Very soon, they will be teaching kids at school that Earth’s gravity pull is felt not only by objects but also mortgage interest rates. Talks of interest rates going up was only beginning to get going before Lenders went about reducing rates…again. It wasn’t so long ago when BLR+0% was considered “hot”.
November saw quite a bit of interest rate activities, culminating in what in our opinion, are some of the best loans ever introduced. Here are some of our favourites:
[Best BLR-based Loan]
Now, EON Bank, for the 3rd consecutive month offers the lowest BLR-based loan, this time at BLR-2.4% for the entire tenure. Launched on the 13th of November the extremely attractive package comes with a few conditions set out as follows:
- Acceptance must be within 2 DAYS of the Letter of Offer date
- Property Value RM 400K and Above
- Only for a maximum Margin Of Finance of up to 80%
- Option to finance the entry costs with additional 5% (80% + 5%)
- For Refinance, Sub-sale, New acquisition of Under Construction properties with completion status > than 70%
- Flexi Loan comes attached with deposit-linked account with cheque book.
- No account Set up Fee (unlike other similar flexi-loans for e.g., Alliance Bank Save Link, SCB Mortgage One where customer has to pay an account set up fee of RM 200 – 1 time payment)
- Monthly maintenance fee of RM 10 - Insurance is optional
[Best Overall BLR-based Loan]
Whilst there is no doubt that EON’s loan package is a winner in the interest rate stakes, critics may grumble that the RM400,000 min loan amount and the maximum margin of finance of 80% are limiting. Well gripe no more…if good rates at a higher margin is what you need, then Affin Bank surprises this month with its Affin Home Solutions briefly summarized as follows:
Affin Home Solutions (Non-Free Moving Costs)
Loan Amount Yr 1-3 Thereafter
<> RM 1.0M BLR - 2.40% BLR - 2.30%
For Free Moving Cost packages, the offers are as follows:
Loan Amount Yr 1-3 Thereafter
<> RM 1.0M BLR-2.20% BLR-2.10%
With the Margin of Finance set at a maximum of 90%, and the loan tenure stretched to a maximum of 45years up to age 75 (where most banks cap loan tenure up to a maximum of age 70), this is certainly one of the best loan packages available today. And just to make sure that they got your attention, Affin caps the loan’s interest rate to a maximum of 10%.
However, am important note is that to enjoy the full bag of goodies, all Letters Of Offer must be formally accepted within 3 days of issuance.
[Best Hybrid Islamic Home Financing-i: Fixed then Float]
Another “newcomer” to our list is none other than CIMB Islamic. For a full range of fixed then floating ISLAMIC loans, no one does it better for now. Here is a summary of what they offer:
For Completed Properties / Loan Amount RM300K to RM500K (Without MRTA)
a) Fixed Rate for 3 years
NFMC 4.90% (Yr1-3), BFR-2.15% (Thereafter)
FMC 5.10% (Yr1-3), BFR-1.95% (Thereafter)
b) Fixed Rate for 5 years
NFMC 5.40% (Yr1-5), BFR-2.15% (Thereafter)
FMC 5.65% (Yr1-5), BFR-1.95% (Thereafter)
c) Fixed Rate for 10 years
NFMC 6.25% (Yr1-10), BFR-2.15% (Thereafter)
FMC 6.45% (Yr1-10), BFR-1.95% (Thereafter)
For Under Construction Properties / Loan Amount RM300K to RM500K (Without MRTA)
d) Fixed Rate for 3 years
NFMC 5.10% (Yr1-3), BFR-1.95% (Thereafter)
FMC 5.30% (Yr1-3), BFR-1.75% (Thereafter)
e) Fixed Rate for 5 years
NFMC 5.60% (Yr1-5), BFR-1.95% (Thereafter)
FMC 5.80% (Yr1-5), BFR-1.75% (Thereafter)
f) Fixed Rate for 10 years
NFMC 6.45% (Yr1-10), BFR-1.95% (Thereafter)
FMC 6.65% (Yr1-10), BFR-1.75% (Thereafter)
NOTE: After the fixed years, the rate is cheaper by a further 0.1% if the borrower takes MRTA.
Other features of this loan include:
- Option to choose Free Moving Cost (FMC)/ Non-Free Moving Cost Package (NFMC);
- Rate protection with capped ceiling rate at 10.75%;
- No stamp duty for refinancing from conventional loan;
- 20% discount on stamp duty for new purchases;
- For completed and Under Construction properties and for landed & Non-landed.
[Best Fixed Rate Loan]
AIA regains the “lowest fixed rate” throne with the introduction of a few new rates
1) Standard Home Loan Packages
NZMC MOF: 80%-90%
MOF: Below 80% 5.85%
5.75%
ZMC MOF: 80%-90%
MOF: Below 80% 5.99%
5.89%
2) AIA Mortgage Save Packages
NZMC MOF: 80%-90%
MOF: Below 80% 5.70%
5.60%
ZMC MOF: 80%-90%
MOF: Below 80% 5.85%
5.75%
Lending Terms & Conditions for AIA Mortgage Save
- Customer is required to purchase a new AIA Whole Life Non-Par (WLNP) policy to fully cover the loan
- The new AIA policy purchased is to be assigned to the loan and must be kept in force throughout the entire loan duration.
Source: Money3.com.my
Wednesday, November 12, 2008
Wednesday, November 5, 2008
The Best Home Loan Package At Your Fingertips
Buying a home is a life-transforming event in terms of financial and social commitments as well as status.
Choosing a financing package for the purchase can be one of the most stressful and important decisions in a persons life.
As you embark on one of the biggest financial decisions you would ever make in your lifetime, it is important to be aware that where home loan packages go, many things are open to interpretation, and sometimes the consequences of an uninformed decision could prove dire.
Getting it right the first time can save you thousands of ringgit. Otherwise, you may find your finances strained as you travel further down the long and winding road of home ownership.
Shopping around and comparing notes is an indispensable part of the search process. But looking for that gem of a deal that suits your requirements to a T can be a daunting experience.
Bombarded with an onslaught of innocuous acronyms and impressive financial jargon from over 500 different home loan packages offered by over 30 lenders in the country; even the money savvy can be overwhelmed.
