What the CEOs say

  • Business
  • Thursday, 22 May 2003


  • THE economic package unveiled by the government pertaining to hotels was generally good but there should be some decrease in property assessment rates. This is crucial for the growth of the hotel industry. The last assessment was done before the 1997 economic downturn. 

    There also should be 3-6 months' moratorium on bank repayments for hotels for its existing loans. - DENNIS TAN, Group general manager, Value Hospitality Management Sdn Bhd 


  • WHEN there was some funding problem recently, a number of training providers turned away National Vocational Training Centre trainees, but we did not turn away a single student. This is our commitment to the country's aspirations to become a developed nation by 2020.  

    The extra allocation provided by the government is certainly good news to the education and training industry. We hope the Human Resources Ministry will come out with new policies and guidelines to ensure that the funding is used in an appropriate manner to achieve the nation's aspirations. - CLEMENT HII, Chief executive officer, SEG International Bhd 

  • THE economic package this time is an extraordinary one for the travel, tourism and hotel industry. I am very heartened by the government initiative in providing a holistic approach in 3 main categories: cashflow relief measures for the companies and its employees, cost reduction sustenance measures and demand stimulation measures for the industry, although some of them are short term.  


    The package is definitely very positive for the industry. There has been much shock and panic in the past 1 and a half months since early April. Business came to almost a standstill so suddenly.  

    The package also provides the much-needed cashflow when turnover drops so sharply and suddenly. The cost of doing business will be lower and this will help to reduce losses for companies in the short term and increase margins in the medium to long term. - DATIN IRENE GAN, Chief Executive Officer, Reliance Pacific Bhd 


  • DR MAHATHIR has acted decisively to counter the hit on the economy from SARS and slowing external demand but the 3-month intervention rate cut to 4.5% from 5% is a real surprise.  

    The last reduction was in September 2001, following the Sept 11 attacks. The latest cut is unexpected as most of the official statements indicated that interest rates are already quite low and further cutting them is unlikely to boost demand. The key now is to see the change in deposit rates by banks, as their margins will be under pressure. JP Morgan is likely to raise its 2003 budget deficit forecast to 5.2% of GDP from 4.7%.  

    Our full-year 2003 GDP growth could be raised by around 0.5%-pt to 3.5%. Still, the revised forecast is much lower than the official forecast of 4.2-4.5% range. - RAJEEV MALIK, Senior economist, JP Morgan (Singapore) 


  • Overall, the economic package is aimed at addressing short-term weaknesses in the economy whilst addressing the medium-term structural issues. These include improving domestic investment climate and driving greater domestic SME investment.  

    Further relaxation of FIC guidelines will help create a more conducive and investor-friendly environment. Over time, this should help spur the continued participation of foreign investment in the domestic capital market.  

    We will see enhancement in domestic spending through the lowering of lending rates, reduction in EPF rates and half-month bonus for government servants. On the whole, the package has been well thought through and crafted. - NAZIR RAZAK, Chief executive, CIMB Group 


  • KEY initiatives in the economic package are strategic and comprehensive in promoting growth for the economy, capital market and stockmarket.  

    While the majority of sectors and listed companies are fundamentally sound and have shown resilience during these challenging times, some specific sectors are adversely affected by recent regional and global events.  

    Therefore, the initiatives in the economic package, in providing flexibilities in terms of levies, waivers as well as time extensions, will certainly be effective in sustaining progress in the economy and cushioning the economy from further external shocks.  

    The effect expected would be one of sustained economic performance and broad-based growth in key economic sectors. - DATUK AZLAN HASHIM, KLSE executive chairman 


  • IN general, the economic package is a key step in helping us overcome the challenges that have resulted from world events and SARS.  

    From a competitive standpoint, the effort to lure foreign investment through various tax exemptions, investor-friendly guidelines and loosening of equity requirements will make Malaysia more attractive, particularly for companies looking to set up Operational Headquarters here.  

    The RM500mil injection to provide training and retraining for new graduates in ICT is a move in the right direction given our country's ambition to be an IT and R&D hub in the region.  

    While these incentives are crucial to address the needs above, I believe the challenge before us is our ability to proactively market ourselves, seek out investments in an environment where funds are limited and attract the right investors to take serious notice of us. - CHING YEW CHYE, Managing partner, Accenture, South East Client Group 

  • We are delighted as it is very positive for the property sector as a whole. This clearly demonstrates the government's recognition of the important role played by the sector in driving economic growth.  


    The significant number of measures introduced for properties priced below RM180,000 greatly benefits developers such as ourselves – with land bank in choice locations and acquired at a low price – as we can sell products within this price and still earn a decent profit.  

    The tax exemption of RM10,000 on loan interest over 3 years for properties priced between RM100,000 and RM180,000 and stamp duty exemption is particularly good for our Bukit Indah and Setia Indah projects in Johor Baru as most of our products are tagged within that price range.  

    The 1-year exemption on real property gain tax will encourage those planning to upgrade to sell their existing houses to buy a home in attractive new developments. - DATUK LIEW KEE SIN, Group managing director, S P Setia Bhd 


  • It is hoped that the relaxation of the Foreign Investment Committee conditions on acquisition of local assets and percentage of foreign equity shareholding will encourage the inflow of funds and foreign investments.  

