Malaysia Weekly Highlights

MALAYSIA WILL ONLY SIGN TPPA IF BENEFICIAL

Malaysia will only sign TPPA if beneficial

Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said Malaysia will only agree to the Trans Pacific Partnership Agreement (TPPA) if the terms are beneficial to the country.

"Malaysia will only enter into the TPPA if it is mutually beneficial, on terms that we can agree to," said Wahid.

He said that the agreement touches various issues, such as the Bumiputera policy, government procurement and state-owned enterprises.

"The text will be finalised over the next 30 days or so. After that, it will be made public and it will go for tabling in parliament," he said.

AGC SAY NO TO BANK NEGARA's REQUEST

AGC: No offence by 1MDB

The Attorney General's Chambers (AGC) has decided that no offence was committed by 1Malaysia Development Berhad (1MDB) based on an investigation paper (IP) by Bank Negara and no further action should be taken.

"The investigation paper was submitted to the AGC on Aug 21 2015. Having studied the investigation paper, Deputy Solicitor 1 Datuk Tun Abdul Majid Tun Hamzah decided that there was no offence committed by 1MDB officials and directed that no further action should be taken," said the AGC in a statement on Thursday.

The AGC added that the IP was returned to Bank Negara on Sept 11.

"However, on Oct 1, Bank Negara sent a letter of request to the AGC to have the decision reviewed. Having considered the request and the fact that there was no new evidence made available, the Attorney General decided to maintain the decision made earlier.

"What has been in the news concerning the Investigation Paper being with the AGC and that discussions were ongoing is inaccurate and not true," said the AGC.

BANK NEGARA RESERVES DIP TO US$93.3 bil

Bank Negara Malaysia's International reserves fell to US$93.3 billion as at September 30. This is a drop from US$95.3 billion in September 15, which is a drop of about 2% in just 2 weeks. In a statement today, BNM said the decline in reserves level in US dollar terms as at September 30, 2015 was mainly due to the quarterly adjustment for foreign exchange revaluation changes. The reserves position as at September 15, 2015 is sufficient to finance 8.6 months of retained imports and is 1.2 times the short-term external debt, said the central bank.

RINGGIT  POISED FOR BIGGEST RALLY SINCE 1998

The Ringgit is geared for its biggest rally since 1998 while stocks rallied due to surging crude oil prices, Bloomberg reported. 

Reacting to the release of the US Federal Reserve’s minutes for its September meeting 

which indicated that the U.S. central bank won't rush to raise interest rates, Asian shares rose and a gauge of the dollar fell, Bloomberg said. 

The report further quoted Masashi Murata, vice president at Brown Brothers Harriman & Co. in Tokyo as saying, "The higher oil price is also supporting the ringgit.” T

he ringgit appreciated 2.4 per cent to 4.1350 a dollar as of 10.07am in Kuala Lumpur, taking its gains for the week to 6.7 per cent. Bloomberg also highlighted that the currency earlier climbed to 4.1213, the strongest level since Aug 21. The FTSE Bursa Malaysia KLCI Index advanced 1.1 per cent on Friday and 5 per cent from Oct 2, paving way for its biggest weekly gain since 2008.

AirAsia

AIRASIA - UNAWARE OF PRIVATISATION TALKS

Air Asia Bhd founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun are sounding out investors about taking the airline private in a management - led buyout, Reuters reported last Tuesday, citing unnamed sources. Air Asia said it has no knowledge of any such plan but confirmed it was in discussion with certain bankers to partially finance share buybacks. 

NAZIR RAZAK SUGGESTS SET UP OF NATIONAL CONSULTATIVE COUNCIL

Banker Datuk Seri Nazir Razak has called for the formation of a national consultative council (NCC) to draw up a much needed social and economic re-engineering plan to chart a new future for the country. He gave his speech at the Khazanah Megatrends Forum last Monday and the need for the council so that Malaysia will not "lose the international economics game."

UMW TOYOTA TO RAISE PRICES OF TOYOTA, LEXUS BY JANUARY

UMW Toyota will increase the prices of all its Toyota and Lexus vehicles by 4% to 16% effective January next year due to the weaker ringgit.

It said on Monday the ringgit had depreciated by 20% year-to-date against the US dollar and as a result, its operating costs had increased.

“The car manufacturer has implemented strategic moves to protect the interest of its customers in the midst of the fluctuation of ringgit, and absorbed additional cost to a certain extent over the past months,” it said. 

It added that it had weighed all possible options, but had no choice but to pass on some cost to the consumers to offset rising input costs due to the strengthening of the US dollar against the Malaysian currency.

UMW Toyota Motor president Datuk Ismet Suki said: “Since the beginning of this year, the fluctuation of the ringgit has impacted our business as some of our parts and components are imported, resulting in an increase in overall cost of production. 

“We have implemented cost-efficiency measures and reviewed our operations across the supply chain to mitigate the weaker ringgit.”

He added the company would have implemented necessary measures to minimise forex losses impact and address the fluctuation of ringgit had it dropped gradually but the huge fluctuation of the currency within a short period had hit its operations. 

“Hence, the company will have to increase the prices of Toyota and Lexus vehicles effective January 2016. The increase is inevitable as there is no clear indication on when the Ringgit will rebound,” he explained.

Ismet also said the company had tried its best to keep the price increase as minimal as possible.

“Even with the increase of our vehicle price, we could only recover partially, not 100% from the impact we have been absorbing. If the ringgit continues to slide in the near future, we may need to review our pricing structure again,” he added. 

That said, he was optimistic that the price increase would not have a big impact on sales. 

The auto player is on track to meet its business targets.

“We are facing challenging times but UMW Toyota is confident we can ride out the storm. We have strong fundamentals and a proven track record. I believe customers will continue to choose us and our vehicles as we deliver quality products and services that complement their lifestyles,” Ismet said.