For the layperson that lacks the depth in financial techniques and knowledge, it would be a Herculean task to separate the wheat from the chaff, from the torrent of information available to determine what is right.
Many among us would welcome a little help in this department before we feel comfortable enough to sign on the dotted line.
Wouldn't it be great if you can talk to an experienced financial advisor or consultant who listens to your needs and is able to proffer an unbiased opinion on the pros and cons of the different aspects in home loan packages, and determine the one most suitable for you, at no extra cost?
HELP AVAILABLE AT YOUR FINGERTIPS
The discerning consumer will be elated to know that such services are indeed available at your fingertips.
Incorporated in Malaysia on Oct 16, 2002, Capital Tree Sdn Bhd (Money3) provides the consumer with relevant up-to-date information on all home loan packages offered by financial institutions in the country.
"A home loan is a financial commitment that changes one's entire financial horizon. Being laden with a home loan will dictate how you manage your personal finances thereafter," Money3 Senior Partner, Martin Chow told Bernama in an exclusive interview recently.
However, according to Chow, in accessing their eligibility for a home loan, borrowers invariably will only take their present financial position into consideration.
But the stark reality is that a person's financial position is hardly ever fixed and yet, most of the time, a very important and substantial financial decision is made based on a very narrow parameter.
In the mid to long-term, a wrong type of mortgage works against that persons financial health.
Presently, so long as the monthly repayment does not exceed a certain percentage of their monthly income as predetermined by the lender, most will be happy to accept the loan.
"Borrowers almost always never take into consideration contingencies like future increase in the base lending rate (BLR), hiccups in cash flows created by unforeseen emergencies or the probability of losing one's present job.
In any case, most if not all hardly ever take into account the impact of the home loan on their ability to adequately save for future expenses such as their children's education and the ultimate need for medical and surgical attention," Chow said.
The reality is that even small changes can have significant effects in the web of life.
One should always be prepared for the unexpected and have workable alternatives at hand for such eventualities. It is to one's best interest not to throw caution to the wind and eventually end up as victim of one's ignorance.
"Most people do not factor in these considerations because they do not know how to," Chow explained.
INDEPENDENT AND UNBIASED ANALYSIS
Money3 specialises in creating computer software and developing financial programmes as tools for analysing monetary and loan packages and services tailored to local economic environment.
Launched in February, the company's website at http://www.money3.com.my/ is the conduit for a convenient way of applying for home loans for the Malaysian consumer and provides such information free of charge.
The website is constantly updated with accurate and truly independent real-time information on the latest home loans available, as well as tools such as calculators for the consumer to use and sort things out, in deciding which package is best suited to his or her requirements.
Money3's multi-level online Loan Search programme allows the consumer to factor in what one is looking for in a home loan package.
Once all the input has been entered, the system will filter through every home loan package available in the country and produce an independent and unbiased analysis of the Top Ten list of lenders, based on the parameters given.
"Our experienced consultants can also provide either over-the-telephone or face-to-face consultation to chisel out workable compromises that satisfy your requirements but at the same time does not burn a hole in your pocket," Chow said.
CLOSE COLLABORATION
Money3 work in close collaboration with several banks - local and foreign - on issues relating to product development, creating sales channels as well as distribution and outsource functions.
These banking institutions have initiated proactive measures by providing information and data support, and are even prepared to factor the company's input into their financial products, all in the name of providing better quality products with faster turnaround time and at a cheaper rate.
"Our partners recognised the fact that as more and more people become aware of the need to develop an aptitude for personal financial planning, they will become better quality customers. Consequently, the propensity for non-performing loan (NPL) diminishes," Chow explained.
This meaningful teamwork and fruitful cooperation has resulted in a cross-pollination of ideas that have opened the floodgate for progressive financial software that will be incorporated into the company's website.
UNIT TRUST AND INSURANCE PORTALS
Liabilities, with a little ingenuity, can be turned into assets. Conversely, assets left to deteriorate and not improved upon, can eventually become liabilities.
Thus, in the ever-evolving world of personal finance, the customer has all the right to expect financial consultants to know more, do more and advise more.
Congruent to such expectations, Money3 will, in the coming few weeks, be rolling out its Unit Trust and Insurance Portal.
In any investment, situations and circumstances can change at the blink of an eye and may require a reversal of decisions made earlier.
The prudent investor should always monitor his portfolio and take decisive actions to stay on top of things.
Everybody would at least know of a person who, as a result of injudicious investments and a cavalier disregard for financial management, has been left with nothing but the shirt on his back.
In recognition of this fact, the Unit Trust Portal has robust safeguards like monitoring, weekly performance report and red-flag functions to allow stopgap measures to enhance gains and prevent losses.
The primary objective of www.money3.com.my is to provide Malaysian consumers with critical up-to-date information on all the financial products available in the money and capital markets, so that they can exercise their freedom of choice in making well-informed and financially savvy decisions.
For the purposes of communication and illumination, such proactive features on the company's website would transform consumers from merely being passive armchair participants to assertive investors.
"The Unit Trust Portal is designed to empower the investor to make informed decisions in different economic environments, critical to minimising investment risks, rather than rely on sales pitch and hearsay advice.
For the professional agent, this portal is set to be the best friend in providing top-level service and added value to their clients," said Chow.
Money3 will soon spread its wings to East Malaysia and is also presently speaking to interested parties in various other states in the Peninsular, with a view of expanding the company's products and services there.
"Ultimately, we want to be the go-to place for those seeking home loan packages and investment opportunities," Money3s affable head honcho declared with spirited enthusiasm.
With over three million hits a month, and growing by the day, that time may not be long in coming.
Source: Money3.com.my
Choosing a financing package for the purchase can be one of the most stressful and important decisions in a persons life.
As you embark on one of the biggest financial decisions you would ever make in your lifetime, it is important to be aware that where home loan packages go, many things are open to interpretation, and sometimes the consequences of an uninformed decision could prove dire.
Getting it right the first time can save you thousands of ringgit. Otherwise, you may find your finances strained as you travel further down the long and winding road of home ownership.
