Perbelanjaan berhemah mampu naikkan penarafan Malaysia

Publication: BH

Date of publication: Mar 2, 2013

Section heading: Bisnes

Page number: 002

Standard & Poor's Ratings Services (S&P) akan menaikkan lagi penarafan Malaysia pada masa depan jika kerajaan meneruskan usahanya melaksanakan perbelanjaan secara berhemah dan mengurangkan defisit fiskalnya.

Ketika ini, firma penarafan antarabangsa itu memberikan penarafan kredit kedaulatan Malaysia pada `A-/A-2' bagi mata wang asing dan `A/A-1' bagi mata wang tempatan dengan tinjauan stabil.

Pengarah Kanan dan Pengurus Analitikal Penarafan Kedaulatan Asia Pasifik S&P, Kim Eng Tan, berkata pihaknya berpendapat rasionalisasi subsidi secara berterusan oleh kerajaan serta pengenalan Cukai Barangan dan Perkhidmatan (GST) pada masa depan dijangka mampu memberi kesan positif yang ketara kepada penarafan kredit negara ini.

Meningkatkan pendapatan

Beliau berkata, dua langkah itu dilihat penting kepada Malaysia bagi meningkatkan pendapatannya, sekali gus mampu mengurangkan defisit fiskalnya dengan lebih pantas.

"Buat masa ini, kami masih mengeka lkan penarafan kredit Malaysia pada paras semasa dan tidak akan melakukan sebarang perubahan dalam tempoh dua tahun ini," katanya ketika ditemui selepas menyampaikan syarahan bertajuk Arah Aliran Kredit Asean di Seminar Pasaran Modal Asean yang dianjurkan S&P di Kuala Lumpur semalam.

Kim berkata sebarang perubahan terhadap tinjauan penarafan kredit Malaysia pada masa depan bergantung kepada kejayaan pelaksanaan langkah yang diambil kerajaan dalam mengurangkan defisit.

Beliau menjelaskan, perkara utama yang menjadi perhatian dalam mengubah penarafan kredit sesebuah negara adalah berdasarkan komitmen jitu kerajaannya dalam meningkatkan pendapatan, pada masa yang sama mengurangkan defisit dan paras hutang.

"Kerajaan Malaysia mempunyai fleksibiliti untuk memantapkan prestasi fiskal dengan melaksanakan dasar yang dapat membantunya mencapai bajet seimbang dan meningkatkan taraf hidup rakyat," katanya.

IMF: Malaysian banks resilient to shocks

Publication: NST

Date of publication: Mar 2, 2013

Section heading: Business Times

Page number: 001

Byline / Author: By Rupa Damodaran

KUALA LUMPUR: The International Monetary Fund lauded Malaysia's financial system for its sound and well-capitalised banking system, backed by a strong regulatory and supervisory framework.

In its first financial sector assessment programme (FSAP) on Malaysia in 2012, the IMF, together with the World Bank, commended the system, saying it has weathered the recent global financial crisis.

"Stress tests suggest that banks are resilient to a range of economic and market shocks; though the high level of reliance on demand deposits is a potential vulnerability," the IMF said in a report from Washington yesterday.

It, however, warned that risks to stability from high household debt or, potentially, from capital flow volatility, must be monitored closely but are contained by high bank capital buffers, ample international reserves, and sound monetary and financial policies.

Policies have so far helped cool off household credit growth and housing prices.

The FSAP has advised that regulations for well developed insurance and securities be strengthened further while the Labuan IBFC's regulatory and supervisory framework needs to be strengthened considerably.

"Malaysia must regain the fiscal space it lost after the global financial crisis," it also said in the annual Article IV Consultation report, adding that the authorities' commitment to medium-term fiscal consolidation should have a concrete and comprehensive plan.

Consolidation efforts must be supported by structural reforms to improve the efficiency of fiscal policy.

"The revenue base must be broadened and diversified away from energy-related receipts, universal fuel subsidies must be gradually replaced by targeted social transfers and public financial management must be strengthened."

It commented that the new minimum wage policy that has taken effect from January and other reforms to strengthen social safety nets will help to boost growth.

In its Article IV Consultation, IMF found Malaysia's macroeconomic policy mix in 2012-2013 "well-calibrated", referring to Bank Negara Malaysia's slightly accommodative monetary policy stance with regard to growth support and inflation and also balancing concerns about the growing public debt.

"The deficit target seems feasible if there are only minor slippages in current spending and a modest fuel subsidy reform is adopted in the second half of 2013."

However, should downside risks to the growth outlook materialise, Bank Negara Malaysia has ample room to cut rates and allow the exchange rate to act as a shock absorber.

In response to commodity price shocks, the fund suggested that the exchange rate should be allowed to adjust.

"If the shock pushes prices up, monetary policy tightening ought to be considered only if second round price effects risk unhinging inflation expectations,"it said, adding that any fiscal revenue windfalls from higher commodity prices should be saved.

On its outlook, the fund, which earlier projected Malaysia to grow by 4.7 per cent in 2013, says the economy will remain robust, fuelled by resilient domestic demand and a modest uptick in exports while inflation should remain restrained.

