Malaysian Economy Updates

MAS and AirAsia in Business Partnership

mansid@yahoo.com — Wed, 10 Aug 2011 23:20:45 PDT

Azman Mokhtar and Fernandes at the collaboration signing

The collaboration agreement would not be committed upon once an anti-trust analysis had been completed

The Collaboration

It has been rumoured that Malaysian Airline System (MAS) and budget carrier AirAsia Bhd will form a working relationship. This is finally taking place with shareholding changes in both airlines.

On August 10, 2011 both airlines inked a landmark deal that is set up to reshape the aviation industry. By cooperating to leverage on their core strengths and expertise, the two carriers plan to lower competition and cut costs in the areas of aircraft purchases, engineering ground support services, cargo services, catering and training.

The whole idea of the collaboration is to salvage MAS and realign its business to become a truly premium carrier along the likes of Singapore Airlines (SIA) and Emirates.

A joint collaboration committee chaired by Azman Yahya will be set up to ensure that the collaboration goes according to plan. The other committee members include Mohd Rashdan, Fernandes and Kamarudin.

Share Swap

Tune Air Sdn Bhd which is owned by Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, via a share swap, will end up with 20.5% equity in MAS. In turn, MAS’s parent, Khazanah Nasional Bhd, will take up a 10% stake in AirAsia Bhd. This brings the investment arm’s stake in MAS down to 49% from 69%. The government also retains its golden share in MAS, whereas Tune Air Sdn Bhd reduce its stake in AirAsia from 23% to 10% after the share swap.

The deal is said to be to be valued closed to RM2 billion based on Friday’s (August 5, 2011) closing, with MAS closing at RM1.60 a share and AirAsia at RM3.95 per share.

The Board

As part of the deal, Tony Fernandes and Datuk Kamarudin Meranun from AirAsia will sit on the MAS board, and Datuk Azman Yahya, MAS director will join the AirAsia board.

The collaboration of AirAsia and MAS saw the appointment of several corporate figures with financial background and the founders of AirAsia being appointed to the MAS board.

Tony Fernandes and Kamarudin Meranum were appointed as non-independent non-executive directors of MAS. Tan Sri Krishnan Tan, former IJM Corp Bhd managing director and Tan Sri Wan Azmi Wan Hamzah, former Land & General Bhd have been appointed to the board of MAS as independent non-executive directors. Two other independent non-executive directors are Datuk Rohana Rozhan Astro, CEO of Malaysia Holdings Sdn Bhd and David Lau Nai Pek of Celcom Axiata Bhd.

Meanwhile, Azman Yahya has been appointed as the non-independent non-executive director of AirAsia Bhd.

The Management

Mohammed Rashdan Mohd Yusof, seconded from Khazanah, has been appointed as executive director of MAS. While, MAS’s managing director Tengku Datuk Seri Azmil Zahruddin stepped down to join Khazanah Nasional as its executive director for investment.

MAS’s board has established an Executive Committee (exco), that will oversee the management of the company until a new managing director is appointed. The exco will be chaired by chairman Tan Sri Md Nor Yusof. Members will include Datuk Mohamed Azman Yahya, Mohammed Rashdan, Tony Fernandes and Kamarudin Meranun.

The Business

The deal struck between Air Asia Bhd and Khazanah Nasional Bhd will not see AirAsia or MAS cut back on neither routes nor plane orders. AirAsia recently made an order for another 200 aircraft while MAS added another 10 aircraft to its ongoing fleet renewal programme. Its order of six A380s is also part of MAS’s fleet renewal programme.

The turboprop operations of Firefly, MAS’s low-cost unit, will become a fully service carrier to ply regional flights. Both AirAsia and sister airline AirAsia X will stick with low-cost airline model for short, mid and long-haul routes.

Conclusion

What Tony Fernandes said: “There’s no need for AirAsia and MAS to cut back on any routes. There are five-star hotels and there are three-star hotels, this is not about rationalization and cutting back. This is about growth.”

What Tan Sri Azman Mokhtar, CEO of Khazahah said: “There are many ways to structure this, particularly for aviation, but we structured this in such a way that the two airlines remain distinct and separate. Separate brands, separate business models, separate governance, separate board, separate cultures even, and the idea is to focus on the core competencies."

Abd Rahaman Rasid

Felda, August 11, 2011

Natural Rubber Price Hike

mansid@yahoo.com — Mon, 08 Aug 2011 01:30:37 PDT

...because of slow supply growth and stronger regional currencies boost rubber price

The Association of Natural Rubber Producing Countries (ANRPC) has estimated total world natural rubber (NR) production this year to be at 9.95 million tonnes, up by 4.9% from 9.49 million tonnes last year. In spite of the higher forecast, the association expected NR supply was seen moving up slowly over the past quarters, thus triggering continued recovery in rubber prices.

Members of ANRPC Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka, the Philippines and Cambodia controlled about 92% of the commodity's global supply.

ANRC in July report said the slow growth in supply, high oil price and strengthening of the baht, rupiah and ringgit can help NR prices to stay strong but the short-term outlook is clouded by uncertainties from the debt crisis in the United States and the eurozone.

However, there are limitations in estimating the area to be uprooted each year from 2012 through 2018. This is because farmers individually make the decision on replanting, and their decision is influenced by factors such as age structure of existing trees, current price and short-term expected prices of rubber and rubber wood, prevailing cost of planting materials and labour and incentives for replanting.

It noted that from 2005 to 2010, the uprooting rate varied from 1.5% to 2.5% of the previous year's yielding areas.

ANRPC expects the uprooting rate from 2012 to be higher, given the low uprooting rate from 2005 to 2010. Farmers largely retained aged trees to take advantage of high NR prices. ANRPC pointed out that a large extent of existing yielding trees were planted during 1980s, which was a boom period of planting. Inevitably, trees planted during that period will have to be uprooted during 2012-2018. On the other hand, it said it was unlikely for the uprooting rate to exceed 5%.

Therefore, the yielding areas from 2012 to 2018 are projected against four different replanting rates, namely 2%, 3%, 4% and 5%. The most likely rates are 3% and 4%. The association added a high rate of uprooting implies that a larger extent of existing yielding areas would be entering the gestation phase spanning seven years. The resultant reduction in yielding areas will be pushing the supply down. On the other hand, a low uprooting rate can minimise the reduction in yielding areas and can contribute to supply.

Other constraints for average yield to improve further, with the exception of the Philippines and Cambodia, include a marked increase in the share of low-yielding non-traditional regions in Thailand, India and Vietnam. (Non-traditional regions are agro-climatically less suitable for growing rubber trees and farmers in those regions are generally new to rubber cultivation and hence unskilled).

Even if rubber prices reach abnormally high levels, there would be limited space to improve yield from existing trees, said ANRPC. This is because farmers have exploited available options as the price has stayed abnormally high in the last couple of years.

ANRPC said there are limits to enhancing the yield in the short term. There have also been reports that yield potential of trees in some regions has been damaged due to unscientific overexploitation of trees in the backdrop of high prices.

Source: TheStarBiz, Monday, August 8, 2011.

Malaysia’s Population Stood at 28.3 Million

mansid@yahoo.com — Fri, 29 Jul 2011 18:47:57 PDT

Map of Malaysia

Slightly more men than women in Malaysian population

Malaysia now has a population of 28.3 million at the end of 2010 compared with 23.3 million in 2010 according to the Malaysian Population and Housing Census 2010. The average annual population growth rate was 2% from 2000 to 2010, declining from 2.6% from 1991 to 2000.

Of 28.3 million people in the country, Malaysian citizens accounted for 91.8 percent and non-citizens 8.2 percent. Male’s population is more than female. The male population is 14.6 million while female is 13.8 million.

Bumiputera accounted for 67.4% of Malaysian citizens followed by Chinese (24.6%), Indians (7.3%), others (0.7%). In the peninsular, the Malays accounted for 63.1% of the population while in Sarawak, the Ibans (30.3%) and in Sabah, the Kadazan/Dusun (24.5 %).

Selangor registered the highest population with 5.46 million followed by Johor (3.35 million) and Sabah (3.21 million) while Putrajaya had the smallest with 72,413 people followed by Labuan (86,908). Kuala Lumpur was the most densely populated area with 6,891 people per sq km followed by Penang (1,490) and (1,478).

Source: TheStar, Saturday, July 30, 2011

Gold is Still the Best Investment

mansid@yahoo.com — Tue, 19 Jul 2011 01:44:29 PDT

No one will deny that gold is still the best and safest investment. Off all the precious metals, gold is the most popular as an investment.

Investors generally buy gold as a hedge against economic, political, or currency crises (including investment market declines, burden of national debt, currency failure, inflation and war). The gold market is subject to speculation especially in the futures contracts and derivatives. The history of the gold standard, the role of gold reserves in central banking, gold's low correlation with other commodity prices, and its pricing in relation to currencies during the financial crisis of 2007–2010, suggest that gold behaves like a currency than a commodity.