Shopping around and comparing notes is an indispensable part of the search process. But looking for that gem of a deal that suits your requirements to a T can be a daunting experience.
Bombarded with an onslaught of innocuous acronyms and impressive financial jargon from over 500 different home loan packages offered by over 30 lenders in the country; even the money savvy can be overwhelmed.
For the layperson that lacks the depth in financial techniques and knowledge, it would be a Herculean task to separate the wheat from the chaff, from the torrent of information available to determine what is right.
Many among us would welcome a little help in this department before we feel comfortable enough to sign on the dotted line.
Wouldn't it be great if you can talk to an experienced financial advisor or consultant who listens to your needs and is able to proffer an unbiased opinion on the pros and cons of the different aspects in home loan packages, and determine the one most suitable for you, at no extra cost?
HELP AVAILABLE AT YOUR FINGERTIPS
The discerning consumer will be elated to know that such services are indeed available at your fingertips.
Incorporated in Malaysia on Oct 16, 2002, Capital Tree Sdn Bhd (Money3) provides the consumer with relevant up-to-date information on all home loan packages offered by financial institutions in the country.
"A home loan is a financial commitment that changes one's entire financial horizon. Being laden with a home loan will dictate how you manage your personal finances thereafter," Money3 Senior Partner, Martin Chow told Bernama in an exclusive interview recently.
However, according to Chow, in accessing their eligibility for a home loan, borrowers invariably will only take their present financial position into consideration.
But the stark reality is that a person's financial position is hardly ever fixed and yet, most of the time, a very important and substantial financial decision is made based on a very narrow parameter.
In the mid to long-term, a wrong type of mortgage works against that persons financial health.
Presently, so long as the monthly repayment does not exceed a certain percentage of their monthly income as predetermined by the lender, most will be happy to accept the loan.
"Borrowers almost always never take into consideration contingencies like future increase in the base lending rate (BLR), hiccups in cash flows created by unforeseen emergencies or the probability of losing one's present job.
In any case, most if not all hardly ever take into account the impact of the home loan on their ability to adequately save for future expenses such as their children's education and the ultimate need for medical and surgical attention," Chow said.
The reality is that even small changes can have significant effects in the web of life.
One should always be prepared for the unexpected and have workable alternatives at hand for such eventualities. It is to one's best interest not to throw caution to the wind and eventually end up as victim of one's ignorance.
"Most people do not factor in these considerations because they do not know how to," Chow explained.
INDEPENDENT AND UNBIASED ANALYSIS
Money3 specialises in creating computer software and developing financial programmes as tools for analysing monetary and loan packages and services tailored to local economic environment.
Launched in February, the company's website at http://www.money3.com.my/ is the conduit for a convenient way of applying for home loans for the Malaysian consumer and provides such information free of charge.
The website is constantly updated with accurate and truly independent real-time information on the latest home loans available, as well as tools such as calculators for the consumer to use and sort things out, in deciding which package is best suited to his or her requirements.
Money3's multi-level online Loan Search programme allows the consumer to factor in what one is looking for in a home loan package.
Once all the input has been entered, the system will filter through every home loan package available in the country and produce an independent and unbiased analysis of the Top Ten list of lenders, based on the parameters given.
"Our experienced consultants can also provide either over-the-telephone or face-to-face consultation to chisel out workable compromises that satisfy your requirements but at the same time does not burn a hole in your pocket," Chow said.
CLOSE COLLABORATION
Money3 work in close collaboration with several banks - local and foreign - on issues relating to product development, creating sales channels as well as distribution and outsource functions.
These banking institutions have initiated proactive measures by providing information and data support, and are even prepared to factor the company's input into their financial products, all in the name of providing better quality products with faster turnaround time and at a cheaper rate.
"Our partners recognised the fact that as more and more people become aware of the need to develop an aptitude for personal financial planning, they will become better quality customers. Consequently, the propensity for non-performing loan (NPL) diminishes," Chow explained.
This meaningful teamwork and fruitful cooperation has resulted in a cross-pollination of ideas that have opened the floodgate for progressive financial software that will be incorporated into the company's website.
UNIT TRUST AND INSURANCE PORTALS
Liabilities, with a little ingenuity, can be turned into assets. Conversely, assets left to deteriorate and not improved upon, can eventually become liabilities.
Thus, in the ever-evolving world of personal finance, the customer has all the right to expect financial consultants to know more, do more and advise more.
Congruent to such expectations, Money3 will, in the coming few weeks, be rolling out its Unit Trust and Insurance Portal.
In any investment, situations and circumstances can change at the blink of an eye and may require a reversal of decisions made earlier.
The prudent investor should always monitor his portfolio and take decisive actions to stay on top of things.
Everybody would at least know of a person who, as a result of injudicious investments and a cavalier disregard for financial management, has been left with nothing but the shirt on his back.
In recognition of this fact, the Unit Trust Portal has robust safeguards like monitoring, weekly performance report and red-flag functions to allow stopgap measures to enhance gains and prevent losses.
The primary objective of www.money3.com.my is to provide Malaysian consumers with critical up-to-date information on all the financial products available in the money and capital markets, so that they can exercise their freedom of choice in making well-informed and financially savvy decisions.
For the purposes of communication and illumination, such proactive features on the company's website would transform consumers from merely being passive armchair participants to assertive investors.
"The Unit Trust Portal is designed to empower the investor to make informed decisions in different economic environments, critical to minimising investment risks, rather than rely on sales pitch and hearsay advice.
For the professional agent, this portal is set to be the best friend in providing top-level service and added value to their clients," said Chow.
Money3 will soon spread its wings to East Malaysia and is also presently speaking to interested parties in various other states in the Peninsular, with a view of expanding the company's products and services there.
"Ultimately, we want to be the go-to place for those seeking home loan packages and investment opportunities," Money3s affable head honcho declared with spirited enthusiasm.
With over three million hits a month, and growing by the day, that time may not be long in coming.
Source: Money3.com.my
Malaysia unveils RM7b stimulus plan
The government has unveiled a RM7 billion stimulus package to reinforce and stimulate the economy, and at the same time, bring relief to the public at an economically challenging time.
