Month: October 2015

No Change To Fuel Prices For The Month Of November

Motorists who are burdened by the recent toll rate hike can heave a sigh relief as the Ministry of Domestic Trade and Consumer Affairs has decided to maintain the existing fuel prices across the board for the month of November.

According to the latest price circular, the retail prices for RON95 remains at RM2.05/liter with RON97 at RM2.45/liter (inclusive of the 6% Goods and Services Tax) and regular diesel at RM1.90/liter (Euro 5 diesel is priced at RM2/liter).

The prices will come into effect from 12.01am on November 1.

In the month of October, MOPS95 (Mean of Platts Singapore) which forms the basis of RON95 petrol price was transacted at a range of US$58.77/barrel-US$62.13/barrel while the ringgit/US dollar exchange rate fluctuated between a high of  US$4.4095/US$ and a low of 4.1175/US$. Based on both elements, the Automatic Pricing Mechanism of RON95 ranged from a high of RM2.18 to a low of RM1.90.

Some 12 major highway concessionaires in the Klang Valley had announced an increase in toll rates – ranging from between 10 sen and RM6 – which came into effect from October 15. However, PLUS Malaysia Bhd in a statement said toll rates at its eight (interstate) expressways remain the same as of now.

The current monthly fuel price adjustment system follows the Ministry of Domestic Trade and Consumer Affairs’ decision to set the market prices of petrol and diesel on a managed float beginning December 1 last year.

The month of February marked the lowest fuel prices thus far for Malaysian motorists with the RON95, RON97 and diesel priced at RM1.70, RM2.00 ad RM1.70, respectively.

Beginning the month of July, the Ministry of Domestic Trade and Consumer Affairs has ceased making a formal announcement on fuel prices revision at the end of every month. Instead any monthly changes in the prices of petrol and diesel will only be made known to consumers from 12.01am at petrol stations nationwide.

 

Month                         RON95 (Per liter)      RON97 (Per liter)      Diesel (Per Liter)

January 2015               RM1.91                       RM2.11                       RM1.93

February 2015             RM1.70                       RM2.00                       RM1.70

March 2015                 RM1.95                       RM2.25                       RM2.25

April 2015                   RM1.95                       RM2.25*                     RM1.95

May 2015                    RM1.95                       RM2.25*                     RM1.95

June 2015                    RM2.05                       RM2.35*                     RM2.05

July 2015                     RM2.15                       RM2.55*                     RM2.05

August 2015               RM2.05                       RM2.45*                     RM1.95

September 2015          RM1.95                       RM2.35*                     RM1.80

October 2015              RM2.05                       RM2.45*                     RM1.90

November 2015          RM2.05                       RM2.45*                     RM1.90

* Including 6% GST charges

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Hanzo Ng: How To Stay Motivated In Tough Times?

Some banks have announced mutual separation schemes. You know it spells trouble when the most prudent of all companies – banks – begin to embark on such cost-cutting measure.

Amid plunging global oil prices, oil and gas companies have begun to shelve oil explorations which do not augur well for service providers. With no contract forthcoming, the service contractors are left with little option but to lay off their geologists and engineers, to name a few.

I, too, have few retail friends who have stopped expanding. Why? Consumers are tightening their belt and there is little growth prospect in sight.

Well, as a martial artist, I do like to think that the battle of tough times should be fought in two distinct areas – (i) the battlefield and (ii) the mind.

As many of us are aware, most if not all wars are first won in the mind no matter how tough the battlefield can be. Most business and sales people have waged war against themselves – some have won, some squared but most have lost. The war in our heads is most often the hardest to win.

Here are some things to consider at the ‘battlefield’:

Better prospecting – Fill your pipeline with really qualified prospects. We call this the CIP or customer ideal profile. Create a worthwhile criteria – match your prospects against your CIP. This will enable you to gauge if you should focus your energy on them. Spend your time in more productive prospecting. Companies are still buying but which one?

