PTPTN deferments will raise debt
The National Higher Education Fund Corporation (PTPTN) will be RM76bil in debt by 2040 if it goes ahead with deferring loan repayments for borrowers earning below RM4,000 a month. this is almost double the current debt of RM40bil that the corporation has today. Previous practices have led to a massive repayment shortfall, which had forced PTPTN to borrow more money if it wants to continue providing loans to students. More than half of PTPTN borrowers have not been paying consistently or have not started servicing their loans at all. A total of 19% of borrowers who owed RM2.8bil have not begun repayment, while 616,000 borrowers have been paying back inconsistently. As of 2018’s end, the outstanding amount has reached RM6.3bil, with 68% of defaulters having not paid for more than a year. PTPTN chairman Wan Saiful Wan Jan said for every RM7,000 of debt cancelled, one new PTPTN applicant will have to be rejected. (The Star Online)
BNM announces measures to boost market liquidity, accessibility
Bank Negara Malaysia (BNM) yesterday announced several initiatives aimed at enhancing market efficiency, liquidity and accessibility in both the bond and foreign exchange (forex) markets, following news last month that FTSE Russell was considering downgrading Malaysia’s market accessibility, which could result in exclusion from its World Government Bond Index (WGBI). Two measures were announced to deepen the bond market: one is by enhancing the repo (repurchase) facility to allow greater flexibility, which includes lengthening the repo tenure beyond one year; the second is the development of an effective hedging platform for investors, which will further enhance the delivery mechanisms for Malaysian Government Securities (MGS) futures settlement. However, the decision by Norway’s sovereign wealth fund to cut its exposure to emerging market (EM) governments and corporate bonds does not have a significant impact on the domestic bond market. (The Edge)
Malaysia aims to become 100% renewable energy nation
Malaysia is getting ready to make a transition towards 100% renewable energy in order to make the environment more sustainable, competitive, efficient and greener. Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin said the transition would be possible after Malaysia signs the global initiative RE100 agreement, probably in January next year. RE100 is a Global Renewable Electricity Initiative that brings together influential businesses committed to 100% renewable electricity with the aim to accelerate change towards zero carbon grids, at the global scale. Yeo said the initiative would not only be targeted to incentivice renewable energy in the country but also seen as an opportunity to make Malaysia as a renewable energy hub in the region. (The Sun Daily)
ATTA Global acquires firm for RM28m to diversify into property investment
Steel products maker ATTA Global Group Bhd is acquiring MPSB Venture Sdn Bhd for RM28 million to diversify its business into property investment. ATTA said the acquisition will provide the group with opportunities to obtain additional land banks for future development. “The board is optimistic that the proposed acquisition would generate synergistic benefits to the group in future,” it said, adding it may also benefit the group in terms of future capital appreciation. The proposed acquisition is estimated to be completed within three months. (The Edge)
Gen Rent still facing financing issues
The government’s housing initiatives are not enough to address the financing issues faced by the “Generation Rent” in purchasing properties, according to online property portal country manager Sheldon Fernandez. Generation Rent are millennials who rent houses for long periods, mainly because they cannot afford to buy a house due to their income and lifestyle. Home ownership in Malaysia is increasingly out of reach for young people – a situation aggravated by the challenging labour market for youth, rising student debt and higher cost of living. Income and family background have a huge impact on millennials in the housing market, with those from affluent backgrounds more likely to own a house due to contribution or gifts by parents. Getting rejected for a housing loan is also one of the factors. Lack of knowledge about the home loan process is a concern among first-time and younger purchasers. (NST Online)