Industry's reaction to Budget 2010/2011
Ho Hon Sang, Managing Director, Property Development Division, Malaysia, Sunway City Berhad:
Overall, it is a very rakyat-friendly budget and we are supportive of the Government's actions to transform the nation in a developed and high-income economy for sustainable development.'' The higher budget of RM212 billion reflects the Government's commitment to implement its economic initiatives as well.
We also believe that the stamp duty exemption of 50% on instruments of transfer on a house price not exceeding RM350,000 for 1st-time house buyers will help spur the property sector and enable lower-income groups to enjoy more affordable homes.
The development of the Malaysian Rubber Board land in Sungai Buloh will also translate to more opportunities within the property sector. We are also heartened that the Government is committed to develop green TECHNOLOGY [] to ensure sustainable development.
As a property developer that is focused on building green buildings, we will continue with our initiatives to develop environmentally-friendly and energy-efficient homes.
The Greater KL MRT project when completed will help to improve connectivity which will also have a positive impact for the property sector.
All in all, we're optimistic that this budget will generate a feel-good factor among house buyers and investors, and this will certainly augur well for the industry.
Gan Eng Peng, Head of Equities of HwangDBS Investment Management Bhd (HwangDBS IM).
A Market Neutral Budget
This is a market neutral budget as the bulk of the market moving announcements have already been factored in, with the evidence in the recent strength in CONSTRUCTION [] and building material stocks.
The 2011 Budget is focused on achieving the recently announced Economic Transformation Plan (ETP), which essentially benefits key stock market sectors like construction, building materials and property.
Our Market Outlook --'' Malaysia & ASEAN region
Our medium-term outlook remains bullish on Malaysia.'' The economic forecast and government stance of loose monetary policy, controlled inflation outlook, falling deficit, continued economic growth and finally, reasonable valuations, is the backbone needed for continued KLCI ascension into 2011.
In particular, market activity will be pique by the detailed economic roadmap in ETP and likely surge of news flow on the numerous entry point projects (EPP).
The recent strength of the Ringgit, if sustained, will translate into lower input costs for most listed corporations.'' Corporate earnings growth is therefore, going to be stronger than what the market has expected in the beginning of 2010.
The Malaysia market has been rallying hard, together with the developing markets of Asean such as Thailand, Philippines and Indonesia.'' This is on the back of coordinated currency moves in these markets.
Going forward, our sense is that Asean markets, including Malaysia, will remain firm but it may start to underperform the lagging markets of China/Hong Kong and possibly Singapore.
Malaysian Stock Market
As mentioned above, the KLCI will continue its ascension into 2011. So far, the bulk of the index rally has been based around a narrow focus of foreign favorite stocks like CIMB, MRCB, UEM Land, Air Asia and the likes.
We think as the bull market goes into the second phase, second liner blue chips-like will gather more activity as investors look for value and laggards.
Risk to our View
The risks are that the market remains skeptical of the Government execution ability.'' Signs of such and deviation from the roadmap will hold back more enthusiastic buying activity.'' Some of the funding for the mega projects remains unclear.
The private companies would not be able to fund it without explicit government guarantees involved.'' The market is weary of too many government guaranteed semi-government entities coming to the market to raise money.
This is in effect government 'off balance sheet' fund-raising and if added back to the budget, is in fact increasing the deficit. So while there is a reduction of budget deficit and direct government bond issuance, the market might not like the indirect fund raising route.
Bobbi Dangerfield, Managing Director, Dell Global Business Center Sdn Bhd:
On Human Capital development
The catalyst for a developed nation is a rich pool of highly qualified, skilled and knowledgeable workers.
However, Malaysia is in dire need of nurturing more knowledge workers and strengthening the talent pool in the country to propel the country's economy to greater heights.
It is evident that there is a shortage of skilled workers who are innovative and capable enough to meet the growing demands of the market, especially in the ICT industry. For this reason, I believe initiatives such as the Talent Corporation to be established in 2011 and aimed at attracting human capital including Malaysians working overseas, will certainly help catapult the country to become a developed nation by 2020.
