Saturday, June 12, 2010

World stocks rise for 4th day; euro steady

LONDON: World equities extended their relief rally into a fourth day on Friday, June 11 on optimism over global economic growth, while the euro steadied as it ran into headwinds above US$1.21 after three days of gains, according to Reuters.

Commodity prices eased, also snapping three days on the up, though crude prices held above US$75 a barrel.

Investors remained optimistic about China's growth, even though fresh data showed inflation in the world's third-largest economy quickened to a 19-month high in May while its factory output and capital spending moderated.

On Thursday, Beijing announced a sharp jump in May exports, boosting investors' confidence about its economy's strength as Europe grapples with a sovereign debt problem.

A string of successful government bond sales from the likes of Belgium, Portugal and Spain this week has also eased immediate concerns about funding problems for euro zone peripheral countries. Italy comes to the market later on Friday.

World stocks measured by the MSCI All-Country World Index advanced 0.4 percent, helped by a 1.7-percent rise in Tokyo's Nikkei average.

The World Index has gained 1.5 percent this week but is still down 7.7 percent this year.

"Europe should have a bit of a spring this morning following on from the Far East," said Justin Urquhart Stewart, director at Seven Investment Management.

The pan-European FTSEurofirst 300 put on 0.4 percent and the Thomson Reuters Peripheral Eurozone Countries Index added 0.5 percent.


EURO STEADY

The euro steadied at $1.2110 after a three-day rebound. Its climb petered out around $1.2150, where options were due to expire later in the day.

That level also provided technical resistance as the $1.2140-1.2160 region had provided support during the euro's downward move in May.

German government bonds struggled to make any headway after two sessions of steep falls as investors positioned for up to 7 billion euros (US$8.5 billion) of Italian debt supply.

"We've seen positive risk sentiment in Asia continuing and this has also spread into the European session so far," said Michael Leister, strategist at WestLB.

"The market is waiting for the results of the Italian auction. If this goes well, the relief sentiment we've seen over the past couple of sessions now will continue."

The two-year Schatz yield climbed 1 basis point to 0.529 percent, while the 10-year Bund yielded 2.635 percent, up 1.7 basis points.

Crude eased 0.5 percent but held above US$75 a barrel, while copper dipped 0.2 percent after three-day of rises. - Reuters




Wah Seong Corp unwilling to take on Socotherms's liabilities

GEORGE TOWN: WAH SEONG CORPORATION BHD [] (WSC) was unwilling to take on all the liabilities of world's number two pipe-coating Italian company Socotherm and hence it was not disappointed over its failure to win the bid for the latter.

WSC deputy managing director Giancarlo Maccagno said on Friday, June 11 that WSC walked away from Socotherm, which it had been pursuing for a year, as it was not willing to take on all the companies liabilities which Socotherm had insisted WSC take on.

"We knew the risks and they tried to push all the liabilities and wanted WSC to guarantee to on all other liabilities. We did not want to put the holding company at risk and despite the fact that ours was the best bid, they didn't agree and hence the winner was the consortium," he said after WSC's AGM.

To recap, Socotherm had favoured a proposal submitted by a consortium led by the world's biggest pipe coater, Bredero Shaw, and two private equity funds, 4D Global Energy Advisors of France and Sophia Capital of Argentina. A successful bid for Socotherm would have given Wah Seong immediate presence in Brazil, the Middle East and Gulf of Mexico.

However, Giancarlo was upbeat about the outlook for the pipe-coating business over the next one to two years due to the tremendous opportunities for WSC to set up pipe-coating plants in Europe.

WSC managing director and group chief executive officer Chan Cheu Leong estimated about US$170 billion would be invested in deepwater exploration and production in the next five years.

"There are opportunities for gas pipes from North Africa into Europe and from the Gulf of Mexico and Brazil," he said.

Chan said WSC would step up its search for mergers and acquisitions due to the deepwater exploration. These presented tremendous oppportunities for WSC's newly developed coating TECHNOLOGY [] for such projects.

"Deepwater developments present an opportunity as WSC is one of the few companies with the technology and track record and we want to expand our core O & G pipe-coating activities not only in the region but globally," he added.

The pipe coating division has commenced the coating operations for Chevron Australia Gorgon project, valued at RM551 million, that involves 850km of pipes to be installed in Australia.

The trial run for the Gorgon project in the first half of this year saw the Kuantan plant operating at 40% to 50% capacity and its capacity is expected to increased to 70% when the Gorgon contract goes into full production.


Axis Inc directors lodge police report over missing records

KUALA LUMPUR: AXIS INCORPORATION BHD []'s board of directors has lodged a police report over several official documents and records belonging to Axis and its units which have gone missing.

It said on Friday, June 11 that it had on Wednesday lodged the report over the missing records of the company and its units'' Asiapin Sdn Bhd, Chongee Enterprises Sdn Bhd and GBC Marketing Pte Ltd from 2004 to 2008 at the offices in Johor Baru, Tangkak and in Singapore.

The missing records included documents in relation to the purchase of machinery sent to contract manufacturers in Cambodia and/or Vietnam;'' bank statements and cheque butts; payment vouchers and supporting documents for payments made to the contract manufacturers in Cambodia.

Also missing were documents, letters, e-mails and correspondences between Axis group and the contract manufacturers; dcuments in relation to the orders placed with the contract manufacturers by buyers; documents of raw materials bought for the contract manufacturers (ncluding purchase orders and delivery orders).

The report also claimed that documents on the account of monies received from the Bumiputera issue in 2004 and the sale of Ganad assets in 2007-2008 were missing.

"As a result of the above missing records, Axis Group of companies in 2009 had to write off substantial amount of its assets and receivables due to the lack of documentary support of these assets and receivables," it said.

The company said the present Axis Board was unable to answer certain queries posed by Bursa Malaysia Securities Bhd.


Share prices end higher on positive note

KUALA LUMPUR: Share prices on Bursa Malaysia ended higher on Friday, June 11 bolstered by the rally on Wall Street and the release of encouraging export data from China, indicating the economy was returning to the growth path, dealers said.

The FBM KLCI added 3.36 points or 0.26% to close at 1,294.67, aided by gains mostly in Axiata, MISC, PPB, Genting and Maybank.

The 30-stock index traded between 1,294.67 and 1,302.07 throughout the day. Advancers led decliners 379 to 193 while 283 counters were unchanged.'' ''Volume declined to 501.72 million shares worth RM839.56 million from 733.253 million units valued at RM743.08 million on Thursday.

A dealer said the market was heading upwards with the benchmark climbing to the 1,324-level supported by overseas leads.

Overnight, the Dow Jones jumped 273.28 points 10,172.53, Nasdaq was up 59.86 points to 2,218.71 while the S&P 500 rose 31.15 points to 1,086.84.

Among Southeast Asian markets, Indonesian shares gained more than 1%, leading gains in most other Asean markets, as investors bought resource shares because of strength in oil prices.

Optimism that the world economic recovery was on track despite Europe's debt woes bolstered sentiment, although stock markets in Singapore, Thailand and Vietnam posted smaller gains.

Indonesia's index ended at its highest since June 7 but it posted a loss on the week of 0.76 percent despite foreign buying of US$79.18 million, down from last week's foreign buying of US$146 million.

Asia's second-best-performing market trades at a 12-month forward price-to-earnings ratio of 13.1, the highest in Southeast Asia, according to Thomson Reuters StarMine.

"Indonesian stocks look overvalued compared to the region. It has priced in recent positive factors, including a decision by Indonesia's central bank to keep its policy rate unchanged," said John Teja, a director at Ciptadana Securities in Jakarta.

"It's likely that the market will be weighed down next week by profit-taking," he said.

Among gainers in Jakarta, state gas operator PT Perusahaan Gas Negara rose 3.4 percent and energy firm PT Indika Energy was up 1.8 percent. Automotive firms also gained including a 0.6 percent rise in automotive distributor Astra International and a 3.7 percent rise in United Tractors.

Markets in the region performed worse than last week although Chinese economic data, which came out late in the week, helped shore up sentiment.

In Manila, the index climbed 1.3 percent on Friday, led by a 3.5 percent rise in Bank of the Philippine Islands, the country's third-biggest bank, and a 1.9 percent rise in Ayala Land.

Foreign investors were net buyers on the week in the Philippines and Vietnam, taking US$46.3 million and US510,000 respectively, according to Thomson Reuters data.

Bucking the trend, Thailand suffered net foreign selling of about US$100 million on the week, with foreigners still cautious
over the political situation in the country.

The Thai government is working on a reconciliation plan to mend political divisions and pave the way for elections after
bloody anti-government protests.

Among outperformers in Bangkok on Friday were property and media sectors, which gained after positive consumer confidence in May, with Pruksa Real Estate, the second-largest housing developer by market capitalisation, rising 4.4 percent.

In Singapore, banking shares extended gains amid optimism about growth in the city-state's economy, with top lender DBS Group Holdings and United Overseas Bank each rising more than 1%. - Bernama, Reuters


#Flash* Berjaya Corp says has MoF nod for sports betting, pending licence re-issuance

KUALA LUMPUR: BERJAYA CORPORATION BHD [] clarified Ascot Sports Sdn Bhd has the Minister of Finance's approval to conduct a sports betting operations and that the formal licence which was first issued in 1987 is pending re-issuance.

It said on Friday, June 11 there had been many conflicting discussions about the actual status of the approval given to Ascot to operate sports betting in the country.

To comply with the directive from Bursa Malaysia Securities Bhd, it reiterated certain parts of the announcement (dated May 12, 2010) to Bursa Malaysia.

BCorp said the May 12 statement stated: "The Minister of Finance has given its approval for the re-issuance to Ascot of the licence to carry out sports betting operations upon certain terms and conditions".

Another paragraph which listed out the approvals required, a sub-paragraph stated "The Minister of Finance for the re-issuance of the sports betting licence and the changes in shareholders and directors in Ascot, if required"

BCorp said on Friday that "as such it is evident from the above statements that Ascot has the approval from the Minister of Finance to conduct a sports betting operations and that the formal licence which was first issued in 1987 is pending re-issuance".


#Update:* Boustead buying 86% of Pharmaniaga for RM534m

KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] is strengthening its pharmaceutical business with the proposed acquisition of an 86.81% stake in PHARMANIAGA BHD [] for RM534 million.

Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said on Friday, June 11 the stake would be acquired from UEM Group Bhd.

The price'' works out to RM5.75 per share or a 12% premium to its last traded price on Thursday of RM5.10.

"We are confident this exercise will place us on a stronger footing to further build our pharmaceutical arm whichis part of the group's manufacturing and services division. Boustead Group's Idaman Pharma Marketing Sdn Bhd already has a presence in the growing healthcare industry," he said.

Lodin said Boustead expected to benefit from cost improvements following the streamlining and optimising of manufacturing facilities, production capacities between the Boustead group and Pharmaniaga's plants.

"We plan to expand our pharmaceutical business by seizing opportunities in ASEAN's biggest market, namely Indonesuia, via Pharmaniaga's existing logistic operations network there," he said.

Upon completion of the acquisition, the Boustead Group will undertake a manndatory general offer to acquire the remaining shares at an offer price comparable to the terms of sales and purchase agreement. The agreement was signed on Fridaty.

"Although we are bound to undertake a MGO, we have no intention of taking Pharmaniaga private. We intend to maintain its listed status as this is in line with our overall corporate strategy of retaining a select and valuable number of entities as public listed companies," he said.

Boustead and Pharmaniaga will resume trading on Monday, June 14.


Affin to complete Bank Ina Perdana acquisition by 3Q

KUALA LUMPUR: Affin banking group plans to complete its acquisition of a majority stake in Indonesia's PT Bank Ina Perdana by the third quarter of this year.

AFFIN HOLDINGS BHD [] group managing director Tan Sri Lodin Wok Kamaruddin said: 'We have got approval from the central bank to talk to Ina Perdana of Indonesia. It's a small bank, but it's a good start to have a footprint in Indonesia."

Speaking to reporters at an event for Affin's parent Boustead Group on Friday, June 11, he said Affin obtained Bank Negara Malaysia's approval to begin acquisition talks in January this year.

'I think we are almost there, we are taking majority stake,' added Lodin.

Following Affin's failed bid in competition with the Hong Leong banking group to takeover rival banking group EON CAPITAL BHD [], Affin was considering expansion through organic growth.

'Going on organic growth is one (option). We are doing quite well now, we have a strong balance sheet our capital is strong, our NPL has been brought down to 2.2% and this year we are targeting 1.9%, we have a good partner in Bank of East Asia and they have agreed to help us expand into the region into China,' he added.

Further takeover exercises either in Indonesia or domestically were, 'off our radar' for the moment, he added.


Friday, June 11, 2010

Japan PM warns of eventual default if debt not fixed

TOKYO: New Japanese Prime Minister Naoto Kan, seeking to lay the groundwork for a future sales tax rise, warned on Friday, June 11 that the country risked defaulting on its borrowing if it failed to rein in its massive public debt.

Kan, who took over the nation's top job after his unpopular predecessor quit abruptly last week, has made tackling a public debt that is already twice the size of Japan's GDP a top priority amid market concerns about sovereign debt risk.

"We cannot sustain public finance that overly relies on issuing bonds," Kan told parliament in his first policy speech.

"As we can see in the euro zone confusion that started from Greece, there is a risk of default if the growing public debt is neglected and if trust is lost in the bond market."

Kan spoke hours after his banking minister Shizuka Kamei ' an advocate of big spending, said he would quit the cabinet, improving the chances Kan can forge ahead with fiscal reform.

The departure of the outspoken Kamei, sparked by a spat over a controversial bill to roll back postal privatisation, removes one obstacle, but how aggressively Kan can implement fiscal reforms will depend on the results of an upper house election, likely on July 11.

Support for the Democrats, who must win the July vote, has jumped since Kan took over, and Kamei's resignation could be another plus, analysts said.

"It was a bit unusual for somebody from such a tiny political party to have this much importance, and with him gone the Kan administration is likely to strengthen its foundation going into the election," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities

"This could perhaps even lead to Kamei's party leaving the coalition ' and while this might seem like political instability to some foreign investors, this will really allow Kan's government a chance to stabilise."

PNP Secretary-General Shozaburo Jimi, an upper house lawmaker, was expected to be given the portfolio, since Kamei's small People's New Party (PNP) remains in the ruling coalition.

Fiscal reform plan, growth strategy
National Strategy Minister Satoshi Arai told reporters the government was aiming to compile a medium- and long-term plan for reining in debt by June 22 at the latest, and that he wanted to base the programme on capping government bond issuance at ''44.3 trillion (US$484.6 billion) in the year to March 31, 2012.

