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Daily Archives: July 7, 2019

SMEs urged to collaborate with government agencies

KUALA LUMPUR, Malaysian small and medium-sized enterprises (SMEs) should work closely with government agencies to accelerate their business growth, said Sarawak layered-cake entrepreneur Mohammad Hafidz Rohani.

The managing director of Iana Corporation Sdn Bhd said the agencies are always ready to help the SMEs — the backbone of the country’s gross domestic product (GDP).

When we first started, the Agriculture Department had assisted us in purchasing our machinery.

The Iana group is also a recipient of SME Corp’s Bumiputera Enterprise Enhancement Programme grant, and has benefited from programmes such as the SME@University programme, including being sponsored to attend a short course at the SaAd Business School at the University of Oxford.

Rating and certification agencies such as the Malaysia Productivity Corporation and SIRIM also helped us in obtaining the 5S certification, LEAN Management, the Halal certification and the Hazard Analysis and Critical Control Point (HACCP) certification, he told Bernama recently.

The Iana group was one of nine Malaysian SMEs selected by the Perbadanan Usahawan Nasional Bhd (PUNB) to take part in a trade mission to Taipei on June 17-21, 2019, in collaboration with the Malaysia External Trade Development Corporation office in Taiwan.

The trade mission was in conjunction with the 29th Taipei International Food Show, organised by the Taiwan External Trade Development Council.

Mohammad Hafidz said the trade mission provided an opportunity for the entrepreneurs to gain exposure and to get ideas for their business growth.

During the event, the Iana group also met with a supplier who could design a specialised machine for the company’s cake-making process.

Iana’s Sarawak layered-cake brand, Siti Payung, has penetrated Brunei and Singapore markets, he said, adding that the company plans to open two new branches in addition to its existing branch in Miri.

Source: BERNAMA (News Agency)

S and P’s rating demonstrates confidence in Malaysia’s economic outlook

KUALA LUMPUR, The affirmation of Malaysia’s credit rating by Standard and Poor’s (S and P) last week demonstrates its confidence in Malaysia’s positive economic outlook, strong institutional profile, sound economic fundamentals and prudent debt management.

In a statement today, the Ministry of Finance (MoF) welcomed S and P Global Ratings’ affirmation of Malaysia’s issuer credit rating at A- with a stable outlook last week.

Minister Lim Guan Eng said the reaffirmation also shows that the increase in the government’s direct debt does not affect Malaysia’s sovereign credit ratings, especially when the government’s overall debt and liabilities have been reduced.

He said one of the key drivers for the rating was Malaysia’s healthy growth prospect.

Additionally, despite the ongoing trade war between China and the United States, Malaysia’s exports have been rising above expectations for the second straight month due to trade diversions.

In May 2019, exports grew 2.5 per cent to RM84.1 billion from RM82.1 billion a year ago, which is above the 2.2 per cent market consensus as compiled by Bloomberg.

As a result of the continuous export growth, trade surplus for the first five months of 2019 rose by 4.3 per cent to RM56.8 billion, compared with RM 54.5 billion in the same period last year.

Approved foreign direct investment (FDI) across all sectors for the first quarter of 2019 rose 73.4 per cent to RM29.3 billion versus RM16.9 billion a year ago.

The growth was driven by a 127 per cent increase in approved manufacturing FDI, which rose to RM20.2 billion from RM8.9 billion a year ago.

“S and P acknowledges the government’s efforts to restore its finances through rigorous fiscal management, including managing overall debt and liabilities.

“Although the government’s direct debt rose to 51.2 per cent of the gross domestic product in 2018 from 50.1 per cent in 2017, it is only one component of the government’s overall debt and liabilities, said Lim.

He added that other components were committed government guarantees and finance leases, as well as other liabilities including the 1MDB debt which the government was compelled to service directly.

The recently established Debt Management Committee would build on these successes and ensure that the government’s debt management practices are in line with global best practices, he said.

Furthermore, the Pakatan Harapan administration has made great strides in combating corruption, an institutional reform that is seen as a credit positive, on top of the country’s economic stability and strong financial institutions, added Lim.

Source: BERNAMA (News Agency)

Window of opportunity for Kazakhstan to be Islamic finance hub

KUALA LUMPUR, Kazakhstan’s Astana International Financial Centre (AIFC) aims to set itself up as the Islamic Finance hub in Central Asia and the Eurasian Economic Union, which has a combined population of more than 200 million.

