No more fuel price change notice to public, only to retailers - Hasan Malek

KUALA LUMPUR: There will no longer be any notification on fuel price change to the public and such a notice will only be issued to retailers at midnight on the last day of the month.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek said this will be done irrespective of whether the price changed or not.

He said this was due to the fact that this had become a routine affair following the implementation of the Managed Float System for the prices of RON95 petrol and diesel from Dec 1 last year.

He told this to reporters after attending the Goods and Services Tax (GST) Open Day organised by UMNO Youth here today.

Also present were UMNO Youth chief Khairy Jamaluddin, who is also Youth and Sports Minister and Deputy Finance Minister and UMNO Information chief Ahmad Maslan.

Prior to this announcement, changes in the prices of RON95 petrol and diesel under the system are announced on the ministry's website.

The price of RON97 petrol is subject to market prices.

The managed float system was introduced after fuel subsidies were removed when world oil prices dropped towards the end of last year.

On June 1, the prices of both RON95 and diesel went up by 10 sen to RM2.05 a litre. RON97 retailed at RM2.35 a litre.

On another matter, Hasan denied that the ceiling price for chicken during the Aidilfitiri festive period would be increased.

He said that the Price Control Scheme for the Aidilfitri season would be announced on Friday.

He added that the government would be announcing more GST zero-rated items in Budget 2016 to ease the people's burden.- Bernama  

Man in BMW full of illegal curry puffs, kueh fails to stop at Tuas checkpoint .

Despite being directed to another area for further checks, he continued driving his luxury car past Tuas Checkpoint, sparking a manhunt by the police. They found the man and his 7-series BMW sedan almost two hours later at Pioneer North Road and arrested him. The police officers found more 100 boxes and plastic bags packed in the boot and on the passenger seats. But instead of contraband such as drugs or illegals, they contained such foodstuff as curry puff and kueh-kueh (local pastries). An Immigrations & Checkpoint Authority spokesman said the 47-year-old suspect arrived at the checkpoint from Malaysia at 12.15pm on Tuesday. The New Paper understands that he had a valid permit to import food from Malaysia, but had underdeclared the quantity in his car. He was directed to a designated bay area for further inspection but apparently misunderstood the instructions and drove away.

Malaysian firms welcomed to invest in China’s Lanzhou bonded zone

BEIJING: Malaysian-run Massino Resources (M) Sdn Bhd hopes to draw some 300 Malaysian companies to invest in the newly established International Brand Centre (IBC) in west China’s Lanzhou New Area Comprehensive Bonded Zone, Gansu province.

IBC, the five-storey commercial building covering 24,430 sq m, is aimed at bringing in quality foreign products, such as halal products, luxury products, cafe restaurant, franchise brands, bird’s nest, fast-moving consumer goods (FMCGs), home appliances, green energy products, automotive products and textiles, said Massino Resources managing director Sim Yuqi.

The company had poured in some 200 million yuan (about RM121mil) into the IBC and expected to generate an annual return of two billion yuan (RM1.21bil), he told Bernama after signing an agreement with Lanzhou New Area Bonded Zone Development Co Ltd, represented by its person-in-charge Sun Xiaowei, here on Friday.

The signing was witnessed by Malaysian Investment Development Authority (Mida) consul (investment) Simon Lee Yew Weng and Lanzhou New Area Committee deputy director Wang Hui.

Despite hoping for more foreign investors to invest in the IBC, we are looking forward to dealing with Malaysian authorities, including the Islamic Development Department Malaysia (Jakim) over Malaysian halal products, Sim said.

The 50-year-old Malaysian, who has been residing in China for about a decade, said he hoped to receive assistance from the Malaysia External Trade Development Corp (Matrade) to introduce more Malaysian products into the bonded zone.

Construction of the IBC commercial building is expected to be completed in October this year, while operations would begin by year-end.

Also present were agriculture counsellor at the Malaysian Embassy in Beijing Aszmy Mahmood Yusof Mohamed and the embassy’s second secretary (economy) Kiew Chia Meng.

Earlier, Wang said in his opening speech that the Lanzhou New Area comprehensive bonded area had attracted 305 projects with a total investment value of 380 billion yuan (RM230bil).

The 3.39 sq km Lanzhou New Area, whose establishment was approved by the State Council, China’s cabinet, on July 15 last year, aims to become an inland import and export distribution centre, industrial clustering area and strategic economic centre in Middle and West Asia.

It also aims to become an important industrial base covering electronic information, petrochemical engineering, bio-medicine, high-end equipment manufacturing and agricultural product processing. - Bernama

Malaysian navy in contact with pirates on hijacked tanker

A Malaysian naval vessel has made contact with the pirates onboard hijacked tanker Orkim Harmony and is trying to persuade them to surrender, a maritime official said on Thursday.