According to an article published in the NST (Friday 8, July 2011) titled "Good Gains from Gold" investment in gold seems to provide an annualized return of 13% over the next three years and should peak at US$2,100 per ounce in 2014.

Economists are bullish on the outlook for gold and there are a few factors contributed to this sentiment. An expected of stronger of economic growth in China and India providing a boost in consumers demand for gold.

Another reason for this bullish was the global central banks are increasing their gold reserves and become net buyers of gold whereas in the past they are net supplier of gold.

Abd Rahaman Rasid

Sime Darby to Fight Corruption

mansid@yahoo.com — Thu, 09 Jun 2011 20:37:25 PDT

As a principle of corporate Governance, it should start at the top and may or may not end at the top. The tone at the top helps to shape up strong corporate governance.

As reported in today newspaper, Sime Darby Berhad signed and handed its Corporate Integrity Pledge for the initiative to the Malaysian Anti-Corruption Commission (MACC) to formalize its commitment in fighting corruption.

The pledge is in accordance with the second initiative of the Government Transformation Programme to fight corruption.

In this area, Sime Darby will work closely with MACC on fine-tuning its internal processes and improve its corporate governance and also to curb bribery and corruption especially among its stakeholders, including suppliers and staff. MACC will act as a secretariat to co-ordinate and assist in the implementation of the pledge. Sime Darby will work with MACC to organize courses for its suppliers pertaining to law and better conduct in doing business.

Abu Kassim, the chief of MACC said Sime Darby had undergone a self-regulating process and it would report to the MACC on efforts it had taken by the end of the year (2011).

Source: TheStar and NST, June 10, 2011

Demand for Condominiums in Kuala Lumpur

mansid@yahoo.com — Fri, 03 Jun 2011 02:06:11 PDT

The market for high-end condominiums and serviced residences in Kuala Lumpur is still very strong, according to CB Richard Ellis (Malaysia) executive chairman Christopher Boyd. Boyd said high-end condominiums and serviced residences launched in the city last year had seen strong sales. Take-up rates range from 65%-88% as of the end of the first quarter of 2011.

One example Boyd provided was Soho@KLCC (85% take-up rate), with 300 units of between 601 and 877 sq ft, and average selling prices of RM700 to RM850 per sq ft. Another example was M Suites serviced apartments, Ampang Hilir (70% take-up rate), with 442 units of between 502 and 1,630 sq ft, and an average selling price of RM850 per sq ft.

A recent CB Richard Ellis report said that in the first quarter of this year, the total supply of existing condominiums and serviced residences (mid-range and above, with average prices of RM350 per sq ft or higher) in Kuala Lumpur was 32,742 units, representing a 4% increase since the end of last year. Of these, about 44% or 14,514 units were located in the Golden Triangle, central business district and Ampang areas, with 34% or 11,121 units in Mont'Kiara and Sri Hartamas.

About 38% of the supply of condominiums and serviced residences were tagged at between RM350 and RM499 per sq ft, with a further 38.6% priced at between RM500 and RM799 per sq ft. The remainder, or 24% of the units, were priced at RM800 per sq ft onwards and categorised as luxury residential units.

Most of these luxury residential units were located in the vicinity of the Suria KLCC shopping centre. According to Boyd, average capital values in the three main condominium markets (KLCC, Bangsar and Mont Kiara) in Kuala Lumpur had remained relatively steady since the 2008 global financial crisis.

The CB Richard Ellis report said that last year, there were 2,156 transactions for high-end condominiums in Kuala Lumpur with an average value per transaction of RM1.09mil. Boyd said that about 76% of buyers of luxury condominiums and serviced residences in Kuala Lumpur were Malaysians. Less than a quarter of Kuala Lumpur luxury condominium buyers are foreigners. Also, most of the local buyers are not highly leveraged and they are not buying for speculative purposes.

The average prime capital values for condominiums in Kuala Lumpur are among the lowest in the region (compared with Bangkok, Guangzhou, Ho Chi Minh City, Shanghai, Beijing, Singapore and Hong Kong) while average gross rental yields are among the highest (hovering around 5.8%).

Eastern & Oriental Bhd head of sales (property division) Fionna Chuah said the company's high-end projects such as Dua Residency condominiums in the Kuala Lumpur embassy enclave, and Idamansara@Damansara Heights gated and guarded landed development, had seen strong capital appreciation ranging from 50% to 60% in the last few years.

A few years ago, prices for Dua Residency were around RM600 per sq ft. Today, it is approaching RM1,000 per sq ft. As for Idamansara, a semi-detached house sold for RM3mil can fetch RM4.5mil today. Chuah said another of the company's prime projects was St Mary Residences, which is a three-tower freehold condominium development (located adjacent to the The Weld shopping mall). The project's developer is Mergexcel Property Development Sdn Bhd, a joint venture between Lion Group and E&O Property Development.

Source: StarBiz, 16/5/2011.

Macro Economic Justification for New Power Tariffs

mansid@yahoo.com — Wed, 01 Jun 2011 01:05:03 PDT

On 30th May 2011, the Government announced that consumers will pay 2.23 sen per kilowatt hour (kWh) more for electricity, or 33.54 sen per kWh effective June 1, 2011. This follows the revision of gas prices for the power sector from RM10.70 per Million Metric British Thermal unit (MMBtu) to RM13.70/MMBtu.

On average, the electricity tariff would be raised by 7.12% from June 1, 2011. The increase was composed of a 5.12% hike to reflect the upward revision of natural gas price to the power sector, and a 2% rise in base tariff for TNB to partly recover from the higher cost of power supply since June 2006.

With the power rates going up, it is expected 75% of the 5.94 million households nationwide will not be affected. The Ministry of Energy, Green Technology and Water said 4.4 million of 5.94 million households which used less than 300kWh or RM77 a month, would not see any increase of their bills.

It is interesting to read a report written by Rupa Damodaran: "Energy rate hike to ease fiscal deficit ratio to GDP" which appeared in the Business Times today.

The move to raise energy rates will enable the government to reduce its fiscal deficit ratio to the GDP from 5.6% in 2010 to 5.4% in 2011 as targeted, economists said. An economist estimated that without subsidy rationalisation, the fiscal deficit may swell to 5.8% of the GDP this year. With the subsidy rationalisation plan in place, it is expected the fiscal deficit to fall about 4% in 2012.

Economists have expressed concern with the high ratio, saying it would impact the country's sovereign ratings. Malaysia has one of the largest ratios of subsidies to total government spending, and it is one component that has to be reduced.

Malaysia is looking to achieve its target of reducing the budget deficit to less than 3% of the GDP by 2015, and one of the ways is to raise its competitiveness via cuts in subsidies and increased spending in quality investments.

Source: Business Times, June 1, 2011: "Energy rate hike to ease fiscal deficit ratio to GDP."

Abd Rahaman Rasid

FELDA, June 1, 2011.

CIMB and Maybank Bid for RHB Capital

mansid@yahoo.com — Wed, 03 Aug 2011 20:35:05 PDT

Updated: June 23 2011

Both banks, CIMB Group and Maybank had dropped separate plans to acquire RHB Capital inlight of Abu Dhabi Commercial Bank setting a high valuation bar when it sold its 25% stake in RHB to Aabar Investment at RM10.80 a share last week.

The price paid by Aabar values RHB at around 23.7 billion ringgit ($7.8 billion), nearly 18 percent above the current market value. Other shareholders likely would also expect at least that much under a deal.

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The 2 largest bank--CIMB Group Holding and Maybank will fight each other to take control on RHB Capital which could cost over RM20 billion. A merger of either bank with RHBCap would create one of the largest banking group in South-east Asia.

Bank Negara Malaysia has given a greenlight to both banking groups for them to commence talks with RHB Capital and its substantial shareholders for a merger. CIMB and Maybank have made their attentions to do so to Bursa Malaysia.

In term of assets, Maybank is the largest bank in Malaysia which has a total assets of US$110.3 billion, followed by CIMB Group (US$88.3 billion)); whereas RHB is the 5th largest bank (US$42.4 billion). It means, with a merger exercise come true, if CIMB wins the battle, it automatically will become the largest bank in Malaysia. But, for Maybank, if it win the bid, Maybank will become the biggest bank in the region by market value, overtaking Singapore's DBS Bank.

RHBCap is controlled by the EPF with a 45% stake and its another shareholder, Abu Dhabi Commercial Bank (ADCB) is looking to sell its 25% stake in RHBCap.

The two banks have a equal chance to win the bid, now it is up to the Government to choose. But, if Malaysia really needs a very strong bank and based on a few factors such as Government's vision and mission, new economic policy and present leadership style, I believe Maybank will win the bid.

