Business

Ringgit ends lower versus greenback on oil price decline, expectation of US rate hike (Mon, 29 May 2023)
KUALA LUMPUR: The ringgit retreated from last week’s gains to close lower against the greenback on Monday as declining crude oil prices and expectations of a US interest rate hike in June weighed on the local currency despite a tentative agreement on the US debt ceiling. At 6 pm, the local note eased to 4.6030/6060 against the US dollar from Friday’s close of 4.5970/6035. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the ringgit hovered at around RM4.60 to the greenback today. The US dollar is still holding steady on expectations of another interest rate hike in the United States next month. On the US debt ceiling, which has adversely impacted currencies around the world, he said the next event is the voting on it among US congressmen on Wednesday. US President Joe Biden has urged Congress to pass the tentative debt limit deal he reached with House Speaker Kevin McCarthy over the weekend. If approved, it would allow the US government to borrow money until well after the next presidential election due in November 2024, according to a BBC report. “At the moment, the resistance and support levels for the ringgit stand at RM4.6257 and RM4.5491 against the US dollar, respectively. “We expect the narrow range for the US dollar/ringgit pair to persist until the debt ceiling stalemate is resolved,” Mohd Afzanizam told Bernama. At today’s close, the ringgit was mostly higher against a basket of major currencies. It was almost flat vis-a-vis the British pound at 5.6829/6866 from 5.6819/6899 at the close on Friday, slightly better against the euro at 4.9330/9363 from 4.9340/9409 and rose against the Japanese yen to 3.2820/2844 from 3.2918/2967 last week. The local note was traded mixed against other Asean currencies. It was flat versus the Indonesian rupiah to 307.3/307.7 from last week’s close of 307.3/307.9, slightly lower at 3.4016/4043 against the Singapore dollar from 3.4012/4062 and increased vis-a-vis the Thai baht to 13.2316/2463 from 13.2539/2784. However, the ringgit rose against the Philippine peso at 8.20/8.21 from 8.24/8.25 previously. - Bernama
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Paramount’s 1Q2023 PBT up by 60% to RM23.3 million (Mon, 29 May 2023)
PETALING JAYA: Paramount Corporation Berhad (Paramount) continued to deliver solid results, with a 60% increase in Profit Before Tax (PBT) at RM23.3 million for the first quarter of 2023 (1Q2022: RM14.6 million) on the back of a 16% increase in revenue at RM194.6 million (1Q2022: RM168.1 million). Paramount Group CEO Jeffrey Chew said the Group’s profit attributable to ordinary equity holders of the company more than doubled to RM11.6 million from RM5.0 million recorded in 1Q2022. “With a larger base of on-going projects in 1Q2023, compared to the previous year, PBT for the property division was 41% higher at RM29.3 million compared to the RM20.7 million recorded in 1Q2022,” Chew said. The property division’s revenue for 1Q2023 was RM185.8 million (1Q2022: RM163.9 million) with Utropolis Batu Kawan in Penang, Bukit Banyan in Kedah and Berkeley Uptown in Selangor, as the top three revenue contributors. “We are also encouraged by our first quarter sales. Our property sales for 1Q2023 was RM292 million, which was 88% higher than of the same period in 2022 of RM155 million, driven mainly by launches in the third and fourth quarters of 2022 as well as that in the first quarter of 2023,” said Chew. These launches include the freehold serviced apartments of Savana at Utropolis Batu Kawan in Penang and the freehold landed homes in Bukit Banyan, Kedah. Chew also pointed out that the growth in sales was partly due to 1Q2022 being a low base as the Malaysian economy had yet to fully reopen last year. Chew was upbeat about the demand for the rest of 2023, saying that although rising cost and interest rate hike could dampen consumer sentiment, the expected expansion of the Malaysian economy and improving labour market would be conducive for property demand. “Riding on the strong sales momentum achieved in 1Q2023, the Group targets to launch properties with an estimated gross development value of RM1.1 billion for the remaining nine months of 2023,” said Chew. Notable launches for the nine months are Paramount Palmera Industrial Park in Bukit Minyak, Penang (a strategically located light industrial development), a new residential development at the prestigious U-Thant enclave, Kuala Lumpur (high-end serviced apartments located next to The Atrium) and Phase 2 of Sejati Lakeside 2 landed homes in Cyberjaya (non-strata double storey semi-detached homes). He said the Group’s unbilled sales of RM1.4 billion as at 31 March 2023 would provide some visibility on its cash flow in the near term but was contingent on the construction progress of projects. As at March 31, 2023, the Group’s undeveloped land bank stood at 525.8 acres. The coworking division recorded its maiden PBT in 1Q2023 at RM0.1 million compared to Loss Before Tax (LBT) of RM0.3 million in 1Q2022. Revenue for 1Q2023 was RM2.9 million, 32% higher than the same period last year of RM2.2 million, mainly attributed to the higher revenue from all Co-labs Coworking outlets.
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Tuju Setia Bhd’s net profit doubles to RM0.9 million for Q1’23 (Mon, 29 May 2023)
PETALING JAYA: Construction services company Tuju Setia Bhd’s net profit doubles to RM0.9 million for its first quarter ended March 31, 2023 (Q1’23), compared with RM0.4 million in its corresponding quarter last year, driven by expedited works for ongoing projects and commencement of new projects. Revenue rose 75.2% to RM149.3 million from RM85.2 million for the same quarter last year, mainly due to higher billing recognition from on-going projects and commencement of new projects namely Jernih Residence in Kajang, Selangor and Emerald 9 (Phase 2) in Cheras, Kuala Lumpur. Managing director Wee Eng Kong said that with the prices of building materials now less volatile, especially for steel related materials, the group hopes to achieve a better recovery on earnings for the current financial year ending Dec 31, 2023. It is also scheduled to complete several on-going projects this year. “With the scheduled increase in work volume, we are continuously working to uplift our project management capabilities and exercise stringent work quality processes to ensure that we deliver timely good quality work to our clients. “On prospects, we continue to receive numerous tender invitations from both existing and new clients...positive of securing more wins to propel our momentum,” he said in a statement. As at March 31, 2023, the group has an order book of RM1.3 billion to be recognised until 2026. Tuju Setia’s on-going projects include Sunway d’hill Residences (Kota Damansara), One Equine (Seri Kembangan), The Pulse Residence (Puchong), 121 Residences (Petaling Jaya), Lakefront Condominiums @ Emerald Hills (Cheras), Riana Dutamas (Segambut), Tuai Residence (Setia Alam) as well as the Kajang Women and Children Hospital.
