Latest news with #StarBiz
The Star
5 days ago
- Business
- The Star
Malaysia faces new US risk from BRICS ties
PETALING JAYA: Malaysia may have to grapple with fresh uncertainties amid a decision by the United States to impose an additional 10% default tariff on any country seen as aligning with 'the anti-American policies of BRICS.' This development comes as the July 9 tariff deadline looms and follows the recent BRICS Summit in Brazil, which was also attended by Prime Minister Datuk Seri Anwar Ibrahim. However, earlier comments by Anwar last month indicated that tariffs talks between Malaysia and the United States had proceeded smoothly. This latest 10% tariff threat – aimed at countries perceived to be closely aligned with BRICS – contributed to weakness on Bursa Malaysia yesterday, with the FBM KLCI declining 12.65 points, or 0.82%, to 1,537.54 at the close, snapping nine consecutive days of gains. The broader market was negative, with 754 losers, 260 gainers and 446 counters unchanged. Socio-Economic Research Centre executive director Lee Heng Guie said the latest tariff threat by US President Donald Trump is a continuation of an evolving trade policy narrative. 'It looks like Malaysia has to live with this uncertainty for the time being. 'If so, the country will have to brace for a situation where, under the Trump administration and maybe even after that, US tariffs become the new norm and are here to stay,' Lee told StarBiz. Companies may need to reconfigure supply chains to adapt to this new reality, as Malaysia's geopolitical neutrality will likely be further tested in the days ahead, he added. BRICS refers to a forum for cooperation among a group of leading emerging economies. Last year, the group expanded beyond its original five members – Brazil, Russia, India, China and South Africa – to include Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates. The bloc – aimed at elevating member nations' global influence and serving as a counterweight to the United States and Western Europe – now represents more than half of the world's population. CGS International Securities head economist Ahmad Nazmi Idrus said the proposed 10% tariff is a negative development for Malaysia. 'Currently, we expect Malaysia to get a 10% tariff (status quo) and if the tariff gets higher than this, it will be negative for the economy. 'That being said, there needs to be a definition on what 'alliance with BRICS' actually means. We are partners and not a full member, but so is Vietnam,' Ahmad Nazmi said. Sunway University's professor of economics Yeah Kim Leng noted that many countries have strong trade relationships with BRICS and are unlikely to be deterred by the 10% tariff threat, especially if the economic and trade benefits with the group outweigh the cost of a US market loss. Meanwhile, SPI Asset Management managing partner Stephen Innes said Malaysia is seen to eventually be impacted by Trump's proposed 10% BRICS-aligned countries in due course. 'With deep trade integration and strategic exposure to China, Malaysia could easily be swept into the penalty net – as a collateral casualty in Washington's increasingly binary view of global alliances. 'Exporters in key sectors like electronics and midstream manufacturing face heightened uncertainty, especially if US buyers start rerouting orders preemptively.' However, beyond trade, Innes said the bigger risk is reputational. 'Being lumped, even implicitly, into the BRICS orbit could chill foreign investor appetite just as Malaysia is trying to attract fresh capital. This is no longer about tariff math – it's about alignment optics. 'If neutrality starts looking like silent endorsement in Trump's framework, Malaysia may need to rethink how it positions itself in a world where sitting on the fence can still get you soaked,' he added.
