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theSun

| THURSDAY MAY 21 2009

business

Inflation in April rises 3%
KUALA LUMPUR: Inflation in Malaysia rose 3% in April compared to the same month last year, the Statistics Department said yesterday. When compared to the previous month, it declined by 0.2%. Meanwhile, from January to April this year, the Consumer Price Index (CPI) increased by 3.5%, the department said in a statement. It said the index for food and non-alcoholic beverages for April compared to the same month last year, showed a high percentage change of 7.5%, while that for non-food increased by 0.9%. The department said the 3.5% rise in the CPI was brought about by increases observed in the indices of all the main groups, except transport, clothing and footwear as well as communication, which decreased by 2.1%, 0.7% and 0.6% respectively. Notable increases among the main groups with high weights were food and non-alcoholic beverages, which increased 8.9% while housing, water, electricity, gas and other fuels rose 1.5%, Bernama reports. Other increases were for alcoholic beverages and tobacco (8.3%), furnishings, household equipment and routine household maintenance (4.6%), restaurants and hotels (4.3%), miscellaneous goods and services (3.4%), education (2.6%), health (2.6%) and recreation, services and culture (1%). Compared with the previous month, decreases were shown in three main groups, namely food and non-alcoholic beverages, which declined 0.4% while transport and miscellaneous goods and services, eased 0.2% respectively. The department said increases were shown for clothing and footwear (0.6%), furnishings, household equipment and rountine household maintenance (0.2%), health, education, restaurants and hotels by 0.1% respectively.

EON Bank targets 50,000 new card holders within a year
KUALA LUMPUR: The EON Bank Group is targeting 50,000 customers within a year for its newly-launched GSC-EON Bank Visa credit card which provides various forms of savings and privileges for cinemagoers at the Golden Screen Cinemas (GSC) outlets. Speaking at the launch, EON Bank Group head of consumer banking Michael Lor said the credit card is a result of the synergy between the bank, Golden Screen Cinemas Sdn Bhd and Visa. Lor said EON Bank was expecting a significant take-up and spending on its credit cards. “For the first quarter of this year, spending on our credit cards grew by about 3% year-onyear, which is above the industry average of 1%,” he said. Non-performing loans on cards has also been on a decline since March, he said. GSC chief executive officer Koh Mei Lee said there was a lot of potential and growth opportunity for the newly launched card. “We anticipate the movie industry to remain resilient despite the growing competition,” Koh said. Last year, GSC generated over RM200 million in sales revenue across 23 cinema locations, out of which over 11% was paid via credit card. “As for this year, we hope to maintain our last year’s performance,” she said, adding that the company was planning to expand its cinema screens. GSC operates 161 cinema screens in 23 locations nationwide which include Klang Valley, Sungai Petani, Ipoh, Seremban, Malacca, Batu Pahat, Johor Baru, Kuantan and Kota Kinabalu. Koh said the company’s flagship outlet in Mid Valley Megamall was also the largest mulitplex in Asia currently with a total of 18 screens. “We will be adding three screens in Alamanda, Putrajaya, eight new screens in Tropicana, four new screens in Puchong and nine new screens in Kuantan by this year. Total investment for these screens will be about RM30 million.” – Bernama

Bank sees no impact from PEDA’s call
KUALA LUMPUR: EON Bank Group does not see any impact on its insurance business from the call by the Proton Dealers Association Malaysia (PEDA) for a boycott if the General Insurance Association of Malaysia implements a direct rebate for motor insurance. EON Bank’s head of consumer banking Michael Lor said as the bank is offering both takaful and conventional insurance products, such a move will have no direct consequence on its business. “Customer will decide if they want to take up takaful or conventional products,” Lor told reporters on the sidelines of the GSC-EON Bank Visa credit card launch yesterday. It was recently reported PEDA was against the direct rebate for motor insurance, saying it will have an adverse impact on the automotive eco-system, particularly the dealers’ network. PEDA warned insurance companies that it will call for a boycott if the proposed direct automotive insurance rebate, which has been approved by Bank Negara Malaysia, is implemented, Bernama reports. For years, new and used car dealers have been acting as agents to general insurers. The proposal will see these agents being bypassed from enjoying the commissions gained by providing the service to the public and financial institutions.