Source: TheStar and NST, June 1, 2011

Abd Rahaman Rasid

FELDA, June 1, 2011

Malaysia's Economy Attains 7th Position

mansid@yahoo.com — Mon, 30 May 2011 20:36:41 PDT

Malaysia's Economic Performance ranking improved to 7th place out of 59 economies this year compared with 12th position in 2007. It was acknowledged in the World Competitiveness Yearbook 2011 Report released by the Institute for Management Development (IMD) recently.

In the ranking for Economic Performance, Malaysia was headed of Taiwan, Sweden, Canada, Australia, the United Kingdom and Switzerland.

The IMD survey continued to rank Malaysia as among the top 5 most competitive nations in the Asia-Pacific region for the second year, taking 6th position in the 20 million population category and 2nd position after Taiwan in the GDP per capita less than US$20,000 category.

Malaysia was ranked 16th overall in terms of competitiveness among 59 economies, compared with 10th place in 2010.

Website: Institute for Management Development (IMD)

Source: NST, May 20 2011: "Malaysia's economy attains 7th position"

CEO Air Asia: Malaysia Will Lose Out

mansid@yahoo.com — Mon, 30 May 2011 17:17:53 PDT

It is interesting to read about Air Asia requests to the Transport Ministry for new routes.

AirAsia's CEO hopes that the Transport Ministry will be more accommodative on its request for new routes rights, following Singapore Airlines' announcement that it is launching a new budget carrier. AirAsia X is still waiting for the green light from the Ministry to fly into Beijing, Shanghai, Osaka and Jeddah. If the Ministry does not give Air Asia route rights, Singapore can do Jeddah, Beijing, Shanghai and Malaysia will lose out.

If the government continues to hold back new route approvals, Singapore will have an advantage to build a hub. Singapore has both long-and short-haul airlines, they have the advantage in building a hub. Singapore is competing with other airlines like Qantas, Jetstar and AirAsia X.

Source: Business Times, May 27 2011: "CEO: Malaysia will lose out by holding back routes.

Durian for China and Chinese

mansid@yahoo.com — Tue, 24 May 2011 20:57:39 PDT

I will visit China soon, then they will

try tempoyak...hehe

For Malaysians, we are already know that Chinese like durians most compared with other races in this country.

It is a good news for durian planters in Malaysia - starting July this year, Malaysian durians will enter the China market after the Chinese government gave its official approval to Malaysia to export the 'king of fruits' to the republic.

Malaysia received the approval letter from the Chinese government on May 11, 2011.

According to the news, the government of Malaysia had been trying to export durians to China, but only the initiatives taken by Datuk Seri Najib were coming to fruition.

The prime minister proposed that during official visits to China, they should bring along Malaysian durians to be tasted by top Chinese leaders, including Prime Minister Wen Jiabao.

The export of durians to China will be managed by FAMA as it would involve a very large quantity. According to FAMA, Malaysia currently produced 300,000 tonnes of durians, with revenue estimated at RM1.3 billion annually, and it was still insufficient.

Malaysia will export two types of frozen durian with seed or seedless, involving 'durian kampung' and durian clones from Pahang, Johor and Perak.

Source: NST, 25/5/2011: "Our durians to enter China in July

Malaysian Economy Grew by 4.6% in First Quarter 2011

mansid@yahoo.com — Wed, 18 May 2011 22:38:02 PDT

1. Overall Economic Performance

The Malaysian economy grew by 4.6% in 1st Quarter 2011 as domestic demand overcame the modest recovery in advanced economies, said Bank Negara governor at the release of the first quarter data. For the 2011, Bank Negara has projected 5-5% economic growth for Malaysia.

2. Demand and Supply

The domestic demand expanded by 6.6% as private sector investments and government consumption grew. Private consumption rose by 6.7% on favourable labour market and income growth while gross fixed capital formation was up 6.5% as companies invested more amidst high capacity utilisation rates and planned investment projects.

The service sector grew by 5.9% where trade surplus widened to RM36.1 billion in the Q1 2011 against RM25.5 billion in the 4Q 2010. Both gross exports and imports registered stronger growth of 7.5% and 12.4% respectively.

On the supply side, all sectors showed growth except for the primary commodities sector which was affected by poor weather and lower crude oil production.

3. Inflation

Bank Negara is maintaining its inflation rate projection between 2.5% and 3.5% this year, despite mounting inflationary pressures. And depending on the economic conditions, Bank Negara would revise the inflation rate.

The Statistics Department announced that the consumer price index (CPI) for April stood at 3.2% from a year ago, driven by higher food and transportation prices. The CPI rose by 2.8% on an annual basis in the Q1 2011. This was due to the increase in global commodity and food prices.

4. Conclusion

Bank Negara expected the economic growth momentum to accelerate in the 2nd half of 2011 when rebuilding takes place in Japan, boosting commodity prices and demand for timber.

Source: StarBiz, 18/5/2011: 4.6% Q1 growth

Abd Rahaman Rasid

FELDA

Malaysian Oil Palm Planters Need ISPO

mansid@yahoo.com — Sun, 15 May 2011 19:10:04 PDT

Malaysian oil palm planters in Indonesia will need to be separately certified under Indonesia Sustainable Palm Oil (ISPO), regardless of whether they have been certified by the Roundtable on Sustainable Palm Oil (RSPO). It means RSPO-certified estates do not automatically qualified for ISPO.

The ISPO's principles and criteria are not the same as RSPO. First, the RSPO is voluntary whereas the ISPO is mandatory. Second, the ISPO is actually a reflection of a unified code of laws concerning best practices throughout the supply chain from oil palm planting to palm oil processing.

ISPO certification means compliance to all existing laws of four ministries in Indonesia.

According to the Agriculture Ministry director of Indonesia, the ISPO is in line with the rules of the World Trade Organisation (WTO). It is designed to get a market guarantee through the mechanism of the WTO and other multilateral or bilateral agreements with buyers.

The RSPO which was set up in 2004, somehow over the years, the roundtable concept of equal duties and rights became lopsided. The RSPO has tipped in favour of environmental and animal rights activists as their expertise in communicating to the public and credibility assertion is being carried out at the expense of palm oil producers.

The Indonesian government seeks to restore balance of social and economic dimensions of oil palm cultivation to be on par with environmental conservation.

Oil palm planters have three years to make adjustments to the ISPO criteria. If companies need advocacy to meet the requirements, assistance will be provided for 6 months to 2 years.

Association of Plantation Investors of Malaysia in Indonesia (Apimi) said his members fully support the ISPO certification.

Source: Business Times, May 10 2011: "Get ISPO cert too, Malaysian oil palm planters told."

Abd Rahaman Rasid

FELDA, 16/5/2011

Hong Leong Completes Acquisition of EON Capital

mansid@yahoo.com — Fri, 06 May 2011 19:17:03 PDT

Hong Leong Bhd (HLB) has completed the acquisition of EON Capital Bhd (EONCap), creating the 4^th largest banking group in Malaysia with total assets of RM140 billion and total staff of 12,000.

HLB had made the full payment of RM5.06 billion or RM7.30 per share for all assets and liabilities of EONCap. The enlarged entity will have an expanded network of 300 branches and 1,200 self-service terminals. Staff of the EON banking group would be absorbed into the enlarged entity.

EONCap’s share price gained 5 sen to RM7.40 yesterday (May 6, 2011), while Hong Leong’s rose 4 sen to RM10.44.

Source: NST, May 7, 2011

Abd Rahaman Rasid
FELDA

Malaysia's Internet-Based Economy

mansid@yahoo.com — Thu, 05 May 2011 23:59:03 PDT

It is interesting to read a small column in theSun today: "Hong Kong internet economy worth US$12 billion a year."

The term "internet-based economy" even though is not new in the world economy today, but it was not widely used in the "Malaysian economy."

I used Google search to get information on "internet-based economy for Malaysian economy" by using several keywords and techniques. And, I found no much information or news related to the internet-based economy in the Malaysia's context.

Do you think that Malaysia should add a line for sub-sector internet based economy under the service sector in the economic report to reflect the contribution of this sub-sector to the Malaysian economy?

Hong Kong's internet-based economy is worth HK$96 billion (US$12.3 billion or RM36.8 billion) a year and growing rapidly. The Google Hong Kong survey, the first of its kind in Asia, found that internet-based business activities accounted for 5.9% of the GDP for Hong Kong.

The share of GDP product from internet-based activities in Hong Kong will grow by 7% a year to a 7.2% overall share, or HK$146 billion, by 2015, according to the report.

The figure compared to between 6% and 7% of GDP in Britain and Nordic countries, and between 2% and 4% in France and Spain.

Internet based economy includes software providers, consumer and business-to-business e-commerce, and goods bought offline after online search, and activities from e-banking and e-brokerage.

