Strong pick-up expected post-GE

Publication: NST

Date of publication: May 10, 2013

Section heading: Real Estate Decor

Page number: 004

A strong market pick-up as a result of pent-up demand and renewed confidence in the market by local and foreign investors is the overwhelming opinion among analysts on the outlook of the property market following a Barisan Nasional win. The research houses include RHB Research, Am Research and CIMB Research.

RHB Research points to several key catalysts as follows:

(i) Uptick in population growth cycle;

(ii) Influx of liquidity driven by low interest rate;

(iii) Consistent GDP growth; and (iv) Catalytic developments, such as the MRT link between JB Sentral and Woodlands Singapore, potential MRT Line 2 and 3, High Speed Rail, as well as the soon-to-be completed Penang Second Bridge.

We expect demand to make a comeback. This year, both the mid-end and high-end segments in the physical market are expected to do well, says the report. While the mass-housing segment will be driven by the local population growth, the higher-end segment will be boosted by foreign buyers.

The report adds that the growing young demographics (age group of 15-65) will continue to underpin the demand for property in Malaysia, in particular, the mid-end mass housing segment. The recent hot selling at IJM Land's Bandar Rimbayu and UOA's Desa Green are good examples. We see a correlation between the ARPP (average residential property price) as well as the change in population growth.

The research house is of the view that asset reflation will be the phenomenon in Southeast Asia (except Singapore). Apart from the low interest rate cycle, the liquidity is also encouraged by lower policy risks in the region. Various regulatory measures have been imposed in the regional countries such as Hong Kong, Singapore and China to curb the overheating property markets and foreign purchases.

Although the household debt in Malaysia has accelerated to 80.5 per cent of GDP in 2012 (from 75.8 per cent in 2011), the Central Bank has recently indicated that the growth of credit to households has begun to moderate. We thus do not anticipate any drastic tightening measures to be imposed this year. We believe interest rate will remain low as the US Fed is likely to keep the rate low at least until mid-2015.

Aiding the anticipated upturn in the property cycle is the stabilising of the European debt crisis and the prevention of a fiscal cliff in the US early this year.

RHB Research is also of the view that the consistent GDP growth in Malaysia (5.4 per cent for 2013) will hold up investors' confidence in property purchases and investments. We expect the property sector to sustain its momentum from late 2012 with the commercial and residential property sales growing by 11.2 per cent and 10.0 per cent respectively in 2013, from a weaker growth of 0.6 per cent and 9.6 per cent in 2012.

Sales statistics from most of the developers have so far confirmed its view. Based on the projects in the pipeline, we are confident that developers will at least maintain their sales growth at 15-20 per cent, with SP Setia seeing its major growth driven by overseas projects.

Hotspots continue to be hot

The report is of the view that key property hotspots such as Kuala Lumpur, Iskandar and Penang will continue to attract foreign buyers. Among the projects within these hotspots that are likely to stand out this year are:

(i) Penang - Penang Second Bridge: Expected to be completed in September this year, the bridge is expected to have a significant economic impact on the Batu Kawan area. Many multinationals have already committed their investments and are currently constructing their plant in the Batu Kawan industrial area. Just recently, the Penang state government has also announced its plans to set up a Premium Outlet at Bandar Cassia next to the PSB interchange. IKEA, the famed Swedish furniture and furnishing company, has also indicated its interest to set up an outlet on the mainland, given the growing industrial and business activities, expanding population and townships, as well as cheaper land costs. Having 600 acres of land close to the second bridge, Tambun Indah is set to be the beneficiary.

After the election, EO is likely to obtain the final approval from the state government for its 760-acre Seri Tanjung Pinang 2 project. The state government will use 110 acres (on net basis) of land on STP 2 to offset some of its road infrastructure spending on the island.

(ii) MRT link, and possibly third link: Developers who already have the right exposure in Iskandar are currently enjoying the strong demand from Singapore. Some developers who have yet to have material exposure down south are busy scouting for landbanks there.

