6 things you should consider when taking up a home loan in Malaysia

May 10, 2013 By Leave a Comment

To the common folk, choosing a home loan is almost as hard as choosing the property itself. If you’re currently in the midst of shopping for a home loan to buy the house of your dream, here are six things you should consider before making what could arguably be the biggest financial decision of your life.

1) Type of home loan

First and foremost, consider what works best for you: a traditional term loan or a flexible home loan (“flexi-loan”). A traditional term loan requires you to pay a fixed amount each month for the entire tenure of your home loan (eg. 30 years), while a flexi-loan gives you the option of reducing your interest whenever you wish (i.e. by saving your extra money into a linked current account. The more you save, the less interest you pay).

If you have a strict and predictable cash-flow pattern, a traditional term loan may be best. If you prefer flexibility in paying off your loan, a flexi-loan is recommended.

2) Interest rate

As of all loans, your priority should probably go to the bank that offers you the lowest interest rate. Citing an example for a home loan of RM500,000 over a period of 30 years, the difference in interest between an interest rate of 4.2% and 4.15% (i.e. a mere 0.05%) could be well over RM5,000! To find out which bank offers the best home loan interest rate, iMoney.my provides a home loan comparison table.

3) Margin of financing (how much you can borrow)

Depending on various factors which include the value of the property as well as your standing with the bank, different banks may offer you different margins of financing. As you’ll be required to pay any amount not covered by the home loan upfront, this becomes very important especially if you’re short on cash.

As an example: for a RM500,000 house, you’ll need to pay RM100,000 upfront if your Margin of Financing is 80%; but you’ll only need to pay RM50,000 upfront if your Margin of Financing is 90%.

4) Lock-in period

Lock-in period is the period you’ll incur a penalty (usually 2-3% of the principle loan amount) if you choose to pay off your home loan in full before it reaches the end of its tenure. When it comes to choosing a home loan, it pays to have a lock-in period that is as short as possible with a penalty that is as low as possible. Also, some banks do not charge a penalty at all if sufficient notice is given. Again, iMoney provides a table comparing lock-in periods of all Malaysian banks.

5) Fees & charges

A home loan application involves professional and government-regulated processes such as preparation and disbursement of loan agreement, payment of stamp duty and processing by the bank, just to name a few. All these processes usually come with fees and charges that will be borne by you, the buyer.

In certain cases, it may also be wholly or partly borne by the banks as part of your loan packages. Hence, is it best to sit down with the loan officers (for all the banks you are considering taking your home loan from) and have them run through the fees and charges with you. The task may be repetitive and time-consuming… but it’ll be time well spent.

6) The bank

Lastly, understand that you’ll be dealing with the bank on a very frequent basis for as long as your home loan is in effect (which may be 20 to 30 years). With that in mind, you should probably choose a bank you are very comfortable with. Some of the things you may wish to think about include:

·         Do you have an existing savings or current account with the bank (for ease of inter-account transfer)?

·         Are you satisfied with their standard of service?

·         Is a local branch available near your home or office?

·         Do you consider the bank to be trustworthy and reliable?

·         Does the bank offer value-added services that will make your life easier for the long haul?

·         How is the bank’s reputation as a whole?

·         Does the bank provide online banking facilities which allow you to pay your instalments easily?

·         Is your loan officer approachable, so that you can phone him or her anytime you have a question?

Bearing all these matters in mind, good luck in finding your next home loan and we hope that you have a smooth and beneficial relationship with the bank which provides you that loan.

Source by: The Star

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Billionaire Robert Kuok’s investment in Iskandar a vote of confidence

April 30, 2013 By Leave a Comment

THE return of Malaysia’s “prodigal son”, Robert Kuok to invest in Iskandar Malaysia, Johor is a vote of confidence in the country’s first economic corridor.

To be sure, Iskandar has already reached a good level of success in the short seven years since its inception, having received RM111.37bil in cumulative committed investments as at the first quarter of this year.

Every big Malaysian property developer has made a concerted effort to get a project in Iskandar going.

But the entry of Kuok, Malaysia’s richest man and South-East Asia’s second richest is expected to spur international interest and catalyse more such investments.

Kuok has not actively invested locally since the 1990s. In fact, he was seen as one of those tycoons who were exiting Malaysia.

