Free water from June 1

Saturday March 29, 2008

By DHARMENDER SINGH

SHAH ALAM: Domestic consumers in Selangor who are using individual meters will start enjoying free usage of water for the first 20 cu m from June 1.

Those whose supply is linked to bulk meters – including flat, apartment and condominium dwellers – will not enjoy the free water just yet.

Water distribution concessionaire Syarikat Bekalan Air Selangor (Syabas) has been working to provide individual meters to those living in flats, apartments and condominiums but the process has been slow, as all the owners in a particular scheme would have to agree to the change before it can be implemented.

Mentri Besar Tan Sri Khalid Ibrahim said in a statement yesterday that the state government had studied the proposal to provide the free water and had worked out a formula that would benefit the people, the state and the environment.

He said the study found that the state government could for now provide free water to households with individual meters.

The decision, he said, was to lessen the burden of the people, especially those in the lower income group.

“But consumers should use water wisely and responsibly to avoid wastage that will affect efforts to conserve the state’s water resources,” he added.

He said the state government would also soon diversify raw water sources as part of a move to conserve the state’s own resources.

Selangor has run out of rivers to tap for drinking water and has been working on an inter-state water transfer project with Pahang to ensure adequate supply in the future.

Syabas declined comment on the free water offer.

Meanwhile, the National Water Services Commission (SPAN) said in a statement that it had studied the Sungei Sireh Water Treatment Plant operation and maintenance agreement and “requires further information before arriving at a decision as to whether it is in compliance with the Water Services Industry Act 2006”.

The statement added that SPAN had received several agreements from Puncak Niaga (M) Sdn Bhd including the Sungei Sireh agreement.

The Sungei Sireh agreement was signed by the State Secretary on behalf of the Selangor State Government and Puncak Niaga on March 7, the statement said.

PSD moves to recover loans

Wednesday March 26, 2008

BY SARBAN SINGH

SEREMBAN: The Public Service Department (PSD) wants all ministries and department heads to submit the names of employees who have taken study loans from the Government.

This is because many have not repaid their loans despite having been employed for several years now.

PSD director-general Tan Sri Ismail Adam said the details of the borrowers, including their place of work, should be submitted by April 7.

“We need to get defaulters to pay up so that others can benefit. Our records show that many loan recipients have either not been paying up regularly or have stopped paying despite the reminders and notices sent,” he said in an interview.

The directive was sent to all ministry secretaries-general and state secretaries on March 13.

It is learnt that some defaulters had not paid a single sen despite having graduated more than 10 years ago. Those who studied abroad were given interest-free loans amounting to RM300,000 but had somehow dodged legal action.

Ismail said the PSD began making deductions from the salaries of its own employees who had defaulted beginning last year and this has helped increase the recovery process.

“Now we want all ministries, government departments and state agencies to help us collect our dues,” he said.

The Government, irked by the attitude of several thousand borrowers who refused to service their loans, had in July last year issued an order that they would not be considered for promotion.

These included those blacklisted by National Higher Education Fund Corp (PTPTN), Mara and other government-linked corporations. However, the response was still poor.

A source said warnings that the 75% discount on the entire loan given to those who scored second-class upper degrees and above would be rescinded had also failed to get them to start paying up.

It is learnt that the defaulters owed the Government more than RM1bil. As of March last year, 438,775 owed the PTPTN some RM920mil.

Since it was established in 1997, the PTPTN has given out RM12.6bil in loans to students for diploma and degree courses.

As for the PSD, about 15,000 borrowers owed it some RM300mil. The amount owed to Mara was RM200mil.

PSD gave out RM3.03bil in study loans to some 145,000 students from 1987 to 2004.

The Higher Education Ministry has identified 40,573 borrowers who are working in government agencies or government-linked companies, who had taken loans from PTPTN.