Investment interest from the Singapore is no longer lagging. The relatively cheaper pricing for Malaysia properties, the currency strength as well as the low borrowing rate in Singapore are the key factors driving the buying momentum. In addition to some participations of highprofile individuals and renowned corporates and organisations, such as CapitaLand, Temasek, Ascendas and Country Garden, selling price for some properties in the primary market as well as landbank has hit to levels never seen before. Some highrise condo and serviced apartments in the JB city centre, Puteri Harbour and Danga Bay are now going at RM1,000 - RM1,500 psf.

Interest will heighten again this year. We believe developers as well as property buyers will concentrate on certain `high-growth' areas, particularly areas surrounding the MRT link - JB City centre/JB Sentral, and Kempas. A new integrated transportation hub will be constructed, similar to the KL Sentral in the Klang Valley, catering for the interconnecting KTM commuter rail network, as well as feeder bus and taxi services.

(iii) Klang Valley - High Speed Rail Link (HSRL), MRT Line 2 and 3: The high-speed rail link (HSRL) was recently agreed between the Malaysian and Singaporean government. It is targeted to be ready by 2020. The HSRL is a big re-rating catalyst for Malaysian properties, particularly the KL property market over the long term. It is a new growth driver for high-end properties in KL city and Mont' Kiara.

Coupled with the MRT network (three lines altogether) resulting in a substantial increase in population flow, not only the residential properties but also the commercial properties (retail malls, and perhaps offices and hotels) could receive a boost in demand and hence valuations in the future. Indeed, we started seeing some foreigners mainly from Singapore, China and Hong Kong buying up properties in KL and Mont' Kiara, a convincing sign of liquidity.

Therefore, we believe there could be a niche opportunity for some branded developers to launch some premium high-end luxury condo projects in these locations. Some of the recent successful projects are St Regis and Banyan Tree Signatures Pavilion KL, recording over 70 per cent take-up rate with average selling price of over RM2,000 psf.

From a regional perspective, these prices are still relatively low when compared to the most expensive properties in Singapore, Hong Kong and China city centres. In the pipeline, there are a few notable projects within the KLCC vicinity which are targeting the same segment including EO's The Mews, Dijaya's W Residences, Wing Tai's Le Nouvel, Ireka's RUMA serviced apartments, and The Four Seasons Place.

We believe the revelation of MRT Line 2 (the circle line) and Line 3 will be announced post-GE. The circle line looping the KL commercial hub is another boost for the city centre properties. Line 3 could potentially benefit certain commercial/residential enclaves, such as UOA's Bangsar South, IJM Land's Pantai Sentral Park and SP Setia's KL EcoCity.

Key KL-based players that will benefit the most from these transportation networks are UEM Land, SP Setia, IJM Land, Sunway, UOA, KLCCP and Pavilion REIT.

We think the Iskandar theme will likely dominate the sector this year. The new listings of Iskandarbased developers, such as Iskandar Waterfront Holdings (IWH) and Medini Iskandar, are expected to create positive spill-over to other developers with sizeable exposure to Iskandar, such as Keck Seng, UEM Land, MPHB, Crescendo, Sunway, KSL, etc.

UEM Land has achieved a great milestone, with the latest entrance of Ascendas lifting the greenfield Gerbang Nusajaya to another level. Sunway will be a long-term play in Iskandar, with an ambitious plan to replicate its successful integrated Bandar Sunway township down south.

Am Research is similarly of the view that the development of the Iskandar Region would resume. It is likely that the BN government would pursue closer ties with Singapore to develop the area, it says in its report, adding that UEM Land is their preferred pick, with Mah Sing and IJM Land also in its favourite list. CIMB Research has also singled out UEM Land as one of the biggest beneficiaries post-GE as it has historical ties with UMNO and is a favourite election play.

More JVs, transactions

RHB Research anticipates more announcements on joint-venture de velopm en t s an d lan db ank transactions in the Malaysian property scene. These include IJM Land's collaboration with some strategic partners for The Light Phase 2 commercial component. EO, too, will have additional plans to add value to the Integrated Wellness Capital project at Medini. MA's, which are rather speculative at this juncture, could also potentially surprise the market. Various rumours on KSL have been circulating in the market, including the possibility of privatisation as well as the disposal of KSL City shopping mall. The possibility of IJM Land buying over 50 per cent stake in Bandar Rimbayu from KEURO is also well on the cards.