The tanker as of noon (0000 ET) was in Vietnamese waters headed south with the Malaysian navy vessel KD Terengganu and a maritime ship in pursuit.

Both the crew and the cargo onboard the tanker are safe, and the navy is negotiating with the robbers through the captain of the Orkim Harmony, said Vice Admiral Ahmad Puzi, deputy director general of the operations unit of the Malaysia Maritime Enforcement Agency (MMEA), in a press briefing.

"From our experience, as long as there's no situation that alarms the criminals, the crew will be safe," Ahmad Puzi said.

"We are using a soft approach first, trying to advise them to surrender," he said, adding that the mood of the negotiations is "good".

The 7,300 deadweight tonne (DWT) Orkim Harmony was hijacked on June 11 about 30 nautical miles from the Johor port of Tanjung Sedili carrying around 50,000 barrels of RON95 gasoline, in the second such incident in the same area this month.

The Orkim Harmony is operated by Malaysia's Orkim Ship Management. On board is a crew of 22, including 16 Malaysians, five Indonesians and one Myanmar national.

After the tanker was hijacked, the pirates repainted the ship and changed the name to Kim Harmon.

Malaysia's Chief of Navy Admiral Abdul Aziz Jaafar said on his Twitter account that at least eight perpetrators were on board the Orkim Harmony armed with pistols and machetes.

Malaysian state oil firm Petronas [PETR.UL] told Reuters that the Orkim Harmony was carrying 6,000 metric tonnes of product from its Malacca refinery to the port of Kuantan on the east coast of Peninsular Malaysia for distribution.

It said "all necessary measures are being taken to ensure undisrupted fuel supply to consumers in the East Coast region."

Earlier this month, a 7,100 DWT oil tanker, Orkim Victory, carrying diesel loaded from Petronas was hijacked on June 4 in the same area and on the same route.

The Orkim Victory was later released by the hijackers after about 770 metric tonnes (6,000 barrels) of its cargo had been siphoned off.

It will, however, be difficult for the pirates to siphon off the gasoline from the Harmony as it is highly flammable and they are likely looking for proper facilities to do a ship-to-ship transfer, Ahmad Puzi had told reporters on Monday.

The two hijackings have raised further concerns over piracy in Southeast Asia, maritime officials said on Monday.- REUTERS

CIMB Research lowers Gas Malaysia target price to RM2.25

KUALA LUMPUR: CIMB Equities Research has lowered Gas Malaysia’s target price from RM2.89 to RM2.25 on news that the introduction of incentive-based regulation (IBR) for the gas sector is well under way.

It said on Thursday it is negatively surprised that IBR could be implemented by as soon as January 2016.

“This is negative for Gas Malaysia as its earnings could drop under the IBR’s pricing framework. We cut our FY15-17 EPS by 2%-19% as we factor in the potential impact of IBR.

“We lower our target price to RM2.25 as we change our valuation method to sum-of-parts from 22 times CY16 P/E to better reflect its earnings composition. We also downgrade to Reduce from Hold as IBR could lead to a sharp earnings erosion.

“The key de-rating catalysts are the introduction of IBR by the end of the year and weaker earnings in 2016. We prefer Petronas Gas for more stable earnings,” it  said.

CIMB Research said it attended an analyst briefing hosted by Gas Malaysia’s CEO Ahmad Hashimi Abdul Manap.

The key takeaway is that the government is likely to introduce IBR to regulate natural gas tariffs in Peninsular Malaysia. The IBR, similar to the one that regulates Tenaga’s electricity tariff, aims to compensate Gas Malaysia a fair return on its pipeline assets.

“The introduction of IBR is not unexpected but its timing is earlier than expected. IBR is expected to have a huge impact on Gas Malaysia as its pipeline assets contributed 99% of its revenue last year,” it said.

The research house said under the IBR, Gas Malaysia’s earnings from its pipeline assets will be a product of 1) value of the assets and 2) WACC of these assets as determined by the government.

“We understand that the current value of Gas Malaysia’s pipeline assets is around RM1.1bn. Its WACC, however, is still being determined by the government. If the IBR is implemented on Jan 1,  2016, our best case scenario estimates that the company’s net profit in 2016 will be 7% lower than that in 2014 while the worst case estimates a much larger decline of 40%,”  it said.

CIMB Research said its  earnings forecast and target price assume that the government will allow Gas Malaysia to earn a return on its pipeline assets that is higher than its actual WACC.