Thus, we welcome the allocation of RM29.3 billion, RM10.2 billion and RM627 million to the Ministry of Education, Ministry of Higher Education and Ministry of Human Resources respectively, to optimise the nation's human capital base.
The allocation of RM200 million from the Human Resource Development Fund to be used by companies to fund specific training programmes for employees, is another positive step.
We also welcome the allocations and programme for education and training institutions that are aimed at up-skilling and re-skilling of workers with technical skills.
With these initiatives and allocations in place, we believe there is great potential to source local talent in the future, with the necessary soft skills and technical talent.
Dell is committed to continue working with the government and the education sector to ensure the nation's talent pool grows, and that our knowledge workers contribute positively towards the development of the country.
Vlasta Berka, General Manager, Nokia Singapore/Malaysia & Brunei
Nokia applauds the Prime Minister and Minister of Finance, Datuk Seri ''Najib Razak, for tabling a very forward-looking Budget 2011, which focuses on several critical growth factors shared by other major economies globally.
We are in full agreement that to achieve this, enhancing ICT is critical.
Nokia is particularly encouraged'' by the Government's proposal to make all types of mobile phones, not just phones with various applications such as internet and personal digital assistants (PDAs), exempt from the existing 10% sales tax.
As more mobile devices are able to access the internet, including the more affordable models, the divide between 'ordinary' phones and feature phones is increasingly closing in.
Furthermore, in today's era of connectivity and with the continued rise in social media, we have always viewed mobile technology as a staple and a must-own, rather than a luxury.
Beyond this, Nokia echoes the Prime Minister's view that an innovative digital economy is key in achieving the target of becoming a high-income nation.
We believe that mobile content development is a significant engine and growth catalyst within the digital economy.
We are supportive of the Government's investment of RM119 million in the MY Creative Content Programme to encourage the development and creation of local content.
Nokia is fully aligned with the Government in our initiatives to invest in local content development through partnerships with local higher learning institutions, mobile operators and content developers.
We already know that content is king in today's market but there can be no substitute for good quality local content in further driving the adoption of the internet, mobile and otherwise.
Geoffrey Briscoe, Managing Director, BMW Group Malaysia
While BMW Group Malaysia is pleased to hear of the government's continued focus on the development of Green Technology and commitment to reducing carbon emission intensity, we hope that the government will provide the full details regarding its plans to introduce the B5, Blending of Biofuels with Petroleum Diesel Programme prior to making it mandatory by June 2011.
Biodiesel in the form of esterified Palm Methyl Ester (PME) can and have been used as a cleaner fuel alternative in some parts of the world when blended in small amounts with natural petroleum Diesel.
However, the most pressing issue that needs to be addressed locally is to ensure that fuel standards in Malaysia are collectively improved to Euro IV standards as a minimum, as this would be the most effective and wide spread method of reducing carbon emission intensity throughout the Malaysian passenger and commercial vehicle segments.
Furthermore, it is vital that the government also introduce incentives to encourage the ownership of Advanced Diesel vehicles in Malaysia, such as was done with the extension of import and excise duty exemption on hybrid vehicles. The fact of the matter is that while Hybrids are designed to be environmentally friendly, they are not the one all and be all solution to promoting sustainability or reducing carbon emissions.
As a matter of fact, under current standards established by the United Nations, the definition of hybrid cars requires that their engine specifications are of at least Euro 3 specification technology and have achieved not less than a 25% increase in combined city-highway fuel economy, relative to a comparable non-hybrid vehicle with a maximum carbon monoxide (CO) emission rating of 2.3 grams per kilometre.
Advanced Diesel engines such as those developed by BMW are already available with Euro 3 technology and specifications.
Additionally, the fuel economy comparison between a BMW 320d and the BMW 320i will provide consumers with a 40% reduction in fuel consumption, not to mention a CO2 emission rating of only 0.326 grams per kilometre.
Based on these points alone, Advanced Diesel vehicles should be viewed as far exceeding the 'Green' requirements and would significantly boost the government's efforts to reduce carbon emissions, particularly, in light of Malaysia's ongoing commitment to reduce carbon emission intensity per Gross Domestic Product (GDP) by 40% in the year 2020 to 2005 emission levels.