Am Research meanwhile says BN may roll out sizeable infrastructure projects to solidify its grip in Sarawak. The projects include the 500kV transmission lines, construction of new hydro dams and fast-tracking the development of the Samalaju Industrial Park. There projects were previously put on hold.

The research house further says it remains to be seen if there would be a consensus between the BN-led Federal government and the Opposition-controlled Selangor in the long-awaited development of some 3,300 acres of land in Sungai Buloh by EPF owned Kwasta Land. This is because all land matters fall under the purview of the state government.

CIMB Research meanwhile expressed the view that the country's growth potential would ultimately depend on the extent of compromise over its reform agenda in the near term. Reform momentum could hit a snag. Without a strong mandate from the people as well as potentially months of political infighting after the general election, some of the policy reforms could be put on the backburner or progress slowly. This will throw off the government's reform credibility and dent investors' confidence in the sustainability of the country's growth momentum. Unpopular measures such as the GST and subsidy cuts could be delayed on worries of political backlash.

It adds: To gain political mileage, more populist measures, including cash transfers, could be in store and if not accompanied by earlier planned tax reforms and subsidy rationalisation, the country's fiscal-reduction plans could be at risk.

Table 1: Post-election property market outlook at a glance

* The removal of election uncertainties and continuity of government would aid buying sentiment. Market may see strong pick-up from pentup demand

* Broad policies would remain relatively unchanged over the next 12 months irrespective of any leadership changes within Barisan

* Key property hotspots such as Greater Kuala Lumpur, Iskandar and Penang will continue to attract foreign buyers

* Interest rate and unemployment rate will remain low

* No drastic tightening measures expected to be imposed this year

* Continuity of growth policies in the Economic Transformation Programme (ETP)

* The consistent GDP growth in Malaysia will hold up investors' confidence in property purchases and investments, supported by solid fundamentals and strong catalysts

* Catalytic developments, such as the MRT link between JB Sentral and Woodlands Singapore, potential MRT Line 2 and 3, High Speed Rail, and the soon-to-be completed Penang Second Bridge, expected to boost the property sector

* Excess liquidity will be parked in tangible assets, including real estate and properties as a hedge against inflation

Apa Itu Goods & Services Tax (GST) ?

Posted by Suzardi Maulan on May 10, 2013

Artikel ini diambil dari sebuah laman blog – oskortos dengan keizinan penulis asal.

Semoga dapat menjawab persoalan para pembaca yang budiman yang mahu tahu apa itu GST. Sebarang persoalan, untuk mendapat respons yang lebih cepat sila terus ajukan kepada penulis asal ya.

Jika pembaca lain ada nak menyumbang artikel tambahan pun dialu-alukan.

—

GST

Oleh: Norman 

Dengar saja tentang GST perkara pertama yang akan terlintas di kepala kita sudah pastilah tentang kenaikan harga barang disebabkan cukai yang dikenakan kerajaan. Memandangkan pada PRU13, BN kekal dipilih sebagai kerajaan pelaksanaan GST mungkin akan terjadi dalam tempoh masa setahun atau dua tahun daripada sekarang. Walaubagaimanapun sebagai rakyat yang matang kita haruslah memahami sesuatu isu tersebut sebelum kita membangkang apa sahaja dasar yang dibawa kerajaan.

Setelah menerima maklumbalas daripada laman media sosial Twitter dan FB saya simpulkan ramai yang sebenarnya tidak faham tentang apa itu sebenarnya GST, bagaimana GST dilaksanakan dan juga kesan GST terhadap harga barang dan perkhidmatan. Saya tidak menyalahkan kawan-kawan semua kerana kerajaan juga tersilap langkah apabila penerangan tentang GST tidak dibuat secara menyeluruh malah peluang menerangkan GST melalui media perdana seperti suratkhabar, tv & radio disia-siakan kerajaan apabila ia hanya digunakan untuk menghentam pembangkang, menabur fitnah dan terbaru membangkitkan semangat perkauman. Sebelum membaca artikel ini saya minta kawan-kawan tinggalkan politik partisan, buka mata dan hati supaya kita faham apa itu sebenarnya GST.

