14  theSun | FRIDAY AUGUST 21 2009

business

Cut in operating
expenditure will not
reduce deficit: MIER
KUALA LUMPUR: The cut of 15% of the govern-
ment operating expenditure will not reduce the
budget deficit to the expected 7%, said MIER.
“We will still see a large budget deficit in the
absence of operating expenditure. In fact it would
be even bigger,” said its executive director Datuk
Dr Mohamed Ariff to reporters here.
Mohamed Ariff was met at the sidelines of
the Industry Insights Seminar organised by The
Perdana Leadership Foundation.
He was one of the speakers at the plenary
session of Industry Insights Seminar.
The session was titled “Whither Malaysia’s
Economy? A Bird’s Eye-View of the Malaysian
Economy and Where it is headed”.
He said the government’s revenue could be
much lower than what has been estimated if the
economy continues the current trend.
“So there is a theoretical possibility of the
government running into budget deficit of more
than a double-digit percentage of GDP.”
In addition, the government may have to fork
out more for other expenditure, he said.
“We are talking about re-modelling the economy
and re-amending it. This is a long-term measure
that requires a lot of government expenditure.”
Mohamed Ariff was asked to comment on the
government’s plan to cut operating expenditure
by 15% in the upcoming Budget 2010.
He said the budget deficit will be at 10 to
11% even if there was a cut by 15% in operating
expenditure.
“It is not too large as historically it was 16%
in 1992. But we should not go back to that kind
of level.”
The government needs to stimulate the
economy even if revenue is at a shrinking mode
as the economy is still expected to be sluggish,
growing at 2-3%.
He also said it would not be easy to reduce
the operating expenditure in one go by 15%.
– Bernama

MISC sees higher
operating cost
KUALA LUMPUR: MISC Bhd,
the largest single owner op-
erator of liquefied natural gas
(LNG) tankers, expects higher
bunker rates to increase it
operating cost for the financial
year ending March 31, 2010.
“We now see bunker prices,
which are a major portion of
our cost, moving up,” MISC
chairman Tan Sri Mohd Hassan
Marican said yesterday.
Last year, the bunker price
breached almost US$700
(RM2,450) per tonne, easing
in the middle of last year to
US$200 per tonne and is now
close to US$400 per tonne.
However, the impact is
cushioned by the nature of
MISC’s business, which is
70% on long-term contracts
with major energy companies,
Mohd Hassan said at a press
conference after the com-
pany’s 40th annual general
meeting here.
“As far as being exposed to
volatility of freight rates in the
present downturn, only 30% of
our business is affected.”
Mohd Hassan said MISC
would continue to expand and
grow organically, and consider
merger and acquisition oppor-
tunities when these arose.
On the latest joint venture
to construct an oil terminal
in Tanjung Bin, Johor, Mohd
Hassan said the oil terminal is
expected to come into opera-
tions in 2012.
On its liner business, Mohd
Hassan said MISC will exit
from the Grand Alliance by
end of this year and will focus
on the intra-Asia and Oceania
sectors and built on its halal
routes.
As part of the re-engineer-
ing of the liner business, a total
of 11 vessels were laid off, he
said. “It cost us less to lay off
than to keep them going.”
On other developments,
Mohd Hassan said MISC was
in discussions with China LNG
Shipping (Holdings) Co on a
joint venture but declined to
disclose further details.
For the financial year
ended March 31, 2009,
MISC’s revenue rose 21.9% to
RM15.78 billion from RM12.95
billion previously while net
profit declined by 39.5% to
RM1.53 billion.
This was attributed to
earnings from petroleum,
offshore and LNG businesses
being weighted down by the
highly adverse performance
of the container shipping
division amid lower volume,
depressed rates and high
costs. – Bernama
Great Eastern,
Etiqa cover
H1N1 claims
KUALA LUMPUR: Great East-
ern Life Assurance (M) Bhd will
cover hospitalisation claims
made by its policyholders who
have been hospitalised due to
influenza A(H1N1).
In a statement, its director/
chief executive officer Koh Yaw
Hui said the pandemic disease
was distressing for the commu-
nity. “We would like to dispel all
uncertainties on hospitalisation
claims by affirming that Great
Eastern will compensate our
policyholders who have been
hospitalised due to H1N1.”
Koh, who is also a direc-
tor of Overseas Assurance
Corp (M) Bhd (OACM), said
policyholders of OACM who
had been hospitalised due to
H1N1, would also be accorded
a similar treatment.
Etiqa Insurance Berhad also
said it will entertain claims by
its medical and health policy
holders who are admitted to
hospital for H1N1 treatment.
Its chief executive officer
and director Datuk Aminuddin
Md Desa said in a statement
the measure would come into
force immediately.
“In these difficult times,
we have decided to extend
the cover for the medical and
health policy holders to include
Influenza A(H1N1),” he said,
adding that this would provide
them with physical and financial
protection. – Bernama

Naza expects 40% growth in

superbike sales
PETALING JAYA: Next Bike Sdn Bhd, a
subsidiary of the diversified conglomerate
Naza Group of Companies, expects sale of its
imported superbikes to rise by 40% this year.
Last year, the company, the sole importer
and distributor of the Italian-made Ducati su-
per bikes, sold 150 dual purpose bikes, touring
bikes, street bikes and classic bikes.
“We can expect more orders for these
models but the small allocation given by
Ducati each year is not enough to cope with
demand”, the group’s joint executive chairman
SM Faisal Tan Sri SM Nasimuddin said here
yesterday.
Faisal was confident Next Bikes would be
able to garner a bigger market share here if
the manufacturer increased the quota for the
Malaysian market.
He was speaking to reporters here after
launching the performance inspired Ducati
StreetFighter, a 167kg twin-cylinder super
sports bike which retails between RM141,000
and RM163,000 per unit.
Faisal lamented that Ducati only alloted 12
bikes to Next Bike which was pre-sold even
before the units arrived in Malaysia. “But we
have received orders for more than 15 Ducati
StreetFighters,” he added. – Bernama