Kan, Japan's fifth premier in three years, has called for a bipartisan debate on raising Japan's 5% sales tax to help fund bulging social welfare costs in an ageing society, while Kamei has been cautious about such a move.

Fiscal reformers in the Democratic Party want an election manifesto due out soon to include a reference to increasing the tax after the next general election, due by late 2013.

Rating agencies have warned they could cut Japan's sovereign debt rating unless Tokyo crafts a credible plan to rein in debt.

But analysts say the Democrats, who swept to power promising to put more cash in consumers' hands to boost domestic demand, would need to abandon some election pledges to slash spending.

Kan also needs to twin his fiscal plans with a formula for engineering growth after decades of stagnation, experts say.

"Ideally, the plan should be grounded in a broader economic policy framework including pro-growth structural reforms and clarity on the monetary policy objective," Andrew Colquhoun, director at ratings agency Fitch's sovereigns ratings team, said in an email.

Election prospects
Kamei, known for attacks on free-market capitalism and pressing the Bank of Japan to do more to fight deflation, formed the PNP in 2005 with other rebels from the then-ruling Liberal Democratic Party to protest plans to privatise Japan Post.

He resigned after the Democrats rejected his call to extend the current session of parliament, set to end on June 16, to enact a bill that would roll back those privatisation plans.

Democrats want the upper house poll soon to capitalise on a big leap in voter support after Kan took over, and extending the session would have pushed back the upper house vote.

Analysts still question whether the Democrats can win an outright majority in the 242-seat upper house.

But the party's chances have clearly improved since Kan took over from indecisive Yukio Hatoyama, who quit with his ratings in tatters just nine months after the Democrats swept to power.

"My sense is that Kamei leaving will probably increase public support for Kan, because it looks as though he isn't going to be pushed around by Kamei," said Columbia University professor Gerald Curtis.

"I wouldn't put any money on it, but I think there is a chance of a majority," Curtis added.

"It all depends on how effective Kan is as prime minister." ' Reuters


Asian markets remain positive at midday

KUALA LUMPUR: Asian markets, including FBM KLCI, stayed in positive territory at midday on Friday, June 11 on the back of the overnight firmer close at Wall Street as well as on optimism that the world economic recovery was on track despite the looming euro zone debt crisis.

There was little impact from a spate of fresh Chinese data, according to Reuters.

The data showed China's inflation accelerated to a 19-month high in May while industrial output and fixed-asset investment growth moderated, sending mixed signals about the temperature of the world's third-largest economy.

At the regional markets, Japan's Nikkei 225 was up 1.78% to 9,712.37, Hong Kong's Hang Seng Index 1.34% to 19,895.48, Taiwan's TAIEX Index 1.69% to 7,303.44, the South Korean Kospi Index 0.92% to 1,666.92, the Shanghai Composite Index 0.36% to 2,571.86 and Singapore's Straits Times Index 0.35% to 2,789.24.

At Bursa Malaysia, the FBM KLCI did manage to briefly breach the 1,300-point psychological level in early trade when it rose more than 10 points, but at midday, it gave up some of its earlier gains and was up 6.04 points to 1,297.35.

Gainers led losers by 347 to 135, while 226 counters traded unchanged. Volume was 276.86 million valued at RM378.02 million.

Maybank Investment Bank Bhd's head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Friday said due to the US' large upward market action overnight, the FBM KLCI might gap-up on Friday to be followed by pre-weekend profit-taking.

"We advise local investors to trade on an intraday basis only and not hold onto stocks for the longer term," he said.

Among the major gainers on Bursa Malaysia at midday, PPB rose 16 sen to RM15.98, DiGi and BAT added 10 sen each to RM22.68 and RM44.10, Axiata rose eight sen to RM3.85, Maybank up six sen to RM7.47 while CIMB was up three sen to RM6.39.

Other gainers included Shell, F&N, IJM PLANTATION []s, MPI, Top Glove, Rimbunan Sawit and Kesm Industries.

Kenmark was the most actively traded counter with 37.53 million shares done. The counter fell 5.5 sen to 14 sen. Other actives included Talam, Denko, LCL, Axiata, CIMB and Maybank.

The losers at midday included Bandar Raya Developments, Amway, Asia File and Crest Builder.


Morgan Stanley says subsidiary buys Parkway shares

SINGAPORE: UK-based FrontPoint Management LLP, a unit of Morgan Stanley, has bought 75,000 shares of Parkway Holdings, Asia's biggest listed hospital operator, for S$3.83 a share for an investment client, the bank said in an exchange filing.

Morgan Stanley is the independent financial adviser to Parkway, which is at the centre of a potential bidding war between Malaysian sovereign fund Khazanah and India's Fortis Healthcare.

The US investment bank said FrontPoint's dealing in Parkway shares was for a "discretionary investment client". The purchase price is above Khazanah's offer price of S$3.78 a share.

Parkway shares were trading slightly lower at S$3.86 at 0420 GMT. ' Reuters


Richard Li's big Bulgarian venture flounders

HONG KONG: Richard Li Tzar-kai is in crisis talks with lenders and the Bulgarian government over Vivacom, the East European country's dominant telecoms provider and one of the PCCW'' boss' big private investments.

Vivacom, which has '1.63 billion (HK$15.4 billion) of debt, may breach its loan agreements on June 30 because its profits are deemed insufficient compared to its borrowings, two people with direct knowledge of the situation said.

According to a person who has seen Vivacom's lending agreements, by June 30 its total debt must be worth no more than 7.2 times its earnings before interest, tax, depreciation and amortisation (ebitda).

Vivacom had ebitda of '169 million last year, according to its public statements. That means its total debt was almost 10 times its profits at the end of last year.

Li travelled to Sofia this week for meetings with government officials as well as Vivacom's management team, people with knowledge of the tycoon's movements said.

One of Vivacom's bankers speculated that Li wanted the Bulgarian government to help him convince the telecoms company's lenders to give it more time to grow its profits and restructure borrowing before they demanded their money back.

Vivacom is majority owned by PineBridge Investments, a private equity fund Li bought from bailed-out American insurer AIG for US$500 million on March 30 this year. A person involved in discussions said Vivacom first signalled it could breach its lending agreements at the turn of this year. Li agreed to buy PineBridge from AIG last September, but the deal took many months to close.

The Bulgarian telecoms firm is successful and profitable, but has been unable to earn enough to service the jumbo loans AIG took out to buy the company in August 2007, the height of the global credit boom.

The PCCW boss, who is the younger son of Asia's richest man, Li Ka-shing, is offering to partially repay banks, including RBS and Deutsche Bank, which are owed just over '1.3 billion by Vivacom.

But Li has dismayed a group of junior lenders, including hedge funds, which Dealogic figures show are owed '325 million. They bought high-risk "mezzanine debt", which paid interest of nearly 12% annually but offered scant repayment rights if Vivacom ran into trouble.

A source involved in discussions said Li's repayment plan would not compensate these junior lenders.

A spokesman for Li declined to comment. A Vivacom spokesman said "we do not comment on market rumours and speculation".

Li has offered to inject '150 million of new cash into Vivacom.

He has also said he will raise up to '200 million for the banks by selling some of its assets, including property, Debtwire, a financial information provider, reported last month.

Investment bank Lazard, which is advising Vivacom on the restructuring, declined to comment, as did Houlihan Lokey, the bank advising junior lenders. ' South China Morning Post


Australian PM announces more spending over mine tax

SYDNEY: Australian Prime Minister Kevin Rudd announced A$2 billion (US$1.70 billion) in infrastructure spending in the resource state Queensland on Friday, June 11, bringing to A$4 billion spending aimed at placating opposition to his mining tax.

More than $20 billion of new resource investment in Australia has already been shelved by global miners due to the 40% "super profits" tax, expected in 2012, and Rudd is losing voter support over the tax ahead of elections expected in October.

"More infrastructure money ' just for mining towns and communities," said Rudd in a statement identical to one announcing A$2 billion for the mining state of Western Australia state earlier in the week.

Rudd denied talk on Friday of a swift deal with miners over his controversial tax, as global miner BHP Billiton rejected a rumoured tax compromise affecting the nation's top export sector.

The reports of a quick deal lifted mining stocks in London, with shares in BHP Billiton, the world's biggest miner, Rio Tinto and Xstrata surging as much as 4.3%, outperforming a 0.9% rise in the FTSE 100 index. ' Reuters


Asian markets up at mid-morning

KUALA LUMPUR: Asian markets advanced on Friday, June 11 after the overnight higher closing on Wall Street in response to signs of health in the euro debt market and as investors snapped up energy shares crushed in the previous day's sell-off.

The energy sector led a broad advance with all but four stocks in the S&P 500 finishing the day higher, according to Reuters.

The S&P energy sector gained 4.9%. New York-traded shares of BP plc jumped 12.3% to US$32.78 a day after posting a near 16% decline. Baker Hughes Inc shot up 10.6% to $42.42 after a JPMorgan upgrade.

The Dow Jones industrial average jumped 273.28 points, or 2.76%, to 10,172.53. The Standard & Poor's 500 Index rose 31.15 points, or 2.95%, to 1,086.84. The Nasdaq Composite Index gained 59.86 points, or 2.77%, to 2,218.71.

At the regional markets at mid-morning Friday, Japan's Nikkei 225 was up 2% to 9,733.06, South Korea's Kospi added 1.05% to 1,668.98, Taiwan's TAIEX Index rose 1.76% to 7,308.17, the Shanghai Composite Index up 1.07% to 2,589.90 while Hong Kong's Hang Seng Index added 1.85% to 19,995.64.

At Bursa Malaysia, the FBM KLCI added 6.99 points to 1,298.30 at 10am. Gainers led losers by 271 to 59, while 127 counters traded unchanged. Volume was 131.54 million shares valued at RM145.17 million.

Among the gainers, PPB and BAT added 18 sen each to RM16 and RM44.18, DiGi up 14 sen to RM22.72, Axiata up 10 sen to RM3.87, MISC nine sen to RM8.43 and CIMB up three sen to RM6.93.

CIMB and Axiata were also among the most actively traded stocks on Friday morning.

Other gainers at mid-morning included LPI Capital, Rimbunan Sawit, Toyo Ink, Supermax and Shell.

Among the decliners, Crest Builder, Bandar Raya Developments, Maybulk and Amway fell five sen each to 70 sen, RM1.60, RM2.95 and RM7.50, respectively. Other losers included Kumpulan Europlus, Dolomite, UBG, Petronas Gas and QSR.

Talam was the most actively traded stock in early trade with 21.42 million shares done. The counter was unchanged at 14 sen. Other actives included Denko, Kenmark and LCL.


Genting stocks up in early trade

KUALA LUMPUR: GENTING BHD [] and Genting Malaysia Bhd share prices rose after the latter confirmed that its unit Genting New York LLC (Genting NY) is bidding for a "racino" project in New York. ''

Genting NY submitted a US$1 million (RM3.3 million) entry fee to the New York Lottery on June 1, 2010.

"This payment allows Genting NY to participate in the bidding process to develop and operate a video lottery facility at Aqueduct Racetrack in the city of New York," the company said on Thursday, June 10.

At 9.20am, Genting was up three sen to RM7.03 while GenM added four sen to RM2.77.

AmResearch has buy calls on Genting for its regional casino exposure and GenM for its potential overseas expansion.


FBM KLCI breaches 1,300-level in early trade

KUALA LUMPUR: The FBM KLCI breached the psychological 1,300-point level in early trade Friday, June 11, lifted by gains at key heavyweights including CIMB, Genting, MISC and KLK.

At 9.10am the bellwether index gained 10.69 points to 1,302.00. Gainers thumped losers 178 to nine, while 49 counters traded unchanged. Volume was 37.42 million shares valued at RM34.45 million.

The top gainer in early trade was BAT that added 32 sen to RM44.32, MISC rose 19 sen to RM8.53, KLK up 18 sen to RM16.20, DiGi 16 sen to RM22.74 and Axiata added 12 sen to RM3.89.

PPB and Tanjong rose 10 sen each to RM15.92 and RM17.26, CIMB five sen to RM6.95 and Genting four sen to RM7.04.

CIMB and Genting were also among the most actively traded stocks.

Other gainers in early trade included Supermax, Toyo Ink and Mudajaya.


MAS up to highest level in three weeks

KUALA LUMPUR: MALAYSIAN AIRLINE SYSTEM BHD [] share price rose 1.98% or four sen to RM2.06 at 9.25am Friday, June 11, its highest since May 17, after BURSA MALAYSIA BHD [] and FTSE Group said the counter would replace Nestle (Malaysia) Bhd in the 30-stock FBM KLCI.

In a joint statement on Thursday, Bursa Malaysia and FTSE Group said the change, to take effect at the start of business on 21 June 2010, followed the semi-annual review approved by the FTSE Bursa Malaysia Index Advisory Committee.


Wall St jumps on upbeat euro, energy rebound



NEW YORK
: US stocks posted their best day in the last nine on Thursday, June 10 in response to signs of health in the euro debt market and as investors snapped up energy shares crushed in the previous day's sell-off.

The energy sector led a broad advance with all but four stocks in the S&P 500 finishing the day higher.

The S&P energy sector gained 4.9%. New York-traded shares of BP plc jumped 12.3% to US$32.78 a day after posting a near 16% decline. Baker Hughes Inc shot up 10.6% to $42.42 after a JPMorgan upgrade.

Spain sold 3.9 billion euros of a three-year benchmark bond seeing strong demand, a positive sign for investors worried about appetite for debt from struggling European nations. The euro rose 1.2% against the US dollar, trading above $1.21.

China confirmed exports jumped nearly 50% in May from a year ago, reassuring investors worried about the impact of the European crisis on global growth.

"The Spanish bond market auction went well and the strength in Chinese export numbers was beneficial," said Brian Lazorishak, portfolio manager at Chase Investment Counsel of Charlottesville, Virginia.

"You had incrementally good news on many of the biggest downside drivers of the market."

The Dow Jones industrial average jumped 273.28 points, or 2.76%, to 10,172.53. The Standard & Poor's 500 Index rose 31.15 points, or 2.95%, to 1,086.84. The Nasdaq Composite Index gained 59.86 points, or 2.77%, to 2,218.71.

The S&P 500 posted a bullish technical alert as its daily moving average convergence-divergence, or MACD, a widely followed momentum indicator, generated a "buy" signal. The S&P and the Dow closed above their 14-day moving average, another short-term bullish sign.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 7 to 1, while on the Nasdaq, about 11 stocks rose for every two that fell.

