CIMB Group Holdings Berhad has reported a Profit Before Tax of RM 714 million for the first quarter of 2020. The weaker PBT was attributed to lower non-interest income and higher provisions across selected markets.
Net interest income grew by 4.8 percent, underpinned by steady 3.8 percent loan growth and operating expenses remained under control.
The Group’s 1Q20 net profit stood at RM 508 million, with Net Earnings Per Share of 5.1 sen and an annualised Return on average Equity of 3.7 percent.
The Group’s net profit had dropped by more than half from RM 1.19 billion in 2019.
“The first quarter was a challenging one and we foresee continued challenges for the rest of the year. Despite this, we are confident that the banking system is far more resilient today, given the lessons learnt from previous crises, and the reforms put in place as a result,”
The Group’s 1Q20 operating income remained steady at RM4.14 billion. NII expanded by 4.8 percent YoY with a marginally lower Net Interest Margin (“NIM”) of 2.44 percent, with spread compression across all operating countries.
However, the Group’s NOII declined by 15.5 percent YoY largely due to weaker trading and FX income from markets adversely impacted by Covid-19 at the tail-end of 1Q20.
Operating expenses remained firmly under control, increasing by just 0.7 percent YoY, while the higher Cost-to-Income Ratio (“CIR”) of 56.0 percent was due to the weaker income during the quarter.
The Group’s total gross loans recorded a 3.8 percent increase YoY while total deposits were 3.9 percent higher YoY, mainly contributed by performance in Singapore (+17.7 percent) and Thailand (+13.4 percent).
CIMB also stated that its Group Commercial Banking performed well operationally, with a 4 percent growth in operating income and a 0.7 YoY decline in operating expenses.
As for CIMB Islamic’s 1Q20 PBT, it rose by 3.1 percent YoY to RM 256 million, driven by a strong 19.7 growth in operating income. CIMB Islamic’s gross financing assets rose by 8 percent YoY to RM79.9 billion, accounting for 22 percent of the Group’s total gross loans. Total deposits (including investment accounts) increased by 8.5 percent YoY to RM88.8 billion.
By Datuk Clifford Hii, Group Managing Director of HCK Capital Group Berhad
The Covid-19 outbreak has left no stone unturned. Every sector must now scramble to adapt to the change introduced by the pandemic, and shift marketing plans to take on the ‘new normal’ ‒ the property industry is no different.
While the outlook for the property industry looks bleak in the months to come, the first half of 2021 is expected to be a strong period for market recovery, and businesses must strategise for the long run to best capitalise on this. With limited contact and movement expected well beyond the MCO, businesses will have to anticipate a change in business structure, and direct their efforts towards more creative means of conducting business.
Traditionally, the property industry has relied on showroom and property visits for sales ‒ the post-MCO world will challenge businesses to expand and potentially pivot to digitising their processes for the future.
What Happens When Property Meets Technology
Industries dealing with large volumes of consumers and prospective customers will likely have access to a vast amount of data. Through a holistic approach to digital transformation, businesses can leverage on existing data to accelerate business outcomes and minimise loss, providing them with a competitive advantage that can set them apart.
Recognising that data is the lifeblood of an organisation is the first step in this evolution, and when data analytics become commonplace among property developers, they can then turn that data into useful information, providing a clearer picture for actionable insights.
With the challenges presented by the pandemic outbreak, the property industry will need to plan for the long term, and proper management of data can be used to accurately identify property buyers as opposed to a scattergun approach.
Realising this potential, HCK has leveraged its data across almost six years, enabling an easier transition into digitising its crucial processes. This includes but is not limited to the implementation of Virtual Reality (VR) and Augmented Reality (AR). These technologies work well with a unique and innovative approach to showrooms, making them virtual while also enhancing the customer experience. This allows for a larger volume of visits within a shorter time, increasing overall efficiency as well as a more structured means of gaining customer insights and the analysis of that information.
Creating The Ideal Customer Experience
Perfecting the customer experience has been the goal for all organisations ever since competition within and across markets has existed. With today’s advancements in technology, the possibilities are endless despite the setbacks faced due to Covid-19. As more businesses move to digitise their operations, harnessing and understanding large volumes of data has become important not only for organisations and their marketing approach but also to provide the ideal customer experience.
With up to 71% of customers preferring personalized advertisements, the need to understand prospective customers on a deeper level is more crucial than ever in adding value to initial interactions. This allows for the promotion of more relevant information to the right audiences, enhancing the customer experience.
The adoption of VR and AR can also be used in crafting a more personalised experience – one with fewer limitations. It creates new opportunities for people to take a longer and deeper look at their dream property from the comfort of their homes with further benefits stretching beyond the MCO by eliminating the need to travel long distances for overseas and out-of-state buyers.
It will also be accompanied by video walkthroughs, providing an immersive yet contactless experience as more property buyers search and even make final decisions online. Furthermore, legal documentation such as Sale and Purchase Agreements (SPAs) that often require physical meetings can also be done online through close collaboration with legal firms. The implementation of these technologies will also be applied to execute virtual events and launches in the future where refreshments will be provided at the attendees’ doorstep, limiting the need for close contact in crowded places.
