RHB Research expects the central bank to hike the Overnight Policy Rate (OPR) by 25 basis points (bps) at the monetary policy committee (MPC) meeting on March 9.

Its view was predicated on three main catalysts, namely that core consumer price index (CPI) inflation is likely to remain elevated into 2Q23, the nominal effective exchange rate (NEER) is on a steep trajectory down, the risks of an announcement of a reinstatement of Goods and Services Tax (GST) in the second half of 2023 (2H23), and targeted fuel subsidy adjustment coming up.

“Our 2023 peak OPR forecast is maintained at 3.25%, with the balance of risks tilted towards a print of 3.5%,” RHB said in a note last week.

However, it said at a big picture level, the real interest rates are too low in an environment where the momentum of the economy is strong and is likely to remain above trend for the better part of 2023.

“This is a cause for concern since it generates demand side pressures and induces upside pressures on core CPI inflation.

“In addition, with financial markets continuously revising up their expectations of the US Federal Reserve(Fed) Bank peak Federal Funds Rate (FFR), pressure on Malaysia’s NEER to fall further (which has been on a steep decline recently), is likely. This will be an important consideration at Bank Negara Malaysia’s (BNM) March 9 MPC meeting,” it said.

On the fiscal policy front, RHB Research said risks are rising that an announcement of a reinstatement of the GST could be made in 2H23, with the timing of implementation unclear.

In addition, RHB Research maintains its base case assumption that a targeted fuel subsidy adjustment will ensue in 2023.

Hence, it opined that these two potential policy changes could raise inflation expectations and put upside pressure on core CPI inflation over the next six months.

Despite the supporting evidence for a 25bps OPR hike on March 9, RHB Research said there may be some other factors that may induce BNM to adopt a wait-and-see approach for the upcoming MPC meeting.

“The policy rate hike might be on hold for the MPC to assess the impact of the cumulative past OPR adjustments, given the lag effects of monetary policy on the economy,” it said.

According to BNM, it usually takes about one year for monetary policy to have the most effect on the economy as it takes time for households and businesses to change their behaviours.

Furthermore, it said, based on the previous MPC statement, BNM remained cautious on the global economic outlook.

RHB Research said the global landscape remains challenging with issues ranging from slower economic growth to unresolved geopolitical tensions, which would potentially lead to downside risks to Malaysia’s economy.

Source: TheMalaysianReserve.com

Developers have been warned not to demolish old buildings without local council approval.

“Whether buildings are in heritage zones or not, no developers should demolish buildings without prior approval,” said Penang Chief Minister Chow Kon Yeow.

Speaking at the refurbished Town Hall building at Esplanade on Saturday (March 4), he said non-governmental organisations (NGO) were unhappy with the lack of conservation and preservation efforts in the state.

He acknowledged that complaints had been made to the Unesco office in Jakarta about the demolition of old buildings and structures on Penang island.

“Local councils should be on their toes as nobody cares about the 1,000 good deeds you have done but will remember the one small mistake,” he said.

Penang, said Chow, remains committed towards conservation and preservation practices in line with its Unesco Heritage status.

He urged local authorities to engage NGOs although none of the buildings in dispute were listed as categories one or two, or located in core and buffer zones.

Source: TheStar.com.my

About The Zen

A mixed development by Asia Green at Bayan Mutiara. It is located next to Tun Dr. Lim Chong Eu Expressway, just a short drive away from the ongoing Penang World City township development by Tropicana Ivory. This development comprises a 46-storey skyscraper with two residential towers, and shop offices located at lower level. The residential component will feature 1,200 affordable units and 730 bigger open market units.

Find out more about The Zen development

Ideal Property Group is setting up a new industrial park at Bertam, Northern Seberang Perai District, with a gross development value of RM4.2billion.

This state-of-the-art industrial park, dubbed Penang Technology Park @ Bertam, will be the first technology park established within North Seberang Perai District. Associated with its name of Penang Technology Park, this prioritised to be well-managed industrial park is set to focus in creating spaces for investors from research and technology segment, allowing potential synergies and innovative to explore in new and emerging technology. Other targeted businesses include fully automated distribution centre, logistic operation and packaging solutions.

Locals to expect a positive economy activities in adjacent neighbourhood. Penang Technology Park @ Bertam will undoubtedly bring huge advantages especially for universities, colleges and learning institutions. The new establishment will foster employment prospects by creating jobs, attracting related businesses, providing access to resources, and offering opportunities for skill development.