True, today his business empire – via flagships Kuok Brothers Sdn Bhd and Kerry Properties Ltd – are mostly outside Malaysia. It is no secret that Hong Kong has been 89-year old Kuok’s base for a very long time.

In 2006, when PPB Oil Palms Bhd was injected into Singapore-listed Wilmar International Ltd, it was seen as Kuok “cashing out” of the country. In 2009, Kuok who is estimated to be worth US$17.3bil according to the Bloomberg Billionaires Index, sold the sugar business that he founded in the 1950s – the Malayan Sugar Manufacturing company – to Felda Global Ventures Bhd.

Following this, his most notable flagship company here is the PPB Group Bhd and Shangri-La Hotels (M) Bhd.

His return to Johor, his birthplace, dispels this notion. He was possibly waiting for the right time and place and what can be more exciting than putting money in a future metropolis that is set to rival Singapore and Hong Kong. Sources say that Kuok has been keen to pursue an investment in Iskandar for some time now.

Kuok’s faith in Iskandar is possibly reflected in that he was willing to pay top dollar or RM334 per sq ft for the two plots totalling 12.5 acres in Puteri Harbour in Nusajaya. This land deal, bought from UEM Land Holdings Bhd sets a new benchmark.

Early this year, UEM Land had sold land 3.5 times bigger than that bought by Kuok in Puteri Harbour to Liberty Bridge Sdn Bhd – a consortium ownded by four tycoons from Malaysia and Singapore for RM211 per sq ft.

The Kuok group has teamed up with UEM Land’s major shareholder, Khazanah Nasional Bhd (in a 70:30 joint venture) to develop the place into a mixed residential and commercial development slated to have a gross development value of RM1bil.

Notably, the project will spin off construction jobs and employment opportunities in multiple disciplines for Johoreans.

It is also likely that the media-shy Kuok would be making more trips to Malaysia as work on this project progresses.

Kuok has done one more favour for Iskandar. He has reportedly influenced another foreign tycoon to invest there. It has been reported that Australian billionaire Lang Walker, who has developed properties around the world, has switched his focus to Iskandar following the hard sell made by Kuok. Walker is undertaking a US$1.3bil project in Senibong Cove, which he is jointly developing with Iskandar Waterfront Sdn Bhd, and this is his biggest bet outside Australia.

The two billionaires are partners in the US$1.4bil Collins Square redevelopment project in Melbourne. With Kuok’s help, Walker identified two areas in Johor Baru – the Lido Beach and Senibong Cove – but picked the latter to invest in.

Meanwhile, the other beneficiary from Kuok’s entry into Iskandar is Khazanah, who has a 30% stake in the venture. The sovereign fund will be able to leverage on the expertise that Kuok brings and enjoy its portion of profits from the project.

 

Source by: The Star

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5% to 10% correction seen in high-end property prices

April 26, 2013 By Leave a Comment

KUALA LUMPUR: Luxury condominiums and even landed property may face a 5%-10% price correction this year in response to a slower occupancy rate last year.

This does not, however, mean that property prices would start to tumble as overall mass market housing would be able to sustain slower growth.

According to real estate services provider CH William Talhar & Wong managing director Foo Gee Jen, the occupancy rate among luxury condominiums in Kuala Lumpur registered only 67% last year, which was “not a very healthy sign”.

That said, the property market outlook for 2013 is flattish, with fair opportunities in prime locations and more focus on areas near public transport lines and affordable housing.

“The occupancy rate has been under pressure, but sales has been surprisingly strong,” Foo pointed out after releasing the Property Market Report 2013.

“If the scenario continues, then the occupancy rate could fall as low as 60%,” he said, noting that the high-end category now encompassed condominiums above RM700,000 in prime locations.

With the lower occupancy being the issue, Foo believes the market needs to re-evaluate its holding power, “How long can you hold an empty building without tenants?”

As for mid-range residential properties, which Foo said the price was hovering around RM400,000 now, there would not be any price correction as “the demand for these is always there”.

Separately, prices in the secondary property market would remain in tandem with the primary market. “The secondary market always benchmarks its prices against the new property within the locality,” he said.

Foo believes that the total transaction value for the sector would be lower, as there would be more affordable housing entering the market, although volume is unlikely to drop.