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Southern Cable to supply 5G battery systems to Telekom Malaysia (Mon, 29 May 2023)
KEDAH: Cable and wire manufacturer Southern Cable Group Berhad has secured a RM44.8 million Letter of Award (LOA) from Telekom Malaysia Berhad (TM) to supply battery systems supporting the nation’s 5G network infrastructure rollout. The LOA to the Group’s wholly-owned subsidiary, Southern Cable Sdn. Bhd., was awarded by TM’s wholly-owned subsidiary, TM Technology Services Sdn. Bhd., to supply, deliver, install, test and commission battery systems including associated engineering services and accessories, to TM’s regional hubs in Peninsular and East Malaysia. The supply contract will commence in May 2023 and be fulfilled until May 2026. The battery systems are part of the power management system for 5G network infrastructure. Southern Cable has an ongoing RM30.4 million contract with TM from September 2021 to supply, deliver, install, test and commission rectifier systems, including associated engineering services and accessories, for the 5G rollout. Managing Director Tung Eng Hai said: “As Malaysia drives forward with its 5G network rollout to target 80% coverage of populated areas by 2023, ensuring seamless operations and reliable connectivity are of utmost importance. Our track record in supporting essential sectors such as telecommunications and power utilities, attests to our expertise and reliability. As a committed partner, Southern Cable is ready to continue supporting TM’s 5G rollout.” Meanwhile, he added they are seeing a good flow of cable and wire orders from their customers and have been ramping up their production to ensure timely delivery. Barring unforeseen circumstances, they are optimistic of their performance for the financial year ending December 31, 2023. The latest battery systems contract awarded by TM brings the Group’s year-to-date contract wins to exceed RM160 million, which also include two power cable supply contracts from a power utility company. The Group’s current orders in hand amount to RM737.5 million to be fulfilled until 2024, comprising mainly supply of power cables and wires, as well as related products and services such as aluminium rods and 5G-related equipment. Southern Cable is a registered supplier for cables and wires with TM, and has a track record of supplying the nation’s premier telecommunications provider for the past 21 years.
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Tiong Nam’s 4Q FY2023 net profit surges more than eleven times to RM27.1 million (Mon, 29 May 2023)
JOHOR BAHRU: Tiong Nam Logistics Holdings Berhad net profit surged more than 11 times in the fourth quarter ended March 31, 2023 (4Q FY2023) to RM27.1 million from RM2.3 million previously, due to fair value gain on warehouse investment property, firm demand for logistics and warehousing services, and lower share of associate loss. The Group’s logistics and warehousing services segment posted healthy revenue, up 2.4% to RM174.8 million in 4Q FY2023 from RM170.7 million previously, attributable to new total logistics customers and business expansion from existing customers. This segment remains the largest contributor, accounting for 94.5% of revenue in 4Q FY2023. Simultaneously, group revenue for 4Q FY2023 increased 4.6% to RM184.9 million from RM176.8 million in the previous year, on higher contribution from the logistics and warehousing services segment, as well as property development. Its manaing director Ong Yoong Nyock said: “We posted resilient results in financial year ended FY2023, with growing number of customers for our total logistics solutions and business expansion from existing customers. Going forward, we will continue to expand our warehousing capacity to capture business opportunities on the back of an improving domestic economy.” Mindful of market challenges of higher inflation and interest rates, he added they will also focus on strategic initiatives such as maintaining market share and improving efficiency. Furthermore, he said they are fostering service innovation in their integrated logistics and warehousing services business to meet dynamic business requirements. “We are committed to reinforcing our leading position of total logistics solutions in Southeast Asia, supporting efficient supply chains of domestic and multinational companies,” said Ong For FY2023, group revenue improved 5.4% to RM727.3 million from RM689.8 million previously, mainly due to higher contribution from logistics and warehousing services segment. The improved revenue, in addition to lower share of loss from an associate, led to a jump in net profit to RM29.3 million from RM5.2 million previously. In its ongoing warehousing expansions, Tiong Nam is on track to complete a new 1.1 million square feet (sq ft) of RM200 million mega-warehouse facility for lease to Mercedes-Benz in Senai, Johor. The warehouse, currently over 90% completed, is expected to be operational in November 2023 and generate long term recurring income. The Group is also constructing three new warehouses and planning another six across Johor, Selangor, Penang, and Kedah. Upon completion, the Group’s warehousing capacity will increase to 7.9 million sq ft in FY2024 from 6.8 million sq ft previously. Besides, Tiong Nam also has a joint venture with Johor Corporation, entered in August 2022, to build and co-develop a 300-acre state-of-the-art, high-tech logistics park in Sedenak Technology Valley, Johor. The project is currently under planning stages.
