in August as stimulus spending helped boost the world’s third-largest economy amid a slump in exports.

The National Statistics Bureau reported that industrial production rose 12.3 percent from a year earlier, accelerating from July’s 10.8 percent increase, while retail sales surged 15.4 percent.

Consumer prices fell 1.2 percent from a year earlier, alleviating worries that massive stimulus spending might fuel a resurgence of inflation.

“Industrial activity should continue to grow in the coming months, underpinned by resilient domestic demand and a rebound in exports,” Jing Ulrich, JP Morgan’s chairwoman for China equities, said in a report.

Despite the steady flow of positive figures over the past few months, China’s exports have remained sluggish, crimped by feeble demand.

Exports fell 23 percent to $103.7 billion in August, customs data showed, while imports totaled $88 billion, down 17 percent year-on-year.

China’s overall trade surplus in August plunged 45 percent, to $15.7 billion. Given the weakness in China’s once-thriving foreign trade, leaders have remained cautious about the recent uptick in China’s growth.

Premier Wen Jiabao on Thursday repeated his pledges to continue the government’s pro-active spending policies to ensure the economy continues to recover.

“The stabilization and recovery of the Chinese economy is not yet steady, solid and balanced,” Wen, the country’s top economic official, told an audience of 1,000 businesspeople, academics and government officials in the northern city of Dalian.

“Some of the stimulus measures will see their effect wane, and it will take time before those long-term policies show effect,” the premier said.

“We cannot and will not change our policy direction in the absence of proper conditions.”

Beijing’s 4 trillion yuan ($586 billion) plan to insulate the economy from the global recession with heavy spending on building highways and other public works helped boost investment in factory equipment and construction so far this year.

Such investment rose 33 percent in January-August from a year earlier, to 11.298 trillion yuan ($1.65 trillion), despite an expected waning of bank lending following a massive surge in the first half of the year.

New bank loans totaled 410.4 billion yuan ($60.1 billion), the central bank reported Friday, higher than estimated and well above the 355.9 billion yuan in new credit in July.

Bank credit traditionally tapers off late in the year.

But lending this year still remains way above normal, having soared to a record 7.1 trillion yuan ($1.1 trillion) in the first half. It reached 8.15 trillion yuan ($1.2 trillion) by the end of August, the People’s Bank of China reported.

Demand for China’s exports appears to be recovering but still remains weak, government officials say.

“We still have much hard work to do to attain China’s goal of 8 percent growth for this year. Many challenges lie ahead,” Li Xiaochao, the statistics bureau’s spokesman, told reporters in Beijing at a monthly briefing on the economy.

While it pushes ahead with its sweeping construction program, China is tinkering with its policy, aiming to keep growth strong while curbing excess investment in sectors burdened with overcapacity, such as steel, cement and some chemicals – a chronic problem. – AP

KUALA LUMPUR: Malaysia recorded its highest number of influenza A(H1N1) cases in a day with 569 infections.

There was also one death, bringing the total number of fatalities to 68.

Health Minister Datuk Seri Liow Tiong Lai said this indicated that the number of detected cases was still on the rise.

“That’s why our surveillance teams are working hard to detect areas that are persistent in local transmission so we can take measures to cut down on it,” he told reporters on Thursday after attending a campaign on prevention and treating A(H1N1).

He added there were 1,533 patients with influenza-like illness (ILI) who were admitted to 104 hospitals included four private establishments.

From this, 195 tested positive for the virus while 35 patients are in the intensive care unit.

A total of 188 people have been discharged from hospital.

Liow also said that private hospitals could not refuse treatment to patients with ILI.

He added the ministry would probe fatalities caused by late treatment of the patients at private hospitals.

According to a press statement from Health director-general Tan Sri Dr Ismail Merican, the death involved a 33-year old woman who was in the 34th week of her pregnancy.

The patient was treated and admitted into a private hospital in Johor Baru on Aug 8 after developing fever and cough for a day.