Product pushing to questioning skills – Whenever I ask participants at my training what is the toughest selling skill, two popular answers tend to be “closing” and “handling objections”. And I don’t agree. The toughest selling skill is “questioning technique”. The reason why most sales people – greenhorn or seasoned – find it hard to close a deal is because they didn’t do a good job at the beginning.

Closing the sale is like “Will you marry me?”, hence the natural response to that question is “Yes, I do” or “Will you like to go ahead with this order?” to which the natural response should be “Yes, I do.”

In good times, prospects may try out your product based on your presentation skill. In tough times, however, we need to move our energy from presenting to questioning. Questioning allows you to find out the true needs of the buyers. It is the hidden psychology to obtain buy-ins or solicit information that is critical. Questioning skills also allow you to create needs by helping buyers to identify their problems. Most sales people do ask questions – but either not the right question or in a manner that is not skillful enough.

Deliver what you promise – This is of course an activity even for good times as we cannot afford to have dissatisfied customers at any one time. You may also want to exceed their expectations to create a ‘Wow’ factor. This assures them that their decision to go with you is the right one. And your relationship with them may last a life time!

Don’t get easily influenced – Your prospects and customers will always remind you how bad the economy or market is. You can empathize but never sympathize with them. Sell them hope. Don’t get sucked into buying their bad news and let them affect your sales process.

You may also want to avoid friends who are always bitching, whining, complaining and making excuses. Unless they are sitting down to discuss the situation and brainstorming for solutions, avoid them at all cost because humans are creatures of environment. Thus, we will be affected by our surroundings and that lead us to harbor negative beliefs, mindset and motivation.

 GIGO (garbage in, garbage out) – I learned this during my computer science college days. Instead of reading how bad the economy is, read motivational books or those which will enrich your business knowledge. Get audio CDs on personal development. Attend more seminars. I’ve read over 400 books and completed more than 70 programs. This allows me to nourish my mind with contemporary knowledge.

Help your prospects – In Sales Ninja training, I clearly define the three roles of selling – (i) helping people to solve their problems; (ii) prevent problems, and (iii) improving their situation. This may be common sense but not common practice.

Most people sell because they want to make money. There is nothing wrong with that but we cannot lead our sales call with that kind of philosophy. Embark on a sales call by asking tough questions, listen and really finding out what challenges your prospect is having or how you can end their misery through your products or services.

TeamworkWhen companies fail, people tend to blame the sales force. While the sales force is important, a company cannot function alone. Every department is important as well. The production people must act fast with consistent quality. The logistics team must deliver on time – every time. The receptionist must greet everyone with enthusiasm. It’s teamwork. Moreover, in tough times, everyone regardless of their job scope must sell and service.

Some will fail in tough times; some will survive; some will thrive. Which one do you choose to be?

 

Hanzo Ng has helped many clients achieved the HIGHEST sales record ever in their company history. He has also turnaround many under-performers and sky-rocketed their sales results through his Sales Ninja training programs. For more information on Sales Ninja training, visit www.SalesNinja.asia today!

TOP FIVE STORIES FOR THE WEEK (October 26 to 30)

1) Kenanga Research Concerns With MRCB’s Net Gearing Level After ‘Triple Strike’

Yesterday, Malaysia Resources Corporation Bhd (MRCB) made three separate Bursa Malaysia filings pertaining to its land banking and construction contract award replenishments in FY2015.

They are:

  • A proposed joint-venture on a 70:30 basis with Cyberview Sdn Bhd to develop 53.4-acre of land in Cyberjaya with its 70% stake amounting to RM269.5 million;
  • A proposed privatization agreement between its 85%-owned subsidiary Rukun Juang Sdn Bhd (RJSB) and the Malaysian Government for the refurbishment of facilities in the National Sports Complex (NSC), Bukit Jalil for a contract sum of RM1.6 billion, in exchange for 92.5 acres or three pieces of leasehold land in Bukit Jalil that has a potential gross development value (GDV) of RM14.6 billion, and
  • The appointment as management contractor to provide services in connection with the development and construction of the 29.82-acre Kwasa Utama commercial development. Spanning a period of about 12 years from 2016 to 2027, the contract has a provisional contract sum of about RM3.1 billion.
  • The good news aside, Kenanga Research has reiterated its concerns on MRCB’s balance sheet given its net gearing which stood at 1.12x as of 2Q FY2015 is already relatively high compared to that of its peers which ranges between 0.30x and 0.40x.