Announcing the stimulus package in Parliament, Deputy Prime Minister Datuk Seri Najib Razak, who is also finance minister, said the measures were proof of the governments concern for the people's well-being and to stimulate private sector confidence.
Najib said the RM7 billion was from the savings derived from cuts in the fuel subsidy.
The government will adopt an expansionary policy as is the current practice in other countries.
He said the government had the flexibility to implement value added high impact projects.
Najib said the gross domestic product would be revised downwards to 3.5 per cent for 2009, but the fiscal deficit would remain at 4.8 per cent.
The reason for the deficit is that the government chooses to continue with Budget 2009, as announced, to maintain the growth momentum.
Najib told the Dewan Rakyat that to ensure more people could own houses, RM1.2 billion has been allocated to build 25,000 units of low- and medium-cost houses.
He said RM500 million has been set aside to upgrade, repair and maintain police stations, living quarters, army camps and quarters.
Najib also said RM600 million would be channelled to minor projects, including village roads, community halls and small bridges.
The deputy prime minister said the jobs would go to small-time contractors.
Public amenities such as roads, schools and hospitals will be allocated RM500 million, while a similar amount will be used to build and upgrade roads in rural areas, villages and agriculture roads, including in Sabah and Sarawak.
Najib said RM200 million had been set aside to improve school facilities, with the funds given evenly to religious, mission, Chinese and Tamil schools.
He said RM300 million would be allocated for a fund to implement a skills programme catering to the needs of employers and industry, particularly in the development corridors.
He said RM1.5 billion would be used to set up a special fund to attract private sector investment and would be disbursed as grants, cheap loans or as equity.
Another RM100 million has been allocated to set up new business premises to increase the number of small- and medium-scale entrepreneurs.
Youth programmes will receive RM100 million.
Najib said the packages were aimed at alleviating hardship and encourage spending.
Civil servants also received some good news with the extension of all housing loans from 25 years to 30 years, while the quantum of loan to buy cars has been increased.
Najib said Bank Negara would encourage local banks to introduce a similar measure for its housing loan customers.
To encourage the development of retail business and domestic tourism industry, hyper markets can open till 11pm on weekdays and 1am on weekends. Those in shopping complexes could seek to operate round the clock.
To stimulate activity in the private sector, import duties for cement, long iron and steel products for the construction and manufacturing sectors have been abolished.
The government will also allow individuals or foreign entities to buy commercial real estate worth RM500,000 and above without any Foreign Investment Committee approval, for their own use.
Source: Business Times Online
Date: 05/11/2008
Announcing the stimulus package in Parliament, Deputy Prime Minister Datuk Seri Najib Razak, who is also finance minister, said the measures were proof of the governments concern for the people's well-being and to stimulate private sector confidence.
Najib said the RM7 billion was from the savings derived from cuts in the fuel subsidy.
The government will adopt an expansionary policy as is the current practice in other countries.
He said the government had the flexibility to implement value added high impact projects.
Najib said the gross domestic product would be revised downwards to 3.5 per cent for 2009, but the fiscal deficit would remain at 4.8 per cent.
The reason for the deficit is that the government chooses to continue with Budget 2009, as announced, to maintain the growth momentum.
Najib told the Dewan Rakyat that to ensure more people could own houses, RM1.2 billion has been allocated to build 25,000 units of low- and medium-cost houses.
He said RM500 million has been set aside to upgrade, repair and maintain police stations, living quarters, army camps and quarters.
Najib also said RM600 million would be channelled to minor projects, including village roads, community halls and small bridges.
The deputy prime minister said the jobs would go to small-time contractors.
Public amenities such as roads, schools and hospitals will be allocated RM500 million, while a similar amount will be used to build and upgrade roads in rural areas, villages and agriculture roads, including in Sabah and Sarawak.
Najib said RM200 million had been set aside to improve school facilities, with the funds given evenly to religious, mission, Chinese and Tamil schools.
He said RM300 million would be allocated for a fund to implement a skills programme catering to the needs of employers and industry, particularly in the development corridors.
He said RM1.5 billion would be used to set up a special fund to attract private sector investment and would be disbursed as grants, cheap loans or as equity.
Another RM100 million has been allocated to set up new business premises to increase the number of small- and medium-scale entrepreneurs.
Youth programmes will receive RM100 million.
Najib said the packages were aimed at alleviating hardship and encourage spending.
Civil servants also received some good news with the extension of all housing loans from 25 years to 30 years, while the quantum of loan to buy cars has been increased.
Najib said Bank Negara would encourage local banks to introduce a similar measure for its housing loan customers.
To encourage the development of retail business and domestic tourism industry, hyper markets can open till 11pm on weekdays and 1am on weekends. Those in shopping complexes could seek to operate round the clock.
To stimulate activity in the private sector, import duties for cement, long iron and steel products for the construction and manufacturing sectors have been abolished.
The government will also allow individuals or foreign entities to buy commercial real estate worth RM500,000 and above without any Foreign Investment Committee approval, for their own use.
Source: Business Times Online
Date: 05/11/2008
Tuesday, November 4, 2008
Inflation on the retreat in Asia
Inflation is slowing across Asia, giving policy makers in the region scope to reduce borrowing costs to protect their economies from a global slump.
South Korean consumer prices rose in October at the weakest pace in six months, the statistics office said yesterday in Gwacheon. Inflation also slowed more than economists expected in Indonesia and Thailand last month.
Asian central banks are switching their focus from fighting inflation to bolstering growth as the global financial crisis that has pummelled the US and Europe threatens to engulf the region's export-dependent economies. The Reserve Bank of Australia and the Bank of Korea are both expected to cut interest rates further this week, according to Bloomberg surveys.
"Central banks have room to reduce rates significantly," said Ramya Suryanarayanan, an economist at DBS Bank in Singapore. "Commodities prices are falling and demand is weakening. You will see inflation declining pretty much everywhere."
Sliding fuel and commodity prices have helped ease inflation across Asia. Crude oil has fallen 53 per cent from an all-time high of US$147.27 a barrel on July 11 and dropped 27 per cent in the past year. Copper and wheat have tumbled more than 50 per cent from records this year.
