Monday, May 3, 2010

20100503 0939 Malaysian Economic News.

Broad money (M3) grew at a higher annual rate of 8.7% in March (8.2% in Feb) underpinned by capital inflows, said Bank Negara Malaysia (BNM).The level of nonperforming loans, including impaired loans, remained stable at 1.8% of net loans as of March (1.9% as of Feb). Total deposits placed with the banking system increased by RM20bn on a month-on-month basis to RM1.07tr in March. On an annual basis, deposits expanded at a higher rate of 8.4% (7.4% in Feb). (Bernama) Please see our Economic Update for further details

Tun Abdullah Ahmad Badawi said he signed a land and sea boundary agreement with Brunei on 16 Mar 09 in which two overlapping offshore exploration fields came under Brunei after it was approved by the Malaysian Cabinet on 11 Feb 09. He confirmed that Block L and Block M concessions now belonged to Brunei but the agreement provided that Malaysia would be allowed to participate in joint development of oil and gas on a commercial basis in the two areas for a period of 40 years.
  • Details of this would be further discussed and thus, in so far as oil and gas resources, the agreement was not a loss for Malaysia, he added. 
  • While Dr Mahathir said the loss of the two blocks cost Malaysia at least US$100bn (RM320bn) from an estimated reserves of almost 1bn barrels of oil. (Bernama)
PM Datuk Seri Najib Tun Razak is confident that talks to resolve sea and land boundary issues between Malaysia and Brunei will result in a win-win solution for both countries. He said that both countries were negotiating the matter as a package, covering all aspects such as the role which Petronas could play with regard to exploration and development, and investment opportunities for Brunei corporations in Malaysia. (Bernama)

The National Economic Advisory Council (NEAC) is currently studying cutting the rate of corporate and individual income taxes, and moving towards a broad-based tax system such as goods and services tax (GST). "One of the proposals we are considering is lowering the taxes by 1%-pt every year for the next 3-5 years. We might begin by replacing the current service tax with GST which will exlude food and basic necessities,” said NEAC member Prof Danny Quah. (Bernama)

A total of 1,493,837 taxpayers submitted their income tax return forms via e-filing as at midnight last Friday, slightly less than the target of 1.5m set by the Inland Revenue Board (IRB) for this year. However, the figure is 18.78% higher compared to 1.3m e-filing usage in 2009. It also noted that total collection for 2009 was expected to remain flat at around RM89bn, similar to 2008's collection, even though there was an increase in the number of tax payers. (Bernama)

Malaysia's participation at the Shanghai World Expo is a good way to achieve the target of attracting 1.2m visitors from China this year, Tourism Minister Datuk Seri Dr Ng Yen Yen said. She said her ministry also hoped to attract investors from China to invest in tourism related products like restaurants or invest in property through the "Malaysia My Second Home" programme. (Bernama)

The Energy, Green Technology and Water Ministry has proposed that financial institutions provide installment payment plans for energy-saving goods. Minister Datuk Seri Peter Chin Fah Kui said the Finance Ministry could give incentives to financial institutions to come up with such facility so that the public could afford to enjoy these appliances. (Bernama)

Malaysia and the Gulf countries can join hands in creating more opportunities to boost trading in the secondary sukuk market, said Labuan Financial Services Authority (Labuan FSA) Deputy Director-General, Danial Mah Abdullah. According to a news report, the GCC is poised to play a key role in driving the global Islamic bond market to a two-fold growth of about US$200bn in 2010. (Bernama)

The government, via the Finance Ministry, is studying the possibility of allowing foreign companies to participate in government procurement contracts. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said this would enable Malaysia to participate in the Trans-Pacific Partnership (TPP) agreement. (Bernama)

Human Resource Minister Datuk Dr S Subramaniam
said a decision on the proposed pay rise for security guards in the private sector, effectively 1 Jul, would be made on Thursday or Friday. (Malaysian Reserve, Bernama)

SME Corp Malaysia has suspended all grants indefinitely as it restructuring funding facilities to stop abuses in the system. Grants under SME Corp will not be renewed even in the 10th Malaysia Plan (10MP) period, its CEO Datuk Hafsah Hashim said. Last year, SME Corp was allocated some RM300m by the government. The allocation for this year was reduced to only RM24m.“From now on we plan to offer soft loans through the Malaysian Industrial Finance Bhd with low interest rates of 4%,” she added. (BT)

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