Rosy outlook for Penang 2014: Strong growth, rise in FDI seen

A roundtable organised by KPMG Penang this week at KPMG new office, the Hunza Tower in Kelawei Road, George Town concludes that Penang will continue to enjoy high economic growth in 2014 and attract foreign direct investors.

Its tourism and property sectors will stay buoyant this year and the recovery in its electrical and electronic sector will continue into 2014.

Penang’s GDP growth in 2013 is estimated to be slightly less than 5%, according to official data.

“Penang remains a highly attractive location for local and foreign investors alike. It is also noteworthy that Penang ranks as one of the top emerging business processing locations worldwide.

“We certainly see healthy prospects for Penang across several industries,” said Johan Idris, managing partner of KPMG in Malaysia.

Penang’s property sector was also expected to maintain its 2013 growth momentum through 2014, he added in a KPMG statement this week.

“The uptrend in businesses and Penang as a desirable location has led to the consistently high demand for both residential and commercial properties on the island.

KPMG Penang, which highlighted tourism as a key sector for the state, expected tourism to remain a mainstay for the state in terms of revenue.

“As a designated UNESCO World Heritage site since 2008, tourist arrivals have steadily increased 14% as at October 2013 recording 4.4 million tourists.

“Penang’s hospitality industry is expected to chalk good returns, particularly as occupancy rates are slated for an upswing. Tourist arrivals are not limited to the ASEAN region but also from across the globe.”

KPMG Penang’s partner, Ooi Kok Seng, said: “The electrical and engineering sector, specifically solar energy equipment manufacturers, has seen a renewed demand.

“We believe that the positive turnaround will continue into 2014 due to the government’s allocation of additional land bank in Batu Kawan. Slated for development, Batu Kawan is an extension of the Bayan Lepas Free Trade Zone which is currently facing limited land space due to rapid expansion.”

KPMG Penang also said foreign direct investments (FDIs) were expected to escalate in 2014 as a result of the completion of major restructuring projects in Penang.

It foresaw additional advisory work in relation to mergers and acquisitions (M&A), transaction and restructuring projects. –The Edge

Rosy outlook for Penang

PENANG can expect strong economic growth this year following the upgrade in ranking by Moody’s Investor Service outlook in November.

KPMG Penang Partner-in-Charge Ooi Kok Sheng said the rating upgrade was an encouraging sign for the country.

“With active steps taken by the Government to implement fiscal reforms, Malaysia remains resilient amidst global economic uncertainty,” said Ooi.

He was speaking during KPMG Penang’s inaugural Economic Outlook Roundtable session at their new office at the Hunza Tower in Kelawei Road, George Town.

“Penang remains a highly attractive location for local and foreign investors alike.

“It is also noteworthy that Penang ranks as one of the top emering business processing locations worldwide.”

He said KPMG Penang saw tourism as a key sector for the state and expected it to remain as the mainstay for the state government in terms of revenue.

“Penang’s hospitality industry is expected to chalk good returns, particularly as occupancy rates are slated for an upswing.

“Tourist arrivals are not limited to the Asean region. The state has many visitors from all over the globe.”

Ooi also anticipated a sustained demand for audit, tax and advisory work in 2014.

“With Penang as a manufacturing and export hub for the northern region and dubbed the semiconductor Silicon Valley of Malaysia, many public-listed companies have based their operations in the state,” he said.

Malaysian Association Hotels (Penang Chapter) chairman Mary Ann Harris said prospects for the state’s tourism sector looked good in Visit Malaysia Year 2014.

“However, we are not without our problems as we are in urgent need of a viable public transportation system,” said Harris.

Penang Rehda chairman Datuk Jerry Chan said the state should benchmark according to international standards, rather than local.

“We have been noted as one of the best food destinations in the world and one of the most liveable cities in the world,” he said.

“It is time for us to set a global benchmark in other sectors.”

- The Star/Asia News Network

'Penang set for healthy growth'

THE opening of the Second Penang Bridge, six new hotels and an influx of medical tourists into the state are expected to keep Penang's economy healthy this year, say captains of various industries.

Malaysian Association of Hotels (MAH) Penang chapter chairman Dr Mary Ann Harris said the soon-to-be opened longest bridge in Southeast Asia is expected to be a tourism draw.

"There is definitely going to be more tourists drawn to the new bridge and we expect many of them to participate in the Penang Bridge International Marathon 2014, which is expected to be held at the second bridge," she said.