PLCs Delay Submission

March 2008

Several public-listed companies in Malaysia have delayed the submission of their financial results to stock exchange Bursa Malaysia beyond the mandatory timeframes, reported The Edge. Reasons for lateness range from alleged accounting irregularities to shortage of manpower and disasters, such as fire wiping out financial documents. Thanks to increasing compliance with IFRS, the standards and quality of the audit process have become more stringent, leading to the heightened discovery and exposure of accounting irregularities. Recent amendments to the Companies Act 1965, which provide immunity from litigation for auditors who report wrongdoings and impose jail and fines for those who fail to report irregularities in writing, may also have empowered auditors to take action.

Enhancing Governance

March 2008

The stock exchange, Bursa Malaysia, recently announced key amendments to its listing requirements in order to raise governance and reassure investors in the wake of unsettling corporate scandals and the exposure of accounting irregularities. Among the recent controversies that were widely reported in the press were the alleged misappropriation of RM36.3m (£5.75m) in funds by a former managing director of Multi-Code Electronics Industries (M) Bhd, claims of fraud and fictitious transactions at Transmile Bhd and Megan Media Holdings Berhad, and alleged missing or destroyed accounting records at OCI Bhd by its previous management.

Bursa Malaysia's amendments affect companies listed on the Main Board, Second Board and Malaysian Exchange of Securities Dealing and Automated Quotation (MESDAQ) market. Notably, the independence of the audit committee has been enhanced and the internal audit function mandated in order to improve internal checks and balances for Plcs. Executive directors are now prohibited from sitting on the audit committee. The internal audit function is also made compulsory to provide more effective support to the audit committee, and it is required to report directly to the audit committee.

Other amendments include setting out the rights of the audit committee to convene meetings with either the external auditors or the internal auditors, or both, and excluding the attendance of other directors and employees at these meetings.

The amendments will take effect from 28 January 2008, but listed companies will be given until 31 January 2009 to comply with the requirements on the revised composition of the audit committee, as well as the mandatory internal audit function.

Policing Auditors

March 2008

Malaysia is expected to table the draft bill for the establishment of the Public Company Accounting Oversight Board (PCAOB) in Parliament by March 2008. The establishment of the PCAOB is aimed at improving governance and investors' confidence by regulating auditors following the unravelling of several corporate scandals. With this move, Malaysia is following in the footsteps of jurisdictions like the US, the UK, Australia, Canada and Singapore, which have all established auditing oversight authorities to regulate the profession.

Controversial Growth Corridor

March 2008

The Malaysian Government launched yet another ambitious regional development corridor to catalyse long-term growth, create jobs and raise socio-economic standards in the run-up to the general elections in early March. The Sarawak Corridor of Renewable Energy (SCORE) is the fifth and largest to be launched following the Iskandar Development Region in the south of Peninsular Malaysia, the Northern Corridor Economic Region, the East Coast Economic Region and the Sabah Development Corridor.

SCORE has identified certain high-priority sectors for development, including petroleum, aluminium, aquaculture and marine engineering. A prime attraction for investment is SCORE's ample energy resources, including 20,000 megawatts of hydropower, 1.46 billion metric tonnes of coal deposits and 40.9 trillion cubic feet of natural gas deposits. To date, SCORE has reportedly drawn about RM110bn (£17.42bn) in proposed investments, one-third of the Government's target of RM334bn (£52.9bn) required for full development by 2030, including five major deals to produce electricity via hydro-dams and coal-powered generation plants.

Unsurprisingly, a project of this scale has also earned flak from environmentalists, since the hinterland in question is a treasure trove of biodiversity and may be considered tribal ancestral land. SCORE will develop about 70,700 sq km, or 57% of Sarawak, affecting more than 600,000 people. However, the Prime Minister has ordered a 'green development framework' study to ensure that SCORE's development is environmentally friendly and that energy resources will be developed sustainably.

In the long run, will the potential economic payoff compensate for any negative environmental impact? The Government is optimistic that the full implementation of the SCORE master plan by 2030 will raise Sarawak's GDP from the current RM23bn (£3.64bn) to RM118bn (£18.68bn), spur annual GDP growth to 7% from the present 5% and spin off 1.6 million high-value jobs, while eradicating poverty in this resource-rich, yet underperforming, region.

