Archive for November, 2017


GLCs are biggest culprits to supply-demand imbalances in property market

Govt major player in ‘luxury’ project development, says Pua

PJ Utara MP says with biggest culprits to supply-demand imbalances in property market being GLCs and GLICs, what’s the point of freeze if only private sector affected.

PETALING JAYA: The cabinet does not have to look far to find one of the main reasons for the glut in “luxury property”, says Tony Pua.

The Petaling Jaya Utara MP pinned a lot of the blame for the oversupply of such property on government-linked companies (GLC) and government-linked investment companies (GLIC).

“The Star reported in April this year on the increasing involvement of GLICs in the property sector, both directly and indirectly.

“EPF has been directly involved developing the new Kwasa Damansara township, which has a massive size of 2,300 acres and RM50 billion in gross development value (GDV).

“Permodalan Nasional Bhd (PNB) on the other hand, is developing the 118-storey Menara Warisan project next to the historic Stadium Merdeka. It will offer 4.3 million square feet of residential, hotel and commercial space,” Pua said in a statement.

He added that with PNB also being the single biggest shareholder of SP Setia, that means the GLIC has oversight on some of the biggest luxury developments in the Klang Valley, including the 25-acres KL Eco-City, Setia Sky Seputeh and many others.

“In addition, EPF and PNB jointly owns 63% of Sime Darby Bhd, which recently launched its RM8 billion GDV AYLA Kuala Lumpur project which covers an area of 360 acres.”

Pua, who is also DAP national publicity secretary, was referring to the government’s decision to freeze luxury property developments valued at over RM1 million following a report by Bank Negara Malaysia (BNM) on Nov 17, warning that unsold residential properties were at a decade-high level.

“BNM had first raised the issue in their 2015 annual report. In its latest report, BNM said that in the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017.

“The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.”

Pua also highlighted the finance ministry-owned UDA’s Bukit Bintang City Centre (BBCC) in the site previously occupied by the Pudu Prison, and which has a GDV of RM8.7 billion.

“There is also the RM20 billion GDV KL Metropolis project, developed by a private company, Naza TTDI, in a land-for-building deal with the international trade and industry ministry; the Khazanah-owned UEM-Sunrise, which specialises in high-end residential market in prestige locations such as Mont Kiara.

“Then we have the two mega-property developments linked to 1MDB, that is the 70-acre Tun Razak Exchange (TRX) and the 486-acre Bandar Malaysia,” Pua said.

Govt major player in ‘luxury’ project development, says Pua
Nov 28, 2017 – FMT


Bank Negara: Property glut highest level in a decade

Bank Negara: Property glut highest level in a decade

Central bank says pricing of residential properties at above RM250,000 is the main reason for this oversupply as most Malaysians cannot afford them.

PETALING JAYA: Bank Negara Malaysia (BNM) has responded to reports on the country facing a residential property glut, warning that it is at the highest level in a decade, The Straits Times reported.

According to BNM, the pricing of residential properties at above RM250,000 is the main reason for this oversupply as most Malaysians cannot afford them.

“There were 130,690 unsold units at the end of March this year, with 83% priced at above RM250,000. Also, 61% of the unsold units are high-rise apartments.

“Supply-demand imbalances in the property market have increased since 2015. Unsold residential properties are at a decade high, with the majority of unsold units being in the above RM250,000 price category,” BNM said in a statement published on its website.

The issue made the headlines in the past week with Deputy Finance Minister Lee Chee Leong saying that the number of completed residential units which have not been sold rose by 40% to 20,807 units in the first half of 2017 (1H17) compared with the same period last year.

“Condominiums and apartments costing over RM500,000 dominate the unsold homes in Malaysia,” he said, adding that the units were worth RM12.26 billion.

Another point highlighted by BNM was that the state with the largest oversupply of residential property was Johor.

“This (glut) situation could worsen if the current supply-demand conditions persist. Within the country, Johor is poised to have the largest property market imbalances (highest number of unsold residential properties and potentially the largest excess supply of retail space).

“As such, it is timely for all parties to act now to mitigate any potential risks to macroeconomic and financial stability,” BNM said.

Bank Negara: Property glut highest level in a decade
November 18, 2017 – FMT


‘Balloon girl’ freed of insulting behaviour charge

‘Balloon girl’ freed of insulting behaviour charge

KUALA LUMPUR, Nov 27 — Dance producer Bilqis Hijjas walked out beaming today after the Magistrates’ Court acquitted her of “insulting behaviour” for dropping yellow balloons at a 2015 event attended by the prime minister and his wife.