Further boosting energy shares, crude futures settled up 1.5%, or $1.10, at $75.48 a barrel lifted by the Chinese data and after the International Energy Administration raised its estimate for growth in oil demand in 2010.

Housing stocks soared after US Senate Majority Leader Harry Reid proposed an extension to a part of a homebuyer tax credit.

Radian Group jumped 10.3% to $8.98 and Lennar Corp gained 8% to $15.58. the Morgan Stanley housing index rose 4.7%.

On the downside, Goldman Sachs Group Inc fell 2.2% to $133.77 and was the S&P 500's top percentage decliner. A source familiar with the situation said the Securities and Exchange Commission, which charged Goldman with fraud in April, is investigating another mortgage-linked deal once pitched by the Wall Street firm.

About 9.16 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion.

Before the opening bell, the US government reported that the number of new filings for unemployment benefits fell less than expected last week, while the international trade deficit widened slightly in April, pointing to a moderate economic recovery. ' Reuters


AmResearch maintains buy calls on Genting, GenM

KUALA LUMPUR: AmResearch has maintained its buy call on GENTING BHD [] at RM6.94 with a fair value of RM7.66 and said Genting New York LLC's reported bid to construct and operate a slot machine-only casino at New York Aqueduct Racetrack as positive.

AmResearch said the bid would act as a platform for Genting Group to expand further in the US.

"Also, it should be earnings enhancing in the long-term although we reckon that any profit contribution could be small in the early stages," it said in a note Friday, June 11.

The research house said based on 4,500 slot machines, slot wins of US$350/day and EBITDA margin of 20%, it estimates that the racino (racing track and casino) could record annual EBITDA of US$115 million (RM379 million).

"Assuming Genting New York's shareholding in the joint venture is 50%, then the company's share could be US$58 million (RM190 million). Genting Bhd's EBIT was about RM2.7 billion in FY09.

"Assuming a Price/EBITDA of 10 times, then the racino could be worth US$1.2 billion (RM3.8 billion). Genting New York's 50% share would be US$575 million (RM1.9 billion)," it said.

AmResearch said the issue was whether the project would be injected into the subsidiaries of Genting Group as Genting New York is believed to be owned by Tan Sri Lim Kok Thay.

It said the only subsidiary with financial muscle to acquire the racino project should Genting New York win, was Genting Malaysia Bhd (GenM).

GenM's cash reserves stood at RM5.3 billion (US$1.6 billion) as at end-March 2010, it said.

"We maintain buys on Genting Bhd for its regional casino exposure and GenM for its potential overseas expansion," it said.




EPF members' investment withdrawals up 43% to RM911m

KUALA LUMPUR: The Employees Provident Fund's (EPF) members' investment withdrawals rose 43.26% in the first quarter of 2010 (1Q10) to RM911.15 million (4Q09: RM896.66 million) from RM636.01 million in 1Q09.

In a statement on Thursday, June 10, EPF said the total applications approved under this withdrawal rose to 113,809 (4Q09: 114,375) from 87,420 a year earlier.

"The increase in withdrawals for investments is in tandem with the recovery in the domestic economy that began in the third quarter of 2009 and has since continued to gain momentum," said EPF CEO Tan Sri Azlan Zainol.

The increase was also attributed to the rise in the number of members who are eligible for investment withdrawals.

In 1Q10, the EPF recorded a 52.8% increase in applications from members who had opted for Flexible 55 Withdrawals, in which a total of 14,869 applications (4Q09: 11,929) were received compared with 9,731 a year earlier, with the amount withdrawn rising 26.05% to RM637.73 million (4Q09: RM454.12 million) from RM505.94 million a year earlier.

Azlan said priority towards prudent investing was reflected in the increasing number of retirees who had opted for Flexible 55 Withdrawals to stretch the value of their retirement savings as opposed to lump sum withdrawal.

There was a 1.99% increase in approved applications for lump sum withdrawal to 36,349 applications (4Q09: 30,120) from 35,640 a year earlier, with the amount withdrawn growing a marginal 0.7% to RM1,632.52 million (4Q09: RM1,235.52 million) from RM1,621.15 million a year earlier.


CCM MD to retire at end-June

KUALA LUMPUR: CHEMICAL COMPANY OF MALAYSIA [] Bhd (CCM) group managing director Datuk Mohamad Hashim Ahmad Tajudin has resigned from the group with effect from June 30, 2010 upon the expiry of his contract.

In a statement on Thursday, June 10, CCM said Hashim had indicated his desire to retire from the company and all board directorships within the group to pursue his personal interests upon the expiry of his contract at the end of the month. Hashim, 56, was appointed in May 2004 and has served two terms with the group.

CCM said the nomination and remuneration committee was in the process of finalising its recommendation to the board on the appointment of a new group MD.

In the interim, the company said an executive committee comprising E Sreesanthan, Tan Sri Dr Abu Bakar Suleiman and Datuk Mohd Nizam Zainordin would be responsible for the operations of the group.


The Edge Billion Ringgit Club to recognise the biggest, best performers

KUALA LUMPUR: Malaysia's biggest and best listed companies will soon be recognised with the establishment of The Edge Billion Ringgit Club, which will induct companies listed on Bursa Malaysia with a market capitalisation or turnover of at least RM1 billion.

Over 20 companies in the club, from seven sectors, will also be recognised in terms of profitability and shareholder wealth creation. The best of these companies will receive the Company of the Year award.

The Billion Ringgit Club and accompanying awards are established by The Edge, Malaysia's leading business and investment weekly. The inaugural awards are being held in partnership with OCBC Bank (Malaysia) Bhd, Audemars Piguet and Mercedes-Benz Malaysia Sdn Bhd. The results will be audited by Deloitte Malaysia.

The club will be inaugurated at a gala dinner on July 5, which will be attended by Prime Minister Datuk Seri Najib Razak and his wife Datin Seri Paduka Rosmah Mansor. At the dinner, the top companies and the personalities behind their success will be recognised.

"Membership in The Edge Billion Ringgit Club is automatically open to companies that meet the criteria. The Edge Billion Ringgit Club awards, on the other hand, are based on performance. The winners are chosen based on a strict but transparent methodology, which looks at a range of criteria," said The Edge editor-in-chief Dorothy Teoh during a handshake event between the publication and two of the sponsors, OCBC Bank and Mercedes-Benz, on Thursday, June 10.

OCBC director and CEO Jeffrey Chew said the purpose of a business is to provide a meaningful service to humanity. "Within this overarching framework lies the role of profits, which represent the mechanism for maintaining the viability and longevity of the business in order for it to continue making available its services," he said.

A good company is the result of purpose and profit combined, he added.

"We see The Edge Billion Ringgit Club as a serious attempt to place the spotlight on companies that are both providing a meaningful service to humanity as well as doing so in a consistently profitable manner."

Peter Hornegg, president and CEO of Mercedes-Benz Malaysia, said the methodology of The Edge Billion Ringgit Club awards promoted transparency. The best companies would inspire other companies to up their own game, he said.

"(Companies should) be proud to be in this league... it is very exclusive," he added.


Smooth ride for AutoV Corp



AUTO-PARTS producer AV Ventures Corp has changed its name to AutoV Corp effective June 3, 2010. The company has seen its fortunes turn around strongly following the launch of the Proton Exora multi-purpose vehicle last year, and after several years of internal restructuring. This looks set to continue in the near future, and the stock is attractively priced.

AutoV Corp Bhd (AVCB, 79 sen) recently announced strong earnings for 1Q FY December 2010, largely due to the Proton Exora's launch in April 2009 which was not reflected in the previous year's numbers.

In 1Q10, revenue surged 93% to RM26.5 million. Pre-tax and net profit came in at RM3.7 million and RM3.5 million, respectively, a reversal from 1Q09's pre-tax and net losses of RM400,000. This accounted for 47% of our earlier full-year forecast of RM7.5 million, which we are revising upwards by 24% to RM9.3 million.

On a quarter-on-quarter (q-o-q) basis, AVCB's earnings also improved from 4Q09 as motor sales rose. Revenue rose 5.6% q-o-q while pre-tax profit rose by 17% q-o-q.

Following the launch of the Proton Exora in April 2009, AVCB's financial performance has turned around strongly, and this was reflected in improved earnings from 2Q09 onwards.

The company's strong balance sheet improved further, due to minimal capex needs and strong cash flow generation. Net cash improved from RM10 million in Dec 2009 to RM13.2 million in March 2010. This is equivalent to 22.7 sen per share and accounts for 29% of the share price.

No interim dividend was announced for the quarter. In 2009, the company paid its first dividend in 12 years, with total dividends of 3.5 sen. We are assuming this is maintained in 2010, which translates into a payout ratio of 17% and a generous dividend yield of 4.4%.

Positive outlook ahead
AVCB is on track for a strong performance in 2010.

Its prospects continue to hinge largely on the success of the Proton Exora MPV, for which it is supplying a large number of components, including shaft steering systems, wiper and washer systems and window regulators. Proton accounts for over 70% of AVCB's total sales.

The Exora has been well received due to its design and affordability, at under RM80,000 for a seven-seater powered by a 1.6-litre CamPro engine. It has also enjoyed some success in the region and has held its ground against the 1.5-litre Perodua Alza MPV, launched in Nov 2009 and priced below RM60,000. To compete in this price segment, Proton launched the Exora Basic in Nov 2009, a lower-end, no-frills manual variant of the Exora.

In mid-May 2010, the government announced that the Exora will be used as the "1Malaysia taxi" to provide better comfort to passengers. It is unclear if this will complement the other existing taxis, which mostly use aging Proton Saga, Iswara and Waja, or ultimately replace them

Earlier concerns over competition from the Perodua Alza for the Proton Exora have not turned out to be. The economic recovery has increased overall car sales and enlarged the pie for all car players. This has allowed the two MPV models to cater for different segments.

Indeed, the outlook for the motor sector has improved considerably as the economic recovery gained traction and consumer confidence improved. Malaysia's total auto sales fell by a much smaller-than-expected pace of 2% to 536,905 vehicles in 2009, well ahead of the earlier forecast of 480,000 vehicles as sales increased in the final quarter of the year.

The Malaysian Automotive Association expects auto sales to rise 2.4% to 550,000 vehicles in 2010, and could even exceed the record high of 552,614 units sold in 2005.

Motor vehicle sales for the month of April 2010 rose 16.8% y-o-y to 48,706 units, with year-to-date sales up 21% to 196,121 units. However, growth in the coming months could taper off as buyers adjust to higher interest rates, after the two rounds of interest rate hikes, and the recent turmoil in global financial markets due to the European debt crisis.

Over the medium term, Proton has a pipeline of new models, including the Persona replacement and Perdana enhancement models that will benefit its component suppliers.

The relatively positive outlook for Proton and Malaysia's motor sector augurs well for AVCB. After many years of losses post 1997-98 Asian financial crisis, the company has turned around nicely. Earnings are being supported by Proton's resurgence and the company has a net cash balance sheet after the earlier asset disposals and in-house restructuring exercises.

Major risks for the company would be largely macro driven ' namely the strength of the global economic recovery, the impact, if any, of the recent European debt crisis and risks of a slowdown in the second half of 2010 when stimulus measures are withdrawn.

Stock attractively priced
We maintain our positive view on AVCB. We expect net profit to rise 38% to RM9.3 million in 2010 and 6% to RM9.9 million in 2011, with EPS of 16 sen and 17 sen, respectively.

At 79 sen, the stock is trading on low P/E multiples of 4.9 and 4.6 times for 2010 and 2011, respectively, with a decent dividend yield of 4.4%

With just 58.4 million shares issued, AVCB's present market capitalisation is a mere RM46.1 million, of which RM13.2 million is in net cash. If we exclude net cash from the market capitalisation, the underlying business is implicitly valued at RM32.9 million ' or just 2.5 times our estimated Ebitda of RM13.4 million for 2010.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


Thursday, June 10, 2010

London Biscuits' offer in TPC lapses

KUALA LUMPUR: LONDON BISCUITS BHD []'s conditional mandatory takeover offer in TPC PLUS BHD [] has lapsed after it failed to secure over 50% of the latter's shares upon the close of the offer period.

London Biscuits had only secured an additional 13.88% of valid acceptances to its 33.11% stake it had already held in TPC Plus, totalling to only 46.99% after the second closing date oin Thursday, June 10.

"In view that the offer has lapsed, the offeror (London Biscuits) shall return all the TPC shares which it has received to the respective accepting holders within 14 days from the second closing date," London Biscuits said in a statement to Bursa Malaysia.

London Biscuits had conditionally offered to acquire the remaining shares of 50 sen each in TPC Plus for 30 sen per share, it said.


Banks say reform plan to hit global GDP growth

VIENNA: The regulatory reforms being proposed for banks around the globe could cut 3 percent off economic growth over the next five years in the United States, euro zone and Japan alone, and cost almost 10 million jobs, top banks said on Thursday, June 10.

The Institute of International Finance (IIF), a bank lobby group representing over 400 firms, said a need to hold more capital, pay more taxes and other possible reforms could hit economic growth hard.

Gross domestic product (GDP) in the three regions would fall by 0.6 percentage points annually between 2011 and 2015 and by an annual average of 0.3 percentage points in the 10 years to 2020, the IIF said in a report released at a meeting in Vienna.

"The IIF calls on the participants of the forthcoming G20 Summit and the international regulatory authorities to consider carefully the content, timing and calibration of proposed bank regulatory reforms, mindful of the potential drag on economic activity that could result," said Josef Ackermann, CEO of Deutsche Bank and IIF chairman.

The economic impact would be hardest in the euro zone, where GDP is projected to be 4.3 percent lower by 2015 if reforms are implemented, compared to a base case forecast. U.S. GDP would be curtailed by 2.6 percent and in Japan it would be restricted by 1.9 percent, the IIF said.

Some 9.7 million fewer jobs could be created due to the reforms over the next five years, the report warned.

Banks face new taxes and requirements to hold more and better quality capital and liquidity and other reforms following the worst financial crisis since the 1930s. Banks in the three key areas would need to raise $700 billion of common equity and issue $5.4 trillion of long-term wholesale debt in the next five years to meet the expected new capital and liquidity requirements, the IIF said.

PRICE TO PAY FOR SAFER SYSTEM

Banks say they recognise change is needed but are resisting some proposals and are concerned about the cumulative impact of a range of measures and want more time to implement change.

"The point of this report is not to argue against regulatory reform," said Peter Sands, chief executive of Standard Chartered and an IIF director.

"But there is a price for making the banking system safer and more stable, and that price will inevitably be borne by the real economy.