Ho Hon Sang, Managing Director, Property Development Division, Malaysia, Sunway City Berhad:
Overall, it is a very rakyat-friendly budget and we are supportive of the Government's actions to transform the nation in a developed and high-income economy for sustainable development.'' The higher budget of RM212 billion reflects the Government's commitment to implement its economic initiatives as well.
We also believe that the stamp duty exemption of 50% on instruments of transfer on a house price not exceeding RM350,000 for 1st-time house buyers will help spur the property sector and enable lower-income groups to enjoy more affordable homes.
The development of the Malaysian Rubber Board land in Sungai Buloh will also translate to more opportunities within the property sector. We are also heartened that the Government is committed to develop green TECHNOLOGY [] to ensure sustainable development.
As a property developer that is focused on building green buildings, we will continue with our initiatives to develop environmentally-friendly and energy-efficient homes.
The Greater KL MRT project when completed will help to improve connectivity which will also have a positive impact for the property sector.
All in all, we're optimistic that this budget will generate a feel-good factor among house buyers and investors, and this will certainly augur well for the industry.
Gan Eng Peng, Head of Equities of HwangDBS Investment Management Bhd (HwangDBS IM).
A Market Neutral Budget
This is a market neutral budget as the bulk of the market moving announcements have already been factored in, with the evidence in the recent strength in CONSTRUCTION [] and building material stocks.
The 2011 Budget is focused on achieving the recently announced Economic Transformation Plan (ETP), which essentially benefits key stock market sectors like construction, building materials and property.
Our Market Outlook --'' Malaysia & ASEAN region
Our medium-term outlook remains bullish on Malaysia.'' The economic forecast and government stance of loose monetary policy, controlled inflation outlook, falling deficit, continued economic growth and finally, reasonable valuations, is the backbone needed for continued KLCI ascension into 2011.
In particular, market activity will be pique by the detailed economic roadmap in ETP and likely surge of news flow on the numerous entry point projects (EPP).
The recent strength of the Ringgit, if sustained, will translate into lower input costs for most listed corporations.'' Corporate earnings growth is therefore, going to be stronger than what the market has expected in the beginning of 2010.
The Malaysia market has been rallying hard, together with the developing markets of Asean such as Thailand, Philippines and Indonesia.'' This is on the back of coordinated currency moves in these markets.
Going forward, our sense is that Asean markets, including Malaysia, will remain firm but it may start to underperform the lagging markets of China/Hong Kong and possibly Singapore.
Malaysian Stock Market
As mentioned above, the KLCI will continue its ascension into 2011. So far, the bulk of the index rally has been based around a narrow focus of foreign favorite stocks like CIMB, MRCB, UEM Land, Air Asia and the likes.
We think as the bull market goes into the second phase, second liner blue chips-like will gather more activity as investors look for value and laggards.
Risk to our View
The risks are that the market remains skeptical of the Government execution ability.'' Signs of such and deviation from the roadmap will hold back more enthusiastic buying activity.'' Some of the funding for the mega projects remains unclear.
The private companies would not be able to fund it without explicit government guarantees involved.'' The market is weary of too many government guaranteed semi-government entities coming to the market to raise money.
This is in effect government 'off balance sheet' fund-raising and if added back to the budget, is in fact increasing the deficit. So while there is a reduction of budget deficit and direct government bond issuance, the market might not like the indirect fund raising route.
Bobbi Dangerfield, Managing Director, Dell Global Business Center Sdn Bhd:
On Human Capital development
The catalyst for a developed nation is a rich pool of highly qualified, skilled and knowledgeable workers.
However, Malaysia is in dire need of nurturing more knowledge workers and strengthening the talent pool in the country to propel the country's economy to greater heights.
It is evident that there is a shortage of skilled workers who are innovative and capable enough to meet the growing demands of the market, especially in the ICT industry. For this reason, I believe initiatives such as the Talent Corporation to be established in 2011 and aimed at attracting human capital including Malaysians working overseas, will certainly help catapult the country to become a developed nation by 2020.
