Industry players and CEOs give their views


  • Corporate News
  • Saturday, 12 Oct 2019

Chief executive officers and industry players generally regard the budget as one that should address the challenges faced by the rakyat. Below are their comments:

Datuk Sulaiman Mohd Tahi

Group CEO AMMB HOLDINGS BHD

Budget 2020 has unveiled several measures addressing financing challenges and low adoption of technology.

Specifically, the 50% matching grant of up to RM5,000 to increase digitalisation of operations for SMEs will improve access to financing.

In addition, the allocation of RM50mil to encourage SMEs to engage in more export promotion activities as well as the smart automation matching grant of up to RM2mil for 1,000 local manufacturers and 1,000 services companies to automate business processes are key incentives to facilitate SME development by contributing to ease of doing business, leveraging opportunities in new areas including green economy and faster adoption of IR 4.0. Improved public-private partnership will further support the SMEs in unlocking their potential.

The introduction of the Rent to Own financing scheme will see up to RM10bil provided by financial institutions, with support from the government via a 30% or RM3bil guarantee. This scheme is certainly a welcome addition to help facilitate home ownership.

Datuk Khor Chap JenPresident & CEO

SP Setia Bhd

We applaud the government’s initiatives to raise the ceiling price of homes made available under the Rent-to-own Scheme, from RM300,000 to RM500,000 as this will give first-time home-buyers more options to choose from.

The increase in the allocation for the scheme, from RM1bil to RM10bil, including a guarantee of RM3bil by the government shows that the government sees home ownership as a very critical issue for the rakyat.

However, it is noted that under the current scheme, only RM156.2mil worth of loans was approved.

We hope the lending guidelines and criteria will be reviewed, especially for first-time home-buyers for them to benefit from the scheme.

The reduction of the foreign ownership threshold value for unsold stocks of condominiums and apartments located in city areas from RM1mil to RM600,000 will help to reduce the overhang for these type of properties as developers can market these range of products to foreign buyers.

We hope that the State authorities will follow suit on this criteria.

The government’s focus in improving the amenities and security for low and medium-cost stratified housing is very much-lauded, as it will help to improve the overall standard of living for the residents currently residing in such developments.

Tan Sri Leong Hoy Kum

Founder and group MD

MAH SING GROUP BHD

Lowering the threshold of high-rise property prices in urban areas from RM1million to RM600,000 in 2020 will have a positive impact as foreign buyers are a blue-ocean pool of potential buyers which can reduce the overhang of properties in this price point.

We also appreciate government’s willingness in listening to the market feedback and announcing improvement to the RPGT policy. Revising the base year for property acquired at Jan 1,2013 for assets acquired before Jan 1,2013 as compared to the previous base year of Jan 1,2000 will allow sellers to pay lower RPGT.

The announcement of the new Rent-To-Own scheme is favourable towards first time home buyers who are facing difficulties in coming up with the initial 10% down payment and securing end-financing as it serves as an alternative option for home-ownership.

We appreciate the government’s initiatives to help the youths and young married couples to own their first home by extending the BSN Youth Housing Scheme from Jan 1,2020 to Dec 31,2021.

The scheme is offered for financing the purchase of either completed, under construction or sub-sales properties priced from RM100,000 to RM500,000.

Datuk Khairussaleh RamliGroup MD

RHB Banking Group

Budget 2020 is comprehensive. It has an eye trained on fiscal discipline, and at the same time emphasis on stimulating the economy and strengthening public welfare.

Emphasis that has been placed on education would increase job opportunities and increase earning capability, in line with the recently launched Shared Prosperity Vision 2030.

Budget 2020 also offers incentives to attract global unicorns involved in high-tech areas, boosting FDIs. This would in turn significantly benefit local SMEs. In addition to that the Government also encourages SME transformation through digitalisation and automation, and being more export oriented. This would further boost efficiency and productivity of the SMEs.

We are also excited with developments in the digital space, especially in the ongoing digital transformation drive with the issuance of virtual bank licenses.

Tengku Datuk Seri Zafrul AzizCEO

CIMB GROUP HOLDINGS BHD

As a strong proponent and enabler of digital banking, we welcome the initiative to advance the nation’s cashless agenda by boosting the use of e-wallets, through the one-time RM30 digital stimulus per qualified Malaysian.

Further, the enabling policies for SMEs to embrace digital in running their business are well thought out.

Going digital is crucial for them to capitalise on the potential afforded by the regional and global e-commerce industry.

CIMB also looks forward to BNM’s announcement on the digital banking licence, which we will definitely consider.

We welcome the government’s support for SRI Sukuk, as well as tax incentive for investments in renewable energy technology right through to 2023.

In particular, the generous 10-year 70% tax exemption for solar leasing technology, together with CIMB’s SME Renewable Energy Financing package will be a definite boost to SMEs’ adoption of renewable energy

Abrar A. AnwarMD and CEO

Standard Chartered Malaysia

The bank welcomes the move by the Malaysian government to introduce special investment packages worth up to RM1bil a year for five years to Fortune 500 companies, “global unicorns” as well as local companies that are able to break through to international markets.

Being a financial institution dedicated to promoting the growth and development of dynamic SMEs, we are pleased to see RM300mil worth of allocations to support SMEs that have the potential to become regional players.