As one of the leading property developers in Malaysia, HCK is innovating their processes through their digital transformation initiatives. As we step into a new normal following the MCO, HCK’s commitment to the community will also see the brand create safer places for their customers for when they visit HCK property, while also reworking their policies to benefit those affected by the virus.
While the government and our frontliners are working tirelessly to safeguard Malaysians against Covid-19 through various efforts in flattening the curve, we must do our part to adhere to the guidelines.
It is now over two months of social distancing and mask-wearing to navigate a new way of living, due to the pandemic. What more can we say on Covid-19 which has not been covered daily in the news?
We hope the news sources are keeping you up to date and not too overwhelming.
Anyways, as usual let us round up the week.
On the local front, we have MATTA calling for government initiatives to resuscitate the tourism industry by developing and implementing health accreditation. According to MATTA President Tan Kok Liang, no amount of digitalisation, promotions, incentives or freebies can directly help to create demand except to boost the much-needed confidence that it is safe to travel through coordinated efforts with the relevant authorities.
He said the Ministry of Tourism, Arts and Culture and the Ministry of Health may consider initiating a health accreditation mark programme for the tourism value chain, otherwise, Malaysian tourism industry will be trailing behind neighbouring countries.
Furthermore, in a survey by Airbnb has also shown that 92 percent of hosts are keen on hosting as often as before the pandemic once travel resumes.
Genting Malaysia, the casino operator had faced more than two months of closure due to the ongoing Covid-19 outbreak and Movement Control Order (MCO) that was implemented on March 18, is reportedly undertaking an “unprecedented” retrenchment exercise to cut 20 percent of its staff force, according to a news report by the Edge Markets.
Prime Minister Tan Sri Muhiyiddin Yassin is currently under a 14-day quarantine despite being tested negative. This comes after an officer who attended the post-Cabinet meeting yesterday at the PM’s office was tested positive for Covid-19.
In international news, a passenger plane with over 100 people onboard near Karachi airport in Pakistan had crashed, leaving no survivors.
Recent news has also shown that India will be resuming purchase of Malaysian palm oil after a 4-month gap.
And with Raya celebrations nearing, cars have been crowding the highways despite the ban on interstate travel, prompting fear that we might face another wave after news of a positive pregnant mother who travelled to Kuantan arose. Do you think there should have been better policies and regulations in place by the Government to tackle this issue? Let us know in the comments below!
This handout photo from Malaysia's Ministry of Health taken and released on February 26, 2020 shows health workers wearing protective suits as the second batch of Malaysian nationals, evacuated from the Chinese city of Wuhan, the epicentre of the COVID-19 novel coronavirus outbreak, arrived at Kuala Lumpur International Airport in Sepang. (Photo by Muzzafar Kasim / Malaysia's Ministry of Health / AFP) / RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT "AFP PHOTO /Malaysia's Ministry of Health/Muzzafar Kasim" - NO MARKETING - NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS
The Ministry of Health has identified 78 new cases bringing total number of active cases in the country to 1,163. 25 of the new cases are imported
With 63 new recoveries bring total number of recovered cases to 5,859, recovery rate is at 82.4 percent.
One death have been reported. Total deaths from the virus outbreak is currently at 115.
Total number of active cases recorded in the country is at 7,137 cases currently.
HSBC Malaysia being the first international bank to launch DuitNow QR, has introduced new cashless payment and transfer features for customers to share and celebrate Raya.
HSBC’s customers can now send their personalised HSBC QR code via any messaging application and have the recipients scan the QR code through their photo gallery to receives the e-DuitRaya in a digital green packet.
Tara Latini, Head of Wealth and Personal Banking of HSBC Malaysia said that since their customers may not be able to meet in person to present their friends and families with gifts or make donation in this season of giving, the bank has enhanced their mobile app in time to enable their customers to make free and instant transfers to charities, friends and families with e-DuitRaya.
“Digital is at the top of our priorities because we believe that technology provides us a gateway to better serve our people and customers, especially during this Covid-19 outbreak. With Raya around the corner, we want to further improve the banking experience for our customers with digital,” she added.
With the ever increasing number of mobile users, the international bank recognised the importance for customers to perform more banking activities on their mobile device cannot be overlooked.
The Move Money journey has been integrated into HSBC Malaysia mobile app to allow customers perform payments and transfer across different account. More features will be added to the Move Money journey by stages so that customers can do more on the mobile app.
“We’re happy to introduce e-DuitRaya for our customers to celebrate this festive season while we practice social distancing and stay safe. Improving upon the strong foundations we have built with our Internet and mobile banking, we continue to invest our efforts in delivering a simpler, faster and more seamless banking journey to our customers,” Heather Goh, Head of Digital, Wealth and Personal Banking, HSBC Malaysia said.
HSBC Malaysia has reached notable digital milestones. Known for the high level of security in the banking experience it provides to customers, HSBC is constantly adding convenience on top of security.
Apart from government bodies and healthcare establishments — in unprecedented circumstances such as the outbreak of the Covid-19 pandemic involving collapse of businesses, loss of lives and jobs — people are looking to insurance firms for support.