Source: theSun, May 6, 2011: "HK internet economy worth US12 billion a year"

Malaysians spent RM1.8 billion shopping online in 2010

Abd Rahaman Rasid

Felda, May 6, 2011

Malaysian Pepper Prices are Soaring

mansid@yahoo.com — Tue, 03 May 2011 22:10:12 PDT

After palm oil, rubber and other commodities prices rally, pepper prices are soaring, boosted by the tight global supply as farmers hold back their stocks in anticipation of higher prices.

The average price of domestic white pepper surged to RM21,530 per tonne on 26 April, 2011, an increase of RM2,030 per tonne, or more than 10%, compared with 2010's highest closing price of RM19,500 per tonne.

The price broke the RM20,000 per tonne mark early last month (March). White pepper prices had enjoyed a good run and surged by about 27% last year.

The average price of black pepper hit this year's new high of RM13,400 per tonne on April 27, which was up by RM1,300 per tonne or nearly 11% from the closing price of RM12,100 last year. In 2010, black pepper soared by nearly 30%, from RM9,350 per tonne recorded in 2009.

White and black pepper hit their historical highs of RM28,000 and RM16,000 per tonne respectively in 1999!

Malaysia, the world's 5th largest pepper producer, exported an estimated 14,040 tonnes worth RM190 million in 2010, up from 13,122 tonnes valued at RM156 million in 2009.

There are more than 14,100 ha of pepper farms in Malaysia, of which 14,000 ha are in Sarawak. The other pepper producing states are Johor and Sabah.

Malaysian Pepper Board said farmers in India and Brazil, the world's 2nd and 4th largest producer respectively, had been holding back their stocks, hoping to sell at better prices later. China, which imported some 1,850 tonnes of pepper from Malaysia in 2010, was buying more of the commodity this year.

The International Pepper Community (IPC), of which major producing countries are members, has forecast that world production in 2011 would dip by about 2% to 309,950 tonnes, from an estimated 316,380 tonnes harvested in 2010. It has projected an estimated global shortfall of some 45,000 tonnes this year.

According to Malaysian Pepper Board, Vietnam, the world's No.1 pepper producer, had just harvested between an estimated 90,000 and 100,000 tonnes, which was close to one third of global production.

Source: StarBiz, 28/4/2011: “Pepper rally continue”

Abd Rahaman Rasid
FELDA, May 4, 2011.

Ekuinas to Invest Up to RM600 million in 2011

mansid@yahoo.com — Sun, 01 May 2011 20:57:17 PDT

Ekuiti National Bhd (Ekuinas), a venture capital company, will invest up to RM600 million in up to 5 companies in any of its 6 priority sectors this year to boost Bumiputera participation in the local economic sector, mainly in equity ownership, management, employment, and the supply chain.

The 6 priority sectors are:

oil and gas,
healthcare,
retail and leisure,
services,
fast-moving consumer goods and,
education.

The move will assist in direct capital investment of up to RM1 billion into the national economy.

Ekuinas, a Government-linked private equity fund management firm is owned by Yayasan Ekuiti Nasional, it does not invest in property and construction sectors, leaving the area to Permodalan Nasional Bhd (PNB) or Khazanah Nasional Bhd.

Ekuinas was Najib’s brainchild mooted during Invest Malaysia in May 2009. It was set up in September 2009, Ekuinas promotes equitable and sustainable Bumiputera economic participation via the creation of Malaysia’s next generation of leading companies.

Ekuinas was first introduced during the tabling of Budget 2010 and was allocated a total of RM5 billion until 2015 under the 10^th Malaysia Plan (2010-2015).

As an investment policy, it invests a minimum of 20% stake in each company and will keep its investments between 5 and 7 years before selling them. It also helps the companies it has invested in to get listed and will not venture overseas. The company will buy stakes in both listed and non-listed local entities to boost Bumiputera participation in high growth companies.

Out of the RM5 billion, Ekuinas received RM500 million in 2010, of which it had spent RM482.7 million to buy stakes in 4 companies, and it will gradually receive the remaining RM4.5 billion by 2015. The stakes of the 4 companies are:

20% stake in cosmetics concern the Alliance Cosmetics Group for RM39.9 million,
24% stake in oil and gas firm Tanjung Offshore Bhd for RM99.8 million,
66% stake in Konsortium Logistik Bhd for RM241 million and,
51% stake in education group Asia Pasific Institute of Information Technology and Innovation for RM102 million.

Its Bumiputera equity value increased to RM483.2 million from the RM380.6 million capital invested.

Equinas had delivered a gross portfolio gain of RM55.3 million for its first financial year ended Dec 31, 2010 which translates to a net internal rate of return (IRR) of 24.3%, exceeding private equity benchmarks of between 12% and an aspirational 20%.

Ekuinas made a net profit of RM3.4 million in 2010 from a loss of RM3 million in 2009 The net profit was derived from management fees and interest income.

This year, Ekuinas will invest more in up to 5 companies with a stake of at least 20% each in any of the six sectors and is expected to make investments of RM400 million to RM600 million this year.

Link: Ekuiti National Bhd (Ekuinas)

Source:

StarBiz: 30/4/2011: "Ekuinas sees at least RM400 mil. investment"

Abd Rahaman Rasid

FELDA, May 1, 2011

Top Malaysian Economist Zainal Aznam Died

mansid@yahoo.com — Wed, 04 May 2011 17:49:25 PDT

Dr Zainal Aznam

This morning, when I was having breakfast with my family and read newspapers, it is sad to know that Datuk Dr Zainal Aznam Mohd Yusof died yesterday (April 30, 2011) after suffering a heart attack. He was 66.

It is a great loss to the nation. Dr Zainal Aznam was the remarkable and a well known Malaysian economist. For me, he was a man with high integrity in giving his economic views. As Datuk Dr Mahani Zainal Abidin, CEO of the Institute of Strategic and International Studies (ISIS) Malaysia, said:

"He was a people's economist who was not afraid to debate issues and had a great deal of sympathy over issues affecting the poor and income distribution"

Zainal Aznam was the adviser to the National Economic Advisory Council (NEAC) and Deputy Director-General of ISIS Malaysia from 1995 until 2002. Prior to that, he was the Deputy Director of the Malaysian Institute for Economic Research (MIER) and the South East Asia Regional Economist at Kleinwort Benson Research (Malaysia) Sdn. Bhd. From 1990 – 1994, he was the Adviser of Economics at Bank Negara Malaysia. He served as consultant for the Asean secretariat, World Bank and Asian Development Bank (ADB).

Zainal Aznam, who held a doctorate in Economics from the University of Oxford, the United Kingdom, was active in the academic field. He has served on boards and teams at Harvard University, Keio University and Korea Institute for International Economic Policy. He was a Visiting Scholar at the Harvard Institute for International Development (HIID), Harvard University.

He was also a Research Fellow at the Centre for Research in Inequality Security and Ethnicity (CRISE), Queen Elizabeth House, Oxford University, United Kingdom from May to June 2004. He sat on the advisory panels of Universiti Kebangsaan Malaysia and University of Malaya, and is an Adjunct Professor at Universiti Utara Malaysia.

Dr Zainal Aznam's current directorships include Rating Agency Malaysia Berhad and Permodalan BSN Berhad. He was a Commisioner in the Securities Commission from 1999 to 2004.

Zainal Aznam was known as a movie critic, and had written short stories. He had also written economic analyses and commentaries for the New Straits Times.

Semoga Allah mencucuri rahmatNYA ke atas roh Allahyarham dan marilah kita sama-sama sedekah A-Fatihah ke atas roh Allahyarham. Alfatihah...

Abd Rahaman Rasid
May 1, 2011
FELDA

Bank Negara Representative in Beijing

mansid@yahoo.com — Fri, 29 Apr 2011 01:58:53 PDT

Wen Jiabao and Najib

Malaysia-China bilateral relations were raised to a higher level with the inking of several agreements and memorandums of understanding in Kuala Lumpur.

A milestone was the agreement on the setting up of a Bank Negara representative office in Beijing. The Beijing representative office is the third overseas representative office established by Bank Negara Malaysia, in addition to its offices in London and New York.

This move would facilitate trade settlement in local currency. The agreement to settle trade in local currency was a huge step forward in bilateral trade.

Malaysia is China's biggest trading partner in Southeast Asia. The quantum of trade settled in in local currencies in the first quarter of this year has exceeded more than the whole of 2010. Both countries had very strong growth in bilateral trade, at an average of 20% per annum in the past few years and hit about US$75 billion (RM225 billion) last year.

A total of 8 agreements and MoUs were signed between Malaysia and China yesterday (29/4/2011). There are as follows:

1. Agreement on Expanding and Deepening Economic and Trade Cooperation between Malaysia and China

2. Agreement between Malaysia and China on Framework Agreement to Facilitate Mutual Recognition in Academic Higher Education Qualifications.