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Petronas denies speculation on merger between MHB, Sapura Energy (Mon, 29 May 2023)
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has denied speculation over a merger between its indirect unit Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) and Sapura Energy Bhd. In a statement today, the national oil firm said any investment or divestment consideration within the Petronas group has always been and will continue to be strictly guided by a board-approved and management-enforced framework. According to news reports earlier this month, a merger between debt-laden Sapura Energy and MHB could well be on the cards if preliminary discussions on the proposal bear fruit. Quoting sources, the reports said the majority shareholders of Sapura Energy and MHB, namely Permodalan Nasional Bhd and Petronas respectively, are “mulling” merging the two oil and gas services providers but stressed the discussions are still at “an early stage”. -Bernama
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Ringgit weakens against US dollar in early session (Mon, 29 May 2023)
KUALA LUMPUR: The ringgit weakened against the US dollar in the early session on Monday amid the recent United States (US) debt ceiling impasse. At 9.01 am, the local note fell to 4.6160/6205 versus the greenback compared with Friday’s closing of 4.5970/6035. Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the indication from US President Joe Biden and the speaker suggests that the congressmen would agree on the terms on Wednesday. On Friday, US Treasury Secretary Janet Yellen indicated that the deadline for the debt limit expiry date had been extended to June 5. “Market participants would remain guarded until the agreement on the debt ceiling has been achieved on Wednesday. The nonfarm payroll which will be released on Friday would also be closely monitored,” he said. In the meantime, the ringgit was traded mostly lower against a basket of major currencies, except against the Japanese yen where it rose to 3.2791/2825 from 3.2918/2967 at Friday’s closing. The ringgit declined against the euro to 4.9474/9523 from 4.9340/9409 and eased versus the British pound to 5.6975/7031 from 5.6819/6899 previously. The local note was also traded mostly lower against other Asean currencies. The ringgit rose slightly against the Thai baht at 13.2510/2697 from 13.2539/2784 but slipped against the Singapore dollar at 3.414/4150 from Friday’s 3.4012/4062. It declined against the Indonesian rupiah to 308.6/309.1 from 307.3/307.9 and depreciated against the Philippine pesos at 8.26/8.28 from 8.24/8.25. -Bernama
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Legally Speaking – Bursa’s new transfer listing framework from LEAP to ACE Market (Mon, 29 May 2023)
ON April 1 2023, the long overdue LEAP Market Transfer Framework (LEAP Framework), which facilitates the graduation of eligible LEAP Market-listed corporations to the ‘Access, Certainty, Efficiency’ (ACE) Market of Bursa Malaysia Securities Bhd (Bursa Malaysia), finally came into effect. With the introduction of the LEAP Framework, many LEAP Market-listed entities are targeting an eventual transfer to the ACE Market. LEAP Market investors are a limited and selective pool of sophisticated investors – accredited investors, high net-worth entities and individuals as prescribed under the Capital Market and Services Act 2007 (CMSA 2007). By comparison, the ACE Market is open to the public, hence companies that successfully transfer from the LEAP Market to the ACE Market will have access to a larger pool of investors. Since the LEAP Market is restricted to sophisticated investors, it is often associated with low trading volumes and the consequent lack of robust price discovery. This has influenced some companies to delist from the LEAP Market. For example, between 2020 and 2023, we witnessed the delisting of Polymer Link Holdings Bhd, Zenworld Holdings Bhd and JM Education Group Bhd from the LEAP Market. Key Amendments under New Transfer Listing Framework Under the LEAP Framework, a transfer applicant must have been listed for at least two years on the LEAP Market at the time of application to be considered as suitable for listing on the ACE Market by a Sponsor; or both Sponsor and Recognised Approved Advisers as Joint Transfer Sponsors. Other requirements are compliance with the admission criteria; transfer of listing requirements set out in the ACE Market Listing Requirements; and the relevant admission procedures and requirements as may be prescribed by Bursa Malaysia. The amendments also require the Sponsor (together with the transfer applicant and other key advisers) to consult the Exchange before submitting the transfer listing application. Under the earlier regime, LEAP Market-listed companies had to delist on the LEAP Market to facilitate its listing on the ACE Market. According to existing records, TT Vision Holdings Bhd and Cosmos Technology International Bhd were the only companies to do so. By contrast, with the LEAP Framework, the transfer applicant will only be delisted from the LEAP Market upon successful completion of the transfer and listing on the ACE Market. This is significant as companies need not risk withdrawing their listing on the LEAP Market without guarantee of a successful transfer listing to the ACE Market. It is now a simple one-step process, where the submission of the application to transfer to the ACE Market and the withdrawal of listing on the LEAP Market occurs concurrently. Further, to withdraw its listing on the LEAP Market, the transfer applicant can opt to provide all its shareholders with an exit offer that complies with the Take-Overs and Mergers Code; or other alternative exit mechanisms that are equitable to shareholders, however, there is no clear definition of what amounts to an “equitable exit offer”. Each exit offer will be assessed independently considering the transfer applicant’s prevailing circumstances, and Bursa Securities must be consulted prior to any announcement of the withdrawal, and the transfer of listing, and it must approve the proposed exit mechanism. Conclusion The LEAP Framework provides opportunities for small and medium enterprises listed on the LEAP Market to have greater access to the ACE Market by setting down a clear and efficient pathway for a transfer listing from the LEAP Market to the ACE Market. This article is contributed by Low Gro Wen of Christopher & Lee Ong.
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Tax Matters – Failure to filecreturns can lead you to jail (Mon, 29 May 2023)
THE Inland Revenue Board (IRB) has “turned up the heat” on taxpayers who fail to file their annual tax returns. The IRB is no longer willing to wait any more and it is prepared to take such non-compliant taxpayers directly to court and charge the taxpayers, which can result in fines ranging from RM200 to RM20,000, and possible imprisonment for up to six months. To add to this “pain”, if the taxpayer fails to file tax returns for two years or more, a special penalty equal to 300% of the tax due can be imposed. The reflection in the change in the mood by the IRB can be seen in the recent Utara Raya Sdn Bhd case where its director,Goh Boon Chai, was brought to the Magistrate’s Court in Batu Pahat. Goh pleaded not guilty. The IRB in this case took the matter directly to court without using the compounding route. This indicates that the IRB is less willing to accommodate such defaults and wants to send a message that non-filing of tax returns is a serious matter that will be punishable in the form of fines, imprisonment, or both. Utara Raya’s case came through an investigation process rather than the normal audit process. Currently, the direction taken by the IRB’s investigation unit is to take such matters directly to court and convict such errant taxpayers. Investigations are serious matters where the taxpayers are unaware until the day when the investigation team raids the taxpayer’s premises. In such cases, the extreme action that could be taken by the IRB where there is evidence to support there is fraud or wilful evasion of tax, the matter could become a criminal in nature where the fines can go up to 300% of the tax due, and the chance of an imprisonment up to a maximum of three years cannot be ruled out. The waiting game is over Taxpayers who believe that the IRB may not have the resources to find them, or those who believe that they will wait until the IRB catches them and thereafter work out a settlement many years afterwards are fooling themselves. The IRB has a special intelligence unit using the latest technology to find errant taxpayers by connecting information from the public domain together with the internal information they possess. This was evident when the IRB announced in June 2022 they discovered 31,598 taxpayers who have not reported their actual income based on a criteria set around asset ownership, income potential, and loans above RM500,000. This is only a “tip of the iceberg” and there are many more taxpayers who have not filed their tax returns. Reasons for backlog Business enterprises may have a backlog of tax returns due to disputes between shareholders, disagreements with auditors, pending legal matters, family disputes. The time bar will not provide protection as it will only run from the time a taxpayer files his tax returns. Once you have such a backlog, it is likely that the documents to support the income and expenditure could also be missing. Such taxpayers can be in deep trouble. Ultimately, directors can be held responsible for the company’s taxes, and if anyone has to go to jail, it will be the directors. Advice to errant taxpayers There is an opportunity for you to get out of this problem. The self-voluntary declaration programme will allow such delinquent taxpayers a final chance to come clean without incurring a penalty. This programme starts from June 1 2023 to May 31 2024. Such taxpayers can participate in the programme by filing their returns together with the basis in arriving at the taxes declared accordingly. Where taxpayers have lost their records or not kept such records properly, it is not the end of the world. There are alternative ways to determine your income in such circumstances which will be acceptable to the IRB. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com). The IRB has a special intelligence unit using the latest technology to find errant taxpayers. – Adib Rawi Yahya/theSun
