Bank Negara’s OPR cut surprises the market, lowest in 9 years

Bank Negara Malaysia’s (BNM) decision to cut the overnight policy rate (OPR) by 25 basis points to 2.75 percent — a level not seen since March 11, 2011 — has surprised the market, upending the wide expectation of the rate being maintained at least for the year’s first Monetary Policy Committee meeting. Many economists and analysts had penciled in a March cut with a view that BNM would wait for confirmation from early-2020 economic data before deciding on the key interest rate. The timing of today’s policy action was unexpected as previous policy actions were preceded by some form of signaling by the central bank. The central bank noted that downside risks to growth remained, including those emanating from domestic factors such as “weakness in commodity-related sectors and delays in the implementation of projects.” However, BNM expects growth to recover gradually with support from the household and external sectors. (The Edge)

Overhang property due to lack of research and pricing

Rahim & Co International Sdn Bhd said property developers should have been cautious and done more research before they embarked on new housing projects in the country. Executive chairman Tan Sri Abdul Rahim Abdul Rahman said there should have been more research on the demand, pricing and cost structure. Some developers launched landed and high-rise residential units at prices that most Malaysians couldn’t afford to buy, contributing to property overhang. Properties remained unaffordable as wages were not moving upward or keeping up with prices. He said, property overhang in Malaysia has been on an upward trend but he expects the situation may improve as developers continue to give discounts and other incentives. On the overall property market, he expects it may improve this year, but moderately, thanks to government initiatives presented in Budget 2020. (NST Online)

Public transport, R&R operators encouraged to go cashless

The Transport Ministry has encouraged operators of public transport service and rest and recreation (R&R) areas nationwide to adopt the cashless payment method. Its Minister Anthony Loke Siew Fook said this was in line with the government’s efforts to improve the public transport system and as part of the preparations for the digital economy. “The ministry welcomes the use of cashless payments and I think that e-Wallet has great potential, it has to be extended to other areas including at R&R areas and public transport system, especially for the stage bus services. We want to ensure a smooth journey for stage buses, passengers have been paying the bus fare in coins which is inefficient for them,” he said. (Bernama)

No changes to Selangor water tariffs, says minister

Even though Stream B of the Langat Water Treatment Plant 2 (LRA 2 ) has been handed over to Air Selangor Sdn Bhd (Air Selangor), there will be no changes in water tariffs in Selangor. Water, Land and Natural Resources Minister Datuk Dr Xavier Jayakumar in giving this assurance said the government had made all the calculations necessary and found that the tariffs can remain as usual. However, he said water tariffs should be reviewed in the long term so that the water company is also comfortable and can make use of the extra profit to find solutions on how to reduce non-revenue water. He assured that total household expenditure for water and will not go beyond 2%. (Malay Mail)

CMT and CCT merge to form Singapore’s largest REIT

CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT) will form a merger to create the commercial REIT CapitaLand Integrated Commercial Trust (CICT). It is set to be CapitaLand’s primary investment vehicle for commercial real estate in Singapore. The REIT is set to be the largest one in Singapore and the third largest in the Asia Pacific with a market capitalisation of $16.8b and combined property value of $22.9bil. CapitaLand will retain its sponsor stake of approximately 29.1%3 in the merged entity.The group will now have a total of three S-REITs with global or developed market mandates listed on SGX, including Ascendas Real Estate Investment Trust (Ascendas Reit) and Ascott Residence Trust (ART). (Singapore Business Review)