3. Joint-Venture Agreement between Smelter Asia Sdn Bhd and Aluminium Corporation of China Limited (CHALCO)

4. MoU between Beijing Foreign Studies University and Universiti Malaya on Jointly Establishing Chinese Studies Centre

5. MoU Resolving Traffic Congestion in Penang between the state government and Beijing Urban Construction Group Co. Ltd

6. MoU on MSC Malaysia Human Capital Development Programme in ICT Industry between Multimedia Corporation Sdn Bhd (Mdec) and Dream Catcher Consulting Sdn Bhd with Huawei Technologies (M) Sdn Bhd

7. Frame Contract for the Supply of Network Infrastructure and Services between DiGi Telecommunications (M) Sdn Bhd and ZTE Corporation China

8. EPC Contract for Duyen Hai II 2x600MW Coal-Fired Power Plant between Janakuasa Sdn Bhd and China Huadian Co Ltd (CHEC).

Related Post
China is the Largest Trading Partner of Malaysia

Source:

NST, April 29, 2011

TheStar, April 29, 2011

Abd Rahaman Rasid

FELDA

Bernas Gets Agreement Extention for 10 Years

mansid@yahoo.com — Sun, 01 May 2011 20:54:23 PDT

BERNAS Chairman

A monopolist rice importer, Padiberas Nasional (BERNAS) has on 22/4/2011 received a letter from Prime Minister's Department on the extension of the BERNAS Agreement, which gives BERNAS monopoly over the country's rice imports, for a period of 10 years.

The extension commenced from January 11, 2011 to January 10, 2021 subject to the terms and conditions to be mutually agreed between both parties.

The Government had agreed to grant BERNAS an interim period of 6 months from January 11 to July 10, 2011 to enable both parties to finalise the terms and conditions of the new agreement.

About BERNAS

BERNAS was incorporated on 14 April 1994 by the Malaysian Government as part of its effort to corporatise the National Paddy and Rice Board. It was subsequently privatised on 12 January 1996 and listed on the Main Board of the Kuala Lumpur Stock Exchange on 25 August 1997.

The company's major shareholder is Tradewinds (M) Bhd which owns nearly 73% of the shares. On 3 November 2009, Tradewinds completed the acquisition of a 31.52% stake in BERNAS from Wang Tak Company Limited (In one time it was a controversial issue in where the Government allowed a foreign company to buy a big stake in a strategic local company, i.e BERNAS). It completed the purchase of another 22.24% stake from Gandingan Bersepadu Sdn Bhd on 20 January 2010.

As the nation's partner in the domestic paddy and rice industry, BERNAS and its group of companies are involved in the procurement and processing of paddy; as well as the importation, warehousing, distribution and marketing of rice in Malaysia. BERNAS currently controls about 24% of the paddy market and 45% of the local rice demand.

Not much information on the financial position of the company, since the last annual report published in the company's website, was for 2008.

About National Rice Policy

The Malaysian policy on rice supply is that 70% is grown locally, while the remaining 30% is imported. In 2010, the majority of Malaysia's imported rice was sourced from Vietnam and Thailand.

More and more paddy lands especially in Kedah and Perlis are converted into housing estates and the productivity of paddy per hectare has not much improved over the years, the policy of 70:30 will be on paper only.

Rice is a survival issue for the nation, but not much actions has been taken to resolve it. We are waiting a revised National Agricultural Policy where the 3rd National Agriculture was expired in 2010.

Source:

1. StarBiz, 26/4/2011: "Bernas gets agreement extension for ten more years."

2. Bernas websiteis

Abd Rahaman Rasid
FELDA

ASNB To Continue Driving Trust Fund Industry

mansid@yahoo.com — Sat, 30 Apr 2011 22:32:11 PDT

Unit Trust Life Cycle

Amanah Saham Nasional Bhd (ASNB) expects to continue being a catalyst in the unit trust fund industry, educating the public on financial planning and investment.

In the last 10 years, the unit trust industry in Malaysia has expanded tremendously. Currently, more than 600 unit trust funds were offered under various categories and managed by 38 companies compared with only 119 funds in 2000.

The number of units in distribution has exceeded 300 billion units compared with 64 billion units in 2000. In terms of net asset value (NAV), the investments in unit trust funds held by 14 million account holders stood at RM240 billion, compared with RM44 billion in 2000.

ASNB also saw its units in circulation increasing significantly from 34.6 billion subscribed by 7.75 million unit holders in 2000, to 119 billion units in 2000.

Interms of NAV, the amount of unit trusts under the distribution of ASNB, a wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), currently stood at 127 billion units or 60% of the unit trust industry. The ASNB units are subscribed by 10.4 million account holders.

Overall, the net asset growth achieved by ASNB is better than the industry. At the moment, PNB manages unit trust funds worth RM189 billion or 15% of the country's market capitalisation.

Source: StarBiz, "ASNB to continue driving trust industry," Monday 25, 2011.

Abd Rahaman Rasid
FELDA

Malaysians Spent RM1.8 Billion Shopping Online in 2010

mansid@yahoo.com — Sun, 24 Apr 2011 18:08:12 PDT

According to a Nielsen company survey, Malaysians spent RM1.8 billion shopping via the Internet in 2010, and this figure is expected to almost triple in 3 years.

The study, commissioned by Internet payment service provider PayPal, also found that Malaysians were spending more on local websites with transactions up to RM825 million, compared to foreign websites which recorded only RM627 million in receipts last year.

Shoppers made online purchases of airline tickets, financial services, fashion items and cosmetics from local websites, while foreign websites saw purchases of books, music and movie downloads. Malaysians shoppers buying from overseas websites cite the unavailability of items locally as the main reason. Cost was the least of their concerns.

The study also found that shopping on mobile devices had a strong growth potential.

The survey said that in 2010 more than 254,000 Malaysian online shoppers spent RM100 million paying for bills, movie tickets, books, movies, music or game downloads on their mobile devices.

Top seven things Malaysians pay online

Travel -- Rm435mil (24%)
Bill payments -- RM329mil (18%)
Entertainment and lifestyle -- RM255mil (14%)
IT and electronics -- RM218mil (12%)
General insurance -- RM205mil (11%)
Fashion and beauty -- RM181mil (10%)
Gifts and collectibles -- RM68mil (4%)

Online security was among the top concerns for online shoppers, with 7 out of 10 shoppers expressing their willingness to spend more online if Internet safety measures were improved.

The above study polled 400 Malaysian online shoppers aged 18 and above from January to February 2011. in which they were asked about their online and mobile shopping transactions in 2010.

Source: TheStar, April 22, 2010

Abd Rahaman Rasid

FELDA,

April 25, 2011

Congratulation: Zeti Reappointed Bank Negara Governor

mansid@yahoo.com — Sat, 30 Apr 2011 22:33:05 PDT

Zeti Akhtar Aziz

Congratulation to Tan Sri Zeti Akhtar Aziz who has been reappointed as Bank Negara Governor for another five years. The appointment was effective from May 1, 2011.

Prime Minister, Dato' Sri Najib said the appointment is to ensure continuity of leadership at Bank Negara Malaysia. Najib added, under the Zeti's leadership, Bank Negara has become a stronger and successful institution as well as respected, both local and abroad.

The prime minister said Zeti has been instrumental in managing the country's banking and financial system and preventing it from being badly affected by recent global economic recession.

Najib said, "We are now facing a very challenging environment. Thus, a continuation of leadership is of utmost importance to manage and handle banking and financial institutions in such a situation. During the recent global economic turmoil, the country had not been adversely affected due to the strength and resilience of our financial systems. One of the reasons is the efficiency of the leadership in the central bank."

Under her leadership, the first Financial Sector Master Plan was launched in 2001 to provide a blue print for the development of the financial services sector in terms of size and scale, as well as prepare for the liberalisation of the sector. The central bank is expected to roll out the Second Financial Sector Master Plan this year. The plan is crucial to the Economic Transformation Programme (ETP) where banking and financial services were identified as one of the country's key economic drivers to achieve high income status as mentioned in Vision 2020.

Zeti is a member of the Southeast Asian Central Banks (SEACEN) board of governors and chairman of the SEACEN board of directors.

Zeti was the recipient of the Tokoh Maal Hihrah award in 2010 and also received the Central Bank Governor of the Year for Asia 2010 award by Emerging Markets magazine.

In 2009, Global Finance magazine, named her as one of the world's best central bank chief.

On November 2008, she was selected as one of the members of a special task force at the United Nations to examine reforms of the global market system.

In 2005, Euromoney named Zeti Central Bank Governor of the Year for her pivotal role in reforming the exchange rate, the capital markets, and the banking industry.

With father and son

About Tan Sri Zeti

Tan Sri Dato’ Dr. Zeti Akhtar Aziz is currently the Governor of Bank Negara Malaysia Bank Negara Malaysia (BNM) and has been holding the portfolio since 2000.