The RM4.5 billion Second Penang Bridge, which connects Batu Maung on the island to Batu Kawan in the mainland, serves as a second land crossing after the first Penang Bridge was opened in 1985.

Harris was speaking after presenting Penang's economic outlook for 2014 at a roundtable session hosted by audit, tax and advisory firm KPMG Penang here yesterday.

The roundtable, which was opened by state executive councillor Datuk Abdul Malik Abdul Kassim; also saw presentations from the Real Estate and Housing Developers Association (Rehda), Penang branch chairman, Datuk Jerry Chan; the Free Industrial Zone, Penang, Companies' Association president Heng Huck Lee; investPenang general manager Loo Lee Lian; and Malaysian American Electronics Industry (MAEI) Association chairman Datuk Wong Siew Hai.

Also present were KPMG Malaysia managing partner Johan Idris and KPMG's northern region partner-in-charge Ooi Kok Seng.

Harris said the state's tourism sector is expected to see the entry of six new hotels of two- to five-star, and the availability of some 1,000 room keys.

MAH Penang's membership is made up of 50 hotels with a total of 10,000 room keys.

Among the new properties expected to open their doors include the Royale Bintang and Rice Miller Hotel, which are both located at Weld Quay.

Other projects are said to include a hotel in Seberang Jaya and serviced apartments in Teluk Kumbar on the island.

Meanwhile, Penang Health Association chairman Datuk Dr Chan Kok Ewe told the roundtable session that seven private hospitals in Penang (with a total of over 1,000 beds), which are members of the association, had recorded RM370 million in revenue from medical tourists last year.

"Prospects for this sector are encouraging. There have also been suggestions to make Yangon in Myanmar a sister city of George Town in Penang, due to the shared heritage of the two cities.

"There is also anticipated demand from medical tourists in China but whether our hospitals, which have been making significant investments with expansion programmes to cater to medical tourists, can cope with the capacity is the question," he added, saying that private hospitals in the state are also experiencing manpower shortage.

Meanwhile, Johan in his welcoming address, said KPMG Penang expects the state's property sector to maintain its momentum throughout this year.

"The industry has certainly fared positively with healthy uptake in retail, residential and industrial lots and is indeed diverse, given the many types of businesses operating in there."

- Business Times

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There’s no place like Penang, said Briton

Briton lured by multiracial culture to settle down in the Pearl of the Orient

Home sweet home: Makins, in his Scottish kilt, posing for a photograph with several hikers during a recent hiking trip up the Moon Gate Point Five trail in the Penang Municipal Park.

BRITON Jonathan Makins has travelled far and wide and lived in various places around the world but Penang has a special place in his heart.

Makins, 59, born in Italy to a Scottish father and an English mother, has been living in Penang since February 2012.

He hopes to continue staying in George Town, which he now calls home.

Currently enrolled under the ‘Malaysia, My Second Home’ programme, Makins has lived and worked in Africa, London and Sweden.

The avid traveller, who considers himself a global citizen, also spent four years in Bangkok before coming to Penang.

“I wanted to stay in an Asian country as I love the climate here, which is better than in Europe,” he said.

“Besides, my Thai visa was coming to an end and I was also not very happy in Thailand.

“I visited Penang about four times before settling here, and I find that it is the right place for me.

“I visited Kuching, Sarawak, once but it is very quiet, while travelling to other areas there takes long hours. I have also been to Kuala Lumpur a few times but it was too noisy and dusty,” he said.

After he was born, Makins’ parents briefly brought him back to England before taking him to Tanzania when he was two.

“After Tanzania, I was raised in Nairobi, the capital of Kenya, when I was about six, before I left for school in England at the age of 10, while my parents remained in Kenya.

“After university, I worked as a civil and structural engineer in South Africa and Botswana for about nine years before becoming a cabinetmaker in London, England, for seven years,” he said.

Makins then went on to become an English teacher in Sweden for nine years before settling down in Thailand, where he spent the following four years.

“Having been to so many places, I consider myself a citizen of the world.

“As of now, I hope to continue staying in Penang. I love how it is so multiracial and everyone has friends of different races, religion and beliefs,” he said, adding that among his favourite delicacies were Indian vegetarian meals and simple home-cooked Chinese dishes.

Makins, who lives on his own at a condominium unit in Tanjung Bungah here, said besides the unique culture and heritage, he also found it easier ‘to make friends’ with the locals in Penang.