“This is not unreasonable because the government has also allowed Tenaga to earn a premium over its actual WACC on its transmission and distribution assets. However, should the final WACC used in the IBR match Gas Malaysia’s actual WACC, Gas Malaysia’s market value may fall close to its book value. This represents a 70% downside from its current share price,” it said. - THESTAROLINE

Weaker ringgit good for tourism and exports, say Ministers.

KUALA LUMPUR: Minister for Culture and Tourism Nazri Aziz claimed that in the short term the weaker ringgit would have a beneficial impact on the local tourism industry,
He, however, acknowledged that he was among a minority who could see positives in the currency’s recent plunge.
According to Bank Negara, the ringgit closed yesterday at RM3.7345 to the US Dollar and RM2.7799 to the Singapore Dollar.
“One of the few people who are happy that the ringgit has gone down is me,” he told reporters yesterday, because it would allow tourists to stretch their currency.
He said that the lower ringgit would make Malaysian goods cheap, leaving the tourists feeling rich, with a lot of money to spend.
“Certainly they will feel like rich tourists,” he said.
Nazri also said that because the ringgit has gone down Malaysians will think twice about travelling overseas given that the exchange rate will become less favourable, which will in turn spur domestic tourism.
“I think in the next few months domestic and foreign tourism can improve a lot,” he said.
A weaker ringgit will also boost exports and foreign investments, but will make imports more expensive, Minister of International Trade and Industry Mustapa Mohamed said yesterday.
“However, this situation won’t be long,” he added according to The Malaysian Insider, saying that Malaysia’s economic fundamentals remain strong which would allow the local currency to strengthen.

AirAsia is top Malaysian brand in Asia’s Top 1000 Brands survey

KUALA LUMPUR: AirAsia is the highest ranked Malaysian brand in the 2015 Asia’s Top 1000 Brands survey done by Campaign Asia-Pacific and Nielsen.

According to the latest annual study, AirAsia rose from 43rd spot last year to number 34 now, its highest ranking in the poll’s 12-year history. Market research firm Nielsen estimated the low-cost carrier’s advertising spending in the region at US$146.67mil (RM540.8mil) last year.

AirAsia is not only the top Malaysian brand but also the top overall airline brand in the region. And it has occupied that coveted spot every year since overtaking Singapore Airlines back in 2010.

There are about 25 other Malaysian brands on the Asia’s Top 1000 list. The reason for us using the word “about” here is due to ambiguity as to whether some are Malaysian, such as brands that were founded by Malaysians but owned or said to originate abroad (including Jimmy Choo and Shangri-la) or brands whose beginnings straddle both Malaysia and Singapore (e.g. Cold Storage).

The survey itself is about consumer perception. The brand-image poll, spanning 13 Asia-Pacific markets from China to Malaysia, covered 14 product/service categories and asked two questions:

1) “When you think of the following category, which is the best brand that comes to your mind? By best, we mean the one that you trust the most or the one that has the best reputation in this category.”

2) “Apart from the best brand that you entered, which brand do you consider to be the second best brand in the category?”

The “Malaysian” brands that made the list include Shangri-la (number 133), Jimmy Choo (271), Old Town White Coffee (332), Mister Potato (385), Maybank (397), Peel Fresh (453), Malaysia Airlines (508), Petronas (511), Maxis (543), Spritzer (552), Poh Kong (657), Mamee (690), Boh (691), Celcom (716), Marigold HL (717), DiGi (759), Habib Jewels (781), PosLaju (798), Firefly (852), CIMB Bank (856), Bonia (861), Cold Storage (888), Mydin (963), Takaful Malaysia (966), Caring (985), and Public Bank (987).

In the inaugural survey 12 years ago, Proton was the highest ranked Malaysian brand at number 80, followed by Petronas (91) and Telekom Malaysia (92).

Malaysia Airlines, whose brand image had recently taken a beating after years of winning international awards, is now ranked 22 among all airlines, down from 7th spot five years ago and from 16th last year.

The top 10 overall brands this year are the same top 10 brands in 2014, except for minor place swaps.

They are, in order of rankings, Samsung (with an estimated advertising spending of US$1.43bil or RM5.3bil in Asia-Pacific last year), Sony, Nestle, Apple, Panasonic, Nike, LG, Canon, Chanel and Adidas. All of them spent above US$190mil (RM700mil) on advertising in the region except for Nike (US$98.56mil).

Campaign Asia-Pacific said in a statement in conjunction with the survey findings' release: “Beyond the headline of Samsung’s hold on the top spot, there is an overall trend in this year’s ranking of luxury names falling almost across the board. In Asia this may be one of the biggest signifiers of an emerging markets becoming more mature - it could also signal the end of a luxury boom that seemed to have no end in sight.”