Tan Sri Dr Zeti Akhtar Aziz is the 7th and current governor of Bank Negara Malaysia Malaysia. She has been governor since May 2000, and was the first woman in the position.

She is the only woman in Asia to be holding the key position at the moment, and is also one of the very few in the world.

Zeti Akhtar Aziz was born in Johor Bahru, Johor. Dr Zeti is the daughter and the only child of the country’s famous academician, Professor Diraja Tun Ungku Aziz and her mother Sharifah Azah Mohamed Alsagoff.

Prof Ungku Aziz is also a former Vice Chancellor of Universiti Malaya. The impressive blood legacy does not stop there; her grandfather, the late Datuk Jaafar Mohamed was the first Chief Minister of Johor, while UMNO founder the late Datuk Onn Jaafar was her granduncle.

Zeti Akhtar Aziz has married to Dr Tawfiq Ayman and have two children.

Zeti received early education at Assunta High School, Petaling Jaya in 1958. She then did her Form 6 in St. John Institution, Kuala Lumpur. In 1970, she received a Bachelor's degree in Economics from University Malaya. She subsequently continued her studies at the Wharton School of the University of Pennsylvania receiving a PhD in monetary and international economics.

Zeti Akhtar Aziz began her career as an economic analyst for the South-East Asia Central Bank Training & Research Center, remaining at that post from 1979 to 1984. In 1985, She joined the Economics Department in Bank Negara Malaysia and then was appointed Secretary to the Board of Directors of the bank in 1987. In 1989, she was posted to the Bank Negara Malaysia London Representative Office as the Chief Representative.

Upon returning to the Head Office in 1994, Dr. Zeti was appointed the Bank's Chief Economist and the Head of its Economics Department. In 1995, she was appointed Assistant Governor, responsible for economics, reserve management, foreign and money market operations and exchange control.

Achievement & Congratulations Quotes

“Nothing stops the man who desires to achieve. Every obstacle is simply a course to develop his achievement muscle. It's a strengthening of his powers of accomplishment.” ~ Eric Butterworth

“The greatest accomplishment is not in never falling, but in rising again after you fall.” ~ Vince Lombardi

“To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.” ~ Ralph Waldo Emerson

“Enthusiasm is the engine of success.” ~ Ralph Waldo Emerson

Abd Rahaman Rasid
FELDA

Prime Minister Speech: 3rd Progress Update Of The Economic Transformation Programme (ETP)

mansid@yahoo.com — Wed, 20 Apr 2011 18:38:30 PDT

Tittle: 3rd Progress Update of The Economic Transformation Programme (ETP)
By: Dato' Sri Mohd Najib Bin Tun Haji Abdul Razak
Venue: Dewan Taklimat, Tingkat 1, Blok Timur, Jabatan Perdana Menteri
Date: 11 Januari 2011

Sejak pelancaran Program Transformasi Ekonomi pada 25 Oktober 2010, saya telah pun mengumumkan 18 Projek Permulaan dan perkembangan berkaitan untuk menjayakan agenda transformasi negara ini. Pada ketika kita menghampiri 100 hari semenjak pelancaran, saya amat berbesar hati untuk mengumumkan 19 lagi Projek Permulaan serta perkembangan berkaitan pada pagi ini.

Kesan daripada Program Transformasi Ekonomi kian ketara. Keyakinan sektor perniagaan dan para pelabur terhadap ekonomi Malaysia kini semakin tinggi. Ini boleh kita lihat daripada prestasi Bursa Malaysia yang telah mencecah tahap penutup tertinggi pada 7 Januari iaitu 1,572.21 mata.

Sementara itu, Laporan Perniagaan Antarabangsa Grant Thornton yang terkini menunjukkan 50 peratus perusahaan sederhana hingga besar (atau medium to large enterprises) positif tentang prospek ekonomi Malaysia pada tahun ini, tahap keyakinan tertinggi untuk Malaysia sejak penyertaan kita dalam laporan tersebut.

Mengikut Frost & Sullivan, jumlah keluaran industri automotif (atau total industry volume, TIV) diunjurkan mencecah paras tertinggi baru sebanyak 623,000 unit tahun ini, peningkatan 4.1 peratus berbanding TIV 2010.

Petanda-petanda positif ini amat menggalakkan dan kerajaan akan terus berusaha sehingga matlamat untuk menjadikan Malaysia sebuah negara berpendapatan tinggi tercapai.

Ladies and gentlemen,

This time around, the 19 projects and developments will come from 10 National Key Economic Areas (NKEA). Combined, they will contribute almost RM67 billion in investment, RM36 billion in gross national income and 35,000 in new jobs.

Some of these projects have been announced or profiled in the media previously. They include the independent deepwater petroleum terminal in Pengerang, Teluk Datai Resorts in Pulau Langkawi, AUO SunPower solar cell fabrication facility in Melaka, High-Value Herbal Plantation in Terengganu, Mass Rapid Transit dan Talent Corporation.

Nonetheless, they are components of the Economic Transformation Programme (ETP) ecosystem and it is important to aggregate their impact to present the complete picture of progress made since the previous announcement. It is also appropriate to announce them now as the necessary approvals required by these projects have been obtained.

Leading the announcement are four Entry Point Projects (ETP) and developments under the Oil, Gas and Energy National Key Economic Area. In November, I announced new tax incentives under the Petroleum Income Tax Act (PITA) to promote development of new oil and gas resources, incentivise development of technically challenging resources and further stimulate domestic exploration activity.

In line with this, ExxonMobil Exploration and Production Malaysia Inc., a subsidiary of Exxon Mobil Corporation, in conjunction with its production sharing contract partner, Petronas Carigali Sdn Bhd, plans to invest over RM10 billion in new oil and gas assets to help ensure reliable and sustainable energy supplies for Malaysia.

This capital expenditure commitment will be utilised to rejuvenate mature facilities and undertake enhanced oil recovery activities in the Tapis field and the Telok gas development project. Located offshore Peninsular Malaysia, the Telok project is being developed under a gas production sharing contract to provide additional supplies for Malaysia's power and industrial needs and will promote organic growth of the natural gas sector.

Another large player in this industry, Shell Malaysia, will also be investing RM5.1billion in multiple projects to upgrade, expand or build facilities in upstream, midstream and downstream activities across Malaysia. These include the expansion of the Shell MDS wax plant in Bintulu, a new diesel processing unit at the Shell Refinery in Port Dickson and the Gumusut deepwater development offshore Sabah.

Further activity in this sector will see Dialog Group Berhad leading a consortium comprising the State Government of Johor and Vopak to develop a RM5 billion independent deepwater petroleum terminal project in Pengerang, Johor. This project will have a total petroleum storage capacity of five million cubic metres and will catapult Malaysia into the ranks of a regional oil storage hub. I expect significant multiplier effects from the Pengerang project to cascade to the entire economy and under the Economic Transformation Programme, it is expected to generate RM1.6 billion in gross national income by 2020.

The government is studying the possibility of deploying nuclear energy to meet future demand and diversify the energy mix for Peninsular Malaysia. To spearhead the initiative, I am pleased to announce the formation of the Malaysia Nuclear Power Corporation in which Dr Mohd Zamzam bin Jaafar has been appointed as its Chief Executive Officer. Dr Mohd Zamzam will lead the planning based on the current development timeline of 11 to 12 years, from pre-project to commissioning.

Ladies and Gentlemen,

Under the Business Services National Key Economic Area, we want to establish Malaysia as a world-class data centre hub. Our aim is to increase sales of Malaysia data centre floor space and today, I am pleased to announce that MyTelehaus, CSF Group and Teliti data centres will help Malaysia close in on this aspiration. With investments of over RM671 million collectively, these three organisations will develop new and upgrade existing facilities to supply 475,000 square feet of data centre floor space to cater to the increased demand.

Turning to healthcare, UM Holdings Sdn Bhd, a corporation wholly-owned by Universiti Malaysia, will establish the Universiti Malaya Health Metropolis in Petaling Jaya, Selangor. Integrating healthcare, bio-research and post-graduate education, the project aims to elevate the standards and quality in these areas to be among the best in the world. It is benchmarked against Harvard’s Longwood Medical Centre and Stanford’s Bio-X Centre, two of the global best-in-class examples. The RM1.25 billion, two million square feet purpose-built facility, will be developed in collaboration with 32 healthcare, academic and technology partners.

Still on healthcare, generics export is a strategic opportunity for Malaysia with a global market worth RM435 billion over the next 10 years, catalysed by the patent expiration of major blockbuster drugs. Hovid Berhad, a home-grown pharmaceutical company, has entered into a joint venture with Winthrop Pharmaceuticals, a subsidiary of Sanofi-Aventis, a global pharmaceutical company. The joint venture will manufacture and supply generic drugs for diabetes and pain management worth RM50 million over the next five years.