“The people here are friendlier and more hospitable when compared to some in other places that I have been to,” he added.

To keep fit, Makins goes hiking at the Moon Gate Point Five trail in the Penang Municipal Park at least twice a week, and recently he drew curious stares from hikers when he went there dressed in a Scottish kilt on Christmas Day.

“I also swim and keep in touch with friends through the Internet during my free time. Music is my main companion.

“I play the flute and am teaching myself the piano,” he said.

Makins, who was born in the Year of the Horse, added that he travelled to Bedong, Kedah, for the Chinese New Year celebrations with some friends.

By  Cavina Lim The Star/Asia News Network

Get an Islamic syariah home loans with discount on stamp duties

Boost for syariah home loans, Govt gives 20% stamp duties discount 

KUALA LUMPUR: Islamic home loans in Malaysia may beat last year’s record in 2014, as the Government provides tax incentives to get more people to use syariah-compliant borrowing, according to CIMB Group Holdings Bhd.

Mortgages that comply with the ban on interest climbed 30% in 2013 to an unprecedented RM61.9bil (US$18.7bil), Bank Negara data showed. Conventional home financing grew 10% to RM271bil, the same pace as 2012, even after the Government introduced property curbs to rein in speculation.

The Government is giving a 20% discount on stamp duties for mortgages that comply with religious tenets as it seeks to boost Islamic banking assets to 40% of the total by 2020 from 24%. The Government started holding monthly roadshows last year to create greater awareness of such financing principles, as it strives to enhance the nation’s status as a global syariah hub.

“There’s still strong potential for Islamic financing,” Badlisyah Abdul Ghani, chief executive officer (CEO) at CIMB Islamic Bank Bhd, a unit of CIMB Group, said in a phone interview in Kuala Lumpur on Wednesday. “The roadshows and the incentives are helping syariah mortgage growth.”

Malaysia is also trying to boost such mortgages by offering to waive stamp duties for the refinancing of existing home loans that don’t conform to syariah principles. Syariah-compliant property borrowings had risen an average 31% per annum over the past five years to account for 19% of the total RM333bil market in 2013, central bank data showed.

Syariah home loans differ from their conventional counterparts in that a bank typically buys the property on behalf of the customer and rents it back at a mark-up to avoid interest payments. Some of the more popular options include contracts such as Ijarah, Murabaha and Tawarruq.

The central bank cut the maximum duration on all mortgages to 35 years from 45 years in July to rein in household debt, which had risen an average 12% per annum since 2008. In October, the Government increased property gains taxes and imposed curbs on foreign ownership.

The nation’s Islamic banking assets had more than doubled to RM543bil in the past five years, according to October figures issued by the Treasury. Sales of syariah-compliant bonds, or sukuk, rose 69% in 2014 from the year-earlier period to RM5.9bil, data compiled by Bloomberg showed. Issuance totalled RM49bil last year after reaching a record RM95.8bil in 2012.

The Bloomberg-Aibim Bursa Malaysia Corporate Sukuk Index of ringgit-denominated debt fell 0.9% this year to 104.155 as of Feb 4, almost erasing last quarter’s 1.1% gain.

“Islamic mortgages complement conventional ones,” Syed Abdull Aziz Jailani Syed Kechik, CEO at OCBC Al-Amin Bank Bhd, the Islamic unit of Oversea-Chinese Banking Corp, said in a Feb 4 e-mail interview. “One of the draws can be said to be the efforts by the Government and central bank to boost the market through incentives related to taxes.”

Last year’s curbs failed to prevent Malaysia’s House Price Index from climbing 1.4% to a record 194 in the three months ended September, the 19th straight quarterly advance, according to data from the Finance Ministry.

Mortgage demand might also pick up this year, particularly in the first half, as property investors sought to guard against a potential acceleration in inflation, CIMB’s Badlisyah said.

Consumer prices climbed 3.2% in December from a year earlier, the biggest gain since November 2011, an official report showed on Jan 22. Costs may increase further after Tenaga Nasional Bhd raised electricity tariffs on Jan 1.

“The products that have been put out in the market have been very well-received both by Muslims and non-Muslims,” Baiza Bain, managing director at Amanie Advisors Sdn Bhd, a Kuala Lumpur-based Islamic finance consultancy, said in a phone interview on Wednesday. “Islamic finance is still very nascent compared to conventional finance. It definitely needs incentives to push the assets toward the right level.”

- Bloomberg

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