Economic News

[snowbird]

Malaysia's decade-old push for Mid-East investments stumbles

The government’s decade-old plan to attract investors from the Middle East is not playing out well, according to a report in the Straits Times of Singapore today.
Several major middle eastern investors, who had earlier indicated pouring in millions into Malaysia, have since withdrawn.

Saudi Aramco is the latest of several major middle eastern companies to have aborted planned investments in Malaysia, largely due to global economic conditions, a US$27 billion (RM119 billion) refinery and petrochemical joint-venture development in Pengerang, Johor, with state-owned Petronas, says report.

Arab involvement in Medini fizzled out after the 2008 global financial crisis and the investments were subsequently taken over by private Malaysian interests.
Other major Arab-led projects in Malaysia “that have been quietly axed in recent years include plans by Abu Dhabi business groups to invest in a US$7 billion oil storage facility in Johor, and a US$4.2 billion aluminium smelter project in Sarawak.

Abu Dhabi investors had pulled out from 1MDB’s multibillion-dollar Tun Razak Exchange ( TRX) real estate development following problems between 1MDB and Abu Dhabi’s International Petroleum Investment Company.
At the same time, Abu Dhabi's IPIC is demanding US$6.5 billion from the Malaysian state fund after it defaulted on a multibillion-dollar financial assistance arrangement.

http://www.straitstimes.com/asia/se-asia/malaysias-decade-old-push-for-mid-east-investments-stumbles

 

[sgcount]

Wow... even the Saudis are pulling out?

No worries... the Chinese are coming in strong to Johor. Too many people in China and too much money.

 

[snowbird]

Wow... even the Saudis are pulling out?

No worries... the Chinese are coming in strong to Johor. Too many people in China and too much money.

What if suddenly, all your new neighbors in JB, every direction you look from your balcony are mostly Mainland Chinese, every shopping mall you go are filled with Mainland Chinese, ........

 

[snowbird]

Wow... even the Saudis are pulling out?

No worries... the Chinese are coming in strong to Johor. Too many people in China and too much money.

You're quite right about the rich Chinese.
Just today, it is reported that MY's national car Proton is now in final negotiation with the Chinese automaker Geely Automobile Holdings Ltd for partnership, (read major capital injection).
And if the deal gets through, it may be renamed GeelyTon (吉利动）because Proton sounds like 不动 (cannot move, bad omen) in Chinese.
So you can see, MY needs all the money and the Chinese are slowly buying up things (read bad debts) in MY and very soon, maybe a local bank or something.

http://www.thestar.com.my/business/business-news/2017/02/07/drbhicom-geely-shares-soar/

 

[sgcount]

What if suddenly, all your new neighbors in JB, every direction you look from your balcony are mostly Mainland Chinese, every shopping mall you go are filled with Mainland Chinese, ........

It has already happened in Singapore. They are everywhere. But be careful to assume they are from mainland China. Many are likely Singaporeans already.

These days, I don't just notice all these Chinese people. Many more from Thailand, Myanmar, Philippines (of course), etc. All speaking in their own foreign accents. You can see many of them in MRT trains and stations.

This is something inevitable for Johor also. So not surprising....

 

[snowbird]

It has already happened in Singapore. They are everywhere. But be careful to assume they are from mainland China. Many are likely Singaporeans already.

These days, I don't just notice all these Chinese people. Many more from Thailand, Myanmar, Philippines (of course), etc. All speaking in their own foreign accents. You can see many of them in MRT trains and stations.

This is something inevitable for Johor also. So not surprising....

So you are suggesting that in time to come, JB will be crowded with foreigners, just like Singapore now?
And those people who had invested a new home in JB, who were thinking of moving away from that maddening crowd are actually moving back to be neighbors to the same maddening crowd?
If not, then what are you trying to say?

 

[sgcount]

My words so complicated meh....?

Isn't it obvious there will be more mainland Chinese in Johor in years to come? Look at which is the majority of buyers for Country Garden Danga Bay and Forest City.

And for other residential areas, I think you can expect even Japanese and Koreans coming in.

It is inevitable that in any large developed cities, people of various nationalities will migrate over.