Consumer prices in South Korea rose 4.8 per cent last month from a year earlier, moderating from a 5.1 per cent gain in September and matching the median estimate in a Bloomberg survey. Prices fell 0.1 per cent in October from the previous month.
The Bank of Korea last week lowered borrowing costs by a record amount, the second reduction in less than three weeks, in an emergency move to restore confidence and revive the economy. Governor Lee Seong Tae hinted at further rate cuts.
Easing inflation in Indonesia and Thailand may give policymakers in Southeast Asia's two largest economies room to pause after raising borrowing costs earlier this year amid soaring consumer prices.
Indonesia's inflation rate declined to 11.8 per cent in October from 12.1 per cent in September, the Central Statistics Bureau said in Jakarta yesterday.
That may give Bank Indonesia room to keep its benchmark interest rate unchanged at 9.5 per cent after six consecutive increases in the measure, said economists including Enrico Tanuwidjaja from Oversea-Chinese Banking Corp in Singapore.
Consumer prices in Thailand rose 3.9 per cent in October from a year earlier, the lowest pace in 10 months and below the 4.9 per cent median estimate in a Bloomberg News survey.
Bank of Thailand policy makers, who next meet on December 3, kept the benchmark one-day bond repurchase rate at a 16-month high of 3.75 per cent on October 8 after raising it 50 basis points in two meetings since July.
"Many economies around the region have started to cut interest rates to support domestic demand and that's the right thing to do," David Burton, head of the International Monetary Fund's Asia-Pacific department, said in an interview with Bloomberg Television in Hong Kong. "Because inflation is coming off, there is room to do more on monetary policy."
China and India, the world's fastest expanding major economies, have cut borrowing costs in the past week.
The Reserve Bank of India on Saturday lowered its benchmark interest rate for the second time in two weeks, and for the first time in 11 years reduced the amount of money lenders are required to keep in government bonds.
The Bank of Japan also reduced its key overnight lending rate by 20 basis points to 0.3 per cent last Friday. Taiwan and Hong Kong also trimmed their benchmark rates last week.
Source: Business Times Online
Date: 04/11/2008
South Korean consumer prices rose in October at the weakest pace in six months, the statistics office said yesterday in Gwacheon. Inflation also slowed more than economists expected in Indonesia and Thailand last month.
Asian central banks are switching their focus from fighting inflation to bolstering growth as the global financial crisis that has pummelled the US and Europe threatens to engulf the region's export-dependent economies. The Reserve Bank of Australia and the Bank of Korea are both expected to cut interest rates further this week, according to Bloomberg surveys.
"Central banks have room to reduce rates significantly," said Ramya Suryanarayanan, an economist at DBS Bank in Singapore. "Commodities prices are falling and demand is weakening. You will see inflation declining pretty much everywhere."
Sliding fuel and commodity prices have helped ease inflation across Asia. Crude oil has fallen 53 per cent from an all-time high of US$147.27 a barrel on July 11 and dropped 27 per cent in the past year. Copper and wheat have tumbled more than 50 per cent from records this year.
Consumer prices in South Korea rose 4.8 per cent last month from a year earlier, moderating from a 5.1 per cent gain in September and matching the median estimate in a Bloomberg survey. Prices fell 0.1 per cent in October from the previous month.
The Bank of Korea last week lowered borrowing costs by a record amount, the second reduction in less than three weeks, in an emergency move to restore confidence and revive the economy. Governor Lee Seong Tae hinted at further rate cuts.
Easing inflation in Indonesia and Thailand may give policymakers in Southeast Asia's two largest economies room to pause after raising borrowing costs earlier this year amid soaring consumer prices.
Indonesia's inflation rate declined to 11.8 per cent in October from 12.1 per cent in September, the Central Statistics Bureau said in Jakarta yesterday.
That may give Bank Indonesia room to keep its benchmark interest rate unchanged at 9.5 per cent after six consecutive increases in the measure, said economists including Enrico Tanuwidjaja from Oversea-Chinese Banking Corp in Singapore.
Consumer prices in Thailand rose 3.9 per cent in October from a year earlier, the lowest pace in 10 months and below the 4.9 per cent median estimate in a Bloomberg News survey.
Bank of Thailand policy makers, who next meet on December 3, kept the benchmark one-day bond repurchase rate at a 16-month high of 3.75 per cent on October 8 after raising it 50 basis points in two meetings since July.
"Many economies around the region have started to cut interest rates to support domestic demand and that's the right thing to do," David Burton, head of the International Monetary Fund's Asia-Pacific department, said in an interview with Bloomberg Television in Hong Kong. "Because inflation is coming off, there is room to do more on monetary policy."
China and India, the world's fastest expanding major economies, have cut borrowing costs in the past week.
The Reserve Bank of India on Saturday lowered its benchmark interest rate for the second time in two weeks, and for the first time in 11 years reduced the amount of money lenders are required to keep in government bonds.
The Bank of Japan also reduced its key overnight lending rate by 20 basis points to 0.3 per cent last Friday. Taiwan and Hong Kong also trimmed their benchmark rates last week.
Source: Business Times Online
Date: 04/11/2008
Australia: Reserve Bank slashes interest rates to 5.25pc
THE Reserve Bank has slashed interest rates by 75 basis points to 5.25 per cent and economists say borrowers can look forward to more cuts in coming months.
Today's 75 basis point cut beat market expectations of a 50 basis point cut.
If banks pass on the rate cut in full to borrowers, home owners with an average $300,000 mortgage will see a further $150 knocked off their monthly repayments.
But by 6.30pm, just one bank had announced it was cutting its mortgage rates - and the cut was not the full amount. Almost immediately after the RBA announcement, Commonwealth Bank said it would cut interest rates on its standard variable home loan rates by 0.58 per cent, effective November 10.
Source: news.com.au
Date: 04/11/2008
Today's 75 basis point cut beat market expectations of a 50 basis point cut.
If banks pass on the rate cut in full to borrowers, home owners with an average $300,000 mortgage will see a further $150 knocked off their monthly repayments.
But by 6.30pm, just one bank had announced it was cutting its mortgage rates - and the cut was not the full amount. Almost immediately after the RBA announcement, Commonwealth Bank said it would cut interest rates on its standard variable home loan rates by 0.58 per cent, effective November 10.
