On The Radar

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DOMESTIC

Bank Negara tightens lending

Bank Negara Malaysia has implemented a set of measures aimed at avoiding excessive household debt and reinforcing responsible lending practices by key credit providers.

The measures, which take effect immediately, include imposing a maximum tenure of 10 years for financing extended for personal use, capping household tenure at 35 years and prohibiting the offering of pre-approved personal financing products.EPF defends mall deal

The Employees Provident Fund (EPF) has shed some light on the deal to acquire a retail mall in Jalan Sultan Ismail for RM1.2 billion. It said that its investment in the Quill City Mall is conditional upon physical completion of the mall, according to the specifications agreed, within three years.

"In addition to the completion of the mall, a minimum of 70% occupancy at an agreed sustainable minimum commercial yield over the long term must be met," it said in a statement.

It was reported on July 1 that Quill Retail Malls Sdn Bhd is selling the retail mall portion of the abandoned "Vision City" development to EPF, as it seeks to revive the partly-completed project which formerly belonged to the Rashid Hussain Bhd group.

1MDB buying 75% of Jimah IPP for RM1.2b

1 Malaysia Development Bhd (1MDB) is buying independent power producers Jimah Teknik Sdn Bhd and Jimah O&M — reportedly 70% owned by the Negri Sembilan royal family — for RM1.2 billion.

This is its third acquisition of a power asset. In its announcement on July 5, 1MDB cited Jimah's strong cash flows and favourable 25-year power purchase agreement as compelling reasons for its confidence in the acquisition.

Bankruptcy Act being amended

Minister in the Prime Minister's Department Nancy Shukri said the Bankruptcy Act 1967 is being amended to allow individuals declared bankrupt to get release, the Dewan Rakyat heard last week.

Several alternative provisions would be introduced so that creditors could get back debt based on the insolvency legal framework such as individual voluntary arrangement and debt repayment scheme.

No distribution of IGB shares

In an unexpected turn of events, the board of Goldis Bhd decided not to table a controversial proposal to transfer its 30.95% stake in IGB Corp Bhd to an unlisted company in return for shares or cash.

In a filing with Bursa Malaysia on July 3, the company said the board had decided not to table the proposal, which was mooted in May, following negative feedback from shareholders.

Selangor water restructuring may take awhile

The restructuring of Selangor's water assets may take awhile as the state and federal governments need to sit down for a few meetings to conclude the deal, says Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim.

Stressing that Prime Minister Datuk Seri Najib Razak had agreed to settle the issue which involves Act 655 of the Water Services Industry Act 2006, Khalid said the process will only start after the state assembly sitting ends.

IJM to invest RM2b in Kuantan port

IJM Corp Bhd, the operator of Kuantan Port, will invest about RM2 billion to build a new deepwater terminal for the berthing of vessels of up to 200,000 deadweight tonnage.

IJM CEO and managing director Datuk Teh Kean Ming said construction of the new terminal is expected to commence in the first quarter of next year. It will have a 24-month completion period.

Astro to invest RM500m in transponders

In a move to expand its services, Astro Malaysia Holdings Bhd has entered into an agreement with Measat Satellite Systems Sdn Bhd for the utilisation of transponder capacity on the Measat 3c (M3c) satellite for US$166.4 million (RM497.5 million).

Astro CEO Datuk Rohana Rozhan said it would use internally-generated funds and pay the sum over 15 years. The group is not expected to withdraw proceeds from its IPO. Astro was relisted on Bursa Malaysia last year.

Government will not cut excise duty on cars

The government will not be cutting down excise duty on imported cars to reduce car prices as promised by the Barisan Nasional coalition in its manifesto, said International Trade and Industry deputy minister Datuk Hamim Samuri when responding to a question by Datuk Chua Tee Yong (BN-Labis) in Parliament.

FSA and IFSA take force

The new Financial Services Act 2013 and Islamic Financial Services Act 2013 came into effect last week, said Bank Negara Malaysia (BNM), ushering in a new era for the regulatory and supervisory framework of the country's financial institutions.

According to a BNM statement on July 1, the acts are especially important during and beyond the next decade with the changing demographics of the country's population and the growing integration of the economy with the region and the world.

Tan Kong Khoon is new HLBB CEO

Hong Leong Bank Bhd (HLBB) named Tan Kong Khoon as its new CEO on July 1. Prior to this, Tan was the head of consumer banking at DBS Group Holdings Ltd. In a statement, HLBB said Tan would oversee the transformation of the bank "as it continues to evolve into a modern, relevant and leading bank in Malaysia and the region".

