Klang Valley Investment @ David Poo 6396: July 2013

Wednesday, 31 July 2013

KVMRT contractors yet to sign offset agreement

While some construction works have already started in the Klang Valley Mass Rapid Transit (KVMRT) project, the six main contractors for its first line have not actually signed the offset agreement.

The six companies involved include Siemens- SMHRail consortium, MMCGamuda joint venture (JV), Bombardier JV, Siemens-Hisniaga consortium, Meidensha Corp and Mitsubishi Heavy Industries Ltd (MHI).

This delay could result to local companies missing out on the action as main contractors could “later bulldoze their way when awarding the contracts, all in the name of keeping to their timeline,” noted a company official interested in clinching one of the smaller work packages.

Known as the economic compensation package, the offset programme is a unique endeavour aimed at boosting local industrial and technological development as well as provide jobs to local companies with the appropriate expertise and skills.

Officials from the Malaysian Industry-Government Group for High Technology’s (MIGHT), a think-tank agency under the Prime Minister’s Office entrusted to oversee the offset programmes, confirmed that the offset agreements for the mega project have yet to be signed and that it is already delayed.

In fact, MIGHT offset management services VP Major Zailani Safari revealed that the agency is still negotiating with the main contractors.

On the contrary, Mass Rapid Transit Corp Sdn Bhd (MRT Corp), which is tasked with overseeing the KVMRT project, commented that the offset programme is “going well” and is presently “finalising its negotiations with the various contractors for their respective programmes,” reported The Malaysian Reserve.

This comment left some construction and services related companies waiting to secure subcontract jobs skeptical, claiming that things are not really moving as smoothly as described by MRT Corp.

Malaysia Enconomy

Based on the total number of $ 2.9 billion (about 9.37 billion ringgit) of government bonds will expire tomorrow, the market fears this may contribute to global investors to massive withdrawals from the bond market, causing ringgit exchange rate today fell to its lowest level in three years .

According to "Bloomberg" reports, Credit Agricole CIB in Hong Kong, a strategist Dariusz Kowalczyk said today ringgit bonds may have a very significant foreign ownership rate, once these foreign funds withdrawal from the local bond market, will result in RM was downtrend. "Bloomberg" The data show that three-year Malaysian government bond yields surged yesterday to 2008, the highest level since November.

Singapore, Australia and New Zealand Banking District senior strategist Khoon Goh noted that "RM One of the major reasons for devaluation, the Malaysian government bonds massive redemptions in the market concerned, the next will see a massive withdrawal of foreign bond market the situation. "

RM 10 points in early trading today, down 0.3 percent to 3.2365 ringgit level. Earlier, more fell to 3.2379 ringgit ringgit is RM since early July 2010, the lowest since record levels. Up to now, RM has been in decline for five consecutive days, the highest since December 2012 the longest losing streak. RM in July fell 2.4 percent overall this year, a decrease of 5.5%.

外资恐撤出政府债券，马币跌至三年最低点

基于我国一批总额29亿美元（大约93.7亿令吉）的政府债券将在明天届满，市场担忧这可能促使全球投资者大规模从债券市场撤资，引发马币汇率在今天下跌至3年来的最低水平。

据《彭博社》的报道，位于香港的Credit Agricole CIB一名策略师Dariusz Kowalczyk今天指出，马币债券可能拥有非常显著的外资持有率，一旦这些外资基金撤出本地债券市场，将导致马币呈下跌走势。《彭博社》的资料显示，三年期大马政府债券的收益率在昨天飙升至2008年11月以来的最高水平。

新加坡区纽澳银行的资深策略师Khoon Goh指出，“马币贬值的其中一大原因，是大马政府债券的大规模赎回活动。市场担心，接下来将看到大规模外资撤出债券市场的情况。”

马币在今天早盘10点，下跌0.3%至3.2365令吉的水平。早前，马币更一度跌至3.2379令吉，是马币自2010年7月初以来的最低纪录水平。截至目前，马币已经连续五天处于下跌趋势，创下2012年12月份以来的最长跌势。马币在7月份整体跌了2.4%，今年以来跌幅达5.5%。

Gov't starts special meeting on low-cost housing

The federal government is totally dedicated to provide comfortable

and low-cost housing to the citizens of Malaysia, especially low-

and middle-income earners, according to Second Finance Minister

Datuk Seri Ahmad Husni Hanadzlah.

He noted that the rapid rise in home prices, particularly in cities,

have made it very difficult for low-and middle-income households

to buy their own house. “Hence, the provision of low-cost houses

has been a priority in the five-year plans and the annual budget.”

As such, the government's Budget 2014 Focus Group Meeting on

Providing Greater Access to Home Ownership aims to consult key

stakeholders on the issue of low-cost residential properties.

Resource person include representatives from the industry

organisations, private sector and government agencies, he said at

the opening remarks for the meeting.

Due to their vital inputs, the government looks forward to listen to

them, explained Ahmad Husni, adding that the views and

suggestions will be used for the 2014 Budget which is expected to

be tabled by Prime Minister Datuk Seri Najib Tun Razak on 25

October.

Other issues to be discussed include the mismatch between supply

and demand, low-cost houses in non-strategic locations, delayed

and abandoned housing projects, no valuation requirements on new

launches, as well as the slow implementation of the Industrial

Building System (IBS).

Moreover, he also highlighted the significant surge in home prices,

saying that prices have increased between 11 percent and 12

percent per annum since 2011 in prime locations like Kuala

Lumpur, which has the most expensive residential properties.

In fact, average prices in the capital stood at RM552,707 per unit

in

Q1 2013, followed by Sabah and Selangor, with average prices at

RM391,981 and RM365,317, respectively.