“I am very pleased. It has taken two years to get here. Thankful to my lawyers to fight this long fight.

“The point has been made, symbolic resistance is possible. I hope people will take heart from this,” the ecstatic 38-year-old told reporters outside the courtroom at the Kuala Lumpur court complex here.

In his ruling earlier, magistrate Mohd Faizal Ismail said the prosecution had failed to prove that Bilqis had hurt anyone by her actions, adding that her testimony made previously has been consistent.

“As a conclusion, the court is in view that the accused has given a consistent statement all the while. The accused also has followed all orders from police and security there.

“After taking into consideration everything, the court has decided that the accused is freed and acquitted from all charges,” he said.

Bilqis was charged on September 23, 2015 with “insulting behaviour” with the purpose of provoking anger that may cause a breach of peace under Section 14 of the Minor Offences Act 1955, which imposes a maximum RM100 fine. The charge but did not specify who was alleged to have been insulted.

She was alleged to have released several yellow balloons printed with the words “Free media,” “Democracy” and “Justice” on August 31, 2015 at around 3.15pm at Pavilion, during the Kuala Lumpur International Arts Festival’s opening ceremony.

She had been previously acquitted on July 1 this year by the Magistrates’ Court without her defence being called, but the High Court reversed the decision on October 3 after the prosecution appealed and called for a retrial.

She was ordered to enter her defence, which she did on November 7.

‘Balloon girl’ freed of insulting behaviour charge (VIDEO)
Nov 27, 2017 – MMO


MACC will open more files on Felda, says Shahrir

MACC will open more files on Felda, says Shahrir

THE Malaysian Anti-Corruption Commission (MACC) will be investigating more cases involving wrongdoing and corruption in Felda, said the agency’s chairman, Shahrir Abdul Samad.

Shahrir said MACC’s investigation into the agency is unlikely to be limited to the purchase of a hotel in Kuching, and property in Kensington, London, by Felda Investment Corporation (FIC).

“I don’t think it (the investigation) will only stop with FIC and the Kensington property, but there will be other cases. We are open to investigation,” the Johor Baru MP said during a press conference at Dialogue TN50 with Felda new-generation settlers at Menara Felda in Kuala Lumpur today.

Present was Youth and Sports Minister Khairy Jamaluddin.

MACC is currently investigating FIC’s purchase of the Hotel Grand Borneo in Kuching, which is affiliated to the 1Borneo Hypermall in Kota Kinabalu, Sabah.

FIC reportedly paid RM86.4 million for the hotel in 2012.

Meanwhile, Merdeka Palace, a five-star hotel with 213 rooms, in Kuching was allegedly purchased for RM50 million more than its original value.

Park City Grand Plaza in Kensington was reported to have been bought for RM330 million, allegedly RM220 million more than its original value of RM110 million.

The acquisition is FIC’s first London property and Felda’s second. FIC is a wholly owned subsidiary of Felda.

The Kensington purchase was made under FIC chief executive officer Mohd Zaid Abdul Jalil during the time that Isa Samad was chairman of Felda Global Ventures Holdings Bhd (FGV), another Felda subsidiary.

MACC has called on a few individuals to assist in investigations regarding the purchases and have also raided a few locations, including Isa’s office when he was in FGV and the Land Public Transport Commission (SPAD) office.

In March 2015, MACC questioned one of Isa’s sons over the Kensington purchase, according to Malaysiakini, citing a source privy to the investigations.

In May that year, Paul Low, the minister in charge of transparency and integrity, told Parliament that MACC found no wrongdoing in FIC’s London purchase.

In January this year, newly appointed Felda chairman Shahrir ordered all FIC board members to resign to facilitate the reorganisation of the company.

Isa resigned from FGV on June 19 after a public row with FGV president and CEO Zakaria Arshad over questionable deals worth hundreds of millions of ringgit.

Isa has since been appointed acting chairman of SPAD.

FIC was previously known as Capital Protocol Sdn Bhd before it was incorporated by Felda in July 2013. –November 14, 2017.

MACC will open more files on Felda, says Shahrir
14 Nov 2017 – TMI


A ‘disaster’ if Arul Kanda made Khazanah chief, says Pua

A ‘disaster’ if Arul Kanda made Khazanah chief, says Pua

PJ Utara MP Tony Pua says Arul Kanda Kandasamy wrong for Khazanah Nasional having had a “shameful record” with rationalisation plan to turn around 1MDB.

