KUALA LUMPUR: The offer by a Chinese bank to issue Panda bonds in China for Malaysia is a positive sign that foreign countries and foreign investors are confident with the new government under the leadership of Prime Minister Tun Dr Mahathir Mohamad.
Finance Minister Lim Guan Eng said the level of interest and confidence shown by foreign countries in providing loans to the new government was at a level never been seen before, when compared with the previous administration.
“Previously, we were borrowing at 100 basis points higher than the market rate, but now, it (the rate) is much lower for Japan (Samurai bonds) where the highest coupon rate is 0.65 per cent and can be lower when it is being issued.
“This is in comparison with the previous government (via Goldman Sachs) which was paying up to 100 basis points higher than the market rate,” he told reporters after delivering his keynote address at the 12th Malaysian Property Summit 2019 here yesterday.
Recently, China’s ambassador to Malaysia Bai Tian said China Construction Bank had proposed to issue Panda bonds in China for Malaysia to help ease the country’s financial stress.
Lim said the proposal had been presented to him, and the prime minister and Cabinet were informed, but it was still in discussions.
Meanwhile, the finance minister said the government was expected be fully back on track in three years.
“This did not mean the economy would stay stagnant but it would be continuously improving itself to become an Asian economic tiger again.
“We will retake our rightful place after the 1Malaysia Development Bhd (1MDB) scandal but bear in mind we have lost almost RM100 billion and it is not easy to recover (from this). After a time frame of three years, we are optimistic that we can achieve this,” he said.
Touching on the property market, Lim stressed that with all the incentives announced by the government, including stamp duty waivers, developers should be feeling optimistic.
Asked on the real property gains tax (RPGT) on profit from disposal of property after five years of ownership, Lim clarified that the imposition of five per cent was on the profit gained from a disposal and not on the purchase price.
“If you do not make any profit, no problem and the one-off exemption still applies. This means if you have a property and you make a profit, you are allowed a one-time exemption.
“But if you have a second property, you have to pay (the tax),” said Lim, adding that owners could choose the property on which the RPGT would be imposed.
Meanwhile, Lim said negotiations on the East Coast Rail Link (ECRL) project was expected to be finalised before April.
“We feel and maintain the best of hope that this matter can be resolved and they (China) can meet our request for a price reduction.
“The cost reduction requested is based on a rate that can be borne by Malaysia…otherwise, we will be faced with burgeoning debts,” he said.
Lim added any negotiations must also be mindful of the good relationship between Malaysia and China. –Bernama