"The challenge is to strike the right balance, to get the maximum benefit for the minimum negative impact."

Banks are getting more vocal about the danger of uncoordinated action ahead of a meeting of G20 leaders in Canada on June 26-27.

Top countries differ on some key topics. G20 finance ministers on Saturday scrapped plans for a universal global bank tax in the face of opposition from Canada, Japan and Brazil, and new capital rules -- dubbed Basel III -- look set to be phased in over a longer time than originally planned.

A need to hold more capital is likely to be passed on to customers, Ackermann said.

Other costs of reform include a reduction in bank credit, a squeeze on margins from higher liquidity requirements, and the impact on earnings from higher taxes.

Other reforms faced by banks include the introduction of "living wills", which the IIF said it supported. - Reuters




Genting M'sia unit submits US$1m fee to bid for NY video lottery

KUALA LUMPUR: Genting Malaysia Bhd's indirect unit Genting New York LLC has submitted a US$1 million entry fee to the New York Lottery in a move to make a bid for the the video lottery operations in the city.

"This payment allows Genting NY to participate in the bidding process to develop and operate a Video Lottery Facility at Aqueduct Racetrack in the city of New York," the company said on Thursday, June 10

Genting NY is evaluating the project and has until June 29 to decide if it wishes to formally submit a bid. The payment was made on June 1.


Shares end mixed

KUALA LUMPUR: Bursa Malaysia ended mixed on Thursday, June 10 prompted by mild profit-taking activities in several CONSTRUCTION []-related stocks following the announcement of the 10th Malaysia Plan, dealers said.

However, the FBM KLCI finished 1.23 points higher at 1,291.31 after opening 0.36 of point lower at 1,289.72, aided by gains in BAT, Nestle and KPJ Health.

"The market was flat as the announcements were within market expectation. It's a long-term plan, so we cannot see any immediate impact on the market," TA Securities Senior Technical Chartist Stephen Soo said.

The Finance Index gained 35.34 points to 11,621.57, the INDUSTRIAL INDEX [] added 2.5 points to 2,577.60 and the PLANTATION [] Index rose 17.26 points to 6,094.79.

The FBM Emas Index increased 7.36 points to 8,686.55 but the FBM Ace Index dropped 11.88 points to 3,770.82 while the FBM70 [] gave up 3.29 points to 8,583.25.

Decliners led advancers 280 to 261 while 290 counters were unchanged. Volume rose to 733.253 million shares, worth RM743.080 million. - BernamaShares end mixed

KUALA LUMPUR: Bursa Malaysia ended mixed on Thursdya, June 10 prompted by mild profit-taking activities in several construction-related stocks following the announcement of the 10th Malaysia Plan, dealers said.

However, the FBM KLCI finished 1.23 points higher at 1,291.31 after opening 0.36 of point lower at 1,289.72, aided by gains in BAT, Nestle and KPJ Health.

"The market was flat as the announcements were within market expectation. It's a long-term plan, so we cannot see any immediate impact on the market," TA Securities Senior Technical Chartist Stephen Soo said.

The Finance Index gained 35.34 points to 11,621.57, the Industrial Index added 2.5 points to 2,577.60 and the Plantation Index rose 17.26 points to 6,094.79.

The FBM Emas Index increased 7.36 points to 8,686.55 but the FBM Ace Index dropped 11.88 points to 3,770.82 while the FBM70 gave up 3.29 points to 8,583.25.

Decliners led advancers 280 to 261 while 290 counters were unchanged. Volume rose to 733.253 million shares, worth RM743.080 million. - Bernama


MDeC: ICT imprint pervasive in 10MP blueprint

KUALA LUMPUR The Multimedia Development Corporation (MDeC) sees the imprint of information, communications and TECHNOLOGY [] (ICT) across the entire blueprint of the 10th Malaysia Plan (10MP) that was unveiled by Prime Minister Datuk Seri Najib Razak on Thursday, June 10.

"The 10th Malaysia plan clearly articulates the central role of ICT as a bedrock for the nation to vault forward towards a truly high-value economy.

"The quantum leap in the plan is how much more the ICT sector will see its role expanded from being merely a vertical to include the horizontal as well, as it cuts across all spheres of the national economy and Malaysian quality of life," said MDeC CEO By Datuk Badlisham Ghazali in a statement on Thursday.

He said this was clearly demonstrated given the fact that ICT was selected as one of the 12 national key economic areas (NKEAs). "It is important to note that Malaysia's ICT industry, encompassing the hardware, software, services and telecommunications clusters, accounted for about 9.8% of the nation's total gross domestic product (GDP) in 2009," he said.

Badlisham said one area in which MDeC would take a leading role was in cloud computing, which would enable SMEs to move from a capex to opex operations giving them speed, agility and huge cost savings. "In this sense, ICT becomes a utility similar to electricity or water," he added.

"Pervasive adoption of ICT across all sectors of the economy can lead to greater productivity growth and GDP contribution. Studies in Europe and the US show ICT contributing 50% and 63% respectively to the total factor productivity (TFP) growth of these regions," Badlisham said.


#Today's Diary* What to expect on June 11, 2010

1. Emerging Opportunities for India, Malaysia Business Engagement conference at Mandarin Oriental Hotel, KL at 9am

2. FAR EAST HOLDINGS BHD [] AGM at Hyatt Regency Resort, Telok Chempedak, Kuantan, Pahang at 9.30am

3. ECOFUTURE BHD. []AGM at Banyan, Ground Flr, Sime Darby Convention Centre, KL at 10am

4. UMS-Neiken AGM at Perangsang Golf Club, No.1 Templer Park Resort, Rawang, Selangor at 10am

5. SANBUMI HOLDINGS BHD [] AGM at 2nd Flr, Wisma EMC, 972 Jln Baru, Prai, Penang at 10am


Quality and affordable homes

KUALA LUMPUR: The government will build 78,000 new affordable public housing units nationwide under the 10th Malaysia Plan.

Low-cost public housing units would be provided to qualified individuals and families with household incomes of less than RM2,500 per month, which was in line with the government's agenda to increase the monthly income
level of the bottom 40%.

The government typically subsidises approximately 30% to 75% of total CONSTRUCTION [] costs for public housing units.

Under the public housing schemes provided by the National Housing Department, a 700 square foot urban low-cost housing unit is sold for RM42,000 to qualified families and individuals.

According to the report, the government will rationalise and streamline the role of federal agencies involved in public housing to increase the efficiency of housing provision.

The government will rationalise housing provision with only one federal agency responsible for the provision of federal-funded housing with the private sector being expected to play a greater role in these efforts.

To address the issue of poor housing maintenance, the government will establish a Housing Maintenance Fund with an initial funding of RM500 million to assist the residents of both public and private low-cost housing units with major repair and maintenance works like replacement of lifts and water tanks.

It said the fund would be based on a matching grant where half of the contribution would come from residents through their joint-management body or management corporation.

This is in addition to the fund known as "Tabung Perumahan 1Malaysia", established in February this year, which provides support for the maintenance'' and major repairs of low-cost private housing in Kuala Lumpur.

During the Plan period, existing laws, including the Uniform Building By-Laws 1984, will be reviewed to incorporate minimum specifications of housing quality, particularly on ensuring quality in the provision of affordable homes.

The report also said that the government would review tax incentives, such as tax breaks for buildings and designs that are environmentally friendly, incorporating green design elements like solar panels for heating, rain water harvesting facilities and water conservation features.

There will also be focus on creating public community spaces within housing projects that a well-landscaped and equipped with basic amenities, such as parks and playgrounds, to reinforce interaction and integration among local communities.

In cultivating a healthy and sustainable housing industry, the government will encourage urban rejuvenation through an en-bloc sale mechanism.

The government will implement a mechanism to ease the sale of collectively-owned developments by amending laws governing the sales of property and land to allow collective sale of PROPERTIES [], including land,'' when majority
consent is obtained or an en-bloc sale mechanism.

The appropriate level of majority consent will be determined from at least 80% to 90% of owners agreeing to a sale.

This would create market incentives for private redevelopment of aging properties in prime locations, the report said.

Apart from that, the government will strengthen monitoring and enforcement to protect the interests of house buyers, especially on quality of housing construction.

The report also said that housing developers would be encourage to adopt the Build-Then-Sell (BTS) approach through the provision of additional incentives such as shortening the approval processes for land and building plans and exemption of deposit payments for licensing housing developments.

On abandoned housing projects, the government will continue to provide assistance to rehabilitate the projects where as of April 30 this year, there were 107 abandoned projects with 38,600 units involving 25,300 buyers. - Bernama




Shares end mixed

KUALA LUMPUR: Bursa Malaysia ended mixed on Thursday, June 10 prompted by mild profit-taking activities in several CONSTRUCTION []-related stocks following the announcement of the 10th Malaysia Plan, dealers said.

However, the FBM KLCI finished 1.23 points higher at 1,291.31 after opening 0.36 of point lower at 1,289.72, aided by gains in BAT, Nestle and KPJ Health.

"The market was flat as the announcements were within market expectation. It's a long-term plan, so we cannot see any immediate impact on the market," TA Securities Senior Technical Chartist Stephen Soo said.

The Finance Index gained 35.34 points to 11,621.57, the INDUSTRIAL INDEX [] added 2.5 points to 2,577.60 and the PLANTATION [] Index rose 17.26 points to 6,094.79.

The FBM Emas Index increased 7.36 points to 8,686.55 but the FBM Ace Index dropped 11.88 points to 3,770.82 while the FBM70 [] gave up 3.29 points to 8,583.25.

Decliners led advancers 280 to 261 while 290 counters were unchanged. Volume rose to 733.253 million shares, worth RM743.080 million. - BernamaShares end mixed

KUALA LUMPUR: Bursa Malaysia ended mixed on Thursdya, June 10 prompted by mild profit-taking activities in several construction-related stocks following the announcement of the 10th Malaysia Plan, dealers said.

However, the FBM KLCI finished 1.23 points higher at 1,291.31 after opening 0.36 of point lower at 1,289.72, aided by gains in BAT, Nestle and KPJ Health.

"The market was flat as the announcements were within market expectation. It's a long-term plan, so we cannot see any immediate impact on the market," TA Securities Senior Technical Chartist Stephen Soo said.

The Finance Index gained 35.34 points to 11,621.57, the Industrial Index added 2.5 points to 2,577.60 and the Plantation Index rose 17.26 points to 6,094.79.

The FBM Emas Index increased 7.36 points to 8,686.55 but the FBM Ace Index dropped 11.88 points to 3,770.82 while the FBM70 gave up 3.29 points to 8,583.25.

Decliners led advancers 280 to 261 while 290 counters were unchanged. Volume rose to 733.253 million shares, worth RM743.080 million. - Bernama


10MP fails to impress market

KUALA LUMPUR: The unveiling of the Tenth Malaysia Plan failed to perk up the market on Thursday, June 10, with the FBM KLCI adding only 2.28 points to 1,292.36 as at 3.05pm.

The announcements that included a mass rapid transport system for Kuala Lumpur, double-tracking project from Gemas to Johor Bahru and an International Financial District did not seem to excite investors very much, as evident from the lacklustre market movement.

Lifting the index were gains at RHB Capital, CIMB and Malayan Banking, as well as TM, Digi and PPB.

Losers edged gainers by 241 to 221, while 247 counters traded unchanged. Volume was 472.86 million shares valued at RM378.17 million.

RHB Capital added five sen to RM5.75, Maybank rose three sen to RM7.41 while CIMB and PPB gained two sen each RM6.90 and RM15.82.

Meanwhile, DiGi rose six sen to RM22.62 while TM added one sen to RM3.32.

Other gainers included Tanjong, BAT, Nestle, KFCH, KPJ and Faber.

DFZ Capital was among the losers and fell 23 sen to RM3.72. Others included K-Star Sports, NSTP, Jerneh, Perduren and Carlsberg.

Talam, which came off the PN17 list Thursday morning, was the most actively traded stock with 230.7 million shares done. The counter added half a sen to 14.5 sen. Other actives included Kenmark, AirAsia, Zelan and CIMB.




DiGi, Celcom in shared network plan

KUALA LUMPUR: DIGI.COM BHD [] and Telenor Asia Pte Ltd are collaborating with Celcom Axiata Bhd and Axiata Group Bhd to explore the viability of long-term collaboration of sharing network infrastructure in Malaysia.

The companies said on Thursday, June 10 that under the MoU, the parties will work together in the network collaborative areas of operations and maintenance sharing; transmission and site sharing; and radio access network sharing.

The MOU is for six months unless there is a replacement of the MoU. Either Party may extend the validity period by giving 30 days notice before expiration of the MOU.


MDeC: ICT imprint pervasive in 10MP blueprint

KUALA LUMPUR The Multimedia Development Corporation (MDeC) sees the imprint of information, communications and TECHNOLOGY [] (ICT) across the entire blueprint of the 10th Malaysia Plan (10MP) that was unveiled by Prime Minister Datuk Seri Najib Razak on Thursday, June 10.

"The 10th Malaysia plan clearly articulates the central role of ICT as a bedrock for the nation to vault forward towards a truly high-value economy.

"The quantum leap in the plan is how much more the ICT sector will see its role expanded from being merely a vertical to include the horizontal as well, as it cuts across all spheres of the national economy and Malaysian quality of life," said MDeC CEO By Datuk Badlisham Ghazali in a statement on Thursday.

He said this was clearly demonstrated given the fact that ICT was selected as one of the 12 national key economic areas (NKEAs). "It is important to note that Malaysia's ICT industry, encompassing the hardware, software, services and telecommunications clusters, accounted for about 9.8% of the nation's total gross domestic product (GDP) in 2009," he said.

Badlisham said one area in which MDeC would take a leading role was in cloud computing, which would enable SMEs to move from a capex to opex operations giving them speed, agility and huge cost savings. "In this sense, ICT becomes a utility similar to electricity or water," he added.

"Pervasive adoption of ICT across all sectors of the economy can lead to greater productivity growth and GDP contribution. Studies in Europe and the US show ICT contributing 50% and 63% respectively to the total factor productivity (TFP) growth of these regions," Badlisham said.


DiGi, Celcom in shared network plan

KUALA LUMPUR: DIGI.COM BHD [] and Telenor Asia Pte Ltd are collaborating with Celcom Axiata Bhd and Axiata Group Bhd to explore the viability of long-term collaboration of sharing network infrastructure in Malaysia.

The companies said on Thursday, June 10 that under the MoU, the parties will work together in the network collaborative areas of operations and maintenance sharing; transmission and site sharing; and radio access network sharing.