PETALING JAYA: Tony Pua says any move to have Arul Kanda Kandasamy take over the helm at national sovereign fund Khazanah Nasional would be a disaster.

The Petaling Jaya Utara MP was referring to a report in Singapore daily, The Straits Times, last week which had said that the 1MDB group president and chief executive officer was one of two “outsiders” being considered to take over from Khazanah managing director Azman Mokhtar, who is due to retire in May 2019.

“It is not hard to imagine Prime Minister Najib Razak giving the job to the man who has willfully bent over backwards to defend his image and paint 1MDB as a success.

“However, appointing Arul Kanda to lead Khazanah would only be an absolute disaster for the sovereign wealth fund, as he has had an utterly shameful record helming 1MDB,” Pua said.

He added that instead of saving 1MDB with the “rationalisation plan” Arul Kanda had masterminded, the troubled state-owned fund has only found itself “in a deeper hole with no sight of the end of the tunnel”.

Pua, who is DAP national publicity secretary, also cited 1MDB’s attempt to sell 60% of Bandar Malaysia Sdn Bhd, which he said was an abject failure.

“The finance ministry had to terminate the contract because of the failure of the purchaser to make payments according to schedule despite repeated extensions.

“To rub salt onto the wound, it was the ministry which refunded the RM741 million ‘deposit’ despite it being 1MDB which received the monies,” he said adding that Arul Kanda’s removal by the finance ministry from Bandar Malaysia “practically says it all”.

According to the Straits Times, Arul Kanda and CIMB Bank group CEO Tengku Zafrul Aziz are two outsiders being considered for the role despite original plans for one of two Khazanah executive directors to take over from Azman.

This turn of events has especially come about following the departure of Khazanah’s former deputy chairman, Nor Mohamed Yackop.

Nor Mohamed resigned from Khazanah on Sept 30, in what was seen as the consequence of his testimony at the Royal Commission of Inquiry into Bank Negara Malaysia’s (BNM) losses due to foreign exchange trading in the early 1990s.

The former second finance minister was said to have been firmly behind the succession-from-within plan but his leaving the sovereign wealth fund has opened the doors for non-Khazanah people to vie for the influential position.

“Apparently senior politicians and well-connected business people close to Arul are lobbying Prime Minister Najib Razak who, as Khazanah’s chairman, would have the final say on who replaces Azman.

“Malaysians must protest the fact that a man who has proven incompetent and devoid of integrity is even considered for the post of managing director at Khazanah.

“If 1MDB, with debts up to RM50 billion at its peak could be brought to ruins, what more could happen at the RM145 billion Khazanah Nasional,” Pua said.

A ‘disaster’ if Arul Kanda made Khazanah chief, says Pua
November 7, 2017 0- FMT


BNM: Imbalances in the Property Market – 130,690 unsold residential units

Imbalances in the Property Market

(source: BNM)


Property market will be badly hit in 2018, says expert

Property market will be badly hit in 2018, says expert

Real estate veteran says property market could crash and bring the price of new homes costing RM500,000 down to RM300,000.

PETALING JAYA: The property market will take a terrible hit next year, with developers and house owners facing one of the toughest times to find buyers, says a real estate veteran.

Ernest Cheong said it could lead to a market crash as consumers do not have the financial capacity to own homes with some failing to even pay their monthly instalments.

“The panic (within developers and house owners) might start after Chinese New Year in February or later if the government decides to pump in money to strengthen the market,” he told FMT.

He was responding to a reply given in the Dewan Rakyat by Deputy Finance Minister Lee Chee Leong who said unsold completed residential units rose by 40% to 20,807 units in the first half of 2017 compared with the same period last year.

Lee had said the units were worth RM12.26 billion with condominiums and apartments costing over RM500,000 dominating the unsold homes in Malaysia.

However, Cheong pointed out that the RM12.26 billion is only from the primary market, which includes launches by developers. It does not include the secondary market, which is house owners seeking to sell their homes.

“Previously, house buyers needed to pay 10% as deposit. Today, the situation is different. Developers are in a desperate situation.

“That is why they are allowing buyers to pay 1% of the property price and pay the remainder upon completion,” he said.

Cheong said this “generous payment mode” exists because developers are finding it hard to sell off their new properties.