Technical Update

March 2008

Bursa Malaysia recently announced key amendments to the corporate governance framework under the Listing Requirements and Malaysian Exchange of Securities Dealing & Automated Quotation (MESDAQ) Market Listing Requirements (MMLR). The amendments are aimed at raising standards of corporate governance for Malaysian public-listed companies, while increasing investor confidence. These changes come in light of the recent revisions to the Malaysian Code of Corporate Governance issued by the Securities Commission.

Among the significant changes made are amendments to strengthen the effectiveness of the audit committee. Executive directors are no longer allowed to be part of the audit committee, and the internal audit function is made compulsory to provide a more effective support to the audit committee in carrying out its function.

The amendments will take effect from 28 January 2008. However, listed companies have until 31 January 2009 to comply with the requirements on the revised composition of the audit committee, as well as the mandatory internal audit function. Audit committees must begin discharging the amended functions with effect from 1 April 2008, with a minimum of ensuring the terms of reference of the audit committee to commence performing the amended functions are ready on this date. Annual reports for financial years ending on or after 31 January 2009 must contain the statement on internal audit function.

A summary of the key amendments include:
- requiring all audit committee members to be non-executive directors, with the majority of them being independent directors
- mandating the internal audit function for listed companies and requiring the internal audit function to report directly to the audit committee
- expanding the functions of the audit committee to include the review of the adequacy of the competency of the internal audit function
- setting out the rights of audit committee to convene meetings with external auditors, internal auditors, or both, excluding the attendance of other directors and employees of the listed issuer whenever deemed necessary
- enhancing the disclosure in the annual reports to include information pertaining to the internal audit function. A statement on internal audit function - whether the internal audit function is performed in-house or outsourced - and the cost incurred for the internal audit function for the year. The audit committee report to include a summary of activities of the internal audit function
- clarifying that Bursa Securities may 'approve' such other requirements relating to the financial-related qualifications or experience that must be fulfilled by at least one audit committee member, and the signatory to the statutory declaration in relation to the accounts, and
- requiring listed companies to submit a copy of written representation or submission of external auditors' resignation to Bursa Securities, as provided under Section 172A of the Companies Act 1965.

Jennifer Lopez, head of policy and technical development, ACCA Malaysia.

An altered Altis

Sunday March 16, 2008

UMW Toyota launched its 10th generation Corolla in Malaysia on Thursday, and the much-anticipated Corolla Altis rolls in.

Occupants for the Corolla Altis will love the interior ambience of the vehicle. There's plenty of plushness and sensible storage space on call, and rear occupants will also enjoy more legroom comfort as the centre hump has been lowered significantly to create a flat floor.

There are five variant forms – the stock form 1.6E and 1.8E, a 1.8G version as well as two models that will appeal to the younger and trendier crowd, the aptly designated 1.8E Sporty and 1.8G Sporty. Here, an exterior aerokit package makes for enhanced sportiness.

Customers can choose between a 1.8l and 1.6l engine. Sharing the same VVT-i engine types as its predecessor, the Altis features a retuned 1.8l 1ZZ-FE block, which now puts out 130bhp at 6,000rpm and 170Nm of torque at 4,200rpm. As for the 1.6l 3ZZ-FE, it develops 107bhp also at 6,000rpm, while maximum torque is 145Nm at 4,400rpm.

The all-aluminium engines have also been tuned to comply with Euro-3 emission control regulations. Both 1.8l and 1.6l model types come with a four-speed automatic transmission, with a gated-type shift lever; the 1.8l versions feature a sequential manual shift.

The new vehicle is 55mm wider (to 1,760mm) and 10mm longer than the previous Altis. The overall height is lower, by 15mm, providing for a lower centre of gravity and better stability.

A significant improvement on the new car is the adoption of EPS (Electric Power Steering) across the variant board; this leaves engine power untouched, resulting in better fuel economy.