The Star
6 days ago
- Business
- The Star
Rising ESG adoption in real estate sector
PETALING JAYA: Property experts are seeing a rise in environmental, social and governance (ESG) adoption within the real estate sector, driven by heightened awareness among industry stakeholders. Zerin Properties chief executive officer Previn Singhe noted that ESG adoption has been 'cascading across Malaysia's property sector,' particularly in the Klang Valley, Penang and Johor. 'This isn't merely regulatory compliance – it's a fundamental market shift. Tenants, investors and financiers now demand sustainability as table stakes,' he told StarBiz. By asset class, Previn said the commercial segment (comprising the office, retail and hotel sub-sectors) was the most advanced when it came to ESG adoption, as it was driven by investor mandates and tenant demand. 'Key ESG practices include energy optimisation, electric vehicle charging, green leases (office and retail), low-carbon materials and enhanced indoor air quality monitoring – all of which are increasingly expected in premium assets.' He added that healthcare facilities were investing in high-efficiency heating, ventilation and air conditioning upgrades; air filtration systems that improve indoor air quality; and building automation systems that optimise temperature and airflow in real-time. 'Meanwhile, in the industrial/logistics sectors, which are being driven by global supply chain requirements, ESG is gaining ground through rooftop solar, green tenancy clauses and tracking of resource use especially in export-oriented industrial parks.' As for the residential segment (comprising both landed and strata developments), Previn noted that developers like Gamuda Bhd , Sunway Bhd and Sime Darby Property Bhd are integrating ESG into landed homes through solar panel infrastructure, bioswales and sustainable landscaping. 'In strata properties, the management corporations are beginning to adopt waste separation and water-saving retrofits, though progress is often limited by fragmented ownership and funding constraints. 'Individual private landed homeowners are also tapping into solar panel incentives under Tenaga Nasional Bhd 's Net Energy Metering 3.0 scheme to reduce energy bills.' Olive Tree Property Consultants chief executive officer Samuel Tan said ESG adoption within the property market has been gaining traction over the years. 'Going forward, it will become the norm rather than a mere white-washing or marketing gimmick. 'Beyond ESG adoption in the construction and development stage, there will be further integration (of ESG practice) right from the acquisition and planning phase, to the eventual stages of building completion, maintenance, leasing and asset management.' Olive Tree Property Consultants executive director Tan Wee Tiam, meanwhile, said it was not surprising that ESG adoption had gained prominence within the real estate market. 'ESG adoption in real estate development ensures long-term compliance of environmental integrity and conformity of ethical practice. 'Such practice will definitely become more prevalent moving forth in view of the challenges such as global warming and extreme temperature changes, rapid building obsolescence due to lousy construction method and sloppy maintenance, lack of ethical and proper governance control in the whole development cycle. 'All the malpractices, if not curtailed in the initial stage of the development cycle, the adverse impact will eventually manifest itself subsequently. The risk to the buyers and investors will be very high and likely become a costly one.' Going forward, Previn said the outlook for ESG adoption within the real estate industry remains promising. 'ESG is becoming increasingly embedded in both the strategy and compliance frameworks across the real estate sector. 'Over the next three-to-five years, we anticipate deeper integration of ESG principles into investment decisions, asset management and day-to-day operations.' Previn believes that there will be stronger policy alignment, including mandatory disclosures, green building codes and carbon pricing mechanisms. 'There will also be improved digitalisation of ESG data, with tech tools enabling real-time monitoring of energy use, emissions and indoor air quality.' He also expects to see a rise of ESG-linked financing such as green loans and sustainability-linked bonds tailored for real estate players. 'There will be a broader adoption beyond prime assets, reaching into mid-market residential, industrial parks, logistic hubs and especially in energy-intensive sectors like data centres, which are expanding rapidly across Malaysia. 'We also see continued use of global ESG benchmarking platforms like the Global Real Estate Sustainability Benchmark which (provides ESG assessments and sustainability benchmarks for commercial real estate and infrastructure), particularly among real estate investment trusts and fund managers, to assess performance, identify gaps and communicate progress to investors.' However, Previn emphasised that capacity building remained critical. 'This is particularly among small and medium enterprises, property managers, valuers and strata communities to ensure ESG integration goes beyond compliance and becomes embedded in valuation, leasing strategies and long-term asset planning.'
