Reports » Malaysia

Malaysia stock market and companies daily report (October 01, 2012)

Contributed by Shares Investment

Rubber Market Heading For Uptrend
The Malaysian rubber market is expected to see a higher demand this week with improved sentiments on the global economic outlook amidst quiet trading. China, the world’s largest consumer of rubber is predicted to announce a large stimulus package to help spur its economic growth. This would in turn boost rubber demand in Malaysia as well as well as market confidence among the global rubber players. Meanwhile, the promising developments in Spain’s debt crisis, the fourth largest economy in Europe, is also another encouraging sign for the local market this week. Physical rubber prices are likely to be influenced by the Tokyo Commodity Exchange and Shanghai Futures Exchange, where the commodity is predicted to climb higher. On a Friday-to-Friday basis, the Malaysian Rubber Board sellers’ official physical price for tyre-grade SMR 20 fell 2.5 sen to 872 sen per kg, while latex-in-bulk rose 11 sen to 623.5 sen per kg.
Significance: Rubber prices rebounded from a two-week low on speculation that China may take additional measures to bolster growth. Rubber futures were also supported by a plan of the World’s three largest rubber producers (Thailand, Indonesia and Malaysia) to boost prices by cutting rubber exports starting October.

Hino To Set Up Its First Manufacturing Plant In Malaysia
MBM Resources through its subsidiary, Hino Motors (Malaysia) entered into a joint venture with Hino Motors, Japan’s leader in the manufacturing of trucks and buses, to set up Hino’s first manufacturing plant in Malaysia. The joint venture is served as a mutual partnership in assembling, manufacturing and selling trucks and buses of the Hino Motors brand within Malaysia. The plant is involving an investment of RM140 million, will be located in a 42 acres land in Sendayan TechValley, Negeri Sembilan. Construction is slated to begin in February next year and should be completed by early 2014. According to the President of the Japanese truck maker, the plant upon completion will enable it to meet the growing demand for Hino products in Malaysia and further strengthen its leadership in the local commercial vehicle segment. According to MBM’s group managing director, not only will the new plant bring the partnership with Hino to next the level but also, contribute to raising the standards of the Malaysian automotive industry.
Significance: The joint venture extends the partnership between Hino Japan and MBM to build a world-class manufacturing facility which is beneficial to the local automotive industry. This is in line with MBM’s plan to become one of the leading and most complete automotive groups in Malaysia.

Tax Relief A Boost To Insurance Industry
The Life Insurance Association of Malaysia (LIAM) welcomed the government’s removal of eight percent investment income tax on deferred annuity. This is seen as a major upgrade to retirement planning for the public where policyholders can now enjoy better returns on their retirement savings, thus boosting the development of retirement planning for the public. As to encourage individuals to invest in annuity schemes that add savings during retirement, the government has also planned to streamline tax treatment on annuity scheme funds with other retirement scheme funds, whereby tax exemption is given for income received by annuity funds. The tax relief is stated to be effective from the assessment year of 2012. Furthermore, LIAM also supported the government’s introduction of a multitude of insurance schemes for petty traders, Malaysian Armed Forces personnel, students and farmers. According to LIAM, with greater awareness of insurance among the public, the life insurance penetration rate will reach 75 percent by 2020 from the current 43 percent.
Significance: The introduction of tax incentives for deferred annuity and new group insurance schemes will turn the insurance industry into a major contributor to the country’s economic development. Fifteen life insurance companies with strong distribution channels would benefit from this opportunity to distribute deferred annuity to the public.