He said they are in danger of losing their bridging finance from banks if they fail to sell at least 40% of the total units. The bridging finance is used by developers to support their construction.

“This is where the danger starts. I predict if this continues, markets will crash within 24 to 30 months because consumers do not have the financial capacity to buy properties any more.

“Furthermore, developers who started building two years ago are expected to flood the market further with their units.”

He estimated the value of homes waiting to be sold in the secondary market to be around RM4 billion and expected more foreclosures by banks.

“So about RM16 billion of properties are waiting for buyers. But there is no demand. The reason is that people don’t have the money,” he said.

When the property crash comes early next year, Cheong expects the prices of houses to fall from RM500,000 to RM300,000.

He advised Malaysian consumers not to commit to buying a home unless they could save up to RM1,000 a month for at least a year.

“This is to cover for rainy days if they lose their jobs.”

Property market will be badly hit in 2018, says expert
November 14, 2017 – FMT


In Camp Najib, fixers fix each other up for top spot

In Camp Najib, fixers fix each other up for top spot

IT is wonderful to be the Prime Minister’s fixer on the ground.

Every word that you utter is taken seriously and you are accorded great respect and deference, far beyond your official position, appearance or educational level.

And even if senior politicians, senior civil servants or other power brokers in Malaysia do not really like you, they know that ultimately you speak for Najib Razak or Madam, as Najib’s wife Rosmah Mansor is known as in PM’s circle.

The flip side to being a powerful fixer on the ground is that every other individual in the PM’s camp also covets that position of closeness and influence and would do pretty much anything to bring you down.

This is where fixer extraordinaire Baling MP Abdul Azeez Abdul Rahim finds himself today. He is learning the fast way that being close to the powerful in Malaysia is a double-edged sword.

One day, you are flying high and seemingly untouchable. But on another day, even your heavily-accented Malay or the fact that you are fluent in Tamil is held against you.

The PM’s political operatives and their bloggers smell blood. They believe that Abdul Azeez’s ties with the first family are fraying and not as strong ‎as it once was.

As a result, there have been a cache of articles about him.

Most of these articles are on Malaysia Today, run by fugitive blogger Raja Petra Kamarudin who has apparently turned pro-government after several years of supporting Anwar Ibrahim when the latter was sacked from the government in 1998.

There is talk among Umno circles that Raja Petra, better known by his initials RPK, is in cahoots with another Najib advisor but it remains just talk until today.

“Wasting my time,” said Abdul Azeez at the Parliament lobby yesterday when asked to comment on the articles by Raja Petra.

What is clear is that Abdul Azeez, who is the Tabung Haji chairman and head of Putera Umno, is being pilloried now as Najib’s circle of advisors jostle to be the main point man for the prime minister.

They want to be in the same position as Abdul Azeez, to even know what the PM is wearing the next day, and his programmes. To be able to walk into the PM’s house at any time of the day and be part of discussions, even if they involve confidential state issues.

There was a time when the point man was those in Najib’s cohort rising through the ranks in Umno. But today, it is these operatives who lurk in the shadows but see it fit that they are known to be the point man in the Najib administration.

In Camp Najib, fixers fix each other up for top spot
3 Nov 2017 – TMI


Satay sales good but only during MRT promo period, say staff

Workers at a satay restaurant say sales dropped back to normal once the discounted fare period ended on August 31.

KAJANG: Jalan Kelab at Bandar Kajang can be taken for a ghost town if not for the few customers seated at rectangular wooden tables in the Sate Kajang Hj Samuri restaurant with waiters milling about.

The empty roads and near-deafening silence save for the occasional passing of a train overhead appear to contradict Prime Minister Najib Razak’s recent claim that satay sales at the restaurant were on the rise due to the Mass Rapid Transit (MRT) project that passes through the area.

During FMT’s visit to the restaurant, the air was heavy with the smell of wet asphalt and smoke from the satay spit as the skies cleared from a heavy downpour.

Granted, it was only 4.30pm, so the lack of a buzz could have been attributed to the fact that it was still office hours.

“Not many people come during the weekdays, maybe because they are working. But they will start to come at night.

“Many people also come on weekends, especially with their families,” one of the waiters told FMT.

However, his senior co-worker disagreed, saying that to his observation, the restaurant was only crowded when rides on the MRT were discounted. The promotion period ended Aug 31.

Shaking his head, he said there was a big difference in the crowds after the 50% discount period on tickets ended.