The Star
27-06-2025
- Business
- The Star
Cautious outlook for retail sector in 2H25
PETALING JAYA: Industry experts remain cautious about the outlook for Malaysia's retail industry in the second half of 2025 (2H25), amid ongoing global and domestic pressures. Malaysia Shopping Malls Association president Phang Sau Lian noted that geopolitical tensions and tariff wars have redirected more foreign businesses and goods to Malaysia. 'While this presents opportunities, it also intensifies competition. Local retailers and mall operators must improve competitiveness and productivity to stay resilient,' she told StarBiz. Domestically, Phang said the rising cost of doing business continues to weigh heavily on the sector. 'The upcoming expansion of the sales and service tax (SST) next month to cover rental and leasing of commercial spaces, construction services, beauty services and selected food items is particularly concerning. 'These areas are core to mall operations and tenant services. The added tax burden could lead to margin erosion, delayed tenancy, higher consumer prices and, ultimately, inflationary pressure across the retail sector.' Malaysia Shopping Malls Association (PPKM) president Phang Sau Lian hopes to bring more new players and brands into local retail market Phang said additional cost pressures from electricity tariff hikes, higher minimum wages and subsidy removals are forcing many retailers and mall operators to cut back on marketing and expansion plans, which will impact overall mall vibrancy. 'At the same time, concerns are rising over the labour market, especially with recent announcements of staff layoffs by key companies like Petroliam Nasional Bhd, which could reduce consumer confidence and spending,' Phang said. Sunway Malls chief executive officer HC Chan concurred that businesses will adopt a cautious stand, given that cost pressures remain elevated, in particular due to the expanded SST and a host ofupcoming national rationalisation measures. 'Certainly, consumer sentiment is foreseen to be continuously muted and subdued, given the heavy presence of uncertainty. It is certainly a very challenging time for all. 'However, there are bright spots in the retail sub-sectors, as some Asia-based intellectual property-related toys and homegrown food and beverage (F&B) brands have shown resilience and bucked the trend. 'They have fared tremendously well and registered high growth. These categories are expected to continue to drive retail sales performance.' On the sector's performance so far, Phang said the retail industry began 2025 on a cautious footing. 'Chinese New Year sales were softer due to the short festive gap following Christmas and year-end promotions, limiting consumer spending recovery. 'Hari Raya sales also fell below expectations, as many households prioritised back-to-school expenses that coincided with the festive season, tightening overall disposable income.' Chan concurred that businesses will remain cautious, especially with cost pressures staying elevated – notably due to the expanded SST and a host of upcoming national rationalisation measures. Phang said a major challenge has been the continued rise of unregulated online platforms offering ultra-low prices without the same tax or compliance obligations, putting physical retailers at a disadvantage. 'At the same time, the rising cost of doing business – driven by electricity tariff hikes, subsidy rationalisation and higher wage commitments – has placed significant pressure on profit margins, particularly for small and mid-sized retailers.' She added that global uncertainties such as tariff hikes and supply chain disruptions have further impacted business strategies, prompting a shift toward market diversification and operational efficiency. 'Despite these challenges, retail segments such as F&B, entertainment and lifestyle experiences have remained resilient, particularly in malls that have invested in asset enhancement, refreshed tenant mix, targeted consumer engagement activities and continuous effective marketing programmes.' On the performance of the retail industry in 1H25, Chan said the sector faced strong headwinds from two fronts, namely rising business costs and lacklustre consumer spending, both of which had dampened retail performance. 'With Chinese New Year falling earlier in January, the shortened sales period and the lower-than-expected Hari Raya sales performance had left the retail sector without much buffer or room to manoeuvre. 'As the second quarter saw the escalation of the tariff wars, the volatility and uncertainty sent shockwaves across the globe, fuelling further cutbacks on discretionary spending by corporations and consumers,' he said. Nevertheless, Chan said Malaysia's tourism sector has been a bright spot for the country and a boon for the retail industry. 'There has been a 21% year-on-year (y-o-y) increase in visitor arrivals for the first four months of this year. This has been a major catalyst. 'Sunway Malls is seeing some benefits of these arrivals, depending on the mall's locality, with Sunway Velocity Mall seeing a large influx of Chinese travellers.' For Sunway Putra Mall, Chan said the group is seeing a significant increase in Indian travellers, as well as other nationalities at its Sunway Pyramid mall. 'However, the retail industry is predominantly driven by domestic consumption. Tourism (impact) is still very location-specific,' he says. Phang also acknowledged that Malaysia recorded a strong increase in tourist arrivals in early 2025, with 6.7 million international visitors in the first two months alone - a 31.3% y-o-y increase. 'This growth has been supported by visa-free access for Chinese nationals and continued visa exemptions for Asean and selected Western countries. 'While the increase in arrivals is encouraging, the boost to retail spending has been moderate and selective.' Phang noted that malls located in prime tourism zones – such as city centres, hotel districts and border-entry areas – have seen some uplift, particularly in categories like wellness, souvenirs and F&B. 'However, the overall impact on nationwide retail has been limited. There are two main reasons: first, a substantial number of Malaysians are travelling overseas and they tend to spend more while abroad, diverting domestic consumption. 'Second, not all tourist arrivals translate into meaningful spending. Many are short-stay visitors or budget-conscious travellers. 'In short, while tourist arrivals have improved, the retail sector has seen only modest gains, concentrated mainly in key tourist areas. 'Broader retail growth is still driven by domestic demand,' she concluded.