“I believe this year would be the reverse of last year, when transaction value was higher, because the market was focused on developing properties worth RM500,000 and above in 2011 and 2012,” he said.

Going forward, Foo saw the emergence of new high-density residential developments along expanding public transport lines, such as the MRT, LRT or new highways.

“The market for affordable houses is those who rely on public transport, (therefore) developers won’t go into such housing projects unless the area is supported by infrastructure,” he said, noting that these projects need to be government-driven.

“The Government would need to give the green light to build high density, only then would it be viable for the developers.”

Following the same line of thought, Foo opined that low-cost housing should not be the main focus in property development as the country moves towards a high-income nation status.

“I think we should move away from building boxy houses as we move towards becoming a high-income nation,” he said.

As for office buildings, Foo said there would likely be an oversupply in the Klang Valley with upcoming mega projects, and the vacancy rate could go up a further 2.5% from 14% in 2012.

He believes rental would be under pressure on landlords competing for tenants who may prefer to pay only slightly higher rent at newer buildings with facilities.

“Old building owners would suffer more and many landlords are prepared to negotiate early with current tenants to lock in their tenancy instead of waiting for the tenancy to expire,” he said, adding that these landowners needed to upgrade their facilities, bring in retail components like upmarket cafes or find a niche market to appeal to.

 

Source by: The Star

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Apartments in London’s regenerating Elephant and Castle launch in KL

April 24, 2013 By Leave a Comment

The Elephant and Castle area in London has historically been considered down-at-heel because of its location in the less affluent south east of London and the several social housing estates there.

The massive traffic roundabout which the area centres around is often characterised by its quirky eponymous statue of a red elephant with a castle on its back, but also several tower blocks from the 60s and 70s, and the decrepit Elephant and Castle shopping centre.

Anyone who’s ever needed to traverse south east London would know, however, that most roads lead to this roundabout (almost like most roads in Georgetown, Penang, converge upon Komtar), thus making this area strategically located. It is also located next to London’s Southbank University, and within 10 minutes’ drive to the South Bank, where the London Eye is located.

In terms of Tube lines, Elephant and Castle also features the interchange station for the Northern and Bakerloo Tube lines.

It isn’t surprising then that the city borough which it is located in, Southwark, has invested into regenerating this area. New projects have also been developed here including the slick Strata Tower which features three wind turbines at its top.

Among one of the regeneration projects is a redevelopment of one of the area’s social housing estates by Australian integrated property and infrastructure group, Lend Lease.

Located off Rodney Road, London SE17 1UU, the development has been renamed Trafalgar Place (not to be confused with Trafalgar Square on the northern side of the river).

Due to be completed by summer/autumn 2015, it will comprise 235 units of studio, one, two and three bedroom apartments ranging in size from 431 to 1,210 sq ft. These apartments are spread out within seven blocks which  range in height from ranging from four to 10 storeys. Guide prices for the first release start at £522 psf.

Sales of Trafalgar Place will take place in Kuala Lumpur from Apr 27 to 28, at the Westin hotel in Kuala Lumpur.

The concept for this development is “green living in the heart of the city” with each apartment having a range of innovative and environmentally sustainable features and either a garden, terrace or balcony. This includes energy-efficient lighting, heating and water recovery systems, as well as better insulation and ventilation including air purification systems.

According to the developer, the homes will be 30 per cent more energy efficient than current regulations require and use 30 per cent less water than the average London household.

The development also promises a “woodland walk”, a rain pool water feature, a garden square and an al fresco café for residents and the local community.

“Trafalgar Place will provide the first new homes to be completed as part of the £1.5 billion regeneration of Elephant & Castle, driven by Lend Lease in partnership with Southwark Council,” said Mark Dickinson, Lend Lease, Managing Director of Development, in a release. “The regeneration is gathering real momentum and will unlock the area’s potential with almost 3,000 new homes, as well as new parks, shops and improved transport taking shape over the next 12 years.

For those interested in learning more about the regeneration of Elephant & Castle, Tom Branton, Lend Lease Development Manager, will be conducting a brief talk at 11.30am each day at the exhibition.

The exhibition will be on Sat 27 and Sun 28 April from 11am to 7 pm at Level 2, The Straits Room,The Westin Kuala Lumpur, Jalan Bukit Bintang, Kuala Lumpur. More info from www.hartamas.com.