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Axiata: Boost-RHB digital bank remains on track for year-end launch (Mon, 29 May 2023)
PETALING JAYA: Axiata Group Bhd, the parent company of Boost, remains optimistic about the upcoming Boost-RHB digital bank launch and highlights that significant groundwork has already been accomplished. Axiata CEO and managing director Vivek Sood said the necessary board members have been appointed, the management team is largely in place, and the implementation of the IT platform is currently under way. “We’ve also carried out the operational review, which is what needs to be vetted out by the central bank phase one, to be submitted to the (central) bank. We have a pipeline of when we start the first product launch ... and that is expected by the end of this year. “We do not see any hurdles as of now. But since this whole process of launching, the bank requires a thorough review done by the central bank and approval from them, we have to work closely with BNM (Bank Negara Malaysia) to get those approvals in place,” he told a virtual media briefing after the group’s AGM last Friday. In addition, he emphasised the robust security measures implemented in the digital bank platform, encompassing privacy protection, defence against data breaches, and cybersecurity. “Not only that, the operational review, which is done by the third party as well as further review done by the central bank would take into consideration whether the platform is adequately secure, and the central bank will give approval only once they’re satisfied that it is in place,” he added. Confirming that the Boost-RHB digital bank remains on track for a year-end launch, Vivek stated that Boost’s exceptional performance in customer acquisition and robust loan book preparation positions it favourably in the digital banking space. He also expressed the group’s confidence in effectively managing the launch and operation of the digital bank. “We are very optimistic and the reason why we are optimistic of the outcomes on digital bank is coming from the fact that there are a lot of things which we have already done, which is to be translated into the (digital) bank. For example, we’ve already done around one and a half billion loans to MSME and SME within our existing business, within Boost Credit. “We’ve also acquired a large number of customers, 10 million, with around half a million of active customers on a monthly basis, which could potentially be the customers of (the) digital bank from day one. So we are very optimistic about this. But we are currently in the process of preparing our plans and will require the necessary approvals from the Central Bank before we can proceed with the launch,” he said. Vivek revealed that the initial capital commitments for the digital bank amount to RM100 million, with its capital commitment at RM60 million. “The target is to make it profitable over the next three to four years. And large part of the product offering would include deposits for the Casa account holders, as well as credits of different forms, insurance products, and other financial products, which we will launch one by one,” he said. As announced by BNM in April 2022, Axiata’s fintech arm, the consortium of Boost, and RHB Bank Bhd appeared as one of the successful applicants for the digital bank licence. During the briefing, Axiata also expressed interest in participating in Malaysia’s second 5G network through its associate CelcomDigi Bhd. The group said it welcomes further discussions with the government to refine the details and contribute to the implementation of the network.
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Synxsoft offers digital solutions to help firms apply for halal cert (Mon, 29 May 2023)
PETALING JAYA: Software development company Synxsoft Sdn Bhd hopes to attract local micro, small and medium enterprises (MSME) by offering digital solutions to simplify the manual halal certificate application issued by the Department of Islamic Development Malaysia (Jakim). According to founder and CEO Mazrie Mahat, Jakim is the only authority in Malaysia to issue halal certificates but the current process is ‘very manual’, thus Synxsoft cannot apply for the certificate but can assist companies with the documentation process, whereby they (companies) can then submit manually to Jakim. He explained that since it involves a manual process, previously companies would outsource the process to consultants who may charge exorbitant fees. Hence, the Sabah-based company developed a “do-it-yourself” digitalised system which replaces the manual work and simplifies it, through its halal digital product, CoreHalal. Jakim told SunBiz that there were 7,939 active halal certificates as of May 26. Mazrie said that based on previous reports, about 200,000 companies are involved in halal-related businesses. Seeing a gap in the market, the company targets to multiply the number of local halal-certified companies, while striving to be the enabler for MSME to obtain the halal certificate and become halal-compliant. Moving forward, global expansion is among the company’s main target. Mazrie said that last year, the company expanded its services to Japan and Australia, where they identified halal certification bodies in both countries to be its local partners, so as to implement its system to users in the respective countries and “from there we can acquire more subscription to our CoreHalal system”. Mazrie disclosed that it is in the final discussions with identified partners in Vietnam and Taiwan respectively. He expects to expand to both markets by end of the third quarter this year. Additionally, he said that there is a huge market for companies from non-Muslim countries to export their products to countries with large Muslim population. Hence, he is of the belief that those interested to export their goods to the latter can utilise CoreHalal because from a business perspective, he opined that halal is a value proposition and “there’s some element of halal that every industry can implement”. “If you want to export your products to Malaysia, the Middle East or to any Muslim majority country, you need to (be halal-certified). We have already digitalised the process ... they can just subscribe to our system, go through the whole process and then submit (their application). That’s how we’re going to help importers and exporters,” he said. Globally, he reckoned that there are around 450 halal certification bodies but some are not regulated by the government. He remarked that the Jakim certification is world renowned due to the high standards that the authority impose. “We want to see how we can further enhance and improve the loose certification process that they have and try to see how we can introduce the (Jakim certification), which is (among) the most sought after halal certificate in the world,” said Mazrie. He added that since CoreHalal is a digital process that adheres to Jakim’s standard, it targets to “so- called export the standard to the rest of the world” and other certification bodies. Currently, CoreHalal is based on a business to business model and offers free as well as paid subscription services, with 150 paid users and almost 2,000 free users on the platform, encompassing all three countries where it operates. It hopes to attract 600 to 1,000 paid subscribers this year from five countries by expanding into the overseas market, while also focusing on the local MSME market. “Hopefully by year end, we expect (to have our digital platform available) in five countries including Malaysia,” he said. Mazrie said that the Islamic economy comprises several sectors, the company is currently focused on halal food and beverages, logistics and warehousing sectors. In the future, he said, it may widen its horizon to include other halal sectors. The company, which plans to be part of the bigger halal framework in Malaysia, has strategically partnered with Halal Development Corp and has been working closely with them to promote halal digitalisation as well as push the digital platform to Malaysian MSME. It was one of the winners for MYHackathon 2020 and a grant recipient of the CIP Spark 2022. Currently, the company is open to talking with local banks and investors. Mazrie says Synxsoft is currently focused on halal food and beverages, logistics and warehousing sectors. – Adib Rawa Yahya/theSun
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Hubei-Malaysia strengthens trade relations via matchmaking meeting (Sun, 28 May 2023)
PETALING JAYA: The “Hubei-Malaysia Business Matchmaking Meeting” held recently has strengthened trade relations and facilitated cooperation between both sides. “Government agencies, business associations, enterprises and news media from both sides gathered here to share development opportunities and discuss future development. This is the largest business fair held by Hubei Province in Malaysia since 2019,” the organiser said in a statement. The event organised by the Hubei Council for the Promotion of International Trade was held in Kuala Lumpur, Malaysia. This matchmaking meeting invited 30 local Malaysian business associations and more than 100 enterprises. Over 230 people attended the meeting, signed more than 200 million yuan of documents and two cooperation agreements. Among them, Hubei Fluttering Food Technology Co., Ltd. signed an export contract of dried mushroom and fungus with Tan Bee Lee Sdn Bhd of Malaysia totaling US$5.62 million; Xiangyang Myxynyuan Ecological Food Co Ltd and Malaysia Dongsheng Food Co Ltd reached a general agency agreement on the export of Chuxinyuan spring, summer, autumn and winter series mushroom soup bags, with an annual export value of 5 million dollars; Hubei Autopa Auto Technology Co Ltd purchased nine containers of auto parts in Malaysia in one time, with a value of 30 million yuan and an estimated annual purchase of 50 million dollars; Jingzhou Council for the Promotion of International Trade and Yichang Council for the Promotion of International Trade signed cooperation agreements with Asean-China Economic and Trade Development and Malaysia-China General Chamber of Commerce respectively. The meeting was presided over by officials of Hubei Council for the Promotion of International Trade.
