OF late, Housing and Local Government Minister Zuraida Kamaruddin seems to have been burdened with extra duties. She is trying very hard to sell Malaysia’s RM100bil worth of completed but unsold properties. She quotes Real Estate Housing and Developers Association statistics.
As a minister, her role is heavy enough – to ensure adequate and balanced housing development for all, especially the lower-income group.
On Wednesday, the press reported that she had proposed to extend Malaysia’s Home Ownership Campaign (HOC) – with stamp duty waivers and rebates – to Chinese and Hong Kong house-buyers.
The same day, she issued a statement that her proposal was to have a housing campaign offering RM1mil and above properties under the Malaysia My Second Home programme to foreign retirees and not extending the HOC to foreigners.
Whether she meant extending the HOC freebies to foreign buyers or marketing properties Malaysians cannot afford to foreigners is moot. Both proposals involve helping developers to sell.
The hot issue today is affordability. Yes, ballooning overhang is distressing but that is not for the housing minister to resolve. Her role is larger than that.
Affordable housing is an issue that most governments are grappling with and unable to find a solution. From Hong Kong to Singapore, young house-buyers are increasingly impatient with the efforts of the government to provide them with affordable housing.
Malaysia is no different. Affordable housing will be a key issue in the next general election that would see voters above 18 having their say on who the next leaders would be.
If developers have taken the risk to build properties beyond the affordability levels of most, that is the business risk they have taken. That should be the least of the minister’s concerns.
In a capitalistic market, developers buy land and build. They plan, design and take risks. They are rewarded for the risks they take. It is entirely left to market forces, something which the developers themselves appreciate.However, affordable housing is something that needs the government’s push. It’s an area that Zuraida should perhaps focus on.
All eyes on MNC Wireless
MNC Wireless Bhd, a mobile and digital solutions company, this week said its newly appointed director Robbie Krishnan had bought eight million MNC shares, or about a 1.67% stake in the company, at 12 sen each. In its alert note emailed to the press on the matter, it highlighted that Robbie is the nephew of billionaire T Ananda Krishnan and also enclosed, among other attachments, his resume. Why this was necessary is not clear.
It it also unclear as to what kind of expertise he would be bringing to the mobile and digital solutions company.
Currently, according to the CV attached, Robbie is an executive producer with ASTRO Measat Broadcast Network System Sdn Bhd and is focused on content and branded development. He is the co-founder of Komik Kon Malaysia “which is an educational corporation to create awareness of and appreciation for comics and related art forms”. The resume also reads: “He has managed multi-million-dollar productions with global teams.”
Many a time, shareholders are more concerned with what kind of real value directors can bring to the table and whether a company, especially one that needs turning around, can be turned around on a sustainable basis.
Having said that, the jury is still out on Robbie’s contributions. MNC made a net loss of RM3.45mil for the consolidated period of Jan 1,2018 to April 30,2019. At last look, its shares were at 9.5 sen apiece, valuing the firm at RM273mil.
Bounty for Boustead
BOUSTEAD HOLDINGS BHD, which has an effective stake of 41.87% in the company that owns BHP petrol stations around the country, is said to be looking at divesting the chain of petrol kiosks.
Boustead took over the chain of petrol stations from British Petroleum in 2003/2004 for RM300mil. In that exercise, it increased its interest in the BHP petrol chain to 100%.
Over the years, BHP with its chain of 386 petrol stations has built a presence in every nook and corner of peninsular Malaysia. The business works on thin margins but big volumes. According to industry officials, BHP should generate between RM200mil and RM300mil per annum.
The reason why British Petroleum sold the petrol stations was because the industry was competitive and the way to grow was to expand and gain market share. The competitors were Petronas and Shell that were the largest operators of petrol kiosks in the country.
Since the change in government, Boustead’s fortunes have not been that great. It has made losses and has a fair share of problems with its plantation business. Hence, the proceeds from the divestment of BHP would come in handy.
The price for BHP is said to be in the region of RM1bil to RM1.5bil. Petronas Dagangan Bhd (PetDag) has been reported as among the contenders. A dark horse is Vitol Malaysia Sdn Bhd, which is an existing shareholder of BHP.
If PetDag gets BHP, it would be the undisputed leader in the petrol kiosk segment of the oil and gas industry. It would overtake Shell Malaysia.
It will be unfortunate for Boustead to exit the business, but the proceeds will come in handy.