I was surprised recently when I went to Australia. Just 8 to 10 years ago, the cities were ok.... easy to walk and more ang mohs than Asians.

Today you go there, you see a lot more Asian faces crowding the streets than ang moh. And no prize for guessing... the majority is the China Chinese.

As for Johor, will it become a city with "maddening crowd"? It really depends on how well the authorities develop it. They have a very long way to go. To many Singaporeans and those from SE Asia, Johor is still a backward, corrupted and crime infested place.

Singaporeans bought properties in Johor either for cheaper retirement, or they were "conned" by property agents back in 2012/13 thinking that Iskandar is still largely a place where their property investments can make money.

So you are suggesting that in time to come, JB will be crowded with foreigners, just like Singapore now?
And those people who had invested a new home in JB, who were thinking of moving away from that maddening crowd are actually moving back to be neighbors to the same maddening crowd?
If not, then what are you trying to say?

 

[rotikok]

Wow... even the Saudis are pulling out?

No worries... the Chinese are coming in strong to Johor. Too many people in China and too much money.

King Salmon... sry is king salman coming to malaysia @ 28th of feb. Thing still got hope, the king may help najib by investing malaysia. I help u, u help me. Najib need money other than china to woo/prepare for election, and the king will bring money to invest to help jib gor this time. See how, maybe still got chance aramco will invest. Investment cancel news coming from singapore press citing from some high ranked insider officer, still not sure true or not, maybe still got surprise. Who knows, maybe aramco IPO will have KL as one of their location.

 

[snowbird]

King Salmon... sry is king salman coming to malaysia @ 28th of feb. Thing still got hope, the king may help najib by investing malaysia. I help u, u help me. Najib need money other than china to woo/prepare for election, and the king will bring money to invest to help jib gor this time. See how, maybe still got chance aramco will invest.

Due to the low oil price, even Saudi is already running out of money that they have to borrow US$17.5 billions just last year via bonds sales.
Not only that, they need to raise money for Aramco by making it public via IPO for international investors by early next year, targeting to raise as much as US$100 billions!
Saudi has a very large royal family to maintain which consists of about 15,000 members of princes and princesses ( all the king's sons, grandsons, uncles, granduncles, brothers, nephews are titled as prince )
So you see, Saudi is very much in need of money right now more than MY.
So now Saudi is really 泥菩萨过江，自身难保。
Maybe the Saudi King's visit is to take back that US$700 millions that Najib confirmed he received from them during the good times.

Investment cancel news coming from singapore press citing from some high ranked insider officer, still not sure true or not, maybe still got surprise.


Well, the news on Mid-eastern investments withdrawing from MY was reported also in other international news portal like Reuters, Bloomberg, WSJ, etc. but of cos will never ever appear in any of MY's newspapers la.

Who knows, maybe aramco IPO will have KL as one of their location.

Yah, wait for the mammoth Aramco IPO la, sure can make some money much faster than investing in properties.

 

[rotikok]

Yah, wait for the mammoth Aramco IPO la, sure can make some money much faster than investing in properties.

Dunno leh, I do not feel saudi running out of money. I see thing in more positive way and perhaps more latest way. 1. Their lavish life not something unchangeable, something that can change. 2. they cut their ministers and gov employee salary by 20% and others bonus and benefit 3. they will implement value added tax by early next year....a bit late la 4. they are eagerly want to diversify.

So they are capable of coming out billions if they want... tapping on bank loan doesnt mean they are running out of cash. IF they are totally run out of cash, then my hope instantly crashed, and you are right. But they have the money, will they spend it for the sake of helping najib....hard to say, i cant say for sure oso, but still got a slim of chance. Anyway, see what the king will do when he come.

It appear inmalaysia newspapers, quoting as sources from reliable news media citing from a unknown high ranked officer. I believe until now aramco still havent officially call off the deal. Maybe aramco investment unit said not worth it, kepala havent say anything yet.

 

[enjoylife77]

Yah, wait for the mammoth Aramco IPO la, sure can make some money much faster than investing in properties.

Is the IPO open to Sg retail investor?

 

[snowbird]

Is the IPO open to Sg retail investor?