Risks to the outlook are mainly external and tilted to the downside.

It commented that the general election, which must be held by June, may add to short-term market volatility.

Following the IMF's consultations in 2010 and 2011, Malaysia agreed on the need for fiscal consolidation and targeted a fiscal deficit of three per cent of GDP by 2015 as well as reducing government debt to 40 per cent of the GDP by 2020.

The Malaysian authorities also agreed on the need for a GST and are planning to introduce it as soon as feasible.

On the IMF's advice to phase out subsidies and replace with targeted cash transfers to the needy, the Malaysian authorities plan to rationalise subsidies and have further increased the use of cash transfers in recent budgets.

BNM: Financial outflows overstated

Publication: NST

Date of publication: Mar 2, 2013

Section heading: Business Times

Page number: 001

Byline / Author: By Roziana Hamsawi

KUALA LUMPUR: THE unrecorded financial out- flows as reported by an external non-governmental organisation recently are likely to be overstated, Bank Negara Malaysia said yesterday.

In a statement, the central bank also said: "It is important to note that estimates highlighted in its (the NGO's) report are essentially unrecorded financial flows, which are not necessarily synonymous with illicit financial flows."

The NGO report had estimated that 80 per cent of the unrecorded financial outflows in Malaysia amounting to US$227.1 billion (RM703.7 billion) during the period of 2001-2010 were due to trade mispricing.

Bank Negara, however, said these unrecorded outflows could not be caused by mere trade mispricing, but also due to data discrepancies and the different conventions used to compile trade statistics among countries.

These include time lag, variations in valuation and exclusion of certain types of goods.

Bank Negara said the situation is further complicated by the treatment of goods that are exported via re-export hubs.

This means that exports by Malaysia to a specific trading partner may not give rise to similar number recorded as total imports from Malaysia by that country.

"After taking into account Malaysia's trade that is exported via Singapore and Hong Kong (re-export hubs), the estimate of trade mispricing between Malaysia and its top 10 trading partners were reduced significantly by about 70 per cent," the central bank said.

"Since the estimates in the report of trade mispricing do not take into consideration such discrepancies in trade statistics, the estimates of illicit flows are overstated."

Bank Negara also highlighted the fact the errors and omissions (E&O) of the country's balance of payments is about two per cent of total trade, well below the five per cent benchmark threshold prescribed by the International Monetary Fund.

"These ratios have also been on a moderating trend since 2010."

In its report, the NGO had estimated that 20 per cent of Malaysia's illicit outflows were accounted for by unrecorded transfers of proceeds via informal channels that are captured by the E&O of Malaysia's balance of payments.

On this, Bank Negara said it should be noted that not the entire E&O figure is attributable to illicit activities, as it also includes genuine statistical errors from the compilation of statistics of external trade and crossborder financial transactions.

"Since Malaysia is a very open economy with total trade in goods and services amounting to an average of 192 per cent of gross domestic product during this period, such discrepancies are bound to be large in absolute amount," it said.

It also said that a portion of the E&O could arise from the transfer of funds obtained from illegal activities, organised crime and tax and Custom duties evasion.

It added that the government has always considered any transgression of the country's rules and regulations a very serious matter and measures will continue to be intensified.

"On mitigating trade mispricing, the Royal Malaysian Customs Department has taken actions against entities and individuals who

Bank Negara added that moving forward, the trade mispricing issue will be mitigated with the introduction of Goods and Services Tax (GST), which requires reporting of value-added at various stages of production.

Bank Negara also said the new Money Services Business Act 2011 further complements the measures that have been put in place and actions taken under the Anti-Money Laundering & Anti-Terrorism Financing Act 2001.

Malaysia is now well supported by robust legislation to combat illegal financial flows, it said.

The country's efforts to reduce illicit financial flows are undertaken by members of a high-level multi-agency special task force, which comprises the Attorney-General's Chambers, Customs Department, police, Malaysian Anti-Corruption Commission, Inland Revenue Board, Immigration Department and Bank Negara.

S&P's keeps Malaysia's stable rating

Publication: NST

Date of publication: Mar 2, 2013

Section heading: Business Times

Page number: 003

Byline / Author: By Rupa Damodaran

KUALA LUMPUR: Standard & Poor's (S&P's) says it will maintain the stable sovereign rating for Malaysia for the next two years with its fiscal consolidation programme in place.

The rating agency, which affirmed its sovereign rating at "A-Stable/A-2", was concerned with the rising government debt in recent years.

"But in the near term of one to two years, we don't see this happening," said S&P's credit analyst Kim Eng Tan at a media briefing here yesterday.

The Federal Government's deficit is estimated to have declined to about 4.5 per cent of gross domestic product (GDP) in 2012 from 4.8 per cent in 2011, while the debt is estimated to have risen to about 53 per cent at end-2012 from about 52 percent in 2011.

Government debt has been rising in recent years but if the deficit is cut down in the next few years, the risk of debt being an issue for sovereign rating will not be " high" , he said.

However, if the large deficit of recent years continues, the net debt ratio for the government will come to a point when S&P's may start assessing a weaker support for ratings.