CUKAI DI MALAYSIA

Terdapat dua jenis cukai utama yang dikenakan kepada rakyat Malaysia yang pertama cukai pendapatan (income tax) dan yang kedua cukai penggunaan (consumption tax). Cukai pendapatan adalah cukai yang dikenakan keatas segala pendapatan termasuk gaji, bonus, hadiah, komisen, dividen dan sebagainya. Manakala cukai penggunaan dikenakan keatas barangan yang dibeli atau perkhidmatan yang kita gunakan. GST terletak dibawah kategori cukai penggunaan (consumption tax).

APA ITU GST DAN SST?

GST adalah ‘Goods and Services Tax’ atau cukai barangan dan perkhidmatan. Selama ini kita rakyat Malaysia membayar SST iaitu ‘Sales tax and Service tax’ atau cukai jualan dan cukai perkhidmatan. SST kebiasaannya dikenakan ke atas bil telekomunikasi, internet, ASTRO, tiket wayang, tiket parking, barangan di supermarket, KFC, McD, Pizza pada kadar 6% untuk cukai perkhidmatan (service tax) dan 10% untuk cukai jualan (sales tax). Anda boleh merujuk bil atau resit setiap kali anda membuat bayaran bil telefon, ASTRO, selepas membeli belah di Tesco, Jusco, Giant dan sebagainya semuanya ada tertera jumlah dan peratusan SST yang dibayar.

GST yang dicadangkan kerajaan Malaysia pada tahun 2009 adalah pada kadar 4% menjadikannya lebih rendah daripada SST pada kadar 6%-10%. Jadi apa bezanya GST dan SST? Pelaksanaan GST merangkumi segala jenis barangan dan perkhidmatan yang ada di Malaysia termasuk barangan yang diimport mahupun yang dibuat dibuat di Malaysia. GST akan mengenakan cukai pada setiap lapisan peringkat bekalan barangan dan perkhidmatan contohnya dari pengilang (manufacturer), pemborong (wholesaler), peruncit/kedai (retailer) hinggalah kepada pengguna (end-customer). Cukai GST ini akan dikutip setiap kali transaksi berlaku dan penjual akan mengutip cukai daripada pembeli mengikut rantaian bekalan tadi. Walaubagaimanapun 4% itu adalah kadar tetap dan tiada cukai berganda (multiple taxes). SST pula kebiasaannya dikenakan kepada pelanggan yang membeli barangan daripada kedai/peruncit dan terdedah kepada cukai berganda. Pelaksanaan SST juga tidak menyeluruh menjadikan ia tidak saksama.

PELAKSANAAN GST

Idea melaksanakan GST ini mula dibincangkan pada tahun 2007 dan pada mulanya dijadualkan untuk dilaksana pada tahun 2009 kemudiannya ditangguh atas sebab pilihanraya dan juga atas sebab kurangnya pemahaman tentang GST dikalangan rakyat Malaysia. Kemudiannya rang undang-undang GST dibaca diparlimen buat kali pertama pada tahun 2009 dan dijadualkan dibaca untuk kali kedua pada 2010 namun ia ditangguhkan juga atas sebab-sebab yang sama.

Anda boleh merujuk keratan berita dari Berita Harian tentang jadual bacaan rang undang-undang GST di sini:

Pelaksanaan GST Ditangguh

GST yang dicadangkan kerajaan adalah pada kadar rata 4% untuk SETIAP barangan dan perkhidmatan WALAUBAGAIMANAPUN kerajaan akan mengecualikan GST ke atas barangan seperti makanan asas beras, gula, tepung, pengangkutan awam seperti tiket bas, komuter, LRT dan juga barangan seperti ubat-ubatan dan sebagainya. Dengan pengecualian ini kesan kenaikan harga ke atas barangan dan perkhidmatan asas adalah minima (atau tiada). Perkara ini ada dinyatakan di laman web Kastam DiRaja Malaysia tentang GST:

KEPERLUAN MELAKSANAKAN GST

GST perlu dilaksanakan untuk meluaskan kadar kenaan cukai kepada semua individu dan perniagaan di Malaysia lalu menambah pendapatan kerajaan secara tidak langsung. GST juga akan menutup kelemahan pengurusan cukai SST seperti cukai berganda, lari daripada cukai (tax evasion) dan sebagainya. Untuk pengetahuan kawan-kawan daripada jumlah penduduk (populasi) seramai 28 juta di Malaysia kurang daripada 10% membayar cukai pendapatan manakala daripada keseluruhan tenaga buruh (workforce) seramai 11 juta di Malaysia peratusan yang membayar cukai pendapatan (income tax) adalah lebih kurang 25%. Rujuk taksiran pembayar cukai bermastautin daripada perangkaan tahunan negara:

Bermakna mereka yang membayar cukai pendapatan adalah sedikit jika dibandingkan dengan mereka yang menerima manfaat daripada kerajaan seperti BR1M, BB1M dan segala bentuk jenis subsidi yang lain. GST akan menjadikan setiap lapisan masyarakat sama ada miskin, sederhana atau kaya membayar cukai untuk menyumbang kepada pendapatan kerajaan.

Much ado about GST

The GST is ‘fairer’ as it widens the tax base

By Vinodhani Nair

We first heard about the idea of a goods and services tax (GST) back in December 2009 when it was first tabled in Parliament after close to half a decade of discussions.

GST, which was supposed to be implemented in Q3 of 2011, is expected to replace the current sales and service taxes in the country.

While still in the offing, the GST is said to have far-reaching implications for businesses. In a media statement released by KPMG Malaysia prior to the supposed implementation, it reportedly said: “It is not just a tax issue; it is a ‘whole of the business’ issue.”

In fact, it went on to state that no one will be exempt from the GST regime, from multinational companies to small- and medium-business owners; therefore, the business community must start to plan and manage this tax transition.

Akin to the concept of a value-added tax (VAT) practised in many countries, the GST is said to be a broad-based tax of a fixed percentage on most goods, services and other items sold or consumed in a particular country. Britain and Australia have already introduced VAT or GST, and nearer to home, Singapore has implemented GST for a while now on most goods and services.

Simply put, a business or person who has registered and incorporates GST in the sales pricing to his/her customer, can claim credit for the GST included in the prices of business purchases. Therefore, a retailer, for instance, will remit the net GST on the value-added element of the goods or services. However, it is the end user or customer who will be bearing the ultimate GST and, in fact, a business concern does not bear the economic cost of the tax.

KPMG said that “to achieve an effective GST implementation, it is vital that each business must understand how GST will impact at pre- and post-implementation levels. In this respect, not only must businesses pay attention to achieving compliance with the GST law and regulations, but it is also pertinent to consider whether there are any opportunities that should be pursued. GST is here to stay and risk management of GST issues must be part of the organisation’s risk management process.”

Jennifer Lopez, ACCA Malaysia country head

ACCA Malaysia country head Jennifer Lopez also believes that while there are many benefits to a GST system, the timing for implementing it is also vital.

“Time is the keyword here. There are many benefits to a GST system which, if implemented properly, can benefit the people and nation as a whole. For one, this will make our taxation system more transparent in that consumers will know what they are paying a tax on and how much. GST is another source of revenue, which the government can use to reduce the national debt.”

However, she does believe there have been many concerns raised by consumers and corporations on the implementation of GST here and the concerns are valid. “For this reason, the implementation of GST has been deferred since 2007. Timing is of utmost importance, until all parties are ready for this new system, implementing GST prematurely would not benefit anyone.”

So will GST ever see the light of day and when? For this, Lopez shares that systems are being put in place by the government to ensure that the GST regime is implemented successfully to benefit all parties. Indeed, corporate Malaysia has had five years to prepare for this and the economy has been resilient amid challenging global conditions.