Until a vaccine is found, the ongoing crisis does not have a fixed timeline. Besides from the millions of fatalities caused, the outbreak has led to severe economic impacts, causing major challenges to the global supply chain and business sectors such as airlines, tourism, and hospitality.
Our central bank has responded by cutting interest rates and expanding its quantitative easing programme to make more liquidity available to borrowers in retail and small and medium enterprise (SME) segments.
A crisis of this scale affects all business sectors – but it especially puts tremendous pressure on insurers who can expect to be inundated with inquiries and claims across multiple different policies, such as health, life, or non-life coverage.
Insurance companies play a pivotal role during times of economic stress by helping companies and households manage risks and cushion losses. Yet, as one of the biggest groups of investors, they are also vulnerable to volatility in financial markets.
So, how is the insurance industry likely to shape up to the unfolding crisis?
Business Today speaks to Raymond Lew, Chief Executive Officer (CEO) and President of Sun Life Malaysia on the implicating pressures insurance organisations face during Covid-19, as since the outbreak, brokers and insurers alike have felt the impacts on their businesses and the industry at large.
“There is no doubt the pandemic and subsequent Movement Control Order (MCO) significantly impacted all businesses and the economy,” Lew says, adding that it will be a challenging time for all and the insurance sector is no exception to it.
The rate at which the virus had spread was alarming and will continue to have lasting effects on the nation and the rakyat.
Raymond Lew, Chief Executive Officer (CEO) and President of Sun Life Malaysia
Despite these uncertain times, Lew is adamant that Sun Life Malaysia (SLM), is well positioned to respond with due diligence.
“We are well positioned to help and support Malaysians through our best of breed life insurance and Family Takaful solutions,” Lew says. He adds that there is an opportunity for them to reach out to a broader segment of Malaysians with suitable and affordable solutions for all their needs.
Although, the company faced minor disruptions to their business operations, supply chain, postponement of key campaigns and on-the-ground events, however, through SLM’s robust business continuity procedures, they have been operating optimally since the MCO was enforced.
“The company prides itself on its core business purpose of empowering Malaysians to achieve lifetime financial security and to live healthier lifestyles,” Lew emphasises.
“We understand this is not quite ‘business as usual’ as we enter into a new normal era, but the company is well positioned as we have been conducting numerous virtual trainings to our bank partner’s sales team and Agency force to maintain Client engagement and support.”
One of the biggest challenges is transitioning workplaces to a remote environment, and Lew points out that with the introduction of strict social distancing laws and employees working from home, a balance between flexibility and reliability is paramount.
In a response to a question, Lew believes that communication with Clients is crucial in times of crisis. “They need to be able to contact us easily to carry out their business since face-to-face contact is abandoned,” he states.
SLM has accelerated the digitisation of their business to ensure that their Clients can continue to contact the company for any enquiries and requests.
At the same time, the insurance provider has established a Non-Face-to-Face sales process to allow continuous sales by their sales intermediaries during the MCO period.
“We believe that our long-term digitalisation plans have been the key towards delivering superior services to our Clients,” Lew asserts.
Through the company’s strong drive in encouraging Clients to utilise digital means as way of communication, SLM saw a 200 percent increase in sign-ups on their Client portal, SunAccess.
A safety net and measures during trying times
Understandably many Malaysians will cut their non-priority policies during this current situation due to job losses or pay cuts, but Lew argues, that instead of cancelling the policies, the pandemic should be a clear reminder that such policies can provide a safety net when needed.
“As health and safety of our Clients is SLM’s top priority, we have adapted our initiatives to fit their current financial scenario in which they can apply to defer their premium/contribution payments for 3 months,” Lew says.
Besides, Lew also shares that their comprehensive range of products are well-suited for different life stages, financial affordability, and goals.
Meanwhile, SLM is constantly innovating behind the scenes to develop more flexible and personalised plans to suit the needs of all Malaysians, and one such plan is the GOLIFE, the first microinsurance plan in Malaysia.
Since it was launched, GOLIFE has touched 55,000 lives, Lew exclaims, as it is designed to help people get protected for as little as RM5 per month via their smartphone.
Additionally, SLM is participating in the RM8 million Covid-19 Test Fund, an initiative to support the Ministry of Health’s efforts to conduct more testing in the country. Qualified individuals who have been referred by registered doctors, to undergo the test at private labs will be reimbursed up to RM300.
Covid-19 a game-changer
Businesses will have to face the reality to pivot ahead, Lew points out, and now is the time to regroup, rethink strategies and re-innovate ways to reach out to the consumers.
“From SLM’s perspective, the company sees market opportunities in the significantly underpenetrated Takaful sector, which Lew says the penetration rate is currently at 15.2 percent.
“This is a market with strong growth potential in the M40 and B40 segments,” he asserts.
Lew believes, in order to reach that market, technology can be a growth catalyst for the industry to align with the new normal by providing protection and services at lower cost and this is where micro-insurance policies will play a pivotal role in this current climate.