The MOU is for six months unless there is a replacement of the MoU. Either Party may extend the validity period by giving 30 days notice before expiration of the MOU.


10MP fails to impress market

KUALA LUMPUR: The unveiling of the Tenth Malaysia Plan failed to perk up the market on Thursday, June 10, with the FBM KLCI adding only 2.28 points to 1,292.36 as at 3.05pm.

The announcements that included a mass rapid transport system for Kuala Lumpur, double-tracking project from Gemas to Johor Bahru and an International Financial District did not seem to excite investors very much, as evident from the lacklustre market movement.

Lifting the index were gains at RHB Capital, CIMB and Malayan Banking, as well as TM, Digi and PPB.

Losers edged gainers by 241 to 221, while 247 counters traded unchanged. Volume was 472.86 million shares valued at RM378.17 million.

RHB Capital added five sen to RM5.75, Maybank rose three sen to RM7.41 while CIMB and PPB gained two sen each RM6.90 and RM15.82.

Meanwhile, DiGi rose six sen to RM22.62 while TM added one sen to RM3.32.

Other gainers included Tanjong, BAT, Nestle, KFCH, KPJ and Faber.

DFZ Capital was among the losers and fell 23 sen to RM3.72. Others included K-Star Sports, NSTP, Jerneh, Perduren and Carlsberg.

Talam, which came off the PN17 list Thursday morning, was the most actively traded stock with 230.7 million shares done. The counter added half a sen to 14.5 sen. Other actives included Kenmark, AirAsia, Zelan and CIMB.




IMF sees Indonesia GDP growth at 6% in 2010,2011

JAKARTA: The International Monetary Fund on Thursday, June 10 forecast Indonesia's economic growth will accelerate this year amid improving investment and said the central bank may need to adjust its monetary policy if price pressures rise.

The Fund also said after meetings in Jakarta with Indonesia's central bank and other officials that recent capital outflows from Indonesia were likely to be temporary and it saw small downside risk from the euro zone debt woes.

"We see growth accelerating to 6% and we think inflation will be contained at under 5%," Thomas Rumbaugh, the IMF's division chief for Asia and Pacific, told reporters.

Southeast Asia's biggest economy expanded 4.5% in 2009, among the few countries in Asia to have posted growth during a period of global recession, thanks to resilient domestic demand.

Drawn by its strong growth prospects, investors have poured into Indonesia's bonds, stocks and currency in the past year, when its markets saw stellar gains. The stock market is up nearly 10% so far this year, one of the best performers in Asia.

Rumbaugh said demand and commodity price pressures could start to rise and lead to slightly higher inflation in the future, requiring a policy response from the central bank, Bank Indonesia (BI).

"We don't see the need for it yet...later in 2010 they may need to prepare to adjust monetary policy if inflationary pressures increase," Rumbaugh said.

Indonesia's annual inflation in May accelerated to 4.16%, its highest level in a year, as food prices picked up, and was in line with expectations.

A Reuters poll in April predicted Indonesia's economy to expand 5.8% this year and 6.1% next year. The poll also forecast Indonesia's year-end inflation at 4.9% this year and 6.0% next year.

Since late 2009, central bank officials have stressed that they saw no reason to raise interest rates as they expected inflation to be within their 4%-6% target range in 2010.

Analysts, however, expect rate hikes by the third quarter this year and see Bank Indonesia as potentially behind the curve.

Deputy governor Hartadi Sarwono told Reuters on Wednesday the central bank may need to raise interest rates to 7% next year after keeping them on hold at a record low of 6.5% this year.

The comments were the first by the central bank on the timing and scale of any rate rises that will likely be aimed at curbing inflation, and come after the country's finance minister said last month rates could stay at 6.5% through 2011.

Indonesia's bond yield curve has steepened in the past two weeks as a result of lower yields on the short end of the curve, which analysts said suggested increased market expectations of a near-term benign rate outlook. ' Reuters


Quality and affordable homes

KUALA LUMPUR: The government will build 78,000 new affordable public housing units nationwide under the 10th Malaysia Plan.

Low-cost public housing units would be provided to qualified individuals and families with household incomes of less than RM2,500 per month, which was in line with the government's agenda to increase the monthly income
level of the bottom 40%.

The government typically subsidises approximately 30% to 75% of total CONSTRUCTION [] costs for public housing units.

Under the public housing schemes provided by the National Housing Department, a 700 square foot urban low-cost housing unit is sold for RM42,000 to qualified families and individuals.

According to the report, the government will rationalise and streamline the role of federal agencies involved in public housing to increase the efficiency of housing provision.

The government will rationalise housing provision with only one federal agency responsible for the provision of federal-funded housing with the private sector being expected to play a greater role in these efforts.

To address the issue of poor housing maintenance, the government will establish a Housing Maintenance Fund with an initial funding of RM500 million to assist the residents of both public and private low-cost housing units with major repair and maintenance works like replacement of lifts and water tanks.

It said the fund would be based on a matching grant where half of the contribution would come from residents through their joint-management body or management corporation.

This is in addition to the fund known as "Tabung Perumahan 1Malaysia", established in February this year, which provides support for the maintenance'' and major repairs of low-cost private housing in Kuala Lumpur.

During the Plan period, existing laws, including the Uniform Building By-Laws 1984, will be reviewed to incorporate minimum specifications of housing quality, particularly on ensuring quality in the provision of affordable homes.

The report also said that the government would review tax incentives, such as tax breaks for buildings and designs that are environmentally friendly, incorporating green design elements like solar panels for heating, rain water harvesting facilities and water conservation features.

There will also be focus on creating public community spaces within housing projects that a well-landscaped and equipped with basic amenities, such as parks and playgrounds, to reinforce interaction and integration among local communities.

In cultivating a healthy and sustainable housing industry, the government will encourage urban rejuvenation through an en-bloc sale mechanism.

The government will implement a mechanism to ease the sale of collectively-owned developments by amending laws governing the sales of property and land to allow collective sale of PROPERTIES [], including land,'' when majority
consent is obtained or an en-bloc sale mechanism.

The appropriate level of majority consent will be determined from at least 80% to 90% of owners agreeing to a sale.

This would create market incentives for private redevelopment of aging properties in prime locations, the report said.

Apart from that, the government will strengthen monitoring and enforcement to protect the interests of house buyers, especially on quality of housing construction.

The report also said that housing developers would be encourage to adopt the Build-Then-Sell (BTS) approach through the provision of additional incentives such as shortening the approval processes for land and building plans and exemption of deposit payments for licensing housing developments.

On abandoned housing projects, the government will continue to provide assistance to rehabilitate the projects where as of April 30 this year, there were 107 abandoned projects with 38,600 units involving 25,300 buyers. - Bernama




IPI up 10.1% y-o-y to 106.1 in April 2010

PUTRAJAYA: The industrial production index (IPI) rose 10.1% year-on-year (y-o-y) in April 2010 to 106.1, according to data released by the Department of Statistics Malaysia on Thursday, June 10.

It said that the rise in April this year was due to the increases in all indices, namely manufacturing (14.3%), mining (0.8%) and electricity (12.1%).

However, seen from a month-on-month (m-o-m) basis, April's IPI fell 4.2%, it said.

The IPI in March 2010 was revised 14.2% y-o-y, the department added.

Meanwhile, the cumulative index for the period of January - April 2010 increased 10.8%, as compared with same period in 2009.

Manufacturing output in April increased 14.3% y-o-y, while output for March 2010 rose 20.5% (revised) as compared to a year earlier. However, April output fell 4.3% m-o-m.

The growth for the first four months of 2010 increased by 15.1%, as compared with the same period last year.

The Department of Statistics said the output for the mining sector in April increased 0.8% y-o-y due to the increase in natural gas index (13.8%).

However, the crude oil index fell 4.5%, while mining output decreased to 4.6%, it said.

The electricity output fell 2.4% m-o-m, while for the period of January-April 2010, it registered an increase of 17% y-o-y.


Shares mixed, blue chips slightly higher

KUALA LUMPUR: Share prices on Bursa Malaysia remained mixed at midday on Thursday, June 10 as investors were reluctant to take fresh positions despite the announcement of the 10th Malaysia Plan (10MP), dealers said.

However, the FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] ended the morning session in the positive territory, up 2.58 points to 1,292.66, supported by mild gains in select heavyweights like Maybank and CIMB Group.

"The market did not react much to the announcement. Investors were still looking for good bargain-hunting opportunities, an analyst said, adding that they were awaiting for prices to ease back before entering the market.

He also said investors' interest may center on CONSTRUCTION []-related stocks, healthcare and consumer stocks that were likely to benefit largely from the RM230 billion development spending announced under the 10MP.

The Finance Index rose 30.9 points to 11,617.13, the INDUSTRIAL INDEX [] went up 3.43 points to 2,578.53 and the PLANTATION [] Index was 8.46 points higher at 6,085.99.

The FBM Emas Index was 11.63 points better at 8,690.82, the FBM70 [] Index decreased 12.01 points to 8,574.53 while the FBM Ace Index dropped 2.26 points to 3,780.44.

Losers thumped gainers 222 to 203 while 222 counters were unchanged. Volume stood at 386.928 million shares worth RM309.460 million.

Among active stocks, Kenmark gained five sen to 19.5, Talam was one sen higher at 15 sen while Affin-WC lost half-a-sen to 1.5 sen.

Heavyweights, Maybank added three sen to RM7.41, CIMB Group rose two sen to RM6.90 while Maxis dropped one sen to RM5.31. - Bernama




Najib's speech on 10MP

Speech by Prime Minister Datuk Seri Najib Razak in the Dewan Rakyat on the Tenth Malaysia Plan (2011-2015).
Towards a high income and advanced nation


Mr Speaker, Sir,
I stand in this august House to table a motion as follows:

"That this House,
acknowledges the challenges of economic growth and socio-economic progress during the implementation of the Ninth Malaysia Plan in the face of a challenging global environment;

endorses the efforts of the government to continue to implement the national mission with the support of the New Economic Model as the framework for development to achieve the objectives of Vision 2020;

approves the Tenth Malaysia Plan, which will be implemented based on strategic thrusts, programmes and allocations which are needed to realise Vision 2020 and to advance the nation to high-income and developed nation status by 2020 as set out in Order Paper CMD.3 of 2010;

That in approving the Tenth Malaysia Plan, this august House calls upon all Malaysians to unite in the spirit of "1Malaysia: People First, Performance Now and make a strong commitment to carry out the noble responsibility to make a success of the transformation plan to become a high-income, developed, resilient and competitive nation, in the interest of the well-being of all Malaysians."

Towards economic prosperity and social justice

Introduction
Mr Speaker, Sir,
3. Praise be to Allah SWT for by His grace and generosity, on this auspicious day, 10 June 2010 or 27 Jamadil Akhir 1431, I am able to table the Tenth Malaysia Plan (10MP) for the period 2011-2015. This plan is critical for the continuation of the national agenda to realise Vision 2020 and become an advanced and high income nation.

Mr Speaker, Sir,
4. Since independence more than five decades ago, as a nation characterised by diversity, Malaysia has achieved remarkable success after success. Many expected Malaysia to fail but we managed to prove that their doubts and cynicism were unfounded.

5. Malaysia can be proud because we have demonstrated that with the right leadership and environment, we have prevailed in the face of many challenges, overcome many barriers and achieved success. As a result, from a low income agrarian nation dependent on rubber and tin, Malaysia has emerged as a modern, industrial, high middle income nation with strong economic fundamentals.

6. All these achievements did not happen by chance nor without proper planning and diligent efforts, instead it was a result of visionary Government leadership, coupled with the rakyat.s unwavering support since independence. In this respect, we are greatly indebted to the past leadership and previous generations, because their great efforts and sacrifices provided us with a strong foundation, from which we can build on. This developmental journey has spanned Two Malaya Plans, Nine Malaysia Plans, Three Outline Perspective Plans as well as a National Mission before coming to this juncture today.

7. At this point, on behalf of the Government and the people of Malaysia, I would like to record our sincerest appreciation and highest gratitude to our five former Prime Ministers, starting from Tunku Abdul Rahman Putra, Tun Abdul Razak Dato. Hussein, Tun Hussein Dato. Onn, Tun Mahathir Mohamad and Tun Abdullah Ahmad Badawi. They are all national heroes, whose contributions deserve to the highest accolades. For those who have left us, we pray that their souls be blessed and accorded the appropriate rewards by Allah SWT.

8. Undoubtedly, the nation.s historical journey has endured crises and enjoyed triumphs. Our history offers valuable lessons, but we cannot allow experience to constrict our ambitions going forward. To succeed, we must be brave enough to think outside of the box. In this regard, even though the Government should use history as a guide, we should not be confined by history from what we intend and plan to do.

9. For the 9MP period, the Malaysian economy is expected to have grown at a rate of 4.2% per annum and gross national income per capita to reach 26,420 ringgit or 8,260 US dollars in 2010. In addition, this is being achieved in a low inflation environment while the unemployment rate is expected to remain at 3.6% in 2010. The federal government fiscal deficit is expected to narrow to 5.3% this year compared with 7% of GDP in 2009.

10. The implementation of poverty eradication programmes successfully reduced the incidence of poverty to 3.8% in 2009, compared with 5.7% in 2005. The incidence of hardcore poverty also declined from 1.2% in 2005 to 0.7% in 2009.

11. To overcome the challenges of the global economic slowdown in 2008 and 2009, the government implemented two economic stimulus packages amounting to 67 billion ringgit. With the grace of Allah SWT, the economy has rebounded and recorded an impressive growth rate of 10.1% for the first quarter of 2010. This is the fastest quarterly growth rate in a decade. God willing, in 2010, the Malaysian economy is expected to recover and record a 6% growth rate.

Mr. Speaker, Sir,
12. Our journey towards Vision 2020 is full of challenges and uncertainties at the global level. The global economic landscape today has changed significantly and Malaysia can no longer depend on a low-cost structure to remain competitive internationally. Globalisation, liberalisation and the emergence of countries, such as China, India, Brazil, Russia, the Middle East and countries in the region have intensified the competition for trade and investment.

13. Apart from external factors, Malaysia faces various internal challenges to drive economic growth to a higher level, while having to implement a prudent fiscal policy. The nation is confronted with the challenge of providing a conducive investment environment as well as developing high quality human capital, which are critical to enable the shift to a higher level of value added and productivity.

