BANK Negara Malaysia is widely expected to leave borrowing costs unchanged but economists said it may carry out other measures to let some hot air out of the financial system and deal with rising prices of consumer goods and services.

The monetary policy committee will make a decision on the Overnight Policy Rate (OPR) today that stands at 2.75 per cent now.

So far, Thailand raised rates on Wednesday, and has indicated more tightening with the rise in consumer prices, a decision which follows China which did the same last month.

Bank Indonesia kept rates unchanged last week but indicated it would raise interest rates gradually.

Almost 90 per cent of those polled by the Business Times expect the central bank to stand pat with the current rate but they expect it to hike the Statutory Reserve Requirement (SRR) ratio this week.

Under the SRR, banks must keep part of their capital as reserve at the central bank. Raising this means banks would have less money to lend.

Credit Suisse economist Wu Kun Lung expects the SRR to be raised by 1-2 per cent to reduce the amount of money sloshing around in the financial system.

This excess liquidity could result in banks giving out easy loans, which could fuel speculation in certain parts of the economy.

Last year, BNM already put a cap on mortgages to deal with speculation in the properties.

"Loan growth rose to a decade-high 13 per cent in January and the momentum remained strong. More worrying was the strong rise in loans for property purchases (both residential and non-residential properties) and construction.

"We would not be surprised to see some macro-prudential measures such as reducing the loan-to-value ratio, on the property sector," he said.

The SRR ratio was cut to 1 per cent in March 2009 from as high as 4 per cent in October 2008.

OCBC Bank economist Gundy Cahyadi said raising the SRR is more likely as it was indicated by the last monetary policy statement in January.

"A rise (in SRR) arguably has little impact on the economy other than potentially affecting the commercial banks' profitability.

"We expect the BNM to continue asserting inflationary risks to the economy, which suggest that rate hikes may still be on the cards going forward," Gundy said.

While Malaysia continues to benefit from rising commodity prices, especially crude oil and crude palm oil, it also adds to rising prices and a heftier subsidy bill, notes Standard Chartered Bank.

"Even as we expect reforms on the subsidies to continue in Malaysia at a more measured pace, a sustained surge in oil price may force the government to accelerate the reform timing and increase the magnitude of the price hikes," remarked economist Alvin Liew.

He expects BNM to raise the OPR today and do another hike in the second quarter.

SOURCE: Business Times

The Golden Triangle is strategically positioned in the middle of three essential locations – Sungai Ara, a bustling residential hub, Relau,  which is a natural green lung and Bayan Lepas, Penang’s vibrant international free-trade zone. Another distinctive advantage that the Golden Triangle enjoys is the vastness of green surroundings as it is located directly opposite 1.9 acres of open space.

It also enjoys the coveted position of being in a new growth area that gives residents a place to call home where they can retreat to while the commercial owners have the luxury of a ready catchment of potential customers. The Golden Triangle’s integrated two-in -one commercial/residential concept and social viability make it the perfect place to hangout not only for young adults but also for families as a whole.

Phase 2 – Golden Triangle 2

Property Project : The Golden Triangle
Location : Relau, Penang
Property Type : Shop Office & Condominium
Tenure : Freehold
Total Units : 80 (Type A & A1), 20 (Type B – Penthouse)
Developer : GSV Development Sdn. Bhd.
Indicative Price: RM 387,000 onwards

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KUALA LUMPUR: The rise in residential property prices is still manageable and measures such as the My First Home Scheme will allow those in the lower-income brackets to own homes.

Prime Minister Datuk Seri Najib Tun Razak said at a press briefing yesterday, following the annual meeting with Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz, that the rise in house prices was being monitored.

“We’re watching the increase in property prices closely which we think is still manageable,” he said, adding that the My First Home Scheme, which was launched on Tuesday for those earning less than RM3,000 a month, was a people-friendly measure to enable the lower income groups to own houses.

Those who qualify for the scheme can obtain 100% financing to buy their first home with a repayment period of 30 years for houses costing between RM100,000 and RM220,000.

Najib added that the Government was also looking into the supply side of housing to see if measures had to be taken to build more residential properties around the RM200,000 level.

According to data released by the Valuation and Property Services Department, the national house price index rose 6.2% year-on-year in the third quarter of 2010 after rising 6.2% in the second quarter and 5.7% in the first quarter.

Najib said any new issues of Islamic bank licences and foreign banks looking to increase their shareholding in local banks would be looked at on “merit” and on a “case-by-case” basis.

He said last week during a visit to Australia that the Government was open to allowing Australia & New Zealand Banking Group Ltd (ANZ) raise its stake in AMMB Holdings Bhd, which owns AmBank (M) Bhd.

Currently the limit for foreign shareholding in local commercial banks is 30%. ANZ has a 26.59% stake in AMMB, making the Australian bank the single largest shareholder.