“Based on simple extrapolation, MRCB would have to fork out a whopping RM2.65 billion to fund its landbank replenishment ambitions i.e. Kwasa Damansara (RM700 million), German Embassy Land (RM300 million), Cyberjaya mixed development (RM300 million), Bukit Jalil privatization agreement (RM1.3 billion) which would further inflate its current net gearing position of 1.12x (2Q15) to an alarming net gearing ratio of 2.27x should all of these transaction materialize,” the research house pointed out.

To accommodate its landbank replenishments or to fund its development projects, Kenanga Research opined that a cash call is imminent. Assuming MRCB needs to raise RM2.65 billion to fund all its landbanks, the research house is looking at a potential 2-for-1 rights issuance with an assumed 40% discount to MRCB’s current price of RM1.19 for its rights price.

 

2) Analysts: RHB Cap To Be Leaner Post Career Transition Scheme Exercise

A major portion of the RHB Bank Group’s Career Transition Scheme (CTS) payout of RM309 million is likely to be paid out in November and December this year with the remaining portion settled in January 2016, suggested MIDF Research.

On a similar note, the research house expects the banking group to begin realizing its RM193 per annum cost savings from FY2016 onwards.

“We have factored this into our (RHB Capital Bhd’s) earnings estimate for FY2016,” wrote analyst Kelvin Ong in a company update. Nevertheless, MIDF Research has not factored the RM309 million one-off payout into its estimate as its net profit forecast is based on core earnings.

Yesterday, the RHB Banking Group announced that it has accepted 1,812 employees for the CTS which is offered to all permanent employees in Malaysia. The figure represents 11.8% of the group’s Malaysian workforce of 15,348 and 13.1% of the Group’s permanent workforce of 13,787 in Malaysia.

At RM309 million, the CTS size is relatively smaller compared to the recent mutual separation scheme (MSS) by CIMB Group (completed on July 2015) with an acceptance of 3,599 employees (1,891 from Malaysia and 1,708 from Indonesia) requiring a payout of RM443.3 million.

 

3) Tenaga’s FY8/2015 Earnings Heavily Impacted By Forex Losses

Tenaga Nasional Bhd’s 4Q FY8/2015 net profit of RM820.9 million (-39.5% y-o-y; +4.0% q-o-q) was adversely affected by forex losses of RM759.4 recorded during the quarter under review against forex gain of RM154.4 million reported in the previous corresponding period.

PublicInvest Research attributed the negative development to the weaker ringgit which has depreciated by an average of 10.2% year-on-year (y-o-y) against the greenback, thus impacting the foreign currency denominated loans of the utility giant.

As of August 31 this year, Tenaga’s debt denominations consist of yen (14.5%), US dollar (7.1%), ringgit (78.3%) and others (0.1%).

“YTD (year-to-date) forex losses of RM932.3 million (RM819.3 million unrealized forex translation loss and RM113 million realized forex transaction loss) dragged FY8/2015 net profit to RM6.1 billion (-5.4% y-o-y),” wrote analyst Syarifah Hidayatul Akmal in a company update. “Stripping out the forex losses, core net profit of RM7.1 billion would have met our estimates at 103% but exceed consensus forecast at 108%.”

Despite recording higher electricity sales of 8.1% y-o-y, Tenaga’s FY8/2015 revenue was flat at RM43.3 billion (+1.2% y-o-y) due to recognition of the imbalance cost pass-through (ICPT) of RM1.9 billion.

A final dividend of 19 sen was declared for the quarter, bringing full year dividend to 29 sen (49% of company’s free cash flow) which is similar to FY8/2014. “We are slightly disappointed with the quantum as it comes short of our expectations of a 33.2 sen payout,” Syarifah Hidayatul pointed out.