In the 1.8G variant, you get the premium treatment with power-operated, eight-way adjustment front seats, chrome door handles and wood trim, among other things. Optitron meters are also featured for the 1.8G for clearer instrument display. A Multi-Information Display (MID) is also present, with dual LCD panels on each meter. The MID provides the driver important information such as odometer/tripmeter, driving range, average fuel consumption readings, instantaneous fuel consumption, outside temperature, elapsed time starting journey and average vehicle speed.

There’s quite a bit in the way of passive and active safety. The front passengers are protected with dual SRS airbags and seat belt pre-tensioners with force limiters.

Elsewhere, front and rear disc brakes, with 15-inch ventilated discs at the front, help bring the Altis to a stop rapidly; ABS is standard on all variants and is assisted with EBD (Electronic Brake-force Distribution). There’s also VSC (Vehicle Stability Control) as well as TCS (Traction Control System).

The vehicle is fully imported from Thailand, and comes in five colours – Silver Metallic, Black Mica, Medium Silver Metallic, Beige Metallic and Greyish Blue Metallic.

Pricing for the Corolla Altis variants are as such: the 1.6E is priced at RM102,900, the 1.8E goes for RM109,900 and the premium 1.8G is RM117,900. As for the Sporty versions, the 1.8G and the 1.8E types are priced at RM120,250 and RM112,250 respectively. All prices are on the road, with insurance. – ANDY MERVIN GEORGE

UMW Toyota aims to sell 90,000 vehicles

Friday March 14, 2008

KUALA LUMPUR: UMW Toyota Motor Sdn Bhd is targeting sales of at least 90,000 vehicles this year, managing director Kuah Kock Heng said.

“We sold more than 82,200 vehicles last year and are confident of hitting 90,000 units this year,” he said after the launch of the new Toyota Corolla Altis yesterday.

“The Malaysian Automotive Association forecast growth of 5% to 6% in total industry volume this year and we expect strong sales,” he said.

On whether the present political situation would have an impact on sales and consumer spending, Kuah said: “I do not see the local political situation having any effect on us. Demand for cars is strong and it will not deter people's decisions to buy.”

Kuah also said the group will be looking to increase its 17.1% market share this year.
For the newly launched Altis, Kuah said the group was targeting to sell at least 800 cars a month, adding that the group was already on target based on the number of bookings received thus far.

“We have already received 898 bookings since March 7,” he added.

The new Altis will be available in five variants: 1.8G Sporty, 1.8G, 1.8E Sporty, 1.8E and 1.6E. It will come in five colours.

All models will only be available in automatic transmission. The on-the-road price of the new Altis (with insurance) is RM117,900 for the 1.8G, RM109,900 for the 1.8E and RM102,900 for the 1.6E. The 1.8G and 1.8E (sporty version) are priced at RM120,250 and RM112,250 respectively.

New service centre for Dusun Tua folk

Saturday March 15, 2008

By GEETHA KRISHNAN

A service centre has been set up in Bandar Sungai Long, Kajang, for residents in the Dusun Tua state constituency.

Dusun Tua assemblyman Ismail Sani who spoke to the media recently said staff who were already stationed at the new centre, would attend to the needs of residents who had difficulty visiting the other service centre located at the 14th mile stretch in Hulu Langat. The new centre is located in the Bandar Sungai Long commercial area near the township.

When asked about the Bandar Mahkota Cheras toll-free road closure, Ismail said the issue could not be further debated because the case had gone to court. Sources said the case would be mentioned on May 21.

On the contra-flow suggestion made in late February to ease traffic heading out of both townships during peak hours, Ismail said the matter was being discussed with the Kajang Municipal Council because it involved the SILK (Kajang Outer Ring) Highway and the Cheras-Kajang Highway.

“What we can do for the present is to request for traffic police to be stationed at the key access points to control the situation during peak hours in the morning and evening,” he said.

