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KUALA LUMPUR: Bank Negara Malaysia is likely to cut its overnight policy rate (OPR) by 25 basis points in 2015, as the fall in the oil prices would cushion the pressure on inflation, according to UBS.

The central bank last increased its OPR in July 2014 to 3.25%, after keeping it at 3% since 2011.

At its last Monetary Policy Committee meeting in September 2014, it decided to maintain the rate.

UBS's Singapore-based senior economist, Asean and India, Edward Teather, said inflation was unlikely to be high in Malaysia, estimating it to be 3.9% next year. This, he said, was well below the government's estimation of 4.5%.

The introduction of Goods and Services Tax in April 2015 would lead to higher inflation, but would be capped by lower crude oil prices with possible increase in demand for the non-oil sector, he said.

In 2015, crude oil prices was expected to average at US$70 per barrel, and in 2016 US$80, said Teather.

"Higher household debt level means that Bank Negara is not going to embark on major rate-cutting cycle.

"At the same time the government's revenue is going to be constraint by lower oil revenue, limiting its ability to help support the economy," he said at a conference call here today.

The bank also estimated that inflation would be reduced to 2.5% in mid-2016.

Teather said the Malaysian Government would be able to meet its fiscal deficit target of 3% in 2015 despite a challenging economic environment.

"If the crude oil price averages around US$70 and US$75 per barrel, the government should be able to manage the situation and its deficit target could be achieved," said Teather.           

He said the ringgit was expected to reach the 3.50 level against the US dollar by end-2015 albeit at a slower pace, should the Asian currencies continue its downward trend against the greenback. 

"We think the stabilising oil price and the ability of the Malaysian investors to bring capital home from abroad will help stabilise the currency," he said. – Bernama


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JOHOR BARU: The state has rejected new applications to build serviced apartments.

Mentri Besar Mohamed Khaled Nordin said this was to ensure that the property market would not be flooded by serviced apartments, especially in Iskandar Malaysia.

“All new applications have been frozen,” he said.

“Those who have received their approval can continue with their projects,” he said at the ground-­breaking ceremony of affordable homes by state-linked PIJ Holdings Sdn Bhd at Jalan Datin Halimah here yesterday.

Mohamed Khaled said construction of serviced apartments was not subjected to housing development conditions such as the providing of basic amenities such as schools, multi-purpose halls and places of worship.

Nowadays, such apartments were no longer rented out but owner-occupied.

“Hence, developers should provide these amenities to buyers,” said Mohamed Khaled.

It was reported that about 86,000 units of serviced apartments had been approved for the country’s first economic growth corridor until 2025.

However, according to the Iskandar Malaysia Comprehensive Development Plan 2006-2025, only about 26,000 units were deemed necessary for south Johor.

“We have directed the Township Development Planning Unit to review the need for such an excessive number of serviced apartment projects,’’ said Mohamed Khaled.

“It is better for developers to focus on building apartment units in Iskandar Malaysia instead of serviced apartments.”

Mohamed Khaled also said the state government had directed PIJ Holdings to conduct a feasibility study on developing wakaf lands in Johor and turn these into revenue-generating entities.

“There is a lot of idle wakaf land, especially in Iskandar Ma­­laysia, worth millions of ringgit,” he said.

 


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KUALA LUMPUR: TH properties has unveiled its latest offering in Bandar Enstek, Negri Sembilan, featuring two-storey super-link homes aimed at professionals with young families and those seeking a lifestyle upgrade.

Hundred East@enstek comprising 100 units of two-storey homes in three different lot sizes are set to be built over two phases.

Phase 1 will offer 46 units priced from RM574,400 onwards, said its senior manager of marketing and sales, Mohd Adlee Yusof.

He said prospective house buyers and long-term investors will find Hundred East@enstek compelling, especially since the current market features more small built-up units and higher cost per square feet.

“Bandar Enstek homes also provide grander habitats for less,” Mohd Adlee said in a statement.

The 2,071.6ha Bandar Enstek township is TH Properties’ flagship development.

It has a projected gross development value of RM9.2 billion and will be completed in 2025.

About 49 per cent of the township has been developed and is currently home to more than 10,000 residents.

He said recent launches within the township development have been well-received and is confident on Hundred East@enstek sales.


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