The Star
24-06-2025
- Business
- The Star
Cautious spending likely in 2H
PETALING JAYA: The inflation rate, which hit a 51-month low of 1.2% last month, will certainly raise the question of whether the time is ripe for the central bank to cut interest rates in the near future. However, it is also important to consider if lower inflation rates might continue into the rest of the year, particularly as the expanded sales and service tax (SST) takes effect next month. Economist Geoffrey Williams said he expects inflation to come out broadly at or below 2%, adding, however, that there are still risks due to subsidy rationalisation, the impending SST and ongoing geopolitical uncertainties. 'While I expect the domestic factors to affect inflation only modestly, the geopolitical impact on supply chains and oil prices is difficult to predict. Nonetheless, with domestic inflation holding low and steady, it provides the green light for the RON95 subsidy rationalisation,' he told StarBiz. Tradeview Research senior analyst Tan Jia Hui, meanwhile, said that core inflation, which doesn't include volatile items like fuel and food, is slightly elevated. 'This is mainly because wages have gone up and some businesses, especially in services, are passing on the higher cost to consumers. As the economy gradually recovers, this trend is likely to continue,' she said. However, Tan cautioned that overall domestic demand is not too strong, noting that the government is still subsidising essentials like fuel and selected food items, which helps keep overall inflation in check. 'Some of the key risks to this outlook include the potential weakening of the ringgit in the second half of this year (2H25) if global risk aversion spikes. Weather-related disruptions could push up food and commodity prices and higher prices from key trade partners could also lead to more imported inflation,' Tan said. According to the Statistics Department, the consumer price index (CPI) stood at 134.4 last month, compared with 132.8 a year ago. It said the food and beverage group, which contributes 29.8% to the CPI, rose more slowly at 2.1% in May 2025 versus 2.3% in April 2025. While the food-at-home subgroup did not register any changes for May 2025 compared to April 2025, the food-away-from-home subgroup was up 4.4% versus 4.3% in the preceding month. A number of other groups had recorded a higher increase in May compared to the month before, including restaurant and accommodation services, health and furnishings, household equipment and routine household maintenance. The information and communication and the clothing and footwear groups remained in negative territory, registering 5.2% and 0.2% declines, respectively. As the SST deadline draws closer, Williams said the impact of the tax regime will be very moderate and most people will be unaffected. Tan, who expects some impact, said consumers, especially in the M40 group, will reduce their discretionary spending, leading to a more cautious consumption pattern in 2H25. She added cost pressures are likely to grow, diminishing purchasing power and discretionary spending. 'However, essentials remain largely unaffected, so the broad-based impact on cost of living is expected to be modest. For businesses, firms in the services and logistics sectors may experience higher operating costs like higher rental or leasing, especially those with limited ability to pass through these costs,' Tan explained. For small and medium enterprises, she said, the cost of compliance and potential loss of competitiveness could be a concern. 'On the positive side, clearer tax treatment and improved government revenue could enhance fiscal consolidation credibility, indirectly supporting business sentiment,' she said. With rising geopolitical and trade uncertainties, disruptions in raw materials or intermediary goods may also increase input costs, higher freight and shipping costs. Tan said a potential rise in commodity prices like oil, palm oil and metals due to conflict-related supply constraints can further add inflationary pressures. 'The ringgit could come under pressure if global risk sentiment deteriorates, making imports costlier. Consumers may face higher prices on imported goods and imported inflation via the weak ringgit. Businesses may face margin pressures, particularly export-reliant sectors sensitive to US-China dynamics. On the flip side, trade diversion could benefit Malaysia in select sectors such as semiconductors, and electrical and electronics if it attracts more supply chain relocations.' Meanwhile, with inflation rates at a much lower level, it is safe to say that there is less pressure on Bank Negara to cut rates as it sees more stability. Kenanga Investment Bank Bhd said while market consensus has implied that the central bank might impose one or two rate cuts in 2H25, it maintains that interest rates will remain unchanged. In a report, the research house said inflation is expected to rise gradually on the back of structural reforms, while economic growth remains resilient. 'The current rate level continues to attract foreign capital into the bond market. That said, should growth fall below 3.5% and sequential quarter-on-quarter gross domestic product (GDP) prints turn negative, the case for a rate cut would strengthen,' it noted. Separately, CIMB Investment Bank Bhd said it expects the Overnight Policy Rate (OPR) to be cut in July, as Malaysia's exports contracted 1.1% in May 2025, falling short of expectations and reflecting intensifying external headwinds. 'Given subdued inflation trends, coupled with weak external trade, we maintain our call for Bank Negara to cut the OPR by 25 basis points to 2.75% at the upcoming Monetary Policy Committee meeting to support growth. 'However, Bank Negara may prefer to assess additional key upcoming data. This would be consistent with the central bank's data-dependent approach to monetary policy.'