“Penang Technology Park@Bertam will serve as the incubator for growing and innovative high-tech enterprises to explore the opportunities for research and development of the emerging applied technologies.  In addition, cooperation between industrial enterprises and surrounding education institutions is viable in nurturing talent pool, accelerates the teaching quality at schools and enhances the graduate employability,” said Tan Sri Datuk Alex Ooi Kee Liang, the Executive Chairman of Ideal Property Group.

Penang Technology Park@Bertam contains 880 acres of freehold land and will be carried out in 3 phrases. Ground works for its first phase is targeted for completion in 2nd quarter this year.  is situated in close proximity to major sea ports, international airport, railway and highway. For instant, it is located 5km from North-South Highway Bertam; 13km away from the proposed New Kulim Airport; 23km from the Penang Port (Butterworth) and 42km from Penang International Airport.

Penang Technology Park@Bertam is a master plan development aims to nurture Industrial Revolution 5.0. PTP consists of five integrated hubs for medical research, education and incubation, space and cyber technology, innovation and smart initiatives, financial and commercial enterprises, which are key to stimulate the synergies between high-technology industries, government, professional bodies and community. The fundamental components that determines the success of Penang Technology Park@Bertam include the flexible commercial spaces for light and medium industry; robust infrastructure such as airport, road and highways, seaport, railway; power and water supply; high speed internet and communication system.  Other key features include the setup of One Stop Centre (OSC) and Park Management Team.

Penang Technology Park@Bertam will incorporate Environmental Social and Governance component such as utilising solar energy in wide variety of industrial applications, renewal of industrial water and waste management.

Topped with its 24-hours security monitoring system under CCTV surveillance, Penang Technology Park@Bertam boasts a secure and conducive environment for innovation, growth and success.

Artist impression

Penang International Airport (PIA) expansion project will take place this year and will be fully funded by Malaysia Airports Holdings Bhd (MAHB).

Transport Minister Anthony Loke Siew Fook said this when he made his first official working trip to Penang yesterday, revealing that the expansion, for now, would cater to 12 million passengers per annum.

On Friday, Prime Minister Datuk Seri Anwar Ibrahim announced that PIA and the Sultan Abdul Aziz Shah Airport (LTSASS) in Subang, Selangor, would be expanded but the construction of the new Kulim airport in Kedah would be stopped.

“The funding will come from MAHB, not from the Federal Government. The Penang International Airport is the third busiest airport in Malaysia and it is commercially viable for MAHB to undertake the project.

“This will also accelerate the project, which will begin this year, probably by the third quarter, and finish within three to four years. MAHB will call for tender in April.

“The airport was upgraded from 2009 until 2013 to cater to a capacity of 6.5 million passengers per annum. But in less than six years, the passenger arrivals exceeded the target in 2019 as it recorded 8.3 million passengers per annum.

“In 2020 and 2021, because of the Covid-19 pandemic, the number came down. But last year in 2022, the trend (of passenger arrivals) went up. Even though the borders were opened in April, the airport recorded 4.27 million passenger arrivals last year. This shows that this year it will hit more than 8.5 million. Therefore, the Government sees the need for it to be expanded.

“So, MAHB has been directed to fund the project. They are able to do it because they have the funds, and it is a commercially viable project.

“The expansion project will be able to increase the capacity of passenger arrivals from 6.5 million to 12 million passengers per annum, double the capacity,” Loke told a press conference in Komtar.

He added that the control tower at the airport would be relocated to allow the terminal floor space to be increased by 100%.

When Loke was the transport minister in 2018, the Federal Government approved the PIA expansion project, but put it on the back burner after a change of Federal Government.

Loke, reinstated in his job after the formation of the Unity Government following the 15th General Election, said the previous construction design was still valid. He explained that the expansion project does not require any land reclamation or acquisition or relocation of a nearby Chinese school.

Asked by a reporter about the cancellation of the proposed Kulim airport in Kedah, Loke said his ministry has not received any application for an aerodrome operator licence from any private party.

He said moreover Kedah has currently two airports – one in Alor Setar and another in Langkawi.

Chief Minister Chow Kon Yeow, who received Loke during his courtesy visit earlier, thanked the transport minister for visiting Penang and giving his support to the airport expansion project.

“We’re glad that the minister is here with his delegation to have a meeting with various stakeholders and agencies associated with the airport expansion and other related transport matters.

“The state government will give its full cooperation to Malaysia Airports Holdings Berhad, and will also ask all state government agencies, especially the district and land office, to facilitate the airport expansion project implementation,” Chow said.

Source: Buletin Mutiara