Great Eastern posts double-digit growth in Q1
by Jonathan Mah
newsdesk@thesundaily.com

PETALING JAYA: In spite of the economic turmoil that has plagued most of the industry, Great Eastern Life Assurance (Malaysia) yesterday announced very strong double-digit growth in the first quarter of this year. Speaking at the Life Planning Adviser (LPA) Programme graduation ceremony yesterday, director & chief executive officer Koh Yaw Hui said the company achieved RM170 million in total weighted new business premiums this first quarter, up from RM 107 million for the same period last year, which translated into 59% growth. Koh said an early evaluation of April accounts revealed even greater growth compared with the first quarter. Riding on the back of these

strong figures, Great Eastern Life Assurance targets RM800 million in total weighted business premiums for this year. Key drivers towards this target include the Agency Transformation Project, of which the LPA Programme is a part. “The company’s core strategy for this year is to keep enhancing the professionalism of the agency force through its Agency Transformation Project, as they are our strongest distribution channel,” said Koh. The 348 Life Planning Advisers who graduated yesterday were part of an eight-module programme which was designed to enhance agents’ efficiency and increase their competitive edge in order to meet the expectations of increasingly demanding customers. The modules revolve around the four fundamental pillars of financial planning, namely

protection, education planning, retirement planning and estate planning. This is the second batch of graduates since the programme’s inception last year. To date, more than 600 agents have been conferred the title. Koh was optimistic about their ability to perform, and said, “The market is still huge in Malaysia. With only 42% of penetration rate, agents will have a whole wide world of opportunities to tap into”. Additionally, with the recent announcement on the liberalisation of the financial services sector, Koh said that in upcoming few months, they will be formalising a bancassurance partnership with OCBC Bank, the parent company of Great Eastern Holdings, which wholly owns Great Eastern Life Assurance.

Moody’s reviews nine M’sian banks for possible downgrade
KUALA LUMPUR: Nine Malaysian banks have been placed on review by Moody’s Investors Service for possible downgrade of their deposit and debt ratings. The banks concerned are AmBank (M) Bhd, CIMB Bank Bhd, CIMB Investment Bank Bhd, EON Bank Bhd, Hong Leong Bank Bhd, HSBC Bank Malaysia Bhd, Malayan Banking Bhd, Public Bank Bhd, and RHB Bank Bhd. “The review of their debt and deposit ratings will look at the extent to which Malaysia’s ability to provide support to its banking system, if needed, is converging with the government’s own debt capacity as a result of the ongoing global economic and credit crisis,” said Moody’s vice-president and senior analyst Christine Kuo. At present, the deposit and debt ratings of the nine banks on review receive between one to five notches of systemic support, the credit ratings firm said in a statement here yesterday. “Moody’s believes most governments are at least as likely, if not more likely, to support their banking systems as they are to service their own debt – a view that has traditionally led to bank ratings often benefiting from significant uplift due to systemic support,” Kuo said. “However, as the financial crisis continues, the capacity of a country and its central bank to support its banks converges with, and is increasingly constrained by, the government’s own debt capacity,” she said. As such, Moody’s will be reassessing the level of systemic support for the banks listed above to determine whether the systemic support they receive needs to be more closely aligned to the government’s local currency bond rating, Kuo said. “Moody’s will review the specific circumstances of Malaysia to determine the appropriate systemic support for Malaysian bank ratings and the implications for the nine banks that have been identified as being potentially affected.” Factors that Moody’s will consider in its assessment of systemic support include the size of the banking system in relation to government resources, the level of stress in the banking system, the foreign currency obligations of the banking systems relative to the government’s own foreign exchange resources, and changes to the government’s political patterns and priorities. During the recent global crisis, the Malaysian government implemented a number of preemptive measures to ensure the stability of the banking system, including the provision of a blanket guarantee until December 2010 to all local and foreign currency deposits with all domestic and locally incorporated foreign banking institutions. – Bernama