“Regarding the poor condition of roads in Taman Alam Jaya, Taman Suntex dan Bandar Mahkota Cheras, an allocation of RM1.5mil had been approved and work had already begun in the respective areas,” he added.

Traffic lights would also be installed at the crossroads of Bandar Sungai Long Section 7 and Bukit Permai to allow residents to turn left after the SMK Sungai Long. The U-turn located 400m after the school would be widened to ensure safe passage for motorists.

PAS MP vows to end Bandar Mahkota Cheras residents’ frustrations

Friday March 14, 2008

LITTLE can be done about the Bandar Mahkota Cheras road closure issue because the case has gone to court.

Kajang Municipal Council (MPKj) deputy president Abdullah Marjunid conveyed this to new Hulu Langat MP Che Rosli Che Mat and Mohd Sany Hamzan, who contested on a PAS ticket in the Dusun Tua state seat in the recent general election.

The duo had sought a meeting with Abdullah recently to request that the road be opened.

The toll-free road leading from the township next to Bandar Sungai Long has been closed since 2005 because Grand Saga Sdn Bhd, concessionaire for the Cheras-Kajang Highway, has deemed it illegal.

Soon after the road was built, the council gave the green light for its opening.

However, Grand Saga barricaded the road and the matter was then referred to the Malaysian Highway Authority (LLM) and the Works Ministry.

Bandar Mahkota Cheras developer, Narajaya Sdn Bhd, is now suing Grand Saga because both companies cannot reach an agreement over the issue of compensation.

Grand Saga is reputed to be asking for RM400mil for loss of toll collection over the years.

Opening of the road is on Che Rosli's agenda as the new MP for Hulu Langat.

Speaking to the media later, he said all avenues would be explored to allow for the opening of the road that has caused frustration among residents.

Mohd Sany who lost to Dusun Tua assemblyman Ismail Sani said he would continue to fight for the cause because Bandar Mahkota Cheras and Bandar Sungai Long residents had asked for his help too.

Majority neglect retirement plans

Friday March 14, 2008

KUALA LUMPUR: More than half of Malaysian workers have not prepared for retirement while those who have, only started planning after age 40, according to a survey.

The average age working Malaysians began preparing for retirement was 41, while retirees said they did so at 47.

“That’s way too late. It doesn’t give them enough time to build their retirement fund,” Axa Affin Life Insurance Bhd branding and communications head Cheah Leng Sooi said in announcing the findings of the AXA Retirement Scope 2008.

In the survey carried out by research house Synovate, 313 working people aged 25 and above and 319 retirees aged below 75 in urban areas were interviewed over the telephone.

The survey, part of a global study conducted in 26 countries and involving 18,000 respondents, was undertaken for the first time in Malaysia, from July 23 to Aug 27 last year.

Among those who had planned for retirement, most began after they married, had children, or fell into financial difficulties or had health problems, Cheah said.

Their sources of retirement income included life insurance, Employees Provident Fund and personal savings.

The retired saved an average of RM478 a month, and the working RM704, figures that were considered low compared with other countries.

“Malaysian retirees feel that their retirement income is insufficient to cover household expenses. Their average income is RM1,243 but the amount they need is RM1,568 – a deficit of RM325,” she said.

In comparison, Singapore’s average retirement income is RM3,690, and the amount needed RM3,465; while Thailand’s average income is RM1,276, and the amount needed RM903, according to the survey.

The disparity between high and low income earners in Malaysia is wide, the high-income retirees having four times more than those with low income, the survey found.

Despite insufficient income, three-quarters of the retirees said their quality of life had improved if not remaining the same, while 83% of the working group expect their quality of life to improve or remain the same.

Malaysia: Countries, International business

February 2008

As part of its efforts to boost company listings on Bursa Malaysia, the Malaysian Stock Exchange, its regulating and licensing authority, the Securities Commission (SC), is instituting new measures that will take effect from 2 January 2008. The eight initiatives are: greater flexibility for dual listing; removal of the mandatory profit forecast requirement; streamlining of regulatory criteria; aligning rules for cross-border listing; approval of asset acquisition by listed companies if there are no changes in controlling shareholders; permission for the Malaysian Exchange of Securities Dealing and Automated Quotation (Mesdaq) companies to undertake acquisitions that may change their business direction; orderly post-listing price discovery for initial public offerings (IPOs); and a public exposure period for IPO prospecti.