 

Source by: The Star

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InvestKL may secure up to 12 global firms to invest in Greater KL

April 22, 2013 By Leave a Comment

PETALING JAYA: InvestKL targets to secure another ten multinational companies (MNCs) to invest in Greater KL in 2013, and if plans sail smoothly, it could even attract up to 12 MNCs.

At the moment, the agency is in talks with five MNCs from the United States, Europe and Japan to make Kuala Lumpur their business hubs.

If the talks are successful, the number of MNCs investing in KL will increase to 22 because thus far, InvestKL has brought in 17 MNCs in collaboration with partners such as the Malaysian Investment Development Authority and Multimedia Development Corp.

According to InvestKL, the investments from the 17 MNCs are expected to create 15,113 high value jobs and generate gross national income (GNI) of up to RM2.71mil by 2020.

Among these MNCs, six are establishing their centres of excellence, five their operational headquarters, four their shared services centres, one is setting up a hub for its trading of non-petroleum commodities while another for its retail business.

Chief executive officer Zainal Amanshah has been dubbed “a man with a 2020 mission”. Indeed, as he has a mission to attract 100 of the world’s largest multinationals from the lists of Fortune 500 or Forbes Global 2000 to invest in Greater KL by that year.

InvestKL, the government entity set up under the Economic Transformation Programme (ETP) has been in operations since August 2011 and it believed that the ETP and the Government Transformation Programme have also been critical to InvestKL’s success.

Under both programmes the initiatives of which have bore results, InvestKL has been able to convince investors that Malaysia is serious about its commitment to transform.

In the 18 months it has been established, Zainal and his team have proven they can deliver results with the strategic oversight provided by the agency’s three ministers – International Trade and Industry Minister Datuk Seri Mustapa Mohamed, Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Zainal Abidin and Performance Management and Delivery Unit chief executive and Minister in the Prime Minister’s Department Datuk Seri Idris Jala.

“At the same time, there is still a lot of work to do. While we have done much over the past 18 months, we have to work closely with the MNCs to ensure their investment is realised,” Zainal said.

“If they succeed, we succeed.”

He also commended the ministers for lending a big hand for fast-track processing and approvals for all investments through their strategic guidance and support.

“Datuk Raja Nong Chik as the minister-in-charge of the Greater KL National Key Economic Area has been instrumental in helping us achieve our key performance indicators,” said Zainal.

He added that Raja Nong Chik is a very hands-on minister who worked closely with InvestKL to ensure that the agency brought in MNCs that would spur innovation, talent and income growth.

“The minister is very focused on ensuring we bring in high quality investment that will create high value jobs, a high income society and contribute to Malaysia’s GNI,” he said.

The 100 hotshot companies InvestKL intends to bring in are expected to contribute RM40bil in GNI and create more than 60,000 jobs by 2020.

InvestKL notes that investors have also been impressed with the Government’s focus to improve Greater KL’s liveability.

“The commitment to resolve transport woes by constructing the mass rapid transit (MRT) and increase connectivity which, among others, include building the high speed train to Singapore,” the agency said, “The greening of the city and the ongoing work to transform the Klang River into a world-class water front have been positively received.”

Top international talent

To support the MNCs’ growth and ensure availability of talent, InvestKL is also working closely with the MNCs to bring in top international talent and is building a pipeline of talent from within the country through tie-ups with institutions of higher learning.

Among the companies already on board, Fortune 500 company Darden Restaurants Inc from the United States will make Malaysia its hub in Asia Pacific.

“We definitely see a lot of potential in this part of the world. We are looking to expand in Asia Pacific and bring some of our brands here,” Darden Inc chairman and chief executive Clarence Otis Jr has been quoted as saying.

The group intends to eventually introduce its chain of restaurants, such as Red Lobster, here and establish a regional operations hub in Malaysia to assist future restaurant growth in the Asian market.

On collaborations with local companies, Darden will also be developing the world’s first integrated lobster aquaculture park in Sabah under a US$600mil (RM1.86bil) deal with two Malaysian companies.

French international group and global leader in innovation and high-tech engineering consulting, Altran has set up its regional centre in Greater KL and will be setting up an innovation centre too.

In a report, chairman and chief executive Phillippe Salle said Malaysia was Altran’s surest way to foray into South-East Asia.

“We’re here for the infrastructure, access to surrounding countries and a wide talent pool.”