The Star
16-06-2025
- Business
- The Star
Powering the future of email marketing
Petaling Jaya: Despite the rapid expansion of new channels and the rise of social media, email marketing still plays a crucial role in today's digital marketing landscape. 'Email marketing has been around for a long time, and in my opinion, it isn't going anywhere,' Jeffri Shahul Hamid, founder of Malaysian AI-powered email marketing platform Enginemailer Sdn Bhd, told StarBiz. 'Just like the Internet, it continues to evolve.' The advent of new technologies has enabled more advanced and optimised email marketing methods, providing marketers tools to better engage customers and drive conversions. 'It's no longer just about uploading a mailing list and sending a million emails, but rather an emphasis on quality over quantity,' said Jeffri. Strong database management systems now allow businesses to understand audiences more deeply, tailoring and targeting them based on distinct interests and profiles. User-friendly drag-and-drop interfaces and templates offer accessible ways to produce polished, well-made email newsletters. AI technology can help craft effective subject lines and generate content, as well as deliver real-time analytics and insights to inform business decisions. Additionally, email marketing platforms such as Enginemailer have the ability to automate and integrate various systems, offering synchronisation and interoperability with preferred customer relationship management software and social media platforms. Jeffri noted that while email marketing is not typically used as a top-of-funnel strategy to create awareness and generate leads, it is highly effective in steering the customer journey. Through emails, businesses have a wealth of opportunities for communicating, engaging, and nurturing the customers towards making purchases. For instance, emails can be used to send automated notifications, reminders, confirmation messages, birthday month promotions, which are customised and specific to each user. 'Email is not the only marketing channel, but it is an integral part of the whole customer experience,' he said. 'Our job is to make that part easier for businesses.' As a SaaS (software as a service) platform, Enginemailer provides database management, email marketing and transactional email for businesses of all sizes. According to Jeffri, the platform was created to empower more micro, small and medium enterprises and small businesses with email marketing and communication tools that only larger companies typically have access to. 'Our customers range from freelancers who send 100 emails on a monthly basis to enterprises that send 50 million emails a month,' he said. The platform uses a subscription-based pricing model, with a 'free forever' tier where users can send up to 10,000 emails per month at no cost. In contrast to other email marketing software services, Enginemailer's paid subscriptions plans are priced based on the number of emails sent, rather than the size of a customer's contact database. Customers also have the flexibility to upgrade and downgrade their existing plans at any given time to suit fluctuating needs for different seasons. 'It can be a cost burden on smaller companies that want to efficiently maintain their database,' he explained. Due to this, one of Enginemailer's notable features is an unlimited database for all users. 'As a company, your database is one of your biggest assets, so this is our way of giving back to smaller businesses and helping them grow.' On what makes a successful email marketing campaign today, the founder said relevancy is key. 'Almost anyone can run an email newsletter now. To stand out, you need to be sending the right information to the right people, giving them the content they are looking for using targeted techniques,' he said. 'With emails, you have an average of 10 seconds of the reader's attention. You cannot be putting out long, complex emails with all the information, expecting them to find the specific section that's relevant to them.' Strategies for email marketing should therefore be geared towards simplicity and personalisation. Beyond this, the importance of data privacy cannot not be overstated. 'Protecting your customer's data is essential for building trust in your brand,' said Jeffri. For this reason, Enginemailer's platform is General Data Protection Regulation compliant, and the system is designed to give email subscribers greater control by allowing them to access, correct or delete their personal data at any time. Lastly, a focus on quality-over-quantity is needed to more effectively reach readers and boost conversion rates, he added.