Nevertheless, he says they are committed to work with the industry to ensure the sector continues to grow as it remains a rapidly growing market with huge upside driven by stable domestic consumptions and increasing consumer awareness.
Whilst Lew expects demand for protection to increase in the wake of this outbreak, they will continue to optimise their distribution channels and products for this market segment.
“It is important to position ourselves and customise our products to the needs, accessibility and affordability of our Clients,” Lew concludes.
Sunway Property has announced that purchasers have snapped up to RM 200 million worth of its properties as a result of its digital campaign, “Always With You” in less than a month since the campaign’s roll out in end of April.
The campaign which was launched in response to the Covid-19 situation took into account the current conditions and rise in uncertainties. Through the campaign, Sunway Property had assisted buyers with financial aid and competitive pricings.
Sunway Property managing director, Sarena Cheah said, “The ‘Always With You’ campaign was launched in response from the feedback we had from customers who were still keen to own a home but were cautious of the economic conditions as a result of the pandemic. To minimise their risk for home ownership, we have included a voluntary exit plan as part of the campaign.”
The voluntary exit plan was put in place in order to allow customer to purchase their home with an ease of mind as they are able to exit the purchase in the event of a loss of employment and obtain a refund.
The plan was also applicable in cases of disability or critical illness up to 12 months from the signing of the sales and purchase agreement or up to vacant possession.
Throughout the campaign, homeowners were able to enjoy a subsidy of up to RM 50,000, interest-free instalment plan of up to 24 months and a flexi-financing scheme that caters to different customers needs. Customers were also able to opt for a guaranteed loan up to 95 percent by Sunway.
“The digital campaign was launched in tandem with the shift in customer behaviours as a result of the Movement Control Order (MCO) and Sunway Property will continue to focus on social media and online digital marketing channels to reach out to interested buyers,” Cheah added.
She further stated that consumers had highlighted their concerns about uncertainty yet are increasingly aware of the need to have well-built and well-designed homes as they spend more time at home due to the pandemic.
“As a result of the campaign, purchasers have snapped up RM 200 million worth of properties, signalling to us that the demand is still strong. And for that, we have our home purchasers to thank, for their trust in our brand,” she said.
The campaign includes Sunway Property’s latest properties including seven developments in Klang Valley (Sunway GEOLake Condo and Townhouse, Sunway Gandaria, Sunway Avila, Infiniti 3, Sunway Serene and Sunway Subang), one in Ipoh (Sunway Onsen Suites), three in Penang (Sunway Cassia Semi-D and Terrace and Sunway Wellesley), and five in Johor (Sunway Citrine Lakehomes, Sunway Citrine Residences, Sunway Emerald Residence, Sunway GRID Residence, and Sunway Lenang Heights).
As countries went under lockdown one after the other across the world, business sectors were faced with an unprecedented crisis. The tourism sector was no exception to the blow delivered by the coronavirus which had led to planes being grounded and travel bans to be implemented.
In Malaysia, hotels that relied entirely on tourism closed down, one after another, week after week, with those facing cash flow issues for months to be the first ones to go. New players who were booked for months saw cancellations pour in. And being part of the hospitality industry, Airbnb took an equal hit as well.
Early May, the home rental company had laid off 1,900 employees, amounting to 25 percent of its staff. The company, much like its counterparts had been hit financially during the pandemic and with thousands cancelling their reservations, its revenue plummeted.
In a letter to his employees, chief executive officer, Brian Chesky said revenue for Airbnb this year will be less than half of what it earned in 2019, which was reportedly $4.8 billion.
In 2018 alone, Airbnb’s host and guest community in Malaysia had generated an estimated RM 3 billion in direct economic impact to the country with senior hosts who are above 60 earning RM 9 million in that year alone.
Despite the grim reality currently, Airbnb’s spokesperson in a chat with Business Today Malaysia expressed optimism in the company’s future in the long run. “This kind of momentum can’t be paused for long, but as travel recovers, it will look different,” the spokesperson said.
“Airbnb believes that people will seek out nearby things to do and places to visit. They will want longer stay options for family, work and study and they will look for sites and activities away from tourism hotspots.”
In a survey by Airbnb, 92 percent of hosts have stated that they plan to host at least as often as before the pandemic once travel resumes. Following that Airbnb says the company is making the needed investments that will strengthen the business in the post-pandemic world.
Highlighting a recent research from Skift who found that travelers will be “drawn to activities and experiences that involve less exposure to crowds, more control of their surroundings and more assurance of cleanliness”, Airbnb told Business Today that they working hard to prepare for the future of travel and to support the community.
With hygiene as their highest priority, Airbnb’s high standards require listings offer a certain level of cleanliness and when those expectations are not met, Airbnb assures they respond rightfully.
Credit: Airbnb
“To date, 94 percent of Airbnb reviews show that guests are satisfied with cleaning, scoring at 4 or 5 stars after their stays,” Airbnb’s spokesperson says.
The home rental company had recently announced its Airbnb’s Enhanced Cleaning Initiative, which will be a global initiative that will be rolled out with enhanced guidelines developed by hospitality and medical hygiene experts. Airbnb hosts who go through the learning and certification programme will have their listings identified on the platform and will be made easy for travelers to find.