He added: “In Europe, we are an innovation centre where we have a pool of engineers who develop patents of their own.”

Salle believes that Kuala Lumpur will offer a fitting environment for Altran to expand in its key areas of business in aviation, automotive, healthcare, telecommunications and smart society.

Philips Malaysia and University of Malaya Specialist Centre are also collaborating to open the region’s first sleep disorders centre in July this year.

The first in the region, the Asean Sleep Research and Competence Centre will run clinical research, training and sleep medicine services to raise awareness and provide early diagnosis of sleep disorders.

On board is also Promat, a leading professional fire protection products and systems manufacturer, which will relocate its existing Asia-Pacific operational headquarters in Hong Kong to Greater KL.

This company is the main subsidiary of Belgium’s Etex Group, which is headquartered in Brussels.

Other companies InvestKL has brought in are European oleochemicals producer Oleon, which will set up its regional headquarters here to complement its processing plant and leading energy solutions and transport company Alstom, which will open its centre of excellence for regional projects in the city.

 

Source by: The Star

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Number of property transactions dropped in 2012

April 19, 2013 By Leave a Comment

Market slowed in Penang, KL and Selangor but recorded double digit growths in Kelantan and Putrajaya.

Source: National Property Information Centre

After several years of growth, the number of transactions within the property market fell for the first time last year. This number fell from 430,403 transactions in 2011 to 427,520 transactions in 2012, a drop of 0.7%, as revealed at the recent launch of Property Market Report 2012 by the Ministry of Finance’s Valuation and Property Services Department.

Sub-sectors which suffered were the commercial sub-sector (which declined in number of transactions  by 5.9%), the agricultural sub-sector (-5%) and the industrial sub-sector (-4.7%).

Taking up the slack was growth in sales of development land which grew by 6.1% but less than in 2011 when it had grown by 14.8%. The residential sub-sector also grew but at 1.1%, compared to 18.9% in 2011.

In terms of states, the states with major property markets saw transactions drop in 2012. These included Penang (which declined about 21%), Perak (-8%), Johor (-7%), Kuala Lumpur (-3%) and Selangor (-2%).

States which have smaller property markets, in the meantime, flourished last year: Kelantan (increased by 50%), Putrajaya (27%), Pahang (15%) and Terengganu (12%). One of the factors to boost Kelantan’s property market was a bulk transfer of 2,603 units of vacant residential plots, which caused its residential sub-sector to nearly double.

While number of transactions has dropped, the value of transactions has increased from RM137.8bil in 2011 to RM142.8bil in 2012 (an increase of 3.6%).

In terms of value, the sub-sectors which increased the most due to prices of transactions being higher, were development land (increased by 16.6%), residential (increased 9.6%), industrial (4%) and commercial (0.6%).

While number of property transactions dropped in Selangor by 1.7%, the value of transactions in Selangor increased by 13.8%, indicating a significant increase in the prices of transactions.

Home sales increased in quantity by 1% but in value by nearly 10%

At the launch of Property Market Report 2012: Valuation and Property Services Department director Datuk Abd Hamid Abu Bakar, Treasury secretary general Datuk Sri Moh Irwan Serigar, National Property Information Centre director Khuzaimah Abdullah

The number of residential property transactions last year grew by 1.1% to nearly 273,000 transactions, totaling about RM68bil in sales.

This 1% growth came from increase in home sales in Kelantan, Pahang and Putrajaya, among others. The growth in these states were offset by drops in transactions in Penang (-24.2%), Perak (-9.1%), Johor (-7.2%), Sarawak (-2.6%), Kuala Lumpur (-1.3%) and Selangor (-0.5%).

The drop in Penang, for example, may have been attributed to a correction in the market. For example, home sales in Penang dropped by 24% last year, after it had already climbed by 68% in 2011.

While home sales in Selangor dropped slightly last year, the state still maintained the highest market share with 28% of the country’s home sales being in this state, followed by Perak (11%), Johor (11%), Kuala Lumpur (9%) and Penang (9%).

Even though the number of sales of homes in Malaysia increased only slightly at 1%, the value of sales increased by 9.6%. Compare this to the increase in value of sales for all sub-sectors at 3.6%, indicating that prices for homes have increased more than prices for other sub-sectors.