Usually such IPOs are not meant for small-time investors whereby a single tranche can be in US$ millions.
However, mega IPO don't usually means mega profits, just look at Facebook, one of the biggest IPOs in technology and internet history, the share price fell on opening and crashed more than 50% soon after.

 

[cow138]

Regardless looks like Johor is in the intersection and will only benefit the Johoreans
Which is good whichever way you look at it.

 

[snowbird]

Regardless looks like Johor is in the intersection and will only benefit the Johoreans
Which is good whichever way you look at it.

Not sure what you mean by "benefit" and "good" but if you were to ask any regular Johorean who is working and living in Johor, they will tell you that Johor is definitely getting more and more developed but everything else is more and more expensive, in fact, far too expensive for many things.

 

[cow138]

I think both goes hand in hand
Standard of living and cost of living
But so long as there's development it's possible that cost of living can be managed

 

[ECboy]

I think both goes hand in hand
Standard of living and cost of living
But so long as there's development it's possible that cost of living can be managed

I also think that JB locals (myself included) have to start improving also along with the environment. No improvement but asking for more? Not logical.

 

[rotikok]

Not sure what you mean by "benefit" and "good" but if you were to ask any regular Johorean who is working and living in Johor, they will tell you that Johor is definitely getting more and more developed but everything else is more and more expensive, in fact, far too expensive for many things.

You raised up a good question. Similarly Hongkies faced the same problem in the past, average ppl living in hong kong, working ordinary job, will be finding life is getting more difficult as time goes by. The benefit of growth is uneven, what make it worse is that hong kong do not have good affordable housing scheme that benefit the rakyat.

Anyway, still can live lah, after years working in the city, can balik kampung where things still much cheaper there. Like how poor singaporean come to jb liddat, if they insist to have car and spacious living.

 

[snowbird]

Aeon Big is shutting down 3 of its Hypermarkets in MY by next month.

Their reason : "consolidating its hypermarket chain and focusing on a single business format."
Can also read as : Poor business so no choice have to shut some stores to cut expenses.

Another reason : "implementation of the GST and higher import prices as reasons for changes in customer behaviour."
Can also read as : Double whammy!! - GST plus the ever falling RM making imports more expensive. Customers are buying much lesser and also much cheaper products.

So it seems like if nothing changes, more stores may be closed later.

http://www.thestar.com.my/business/...16/aeon-big-embarks-on-new-business-strategy/

 

[enjoylife77]

If this is the trend going forward, both new & existing mega mall may have to take a longer time getting tenants. Even City Square Mall & Komtar JBCC with easy access, I can see plenty of vacant shop space.

 

[snowbird]

You raised up a good question. Similarly Hongkies faced the same problem in the past, average ppl living in hong kong, working ordinary job, will be finding life is getting more difficult as time goes by. The benefit of growth is uneven, what make it worse is that hong kong do not have good affordable housing scheme that benefit the rakyat.

Anyway, still can live lah, after years working in the city, can balik kampung where things still much cheaper there. Like how poor singaporean come to jb liddat, if they insist to have car and spacious living.

For those in JB, can live or cannot live depends on where you are working.
In Johor, the general working population can be roughly divided into 2 groups.
One group go over to SG to work, doing a wide variety of jobs from cleaners to engineers, earning S$ every month.
Another group stay put and work in JB and this group comprises mainly civil servants (an extremely large group), small-time traders/hawkers, service providers, etc.
For the same job and doing the clocking in the same hours, the guy working in SG is able to earn almost 3 times the guy in working and living in JB.
For example a bus driver.
In SG, the driver can take in at least S$1,200 (RM3,750) whereas in JB, it may be even less then RM1,000.
Even a shampoo girl from Batu Pahat, with little education, working in SG can earn a lot more than a graduate school teacher in Johor.
A crane operator, a job that many Singaporean shuns, including OT can take in up to average S$5,000 pm (RM15,500), much more than a qualified engineer with many years experience in MY.

Hence in JB, it is a peculiar situation as far as spending power is concerned.
With things getting more and more expensive in JB, one group will find the situation still tolerable and still able to dine out now and then.
As for the other group, the situation is just get tougher and tougher.