“We have also updated our policies to allow guests to cancel eligible reservations for a full refund to minimise non-essential travel and created a Covid-19 resource hub where people can find the information they need,” Airbnb spokesperson shares.
The home rental company is also providing support to hosts during the pandemic, which includes a $250 million payout to hosts impacted by cancellations and $17 million Superhost Relief Fund. Furthermore, Airbnb has joined industry players in urging the Malaysian government to consider including tourism entrepreneurs involved in the industry through new business models and platforms.
These include individuals who are hosting short-term rental accommodation or are providing local activities through internet platforms. The company had also committed to help house 100,000 healthcare professionals, relief workers and first respondents around the world and this included Malaysia as well.
“Many of these entrepreneurs have made business decisions and investments in fixed assets, and the extension of stimulus measures to include this group of affected individuals would help to ensure that these Malaysians can continue to support themselves while Malaysia continues its efforts to prevent the spread of Covid-19,” Airbnb tells Business Today.
According to The Edge Markets, Genting Malaysia is reportedly undertaking an “unprecedented” retrenchment exercise. The news report by the financial paper stated that the company will be retrenching up to 20 percent of its staff force.
The casino operator had faced more than two months of closure due to the ongoing Covid-19 outbreak and Movement Control Order (MCO) that was implemented on March 18.
According to a source that spoke to the paper, the cost-cutting exercise was inevitable as salaries make up a large portion of the operator’s costs.
Earlier this month, research house, RHB Retail Research had expected the casino operator’s 2Q20 to register negative EBITDA of RM 300 million.
“We now estimate FY20F to register RM141 million losses (from RM885 million profit) after factoring in the extended closure and slower 2H20F recovery. FY20F visitor arrivals are expected to decline 40% year-on-year,” the research house said in its trading notes early May.
Players across the hospitality and tourism industry continues to face economic impact due to the virus outbreak that had led to disruptions in the travel industry as well as restrictions in the movement.
Social distancing has become second nature in today’s Covid-19 world and the Malaysia International Trade & Exhibition Centre (MITEC) has enhanced and updated its Standard Operating Procedures (SOPs) to adapt to the requirements.
MITEC’s comprehensive Venue’s strict SOPs include continuous staff training, public awareness and multi-media displays, social distancing at public areas and event venues, QR code for e-health screening and declaration form, temperature checks, hand sanitisers, ISO 22000 advanced food safety measures, routine surface cleaning, reduced touchpoints, air quality control and daily monitoring systems. The Venue also offers face masks, gloves and other hygiene protective gear for purchase at its medical clinic.
As a world-class operation, MITEC champions the UN Sustainable Development Goals (Global Goals) Goal #3 to ensure healthy lives and promote wellbeing for all, providing secure and safe SOPs for our visitors we value of utmost importance. As such, it is embedded in our Health, Safety, Security and Environment (HSSE) protocols to safeguard everyone at our premise and to eliminate and minimise any environmental or significant hazards and risks,” said Gunther Beissel, Chief Executive Officer, Malaysia International Trade and Exhibition Centre.
The Venue is among the hardest-hit sector by the pandemic and has implemented new best practices with strict HSSE measures to enable Covid-19 conscious events in the future. MITEC is the only trade fair venue in Malaysia with its own in-house medical clinic including an isolation room if needed, providing the community with peace of mind and support whilst at its Venue.
The facility also has an ambulance stationed at the South entrance during business hours and extended hours during events. Long before the Movement Control Order was announced by the Malaysian Government in March 2020, MITEC had imposed high standards of hygiene and protection as the wellbeing of its staff and guests is of paramount importance.
“We are committed and very confident to offer a controlled safe environment for all our centre visitors and staff and with the supportive understanding from Government, we are ready to move into the next level of business events,” he said.
In a special report by CBRE Research, ‘Four Months into Covid-19: The Negatives, The Positives and The Unknowns’, CBRE has pointed out that office demand in Asia Pacific has weakened significantly owing to the double impact of the fading economic growth prior to the onset of the virus outbreak.
Demand in Greater China and Singapore was the first to be affected with net absorption in Mainland China turning negative in Q1 2020. Other markets had also started showing signs of slowdown in leasing activity towards the end of the quarter as lockdown and social distancing measures came into force.
“The full extent of the decline in demand will became more visible in Q2 2020,” CBRE stated.
In terms of leasing processes, CBRE’s April Asia-Pacific Occupier Flash Survey found that at least two-thirds of respondents had experienced delays to the process, including postponements of site visits and suspension of expansionary plans.
“Even if Covid-19 is brought under control relatively quickly, leasing demand will take some time to recover to pre-outbreak levels owing to rigorous approvals for capital expenditure.”
Some of the short-term downside risks to office demand will include more headcount reduction, along with faster consolidation in the flexible space industry, which could trigger more merger and acquisition activity and lead to consolidation as well as the closure of centres.
Additionally, there will be disruption to new supplies for the remainder of the years as disruption to global supply chain has led to a shortage of construction materials. The trend is expected to be prevalent in India and China both which typically see a slippage ratio of 20 percent every year.