Mr Speaker, Sir,
The Tenth Malaysia Plan ' the way forward

14. The 10MP has been formulated with various new approaches towards becoming a high income and high productivity economy, in line with the New Economic Model. During the 10MP, the gross national income per capita is targeted to increase to 38,850 ringgit, or 12,140 US dollars, in 2015. This requires achieving real GDP growth of 6% per annum. Growth will be led by the services and manufacturing sectors, in addition to revitalising the agriculture sector towards higher value added as well as the adoption of ICT, bioTECHNOLOGY [] and other relevant technologies.

15. A key challenge of the 10MP is to stimulate private sector investments to grow at 12.8% per annum or 115 billion ringgit per annum. At the same time, the government is committed to reducing the fiscal deficit from 5.3% of the GDP in 2010 to less than 3% in 2015. In addition, the government will ensure that the living standards as well as the quality of life of the rakyat continues to improve, particularly for the bottom 40% household income group.

Mr Speaker, Sir,
10MP ' 10 Main Premises

16. Transforming the nation towards achieving Vision 2020 requires a holistic and focused approach. We can only succeed if we put our hearts and minds to it. This Plan is based on 10 ideas, which have been translated into 10 Main Premises as follows:
First: Internally driven, externally aware.
Second: Leveraging on our diversity internationally.
Third: Transforming to a high-income nation through specialisation.
Fourth: Unleashing productivity-led growth and innovation.
Fifth: Nurturing, attracting and retaining top talent.
Sixth: Ensuring equality of opportunities and safeguarding the vulnerable.
Seventh: Concentrated growth, inclusive development.
Eighth: Supporting effective and smart partnerships.
Ninth: Valuing our environmental endowments.
Tenth: Government as a competitive corporation.

10MP ' Five Strategic Thrusts
17. To achieve the aspirations of the 10MP, five key strategic thrusts have been identified. These thrusts are holistic and comprehensive strategies to achieve the objectives and targets set in the 10MP. The five thrusts are as follows:

First: Designing Government philosophy and approach to transform Malaysia using NKRA methodology;
Second: Creating a conducive environment for unleashing economic growth;
Third: Moving towards inclusive socio-economic development;
Fourth: Developing and retaining a first-world talent base; and
Fifth: Building an environment that enhances quality of life.

Mr Speaker, Sir,
First Strategic Thrust: Designing Government Philosophy And Approach To Transform Malaysia Using NKRA Methodology

18. The transformation of the nation requires the transformation of the Government machinery to support changes in the economic landscape. To emerge as a competitive nation at the global level, the Government needs to increasingly act as a competitive corporation. In pursuing our aspiration to become an advanced and high income country, we can no longer resort to mere incremental measures but instead, the Government must implement transformational measures, while at the same time, pursuing its social justice agenda. For these reasons, the Government will uphold 4 main pillars that is the four by four formula.

19. Two of these components can be divided to 4 Main Pillars, comprising Firstly: The 1Malaysia, People First, Performance Now philosophy; Secondly: The Government Transformation Programme or GTP; Thirdly: The Economic Transformation Programme or ETP which rests on the New Economic Model; and Fourthly: The five-year development plans which are the Tenth Malaysia Plan and Eleventh Malaysia Plan. These four main pillars are supported by 4 complementary values. Firstly: Acculturation of creativity and innovation; Secondly: Emphasis on speed of decision-making and execution; Thirdly: Value for money; and Fourthly: Integrity values. Using the analogy of a house, the roof would be the prime philosophy depicting 1Malaysia, People First, Performance Now, the walls would be the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP), and the foundation that is being constructed can be likened to the Tenth Malaysia Plan and Eleventh Malaysia Plan. The staircase to the 1Malaysia home would be the social justice policies and a culture of high achievement.

20. Furthermore, the Government.s transformation measures that are currently being undertaken began with the implementation of the six national key result areas or better known as NKRA. Through the NKRAs, the Government is determined to reduce crime, fight corruption, improve student outcomes, raise living standards of low income households, improve rural basic infrastructure and urban public transport. The consultative approach with the public and private sectors as well as the non-government organisations (NGO) has been adopted to ensure that the wants and needs of people are taken into account.

21. To date, many of the initiatives under the NKRAs have borne fruit. As an example, the overall crime index dropped by 15% in the first quarter of 2010 compared to the target of 5% in 2010. In the effort to fight corruption, the Whistleblower Act was approved by this august house in April 2010. Under the NKRA on urban public transport, measures to realign the routes linking main towns have increased ridership by 13%. For the NKRA on education, about 18,000 children have benefited from 929 pre-school classes.

22. Continuous initiatives have been identified by PEMUDAH to enhance Government efficiency and procedures. These have resulted in marked improvements in many areas. For example, beginning 1 April 2010, the time taken to start a business was significantly reduced to 3 days from 11 days . Today, registration of land transfers can be completed in one day compared to 30 days previously. Effective 11 May 2010, there are 26 locations nationwide where Malaysian international passports can be issued within 1 hour.

ST1.1 Shift of Focus to Non-Physical Infrastructure

23. Moving forward, the Government will focus on efforts to develop non-physical infrastructure, including human capital development such as skills development and strong innovation capabilities.

Meanwhile, the 10MP allocation for non-physical infrastructure will be increased to 40%, compared with 21.8% in the 9MP. Focus will be given to skills development programmes, R&D activities and venture capital funding geared towards promoting a higher level of innovation in the country.

24. This approach is also in line with efforts to encourage the private sector to invest in physical infrastructure and provide services such as skills training. To support this objective, the Government will shift its focus to the private sector for procurement of services. This means that the private sector will compete to offer skills training services at competitive costs.

ST1.2 Improving Efforts for Human Capital Development in the Public Sector

25. We take cognisance that the delivery of efficient and effective government services is closely linked to the quality of human resource. To ensure the best talents remain in the civil service, the framework for human resource management and career development will be improved. Opportunities for civil servants to increase their knowledge and field of expertise will be expanded. In this respect, a world-class civil service college will be established to raise the competency of civil servants.


Mr Speaker, Sir,
Second Strategic Thrust: Creating a Conducive Environment for Unleashing Economic Growth
ST2.1 National Key Economic Areas (NKEAs)

26. The main approach in transforming to a high income economy will be to adopt strategies based on specialisation, given that strong and sustainable competitiveness is difficult to achieve without specialisation. This Plan will focus on 12 national key economic areas or NKEAs which have potential to generate high income. Apart from 11 sectors, Greater Kuala Lumpur has also been selected as an NKEA as it has the potential to become a world-class city that can be a driver of economic growth. Details of the NKEA will be finalised in the Economic Transformation Programme, which will be announced in October. The following are the NKEAs:

(i) Oil and gas; (ii) Palm oil and related products; (iii) Financial services; (iv) Wholesale and retail; (v) Tourism; (vi) Information and communications technology (ICT); (vii) Education services; (viii) Electrical and electronic; (ix) Business services;

(x) Private healthcare; (xi) Agriculture; and (xii) Greater Kuala Lumpur.

An Economic Transformation Unit will be established to plan and coordinate the implementation and development of the NKEAs.

27. In addition, the application of high technology will be emphasised in the development of NKEAs. Technology platforms such as biotechnology, nanotechnology and high-end engineering will further increase the impact of the NKEAs on economic growth.

28. For economic sectors which are not listed as NKEAs, such as green technology, automotive, aerospace and logistics, the development of these sectors will continue to be driven by relevant ministries, agencies and councils.

ST2.2 Creating Private Sector-led Economy

29. The achievement of the 6% per annum growth target for the 10MP period requires a significant leap in investment activities led by a more dynamic private sector. To achieve this goal, the Malaysian Investment Development Authority (MIDA) has been corporatised and rebranded. In addition, business regulations which are outdated will be abolished. Towards this end, the Malaysian Productivity Corporation (MPC) will be restructured to spearhead a comprehensive review of business regulations and improve processes and procedures to increase productivity and competitiveness of major economic sectors.

30. Healthy competition is needed to make the economy more efficient and dynamic. For this, the Competition Law will be introduced to provide a regulatory framework against market manipulation and cartel practices that may affect market efficiency. A Competition Commission and Appeal Tribunal will be established to ensure more orderly and effective implementation of the law.

31. China, India and the Middle East are among the rapidly growing economies. Malaysia, which has historical and commercial links with these countries and is strategically located, must strengthen its relationship with these countries including East Asia. Therefore, Malaysia must focus on building the regional markets through trade promotions and trade agreements. In addition, we will continue to strengthen existing economic relations with Europe and the US.

32. I am confident that the measures that we will implement can make Malaysia one of the best countries to do business in, particularly in the Asian region. According to the World Bank Report, Malaysia is now ranked 23rd out of 183 countries for ease of doing business. The Government believes that the country will be ranked among the top ten by 2015.

33. This is not impossible given that Malaysia has leaped to become the 10th most competitive country within a year based on the recent report of the Institute for Management Development. Malaysia is the only OIC and NAM country in this top ten list. However, the Government will not rest on its laurels and will continue to strive to be among the top five in the world in the future.

ST2.3 Public-Private Partnership

34. Smart and effective partnerships between the public and private sectors will be established to drive the economic transformation agenda. This new wave of public-private partnership (PPP) will ensure equitable sharing of risks and returns.

35. To date, 52 high-impact projects worth 63 billion ringgit have been identified for implementation. These include:

First: Seven highway projects at an estimated cost of 19 billion ringgit. Among the projects are the West Coast Expressway, Guthrie-Damansara Expressway, Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway;
Second: Two coal electricity generation plants at an estimated cost of 7 billion ringgit; and
Third: Development of the Malaysian Rubber Board.s land in Sungai Buloh, Selangor covering an area of 3,300 acres at an estimated cost of 10 billion ringgit.

36. The private sector will also have the opportunity to participate in the development of several projects led by government-linked companies (GLCs). These include projects such as the Kuala Lumpur Strategic Development by 1Malaysia Development Berhad (1MDB) covering the Sungai Besi Airport area, the KL International Financial District in Kuala Lumpur, CONSTRUCTION [] of the liquefied natural gas regasification plant by PETRONAS in Melaka at an estimated cost of 3 billion ringgit as well as two aluminium smelters in SCORE Sarawak with an estimated cost of 18 billion ringgit.

37. To help the private sector finance these projects, a Facilitation Fund of 20 billion ringgit will be provided under the 10MP. This fund aims to help bridge the private sector viability gap with respect to projects that have a strategic impact and those with huge economic spill over. The fund is expected to attract private sector investments worth at least 200 billion ringgit during the Plan period. Projects that are being considered for financing under this fund include Land Reclamation in Westport in Port Klang, Malaysia Truly Asia Centre in Kuala Lumpur and Senai High Technology Park in Iskandar Malaysia, Johor.

ST2.4 Innovation-led Growth

38. As we all know, economic growth thus far has been driven by factors of production, mainly investment, energy and labour. The shift to high income will need growth that is based on productivity and led by innovation. For that purpose, the Government will establish a special unit under the Prime Minister.s Department to set the direction and drive the National Innovation System and innovation policies and strategies.

39. An important measure in the 10MP is improving the method of financing for public venture capital companies. Currently, government financing for public venture capital companies, such as the Malaysian Technology Development Corporation and Malaysian Venture Capital, is provided through long-term loans. In this Plan, financing will be in the form of equity to match the risk profile of venture capital investment. For this purpose, the Mudharabah Innovation Fund (MIF), with an allocation of 500 million ringgit, will be introduced to provide risk capital to government venture capital companies. To bridge the financing gap between the early stage of commercialisation and venture capital financing for high tech products, the Government will set up a Business Growth Fund with an initial allocation of 150 million ringgit. The aim of this fund is to support these companies until they can generate sufficient commercial value to attract venture capital financing and other forms of financing.

40. We realise many entrepreneurs have failed due to unexpected business risks. It will be a tragedy if a high calibre and credible entrepreneur who fails once, is not given a second chance to recover and become a successful entrepreneur. We are aware of many individuals, businesses and innovation initiatives that failed the first time, but became successful later. Hence, bankruptcy laws will be simplified to support a risk-taking culture, eliminate the stigma of failure and allow high calibre and credible entrepreneurs who fail to become active again.

ST2.5 Building World-Class Infrastructure

41. The 10MP will continue to focus on the provision of infrastructure to support national growth, while ensuring that it benefits all segments of the rakyat. The implementation of the high-speed broadband project will cover major towns, priority economic growth areas and industrial areas. This will be complemented with the roll out of the Broadband for General Population which will provide coverage for sub-urban and rural areas. For the rural population, last mile broadband services will be provided through wireless infrastructure, offering a variety of affordable packages.

42. The development of a wider and efficient multimodal transport network is also needed to support national growth. Among the major projects that are currently being implemented is Phase 2 of the East Coast Expressway from Kuantan to Kuala Terengganu, which will be completed in the Plan period at a total cost of 3.7 billion ringgit. This expressway will also be linked to the Kuantan Port, which will be upgraded and will spur growth in the east coast. Road networks to the hinterlands will also be improved. Among them are the roads linking Kuala Lipis to Cameron Highlands and from Jerantut to Sungai Lembing. In addition, the electrified double track rail project from Gemas to Johor Bahru, which is estimated to cost 8 billion ringgit, will be implemented to complete the electrified double track rail project from Padang Besar in the north to Johor Bahru in the south. Apart from these, will be the construction of a sewerage treatment plant using green technology in Lembah Pantai, Kuala Lumpur and at a later stage, similar plants throughout the country.

ST2.6 New Energy Policy

43. In this Plan, energy supply will continue to be strengthened by creating a more competitive market and reducing energy subsidy in stages. The New Energy Policy has identified five approaches:

First: rationalising energy pricing gradually to match market price, taking into account current economic condition and affordability to the rakyat;
Second: undertaking a more strategic development of energy supply by diversifying energy resources, including renewable energy resources. Nuclear energy will also be considered as an alternative source of energy;
Third: accelerating the implementation of energy efficiency initiatives in the industrial, commercial, residential and transport sectors;
Fourth: improving governance to support the transition to market pricing, while providing assistance to mitigate impact on the low income group; and
Fifth: ensuring that the New Energy Policy is implemented based on an integrated approach and according to schedule to achieve energy supply security.

ST2.7 Cluster Development

44. Regional economic development will focus on a number of dense urban clusters with high value industries to attract investments and skilled workforce. This is intended to transform several cities in Malaysia as destinations to attract high tech investments, talent and knowledge workers.

45. The cluster-based development approach that will be adopted in the corridors will exploit the potential and available resources and serve as a catalyst to growth. Cluster development will focus on selected sectors as well as identify key investors, including government linked companies and the private sector, to lead the development of clusters in the corridors. In addition, connectivity and linkages between the clusters and its suburban and rural hinterland will be improved to ensure direct benefit to these areas.

