No application needed for one-off RM100 Sara aid
Deputy Treasury secretary-general (Policy) Zamzuri Abdul Aziz said the cash aid did not utilise any e-Wallet service as well.
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New Straits Times
an hour ago
- New Straits Times
No move to raise SST threshold for construction sector
KUALA LUMPUR: The government has no plans to raise the Sales and Service Tax (SST) registration threshold for taxable construction services from RM1.5 million to RM3 million, said Deputy Works Minister Datuk Seri Ahmad Maslan. During the Minister's Question Time in the Dewan Rakyat, he said the Works Ministry had not submitted any request to the Finance Ministry to review the threshold, despite requests from the industry. "As of now, there have been no discussions to raise the RM1.5 million threshold. It remains unchanged, and we have no plans to increase it to RM3 million. "This matter falls under the purview of the Finance Ministry. However, we understand the need to consider a revision if necessary. But so far, there has been no request to do so," he said. Ahmad was responding to a question from Abdul Latiff Abdul Rahman (PN–Kuala Krai) on whether the government was prepared to consider the industry's proposal to raise the SST threshold for taxable services, particularly in the construction, rental, and leasing sectors. Currently, construction services are subject to a six per cent service tax. The scope includes all works related to infrastructure, commercial buildings, and industrial facilities. The tax applies when the total value of taxable services reaches RM1.5 million within 12 months, a threshold designed to ease the compliance burden on small and medium-sized contractors. Meanwhile, Ahmad Maslan said the government does not tolerate delays in project delivery. He said companies that fail to complete projects even after two or three approved extensions of time (EOT) would be subjected to Liquidated Ascertained Damages (LAD) fines, calculated based on the number of days delayed. "Delays can cost contractors tens of thousands of ringgit per day. This becomes a serious obstacle. If companies are repeatedly fined for delays, they will not be awarded government projects in the future," he said. He was responding to a supplementary question on how the government handles delayed projects where contractors seek additional costs and EOTs, including the case of the Sungai Durian project, which has already been granted three extensions.
The Sun
5 hours ago
- The Sun
RM100 aid short-term spending booster but not market mover: Economists
PETALING JAYA: Prime Minister Datuk Seri Anwar Ibrahim's announcement of a one‑off RM100 cash handout has lifted sentiment in consumer‑related stocks, but economists caution that the impact on actual spending and equity performance may be fleeting, with deeper structural challenges still weighing on the economy. The initiative, worth RM2 billion, is designed to provide relief to households and channel spending into local goods and services. However, views among analysts and economists are mixed – some highlight modest gains for low‑income groups and small businesses, while others warn the measure may do little to shift broader market fundamentals. Center for Market Education chief executive Dr Carmelo Ferlito was blunt in his assessment, describing the handout as neither transformative for household consumption patterns nor meaningful for equity markets. 'While the measure is costly at the aggregate level, it is not a needle‑mover at the micro level,' he told SunBiz. 'I struggle to see how RM100 can affect consumption patterns in any sensible way. Economically, it hardly has any logic behind it and appears to have more of a political flavour.' Ferlito also raised concerns over the potential inflationary effects of injecting cash into the economy, particularly if such policies become frequent. 'Monetary injections are the real cause of inflation, a permanent and generalised increase in prices due to the quantity of money growing faster than economic output,' he said, adding that such measures risk masking structural issues in household income and consumer demand. From a sectoral perspective, Dr Ida Yasin, economist at Universiti Putra Malaysia, said the RM100 payment is more likely to generate a temporary boost for retailers and wholesalers rather than driving sustained gains in the stock market. 'This voucher is to boost demand for goods and services in Malaysia, not so much the demand for stocks,' she said. 'Retail and wholesale demand could rise temporarily, especially in essentials like food and household goods, but most stock market movements depend on business fundamentals.' Ida stressed that the handout's impact would likely fade after its expiry in December, underscoring the short‑term nature of the initiative. 'It benefits sellers, wholesalers and producers, from vegetables to chicken, but the up‑and‑down movements in the stock market are quite normal and not directly tied to such measures,' she said. In contrast, Prof Geoffrey Williams, economist and founder of Williams Business Consultancy, sees value in the handout for low‑income households, noting its multiplier effect on domestic consumption. 