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APEC needs to ensure trade policy prioritises green economy, build resilient global health system: Liew (Sun, 28 May 2023)
KUALA LUMPUR: The Asia Pacific Economic Cooperation (APEC) needs to ensure that trade policies among its member countries prioritise green economic policies and build a resilient global health system. Deputy Minister of Investment, Trade and Industry Liew Chin Tong (pix) said this is because when Apec was established in 1989, the world was coming out of the Cold War era. “Many are confident about the future, and some even hope that the countries of the world will cooperate more, however, today we see the world getting darker, faced with various simultaneous crises such as pandemics, wars and geopolitical tensions, financial crises and inequality, as well as climate change,“ he said. Therefore, he said Apec countries need to ensure that their trade policies prioritise green economic policies and be able to build a resilient global health system. Liew said this when speaking at the “Supporting the Multilateral Trading System” session during the 29th Apec Trade Ministers’ Meeting which took place from May 25 to May 26 in Detroit, United States. Malaysia also called on Apec to ensure that its member countries do not enter into economic decoupling so that that the world will not be divided into two blocs. “It is important for us to ensure that Apec, the World Trade Organization (WTO), and the Multilateral Trade System continue to move forward,“ he added. In addition, Liew said Malaysia is also looking at a new vision of Apec trade that is pro-worker and its benefits that rise from the bottom up and from the middle up are a new way of looking at trade and are believed to be able to end the ‘race to the bottom’ competition that harms workers, brings down product and service quality, as well as weakening regulations over the past 40 years. “However, we need to realise that this mission will only be complete if it can protect the middle class in developed countries as well as in Malaysia and other developing countries, especially in Southeast Asia. “This vision needs to ensure that there will be quality jobs with fair wages and better business opportunities for small and medium enterprises (SMEs) in all APEC member countries,” he added. Malaysia also urges Apec to ensure that trade will benefit all in addition to achieving the Putrajaya Vision 2040 that was agreed upon at the Apec Summit 2020 when Malaysia was the host, which is to create an open, dynamic, resilient and peaceful Asia Pacific community. Meanwhile, in another session titled ‘Fostering Sustainable and Inclusive Trade in the Region’, Liew noted that Malaysia approved the National Investment Aspiration (NIA) in 2022 in an effort to improve a more sustainable investment approach. He said NIA’s aspirations include efforts to increase economic sophistication, create high-quality jobs, expand domestic linkages, develop new and existing clusters, increase inclusivity, and implement ESG – environmental, social and governance. “Malaysia is currently drafting the New Industrial Master Plan (NIMP), which is based on the vision and aspirations of the NIA, to be a guide to the country’s trade, investment and industry,” he added. Bursa Malaysia has also decided to make ESG and carbon declaration mandatory from December 2023 for all public-listed companies and micro, small, and medium enterprises (MSMEs) in their supply chain, said Liew. - Bernama
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BNM Governor: Monetary policy is pre-emptive, not premature (Sun, 28 May 2023)
KUALA LUMPUR: Bank Negara Malaysia (BNM) Governor Tan Sri Nor Shamsiah Mohd Yunus (pix) today wrote a letter to editors with the title “Monetary Policy is Pre-emptive, Not Premature”, seen here below: Monetary policy decisions affect many facets of a nation’s economy. As such, it is often the case that such decisions are closely watched and debated not just by financial markets, but also by the general public. The lively conversations around the BNM Monetary Policy Committee’s (MPC) decision to raise the OPR by 25 basis points on 3 May exemplify this fact. Deciding on the OPR isn’t something we take lightly. There are many factors that the MPC considers. Our analysis is based on a broad range of forward-looking data and engagement with various industries and consumers. In addition to the Monetary Policy Statement itself, we have also put out other explainers (e.g. a simplified snapshot of our Monetary Policy Statement, FAQs) on our website and on social media. In this letter, I hope to provide further context and colour to the MPC’s actions and clarify some points that have been made in the public discourse that we have been observing. OPR Hike Will Affect Economic Growth BNM’s mandate is to maintain price stability that is conducive to the sustainable growth of the Malaysian economy. In doing so, the bank pursues a monetary policy that serves the interests of the country with this objective in mind. This means not just considering the immediate impact of our action, but also taking a long-term view of our policy measures, including OPR decisions. All central banks work under the same premise. The past and recent decisions on the OPR are based on this principle. At every meeting, the MPC walks the policy tightrope carefully – balancing between the risks to economic growth and inflation. Meeting over the course of two to three days, we examine and discuss a range of indicators and macroeconomic models to assess the health of the economy and inflation. We also review feedback and observations shared with us from households, businesses and market players, allowing us to get a better understanding of developments and economic conditions on the ground, across all segments of the economy, up and down our country. It is important that the MPC be prudent and forward-looking. BNM was one of the first central banks in the region to have started normalising interest rates last year, and this can be seen by our inflation rate being lower than the regional average. We also want growth to continue steadily, and not engineer a slowdown in growth or even a recession to bring down inflation. This is a spectre facing quite a few countries which we want to avoid. In normalising the OPR, we made sure to do so in a way that works for our economy. Hence, our increases were measured and gradual. In fact, they were smaller and slower than rate adjustments made around the region in the past year. We even paused twice to assess the cumulative impact of our OPR increases last year. This is because monetary policy actions take time to transmit through the economy, and it was important to observe if there were signs that might suggest an over-tightening of monetary conditions. The picture that we’ve gleaned at the MPC meeting May 3 and other recent meetings is this: Our economy continues to show strength. The 5.6 per cent GDP growth for 1Q 2023 was stronger than the pre-pandemic period. Hiring is also up. We see various indicators highlighting the continued strength in domestic demand: retail spending, passenger car sales, tourist arrivals, and more. Looking ahead, we expect our growth prospects to remain resilient based on many forward-looking indicators including loan growth, and insights from businesses across all sectors such as backlog orders, export orders, and business outlook, to name a few. MPC looks at a broad suite of indicators to form a view on the outlook for growth and inflation. It has to consider all relevant information, both global and domestic, holistically; it cannot consider data in isolation. This is crucial for MPC to make an informed judgment on the state of the economy. The Purchasing Managers’ Index (PMI), along with other indicators, are tracked but individual indicators on their