 

4) BIMB Securities Research: Online Immigration Services A Boon To MyEG

MyEG Services Bhd, a concessionaire for the Malaysian e-government MSC flagship application, can expect its foreign permit renewal segment to be a major revenue growth contributor in the medium-term.

According to BIMB Securities Research’s projection, MyEG should be able to generate RM90 million and RM162 million for FY2016 and FY2017, respectively from this segment. The research house based its estimation on the existence of around 2 million foreign workers in Malaysia with another 2 million-3 million illegal foreign workers who are allowed to be registered in the near future.

As of May 1 this year, the government had stopped processing permits over the counter thereby ensuring 100% penetration for MyEG’s online service.

“MyEG immigration services are full of potential,” BIMB Securities Research pointed out in initiating coverage on the company. “MyEG have shown tremendous growth over the years with a compound annual growth rate (CAGR) of 18% for the past six years.”

Currently, MyEG is engaged in the business of developing and implementation of e-government services and the provision of other related services for the e-government initiative as well as investment holding.

 

5) Lower Oil Prices Could Put Asia-Pacific’s O&G Companies In A Quandary

Asia-Pacific oil and gas (O&G) companies may be called to take tough decisions if the fall in oil prices is prolonged, according to a report published by the Standard & Poor’s Ratings Services

The report entitled Another Decline In Oil Prices Could Have Asia-Pacific Oil And Gas Companies Over A Barrel observed that the ratings on 40% of O&G companies rated by Standard & Poor’s Ratings in Asia-Pacific and 60% of the stand-alone credit profiles will face downward pressure if oil prices fall 10% below US$50 per barrel without any signs of recovery.

“Overall, the ratings on Chinese state-owned enterprises and Australian companies are the most vulnerable, while the stand-alone credit profiles of the government-owned companies in countries such as Indonesia and South Korea are at the greatest risk,” Standard & Poor’s credit analyst Mehul Sukkawala pointed out.

Nevertheless, the international rating agency opined that O&G companies in Asia-Pacific are still better off than those in other regions where the energy sector has been a significant contributor to higher default rates.

Standard & Poor’s current Brent crude oil price assumptions build in a gradual improvement. It forecasts oil prices at US$55 in 2016, US$65 (2017) and US$70 (2018 and beyond).

Malaysia’s FDI Posted A Net Inflow Of RM35.3b In 2014

Foreign Direct Investment (FDI) posted a net inflow of RM35.3 billion (2013: RM38.2 billion) in 2014 to attain a position of RM467.5 billion as of end-2014 (2013: RM446.4 billion), according to the Statistics Department.

Meanwhile, income of RM62.6 billion was recorded in 2014 (2013: RM56.9 billion).

By component, the FDI inflows were mainly generated from equity & investment fund shares of RM30.3 billion (2013: RM31.3 billion) or 85.8% while debt instruments posted RM5.0 billion (2013: RM6.8 billion) or 14.2%.

“As for position, the value of equity & investment fund shares rose to RM429.2 billion from RM414.1 billion, an increase of RM15.1 billion (3.6%),” the Statistics Department pointed out.

Debt instruments also attained a higher position of RM38.4 billion from RM32.3 billion in 2013. Income on equity & investment fund shares recorded a value of RM62.1 billion (99.3%) and interest of RM500,000 (0.7%).

The top five investing countries for inflows in 2014 were Singapore, the Netherlands, Hong Kong, Cayman Islands and Bermuda. These countries recorded a total of RM22.4 billion or 63.4% of the total inflows into Malaysia.

With regard to position as of end-2014, FDI investment originated mainly from Singapore, Japan, Netherlands, the United States and Norway which amounted to a total of RM257.7 billion or 55.1% of total position in Malaysia.

“In terms of income, the US, Singapore, Netherlands, Japan and Bermuda were the top earners in 2014,” noted the Statistics Department. “These countries recorded a total of RM39.0 billion or 62.3% of total income in Malaysia.”

As for flows, the services sector was the largest recipient of FDI with 46.6% in 2014. This was followed by mining & quarrying sector (36.0%) and manufacturing sector (13.2%).