She was subsequently, referred and admitted to the intensive care unit of the Sultanah Aminah Hospital in Johor Baru for breathing difficulties five days later.

Tamiflu was administered.

“However, she died the following day because of severe pneumonia and respiratory failure,” he said.

She confirmed positive for the virus on Aug 14.

Earlier, Liow said government clinics in urban areas would now be opened on weekends to treat flu patients.

He said this was to reduce congestions and long queues at public hospitals.

The move takes effect immediately and the hours would differ from state to state, he added.

“In terms of hours, it will be the same as weekdays from 8am to 8pm for selangor,” he told reporters on Thursday after the launch of a seminar of stem cell research and therapy at Ampang Hospital.

“It is up to the state directors to decide on the exact number of hours to open in their respective areas depending on the number of patients.”

He added the doctors from public hospitals will be deployed to the clinics whenever necessary to assist the staff there.

Liow added insurance companies should include cause of death due to complications as a result of contracting influenza A (H1N1) in policies for their clients, regardless of whether they were new or old policy holders.

“I am confident that the demand for insurance will go up because of this health sit due to H1N1,” he added.

WASHINGTON: Now that the worst of the economic crisis is past and recovery is slowly under way, Congress must halt the mounting increase in U.S. debt to avoid damage to long-term growth and destruction of the dollar, Warren Buffett is urging.

The plainspoken billionaire weighed in with his view in an Op-Ed piece published in The New York Times Wednesday, saying that once recovery is solidified, lawmakers need to exercise “extraordinary political will” and slow the printing of money to finance the spike in debt.

That huge spending for financial bailout and economic stimulus was sorely needed to rescue the economy in its greatest peril since the 1930s, Buffett said, but now “unchecked emissions” of dollars “will certainly cause the purchasing power of currency to melt” the way runaway carbon emissions will likely melt icebergs.

With government spending now nearly double what it is taking in, “truly major changes in both taxes and outlays will be required,” Buffett wrote.

“A revived economy can’t come close to bridging that sort of gap.”

Buffett, one of the world’s wealthiest men, enjoys opining on issues of the day.

And as the “Oracle of Omaha” and head of a successful investment firm, his views carry weight in the public arena.

He has gained a sharper political profile in recent years and has spoken out, for example, on the obligation of the privileged to help the poor.

Buffett was a top economic adviser to Republican Arnold Schwarzenegger’s first campaign for California governor and advised Democrat John Kerry’s presidential campaign in 2004.

Last September at the height of the financial turmoil, Buffett’s firm, Berkshire Hathway Inc., rushed in with a $5 billion in investment in Wall Street powerhouse Goldman Sachs Group Inc., a move viewed as a vote of confidence for a survivor of a crisis that felled two of its investment banking peers.

The economy “is now out of the emergency room and appears to be on a slow path to recovery,” Buffett wrote in the Op-Ed.

“But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”

Because of the deficit, the amount of U.S. debt that is publicly held likely will rise to around 56 percent of Gross Domestic Product this fiscal year ending Oct. 1, from 41 percent last year, Buffett noted.

The three ways of financing the rising debt – borrowing from other countries, borrowing from Americans or printing money – all carry problems, he said.

“The United States is spewing a potentially damaging substance into our economy – greenback emissions,” Buffett wrote. – AP

KUALA LUMPUR, Aug 19 (Bernama) — Small and medium enterprises (SMEs) in Malaysia are optimistic that the current sluggish global economy will recover by this year or in 2010, according to the UPS Asia Business Monitor (UPS ABM) 2009.

In a statement on Wednesday, UPS said Malaysian SMEs, along with those surveyed in India, Taiwan, China and Singapore were the most optimistic toward recovery next year.

“Business prospects for 2009 have taken a sharp downturn. SME leaders in Malaysia are looking to offer more value added products and services, diversify their business and explore new revenue streams,” said UPS Malaysia marketing manager Tee Wee Ping.

Tee said, of the 100 companies surveyed across Malaysia, 69 percent expected economic growth for the Asia Pacific to decline this year compared to only eight percent in 2008.