Construction delays in Singapore will also be prominent and are set to affect new supply in 2021 and 2022.
The report also highlights on rent abatement as a result of sharp decline in business activity, a trend first noted in Greater China and subsequently in other markets. According to CBRE, landlords and investors are increasingly concerned about rising vacancy risk resulting from weak demand owing to the impact this will have on cashflow and valuations.
Rent abatement is adding to downward pressure on Asia Pacific Grade A office rents, which fell by o.6 percent Q-o-Q in Q1 2020.
Furthermore, the rise of the work-from-home trend is also expected to be a permanent feature of the Asia Pacific office landscape. “Several multinational technology and financial companies have already announced the extension of work-from-home policies to the end of 2020.” CBRE said.
Twitter for instance has told its staff that they can keep working from “forever if they wish”.
“Combined with increased vigilance around health and safety, a more fluid office-based workforce will require occupiers to re-think their workplace requirements, particularly workstation size, desk spacing and meeting room and social area capacity,” said CBRE.
However, on the bright side the easing of lockdowns have seen office-based employees in several countries – Greater China, South Korea and Vietnam – return to work, while employees in other markets are gradually expected to do the same.
CBRE believes it is too early to ascertain how office space demand will evolve in individual markets. The process of portfolio rebalancing will take at least two to three years before occupiers achieve an equilibrium that satisfies all these requirements.
Visa has announced that Fintech company, Soft Space Sdn Bhd will be the first Fintech partner to join its Fintech Fast Track programme in Malaysia.
The programme by Visa aims to allow Fintech partners to build and deliver new commerce experiences on Visa’s payments network. The two companies will be working together to offer start-ups and technology companies the opportunity to work with Soft Space to launch Visa’s prepaid card products in the country.
This solution will be introduced through Soft Space’s wholly-owned subsidiary, Fass Payment Solutions Sdn. Bhd. (Fasspay), which is an e-money license holder regulated by Bank Negara Malaysia.
Visa’s country manager, Ng Kong Boon said in a press release, Visa will be working closely with Soft Space to support their growth in creating digital payment products that are relevant to the needs of cardholders in the country.
Soft Space’s chief executive officer, Joel Tay, said, “By joining Visa’s Fintech Fast Track program, our partners are able to introduce their own Visa prepaid cards, thereby offering more features including expense tracking and worldwide acceptance. Moreover, partners will not have to deal with complex technology and regulatory approval issues, thereby enabling them a quicker go to market in a cost-effective manner especially during uncertain economic times.”
Both Visa and Soft Space have collaborated prior to this, on developing Maybank’s Tap2Phone solution, which was aimed at catering to small businesses as well as delivery and sales agents.
The Visa Fintech Fast Track programme is part of Visa’s global strategy to open up our network and support a broad range of players that are developing new commerce experiences. The Fintech Fast Track program provides a new commercial framework that includes eased access to Visa’s payment capabilities and streamlined processes to support companies of different sizes and at different growth phases.
Photo caption (Left to Right)
• Mr. Gary Ting ( Head of Corporate Finance of M&A Securities Sdn.
Bhd.
• Datuk Bill Tan, Managing Director of Corporate Finance of M&A
Securities Sdn. Bhd.
• Mr. Martin Phillip Ik Piau , Executive Director of Ocean Vantage
• Mr. Kenny Ronald Ngalin, Managing Director of
Ocean Vantage
• Mr. Stephen Yau Kah Tak , Executive Director of Ocean Vantage
Sarawak-based oil and gas (“O&G”) integrated support services provider, Ocean Vantage Holdings Berhad, has entered into an underwriting agreement with M&A Securities Sdn. Bhd. in conjunction with its initial public offering (“IPO”) on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
As per the agreement, M&A Securities will underwrite new shares to be made available for the Malaysian public and its eligible directors and employees of the Group.
Managing Director of Ocean Vantage, Kenny Ronald Ngalin said, “This is indeed a momentous occasion for us especially during this unprecedented time. We are aware of the tough operating outlook for O&G players given the fluctuations in crude oil prices and economic impacts due to Covid-19 pandemic. However, we believe that there are pockets of opportunities for outsource support services providers such like Ocean Vantage
as large corporations are consolidating its operations and workforce.”
“While Ocean Vantage is a relatively young company, we have been through several challenges since our formation and remained resilient as we continue to record growth in our business and financial performance, underpinned by our asset light business strategy. Our expansion plans remain intact and we will continue to grow the ecosystem of our services, which includes developing in-house capabilities in underwater diving services and advanced non-destructive testing (“NDT”) inspection services with the proceeds raised. We are also planning to invest and further expand our business in the downstream segment,” Kenny further added.
Ocean Vantage is an O&G integrated support services provider for both upstream and downstream of the O&G industry headquartered in Miri with offices in Bintulu, Puchong and Labuan, and a fabrication yard in Senai.
The Group’s IPO exercise entails a public issue of up to 82.2 million new shares, representing 20 percent of its enlarged share capital, and an offer for sale of up to 41.1 million existing shares by way of private placement to identified investors. Ocean Vantage is scheduled to be listed on the ACE market of Bursa Securities by July 2020.