'RM100 does not sound like much, but it is a 6% boost for someone on minimum wage of RM1,700. For a family of four adults in the B40 group, that's about a 6–7% rise in monthly income,' he explained. Williams estimated the RM2 billion programme could generate RM6 billion in consumption through multiplier effects, providing a small but notable stimulus to economic growth in the second half of the year. 'This will particularly help SMEs in local communities. It won't harm the fiscal deficit because it's funded by subsidy rationalisation savings,' he said. Williams also suggested the initiative could act as a pilot for a more ambitious social welfare reform. 'If this evolved into a monthly universal basic income, it could be a game‑changer for social policy. Universality reduces costs and complexity, and future versions could be made more progressive,' he added. Despite the initial rally in consumer‑linked counters on Bursa Malaysia, analysts caution that sentiment‑driven gains may not be sustainable without underlying earnings growth. Ferlito pointed to external headwinds, including global political tensions and slower economic momentum, as key drivers of investor caution. 'What emerges here is the concern about the economy slowing down due to international tensions, both political and economic,' he said, warning against overestimating the handout's role in market performance. Ida echoed this, noting that investors should watch core consumption data, such as household spending trends within GDP, to gauge any lasting effects. 'Most of the time, it depends on fundamentals rather than short‑term cash injections,' she said. With the cash handout set to conclude by year‑end, attention now turns to whether Malaysia will adopt similar measures in Budget 2026. Williams believes the government should study the current initiative's outcomes to guide future policy design. 'The most important thing is to learn lessons about the impact so that Malaysia can move to a regular monthly payment. Hopefully this can be announced in Budget 2026,' he said. For now, economists agree that while the RM100 handout provides short‑term relief and a modest consumption boost, it does little to address structural income gaps or long‑term growth prospects for consumer stocks. As markets digest the announcement, the focus will likely shift back to corporate earnings, inflation trends and global economic conditions heading into 2026.
The Star
5 hours ago
- The Star
Nestle's outlook brightens with wage growth, govt support measures
PETALING JAYA: Things are starting to look up for Nestle (M) Bhd , the purveyor of Milo chocolate malt drinks and Maggi noodles, as lower commodity prices, a combination of wage growth and government support measures and the decline of boycotts drove earnings in the second quarter ended June 30, 2025 (2Q25). While analysts remain cautious of the company's outlook, CIMB Research, which has maintained a 'hold' call on the stock with a target price (TP) of RM86.20, expects gradual demand recovery as consumer sentiment normalises amid fading boycott impact as well as likely improvements in exports leveraging on its place as Nestle SA's global halal hub. It believes the share valuation of 35.9 times financial year ending Dec 31, 2025 (FY25) price-to-earnings (PE) has priced in the weak near-term outlook, driven by lower sales volume assumptions amid prevailing soft consumer sentiment and global uncertainties, noting the inelastic demand for its largely consumer staple product offerings, strong brand equity, and diversified product portfolio across key food categories. Affin Hwang Research noted that the 2Q25 financial performance signals that the worst could probably be over, with the boycott pressures easing meaningfully, and has upgraded the stock to a 'buy' call and a TP of RM95 from RM85, implying 42 times PE. A stronger ringgit together with easing commodity prices may help lift the company's margins in the coming quarters. It pointed out that the RM100 credit given through the MyKad to all Malaysians aged 18 and above would also support higher sales in the second half of the year, as many Nestle products comes under the MySara programme. RHB Research said revenue growth, which returned in 2Q25, could be sustainable premised on the company's effective marketing engagements to stimulate consumer spending and the normalising sentiment on its brands. It has upgraded the stock to a 'buy' call from 'neutral' and raised the TP to RM95 from RM77 as the research house thinks that the comeback 'is timely in view of the pick-up in investor appetite for defensive stocks amidst uncertain market conditions.' 'We also expect a margin recovery ahead, on easing commodity prices. 'Post results, we raise FY25 to FY27 earnings by 8%, 7%, 3% after imputing higher sales growth and gross profit margin assumptions,' it said. UOB Kay Hian Research, which has maintained a 'hold' recommendation but with a higher TP of RM82 from RM76, said earnings for FY25 and FY26 has been lifted by 5.6% and 5.2% respectively to factor in higher sales and margin assumptions. 'Nestle had undertaken a price exercise adjustment in July 24 for certain products by 5% to 6% that appears to have largely protected its margins against higher input cost. 'Coupled with its hedging, margins should sustain over the near term,' it added.