As such, even though six states recorded a drop in number of sales, nearly all reported an increase in the volume of sales, except for Penang and Perak.

Putrajaya in particular showed a marked value appreciation, with number of transactions having increased by 27% but value increasing by 78%!

And even for the biggest loser, Penang, even though number of transactions dropped by 24%, the value of these transactions dropped by only 8%, so prices were seen to have held somewhat.

In terms of pricing, the segment with the highest activity was the RM250,000 to RM500,000 segment, taking 18% of the market. Sales of homes priced above RM500K also increased from around 22,000 units in 2011 to around 26,500 units in 2012.

In terms of property types, terraced houses remained the most popular with about 36% of the market, while condos made up 15%. Many of these houses were located outside of the Kuala Lumpur and Selangor, however, given that 75% of of condo/apartment transactions were conducted in KL and Selangor.

In terms of developer units, the number of new launches increased from around 49,000 units in 2011, to around 57,000 units last year. Over 60% of these new launches were in KL, Selangor, Johor and Perak.

Take-ups from these launches were the best in KL (with 60% sales), Penang (56%) and Melaka (51%).

In terms of residential overhang, number of unsold developer homes dropped and Putrajaya and Labuan even recorded zero overhang. Among those units which remain unsold, 21% were condos/apartments, with nearly half of this number priced over RM1mil and located in Kuala Lumpur.

Source by: The Star

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Proposed Penang undersea tunnel faces underuse, says expert

April 19, 2013 By Leave a Comment

GEORGE TOWN: The state’s proposed 6.5km Gurney Drive-Bagan Ajam undersea tunnel project may end up being underutilised, said Australian architect and town planner Dr Peter R. Jensen.

“Penang may face a similar situation like Sydney, in which the volume of vehicles using the Cross City Tunnel was very low. The state government there had to close other roads to ensure that it was utilised.

“Eventually, they had to bow to pressure and reopen the affected roads,” he said.

Like what happened in Sydney, said Dr Jensen, the Penang state government had also entered into a private-public partnership with the Malaysia-China joint venture Consortium Zenith BUCG Sdn Bhd for the tunnel.

“Sydney also faces similar problems such as over-development and traffic congestion like Penang,” he said, adding that the decentralisation of crowded cities would be one of the better solutions to solve such issues.

“However, to make this work, jobs must be available to entice people to relocate or they will not want to move.

“Growth is inevitable. Rather than growth being the problem, you have to find the solutions for it,” he said.

Dr Jensen also called on the people to take more notice and interest in development issues to keep the state government in check, adding that they could decide what they want.

“It seems to me that you are probably going to look for very similar things like what we want for Sydney in Australia,” he said, adding that this was a coherent balanced growth as well as a liveable and attractive city with a sustainable environment, functional access network and healthy social surrounding.

Besides the 6.5km Gurney Drive-Bagan Ajam undersea tunnel, the mega project has the 4.2km Gurney Drive-Lebuhraya Tun Dr Lim Chong Eu Bypass, the 4.6km Lebuhraya Tun Dr Lim Chong Eu-Bandar Baru Air Itam Bypass and a 12km Tanjung Bungah-Teluk Bahang paired road.

 

Source by: The Star

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Foreign funds keep Malaysia equity market on a roll

April 16, 2013 By Leave a Comment

Financial services group MIDF Investment Research said within a week after the polling and nomination dates were announced, foreign investors bought RM747 million worth of Malaysian equities in the open market (excluding off-market deals).

“That was solid 18 consecutive weeks of foreign buying, edging closer to the record 20 straight weeks set between June 18 and November 2 last year,” the research house said.

Among the seven Asian markets, Malaysia was the clear gainer for the third week running, hauling net US$246 million (RM748 million) via the open market (excluding off-market deals). Kuala Lumpur is going against the tide,” MIDF said in its research report on fund flows for the week ended April 12.

MIDF said with three weeks to go before polling day, foreign buying momentum appears to be taking a breather which, in its opinion, is a healthy consolidation.

It expected another strong push in the run-up to May 5 election day.

The nervous global equity market brought about by weaker US job figures in March did not deter foreign investors from continuing to add on to their Malaysian equity share holdings.

The research house said there was some agitation among investors last Monday subsequent to the selldown on the preceding Friday.