Source: news.com.au
Date: 04/11/2008
Thursday, October 23, 2008
Call for banks to continue giving loans
Banks and financial institutions should not be too strict and rigid in approving housing loans to eligible borrowers during this global financial crisis.
Real Estate and Housing Developers Association (Rehda) Johor branch immediate past chairman Steven Shum said they should not use the situation in Europe and the US as an excuse.
“We believe banks are cautious now but they should not tighten for the sake of tightening,” he told StarBiz.
Shum said banks in the country should not use the subprime crisis or credit crunch in the US as an excuse not to dispose loans to deserving consumers in Malaysia.
He said although giving out loans was the prerogative of the banks, sometimes it required judgment, confidence and trust on their side.
Shum said if the businesses were viable or the persons applying for the loans had long-term employment and able to serve their loans, banks should not be reluctant to lend them the money.
“At the same time, banks also should look at ways to assist existing borrowers to either refinance their loans or extend their payment period.
“It should be a win-win situation for both the banks and borrowers and the Government must step in to ensure that both parties are well protected,” said Shum.
Developers were likely to consolidate during this time and would look at better construction methods to reduce cost, he said, adding that more were expected to adopt the pre-fabricated method as the costs of labour and raw materials were escalating.
“The pre-fabricated method seems to be a better choice because fewer defects occur during construction, as the pieces are manufactured at the factories compared with the in-situ methods.”
Beginning next year, most developers would go for small launches, said Shum.
Rehda Johor will be organising the Malaysia Property Expo 2008 at the Podium Area, Johor Baru City Square shopping complex, from Oct 30 to Nov 2.
Although the economic outlook was not good, 34 developers taking part in the event were still optimistic that they would be able to generate RM60mil in sales, he said.
He added that they were committed to serve and deliver their products during good or bad times and buyers should use the event to do market research.
Source: The Star Online
Date: 23/10/2008
Real Estate and Housing Developers Association (Rehda) Johor branch immediate past chairman Steven Shum said they should not use the situation in Europe and the US as an excuse.
“We believe banks are cautious now but they should not tighten for the sake of tightening,” he told StarBiz.
Shum said banks in the country should not use the subprime crisis or credit crunch in the US as an excuse not to dispose loans to deserving consumers in Malaysia.
He said although giving out loans was the prerogative of the banks, sometimes it required judgment, confidence and trust on their side.
Shum said if the businesses were viable or the persons applying for the loans had long-term employment and able to serve their loans, banks should not be reluctant to lend them the money.
“At the same time, banks also should look at ways to assist existing borrowers to either refinance their loans or extend their payment period.
“It should be a win-win situation for both the banks and borrowers and the Government must step in to ensure that both parties are well protected,” said Shum.
Developers were likely to consolidate during this time and would look at better construction methods to reduce cost, he said, adding that more were expected to adopt the pre-fabricated method as the costs of labour and raw materials were escalating.
“The pre-fabricated method seems to be a better choice because fewer defects occur during construction, as the pieces are manufactured at the factories compared with the in-situ methods.”
Beginning next year, most developers would go for small launches, said Shum.
Rehda Johor will be organising the Malaysia Property Expo 2008 at the Podium Area, Johor Baru City Square shopping complex, from Oct 30 to Nov 2.
Although the economic outlook was not good, 34 developers taking part in the event were still optimistic that they would be able to generate RM60mil in sales, he said.
He added that they were committed to serve and deliver their products during good or bad times and buyers should use the event to do market research.
Source: The Star Online
Date: 23/10/2008
Wednesday, October 22, 2008
Rate cut likely to be put on hold
Conditions may seem ripe for Bank Negara to cut interest rates at the monetary policy meeting on Friday but economists feel the central bank may leave rates unchanged for the moment.
Domestic economic indicators still show some strength and economists feel interest rates would only be cut should there be signs of a precipitous decline in the economy.
“There are no worrying signals yet and I don’t think Bank Negara will rush to react,’’ said Aseambankers Malaysia Bhd chief economist Suhaimi Ilias. “Perhaps from Bank Negara’s standpoint, the economy is fairly resilient.’’
Worries have emerged over the health of Malaysia’s external trade and industrial production, but consumption indicators such as strong sales of cars in September and credit card repayments indicate the consumer was still in good financial health. This sends a mixed bag of signals on the health of the economy.
The possibility of a rate cut in Malaysia was floated by some after the Government on Monday released pre-emptive measures such as giving RM5bil to Valuecap Sdn Bhd and promising not to cut spending to stabilise the economy. Details of the full package would be known on Nov 4.
The Government’s move was in response to external-led economic worries, which have led to a number of countries to introduce fiscal measures with deep cuts in domestic interest rates.
Those countries have slashed interest rates over the past few weeks to keep growth rates up on concerns over the repercussions from a financial meltdown in the US.
A similar argument for Malaysia could be made but economists were quick to point out that Bank Negara kept interest rates steady in the past even though other countries were raising rates to stem off inflationary pressures. Those interest rate hikes were made prior to the financial crisis in the US.
“At this point, there is ample liquidity in Malaysia,’’ said RAM Holdings Bhd chief economist Dr Yeah Kim Leng.
“When a market lacks confidence, it is not the rate cut that counts.’’
Yeah said there was a possibility of a cut in rates, but he too does not think it would take place at the end of the week.
He said that with real interest rates extremely low as they already were, any cut in the current global environment might not be as effective given the lack of confidence in the global capital markets.
Bank Islam Malaysia Bhd senior economist Azrul Azwar also felt that Bank Negara would keep interest rates unchanged.
“Come Nov 24, the date of the final meeting for the year, Bank Negara might have more or less a complete picture of the current economic trends in Malaysia,’’ he said. “If by then the economy does turn out to be worse, Bank Negara may cut interest rates then.”
Source: The Star Online
Date: 22/10/2008
Domestic economic indicators still show some strength and economists feel interest rates would only be cut should there be signs of a precipitous decline in the economy.
