Malaysia’s central bank will keep its key interest rate unchanged at 2.75% for a third consecutive meeting next Wednesday (May 3) and for the rest of this year and next as inflation has cooled faster than expected, a Reuters poll of economists found.

After reaching a peak of 4.7% in August, inflation dropped to a nine-month low of 3.4% last month, approaching the top of the central bank’s target range of 2%-3%. That provides space to assess the impact of four consecutive rate hikes in 2022.

Over 80% of economists, 21 of 25, in the April 24-27 Reuters poll expected Bank Negara Malaysia (BNM) to keep the overnight policy rate unchanged at 2.75% at its May 3 meeting. The remaining four forecast a 25 basis point rise.

“Malaysia’s moderating inflation path, as seen from the slowdown in both headline and core inflation for March, should be a relief to policymakers, even though inflation remains elevated vs. history,” wrote Chua Han Teng, economist at DBS.

“We expect Malaysia’s economic growth to slow in 2023 amid global external headwinds, and therefore BNM, being cognizant of downside risks, would also aim to keep the monetary policy stance supportive of growth.”

Malaysia’s economic growth rate was expected to more than halve to 4.0% this year from 8.7% in 2022 and was projected to recover only marginally to 4.6% next year, according to a separate Reuters poll. That may discourage the central bank from implementing further rate hikes.

While the median forecast showed rates would remain unchanged at 2.75% until at least the end of 2024, a significant minority — nine of 22 economists — predicted at least one more hike this year.

“Backed by sticky core inflationary pressures, still positive domestic growth momentum and domestic financial stability, we continue to see room for Bank Negara Malaysia to further normalise its monetary policy back to pre-pandemic level,” noted Julia Goh, senior economist at UOB.

Source: TheEdgeMarkets.com

Developers in Penang will delay some new residential projects in the state this year as labour and materials costs continue to rise.

Real Estate and Housing Developers’ Association (Rehda) Penang branch chairman Khoo Teck Chong said the number of new launches this year could be up to 60 per cent lower than in 2019.

He said the pace of new launches in the last two years had already been slower due to the pandemic, but buyers have remained cautious even as Malaysia was transitioning out of the pandemic.

“Not many developers are keen to launch new projects now especially with rising labour costs and material costs,” he said in an interview with Malay Mail.

He added that property developments have already slowed even further since early this year.

He said labour and material costs have increased by almost 30 per cent since the pandemic, affecting many developers.

He said there was now a lot of uncertainty in the housing sector and many developers felt the market would not be able to handle more property launches.

Developers will be monitoring the industry, especially the labour and materials costs, and adjust their plans accordingly, Khoo said.

“We hope that the prices of materials will stabilise by the third quarter of this year and maybe after that, developers will consider launching new projects that have been put on hold,” he said.

According to statistics from the National Property Information Centre (NAPIC), Penang topped the list in new residential launches with 2,560 units as at the third quarter of 2022.

However, Penang also had the second-highest number of overhang or unsold residential properties of 5,222 units valued at RM3.48 billion in the same period.

About 55 per cent of the overhang residential units in Penang were those priced below RM500,000; 30 per cent were properties priced between RM500,001 and RM1 million; while the rest were properties priced above RM1 million.

In 2021, Penang’s residential unit overhang was 5,493 homes.

Khoo said the slowdown in new property launches may affect the supply of affordable housing in the state.

“Rehda has proposed that the state government take over the construction of low cost and low medium cost housing instead of expecting the private sector to build it as part of its contribution,” he said.

He said developers would make the required contributions to the state for the state to build low cost and low medium cost housing.

“It is most ideal to build low cost and low medium cost housing this way, the state identifies a suitable location, the private sector makes the necessary contributions and the state can build using the contributions and allocate it to those eligible,” he said.

Napic statistics showed that out of the 5,222 unsold residential units, a total 1,121 units (21.5 per cent) were affordable housing units priced below RM300,000.

Khoo said affordable housing units should be built only in locations that are in high demand instead of being built in unsuitable locations.

“The state needs to identify where affordable housing is needed and build it in those locations so that there will be higher uptake,” he said.

Source: MalayMail.com

MIDF Research has placed a positive outlook on Mah Sing Group Bhd following the final approval given to the Penang South Islands (PSI) project by federal environmental regulators.

The research house yesterday maintained its “buy” call on the property development group, with a target price of 75 sen.

“We remain positive on Mah Sing as its strategy of quick turnaround and targeting first-time homebuyers will support new sales outlook,” said MIDF in its report yesterday.

Contributing to MIDF’s optimistic recommendation is Mah Sing’s Southbay project, which is located at the southern end of Penang island and stands to benefit from the upcoming PSI project, particularly the development of the Green Tech Park on Island A.

Southbay currently has 21 acres of remaining land, with a development period of eight to ten years. Its land parcels are earmarked for residential and commercial development.

“We gather that Mah Sing may revise the planning as necessary to mid to high-end residential development that is expected to complement the Green Tech Park,” the report suggested.