Najib said the foreign shareholding limit for banks here would be reviewed individually and there would not be any changes to the Banking and Financial Institutions Act 1989 because this was an “administrative issue”.

So far, there has been no proposal by ANZ to raise the bank’s stake in AMMB and other foreign banks have also not applied.

Meanwhile, Najib said the economy was expected to grow by 5% to 6% this year but would face challenges due to slower global growth, which would affect external demand.

He said the challenges were from higher crude oil prices, inflation and the sovereign debt crisis in the euro-zone.

“We’ll monitor these developments closely and take the necessary steps,” Najib said.

He added that several interim measures would have to be taken to support private consumption and investment should energy prices continue to rise to a “critical point”.

However, Najib said the Government was committed to long-term subsidy rationalisation, although on a gradual basis, with savings from the lower subsidy to go to those in the lower-income brackets.

SOURCE: The Star

KUALA LUMPUR: Young working adults can now buy themselves a new home without having to pay a sen in down payment.

Those earning less than RM3,000 a month can obtain up to 100% financing to buy their first home under a new scheme launched yesterday.

The My First Home Scheme, launched by Prime Minister Datuk Seri Najib Tun Razak yesterday, will enable them to buy houses costing between RM100,000 and RM220,000 with a repayment period of up to 30 years.

The scheme sees the participation of 25 conventional and Islamic financial institutions including major banks like AmBank, CIMB, Hong Leong, Maybank, Public Bank, RHB and Standard Chartered.

To qualify for the scheme, which is for both houses under construction and completed properties, house buyers must be those working in the private sector and are confirmed employees with a minimum of six months in the job.

The self-employed do not qualify for the scheme while joint applications are allowed, provided that both are in the private sector and are family members, such as siblings or spouses.

The monthly financing repayment sum must also be not more than one-third of the applicants’ monthly gross income.

However, this sum can go up to 50% of their income if additional credit is permitted under the banks’ underwriting policy.

The Government through Cagamas Berhad – a national mortgage corporation – will bear the costs of the initial 10% deposit for the house while normal interest or profit rates for Islamic banks apply under the scheme.

The scheme does not cover refinancing of a home.

In his speech during the launch yesterday, Najib said the scheme would enable young adults in the country to own their first home within a short time.

“This scheme is a government initiative to help the young citizens as well as to inculcate confidence and desire in them to own houses.

“It is also part of the Government’s objective to provide affordable housing to all Malaysians in rural and urban areas,” he said.

The Prime Minister had announced the scheme during the tabling of the Budget in October.

Later, Najib witnessed the agreement signing between the Finance Ministry and the participating institutions, which was also attended by Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz and Treasury secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah.

Also present was Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah, Deputy Finance Minister Datuk Donald Lim Siang Chai and Cagamas Holdings Berhad chairman Datuk Ooi Sang Kuang.

SOURCE: The Star

The Society for the Prevention of Cruelty to Animals (SPCA) has urged residents of high-rise units in Penang not to leave their pets unattended in their premises.

Penang SPCA administrator Lily Leng said pets should also not be kept in balconies as the animals are not fully protected from the rain or sunshine.

She said pet owners should keep their pets in a secured place where there is no risk to the animals.

“If the owners are not around, they should ensure that the pets do not become a nuisance to their neighbours,” she said.

Leng was commenting on a complaint it received on a mongrel which was howling in pain for about an hour in a condominium in Bandar Baru Air Itam yesterday. A resident had called up the SPCA after he spotted that one of the dog’s paw was trapped in the iron grille of the balcony of the ground floor unit.

But before the SPCA’s personnel could reach there, the owner returned to the unit and freed the canine.

The woman was seen keeping another dog in her unit.

The SPCA’s team which arrived about 20 minutes later advised the woman to relocate the animals.

It is learnt that she agreed to send the dogs to her mother’s house elsewhere within two days.

Penang municipal councillor Ong Ah Teong said the council has no authority to act against residents of high-rise units who keep pets in their premises.

“Only the property management companies can take action under the Strata Title Act.

“Residents can lodge a complaint to their property management companies if the pets are causing a nuisance,” he said, adding that they only take action on pets kept in council-owned buildings.

Meanwhile, Bandar Baru Air Itam Management Sdn Bhd (BBAIM) building supervisor James Ng said pets were not allowed to be kept in high-rise units.

“When we receive a complaint, we would notify the owners in writing to relocate their pets,” he said.

He said there were pet owners who do not scoop dogs’ droopings after walking them in their vicinity.

A resident of Tanjung Court Condominium, who declined to be named, said he was irked that there were many dogs roaming in the condominium’s compound.

“Some people are keeping dogs, including exotic breeds in their units even though they know that this is not allowed.

“These people are educated but they are not bothered about the inconvenience it causes to others.

“When their dog defecates or urinates in the lifts, they do not clean up the mess and the foul odour lingers for hours. Somebody else have to clean up the mess,” he said.

SOURCE: The Star