“There are no worrying signals yet and I don’t think Bank Negara will rush to react,’’ said Aseambankers Malaysia Bhd chief economist Suhaimi Ilias. “Perhaps from Bank Negara’s standpoint, the economy is fairly resilient.’’
Worries have emerged over the health of Malaysia’s external trade and industrial production, but consumption indicators such as strong sales of cars in September and credit card repayments indicate the consumer was still in good financial health. This sends a mixed bag of signals on the health of the economy.
The possibility of a rate cut in Malaysia was floated by some after the Government on Monday released pre-emptive measures such as giving RM5bil to Valuecap Sdn Bhd and promising not to cut spending to stabilise the economy. Details of the full package would be known on Nov 4.
The Government’s move was in response to external-led economic worries, which have led to a number of countries to introduce fiscal measures with deep cuts in domestic interest rates.
Those countries have slashed interest rates over the past few weeks to keep growth rates up on concerns over the repercussions from a financial meltdown in the US.
A similar argument for Malaysia could be made but economists were quick to point out that Bank Negara kept interest rates steady in the past even though other countries were raising rates to stem off inflationary pressures. Those interest rate hikes were made prior to the financial crisis in the US.
“At this point, there is ample liquidity in Malaysia,’’ said RAM Holdings Bhd chief economist Dr Yeah Kim Leng.
“When a market lacks confidence, it is not the rate cut that counts.’’
Yeah said there was a possibility of a cut in rates, but he too does not think it would take place at the end of the week.
He said that with real interest rates extremely low as they already were, any cut in the current global environment might not be as effective given the lack of confidence in the global capital markets.
Bank Islam Malaysia Bhd senior economist Azrul Azwar also felt that Bank Negara would keep interest rates unchanged.
“Come Nov 24, the date of the final meeting for the year, Bank Negara might have more or less a complete picture of the current economic trends in Malaysia,’’ he said. “If by then the economy does turn out to be worse, Bank Negara may cut interest rates then.”
Source: The Star Online
Date: 22/10/2008
Announcement On Price Reduction For Consumer Products On Friday - Shahrir
In line with Prime Minister Datuk Seri Abdullah Ahmad Badawi's call to industries to reduce prices of commodities and oil, consumers can expect a reduction in prices of essential products by Friday, says Domestic Trade and Consumers Affairs Minister Datuk Shahrir Samad.
Shahrir said his Ministry had held discussions with a number of hypermarkets but so far only company had agreed to reduce the prices of essential products.
"We hope more companies will agree to reduce prices, especially prices of food and household products," he told reporters after meeting representatives of Non Governmental Organisations (NGO), Industries and Media at his Ministry here Wednesday.
He added that apart from trying to reduce the prices of essential goods, his Ministry was also carrying out a study to overcome a shortage in supply of essential products in rural areas.
"We are carrying out a pilot project in Seberang Perai Utara, Penang and Pekan, Pahang to improve the delivery system so that rural areas can receive essential products on time and at a reasonable price. The project has been successful and I will submit it to the cabinet," he said.
Speaking of a demand by 3,200 petrol station operators who had claimed RM41 million in compensation from the Finance Ministry, Shahrir said in business, loses are a common risk faced by everyone and that no business was free from such risks.
The 3,200 petrol station operators had claimed that the 10 sens reduction in oil prices by the government on Oct 15, had resulted in loses amounting to RM41 million.
"Since the price of crude oil in the global market had dropped, the government had decided to reduce the price so that the people can enjoy the benefit. If we (government) didn't do that it won't be fair," he said.
He added that the operators had also urged the government to review oil prices once a month and not once in two weeks but they must understand that though we review the prices every 14 days, it does not mean that prices would go down.
"They can avoid risks by not stocking up supply before the old stock runs out," said Shahrir.
Source: Bernama.com
Date: 22/10/2008
Shahrir said his Ministry had held discussions with a number of hypermarkets but so far only company had agreed to reduce the prices of essential products.
"We hope more companies will agree to reduce prices, especially prices of food and household products," he told reporters after meeting representatives of Non Governmental Organisations (NGO), Industries and Media at his Ministry here Wednesday.
He added that apart from trying to reduce the prices of essential goods, his Ministry was also carrying out a study to overcome a shortage in supply of essential products in rural areas.
"We are carrying out a pilot project in Seberang Perai Utara, Penang and Pekan, Pahang to improve the delivery system so that rural areas can receive essential products on time and at a reasonable price. The project has been successful and I will submit it to the cabinet," he said.
Speaking of a demand by 3,200 petrol station operators who had claimed RM41 million in compensation from the Finance Ministry, Shahrir said in business, loses are a common risk faced by everyone and that no business was free from such risks.
The 3,200 petrol station operators had claimed that the 10 sens reduction in oil prices by the government on Oct 15, had resulted in loses amounting to RM41 million.
"Since the price of crude oil in the global market had dropped, the government had decided to reduce the price so that the people can enjoy the benefit. If we (government) didn't do that it won't be fair," he said.
He added that the operators had also urged the government to review oil prices once a month and not once in two weeks but they must understand that though we review the prices every 14 days, it does not mean that prices would go down.
"They can avoid risks by not stocking up supply before the old stock runs out," said Shahrir.
Source: Bernama.com
Date: 22/10/2008
Rising cost of living puts a damper on Deepavali sales
The Star Multimedia team recently spoke to shoppers and retailers at the KL Sentral Deepavali bazaar to hear what they have to say.
Monday, October 20, 2008
During financial "tsunami" buying property a better bet
CAN the financial “tsunami” currently drowning many banks in the United States and Europe hit our shores? And, if so, how will our property market be affected?
I believe we cannot run away from the contagion effects of the credit crunch in the West and like it or not when our economy is affected, so will the property market.
However, we will pull through especially given our conservative and well-regulated banking system.
The good thing is we are not faced with a property “bubble” as in the early 1990s and also, banks have reduced their construction loans since end of last year to avoid an over-supply situation.
Fear, uncertainty and even panic have gripped many investors who have dumped their shares in the local bourse.
We must remember that it’s not the global credit crunch that is worrying but soaring inflation caused mainly by spikes in crude oil prices. Although crude oil price has dropped recently, it may go up again.