That started to clear last Tuesday, improving everyday until last Friday as net foreign buying peaked for the week to exceed RM200 million again.

“Overall, net foreign purchases still averaged a respectable RM149 million per day last week compared with an average RM406 million in the preceding 10 trading days.”

Sentiment in the global equity markets weakened last week and this had caused global funds to exit Asian equities.

However, selling was relatively light without much damage on prices., it added.

MIDF said during the run-up to the election nomination day on April 20, the market may take a breather as uncertainty looms over seat allocations and the fate of various candidates.

Up to the polling day, it expects the market to gyrate within a certain range and profit-taking to swiftly follow any buying-on-weakness spree.

“The odds for a post-election rally are better than ever, in our opinion. MIDF Research has pivoted its expectations and outlook for the market on Barisan Nasional winning the election,” it said.

Source by: Business Times

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1MDB, Abu Dhabi partner raise US$3b

April 16, 2013 By Leave a Comment

1MDB and Aabar Investments PJS has raised the US$3 billion through their 50:50 joint venture, Abu Dhabi Malaysia Investment Company (ADMIC).

The capital is an integral part of the strategic pact between Malaysia and Abu Dhabi sealed on March 12 during the visit by Abu Dhabi’s Crown Prince Sheikh Mohamed Zayed Al Nahyan.

The capital will be used for investments in strategic and important high-impact projects, such as energy and strategic real estate, which are vital to the long-term economic growth of Malaysia and the emirate, IMDB said.

“This success underlines investors appetite and confidence in the Malaysia-Abu Dhabi partnership, as well as in Malaysia as a sustainable growth centre enjoying peace, stability and good governance,” said 1MDB chief executive officer Mohd Hazem Abd Rahman in a statement yesterday.

1MDB’s bonds have received an A- rating from rating agency Standard & Poor’s, which also assigned an “axAAA” Asean regional scale rating.

The Tun Razak Exchange (TRX) could potentially be the first investment by ADMIC, IMDB said.

TRX is estimated to generate a gross development value of RM26 billion and attract 250 of the world’s leading companies, creating 40,000 jobs for knowledge workers.

The multiplier effect generated will produce up to 500,000 new jobs, directly and indirectly nationwide, by the time it is fully completed.

1MDB has also earmarked US$2.32 billion (RM7 billion), which are proceeds originating from its 1MDB-PetroSaudi International joint venture, for future investments.

As of this year, all PSI Murabaha notes have been fully redeemed at a profit, it said.

The proceeds are reinvested in various classes of participating shares in a Segregated Portfolio Company, registered in the Cayman Islands.

“Cayman Islands is in the OECD (Organisation for Economic Cooperation and Development) white list of countries recognised by the organisation for using international tax standards.

“1MDB is transparent and open about the placement of its funds. This was reported in the company’s annual return lodged with the Companies Commission of Malaysia,” Hazem said.

“It is an interim measure until we identify suitable investment opportunities. The returns generated match or exceed the cost of financing,” he added.

1MDB is considering investment opportunities in all of its core sectors, including global expansion, when it supports strategic initiatives that will bring long-term benefits to Malaysia.

With its strategic partners, the group can jointly explore opportunities internationally, it said.

The global platform is useful in forging further collaborations with energy players, such as investors, technology leaders and construction players from Japan, Germany and the Middle East.

Source by: Business Times

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A guide for those getting a home loan for the first time

April 16, 2013 By Leave a Comment

To the common Malaysian, there is probably nothing more intimidating that signing up for a home loan to buy a house for the first time.  Not only are you making a financial decision that would affect a good part of your working life; you’ll also need to deal with bank letters of offer that resemble anthologies of alien text, as well as loan officers spewing words like “lock-in period” and “variable rate” with seemingly no intention other than to confuse you.

Unfortunately, being the generally trusting populace that Malaysians are renowned to be, many first-time home buyers end up signing on the dotted line without fully understanding the terms of their home loans.  This could boil down to many reasons: not wanting to look bad in front of the loan officer, literally being pestered into signing, or in some cases, simply being too busy (or lazy?) to read the terms and conditions.

For first time home buyers who find bank terms and conditions too hard to comprehend, here is a list of questions you should clarify with your loan officer before you sign that letter of offer.  Remember: when it comes to home loans, it’s better to be safe than sorry.  What you ask now could potentially save you tons of heartache and regrets many years down the road!