Furthermore, only 21 percent of SMEs in Malaysia predicted better business growth prospects for their companies this year, compared to 73 percent in 2008, he explained.

The ABM 2009 also revealed that despite the impact of the slowdown on their business, SMEs in Malaysia are still showing pockets of confidence by remaining stable with 40 percent of them expecting business prospects to remain the same.

“Most felt that tightening cash management via strict credit control and collection plans, exploring new revenue lines and reducing other cost such as rent, utilities and miscellaneous items is the way to sustain business and counter the effects of a global economic recession,” he said.

Tee added SME leaders are not looking to downsize their staff count despite the current economic conditions as retaining talent and providing adequate training and support to employees is a key factor to growing a qualified workforce and staying competitive.

About 61 percent of Malaysian SMEs also intend to retain their current workforce with another 24 percent planning new recruitment.

He said the lack of a qualified workforce has been rated as one the biggest threats to the competitiveness and future growth of SMEs in Malaysia.

Overall in Asia, SMEs in the region saw major obstacles to competitiveness in the form of lack of government support, access to funding and working capital, innovation and the availability of a qualified workforce.

Social media such as Twitter, Facebook and YouTube are free services that can give you information about the latest trends, almost as soon as it happens; however, the convenience of such technologies does not come without a concern or two. Recently, Mashable reported that the Southeastern Conference (SEC) will be coming out with a new media policy to ban all social media usage at SEC games; which of course, caused this topic to be raging among the most popular trends.

Such policy, which reads “Ticketed fans can’t “produce or disseminate (or aid in producing or disseminating) any material or information about the Event, including, but not limited to, any account, description, picture, video, audio, reproduction or other information concerning the Event.”, is aimed at protecting CBS, the authorized media coverage of the event, because according to The St Petersburg Times, CBS has a $3 billion deal with the conference over the next 15 years.

Ever since the news first surfaced, it created an overwhelming number negative response from just about everybody; the SEC has hence decided to reconsider the ban. On the other side, while it may be harmless to just tweet scores and such, social media can still be a threat to the more sensitive issues – not too long ago, the US Marines were banned from accessing any social media networks for the fear that too much information might be exposed to the adversaries.

KUALA LUMPUR: China-based shoe sole maker Multi Sports Holdings Ltd. began trading Wednesday on Malaysia’s stock exchange, becoming the second foreign company to list here.

It was a shot in the arm for the Malaysian bourse, which recently simplified and sped up procedures to attract more foreign listings and give its market more depth amid the global credit crunch.

Multi Sports hit a high of 0.89 ringgit (25 cents) shortly after debuting on the main board of Bursa Malaysia, up from its initial public offering price of 0.85 ringgit (24 cents).

However, it slid to 0.815 ringgit (23 cents) at noon in an overall sluggish market.

Chris Eng, analyst with OSK Securities, said investors are expected to be cautious with the two foreign stocks as the companies are fairly small and in the competitive area of shoe manufacturing.

Stock of China’s sportswear company Xingquan International Sports Holdings Ltd, which began trading July 10, was at 1.43 ringgit (40.4 cents) at noon Wednesday, down 16 percent from its IPO price of 1.71 ringgit (48 cents).

“The appetite for good quality foreign IPO is huge but people tend to be cautious of generally small foreign companies,” Eng said.

Authorities waived listing fees and gave fast-tracked approvals to Xingquan and Multi Sports under its efforts to get more foreign participation.

Multi Sports Chief Executive Lin Hou Zhi said the company chose to be listed in Malaysia because it was less affected by the global financial crisis compared to other nations.

The company has said it expected to raise 58 million ringgit ($16 million) from its share sale and would use part of the proceeds to build a second factory in China to triple its production capacity to 74.6 million pairs of soles a year.

Based in the southeastern city of Jinjiang in the Fujian province, Multi Sports posted a net profit of 46.8 million ringgit ($13 million) last year. – AP