Our property market has been affected by the high construction costs, inflation and a perceived over-built situation especially of high-end homes.
However, I am confident that if one has extra money and can afford to service a loan, investing in property especially in a good location is still a safer bet and will yield better returns in the long run.
This is not to say that one should not save money in fixed deposits. It is always prudent to have sufficient savings but with fixed deposit rates hovering around 3.7% to 4.2% for 12- and 60-month tenures respectively, it is still a negative return when compared with the current inflation rate of over 7% (for many people it is more like 30%).
What about the stock market? Punters have been nibbling at some bargains in the hope of making a tidy profit in the event of an upswing in price. Trouble is many of us are unsure of when it will hit bottom and how long it will take for it to recover, not to mention a bull-run which seems unlikely in the near future.
Unlike property, which is solid brick and mortar, share prices are often determined by sentiments and, currently sentiments are very weak. Many property counters have taken a beating.
My advice for those wishing to buy their first home is to do it now. Don’t fool yourself that prices of new launches will come down because developers cannot afford to reduce prices anymore as their profit margins are already cut to the bone.
In fact many developers I talked to said they were either withholding launches or increasing prices by 20% to 30%. This is also a good time to go bargain hunting in the secondary market and snap up unsold units of upmarket residential homes before developers are forced to increase their price.
Those who can afford homes priced above RM1mil may hold back on their purchase because of the prevailing global financial and local political uncertainties. There are already reports of some high-end projects having problems pushing off their units.
Times are indeed very challenging.
Even established companies such as Sunrise Bhd has seen a 50.6% drop in property sales from RM1.182bil in 2007 to RM583mil for its financial year ended June 30, 2008.
Sunrise executive chairman Tong Kooi Ong in the latest annual report said the current environment was extremely hostile to property developers in launching new properties, even if they could secure financing.
“We face many of the same challenges as other developers. The most critical currently is the sharp rise in construction costs. With a weaker demand condition, gross margins of future projects will likely fall.
“Projects launched earlier face shrinking profits due to higher costs now. Sales will also likely be slower in the months ahead affecting cash flows and profits negatively.
“With two major future projects on the basis of build-then-sell, our gearing is expected to rise substantially and our interest expenses is likely to be much higher,” he said.
Tong said the sudden and substantial rise in costs had severely damaged the construction industry’s capacity.
“This will affect timely completion of projects and will reduce the availability of suppliers and contractors. The industry is further challenged by the increasing shortage of professionals due to the attraction of overseas markets,” he added.
He warned that construction costs for new projects were expected to rise even further in the months ahead.
“The weaker demand means developers will not be able to adjust prices upwards, leaving little, if any, profit margins,” he said, adding that problems faced by contractors, with mounting costs and shrinking cash flow, would further burden developers.
Source: The Star Online
Date: 20/10/2008
I believe we cannot run away from the contagion effects of the credit crunch in the West and like it or not when our economy is affected, so will the property market.
However, we will pull through especially given our conservative and well-regulated banking system.
The good thing is we are not faced with a property “bubble” as in the early 1990s and also, banks have reduced their construction loans since end of last year to avoid an over-supply situation.
Fear, uncertainty and even panic have gripped many investors who have dumped their shares in the local bourse.
We must remember that it’s not the global credit crunch that is worrying but soaring inflation caused mainly by spikes in crude oil prices. Although crude oil price has dropped recently, it may go up again.
Our property market has been affected by the high construction costs, inflation and a perceived over-built situation especially of high-end homes.
However, I am confident that if one has extra money and can afford to service a loan, investing in property especially in a good location is still a safer bet and will yield better returns in the long run.
This is not to say that one should not save money in fixed deposits. It is always prudent to have sufficient savings but with fixed deposit rates hovering around 3.7% to 4.2% for 12- and 60-month tenures respectively, it is still a negative return when compared with the current inflation rate of over 7% (for many people it is more like 30%).
What about the stock market? Punters have been nibbling at some bargains in the hope of making a tidy profit in the event of an upswing in price. Trouble is many of us are unsure of when it will hit bottom and how long it will take for it to recover, not to mention a bull-run which seems unlikely in the near future.
Unlike property, which is solid brick and mortar, share prices are often determined by sentiments and, currently sentiments are very weak. Many property counters have taken a beating.
My advice for those wishing to buy their first home is to do it now. Don’t fool yourself that prices of new launches will come down because developers cannot afford to reduce prices anymore as their profit margins are already cut to the bone.
In fact many developers I talked to said they were either withholding launches or increasing prices by 20% to 30%. This is also a good time to go bargain hunting in the secondary market and snap up unsold units of upmarket residential homes before developers are forced to increase their price.
Those who can afford homes priced above RM1mil may hold back on their purchase because of the prevailing global financial and local political uncertainties. There are already reports of some high-end projects having problems pushing off their units.
Times are indeed very challenging.
Even established companies such as Sunrise Bhd has seen a 50.6% drop in property sales from RM1.182bil in 2007 to RM583mil for its financial year ended June 30, 2008.
Sunrise executive chairman Tong Kooi Ong in the latest annual report said the current environment was extremely hostile to property developers in launching new properties, even if they could secure financing.
“We face many of the same challenges as other developers. The most critical currently is the sharp rise in construction costs. With a weaker demand condition, gross margins of future projects will likely fall.
“Projects launched earlier face shrinking profits due to higher costs now. Sales will also likely be slower in the months ahead affecting cash flows and profits negatively.
“With two major future projects on the basis of build-then-sell, our gearing is expected to rise substantially and our interest expenses is likely to be much higher,” he said.
Tong said the sudden and substantial rise in costs had severely damaged the construction industry’s capacity.
“This will affect timely completion of projects and will reduce the availability of suppliers and contractors. The industry is further challenged by the increasing shortage of professionals due to the attraction of overseas markets,” he added.
He warned that construction costs for new projects were expected to rise even further in the months ahead.
“The weaker demand means developers will not be able to adjust prices upwards, leaving little, if any, profit margins,” he said, adding that problems faced by contractors, with mounting costs and shrinking cash flow, would further burden developers.
Source: The Star Online
Date: 20/10/2008
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