We support the government’s commitment in moving Malaysia towards a digital economy via various tax incentives, setting up one-stop digital improvement centres nationwide, as well as stimulation packages to boost adoption of e-wallets.

Islamic financing is another area in which the government has clearly prioritised.

We believe that continued tax exemptions on shariah-compliant and sustainable and responsible investment (SRI) funds will further spur the growth of Malaysia’s Islamic capital market.

Anushka ShahVice-president - Senior Analyst, Sovereign Risk Group

Moody’s Investors Service

The budget’s emphasis on backing higher-value added industries and on infrastructure development (both social and physical) will support growth against a challenging global environment.

However, set against a projected contraction in revenues, the expanded budget puts the government’s original 3% deficit target for 2020 further out of reach.

Fiscal strength will continue to constrain Malaysia’s credit profile, although the focus on some inclusive growth measures will be credit positive for the country if sustained over time.

Cormac O’Rourke MD

JTI Malaysia

While we welcome the government’s allocation of RM235mil to purchase 20 additional cargo scanners to be placed at strategic ports of entry, it must be noted that eliminating smuggling completely will not be achievable so long as there are human elements that intervene into the proper enforcement of laws.

Several key measures including the establishment of an independent body to lead a special taskforce on addressing illegal cigarette sales, a ban on transhipment of cigarettes and a further 2-year moratorium of tobacco excise increases are needed in conjunction with enforcement if there is to be any improvement.

Mohd Khairil Abdullah

CEO

Boost

The Government’s e-wallet stimulus initiative will drive the adoption of e-wallets as an exceedingly convenient method of payment for consumers.

It can also be viewed as a form of endorsement of the technology used which is safe and very secure for financial transactions

Nik Amlizan MohamedChief executive

Lembaga Tabung Angkatan Tentera

LTAT welcomes the 12% increment in budget allocation for the Ministry of Defence from RM 13.9bil to RM15.6bil for the 2020 fiscal year. This increment bodes well for us given that it provides opportunities to companies under the current LTAT stable that are key participants in the maritime sector, with current projects with the Ministry.

In addition, the Government’s move to expand the Bantuan Sara Hidup scheme is indeed great news particularly for our Armed Forces veterans. This timely measure will help our veterans better manage the rising cost of living.

We are particularly pleased with the Rent To Own (RTO) financing scheme that was announced as it will positively impact our ability to sell the remaining unsold condominium units owned by LTAT. Moreover, LTAT will be offering 2500 units of affordable homes in Taman LTAT Bukit Jalil to members of the Armed Forces in the coming fiscal year which should also benefit from the RTO scheme.

With people-centric measures that are solidly routed in the reality of our current economic climate, LTAT is positive that Budget 2020 will stimulate a year of shared growth.

Tan Sri Teh Hong PiowFounder, chairman emeritus, director and adviser

PUBLIC BANK BHD

The government is cognisant about driving growth in the new economy and digital era. We welcome the measures to make Malaysia as a preferred destination for investment, accelerating the digital economy, enhancing access to financing for businesses as well as strengthening the diversity of the Malaysian economy. In particular, we note that the Government is also developing the relevant infrastructures to enhance the ecosystem to drive growth, for example, economic zones, transportation, 5G connectivity and digital applications.

Datuk Abdul Farid Alias Group president and CEO

MALAYAN BANKING BHD

There is an array of customised incentives targeted to stimulate investments and develop enabling infrastructure for 5G technology and Industry 4.0, which shows the government’s commitment in accelerating economic growth to be supported by the growth in digital economy.

There is also an initiative to encourage the SME sector to digitise their operations. Perhaps what we can add in this area is an effort to re-skill the work force, and to curate an environment where an evolution towards digital immersion will not just be allowed but encouraged.

Taufiq Iskandar Jamingan

Fund Manager & teaching assistant

Westminster Business School, London

The Budget provides highly targeted intervention to boost private investment especially on promoting automation as well as digitalisation for Small and Medium Enterprises (SMEs).

The move to consolidate Development Financial Institutions (DFIs) may also strengthen the credit mechanism to support SMEs within strategic sectors.

It also provides further clues as to how the government intends to reduce the income and wealth gaps by promoting employment as well as reducing the dependency on foreign labours.

"Malaysians@Work" initiatives enlist strategies as well as incentives to promote employment opportunities amongst targeted groups. The introduction of the 30% income tax rate for those with annual income exceeding RM2mil is a step in the right direction albeit no consideration for wealth tax presently.

The Budget also recognises a few critical issues such as housing affordability and the rising cost of living. It also acknowledges the rising incident of unsold properties as well as credit access for first-time homebuyers.

I look forward to the newly introduced "Rent-to-Own" scheme that can provide an affordable way to get on the housing albeit the devil is in the detail. Based on the experience overseas, the success of such a scheme depends on the details and implementation. The government may need to address the reality of persistently high prices of basic food that has more to do with increasing food import bill.

The Budget assures that the economic momentum remains with a 4.8% GDP growth expected next year contrary to the mainstream view that the world economy is moving into troubled waters. Warning lights come in the form of trade tensions, geopolitical disruptions, currency movements, and growth deceleration of major trade partners.

I urge the government to be nimble, and if outlook changes, to come out with counter-cyclical measures that buffer the Malaysian economy against deteriorating external environment and economic shocks.


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