Among the biggest gainers this year are Milo, which surged 143 places to reach number 72, and Acer, which leaped 45 spots to reach number 78.

Major declines included Singapore Airlines’ slumping 20 places to number 83 and Omega’s 43-notch plunge to number 235.

 

Getting the house back in order

MALAYSIA Airlines Bhd (MAB) will have to undergo a “harsh” turnaround plan over the next three years before the national carrier reclaims its position as a leading airline in the region. Chief executive officer Christoph Mueller acknowledged that the company, which officially commenced business yesterday, was “technically bankrupt”, and the current focus was to stop the bleeding. “That will be the more painful exercise. There’s overcapacity in the market. We have to prune our network, frequency pattern and aircraft size accordingly, and eliminate losses. “The headcount rightsizing is happening today,” he said, referring to the issuance of retrenchment letters to 6,000 staff throughout the group. Mueller said key contracts that previously ate into the airline’s profits were also being renegotiated. It recently concluded a fresh deal with its main caterer, Brahim’s, on more favourable terms. “The most important factor in our turnaround plan is cost structure. We assume that our costs are 20 per cent too high,” he said, adding that this was also due to an inefficient procurement process. “At last count, we have about 20,000 suppliers. An airline of our size should get along with just 2,000 to 2,500 suppliers”. Mueller, whose track record of successful turnarounds includes Ireland’s Aer Lingus and Lufthansa, was speaking at a media briefing here yesterday on the way forward for the new Malaysia Airlines. The briefing was held in what will be MAB’s new corporate headquarters here. “Today, Malaysia Airlines, as we know it, is leaving its cruising altitude and is about to prepare the cabin for a very safe landing. At the same time, the new Malaysia Airlines is preparing for the first flight and it’s getting ready to take off,” he said. Mueller said more than 40 projects had been identified to transform Malaysia Airlines into a sustainable operation. These would be implemented in stages, beginning this year. For example, there needs to be a new manpower and rostering system to better manage human resources in the operational units. “We either have too many people and they are idle, or not enough and then incur high overtime costs. A human brain cannot do that any longer in an entity this size. There are IT solutions available that can help us,” he said. Other improvement projects include better pricing yield management (offering a wider range of prices to cater for different passenger needs), paperless cockpits (pilots currently carry up to 15kg of manuals and documentation on flights) and streamlining catering (consistency in quality throughout flights and in premium lounges). The new MAB group will have at least 12 subsidiaries spread out over three main activities — operations; support functions; and learning and development. This structure could potentially generate enormous third party revenues for the new entity. “The entrepreneurial spirit was slightly curbed previously because these different units were residing as divisions in the airline. For example, we operate a set of simulators for flight training. It can be a business in its own right. We can train pilots of other airlines,” Mueller said. He said there would be minor changes in the network in the next few months, but there would not be any capacity reduction in domestic routes. On the contrary, flights to Sabah and Sarawak may be increased, and MASwings may be utilised entirely for rural air services. “It is an important element of our mission, to connect remote parts of the country to the world. Air travel is an enabler to the economy, and, as a national carrier, we have to provide people with cheap travel to make the gross domestic product grow.” Talks with aircraft leasing companies are ongoing, and their outcome could determine the final make up of the company’s fleet, which comprise Airbus (A380, A330 and A330 freighters), Boeing (B777, B737 and B747 freighters) and Viking (ATR and Twin Otter) aircraft. Mueller said future plans, included refurbishing the business class on all planes in the fleet, upgrading the in-flight entertainment system and a new online booking engine and mobile app. The group’s information technology infrastructure would also be overhauled to incorporate new advances and streamline overall operations. “We will do the best we can without any disruption to the customers,” he said. On the possibility of tie-ups with other companies, Mueller said there were areas where the company could benefit from firms with more expertise, such as in maintenance, repair and overhaul, and ground handling, but it needed to get its house in order first. Mueller said while brand loyalty towards Malaysia Airlines remained strong domestically, in important overseas markets — Australia, China and Europe particularly — it has suffered badly due to the overexposure of the flights MH370 and MH17 incidents in the media. “Our responsibility is to embark on discussions with shareholders, the public, tour operators and others on how we want to position the new Malaysia Airlines. Under no circumstances can we lose the loyalty of our home market, but we have to do something about it in foreign markets.” Mueller said the final phase of the turnaround plan in 2017/18 will see a new airline emerge that is a leader in Southeast Asia, and regain market share through improved network, competitive cost and revenue management, and industry-leading technology.- NST ONLINE