It also estimated that Southbay’s current gross development value (GDV) of RM1.4 billion will increase further following the potential revision of the project’s development plan, which will positively impact Mah Sing’s long-term earnings.

In light of this projection, MIDF has maintained Mah Sing’s earnings forecast for the 2023, 2024 and 2025 financial years.

“Overall, we are positive on earnings outlook for Mah Sing due to stable new sales outlook,” concluded MIDF.

Yesterday, Penang chief minister Chow Kon Yeow announced that the natural resources, environment and climate change ministry has granted the PSI project approval, which was attached with 71 conditions under an elaborate environmental management plan.

The project would involve the development of three artificial islands with an area of approximately 1,700 hectares in the waters of Permatang Damar Laut, near Bayan Lapas.

Reclamation works are expected to start in the third quarter of this year.

Source: FreeMalaysiaToday.com

The once upon a time buzzing Island Plaza in Tanjong Tokong is set to take the limelight once again after a Hong Kong businessman snapped up the iconic landmark and has vowed to make the place great again!

It will be renamed ‘Island 88’.

Since the emergence of new shopping malls in the state offered stiff competition with one another, Island Plaza was neglected despite being in the prime Tanjong Tokong area.

All is not lost though as the building is expected to go through redevelopment, re-design and major revamping on the road to becoming a preferred destination filled with exciting and fun activities once again.

Chief Minister Chow Kon Yeow said back in the late 1990s, Island Plaza was a hub of commerce, entertainment, and social interaction.

“It was, at the time, one of the major shopping complexes in Penang, after Komtar.

“But as we all know, competition from other malls which emerged later took its toll on this grand structure that used to be Penang’s most glamorous shopping mall decades ago.

“All is not lost though, and with the new management taking over, it’s time to give it a much-needed new lease of life.

“The rebirth of Island Plaza into what shall be known as Island 88 is a testament to our commitment to preserving Penang’s heritage while embracing modernity and progress.

“This would not have been possible without the commitment of Paul Law and Philip Law from the management (Hong Kong), as well as their team’s tireless efforts and dedication to ensure that this project is kickstarted with the highest standards of quality and safety.

“Your unwavering dedication towards your vision of what Island 88 should be is similar to the values that make Penang a great place,” Chow said in his speech during the groundbreaking ceremony of the new project at Island Plaza in Tanjong Tokong yesterday.

The refurbished Island 88 will be a sight to behold, a modern, state-of-the-art facility that will provide our people with world-class shopping, dining, and entertainment options.

“It will be a source of pride for Penang, a reflection of our unwavering commitment to progress, and a clear indication of our resilience in the face of adversity,” Chow added.

Source: Buletin Mutiara

The Environmental Impact Assessment (EIA) report of the Penang South Islands (PSI) project has received conditional approval from the Department of Environment (DoE) under the Ministry of Natural Resources, Environment and Climate Change.

Chief Minister Chow Kon Yeow said the approval includes 71 conditions to be complied with.

“The Penang State Secretary received a letter on April 11 informing the state government of the EIA approval.

“The 71 conditions include the implementation of the Social Impact Management Plan (SIMP) and the Ecology Offset Master Plan (PEOM).

“Following the EIA approval, the Penang government through its project delivery partner (PDP) for the PSI project is now in the process of applying for the Environmental Management Plan (EMP) approval from the DoE.

“The EMP report contains the plans to comply with the conditions of the EIA approval,” Chow told a media conference at his office in Komtar yesterday.

Chow said the approved EIA was for the entire PSI project, involving the reclamation of three islands – Islands A, B and C.

The tri-islands (Islands A, B and C) will be located at the south-end of the Penang island, measuring a total of 4,500 acres in land size. Island A will be 2,300 acres in size, Island B will be 1,400 acres and Island C will be 800 acres.

“Land reclamation works will only start after the PSI project receives the EMP approval from the DoE. It will begin with Island A.

“A portion of the 2,300-acre Island A has been designated as a Green Tech Park to fulfil the needs of the industry.

“Land reclamation works are scheduled to begin in the third quarter of this year,” he said.

Chow was quoted that Penang would become an even more well-rounded regional industrial hub with the realisation of the Green Tech Park on Island A.

He had said that the state was looking at niche upstream value chain activities, including product research, as well as design and development investments for the Green Tech Park.

“Such investments would emphasise creating top-notched working environments which would, in turn, attract talents,” he added.

Separately, after the media conference, Chow said the Penang government recognised that the climate change crisis is real.

“We must be ready for a new paradigm shift and look at how roads, towns or mitigation works are planned and implemented.

“The government and professional bodies must recognise the threat of climate change,” he said.

Chow spoke about the collective effort of addressing the long-term effect of climate change and its impact on public health via the Penang Nature-Based Climate Adaptation Programme (PNBCap).

PNBCap is a multilateral initiative to enhance urban resilience and reduce human and ecosystem vulnerability to climate change impacts and extreme weather events through the implementation of nature-based solutions.

Source: Buletin Mutiara