“During the first week of the MRT offer, we got many customers, mostly those who came down here after crossing the road from the Stadium Kajang station.

“Sales were good during the weekends, and even on weekdays. There would often be long queues at the counters, and some even had to wait their turn to get into the restaurant.

“But after the discount ended, sales went back to normal,” he said, gesturing around him at the many empty tables.

Although the restaurant still has a fair number of customers during the weekends, weekdays are slow.

Satay sales good but only during MRT promo period, say staff
November 18, 2017 – FMT


Total cost for MRT1, MRT2 & MRT3 will be more than RM100 billion!!

RM40-RM50bil MRT3 heavily tilted in favour of China

A QUESTION OF BUSINESS | Unheard of major changes to the tender conditions for the RM40-RM50 billion third phase of the Klang Valley Mass Rapid Transit (KVMRT) project, such as a financing package of 90 percent of the project cost, a 30-year term and an eight-year moratorium, indicates the tender is heavily weighted to China contractors.

Also, other technical qualifying requirements for the tenderers, such as experience and size of contracts undertaken, puts it beyond the capacity of local players.

The financing terms are reminiscent of the seven-year moratorium and 20-year financing for the RM55 billion East Coast Rail Link (ECRL) to be undertaken by a China state-owned company, which provides 85 percent financing at an interest rate of 3.25 percent.

The mass rapid transit lines are going full swing with MRT1 (Sungai Buloh-Kajang) already completed for RM23 billion and MRT2 (Sungai Buloh-Serdang-Putrajaya) costing RM32 billion under construction.

But now, Mass Rapid Transit Corporation, or MRT Corp, 100 percent owned by the Minister of Finance Incorporated and the developer and asset owner of the KVMRT project, is calling for tenders for MRT3, which industry people estimate may cost RM40-RM50 billion. MRT3 is also known as the Circle Line.

That takes the total construction cost of KVMRT to more than RM100 billion, if the top end of estimates are used. That in itself is not alarming – MRT3 was in the plan anyway. But significantly, the completion target for MRT3 was moved two years forward to 2025 from 2027, the announcement being made by Finance Minister and Prime Minister Najib Abdul Razak in his Budget speech on Oct 27. MRT Corp called for the tender shortly after, on Nov 6.

Even that may not be considered out of the ordinary but the tender terms are. No longer are project delivery partners (PDP) in place – instead it’s a turnkey contract. The previous PDPs for the earlier phases, Malaysian companies, took responsibility for on-time delivery and were on paper responsible for appointing other contractors, although in practice these were politically influenced as well.

But what is truly amazing are the financing terms – contractors have to provide minimum 90 percent financing, minimum eight-year moratorium period during which no repayment of principal and interest will be made, and a long minimum 30-year repayment period. Also, financing only in ringgit, US dollars, renminbi, yen or euro is allowed. Also, the financing shall be in a single currency only, which must match the currency of contract price payments.

Now, who can provide these terms? US companies will not be able to arrange financing for 30 years on a commercial basis for a project which is likely to be unprofitable, neither will the Japanese or the Europeans, for their tenders will have to be made on a commercial basis. And how is the interest rate going to be determined? Will it be fixed rate? Most likely it will float, for no one can guarantee a fixed rate for 30 years – you can’t even hedge for that long.

Giving an eight-year moratorium will take the term to 38 years, making it unviable for all commercial proposals. That leaves only the proposals with government backing left – the China state-owned companies with renminbi loans.

Technical requirements

On top of that, technical requirements seem almost designed to keep local companies out. Some of the conditions specified include the following:

RM10 billion contract value, in each case the works being let out on a design & build or turnkey basis;

Two urban tunnelling projects utilising Slurry/Mixed Shield and Earth Pressure Balance (EPB);

Tunnel Boring Machines (TBMs) greater than 6m diametre in rock and mixed face conditions, including at least a single project with a minimum tunnelling of 8km (twin bored);

Five underground rail transit stations in a single project;

Five elevated rail transit stations with 10 km of viaducts in a single project;

One rail transit depot, with heavy maintenance facilities; and

System works of either two urban metro projects of at least RM2 billion contract value each or one urban metro project of at least RM4 billion contract value, in each case the works being let out on a design & build or turnkey basis.

RM40-RM50bil MRT3 heavily tilted in favour of China
9 Nov 2017 – Malaysiakini

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All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?