"At the end of the day, we are looking at the fiscal position of the government debt and that involves two big measures - on the revenue front, if you can raise the Goods and Services Tax (GST) to cover the expenditure and, on the other hand, if you cut subsidies and lower spending - that would be good for the fiscal balance (and less pressure on the rating)."

Kim expects another subsidy rationalisation scheme post-general election as there is greater clarity of the government with uncertainties removed, leading to an improved economic story.

"The Malaysian economy is still enjoying high growth and budgetary spending pressures are structurally not that pressing. The government has the flexibility to improve the fiscal performance, although that may cause unhappiness in certain segments of the population."

Implementation of the plans is crucial, he said.

S&P's managing director for Asean, Surinder Kathpalia, said one of the commitments of the rating service company in Malaysia is to connect its national bond market with the region.

"Malaysia was a poster child for bond market development across emerging markets. It has done exceptionally well - it has a terrific market infrastructure with all the mechanisms like bond pricing agency, predictable legal framework, deep savings pool, pipeline of Malaysian issuers and the country has also done exceptionally well with Islamic finance."

Likewise, with two-thirds of global Islamic finance in Malaysia, the challenge is to connect Malaysian Islamic finance with the petro-dollar and deep pool of capital in the GCC (Gulf Cooperation Council), which has invested in Asia through US dollars and not in the ringgit market.

S&P's had given Sime Darby Bhd's US$1.5 billion (RM4.5 billion) multi-currency sukuk an "A" rating.

Kathpalia also explained that the Asean regional rating scale was in part a response to regional policymakers' desire to look for private sector mechanism that will help them to tackle challenges, which includes tapping the high savings in intra-Asean investments.

Meanwhile, at the Asean Capital Markets seminar organised by S&P's, participants were informed that the percentage of foreign investors has shrunk to five per cent from 10 per cent to 15 per cent before the crisis due to the aggressiveness of Malaysians, according to Cagamas Bhd (Malaysia) senior vice-president Angus Salim Amran.

With the bond market being more mature now, there is a need to look for currencies other than the ringgit, he said.

CIMB Principal Asset Management deputy chief executive officer Munirah Khairuddin said the main challenge last year was that there were not enough papers and yields that would come off.

She described 2013 as an equities year compared to 2012, which was more focused on fixed-income, and the former already has many investors, both domestic and foreign, waiting on the sidelines.

Managing director and S&P Middle East head Stuart Anderson said there has been keen interest in the wealth funds, real estate and private equities in Asia but the investing community is seeking greater transparency and some benchmark that they can relate to.

BNM perjelas isu aliran keluar wang haram

ARKIB : 02/03/2013

PENGURUP wang mengira mata wang Malaysia. - GAMBAR HIASAN

KUALA LUMPUR 1 Mac - Bank Negara Malaysia (BNM) menjelaskan laporan sebuah pertubuhan bukan kerajaan (NGO) asing yang baru-baru ini membangkitkan isu aliran keluar kewangan haram dari negara-negara sedang membangun, pada dasarnya merupakan aliran kewangan yang tidak direkodkan atau terlebih catat.

BNM dalam satu kenyataannya berkata, perkara itu mungkin timbul akibat percanggahan data dan cara pengumpulan perangkaan perdagangan yang berbeza antara negara-negara yang menjalankan perdagangan.

Perkara itu boleh berlaku daripada segi perbezaan masa merekod, pelbagai cara penilaian dan pengecualian beberapa jenis barangan.

Laporan NGO itu menganggarkan sebanyak 80 peratus daripada jumlah aliran keluar kewangan yang tidak direkodkan di Malaysia, iaitu sebanyak AS$227.1 bilion (RM703.3 bilion) bagi tempoh antara 2001 hingga 2010 disebabkan oleh salah nilai perdagangan (trade mispricing).

Aliran keluar kewangan yang tidak direkodkan diperoleh daripada perbandingan data eksport dan import antara negara.

Kata bank pusat itu, keadaan dirumitkan lagi melalui kaedah merekod barangan yang dieksport melalui hab eksport semula (re-export hub), yang kadangkala mungkin menyebabkan nilai rekod yang tidak sama.

"Percanggahan ini timbul kerana import direkodkan berdasarkan negara pengeksport asal yang juga merangkumi eksport melalui negara lain," jelas BNM dalam kenyataan itu di sini hari ini.

Laporan itu juga menganggarkan 20 peratus daripada aliran keluar haram merujuk kepada pindahan perolehan yang tidak direkodkan melalui saluran tidak rasmi yang dicakupi dalam item Kesilapan dan Ketinggalan (E&O) Imbangan Pembayaran Malaysia.

"Perlu diambil perhatian bahawa bukan kesemua jumlah E&O disebabkan oleh kegiatan haram, memandangkan ia juga termasuk kesilapan perangkaan yang sebenar daripada pengumpulan perangkaan perdagangan luar dan transaksi kewangan merentas sempadan.

Tambah BNM, masalah 'trade mispricing 'boleh diatasi dengan pelaksanaan Cukai Barangan dan Perkhidmatan (GST).

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