15 October 2020: Total value of loan repayments reached 70% of pre-moratorium levels, says BNM

BNM: Total value of loan repayments reached 70% of pre-moratorium levels

Bank Negara Malaysia (BNM) data showed that the total value of loan repayments had reached 70% of what it was prior to the blanket loan moratorium period. “Many borrowers are starting to repay their loans,” BNM deputy governor Jessica Chew said. BNM data revealed that two million borrowers had been engaged by banks by the end of September, out of which 514,000 were R&R (rescheduling and restructuring) applications received with a 98% approval rate. For businesses, banks approved 6.3 times applications compared to total outstanding R&R loans at the end of 2019. Just this month, Malaysia transitioned into a targeted moratorium after the blanket automatic loan moratorium period ended on Sept 30, 2020. In the Financial Stability Review report, the regulator noted that household loan impairments are projected to double — albeit from historically low levels. (The Edge)

BNM sees spike in property market risks as MCO takes toll

Risks in the real estate sector have risen due to both prevailing oversupply and a re-evaluation of business property needs due to the various movement control orders, Bank Negara Malaysia (BNM) said in a review. According to its Financial Stability Review for First Half 2020, the most apparent loser of the movement curbs was the retail space sector, with consumers either shying away due to restrictions or perceived risks amid the Covid-19 pandemic. Overall, property transactions fell by over 25% by volume in the first half and by nearly 27% in terms of value. “Amid pre-existing oversupply conditions and changes to consumption behaviour since the pandemic, rental rates in the retail commercial property market are likely to remain depressed in the period ahead,” the report said. The estimated timeline for a recovery could be as long as 12 months, according to industry experts. For the residential sector, however, it cited previous findings that four in five mortgages were for owner-occupied homes, which BNM said reduced the risk of default. Repeated cuts to the overnight policy rate should also support demand for residential property, it said. (Malay Mail)

Penang developing policy on homestays in stratified residential buildings

The Penang government is coming up with a new policy to govern the conversion of stratified residential premises into homestays and short-term accommodations, state exco Jagdeep Singh Deo told the state legislative assembly. He said there are currently no laws on both, especially in stratified residential premises. He said Penang has the third-highest number of stratified properties and there is a need for such guidelines as short-term accommodations could affect the social security and safety of other residents. He said the guidelines would focus on the importance of obtaining approvals from all residents on whether to allow short-term accommodations at stratified residential premises. He added that the city councils were already advising management corporations (MC) and joint management bodies (JMB) to come up with house rules that prohibit homestay or short-term accommodations in their buildings. (Malay Mail)

Nationwide enforcement on workers’ minimum standard housing

Integrated enforcement operations on compliance with Workers’ Minimum Standards of Housing and Amenities Act 1990 (Act 446) will be conducted throughout the country, said the Ministry of Human Resources (MOHR). The ministry said the operation is aimed at raising the awareness of employers and centralised accommodation providers on Act 446 and its regulations which came into effect on June 1 2020 as well as the subsidiary legislation which came into force on Sept 1, 2020. Act 446 requires employers to provide workers’ accommodation according to the rules outlined on safety, health and cleanliness. Indirectly, Act 446 encourages employers to practise the new work normal via physical distancing at the workplace and accommodation. MOHR said the jurisdiction of Act 446 had been expanded to cover all employment sectors which provide housing and accommodation to workers and each accommodation or centralised accommodation should get the certification from the Peninsular Malaysia Labour Department (JTKSM) director-general. (The Sun Daily)

Khazanah says Firefly could become Malaysia’s new national airline

Malaysia’s Khazanah Nasional has the option to channel funds to low-cost carrier Firefly which could become the country’s national airline if Malaysia Airlines was shut down, the head of the sovereign wealth fund was quoted as saying. The comments by Shahril Ridza Ridzuan are the fund’s first public statements since it emerged that Malaysia Airlines’ parent company has warned that the flagship airline could be wound up if lessors did not agree to steep discounts. Firefly, which operates a fleet of 12 twin turboprops, mainly within the country, is currently a fully owned subsidiary of Malaysia Aviation Group (MAG). Khazanah, the sole shareholder in MAG, will discuss next steps when the outcome of restructuring talks becomes clearer, according to Berita Harian. Finance Minister Datuk Seri Tengku Abdul Aziz said last week the government will not provide financial support to Malaysia Airlines. (Malay Mail)