Petronas' new company to focus on marginal fields

Petroliam Nasional Bhd, through Petronas Carigali Sdn Bhd, has set up a new company to focus on the development and production of small, marginal and mature fields in Malaysia and abroad.

Vestigo Petroleum Sdn Bhd, a wholly-owned subsidiary of Petronas Carigali, will complement the activities of its parent to continue exploring and developing larger and more technically complex fields.

INTERNATIONAL

The Egypt military ousted the country's first democratically elected president from power after days of massive street protest.

President Mohamed Morsi and his political party — in power just a year — remained defiant, insisting that they continued to be Egypt's legitimate authority. Hundreds of thousands of people took to the streets over the military's actions, that were decried by Morsy's supporters as a "coup" and celebrated as a "correction" by his opponents.

Eurozone unemployment is at a record high and consumer prices are being driven upwards by volatile energy and food prices, data showed on July 1, underlining the fragility of the bloc's economic health.

The European Parliament called on July 4 for the scrapping of two agreements granting the US access to European financial and travel data unless Washington reveals the extent of its electronic spying operations in Europe.

Activity in China's services sector was lacklustre in June as new orders grew at their weakest pace in more than four years, a survey showed, providing further evidence that the world's second-largest economy was losing momentum.

A Hong Kong jury found the lover of the late billionaire tycoon Nina Wang guilty on July 4 of forging a will naming him the sole beneficiary of her estimated US$4 billion estate.

The European Central Bank left interest rates unchanged on July 4 and will try to reassure investors rattled by new turmoil in Europe and the US Federal Reserve's plans to begin winding up its stimulus.

China's top economic planning agency is investigating costs and prices charged by drugmakers, including units of GlaxoSmithKline and Merck, as foreign firms come under pressure from Beijing over possible price-fixing.

Australia's Santos Ltd and BG Group plc agreed on July 4 to link their major gas pipelines, allowing them to buy, sell, and swap gas supplies — a move that will help slash costs at a time when they have been hit by budget overruns.

Don Mattrick, the head of Microsoft Corp's Xbox business who will replace Zynga Inc's founder Mark Pincus as chief executive next week, will get a hefty, largely stock-based compensation package of about US$50 million in coming years, the company said in a regulatory filing on July 3.

US regulators approved the merger of Sprint Nextel Corp and SoftBank Corp on July 3, sources familiar with the situation said. This is the last hurdle in the Japanese company's drawn-out battle to take control of the US No 3 wireless provider.

Manufacturing activity in Singapore quickened in June as production rose and new orders remained positive, a further sign that the city-state's factories have turned the corner, an industry survey showed on July 3.

US private employers stepped up hiring in June and new applications for unemployment benefits fell for a second straight week in the last week of the month, pointing to improving labour market conditions.

Britain's service sector put in a stellar performance in June, suggesting the economy is recovering faster than expected and dimming talk that new Bank of England governor Mark Carney may want to push quickly for more monetary stimulus.

Billionaire investor Carl Icahn asked for a meeting with Dell Inc's special board committee on July 1 after lining up US$5.2 billion in loan commitments to back up his bid for a leveraged recapitalisation of the PC maker.

Suntory Beverage and Food Ltd rose in its market debut on July 3, finding favour with retail investors and players who shifted out of rival drink makers, after it raised nearly US$4 billion in Asia's largest IPO this year.

Pimco Total Return, the world's largest bond fund, suffered record large outflows in June, in a second straight month of withdrawals amid carnage in the bond market that have reduced the fund's assets by 8.5%, data from Morningstar showed on July 2.

A federal judge has approved HSBC Holdings Plc's record US$1.92 billion settlement with federal and state investigators of charges that it flouted rules designed to stop money laundering and thwart transactions with countries under US sanctions.

Insurance company Prudential Financial Inc said on July 2 that it will contest a proposal by the new US risk council to designate it as systemically important — a tag that would subject it to stricter oversight by federal banking regulators.

US new motor vehicle sales in June were poised to record their strongest month in more than 5½ years and factories posted a second straight month of gains in new orders in May, indicating some pick-up in economic activity.

Japan's Mitsubishi UFJ Financial Group has agreed to buy a controlling stake in Thailand's Bank of Ayudhya Pcl for up to ¥560 billion (RM17.9 billion) as Japanese lenders expand into fast-growing Southeast Asian economies to beat slower growth at home.

Brazilian billionaire Eike Batista's flagship oil company OGX Petroleo e Gas SA slashed capital spending on July 1 and pulled the plug on three offshore oil prospects — the latest move by his EBX Group to bolster finances and avert collapse.

This story first appeared in The Edge weekly edition of July 8-14, 2013.