AIFC governor Kairat Kelimbetov said the centre has been looking into several potential areas to be developed, including Islamic finance, which currently accounts for less than one per cent of the country’s total banking assets.

Other areas include capital market, financial technology (fintech), asset management and private wealth management.

He said Kazakhstan plans to develop the Islamic finance industry to create alternative financing sources for state and municipal projects, as well as private ones.

Kelimbetov said the AIFC has been working with a number of Malaysian institutions, including Maybank and the Islamic research institute of Bank Negara Malaysia (BNM) for consultation purposes.

Currently, the centre is commissioning Malaysia-based ZICO Shariah, a Shariah advisory service provider to develop a comprehensive five-year masterplan for Kazakhstan to develop its Islamic finance industry.

“One of Kazakhstan government’s strategic goals is for the country to become a pioneer and play a leading role (in Islamic finance). We believe that the Malaysian experience on sukuk issuance is a great example for us.

“We want to play a significant role in Kazakhstan and are working with the Ministry of Finance in the next two years to issue the first sovereign sukuk here,” he told the international media recently at the conclusion of the Astana Finance Days 2019 convention in Nur-Sultan, Kazakhstan.

The list of financial institutions under the AIFC includes Abu Dhabi-based Al Hilal Bank.

“We are working with Banque Misr from Egypt and we are now in the process of working with the authorities to allow them to establish a branch office in Kazakhstan,” said Kelimbetov.

Meanwhile, ZICO Shariah’s lead consultant, Professor Datuk Dr Mohd Azmi Omar said the framework that was being developed would be a dedicated and detailed masterplan for the development of Islamic finance and banking in Kazakhstan and the AIFC.

“The framework also aims to build AIFC’s internal capacity in terms of executing and implementing the masterplan,” he said in his presentation on the Islamic Finance masterplan during the convention.

About 70 per cent of Kazakhstan’s total population are Muslims, and the combined Muslim population in Central Asia is about 80 million.

About 42 per cent of the population are between 24 and 54 years old — forming a key retail growth driver.

“According to the Thomson Reuters report, Kazakhstan ranks fifth in the Islamic investment destination among 57 OIC member countries.

“Islamic finance currently represents less than one per cent of its total banking assets, with a plan to grow to 10 per cent by 2025. It is a big leap, so therefore the plan must also have a quantum leap to push it forward,” said Mohd Azmi, who is also the president and chief executive officer of BNM’s International Centre for Education in Islamic Finance.

He noted that the framework would incorporate a very important element — the integration of halal industry and Islamic finance — which is lacking in many countries.

“Many countries develop Islamic finance without seeing how Islamic finance can support the halal industry and vice versa.

Somehow, they forgot about the halal industry, as if the halal industry is a channel of its own, said Mohd Azmi.

Launched in 2018 and modelled on similar centres in Singapore and Dubai, the AIFC uses English as its main language, follows British securities and corporate law, and offers visa and tax waivers for global financial investors.

AIFC members are exempted from Kazakhstan’s corporate income tax, individual income tax, land tax and property tax for 50 years.

The centre includes the AIFC Court, which is independent in its activities and separate from Kazakhstan’s judicial system, but has no jurisdiction over criminal and administrative proceedings.

Additionally, its partners may benefit from services of the International Arbitration Centre, which has its own panel of world-leading arbitrators and mediators and allows for independent and speedy alternatives to court litigation.

Kelimbetov noted that the English Common Law — the basis of AIFC’s regulations — was chosen because of its flexibility.

“Most of the world’s most successful financial centres operate in Common Law jurisdictions. This is due to the fact that it quickly adapts to the requirements of the market and at the same time guarantees investors’ fairness and impartiality in making court decisions,” he pointed out.

The brainchild of the former Kazakhstani President Nursultan Nazarbayev, the AIFC is expected to become a catalyst for attracting foreign capital and bring Kazakhstan’s stock market to a new level of development.

The AIFC had also established the Central Shariah Advisory Board, led by Malaysia’s Amanie Advisor Sdn Bhd founder and group chairman Datuk Dr Mohd Daud Bakar.