ST2.8 Developing SMEs as the Engine of Growth and Innovation

46. Small and medium enterprises (SMEs) play an important role in spearheading the economic growth of the country. The Government will continue to support SME development, including small companies that are still in the early stage, and companies that have the potential to become global. We will also encourage foreign SMEs to collaborate with local SMEs, particularly in modern technology, so that they can mutually benefit from the transfer of technology and access to wider markets.

47. To ensure that the SMEs have better access to financing facilities, the Government established the Working Capital Guarantee Scheme totalling 7 billion ringgit and the Industry Restructuring Loan Guarantee Scheme totalling 3 billion ringgit which I announced under the Second Economic Stimulus Package. The entire 7 billion ringgit under the Working Capital Guarantee Scheme has been approved. In view of the encouraging response to the Working Capital Guarantee Scheme, the Government will provide an additional three billion ringgit under 10MP, making it a total of 10 billion ringgit.

48. The Government is aware that there are local SMEs, which have penetrated international markets, but face problems to gain a foothold locally. There are also SMEs that have obtained domestic recognition or international awards in terms of quality and innovation. Such SMEs will be given green lane access or priority in the procurement processes of the Government and GLCs.

49. The Government views seriously the provision of credit facilities for SMEs to facilitate their participation in key economic activities. In this regard, the Government will consider increasing the financial resources of the SME and the Agro Bank to enable them to provide effective services to SME entrepreneurs. In addition, SME Corp will be provided adequate financial allocation to ensure that SMEs with potential to succeed receive appropriate assistance.


Mr Speaker, Sir,
Third Strategic Thrust: Moving Towards Inclusive Socio-Economic Development

50. Inclusiveness is the main prerequisite to ensure that every Malaysian can benefit from the prosperity resulting from the country.s development. This approach will ensure social justice for groups that are truly in need of assistance and no one will feel marginalised.

51. The Government will continue to undertake relevant initiatives in ensuring a better future for the rakyat. Development policies will be driven by the principles of progressiveness and pragmatism in the interest of the rakyat. However, we will always abide and uphold the Federal Constitution with the highest regard and sanctity.

ST 3.1 Participation of the Bumiputera Community in the Economy

52. The Bumiputera development agenda will continue to be addressed in line with the concept of growth with distribution. In view of the increasingly challenging global and domestic economic environment, there is a need to transform the Bumiputera development agenda to enhance participation among competitive and resilient Bumiputera companies. This new approach will be based on four key principles: market-friendly, needs-based, merit-based and transparency.

53. Priority will be given to enhancing Bumiputera capabilities. In this regard, emphasis will be given to enhance Bumiputera capabilities by leveraging on past achievements. Support will be given to potential Bumiputera enterprises who have demonstrated their capability and credibility to enable them to move towards higher value added activities in line with the Government.s aspiration, so that they can realise and optimise their potential.

54. The objective of Bumiputera ownership restructuring in the early 1970s was focused on equity ownership. Going forward, the measurement of Bumiputera participation in the economy will be enhanced to include financial and non-financial assets, such as real estate and business premises as well as professional employment. This holistic and comprehensive approach focuses not only on the aspect of wealth ownership, but also the aspects of income enhancement, in line with the government's aspiration to become a high-income nation. At the same time, the target of achieving at least 30% Bumiputera corporate equity ownership at macro level remains.

55. Accordingly, five strategic initiatives to strengthen the Bumiputera development agenda have been identified for implementation as follows:

First: Increasing Bumiputera equity ownership through institutionalisation. In this regard, private equity programmes in government-linked investment companies, such as Permodalan Nasional Berhad (PNB), Lembaga Tabung Angkatan Tentera and Tabung Haji will be renewed, strengthened and expanded to consolidate and pool various funds to broaden ownership and control of Bumiputera equity.

In this context, EKUINAS was established as a Bumiputera private equity investment institution. EKUINAS has a similar function as PNB, with special emphasis to invest in high potential medium-sized companies, to be supported to become champions and leaders in their respective sectors.

EKUINAS will adopt a new approach which is more market-friendly and merit-based. In this regard, the Government will support credible Bumiputera entrepreneurs and capable Bumiputera professionals to expand their businesses to a higher level at the domestic, regional and international arena.

Second: Increasing Bumiputera property ownership. In this context, Pelaburan Hartanah Berhad will establish a Real Estate Investment Trusts (REITs) to facilitate Bumiputera investment in commercial and industrial PROPERTIES [] and benefit from property appreciation. In addition, Kampong Bharu, a valuable Bumiputera asset in the heart of Kuala Lumpur will be redeveloped to enable landowners to realise and unlock the value of their properties without affecting the Malay ownership.

Third: Improving skill and entrepreneurial development programmes and funding through various Bumiputera development agencies. An integrated development package will be provided to the Bumiputera Commercial and Industrial Community (BCIC) to strengthen their competitiveness and resilience. The package will include entrepreneurial training, technical assistance, financing, consulting services, promotion and marketing. To improve access to financing facilities, 1.5 billion ringgit or half of the additional Working Capital Guarantee Scheme of three billion ringgit, which I announced earlier, will be allocated to Bumiputera entrepreneurs. In addition, entrepreneurial development organisations, such as MARA and Perbadanan Usahawan Nasional Berhad (PUNB), will be strengthened. For this, an allocation of three billion ringgit will be provided;

Fourth: Developing professional Bumiputera employment in a more holistic manner. In terms of employment creation, we have successfully produced large numbers of Bumiputera professionals, including accountants, engineers, medical specialists, lawyers and others in the corporate sector. Currently, Bumiputera participate in all professions and even lead in the fields of engineering, medicine, law, surveying and architecture. During the period 2000-2008, Bumiputera overall employment increased from 56% to 63%, while in the managerial and professional category, it increased from 46% to 51%; and

Fifth: Establishing a high-level Council to plan, coordinate and monitor the implementation of the Bumiputera development agenda. I will lead this Council, made up of relevant cabinet ministers, senior government officials and the private sector. The Economic Planning Unit in the Prime Minister's Department will be the secretariat to the Council. The Project Management Unit in the Ministry of Finance will monitor the implementation of programmes to ensure their efficient and effective implementation.

ST3.2 Continuation of Social Justice Policy

56. The Government is cognisant of its responsibilities and commitments arising from the mandate given by the rakyat towards ensuring social justice. The Government is committed to continue policies based on social justice. I believe many of the difficulties faced by the rakyat, whether in interior villages, estates or the Chinese new villages, can be resolved by giving specific attention to the issues. The intention of my walkabouts is to receive feedback on difficulties faced by the rakyat.

57. The 10MP will focus on raising the income and quality of life of the bottom 40% household income group. Bumiputera form the largest number, that is 73% of the 2.4 million households in this group.

58. In order to enhance competitiveness and market efficiency, as well as ensure more optimal utilisation of resources, price controls and subsidies need to be reduced in stages to eliminate market distortions and abuses. However, any subsidy reduction will only be undertaken after taking into consideration the feedback from the rakyat. I wish to give the assurance, that the lower income group and those who are most vulnerable will continue to be given assistance to mitigate the impact of any subsidy reduction on their cost of living.

59. Specific focus will be given to disadvantaged groups, especially those living in the interior, those who live in long houses in Sabah and Sarawak, as well as the Orang Asli and estate workers in Peninsular Malaysia. There are still pockets of people living without electricity and water supply, and with limited access to health facilities. There are school children who have to make arduous daily trips to schools. I assure you that we will address issues of the less fortunate and free them from the poverty trap. I want to ensure that the prosperity, resulting from the country.s development, will be enjoyed by all Malaysians, to those in a Malay kampung in Grik, Perak; to Orang Asli communities in Pos Titom, Cameron Highlands; Indian estate workers in Mary PLANTATION [] Estate, Kuala Selangor; residents of Chinese new village in Pasir Hitam, Perak; Iban communities in Mujong Balleh, Sarawak; and Rungus communities in Kudat, Sabah.

60. For this, the Government will intensify the implementation of economic programmes and the provision of basic amenities. The Government is also considering to grant land titles to the Orang Asli and Bumiputera of Sabah and Sarawak. This will enable them to benefit from integrated agricultural development programmes through the agropolitan and contract farming approaches. They will also be given better access to infrastructure and public facilities, such as roads, education and skill training.

61. Focus will also be given to improving the quality of life of workers in estates and displaced estate workers. Water supply will be provided to 182 estates, up to 1,000 acres in size and located less than five kilometres from the water mains, costing 109 million ringgit. Skills training will be provided especially to school drop-outs from various ethnic groups, to enhance their employability. Those interested to venture into small businesses will be given appropriate access to AIM and TEKUN micro-credit facilities and this will help to address urban poverty. This loan scheme will be packaged together with entrepreneurship training to develop their capabilities in areas such as financial management, preparation of business plan, marketing and promotion. The training will be conducted in Institut Keusahawanan Negara (INSKEN), Pusat GiatMara and Institut Kemajuan Desa (INFRA).

62. Residents in Chinese new villages will also be given assistance. Currently, there are about 280,000 households living in these new villages. The residents will be provided soft loans to assist them to pay their land premiums and renewals of leasehold. The loan will be channelled through Bank Simpanan Nasional and an initial fund of 100 million ringgit will be provided. In addition, the Cabinet Committees for Indians as well as Sabah and Sarawak Bumiputera affairs will continue to address the issues of the respective communities.

Mr Speaker, Sir,
Strategic Thrust 4: Developing and Retaining a First-World Talent Base
63. Competition for talent has intensified, many countries particularly developed nations, have adopted comprehensive and open policies in attracting the best talent including Malaysians. A skilled and knowledgeable workforce is the cutting edge of a nation.s competitiveness. In this regard, the Government will implement holistic measures to strengthen education and training systems, starting from early childhood to tertiary education. Aside from providing the best teaching and learning infrastructure, the Government will also ensure that the quality of teachers and educators are of a high level.

ST4.1 Raising Student Quality

64. To improve the quality of students, the proportion of graduate teachers in primary schools will be increased from 28 to 60%. The performance of students in critical subjects, particularly the National Language, English, Science and Mathematics, will also be improved by increasing the number of quality teachers. To achieve this goal, the programme enabling non-graduate teachers to attain degrees will be intensified. To improve the quality of preschool teachers, the qualification requirement for their appointment will be raised to a diploma and bachelor's degree. The Government will also implement measures to establish teaching as a profession of choice.

65. In order to meet the demand for quality Mandarin language teachers in Chinese National Schools and National Schools, those with Unified Examination Certification and Sijil Pelajaran Malaysia or SPM will be considered for enrolment into the Chinese Language Programme in Institutes of Teacher Education. The same consideration will also be given to those who have Sijil Menengah Agama or Sijil Tinggi Agama and SPM to become teachers in J-Qaf and Islamic Education Programme.

66. The government has also established high-performing schools to enable students to achieve excellence in all aspects of education. Twenty schools have been awarded the status of high-performing schools based on their achievement and performance. The number of high-performing schools will be increased to 100 by the end of 2012, which will include primary, secondary, day and residential schools.

67. A Trust School framework will be introduced to enable public private partnership in the management of selected government schools. The Government will provide Trust Schools with greater autonomy in decision making and in return greater accountability in improving student outcomes. The autonomy will include flexibility to modify the learning curriculum, use of allocation, providing incentives to teachers in line with their performance and selection of teachers and support staff.

68. The Government will continue to help government-aided schools to ease the burden borne by the school management. For purposes of renovating and upgrading government-aided schools, a sum of 280 million ringgit will be allocated for 2011 and 2012. Each category of government-aided school, namely Chinese schools, Tamil schools, religious schools and mission schools will receive an allocation of 70 million ringgit for the first two years of the Plan. In addition, assistance will be provided to pay electricity and water bills, up to two thousand ringgit per month per government-aided school, benefiting about 1,900 government-aided schools.

69. Children are our most valuable assets. They are our future. The Government is committed to provide children with opportunities for their future success in coping with challenges and competition. The investment on these children is vital for the country's future. Accordingly, the PERMATA early childhood education programme has become an important national agenda.

70. According to experts, there is a gifted child for every 10,000 children. In 2007, there were about 8.9 million children under the age of 14 in Malaysia. This means there are at least 900 gifted children in Malaysia.

71. The enrollment of children between the ages of 4+ and 5+ years in preschools will be increased from 67% in 2010 to 87% in 2012. This target will be achieved through the addition of preschool classes in government primary schools and by encouraging the private sector to establish preschools. An incentive of 10 thousand ringgit will be provided to private preschool providers for each new preschool established.

72. In addition, to strengthen pre-school programmes, the government is considering lowering the entry age of formal schooling from 6 to 5 years during the Plan period based on the capacity of the Government. The lower entry age will extend the access to structured education for children during their formative years.

ST4.2 Mainstreaming Technical Education and Vocational Training

73. In developed countries, technical education and vocational training are the preferred choices for students expecting good career prospects. In Malaysia however, it appears to be the last choice due to perceived limited career opportunities. This misperception has to be changed. Technical and vocational training provides a viable alternative for individuals to realise their full potential. Every year, 100,000 SPM holders or 22% enter the job market without any skills training. To enable them to obtain technical education and vocational training, such facilities will be enhanced. The focus will be to improve the value proposition and attractiveness of technical education and vocational training to prospective student, providers and industries. In this regard, the Department of Skills Development will be the sole agency in developing and certifying the quality of the technical education and vocational training curriculum. The Malaysian Skills Certificate will be recognised for entry into the civil service and institutions of higher learning. I believe these measures will increase confidence and encourage more school leavers to pursue their studies in technical education and vocational training.

74. Currently, only 23% of our workforce is highly skilled. This percentage is much lower compared with other developed countries. We need to improve the composition of highly skilled workers to at least 37% by 2015, to become a developed nation. To encourage private sector involvement in the training for highly skilled workers, the Government will undertake the following measures:

First: Expand the coverage of matching grants of the Human Resource Development Fund and SME Corp Malaysia to assist employers of small and medium industries in the training of their employees;
Second: Provide financial assistance in the form of loans for employees to undergo training to enhance their qualification. A sum of 500 million ringgit will be provided under the Skills Development Fund Corporation and this is estimated to benefit at least 38,000 employees;
Third: Establish a joint fund financing between the Government and employer to enable employees to study at the PhD level in fields related to the industry where they are currently employed;
Fourth: Expand the National Dual Training System (NDTS) programme, which stipulates 70% of training content is hands-on in the workplace and 30% is theoretical class at training institutions. The NDTS covers workers and SPM school leavers and will be expanded to include those unable to complete 11 years of education;
Fifth: Expanding the recognition of prior learning by awarding the Malaysian Skills Certificate to 60,000 employees annually on the basis of their knowledge, experience and skills acquired in the workplace; and
Sixth: Encourage the private sector to provide vocational and skills training using the Public Private Partnership method.