RHB Research has maintained ‘buy’ for Supermax Corp with a higher RM6.08 target price from RM3.90, with 33 percent upside and 1 percent yield.
Supermax’s 3QFY20 earnings have more than doubled, exceeding expectations. Both sales and margins are at record highs and RHB Retail Research expects for its 4QFY20 earnings to do even better.
“We increase our earnings estimate and TP,” the research house said.
The outperformance was caused by exceptional sales and EBITDA margins registered in 3QFY20. Note that sales surged 16% QoQ (+24% YoY) to MYR447m due to a climb in gloves demand. EBITDA margins also expanded QoQ and YoY on declines in raw material prices
“While we expect the gloves industry’s ASPs to increase, Supermax’s magnitude should be higher. Note that 50% of its
products are sold under the OBM segment, which allows it to enjoy margins all the way up to the end customer level instead of selling to distributors under the original equipment manufacturer (OEM) segment,” RHB said.
According to the research house, in the long run, Supermax is a beneficiary of the long-term uptrend in global gloves consumption: 8 to 10 percent annually, even without Covid-19.
“Risks to our call, lower-than-expected sales volumes and USD/MYR, and higher-than-expected raw material prices,” the research house said.
The Malaysian Association of Tour and Travel Agents (MATTA) is calling for Government initiatives to resuscitate the tourism industry by developing and implementing health accreditation that can guarantee health and safety standards to boost confidence on tourism facilities for both locals and tourists.
MATTA President Tan Kok Liang in his statement at the Online Forum organised by MATTA in collaboration with The Star Media Group said, “The tourism industry needs to deal with the core issue of health and safety confidence in travel as the new priority. No amount of digitalisation, promotions, incentives or freebies can directly help to create demand except to boost the much-needed confidence that it is safe to travel through coordinated efforts with the relevant authorities. The global private sector has aligned around the health and safety protocols to create consistency across the industry.”
“Today, we see malls and food and beverage outlets running under low capacity due
to the ‘Stay At Home’ tagline and the fear of being infected with Covid-19. The authorities should replace the ‘Stay At Home’ tagline with a new one such as ‘Stay Safe’ to portray a more positive message. The future of travel and market recovery in the next 12 months will be challenging and unpredictable due to the global recession along with travel restrictions resulting in the industry coming into a standstill.”
“The Ministry of Tourism, Arts and Culture and the Ministry of Health may consider
initiating a health accreditation mark programme for the tourism value chain which
includes aviation, hotels, tourism attractions, retail outlets, transportation operations,
cruises and food and beverage outlets amongst others.
“Otherwise, Malaysian tourism industry will be trailing behind neighbouring countries. Travellers will only venture into the world if they feel it is safe to do so. It is therefore crucial for industry stakeholders to provide them with confidence and peace of mind.”
Tan further highlighted that the badge will act as a safeguard towards staff and visitors and earning it will require rigorous online training and assessment session focused on hygiene and physical distancing which suppliers will need to complete before self-certifying. Spot checks will also be carried out and the mark will be stripped from any business that is found to be non-compliant.
“Implementation and coordination by the Government is vital to ensure that measures
are in place to help rebuild confidence which are jointly embraced by the Government
and private sector. Many tourism businesses are beginning to embrace the emergence
of new norms positively, in preparation for when the situation starts to normalise,” Tan said.
According to MATTA, if the situation continues to prevail, about one million workers will soon lose their jobs if the situation continues driving tourism workers into poverty.
Minister in the Prime Minister’s Department Datuk Seri Mustapa Mohamed is urging for strong collaborations between the public and private sectors in order to support the nation’s economy.
“We want to sustain the country’s economic growth. Therefore, we need to take the advantage of the growth opportunity presented by the global digital age to the fullest and to increase our productivity and enhance our competitiveness,” he said in his keynote address during a policy webinar themed “Rebuilding the Economy with Enabling Policies”
He further recalls that public-private partnerships have proven to be effective in the past and can do so during and after MCO.
In a news report by Bernama, both the public and private sector need to become more efficient and dynamic and can do so by leveraging on the opportunities ICT can offer.
Furthermore, he pointed out that Putrajaya aims for public sales and transactions to be made available online by 90 percent or even 100 percent.
“In the current challenges that we’re facing, it has motivate us to move even faster from this journey of digital society or fully digital society,” Bernama quoted him.
The panel further highlighted the importance of an enabling policy infrastructure to accelerate economic reboot post Covid-19.
RHB Retail Research says, JHM Consolidation Bhd is likely resuming its upward move, following the recent retracement that saw it testing the 21-day SMA line with a low of MYR0.855.
In a trading note, the research house says a positive bias may emerge above MYR.0.855, with resistance points pegged at MYR0.96, followed by MYR1.00. A stop-loss can be set below MYR0.89.
ACO Group Berhad, has been appointed as an authorised distributor for SYLVANIA brand of lighting products.
A distribution agreement was entered between ACO Group’s wholly owned subsidiary, Actgen Industry Sdn Bhd (“Actgen”), and Sylvania Electrical & Electronics Sdn Bhd.