The main challenge in the implementation of GST is in making sure that all parties are well informed. For this reason, many parties, ACCA included, have dedicated much effort over the last few years to enhancing awareness and education about GST to prepare for the imminent change, she adds.

There is a need to dispel some of the misconceptions about GST since many believe consumers will be taxed twice – but this is not true.

Lopez clarifies that GST is a broad-based tax that distributes the burden of taxation among a larger section of the population based on consumption. It states the types of taxes consumers will be paying for goods or services and how much.

Another concern, she adds, is that companies think GST will be an added cost.

“GST is a tax paid by the end-consumer. All GST-registered entities would pass on the GST to their customers through their prices (output taxes). If anything, the costs would relate to preparation costs to ensure their business is ‘GST ready’, such as personnel training and IT systems update.”

She encourages everyone to learn about the GST at various seminars and talks.

While in the short term, certain goods and services may be affected by the GST, everyone should understand its benefits. When in doubt, just look at other successful GST cases worldwide and know it can be done here, too.

Private investments set to improve

Publication: NST

Date of publication: May 7, 2013

Section heading: Business Times

Page number: 001

Byline / Author: By Rupa Damodaran

KUALA LUMPUR: The coalition government's win in the 13th General Election will improve Malaysia's investment climate, attracting both foreign and domestic direct investments, economists say.

Private investments are likely to rebound in the second half of the year as businesses resume their capital expenditure (capex) spending, which had been placed on the back burner due to their cautious outlook in the run-up to the general election.

Affin Investment Bank economist Alan Tan said Sunday's election results meant that the investment realisation rate from the Economic Transformation Programme (ETP) as well as the Strategic Reform Initiatives will continue to pick up.

Barisan Nasional's (BN) success will help improve the investment climate and promote both domestic direct and foreign direct investments, Tan said.

Since the launch of the ETP, private investment has become the engine of economic growth for Malaysia, rising sharply to 15.5 per cent of the country's gross domestic product (GDP) last year from 12.5 per cent in 2010.

Going forward, we believe that the BN government wil implement strategies to sustain Malaysia's competitiveness and private investment growth, he added.

JPMorgan Malaysia senior country officer Steve Clayton was relieved that the much-awaited event was over, saying that the long run-up had slowed significant investment activities in Malaysia.

There were numerous corporate deals in the pipeline that we could not bring to the market due to the high political risk premiumbefore the general election.

However, aside from the investor fatigue from the almost two-year wait for the polls to take place, it had not deterred the foreign investors, he added.

Foreign investors were the net buyers of equities and fixed income and are still buying (post-general election), he said, adding that the momentum will likely continue in the short term.

Bank of America Merrill Lynch Asean economist Dr Chua Hak Bin said the government will likely pay greater attention to fiscal consolidation after a string of populist handouts in the run-up to the elections over the past year.

We expect the government to resume cutting fuel subsidies in the second half of the year and introduce a consumption tax or GST (goods and services tax) in 2014.

Chua added that such fiscal commitments will likely be positive for the ringgit.

Santitarn Sathirathai of Credit Suisse Singapore, however, thinks that the government will continue on an expansionary fiscal stance in the first half, leaving consolidation to later.

Having been in a tight electoral race means the government is unlikely to carry out budgetary reforms, including the long- awaited introduction of the GST and hikes in subsidised fuel prices.

The fiscal deficit is likely to be above the targeted four per cent, pushing the public debt close to the 55 per cent limit.

He said GDP growth in the first half will moderate due to a perfect storm of three negative forces, namely weak global growth, unfavourable commodity prices and uncertainties around the general election.

He is, however, optimistic about Malaysia's domestic demand growth later in the year, saying that investments will lead expansion as businesses resume capex spending activities, infrastructure investments and a people-friendlier fiscal policy.

Fitch Ratings said it now looks towards greater clarity on the government's fiscal and economic policy programmes.

Andrew Colquhoun, head of Asia-Pacific Sovereigns, said the rating agency has highlighted that rising public debt ratios may eventually exert negative pressure on the ratings.