Besides Mohd Daud, the five-member Shariah Advisory Board consists of scholars from Kazakhstan, Saudi Arabia, Bahrain and Pakistan.

“Kazakhstan can learn from the best in the Islamic finance sector. With the new council, Kazakhstan could speed up the process to succeed in the industry,” Mohd Daud told Bernama.

The second Astana Finance Days, held from July 1- 4, saw participation from world experts, representatives of businesses, civil services, academics and international financial centres.

Source: BERNAMA (News Agency)

Government needs to focus on ecosystem, people on digitisation plan

KUALA LUMPUR, When it comes to digitisation, there is much to be done by the government, says executive director of the Asia-Pacific Economic Cooperation (APEC) secretariat Tan Sri Rebecca Fatima Sta Maria.

She said the government should focus on the ecosystem as well as the people, as digitisation is not only about system replacements but is more about a new way of working which makes the process extremely difficult, as it requires leaders and the people to step out of their comfort zone.

“This is easier said than done. The government always say things like ‘we need to go online, we need to have more small and medium enterprises engaged in e-commerce’, but what are we doing about the ecosystem to facilitate these folks getting online

For example, if I am doing business in a rural area, with no broadband access, no proper roads and no proper logistics system, how am I going to move my products from my home to the clients” she said during a panel discussion on social economics at the Future of Works 2019 Conference, here, recently.

Rebecca said the right ecosystem includes providing training, skills, necessary infrastructure, access to finance as well as having the laws and regulations to build trust in the system.

“You have to make sure the physical infrastructure is in place, and while there are regulations which facilitate the whole process, you do not want to over regulate.

But at the same time, you want to ensure that the customers are protected, she said.

Rebecca said the government should work closely with the private sector and the civil society, and cited the ASEAN digital innovation framework as a good example of a comprehensive plan on digitisation.

Source: BERNAMA (News Agency)

RM253.4 milion foreign buying good sign for local market

KUALA LUMPUR, The net inflow of RM253.4 million between Monday-Thursday in the first week of July was a good sign for the domestic equity market.

However, market players continued to be on the lookout for uncertainties at the global and local levels.

Inter-Pacific Securities head of research Pong Teng Siew said the performance during the first week of July 2019 surpassed that of the entire month of June, which saw a net inflow of RM87.9 million and net outflow of RM134.6 million.

Even though the market saw profit-taking activities last Thursday, a net outflow was only recorded after six straight days of net inflows, which is a good sign, he said.

Pong opined that there are still concerns about the trend in the equity market as there is a possibility that net buying could go on for an extended period.

The current pattern is similar to the one recorded early this year when net buying was strong from Jan 9-Feb 8. But then the trend reversed, he added.

He said the huge decline in the Malaysian cash market in the fourth quarter of last year saw foreign investors — including funds across the globe — going on bargain hunting activities.

After the cash market recovered, the funds started to let go of their stocks.

The current situation is similar to the previous cycle, because the benchmark index fell to its lowest somewhere in May and continued to decline, reaching its lowest point since August 2016. Hence, we believe that bargain hunting will emerge, said Pong.

On another note, he said the China-United States (US) trade war would continue to be a key theme this year.

Meanwhile, the possibility of the US Federal Reserves (Fed) reducing the interest rate is positive news. The global markets rallied for almost three weeks when the Fed announced a lower interest rate years ago.

Markets went up, including the Malaysian market, he said.

Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the average foreign fund participation ratio between July 1-4 stood at 22.5 per cent versus 29 per cent between June 24-27.

He said foreign funds inflows were quite impressive despite external uncertainties.

The G20 summit in Japan last week saw another round of ceasefire between the US and China and it has resulted in positive sentiments in the equities market, he told Bernama.

Mohd Afzanizam said in June, the US ISM Purchasing Managers Index declined to 51.7 points for the third month in a row due to weak business sentiments, while the inflation rate was below the two per cent target.

The unfavourable scenario raised a question of the timing of the rate cut and the quantum, he said.

He said the market’s sentiment remained cautious amid lingering concerns following the headwinds from trade tensions and global growth.

As for ringgit movement, Afzanizam said inflows of funds from foreign investors in the past two weeks provided support for the currency.

The impact of the trade war on the local currency has somewhat subsided and the potential rate cut by the Fed has bolstered the optimism for better growth ahead, he said.