Thus, we welcome the allocation of RM29.3 billion, RM10.2 billion and RM627 million to the Ministry of Education, Ministry of Higher Education and Ministry of Human Resources respectively, to optimise the nation's human capital base.
The allocation of RM200 million from the Human Resource Development Fund to be used by companies to fund specific training programmes for employees, is another positive step.
We also welcome the allocations and programme for education and training institutions that are aimed at up-skilling and re-skilling of workers with technical skills.
With these initiatives and allocations in place, we believe there is great potential to source local talent in the future, with the necessary soft skills and technical talent.
Dell is committed to continue working with the government and the education sector to ensure the nation's talent pool grows, and that our knowledge workers contribute positively towards the development of the country.
Vlasta Berka, General Manager, Nokia Singapore/Malaysia & Brunei
Nokia applauds the Prime Minister and Minister of Finance, Datuk Seri ''Najib Razak, for tabling a very forward-looking Budget 2011, which focuses on several critical growth factors shared by other major economies globally.
We are in full agreement that to achieve this, enhancing ICT is critical.
Nokia is particularly encouraged'' by the Government's proposal to make all types of mobile phones, not just phones with various applications such as internet and personal digital assistants (PDAs), exempt from the existing 10% sales tax.
As more mobile devices are able to access the internet, including the more affordable models, the divide between 'ordinary' phones and feature phones is increasingly closing in.
Furthermore, in today's era of connectivity and with the continued rise in social media, we have always viewed mobile technology as a staple and a must-own, rather than a luxury.
Beyond this, Nokia echoes the Prime Minister's view that an innovative digital economy is key in achieving the target of becoming a high-income nation.
We believe that mobile content development is a significant engine and growth catalyst within the digital economy.
We are supportive of the Government's investment of RM119 million in the MY Creative Content Programme to encourage the development and creation of local content.
Nokia is fully aligned with the Government in our initiatives to invest in local content development through partnerships with local higher learning institutions, mobile operators and content developers.
We already know that content is king in today's market but there can be no substitute for good quality local content in further driving the adoption of the internet, mobile and otherwise.
Geoffrey Briscoe, Managing Director, BMW Group Malaysia
While BMW Group Malaysia is pleased to hear of the government's continued focus on the development of Green Technology and commitment to reducing carbon emission intensity, we hope that the government will provide the full details regarding its plans to introduce the B5, Blending of Biofuels with Petroleum Diesel Programme prior to making it mandatory by June 2011.
Biodiesel in the form of esterified Palm Methyl Ester (PME) can and have been used as a cleaner fuel alternative in some parts of the world when blended in small amounts with natural petroleum Diesel.
However, the most pressing issue that needs to be addressed locally is to ensure that fuel standards in Malaysia are collectively improved to Euro IV standards as a minimum, as this would be the most effective and wide spread method of reducing carbon emission intensity throughout the Malaysian passenger and commercial vehicle segments.
Furthermore, it is vital that the government also introduce incentives to encourage the ownership of Advanced Diesel vehicles in Malaysia, such as was done with the extension of import and excise duty exemption on hybrid vehicles. The fact of the matter is that while Hybrids are designed to be environmentally friendly, they are not the one all and be all solution to promoting sustainability or reducing carbon emissions.
As a matter of fact, under current standards established by the United Nations, the definition of hybrid cars requires that their engine specifications are of at least Euro 3 specification technology and have achieved not less than a 25% increase in combined city-highway fuel economy, relative to a comparable non-hybrid vehicle with a maximum carbon monoxide (CO) emission rating of 2.3 grams per kilometre.
Advanced Diesel engines such as those developed by BMW are already available with Euro 3 technology and specifications.
Additionally, the fuel economy comparison between a BMW 320d and the BMW 320i will provide consumers with a 40% reduction in fuel consumption, not to mention a CO2 emission rating of only 0.326 grams per kilometre.
Based on these points alone, Advanced Diesel vehicles should be viewed as far exceeding the 'Green' requirements and would significantly boost the government's efforts to reduce carbon emissions, particularly, in light of Malaysia's ongoing commitment to reduce carbon emission intensity per Gross Domestic Product (GDP) by 40% in the year 2020 to 2005 emission levels.
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