SYLVANIA is a leading global lighting solutions provider for the consumer, professional and architectural markets. The European brand’s history roots can be traced back to 1901 and it has accumulated over a century of manufacturing expertise in lamps and luminaires.
Under the distribution agreement, Actgen is granted the distribution rights for the
promotion and sale of SYLVANIA light emitting diode (“LED”) lighting products within Malaysia. The agreement will come into effect from June 1.
ACO Group’s Group Managing Director, Ir. Tang Pee Tee
ACO Group’s Group Managing Director, Ir. Tang Pee Tee said, “We are pleased to be entrusted by yet another established global brand such as SYLVANIA to distribute its LED lighting products across our sales outlets and distribution centres nationwide.”
Tan further highlighted that consumers are more aware of the environmental benefits of using LED lighting products as they are more energy efficient and have a longer lifespan. This is due to the growing trend amongst homes, offices, factories, buildings as well as streetlights that are converting to LED lighting products to reduce power consumption and promote long-term sustainability.
“At ACO Group, we carry a wide range of electrical products and accessories that
serve the needs of the residential, retail, commercial and industrial users. With the
addition of SYLVANIA, we now carry close to 90 brands of electrical products and
accessories. This further strengthens our value proposition as it enables our customers the access to a broader range of product selections,” Tan added.
New Normal, New Strategy: Property industry must adapt to changing climate by going digital
By Datuk Clifford Hii, Group Managing Director of HCK Capital Group Berhad
The Covid-19 outbreak has left no stone unturned. Every sector must now scramble to adapt to the change introduced by the pandemic, and shift marketing plans to take on the ‘new normal’ ‒ the property industry is no different.
With the implementation of the Movement Control Order (MCO), reports have suggested that property prices could decline up to 20%, and that the property market will continue to experience stress from different perspectives, leading to a hold on investments for both commercial and residential properties.
While the outlook for the property industry looks bleak in the months to come, the first half of 2021 is expected to be a strong period for market recovery, and businesses must strategise for the long run to best capitalise on this. With limited contact and movement expected well beyond the MCO, businesses will have to anticipate a change in business structure, and direct their efforts towards more creative means of conducting business.
Traditionally, the property industry has relied on showroom and property visits for sales ‒ the post-MCO world will challenge businesses to expand and potentially pivot to digitising their processes for the future.
What Happens When Property Meets Technology
Industries dealing with large volumes of consumers and prospective customers will likely have access to a vast amount of data. Through a holistic approach to digital transformation, businesses can leverage on existing data to accelerate business outcomes and minimise loss, providing them with a competitive advantage that can set them apart.
Recognising that data is the lifeblood of an organisation is the first step in this evolution, and when data analytics become commonplace among property developers, they can then turn that data into useful information, providing a clearer picture for actionable insights.
With the challenges presented by the pandemic outbreak, the property industry will need to plan for the long term, and proper management of data can be used to accurately identify property buyers as opposed to a scattergun approach.
Realising this potential, HCK has leveraged its data across almost six years, enabling an easier transition into digitising its crucial processes. This includes but is not limited to the implementation of Virtual Reality (VR) and Augmented Reality (AR). These technologies work well with a unique and innovative approach to showrooms, making them virtual while also enhancing the customer experience. This allows for a larger volume of visits within a shorter time, increasing overall efficiency as well as a more structured means of gaining customer insights and the analysis of that information.
Creating The Ideal Customer Experience
Perfecting the customer experience has been the goal for all organisations ever since competition within and across markets has existed. With today’s advancements in technology, the possibilities are endless despite the setbacks faced due to Covid-19. As more businesses move to digitise their operations, harnessing and understanding large volumes of data has become important not only for organisations and their marketing approach but also to provide the ideal customer experience.
With up to 71% of customers preferring personalized advertisements, the need to understand prospective customers on a deeper level is more crucial than ever in adding value to initial interactions. This allows for the promotion of more relevant information to the right audiences, enhancing the customer experience.
The adoption of VR and AR can also be used in crafting a more personalised experience – one with fewer limitations. It creates new opportunities for people to take a longer and deeper look at their dream property from the comfort of their homes with further benefits stretching beyond the MCO by eliminating the need to travel long distances for overseas and out-of-state buyers.
It will also be accompanied by video walkthroughs, providing an immersive yet contactless experience as more property buyers search and even make final decisions online. Furthermore, legal documentation such as Sale and Purchase Agreements (SPAs) that often require physical meetings can also be done online through close collaboration with legal firms. The implementation of these technologies will also be applied to execute virtual events and launches in the future where refreshments will be provided at the attendees’ doorstep, limiting the need for close contact in crowded places.
As one of the leading property developers in Malaysia, HCK is innovating their processes through their digital transformation initiatives. As we step into a new normal following the MCO, HCK’s commitment to the community will also see the brand create safer places for their customers for when they visit HCK property, while also reworking their policies to benefit those affected by the virus.
While the government and our frontliners are working tirelessly to safeguard Malaysians against Covid-19 through various efforts in flattening the curve, we must do our part to adhere to the guidelines.