Nonetheless, Afzanizam noted that the trade conflict is still fluid and could take a sudden turn.

In that sense, the appreciation of ringgit is quite limited, he said.

The ringgit retreated at Friday’s closing after recording gains for two consecutive days, as investors remained cautious ahead of the US non-farm payrolls (NFP) data.

The local currency stood at 4.1340/1370 versus the greenback compared with Thursday’s close of 4.1310/1350.

The NFP data, which was released on Friday, showed that more jobs were created in June, calming fears of a sharp slowdown.

The closely-watched NFP rose by 224,000 in June, up from a downwardly-revised 72,000 in May.

Source: BERNAMA (News Agency)

Taiwan Halal Pavilion highlights bubble tea innovation

GEORGE TOWN, Taiwan, which famously known for ‘bubble tea’, is leveraging on Malaysian halal market by introducing halal bubble tea ingredients, as well as the latest technology in the bubble tea making at Taiwan Expo 2019 here.

One of the products that caught visitors’ attention at Taiwan Halal Pavilion is ‘smart bubble tea maker’ by Yung Soon Lih Food Machine Co Ltd.

The company’s official distributor in the country Sym Equipment Sdn Bhd said the product had been receiving tremendous response globally since its launch in October last year.

Here, it is sold at RM6,000 a unit and I would like to say it is a good investment as the product can reduce the time taking to make quality bubble teas, which translates into cost savings in terms of time and labour, said Sym Equipment senior sales and marketing executive Alex Yong to Bernama Radio today.

Apart from bubble tea maker, the expo also highlights halal raw ingredients and high-quality agriculture products.

V&T International Co Ltd public affairs department director Tom Liu said currently, the company was looking at exporting ‘Aiyu’ fruit which only available in Taiwan, into the Malaysian market.

Saying that the fruit was full of nutrients, Liu said it could be processed into an organic drink that suitable for hot-weather countries such as Malaysia.

We are looking for potential distributors in Malaysia, said Liu, adding that he also saw vast opportunities for Taiwan agriculture products to enter the Malaysian market.

I have seen a lot of imported fruits and vegetables at your supermarkets and I think there is an opportunity for us to bring in our products here, he said.

Other exhibitors at the Taiwan Halal Pavilion are Shih Chen Foods, FuGann Enterprise, Anyong Biotechnology Inc and Kuojer Enterprise which feature halal products such as instant milk tea and premium fish essence.

The pavilion also showcases halal health and cosmetic products.

Source: BERNAMA (News Agency)

Taiwan Halal Pavilion highlights bubble tea innovation

GEORGE TOWN, Taiwan, which famously known for ‘bubble tea’, is leveraging on Malaysian halal market by introducing halal bubble tea ingredients, as well as the latest technology in the bubble tea making at Taiwan Expo 2019 here.

One of the products that caught visitors’ attention at Taiwan Halal Pavilion is ‘smart bubble tea maker’ by Yung Soon Lih Food Machine Co Ltd.

The company’s official distributor in the country Sym Equipment Sdn Bhd said the product had been receiving tremendous response globally since its launch in October last year.

Here, it is sold at RM6,000 a unit and I would like to say it is a good investment as the product can reduce the time taking to make quality bubble teas, which translates into cost savings in terms of time and labour, said Sym Equipment senior sales and marketing executive Alex Yong to Bernama Radio today.

Apart from bubble tea maker, the expo also highlights halal raw ingredients and high-quality agriculture products.

V&T International Co Ltd public affairs department director Tom Liu said currently, the company was looking at exporting ‘Aiyu’ fruit which only available in Taiwan, into the Malaysian market.

Saying that the fruit was full of nutrients, Liu said it could be processed into an organic drink that suitable for hot-weather countries such as Malaysia.

We are looking for potential distributors in Malaysia, said Liu, adding that he also saw vast opportunities for Taiwan agriculture products to enter the Malaysian market.

I have seen a lot of imported fruits and vegetables at your supermarkets and I think there is an opportunity for us to bring in our products here, he said.

Other exhibitors at the Taiwan Halal Pavilion are Shih Chen Foods, FuGann Enterprise, Anyong Biotechnology Inc and Kuojer Enterprise which feature halal products such as instant milk tea and premium fish essence.

The pavilion also showcases halal health and cosmetic products.

Source: BERNAMA (News Agency)