(NOTE: The following list is meant as a guide for first-time home buyers only. We apologise if this is too basic for seasoned home investors.)

Question 1: What kind of home loan is this?

Let’s start off with an easy one.  First, find out if the loan offered is a Term Loan or a Flexi Loan.  To put it in the simplest terms possible: a Term Loan is a standard home loan account, while a Flexi Loan is linked to a current account.  For Flexi Loans, you can deposit extra money into the linked current account to reduce your principle loan amount, or withdraw the extra money you’ve deposited as you see fit.  However, there is usually a fee of RM10 per month to maintain the said current account.

Question 2: What is the interest rate? Is this the best you can offer?

As with any matter that involves borrowing money, you’ll want to keep the loan interest as low as possible.  Based on the experiences of many home buyers in Malaysia, it is a common tendency for loan officers to tell you that “all loan rates are the same”.  However, something as small as a 0.05% difference could yield thousands of Ringgits in savings, so it would be in your best interest to get the best rate!

You can see the various rates available on iMoney’s online home loan comparison table, for example.

You can actually apply for a multiple number of home loans, say three, as long as you don’t sign on the letters of offer.

When the letters of offer arrive, use them as bargaining chips to negotiate for better rates with all the banks you’re interested to sign up with.

Question 3: Is the interest rate fixed or variable?

In Malaysia, most home loans are calculated based on Base Lending Rate (BLR), which is regulated by Bank Negara Malaysia.  Say the current BLR is 6.6% p.a. and the bank offers you -2.4% p.a., it means your home loan is charged at an interest of 6.6% – 2.4% = 4.2%p.a..  You pay more interest if BLR goes up, and less interest when BLR goes down.  This form of calculation is commonly known as a Variable Rate.

On the other hand, some banks may offer you a Fixed Rate, which remains unchanged throughout the loan period. Say you’re offered a fixed rate of 4.2% p.a. in your letter of offer; you’d basically be paying the same 4.2% for the rest of your loan period, no matter how the BLR changes.

As a home buyer, there is really no “golden formula” to determine the better option though many believe that interest rates as a whole are about to increase. So if you get a low fixed rate, it might be good to lock in your home loan at this rate.

Question 4: Would I be penalized for settling the loan early?

Somewhere along the line, you might wish to refinance your home loan, shorten your loan period, or pay it off entirely.  Either way, this requires you to cancel your loan agreement before the loan period in the form of early settlement.

If this happens during the “lock-in period”, you have to pay a penalty. In Malaysia, the “lock-in period” is usually three to five years, although some loans don’t have lock-in periods at all! Penalty charges can range from 2% to 3% of the full loan amount. If your loan package indicates an overly lengthy lock-in period or outrageous penalty charges, you’re better off looking at other banks’ offerings.

Also, take note that some banks start counting the lock-in period from full release of your loan, whilst others do so from the first draw down (i.e. the first time the bank releases a payment to the seller).  Make it a point to go with the latter.

Question 5: Can I pay more than the monthly instalment to reduce my principle loan amount?

Nowadays, banks generally do allow you to make extra payment to reduce your principle loan amount.  For a Flexi Loan, you can do so by depositing your extra funds into a linked current account.  For a conventional Term Loan, you may need to inform the bank a month or a few months in advance.  Whatever it is, make sure this is clearly stated in your letter of offer.

Question 6: Who is paying the loan legal charges?

In Malaysia, taking a home loan involves legal and stamp duty charges that generally include: loan agreement fees (1% for first RM150,000; 0.7% of remaining value of loan under RM1 million), stamp duty (0.5% of loan amount), legal disbursement charges and government tax on legal fees.  For a home loan of moderate value, this easily comes to a few thousand Ringgit.

A tip to those of you who want to avoid paying such legal costs: look for home loan packages that come with “zero moving costs” (which basically means that the bank absorbs part or all of the aforementioned costs and charges).  However, banks generally do so in return for less-competitive interest rate on your home loan.  So, make sure you do the math before you commit.

And there you go!  By asking the questions above, you should be able to ascertain some of the most important terms on your home loan.  As you become a more seasoned home buyer, you may also start asking more complex question such as redraw and overdraft facilities.  But in the meantime, Happy home hunting!

 

Source by: The Star

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