own cannot be the sole basis of determining an appropriate policy stance. There Is No Reason To Hike After The Earlier Pause And With Inflation Moderating On inflation, the picture is more nuanced. Indeed, as some have observed, cost pressures have been easing. Headline inflation was lower, averaging at 3.6% in the first quarter compared to 3.9 per cent for the previous quarter. Much of this downtrend was driven by lower RON97 prices, which contributed around two-thirds of the decline during the first quarter. However, despite some moderation, prices are expected to remain elevated compared to what Malaysians are used to. This is because demand remains strong, driven by the economic recovery. Core inflation, which is a proxy of demand-driven inflation, remains high, averaging 3.9 per cent in the first quarter compared to the long-term average of 2.1 per cent. In sum, from a macroeconomic perspective, economic conditions have even surpassed pre-pandemic levels. So it is only right that macroeconomic policies are recalibrated to reflect this and in general, return to pre-pandemic levels. It is against this backdrop that the MPC decided that it was the right time to normalise the OPR. While some have claimed that our policy normalisation is “premature”, we aim to be pre-emptive as this is less costly to the economy than waiting until it is too late to act. It will take much bigger and faster OPR increases to bring inflation down once it has taken root – as we can see in other countries. There are also the perils of having a ‘too low for too long’ interest rate environment, with damaging effects on the economy. The devastation of the Global Financial Crisis that happened within the recent two decades, rooted in the US housing market, is a sobering reminder of this. In the run-up to the decision in May, a further OPR hike was widely anticipated by financial market observers in line with the central bank’s communication of a “gradual and measured” normalisation path, although there were differing views on the precise timing of the increase. Many expected us to do it in the second half of the year but some noted that it was timely to do so in May to prevent inflation from becoming entrenched given the resilient economic growth. We are not out of the woods yet and need to be on our guard. OPR Hikes Have Caused Financial Hardship For Borrowers We recognise that some people may be more affected than others by the OPR hikes. The OPR is by design a blunt tool to deliver price stability. It does not distinguish between those who have loans and those without in its transmission to the economy. Having said that, any borrowers – B40 or M40, any individual or businesses – who may be facing difficulties servicing their loans can reach out to their banks or AKPK to work out an alternative repayment arrangement that works for them. Help is available for borrowers that need it, and such customised arrangements would benefit both the borrowers and the banks. That said, over 50 per cent of loans from B40 and vulnerable groups are in fixed-rate instruments. So their monthly repayments from these fixed-rate loans will not be impacted by the OPR increases. However, if we do not manage excessive price pressures like we are seeing in some other economies, this will affect everyone. The B40 and vulnerable groups are the ones who will be the most affected if we let inflation get out of hand, and we will not be able to preserve sustainable growth over the longer term. We cannot and must not let that happen. OPR Has Not Helped The Ringgit The value of the ringgit against other currencies is determined by the market. It reflects ongoing developments domestically and abroad. At present, the movement of the US dollar continues to be the major factor that affects other currencies, including the ringgit. In particular, the higher demand for the US dollar has been partly due to uncertainty over the US government debt ceiling and disappointing economic data for the month of April from China. Sentiment on the ringgit was further weighed down by views on the importance of trade linkages between Malaysia and China. Furthermore, OPR hikes were done at a more gradual pace compared to major and regional peers, making the OPR the lowest in the region. Under a flexible exchange rate regime, it is reasonable to expect the ringgit to fluctuate from time to time. These adjustments are necessary to allow the domestic economy to adjust to global economic and financial shocks. In 2022, at one point the ringgit swung as much as 11.5 per cent between end-March to early November, before appreciating towards the year’s end. Yet the real economy grew by 8.7 per cent during the year. This is how the exchange rate and the deeper financial market buffer us from adverse external shocks. Malaysia remains an open economy and BNM’s role is to ensure that in the short term, excessive volatility to the ringgit is contained. The policy priority now is to sustain economic growth in an environment of price stability and to further strengthen domestic economic fundamentals through structural reforms. BNM has been steadfast in our calls and advocacy for structural reforms. This, rather than short-term measures or monetary policy decisions, will provide more enduring support for the ringgit. - Bernama
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Twitter quits EU disinformation code, says commissioner (Sat, 27 May 2023)
BRUSSELS: Twitter has decided to leave the EU’s disinformation code, a voluntary pact that groups together the major social platforms, but “its obligations remain”, EU industry commissioner Thierry Breton tweeted today. Launched in 2018, the EU’s code of practice on disinformation counts nearly three dozen signatories, including the giants in the sector such as Meta, Google, Twitter, Microsoft and TikTok. It also covers smaller platforms, as well as advertisers and fact-checkers and non-governmental organizations. The code was written by the industry players themselves and contains more than three dozen pledges such as better cooperation with fact-checkers and not promoting actors distributing disinformation. “You can run but you can’t hide. Beyond voluntary commitments, fighting disinformation will be legal obligation under DSA (digital services law) as of Aug 25,” Breton wrote. “Our teams will be ready for enforcement,” he warned. Since buying the social network six months ago, billionaire Elon Musk has relaxed the moderation of problematic content, which appears to have amplified the voices of notorious propagators of disinformation on the platform. “If (Elon Musk) doesn’t take the code seriously, then it’s better that he quits,” a European Commission official had told AFP on Friday.-Bernama
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Cautious trading to continue on Bursa Malaysia next week (Sat, 27 May 2023)