Ladies and gentlemen,

Malaysia is recognised globally as one of the leading tourism destinations and this sector is the fifth largest contributor of gross national income to Malaysia presently. Just recently, I announced that Teluk Datai Resorts Sdn Bhd and its partners will invest RM1 billion in the Teluk Datai master development plan. To be completed by 2014, the five-year plan will see the expansion and upgrading of the existing Teluk Datai Resorts’ hotel and golf course as well as the construction of new hotels.

Today, I am pleased to announce that the YTL Group, after the recent Hotel Majestic announcement I made in November 2010, will build the Pulau Gaya Resort. Set amidst rainforest on the idyllic island off the coast of Kota Kinabalu, this RM75 million property will be a deluxe family resort that will certainly help to boost tourist receipts in Sabah.

In the Electronics and Electrical area, I recently had the pleasure of officiating the opening of the AUO SunPower solar cell fabrication facility in Melaka, a joint venture between SunPower Corporation of the USA and AU Optronics Corporation of Taiwan. Scheduled to be fully operational in 2013, the RM2.2 billion facility is expected to produce high-efficiency solar cells that generate more than 1,400 megawatts annually.

Ladies and gentlemen,

We aim to transform the agriculture sector into agribusiness, a model which is inclusive but simultaneously anchored on market-centricity, economics of scale and also value chain integration. To this end, I am pleased to announce that the East Coast Economic Region Development Council has received approval to develop a High-Value Herbal Plantation on 461 hectares in Pasir Raja. This project will cultivate seven types of herbs in high demand, create 285 jobs and ensure the availability of a ready source of raw material as Malaysia moves up the value chain to become a leader in the production of nutraceuticals and botanical drugs. It will also contribute about RM2.2 billion in gross national income by 2020.

Moving on to Communications Content and Infrastructure, SelecTV will invest RM30 million to create an effective and sustainable internet protocol TV platform to distribute Malaysian content such as TV programmes and documentaries to about 20,000 hotel rooms in Malaysia, Thailand, Indonesia and the Middle East. The IPTV platform will also allow travellers to enjoy advanced in-room entertainment and communication services during their stay in these hotels. This project will see a gross national income of RM90 million by 2020.

Another major contributor to gross national income is the wholesale and retail sector. In this area, the current MINES Resort City will be expanded and transformed into the MINES Wellness City, an integrated health and wellness resort city, south of Kuala Lumpur. It aims to be the location of choice for those who seek lifestyle and fitness counsel, health foods, retail, green homes, recuperation and rehabilitation. With an investment of approximately RM3 billion by 2020, this project will contribute about RM5 billion of gross national income over the next 10 years.

Ladies and gentlemen,

The 10th Malaysia Plan has set a target for a 40% skilled workforce by 2020. Skill training is, therefore, critical to achieve this target. In this context, the Jabatan Pembangunan Kemahiran will launch Skills Malaysia 2011, an initiative to raise awareness and showcase the vocational opportunities for students who have completed their SPM and upgrades for unskilled workers.

This initiative is a component of the larger Entry Point Project on private skill training provision that is expected to generate RM2.1 billion in gross national income in 2020 and creating 12,400 jobs in the process.

To enable Greater Kuala Lumpur/Klang Valley’s initiative to attract 100 multinational companies to establish their headquarters here, the city needs adequate supply of top-grade office space and supporting amenities. To this end, Guocoland Berhad will invest RM1.9 billion in an integrated development called Damansara City, located in Pusat Bandar Damansara. Comprising two office blocks of 560,000 and 285,000 square feet each, a 290,000-square feet retail block, a 300-room hotel and a 260-unit serviced apartment block, this project is expected to be launched this year.

In recent times, you would have read a lot of news on the Mass Rapid Transit and the establishment of Talent Corp, which fall within the Greater Kuala Lumpur/Klang Valley National Key Economic Area.

I cannot stress enough the importance of the MRT as a pre-requisite to an economically vibrant and liveable Kuala Lumpur. Connectivity is absolutely critical for urban growth and improved productivity.

The MRT will employ about 130,000 people at its peak construction phase, with a significant multiplier impact on associated industries. An investment of RM36.6 billion will see an incremental gross national income contribution of RM21.3 billion, come 2020.

The Economic Transformation Programme requires a lot of skilled talent including local talents, the Malaysian diaspora and foreigners to fill the 3.3 million positions that will be created by the various National Key Economic Areas. To this end, we have established Talent Corporation, a new government agency under the stewardship of Johan Mahmood Merican as the Chief Executive Officer, to strategise and implement initiatives to engage and attract the best talents.

Ladies and gentlemen,

As you can see, the Economic Transformation Programme has started the year very strongly by going into overdrive and is surging ahead with more Entry Point Projects and developments.

As the saying goes, the proof of the pudding is in the eating. By kick-starting these projects as well as the earlier announced projects, the economic effects will soon be tangible.

We are completely focused on results and by delivering them, I hope to galvanise the majority of Malaysians who are believers and also convert the minority naysayers to join this cause. After all, this is a national transformation agenda and we must get everyone on board, in the true spirit of 1Malaysia, People First, Performance Now.

Thank you.

Wabillahitaufiq Walhidayah Wassalamualaikum Warahmatullahi Wabarakatuh

Prime Minister Speech: 5th Progress Update Of The Economic Transformation Programme (ETP)

Economic Transformation Programme (ETP): An Overview

Prime Minister Speech: 5th Progress Update Of The Economic Transformation Programme (ETP)

mansid@yahoo.com — Wed, 20 Apr 2011 16:57:55 PDT

Tittle: 5th Progress Update of The Economic Transformation Programme (ETP)
By: Dato' Sri Mohd Najib Bin Tun Haji Abdul Razak
Venue: Putrajaya International Convention Centre (PICC)
Date: 19 April 2011

Bismillahirrahmanirrahim.

Assalamualaikum Warahmatullahi Wabarakatuh, Selamat Petang dan Salam 1Malaysia.

Yang Berhormat Dato’ Sri Mustapa Mohamed,

Menteri Perdagangan Antarabangsa dan Industri;

Yang Berhormat Senator Dato’ Sri Idris Jala,

Menteri di Jabatan Perdana Menteri merangkap Ketua Pegawai Eksekutif, PEMANDU;

Tan Sri-Tan Sri, Datuk-Datuk, pemilik-pemilik Projek Permulaan, wakil-wakil media dan para hadirin yang dihormati sekalian.

Seperti mana yang saya maklumkan semasa Invest Malaysia 2011 pada minggu lepas, pelaksanaan Program Transformasi Ekonomi sedang berjalan dengan lancar. Daripada 60 projek yang telah saya umumkan sebelum ini, sebanyak empat projek telah mula beroperasi sementara 26 lagi telah dimulakan. Nilai pelaburan untuk projek-projek ini ialah RM37.26 bilion atau 39 peratus daripada jumlah nilai pelaburan keseluruhan sebanyak RM95.24 bilion. 30 projek yang selainnya sedang giat disiapkan untuk pelancaran.

Kerajaan berhasrat untuk meletakkan sektor swasta sebagai enjin pertumbuhan negara. Di dalam konteks ini, kerajaan akan terus menyokong perlaksanaan projek-projek baru dan mempercepatkan projek-projek yang sedang berjalan untuk memangkinkan kegiatan sektor swasta.

Ladies and gentlemen,

This brings me to today’s progress update. I am proud to announce seven all-new projects or initiatives and recap five projects announced since the last ETP progress update on 11 March.

Together, these 12 projects within seven National Key Economic Areas (NKEAs) will bring about RM11.16 billion in investment, RM16.62 billion in Gross National Income (GNI) and 74,457 incremental jobs.

To begin, Infineon Technologies will invest RM480 million to expand and upgrade its production capacity, research and development and its manufacturing facilities in Malacca. The recently announced investment will increase the capacity to produce power semiconductors for energy efficiency applications and will add 350 jobs. This project is expected to have a GNI impact of up to RM814 million.

This investment in Malaysia is an additional step to expand the company's presence in Asia, where it generates 42 per cent of its revenue, and to integrate more tightly into local market structures.

Next, we will see the establishment of the electrical home appliances manufacturing hub and international distribution network in the state of Penang. As part of the Electrical and Electronics (E&E) NKEA, Pensonic Holdings Sdn Bhd will manage this initiative that aims to capture the rising market opportunities in the Southeast Asian region and the Middle East.

It will place an emphasis on strong product branding and research and development to consolidate Malaysia's position in the regional electrical home appliance sector, especially in own-brand manufacturing (OBM) and the original-design manufacturing (ODM). This project with an investment of RM250 million is expected to have a GNI contribution of up to RM500 million and create 850 jobs by 2020.

The next project, a collaboration between the CCI and E&E NKEAs, entails the setting up of Radio Frequency Identification (RFID) infrastructure to provide security and automation of paperless Royal Malaysian Customs Checkpoint throughout Malaysia.