These efforts are indicative of the move to streamline Bursa Malaysia's operations with international best practices. They are also intended to promote greater transparency where IPOs are concerned. Bursa Malaysia recorded 25 listings in 2007; it is hoped that, with these initiatives, 2008 will see at least 40 new listings.

Overall, the initiatives are designed to attract more foreign participation as current rules become aligned with more widely-accepted international standards, without compromising on security. As an example of greater flexibility for dual listing, full trading fungibility across Bursa Malaysia and other exchanges will soon be realised. Companies may list their entire issued capital to this end.

As cross-border listing rules are aligned and cross-listed shares become fungible, cross-border mergers and acquisitions will also be facilitated. Buyers can expect to see a simplification of the trading process. Aligning rules for cross-border listings will allow companies to list even if they are incorporated outside Malaysia.

Foreign companies intending to list on Bursa Malaysia must, however, provide the same standards of shareholder protection currently available in Malaysia. These must be stated in their Memorandum and Articles of Association. Should listed companies wish to acquire assets, the SC's approval will no longer be necessary, provided these moves do not effect a change in the company's shareholders, board of directors or core business.

This is widely recognised as one move that will reduce the regulatory burden on companies and facilitate merger and acquisition activities. However, the acquisitions must be made for cash, not issuance of shares, the SC's chairman, Zarinah Anwar, said.

In addition to this, companies will no longer have to provide the mandatory profit forecast previously required by Bursa Malaysia. Instead, company directors must provide ‘robust information' based on management discussion and analysis of the company's finances, its operations and long-term prospects.

A move in this direction will have a two-fold effect. It will increase directors' accountability for the information about the company that may be issued before listing, while providing potential investors with access to wider, more relevant information before they make their decisions.

The market can therefore look forward to increased investor awareness and a higher level of investor education, vis-à-vis company fundamentals, as buyers begin to take more responsibility for acquiring the relevant knowledge about their intended investments. They will actually have to read the prospectus, instead of just relying on what numbers tell them, before they decide where to park their money.

Besides increasing buyer awareness and education, this particular move may match supply and demand more effectively and result in more stable and orderly pricing mechanisms. However, the profit forecast requirement will be retained where corporate proposals involving distressed listed companies are concerned.

Bursa Malaysia comprises the Main Board, Second Board and Mesdaq, where primarily technology-based companies seek to be listed. Recognising that companies need to expand their businesses, changes have been made to benefit Mesdaq-listed companies as well.

Previously, only Mesdaq-listed companies were allowed to acquire the assets of other distressed Mesdaq companies. With the new ruling, this regulation has been liberalised and companies on the Main and Second Boards may now acquire assets of Mesdaq-listed companies.

The market response to the SC's initiatives has been positive so far, with analysts lauding the move as a positive step towards increasing the regional competitiveness of the Malaysian Bourse. Although the effects of the initiatives are yet to be seen or felt, some market watchers are expressing cautious optimism that 2008 will see the burgeoning of the Malaysian capital market as more global players sit up and take notice of what the country has to offer.

by Majella Gomes
04 Feb 2008
Majella Gomes is a business writer with a background in corporate communications and IT.

Malaysian talent export

February 2008

2007 was a banner year for Malaysia's exports of palm oil, oil and gas, and - wait for it - financial professionals.

Although the brain drain cuts across all sectors, accountants are in hot demand. Since Malaysia is perceived as one of the most developed accounting regimes in the Asia Pacific, on a par with Singapore and Hong Kong, it makes sense that qualified Malaysian accountants are sought after for their skills and experience. Apart from professional qualifications and familiarity with IFRS, corporate governance and risk management, many Malaysian accountants are fluent in English, Mandarin and Malay, and are at home in a multicultural environment.