Meanwhile, the FDI position were channeled mainly into services sector (45.6%), manufacturing sector (43.7%) and mining & quarrying sector (7.7%). With regard to income, the manufacturing sector generated the highest earnings (44.1%) in 2014.

“This was followed by services sector (38.7%) and mining & quarrying sector (14.7%),” added the Statistics Department.

Daily Market Close (Down 1.27 points)

The FBMKLCI extended its losing streak for the fifth straight trading session after shedding 1.27 points or 0.08% on Friday to close the week below the psychological 1,700-mark at 1,665.71. Despite the lackluster performance, buying interest remained intact as evident by the breaching of the 2 billion share-mark, probably as investors dabbled in second liners and penny stocks.

At the currency market, the ringgit closed flat against the greenback at 4.3012/US$, a mere 0.05% lower from Thursday’s close of 4.2990/US$. The intra-day low touched by the local currency was 4.3210/US$.

At the regional level, except for Japan’s Nikkei 225 Index which firmed 147.39 points or 0.78% to 19,083.10 on hopes of fiscal policy stimulus, other major stocks markets ended Friday’s trading in the red. China’s Shanghai Composite Index ended flat at 3,382.92 (down 4.39 or 0.13%) while neighboring Hong Kong’s Hang Seng Index tumbled 179.90 points or 0.79% to 22,640.04.

Elsewhere, Australia’s S&P/ASX 200 retreated 27.42 points or 0.52% to 5,239.44 while South Korea’s KOSPI Index  shed 4.69 points or 0.23% to 2,029.47.

Back home, the Finance Index dipped 0.18% to 14,161.21 points, the Properties Index gained 0.07% to 1,186.87 points but the Plantation Index was 0.01% lower at 7,540.21 points. The market traded within a range of 9.50 points between an intra-day high of 1,673.26 and a low of 1,663.76 during the session.

Major decliners among the index-linked stocks were CIMB (-8 sen to RM4.61), PPB (-26 sen to RM15.46), SIME (-12 sen to RM8.36), ASTRO (-3 sen to RM2.86) and KLK (-20 sen to RM22.78).

Actively traded stocks included RGB (+1 sen at 18 sen), XOX (+4 sen at 31 sen), MRCB-WA (+2 sen at 17 sen), GENETEC (unchanged at 20.5 sen) and INIX (+½ at 13.5 sen). Trading volume decreased to 2,124.40 million shares worth RM2,044.50 million as compared to Thursday’s 2,168.17 million shares worth RM2,281.07 million.

Major decliners among the index-linked counters were HLBANK (+26 sen to RM13.98), UMW (+14 sen to RM8.22), GENM (+6 sen to RM4.30), PETCHEM (+8 sen to RM6.35) and IHH (+6 sen to RM6.31).

Market breadth was positive with gainers outpacing losers with 451 to 396.

Malaysia’s Trade Surplus Could Decline Post TPP Agreement

Based on a study by World Trade Organization (WTO), the impact of tariff liberalization for Malaysia among Trans Pacific Partnership Agreement (TPPA) members is not necessarily favorable for overall trades.

Many developing countries like Malaysia are experiencing a fall in their domestic value-added (DVA) exports due to the rise in imports for inputs in export sectors. For instance, Malaysia’s intermediate imports account for close to 60% of total imports.

“We gather that trade liberalization among TPPA member countries is negative for Malaysia’s net trades,” wrote AmResearch economist Patricia Oh Swee Ling in an economic update. “Overall trade surplus could decline by US$1.3 billion to US$24.1 billion post TPPA.”

In the economist’s view, Malaysia’s exports to TPPA partner countries may rise to US$99.4 billion (from US$97.8 billion in 2014) but imports will improve to US$75.3 billion post TPPA (vs US$72.5 billion in 2014).

“Malaysia’s trade with Japan will experience the most decline in balance of trade (BOT) post TPPA (with a decline in BOT by US$1.2 billion), followed by Australia (-US$287 million); the US (-US$266.2 million) and Singapore (-US$60 million),” projected the economist. “Malaysia-Vietnam bilateral trades are positive owing to the boost in BOT by US$579 million.”