Under the Security and Trade Facilitation System project, containers entering and leaving the country, and moving within the country will be tracked under the RFID system. This system will enhance the efficiency of container clearance by reducing queeing times at Customs Checkpoints, improving security through automatic detection of a compromised or open container, and optimising human resources for better services. With an investment of RM45 million, this project will see a GNI impact of about RM201 million up to 2020 and create 100 new jobs.

Within the Business Services NKEA, MYLED MASTER Sdn Bhd and its subsidiary, MYLED Opto Technology Sdn Bhd, will be expanding their manufacturing capability in the green technology sector. MyLED Master is the first local company that to possess solid state lighting (SSL) manufacturing technology. While MyLED Opto Technology will possess the manufacturing technology for light emitting diode (LED).

Located in Malacca with an investment of RM175 million, this production facility is set to meet the growing demand for solid state lighting both locally and in overseas market such as India and Middle East countries in two years time. In addition, it will also house research and development operations, where innovation and creativity will help to bring costs down further. It is expected to have a GNI impact of RM100 million and create up to 900 jobs.

Asia Media will invest RM500 million in developing the first Digital Live Transit-TV Broadcasting infrastructure in Malaysia. This mobile broadcast network in public transportation falls squarely within the Communications Content and Infrastructure (CCI) NKEA. By adopting international broadcasting standard infrastructure, the organisation will be capable of delivering live video and voice to the transit industry such as the Light Rapid Transit, bus network and perhaps even, the Mass Rapid Transit in the future. This project is expected to generate RM604 million in GNI and about 400 jobs.

Ladies and Gentlemen,

As you are aware, we have begun to look into e-government and paperless initiatives in a bid to be a more environmentally friendly and modern government.

The next initiative, which also falls within the CCI NKEA, is a baseline study on e-counter services and paperless government. The project aims to establish baseline measurements on government initiatives for the improvement of services, specifically in the transformation towards an electronic government (EG) and going paperless.

Managed by the Malaysia Administrative Modernisation And Management Planning Unit (MAMPU) and Government Integrated Telecommunications Network (GITN), this project involves data collection and an analysis of e-counter services, electronic transactions and paperless government initiatives in the public sector, an assessment of government agencies’ data centres as well as network infrastructure and services. Once completed, it will ensure that services provided by the Government are more transparent, fit- for- purpose, efficient and effective to the Rakyat. The government will invest RM3.261 million in the project that will see the creation of 155 jobs.

Another project within this NKEA is the recent policy announcement that new housing projects in Kuala Lumpur are required to provide internet broadband facilities. This requirement will enable more households in Kuala Lumpur access better internet connection. It will help to address gaps and ensure broadband services reach all inhabitants of urban areas around the nation, similar to access to water and electricity.

The CCI NKEA is also kick-starting a government initiative to provide a unique and official email account and identification for citizens of Malaysia. With a GNI impact of RM39 million up to 2015, this 1MY email initiative will allow direct and secure communications between Malaysian citizens and the Government, as well as enhance the delivery of Government services to consumers and businesses alike.

Tricubes Bhd will spearhead this RM50 million investment which also includes the development of a web portal, an email account for all Malaysian citizens aged 18 and above, a one-stop centre for government services, provision of value-added services such as social networking, checking bills online as well as payment, in addition to web development toolkits for citizen and business entities to creatively develop applications.

Ladies and Gentlemen,

The oil and gas industry plays a vital role in the growth and development of the Malaysian economy. To realise Malaysia's aspiration to become the No 1 Asian hub for the oil and gas industry by 2017, the Malaysia Petroleum Resources Corporation (MPRC) has been established.

This unit will be responsible to attract RM320 million worth of investments for the industry during this year alone. Headed by its interim CEO, Dr Mohd Shahreen Madros, the organisation will facilitate cross-border investments and assist Malaysian oil and gas companies through the identification of suitable markets and opportunities abroad.

It will undertake the planning for the development of this industry in Malaysia, evaluate the application for tax incentives for activities within the industry and the exemption of duty on raw materials, components and machinery. In addition, it will support both domestic and foreign investors who are looking to set up operations in Malaysia, facilitate the exchange of information and the co-ordination of information amongst industry-related institutions or agencies.

With a board of directors from MIDA, Petronas and PEMANDU amongst others, it will also interact with other parties in a bid to ensure that industry requirements such as talent, research and development and other related matters, are met. To grow Malaysian oil and gas companies, this organisation will rationalise these businesses through mergers and acquisitions to develop them into regional champions.

Looking at the Education NKEA and our country’s bid to be at the forefront of the Islamic financial services, the International Islamic University Malaysia will spearhead an initiative to develop and position Malaysia as one of the world’s leading Islamic finance education hub. With an investment of RM3.17 million, it will set up the Islamic Finance and Banking education cluster that will develop and harmonise globally accepted curricula in Islamic Finance-related areas.

It will also establish the Association for Islamic Finance Advancement (AIFA), which will accredit programmes and advance and promote Islamic Finance education globally. With a GNI impact of RM1.2 billion by 2020, it will see the creation of about 4,300 related jobs.

Tourism continues to be a solid income earner for our nation. So, over in the state of Sabah, a consortium consisting of Prism Crystal Enterprises Ltd, Tan Sri Dr Chen Lip Keong and group of companies together with landowners, Karambunai Corp Bhd and Petaling Tin Berhad, will develop the Karambunai Integrated Resort City (KIRC) with an investment of RM 9.6 billion.

Contributing a GNI of about RM 9.319 billion by 2020 and creating about 11,002 jobs by 2020, this premier world-class ecotourism destination will leverage on Malaysia’s competitive advantages in ecotourism and biodiversity, and feature tourism, health and eco-nature edutainment recreation facilities.

This would include water theme park, water spectacles and fountain, cable car, mangrove research centre, harbour cruise, aqua and spa village amongst others.

The next Entry Point Project that sits within the Wholesale and Retail NKEA, looks to transform various markets such as "pasar tani", "pasar malam" and "pasar tamu" and consolidate them into one, to be called "Pasar Komuniti". This is because the traders from each of these were encountering challenges such as lack of suitable and strategic locations, and proper infrastructure and logistic facilities. Led by the Federal Agriculture Marketing Authority (FAMA), the “Pasar Komuniti” initiative (PAKAR) is a concerted effort to co-ordinate and amalgamate them in location with better facilities.

With an investment of RM50 million, PAKAR will not only benefit the entrepreneurs but also the consumers, who will experience convenience and comfortable shopping within a solid and fixed structure. This project will contribute RM3.52 billion in GNI annually by 2020 and create 56,400 jobs.

Ladies and gentlemen,

As you can see, today’s announcement shows the continued interest of investors in the ETP. The bright future of Malaysia is not a pipe dream. Cumulatively, the ETP has to date garnered RM106.405 billion in investment, RM153.83 billion in GNI and 298,865 new jobs. The 72 projects within 54 Entry Point Projects announced to date mean that 41.2 per cent of the 131 Entry Point Projects have commenced, all in less than six months since the ETP was launched. Now, that is big results fast.

Just over two weeks ago, I announced the achievements of the Government Transformation Programme and they were overwhelming. The correlation between the Government Transformation Programme and the Economic Transformation Programme is becoming more and more evident. A transparent and accountable government system will enable and drive the economy. Simultaneously, economic activities and growth will also benefit from high standards of integrity.

Most recently, the Anti-Corruption Corporate Integrity Pledge and Principles for Corporations in Malaysia (2011) was launched in Kuala Lumpur. This initiative will pave the way for integrity and accountability amongst corporations in Malaysia.

With this, companies can voluntarily make a unilateral declaration that it will not commit corrupt acts, will work towards creating a business environment that is free from corruption and uphold the Anti-Corruption Principles for Corporations in Malaysia in the conduct of its business and in its relations with its business partners and the Government.

I am proud to say that some of the first corporations to say no to corruption and sign the pledge are the partners of previously announced Entry Point Projects within the ETP. In addition, several partners of the ETP projects announced today will also come forward to show their commitment towards transparency, accountability and good governance.

I commend them for their pledge towards integrity and in making Malaysia a conducive business environment, today and into the future. It is truly a momentous occasion for corporate Malaysia as they come together to fight corruption and help Malaysia strengthen its economy as we head towards Vision 2020, and I am honoured to be a witness to it this afternoon.

With that, I thank you for your presence and I wish you all a pleasant afternoon ahead.

Wabillahitaufiq Walhidayah Wassalamualaikum Warahmatullahi Wabarakatuh.

Related Post:

Prime Minister Speech: 3rd Progress Update Of The Economic Transformation Programme (ETP)

Economic Transformation Programme (ETP): An Overview

Source: Office of the Prime Minister of Malaysia