KUALA LUMPUR: Bursa Malaysia is expected to continue to trade in cautious mode next week amid concerns over the global economic developments, an analyst said. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the local market undertone will remain cautious until the US debt ceiling issue is resolved, although bargain-hunting activities may emerge as well. “Hence, we anticipate the FTSE Bursa Malaysia KLCI (FBM KLCI) to trade rangebound for next week within 1,400-1,410 points. On a technical point of view, we see the immediate support at 1,400 and resistance at 1,440. “Additionally, we believe next week’s focus will remain on the US debt ceiling issue and local corporate earnings towards the end of results season,” he told Bernama. On a Friday-to-Friday basis, the FBM KLCI declined 25.56 points to end the week at 1,402.98 from last week’s 1,428.54. The local bourse traded on a declining pattern during the week, mainly influenced by external factors, namely the worries over the progress of the US debt ceiling issue and the worsening Sino-US tensions, which dampened sentiment across the region. On the index board, the FBM Emas Index decreased 178.28 points to 10,296.47, the FBMT 100 Index slid 167.73 points to 10,002.63, the FBM Emas Shariah Index tumbled 160.48 points to 10,669.03, the FBM 70 Index fell 165.75 points to 13,480.00, and the FBM ACE Index dipped 22.00 points to 4,980.90. Sector-wise, the Plantation Index lost 271.29 points to 6,755.26, the Energy Index erased 31.22 points to 808.31, the Financial Services Index dropped 301.80 points to 15,304.43, and the Industrial Products and Services Index shed 0.91 points to 164.08. Weekly turnover declined to 12.60 billion units valued at RM9.06 billion versus 13.33 billion units valued at RM8.18 billion on Friday last week. The Main Market volume trimmed to 8.01 billion shares worth RM7.80 billion compared with 8.39 billion shares worth RM7.05 billion in the previous week. Warrants turnover shrank to 1.60 billion units valued at RM222.39 million from 1.85 billion units valued at RM288.01 million a week ago. The ACE Market volume decreased to 2.95 billion shares worth RM875.29 million from 3.08 billion shares worth RM830.39 million last week. - Bernama
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Ringgit set to trade cautiously next week as US debt ceiling deadline looms (Sat, 27 May 2023)
KUALA LUMPUR: The ringgit is projected to trade in a narrow range next week as the US debt ceiling deadline looms on June 1. SPI Asset Management managing director Stephen Innes noted that the ringgit traded stronger on Friday on a relief rally after some positive developments in the debt ceiling talks, raising hopes that a deal could be reached before June 1. However, if markets continue to price in a better US growth outlook and more hawkish Fed expectations, then the ringgit would underperform, he said. “Based on a more hawkish US Federal Reserve (Fed) outlook, we could see ringgit trading within the 4.59 to 4.61 level next week. “And if US (economic) data continues to hold up and the debt ceiling deal is signed, this could increase the odds of the Fed hiking (interest rates) in June,” he told Bernama. On Malaysia’s consumer price index (CPI), Innes noted that Malaysia’s inflation moderated to 3.3 per cent in April due to lower food prices while core inflation, which removes items such as fresh food and energy from the gauge, also fell to 3.6 per cent year-on-year (March: 3.8 per cent). “So this was good news for the broader economy hence the ringgit traded better on local impulse,” he added. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the latest CPI showed that the disinflationary trend has continued to prevail. “Therefore, the overnight policy rate should stick at 3.00 per cent throughout the year,” he added. Meanwhile, the local note depreciated versus a basket of major currencies over the seven-day span. On a Friday-to-Friday basis, the ringgit dropped against the US dollar to 4.5970/6035 compared with 4.5350/5405 a week earlier. It slipped against the Japanese yen to 3.2918/2967 from 3.2839/2881 previously. The local note weakened against the British pound to 5.6819/6899 from last Friday’s 5.6370/6438 and went down vis-a-vis the euro to 4.9340/9409 from 4.8978/9037 a week before. The ringgit also traded lower against its Asean peers. It slipped against the Thai baht to 13.2539/2784 from 13.1862/2083 and was lower versus the Singapore dollar at 3.4012/4062 from 3.3715/3758 at the end of the preceding week. The local note eased against the Indonesian rupiah to 307.3/307.9 from 303.6/304.2 last week and weakened vis-a-vis the Philippine peso to 8.24/8.25 from 8.14/8.16 previously. - Bernama
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Tax Matters – Lingering problems with foreign-sourced dividends (Mon, 17 Apr 2023)
ON DEC 30, 2022, there was a press statement issued by the Ministry of Finance (MoF) which indicated that foreign-sourced dividends will be tax exempt. An excerpt from the press statement: “The government has agreed to exempt taxation on foreign-source income (FSI) for resident taxpayers to ensure the smooth implementation of the tax initiative .... “Subject to Inland Revenue Board (IRB) criteria and guidelines, income tax exemption on dividends will be given to companies or limited liability partnerships while individuals will be tax-exempted for all types of income.” The intention here was clearly to exempt foreign-sourced dividend income received in Malaysia. However, subsequently, when the IRB guidelines came out, the original intention of exempting dividends in totality appears to have been restricted with the requirement to comply with the stringent conditions which seems to be going against the spirit of the intention behind the press statement. What is the problem? In the case of resident companies, LLPs and individuals receiving income through partnerships, to benefit from the exemption, they are required to comply with three conditions: 1. The dividend income has been subjected to tax in the country of origin; 2. The highest tax rate in the country of origin is not less than 15%; and 3. The recipient has to have economic substance. Condition 2 can easily be met because the highest tax rate in most countries is more than 15%. The first condition requires dividend income to be subject to income tax or withholding tax in the country of origin. This condition can be satisfied if the payment is a direct payment from the foreign company to the Malaysian resident. However, in many cases, dividends are received through companies in intermediate countries, such as Singapore or Hong Kong, China, where such income received may not be subject to taxation due to local legislation exempting such income. As the guidelines stand, they state that dividends received in Malaysia from such intermediate companies will be taxed. This is the problem. The guidelines go further and state that if the dividends are received by an intermediate company which is exempt from tax from another company in the same jurisdiction paying taxes, and thereafter the distribution from the intermediate foreign company to the Malaysian resident company will attract income tax according to the guidelines. However, when it comes to individuals receiving other types of income such as employment income, from a country which exempts such income from tax, or does not impose tax on such income, the income received from the foreign country is exempt. Here, the guidelines appear to be applying different standards to individuals and companies. If one is to use an analogy in exempting individuals’ foreign-sourced income from non-dividend sources, the spirit of applying this exemption seems to be contradictory. The third condition of requiring the recipient to have economic substance makes equally difficult to benefit from this exemption. Economic substance here requires having employees and operating expenditure with possibly business activities. What happens to passive investment holding companies? Are they excluded from benefiting from this exemption because they won’t be able to meet this condition. Is the original intention lost? From the way the IRB guidelines have come out, it appears that the authorities have backtracked from the original intention of exempting foreign-sourced dividend income by imposing stringent conditions. Changes that need to be made Condition 1 in particular should be relooked to implement the original intention. Here, such dividend income received in Malaysia which has been exempted in the foreign country should not be taxed in Malaysia. The rationale here is to bring such income into the level playing field with the treatment accorded to individuals who receive other income from foreign locations which do not subject such income to tax. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).