Oh pointed out that TPPA is unfavorable for Malaysia’s bilateral trade with the US owing to the reduction in balance of trade by more than US$266 million. Many sectors in Malaysia including boilers, tobacco, articles of iron and steel, electrical machinery and glass and glassware, plastics will experience narrower surpluses.

“Meanwhile, Malaysia’s BOT would improve post TPPA for textiles and clothing, rubber articles, wood pulp and wood articles and miscellaneous chemicals,” justified the economist.

According to Oh, rise in DVA exports is important for a country in terms of production-linked gains via exports growth. While gains in exports and net trade augur well for domestic growth, the additional benefit to the general economy derives from the domestic value-added segment.

“In recent years, maximum decline in DVA exports of Malaysia has been with the US,” explained Oh. “DVA slipped to 42% in 2009 from 65% in 1995.”

According to the economist, total imports are likely to grow by 3.9% to RM75.3 billion post TPPA. Noteworthy to mention is that imports of vehicles could potentially rise by US$470.3 million to US$552.5 million in Malaysia post TPPA (2013: US$82.2 million).

Other sectors which will likely experience a significant increase in imports include iron and steel; mineral fuels; plastics and articles thereof; nuclear reactors, boilers and machinery as well as electrical machinery.

In essence, AmResearch opined that it is unnecessary that production-linked gains from higher exports and GDP growth will result in higher employment for the economy. High intermediate imports could result in a decline in DVA exports going forward.

“As such, focus for trade should be in terms of productivity growth to stimulate the economy via trade activities and not just for increasing overall trades,” suggested the research house. “All in, Malaysia’s imports are expected to rise by US$2.8 billion and exports to gain by US$1.6 billion post TPPA.”

As such, Malaysia’s balance of trade is likely to decline by approximately US$1.3 billion per annum as imports grow at a stronger pace compared to exports.

Life Expectancy Of Malaysians Rises To 74.8 Years In 2015

Life expectancy at birth of Malaysians is on the rising trend. In 2015, a newborn is expected to live up to 74.8 years, an increase of 0.7 years from 74.1 years in 2010, according to the latest data furnished by the Statistics Department.

On average, a new-born female is expected to live longer than a new-born male. A new-born female in 2015 is expected to live up to 77.4 years as opposed to 72.5 years for their male counterpart, an increase of 0.8 years and 0.6 years, respectively as compared to 2010.

“The difference in life expectancy at birth between sexes in 2015 was 4.9 years,” the Statistics Department pointed out in a media release.

This follows the publication of Abridged Life Tables, Malaysia, 2012-2015 which provides estimates of life expectancy by age, ethnic group and sex based on age-specific mortality rates. Among others, the report highlights life expectancy at birth; life expectancy at 15 years; life expectancy at 65 years and life expectancy by major ethnic group.

According to the report, life expectancy at the age of 15 has continued to improve over the years. Between 2010 and 2015, life expectancy increased by 0.5 year for males and 0.8 year for females.

“On the overall, the difference in life expectancy at 15 years between males and females is 4.8 years in 2015,” noted the report.

Males who reach the age of 65 in 2015 are expected to live for another 14.9 years, an increase of 0.6 year as compared to 2010. On the other hand, females are expected to live for another 16.9 years, an increase of 0.8 year from 16.1 years in 2010.

“The difference in life expectancy between sexes in 2015 is 2.0 years as compared to 1.8 years in 2010,” revealed the report.

Throughout the period of 2010-2015, Chinese continued to have the highest life expectancy among major ethnic groups in Malaysia – at 75.1 years for male and 80.1 years for female. On the contrary, Indians recorded the lowest life expectancy at birth with 67.7 years (male) and 75.8 years (female).

More broadly, all ethnic groups recorded an increase in life expectancy at birth for the period of 2010 to 2015. For males, the Chinese recorded the highest increase in life expectancy with 0.7 year followed by Bumiputera (0.5 year) and Indians (0.1 year).

“The Chinese also had the highest increase of life expectancy for female by 1.0 year followed by Bumiputera (0.7 year) and Indians (0.1 year),” added the report.