China is a prime destination for Malaysian talent. Its scintillating boom has spawned a human resource shortage, and it makes sense for China to recruit talent from Malaysia, which boasts one of the largest pools of Mandarin-speaking accountants worldwide. Apart from China, scores of Malaysian financial professionals have moved on to jobs in Singapore, Hong Kong, the UK and the Middle East, particularly the Gulf Cooperation Council (GCC) nations.

Carrots used to lure Malaysian accountants include the challenge of working abroad, an improved work-life balance, as well as compensation packages that can be up to three or four times more than what they were making previously.

On the downside, the migration of Malaysia's accountants abroad has intensified the staffing shortage in key areas like audit and assurance, and in the financial industry. Whereas, on a holistic basis, the exodus contributes to the chronic shortage of qualified accountants who are needed to fuel a growing economy. It is estimated that, come 2020, Malaysia is likely to be short of 16,000 qualified accountants.

Fuel Subsidy Review?

February 2008

Malaysia is likely to review its massive fuel subsidies in light of record oil prices. In 2006, direct fuel subsidies amounted to RM15bn (£2.35bn) or 2.6% of gross domestic product. In the first eight months of 2007, Malaysia spent RM16bn (£2.51bn) on petrol subsidies. The hefty fuel subsidy jeopardises the Government's fiscal deficit target of 3.1% of GDP in 2008. As a solution, economists anticipate a 15%-20% rise in pump prices sometime in 2008, probably post-election, which would raise the price of premium petrol to about RM2.30-RM2.40 (£0.36-£0.38) from the current RM1.92 (£0.3) per litre. Cutting the subsidy would mitigate the fiscal deficit but higher petrol prices risk stoking inflation.

Maybank Sells NPLs

Febraury 2008

In a bid to enhance asset quality, Malaysia's largest banking group, Maybank, is selling non-performing loans (NPLs) with a face value of US$422m or RM1.4bn to Standard Chartered Bank (HK) Ltd Alternative Investments and ORIX Leasing Malaysia Bhd. The NPLs are predominantly consumer loans secured by residential properties in Malaysia. Maybank sold NPLs with a face value of RM2.1bn (US$0.65bn) in 2007. It intends to dispose of yet another tranche of unsecured NPLs with a face value of RM1bn (US$0.31bn) in the financial year ending 30 June 2008.

Can the Bull Survive?

February 2008

The Bull remained alive and kicking in Malaysian equities as it entered 2008, with the Kuala Lumpur Composite Index (KLCI) breaching the historic barrier of 1,500 points in January before consolidating downwards as nervous investors spooked by US recession fears and lingering subprime woes took profit.

The new milestone was set in the wake of a record-breaking 2007, which saw the KLCI posting a second straight year of double-digit gains and its biggest annual rise since 1999. The index gained 31.8% for the year, while total market capitalisation rose to a record RM1.1 trillion (£0.17 trillion) as of the end of December, up from RM850bn (£133.1bn) a year ago.

Plantation companies were the flavour of the year, riding on the oil palm boom which spurred crude palm oil (CPO) prices to gains of over 50% for 2007. The world's largest palm oil plantation company, Sime Darby Bhd, ended 2007 as the largest listed entity with a market cap of RM71.5bn (£11.2bn).

Traditional heavyweights Telekom Malaysia Berhad (communications behemoth), Malayan Banking Bhd (Malaysia's largest bank) and Tenaga Nasional Bhd (the national power company), however, underperformed the market.

The market punished suspect corporate ethics: Transmile Group lost 81% for the year and erased about RM3.3bn in market cap following allegations of a substantial accounting fraud.
Going forward into 2008, the prevailing mood is one of cautious optimism. Positive drivers for equities include strong domestic expansion, high commodity prices, election fever, the strengthening ringgit and decent dividend yields, but these are leavened by slowing exports, regional and local asset inflation and US weakness.