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Tax Matters – Time for fraudsters to stop cheating the taxman (Mon, 10 Apr 2023)
GOOD taxpayers are being cheated by bad taxpayers who intentionally set out to avoid paying taxes or underpay their taxes. Be forewarned that Customs and Inland Revenue Board (IRB) are actively increasing their vigilance to uncover the fraudsters. These taxpayers are enjoying benefits provided by the government without contributing their share. The top of the game for fraudsters is to avoid bringing cash receipts into income, or in layman’s terms, it is equivalent to keeping two sets of books – one that is declared, and one that is not declared. This is common where cash transactions are pre-dominant – construction, food and beverage, agriculture, traders, manufacturers, etc. Cash received from illegal transactions, bribery, or transactions involving money laundering are usually hidden away from tax. The realisation of profits on crypto assets by cryptocurrency traders frequently falls under this category on the belief that the tax authorities cannot catch them. Taxpayers tend to believe that activities carried out overseas by Malaysian business should not be brought to tax in Malaysia as long as such income is kept overseas. This is incorrect as such income can be regarded as domestic source and will be taxed whether or not it is remitted to Malaysia. Transfer pricing without proper justification to meet the arm’s length rules is another common means of understating income. Other types of tax frauds committed by taxpayers are: creating or buying fictitious invoices for expenses and purchase of goods which were never received; bribery payments tucked away and falsely described as legitimate business expenses; inflating employee costs by including fictitious employees in the payroll; or buying assets which are non-existent. Business enterprises may try to shift profits from one company to another by introducing charges for services such as management services or technical support etc (supported by legal agreements), but were never provided in reality. Another approach used to defraud is to move profits around in circles within multiple companies with different financial year ends to defer the payment of taxes indefinitely. Although tax planning is legal, pushing this beyond the boundaries can lead up to tax fraud. A typical example would be in the case of service tax, there are thresholds which triggers a business to register. In order to avoid the registration for service tax purposes, businesses tend to create multiple business outfits to stay within the threshold and avoid accounting for service tax. In the indirect tax area, licensed manufacturers who sell their goods without accounting for sales tax are also falsifying their tax returns. How will the tax authorities find you? The tax authorities are not stupid. They have a group of dedicated people and the necessary soft-ware to weed out taxpayers either by identifying those who are out of sync with the rest of the industry or connecting your asset base or asset growth to the income levels. Please do not forget that the tax authorities are constantly connecting the various declara-tions that are being made to them. Examples are annual tax returns, withholding tax returns, employer returns, public state-ments in the press, stamped documents, real property gains tax returns, etc. Do not forget that the tax authorities of different countries are exchanging information and cooperating with one another. There are the hardcore tax evaders who will believe they are beyond the law because they are well-connected, or that they are privileged. This assumption has been recently debunked by our prime minister who said: “I am saying this so that everyone, whether they are my acquaintances or not, my supporters or not – taxes must be paid and LHDN (IRB) must search and look for the tricks used (to avoid paying taxes)”. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).
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Scientex in joint venture for maiden foray into Indonesia affordable housing (Thu, 23 Mar 2023)
SHAH ALAM: Global packaging manufacturer and leading property developer Scientex Bhd has entered into a joint venture with Indonesia’s Mustika Land and Japan’s Creed Group to make its maiden foray into building affordable homes in Indonesia. Scientex’s wholly owned subsidiary Scientex Quatari Sdn Bhd (STX) entered into a JV with PT Graha Mustika Tamansari (PT GMT) and Creed Property PH-1 Pte Ltd (CRD) to form a JV company, with PT GMT holding a 60% stake and STX and CRD holding 20% each. The JV company will subsequently acquire land from PT GMT for Phase 1 development of Graha Mustika Tamansari. The JV company will develop the Graha Mustika Tamansari township in Bekasi, Greater Jakarta. Phase 1 involves developing 400 affordable landed homes with estimated gross development value (GDV) of US$19 million (about RM85.5 million). Mustika Land has 18 property development projects in Greater Jakarta since 1995, including three township developments and commercial properties. Creed Group is a Japanese real estate investment group focusing on property development in Southeast and South Asia, including Cambodia, Thailand, Indonesia, Vietnam and Bangladesh. It has developed over US$3 billion GDV projects in Southeast Asia since 1996. Scientex CEO Lim Peng Jin said: “Having delivered nearly 28,000 affordable landed homes of RM8 billion in cumulative GDV across Malaysia, Scientex is now ready to embark on our ‘Cross Border’ strategy to penetrate new markets in Southeast Asia and fulfil regional demand. “While our JV with these reputable property players leverages on their deep knowledge of the local domain in Indonesia, Scientex will bring to the table our proven expertise in developing large-scale townships with quality and efficiency based on our home-grown building technologies, which has been our hallmark for the past 28 years. Our long-term vision is to expand our Scientex brand in Indonesia’s property development sector, and share our affordable housing knowledge, expertise and experience in the region.” Bekasi is about 24km from West Jakarta and has a population of 3.16 million. The 40-acre Graha Mustika Tamansari is the fourth township development undertaken by Mustika Land along the Jakarta Outer Ring Road 2, an under-construction major toll-road connecting various parts of Greater Jakarta. The JV company will develop Phase 1 of Graha Mustika Tamansari of about 12 acres in 2023], with targeted completion in 2025.
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