    However, it is also critical to ensure consistency and transparency in the rules to instil greater investor confidence. Given the challenging economic, domestic and external conditions, the reduction of Bank Negara's intervention rate by 50 basis points to 4.5% is reflective of Malaysia’s monetary “ample liquidity” conditions, which have remained supportive of stronger economic expansion. In this regard, it is hoped that the lower cost of borrowings will fuel greater credit growth in 2003. The other significant measures are directed towards the construction and property sectors. The various tax concessions granted as well as the lowering of ceiling for purchases by foreigners should provide a boost for the industry by simultaneously stimulating both supply and demand. The reduction in employees’ contribution to EPF from 11% to 9% is meant to increase consumer spending. - KHOO CHUAN KEAT, Executive director, PricewaterhouseCoopers  


  • THE economic package will substantially boost Malaysia's economy going forward. It is encouraging to note that the government is making the right move in tackling main issues including the real estate sector in view of the current property overhang situation.  

    Encouraging incentives like the exemption in real property gains tax for a year beginning next month, the launch of Projek HARAPAN and the exemption of stamp duty for purchases of houses below RM180,000 will certainly augur well for the real estate sector.  

    The focus on enhancing the small and medium industries by creating the microcredit scheme for entrepreneurs is also timely following uncertainties in the market. - TAN SRI ABDUL KHALID IBRAHIM, Group chief executive, Kumpulan Guthrie Bhd 

  • The performance of the retail industry is closely associated with consumer sentiments.  


    This is particularly valid for food retailers like us. We feel that the government’s measures are a positive step. We welcome the initiatives to stimulate the economy and to boost consumer confidence as well as spending. Measures such as reducing the interest rate and lowering the EPF contribution rate would have a direct impact on disposable incomes, which will translate to more discretionary spending from consumers and hopefully translate to increased sales for retailers.  

    Giant already exports Malaysian-made goods to Singapore, Hong Kong and Indonesia. The government’s initiatives should provide more opportunities for Malaysian-made goods to be exported overseas. - JOHN COYLE, Chief executive officer, Dairy Farm Giant Retail Sdn Bhd 

  • AMBM would like to record our appreciation for the government's continuing commitment and efforts in supporting the country's economic growth and development.  

    Despite experiencing 6 years of budget deficit, the government has again been able to formulate yet another comprehensive economic package to address immediate and longer term issues facing the various sectors of the economy.  


    Appropriately, the involvement of other financial institutions including Bank Negara, Bank Pertanian Malaysia, Bank Simpanan Nasional and Bank Pembangunan Infrastruktur and Industri would help overcome the government's budgetary constraint while ensuring success of this package in attaining the desired objectives.  

    The government has been very receptive to the views and recommendations made by various parties in the private sector and incorporated measures and programme to address issues affecting various sectors of the economy.  

    We believe the economic package announced by the Prime Minister would be able to alleviate the immediate issues and promote the longer term development of small and medium-sized industries, agriculture, manufacturing, capital market, properties, hospitality and tourism industries as well as the health sector. While the lowering of intervention rate by 50 basis points will reduce costs for business and may result in lower margins for the banking institutions, we are confident that it will support and sustain the growth of various sectors of the economy. - TAN SRI DATUK AZMAN HASHIM, Chairman, Association of Merchant Banks in Malaysia 


  • Although there is no direct relief granted to the airline industry, which has been directly hit by the SARS outbreak, we welcome the assistance package for the travel and tourism sectors. 

    The positive impact of the RM1bil package would naturally filter through to the airlines, as people are encouraged to travel again - be it for business or leisure. 

    Also the 2% reduction in personal EPF contribution and half-month bonus for government servants would most likely flow immediately to consumption spending, which when viewed from the aggregate amount should be a welcome fillip to the economy.  


    Some of this spending may find their way to airline travel. - DATUK MD NOR YUSOF, Managing Director, Malaysia Airlines 

  • The much-awaited economic package is fairly comprehensive and will benefit all sectors of the economy. It will certainly bring about the much-needed boost to the overall economic activities and help cushion the country from the effects of the Iraq war and SARS as well as the generally uncertain global economic conditions.  

    The government has focused its measures on 4 critical areas, i.e., tourism-related sectors, housing, SARS related issues and foreign investments. The measures are aimed at addressing specific issues facing the various sectors. These wide array of measures including relaxation of existing FIC guidelines, rebates to tourism-related sectors and exemptions on stamp duty for purchases of houses below RM180,000 will help to address not only the immediate issues arising from SARS but also the longer term structural challenges faced by the economy. - DR ROZALI MOHD ALI, Chairman, Association of Banks in Malaysia 


  • Looking at the economic package in totality, we are confident that it will keep the momentum of growth intact. While in the short term, the package will definitely lessen the impact from slower economic activities, it also provides a base for the economy to be more resilient and competitive.  

    Perhaps the significant aspect of this package is that it indicates the commitment of the government in ensuring that our economy remains strong.  

    Hence, in the spirit of Malaysian Inc., it is now for other segments of the economy, including the financial services industry, to respond to this gesture. - DATUK AMIRSHAM A. AZIZ, President and CEO of Malayan Banking Bhd 

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