ST4.3 Raising Graduate Competence

75. To improve the competence of graduates, their employability will be one of the KPIs of universities. Financial allocation to universities will depend on the achievement of their KPI targets. In addition, the Government will grant gradual autonomy to the universities to improve their performance.

76. The quality of academic staff will be improved by increasing the number with PhDs, with a target of 75% in research universities and 60% in other public universities. To achieve this target, the implementation of the MyBrain15 programme will be intensified to finance doctoral studies for the purpose of increasing the number of PhD holders to 18,000 by 2015. In addition, salary packages will be reviewed to attract foreign lecturers and retired academic staff.

77. The higher education institutions in the country have played a pivotal role in moving and providing the impetus for research, development and commercialisation activities. Academicians in various fields of expertise have been pioneering new ideas, concepts or theories to be the leading edge for new discoveries, expansion of knowledge as well as new creations and inventions that are technologically advanced and innovative. As a matter of fact, there is significant relationship between economic growth and R&D activities in higher education institutions. Hence, in order to promote and encourage R&D activities among the higher education institutions, the Government has declared UM, UKM, UPM and USM as research universities. In tandem with our aspirations to further enhance R&D activities and programmes under the 10th Malaysia Plan, I hereby, have the pleasure of announcing another public university to be elevated to the status of a research university. The said research university is Universiti Teknologi Malaysia (UTM).

ST4.4 Increasing Labour Market Efficiency

78. The efficiency of the nation.s labour market needs to be improved. In this regard, related labour laws will be reviewed to ensure a balance between labour market flexibility and job security.

79. Currently, the country has approximately 1.9 million foreign workers, especially in jobs that are not favoured by locals, the continued reliance on unskilled foreign workers will hinder our aspiration to shift to higher value added economic activities. Therefore, the foreign worker employment policy will be streamlined by introducing different levy rates according to the ratio of foreign workers to total workers in the company, and vary according to the skill level of the foreign workers. Higher rates will apply for lower skilled workers. The rates will be increased yearly.

80. To attract more skilled workers into the country, the Government will establish a Talent Corporation, which will identify skill shortages in key sectors, and attract and retain necessary skilled human capital. While we are faced with the shortage of skilled manpower, there are more than 700,000 Malaysians currently working abroad. The Talent Corporation is expected to spearhead Malaysia's initiative to attract the Malaysian diaspora back to the country to contribute to the country's skilled manpower needs.

81. For this, the Talent Corporation will provide an integrated Skilled Human Capital Blueprint with the cooperation of the public and private sectors. In addition, the Talent Corporation will become a one-stop centre to coordinate with relevant government agencies, including immigration matters, for the entry of skilled workers into the country.

82. The Government has launched the National Council of Professors to mobilise intellectual potential in public universities. The intellectual capacity and expertise of more than 1,400 professors in public higher education institutions will be fully capitalised through this initiative. Producing quality human capital is another national agenda to realise Malaysia.s objective to become a developed nation with high income. Therefore, public universities must have the best and highly motivated academic staff and researchers.

83. For this purpose, the Government has announced an improved service scheme for professors and lecturers at public universities and teaching institutions. Under the new scheme, the Senior Professors category will have Staff Grade pay scale. Promotion to this level will be based on individual qualification and performance, and will not be limited to a certain number. Furthermore, the Government has decided to reward The Royal Professor with a better remuneration package in line with the responsibility and prestige of the title. Since The University and College University Act, 1971 has restricted the number of The Royal Professor holders, the Government does not intend to increase their numbers.

Mr. Speaker, Sir,
Strategic Thrust 5: Building an Environment that Enhances Quality of Life
84. Strong and sustainable economic growth is unsatisfactory if the quality of life for all levels of society does not improve in tandem. In line with the concept of social justice imbued in the Tenth Plan, the Government will ensure that the economic prosperity of the nation is equitably distributed, thus, improving the quality of life of all the rakyat.

ST5.1 Ensuring a Higher Quality of Life in Urban Areas

85. Global competition is no longer just between countries but increasingly between cities. Economic activities will naturally concentrate in cities, where the density of firms and talent drives productivity and innovation. Cities are therefore at the frontline in the drive towards high income. The challenge is to enhance the liveability of cities to ensure that the benefits of agglomeration are not lost to escalating crime, grime and time (congestion). In reality, the trend of urbanisation is increasing in Malaysia. Presently, 67% of the population are living in urban areas. To cater for the increasing density, the Government will ensure that urban areas are vibrant and liveable, complete with the necessary infrastructure and facilities. In this regard, the National Physical Plan 2, which will be finalised this year, will pave the way for more strategic and better planning in the creation of compact yet efficient urban areas.

86. The Government aims to provide an attractive and comfortable living environment for city dwellers to live, work and play. Open spaces and green areas will be created and improved. Among the initiatives to be implemented are the transformation of the Lake Gardens in Kuala Lumpur into a botanical garden and the setting up of a Malaysia Truly Asia Tourism Centre in Kuala Lumpur. Waterfront areas of cities will be beautified and turned into attractive spaces, similar to the restoration of the Melaka River waterfront.

ST5.2 Expanding Essential Facilities in Rural Areas

87. Focus will be given to increasing the coverage of basic infrastructure such as roads, electricity and water supply, and communication networks to rural areas. The government will build 6,300 km of paved roads in Peninsular Malaysia, 2,500 km in Sabah and 2,800 km in Sarawak, which is expected to benefit 3.3 million people. The Government will also improve rural water supply with a target of 99% in Peninsular Malaysia, 98 percent in Sabah and 95% in Sarawak. This will involve the extension of water supply to 117,000 homes in Peninsular Malaysia, 112,700 in Sabah and 87,400 in Sarawak.

88. The provision of electricity supply in rural areas will be extended to 6,000 homes in Peninsular Malaysia, 59,000 homes in Sabah and 76,000 homes in Sarawak. Apart from providing infrastructure and basic utilities, the government will also provide social amenities and information and communications technology (ICT) facilities to rural communities.

ST5.3 Enhancing Public Transport Efficiency

89. Improving the public transport system is a major priority of the government. The government has established the Public Land Transport Commission (SPAD) as the lead agency responsible for planning, regulating and enforcing public land transport related matters and operations. It will also be responsible for providing safe and reliable services at reasonable fares to encourage more people to use public transport.

90. In line with the 'Greater Kuala Lumpur' NKEA, the Government will further enhance the public transportation network in Kuala Lumpur with the implementation of the high capacity Mass Rapid Transit system. This is an iconic project in our capital city that will be highly beneficial to commuters and have large spillovers to the economy. When completed, the system is expected to cover a radius of 20 km from the city centre with a total length of about 150 km, and when fully operational, will serve up to two million passenger trips per day from 480,000 trips on current urban rail systems.

91. The construction of bus and rail terminals such as the Gombak Integrated Transport Terminal, will ensure that public transport runs smoothly. These measures are expected to increase the public transport modal share in Greater KL from 12% in 2009 to 30% in 2015. Efforts to enhance the public land transport system will also be expanded to other cities. For this purpose, a Bus Rapid Transit system will be introduced in Iskandar, Johor, while the number of public buses in Pulau Pinang will be increased by 200 buses to enable the expansion of 26 routes with an added capacity of 75,000 passengers per day.

ST5.4 A Healthy People, a Productive Society

92. A healthy society contributes to a dynamic and productive nation. Thus, measures to improve the health of the rakyat will be given special focus. Healthcare access, coverage and quality will continue to be improved. Amongst the Government.s major initiatives are the construction of 8 hospitals, including specialist hospitals, 197 clinics and 50 additional 1Malaysia clinics, which are expected to be ready in the first half of the Tenth Plan.

93. It has been said that a healthy mind comes from a healthy body. A community that is active in sports will be a healthy and productive society. Furthermore, sports can bring not only recognition and glory to the nation, but also serves as a platform for national unity and integration. The Government, in collaboration with the private sector, will emphasise family-orientated sports and recreational activities and its acculturation into the daily life of the community. Accordingly, sports and recreational facilities will be built and upgraded in strategic and easily accessible locations.

ST5.5 Affordable Housing for the People's Well-Being

94. The Government intends to provide an adequate supply of affordable houses especially for the low income. For this, 78,000 affordable houses will be built during the Plan period. Related laws will also be tightened and enforcement enhanced to ensure the quality of affordable houses built.

95. A fund of 500 million ringgit will be established for the repair and maintenance works of public and private low-cost housing. This fund will be allocated on a matching grant basis, where half of the contribution will be borne by the Government and the other half by the management committee or residents. association.

ST5.6 Enhancing People's Confidence in Public Safety

96. Public safety and order is a critical concern for all Malaysians. The Government.s efforts and strategies to improve public safety have shown positive results based on the decrease in overall index crime in the first quarter of 2010. Police patrols will be increased, especially in 50 hot spots to curb criminal activities. These efforts will be complemented and supplemented by RELA, the Civil Defence Department and other public volunteers. In addition, 496 CCTVs are currently being installed nationwide to increase monitoring capacity. The Safe Cities programme is also ongoing with the mobilisation of various government agencies such as the Royal Malaysian Police, local authorities, National Anti-Drug Agency and Department of Social Welfare.

ST5.7 The Development of a Progressive Society

97. As the saying goes, the hand that rocks the cradle rules the world. The status of women in society is a good indicator of a dynamic and progressive country. Women are the cornerstone of happy families and the essence of a successful nation. Steps will be taken to increase the participation of women at all levels in both public and private sectors, including entrepreneurial ventures. Existing laws and related regulations will be reviewed to create a more conducive environment that encourages greater female participation in the workforce. I call upon the private sector to increase the participation of women, especially in senior positions, such as chief executive officers and members of Board of Directors.

98. The young generation is also important because they will shape the future of the nation. Being the largest segment of citizens, the Government will be accommodative to their aspirations. We will become better listeners to as well as constructive partners to youth. Their idealism, ideas and energy are needed by the nation to realise a better future. Therefore, the Government will streamline the delivery system of existing youth development programmes to ensure that the younger generation is more productive in the nation.s socio-economic development, particularly through the activities of associations and volunteerism. Following the success of the Youth Day celebration held recently in Putrajaya, I am also pleased to announce that Putrajaya will be a focal point for youth and it will provide avenues and opportunities for their activities and programmes. More importantly, these programmes can serve as a successful platform to cultivate unity among youth as well as pave the way for entrepreneurial and innovative avenues and opportunities for them.

99. Older persons are also not forgotten. By 2020, it is estimated that they will number 3.4 million. The Government realises that harnessing this pool of resource is valuable. This group should be given the opportunity to remain healthy, active and productive in their golden years. In line with this, programmes will focus on enhancing elderly-friendly infrastructure, improving access to affordable healthcare, ensuring adequate provision of homes and improving financial security as well as employment opportunities. To facilitate this, the collaboration amongst the Government, non-governmental organisations and the private sector is vital towards increasing the senior citizens. involvement in social and economic activities.

100. The Government is committed to enhancing the well-being of persons with disabilities. Greater efforts will be made towards providing them with more opportunities for skills training, employment and entrepreneurship. Measures will be taken to provide easy physical access for transportation and buildings, towards creating a more disabled-friendly environment. Enhanced focus will be given to mainstream persons with disabilities into society thus enabling them to be independent, productive and valued contributors in the nation.s development.

ST5.8 The Sustainability of the Environment is Our Responsibility

101. In this plan, various measures will be implemented to ensure the sustainability of the environment. Emphasis will be placed on the use of renewable energy and increasing energy efficiency. The Government will introduce the Feed-in Tariff and Renewable Energy Fund to encourage the implementation of renewable energy projects. Relevant guidelines, standards and laws will also be introduced to ensure efficient use of energy, and to reduce greenhouse gas emission.

102. Environmental conservation cannot rely purely on a sense of responsibility. The Government will, therefore, promote economic opportunities that create value from conservation. For example, eco-tourism can generate income particularly for local communities to encourage the conservation of the country.s flora and fauna. We must also seize opportunities that arise from emerging trends, where green products, services and technology are increasingly in demand. In this respect, I call upon industries to take this opportunity and use the incentives provided by the Government through the Green Technology Financing Scheme worth RM1.5 billion to enhance the application of green technology in the production of goods and provision of services.

103. The Government will also promote environmentally friendly housing by introducing guidelines and a green rating system. Putrajaya and Cyberjaya will serve as flagship green townships. The Government will take the lead in adopting green building standards. New Government buildings will be designed to meet green standards. Energy efficiency of existing buildings will be enhanced and as a showcase example, the Prime Minister.s Office complex will be upgraded to meet the Gold Standard Green rating.


Development allocation
Mr Speaker, Sir,

104. Beginning with the Tenth Plan, the implementation of programmes and projects on a rolling plan basis will be introduced. With this approach, allocation for programmes and projects will be provided on a two year basis beginning 2011-2012. This allows commitment to be made based on the financial position of the Government and provides flexibility to respond to new priorities and changes in the global and domestic economic environment. The detailed list of the programmes and projects for the first rolling plan will be ready by the end of August 2010. To carry out the Tenth Malaysia Plan development programmes, the Government will make available an allocation of 230 billion ringgit for development expenditure. This will comprise 55% for the economic sector, 30% social sector, 10% security sector and 5% for general administration.

Conclusion
Mr Speaker, Sir,

105. In the spirit of the World Cup, which begins tomorrow, we can use the analogy of a successful football team to relate to the successful realisation of Malaysia.s aspiration to become a developed nation and high income economy.

106. For a football team to succeed, all players in the team, irrespective of their position, need to work together and play as a team. If they don.t, they are unlikely to win, worse, they may lose badly. Each player, whether it is the goalkeeper, defender, midfielder or striker, is equally important. However great the footballers are as individual players, victory can only be achieved as a team. Each individual team member is a valuable asset and everyone.s potential must be optimised to achieve success.

107. Even if the team has the best strikers in the world, such as Rooney, Messi or Ronaldo, the team would still lose if it had weak defenders or goalkeeper, as the number of goals scored would be more than offset by the number of goals conceded. Therefore, to succeed, we must form a 1Malaysia team, that is united and aligned in purpose and vision, to achieve the best for Malaysia, through our collective best efforts.

108. Malays, Chinese, Indians, Melanau, Iban, Kadazan, Dusun, Murut, Sikhs, Orang Asli, S