In today’s edition of Evening 5 — AMMB Holdings and MetLife are proposing to sell their insurance and Takaful businesses to Great Eastern for approximately RM1.12 billion. Meanwhile, Astro Go Shop is set to close shop on Oct 11.
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00:04 AMNB Holdings and MetLife International Holdings are proposing to divest their jointly-owned
00:09 insurance and takaful businesses to Singapore's Great Eastern Holdings for approximately
00:14 RM1.12 billion. Great Eastern is a unit of OCBC Bank. AMNB's wholly-owned AMAB Holdings owns 50%
00:22 minus one share in M MetLife Insurance and 50% plus one share in M MetLife Takaful,
00:28 with the remaining stake in both units owned by MetLife. The plan is for Great Eastern Life
00:33 Assurance Malaysia and Great Eastern Takaful buying 100% share capital in M MetLife Insurance
00:39 and M MetLife Takaful. Post-acquisition, both M MetLife Insurance and M MetLife Takaful will be
00:45 merged and integrated with Great Eastern Life Assurance and Great Eastern Takaful, respectively.
00:50 According to AMNB's BOSS filing, the proposal will also see these four insurance units entering
00:55 into exclusive 20-year bank assurance and bank takaful agreements for the distribution of life
01:01 insurance and family takaful products through the distribution network of AMNB's banking
01:06 subsidiaries. In a statement, AMNB Group CEO Dato' Sulaiman Muhammad Tahir said that the
01:12 synergistic integration will provide the bank with the advantage of securing economies of scale that
01:17 will translate into superior customer value, enhanced by its combined and complementary
01:22 capabilities in product design, digital innovation and distribution expertise.
01:27 According to MetLife and M MetLife's websites, their strategic partnership can be dated back to
01:32 April 2014, when MetLife took up half of the shareholdings in M Life Insurance and M Family
01:38 Takaful at a price of US$812 million or US$249 million. The proposal is subject to, amongst
01:46 others, the prior written approval of Bank Negara and/or the Minister of Finance and the Monetary
01:51 Authority of Singapore.
01:52 The World Bank reduced its forecast for Malaysian economic growth as measured by gross domestic
02:02 product to 3.9% this year from 4.3% projected previously amid substantial deceleration in
02:09 external demand. However, the bank raised its 2024 projection for Malaysian GDP to grow 4.3%
02:15 up from 4.2% previously, according to its East Asia and Pacific October 2023 Economic Update,
02:23 published on Monday. Lead economist from Malaysia Dr. Apurva Sangi said the country's
02:28 economy is expected to be driven by recovery in global growth, the tourism sector and anticipated
02:34 higher oil prices. He explains that the economy is expected to face significant external risks
02:40 and that deeper global growth shocks could potentially result in a more significant
02:44 slowdown than anticipated. Sangi said the base effect also plays a role in the World Bank's
02:49 GDP's growth forecast, given that the country's economy rebounded 8.7% last year, so expansion
02:56 is projected to moderate in 2023 before accelerating in 2024. As the economy continues to grow,
03:02 Sangi said it is expected that poverty and income inequality will further decrease,
03:08 provided that it is accompanied by policies that enhance inclusiveness. Meanwhile, the bank says
03:13 that Malaysia's economy is required to open its services sector like digital, legal, accounting,
03:19 logistics and transports in order to continue attracting both foreign and domestic investments.
03:24 Sangi points out that Malaysia's investment-to-GDP ratio has been consistently coming down
03:29 since the Asian financial crisis, from a high of over 40% of GDP to below 20% today. He adds that
03:36 proactively liberalising services will remain key in boosting Malaysia's investment and new
03:42 industrial master plan 2030's success story execution.
03:46 Pay TV provider Astro Malaysia Holdings announced that it will close down its home shopping business
03:56 under GoShop from October 11, citing challenging overall economic landscape and the changes in
04:02 consumer shopping behaviour. In a statement, Astro elaborated that there has been a significant
04:07 downturn in this mode of shopping since the COVID-19 pandemic and closure will ensure that
04:13 the group's resources are focused on business lines that contribute the biggest difference
04:17 to the overall operations. Astro and its Korean JV partner GS Retail have decided that AstroGS Shop,
04:24 which operates the home shopping business, will cease operations beginning October 11.
04:29 It is noted that GoShop is not considered a material subsidiary of the group and is not
04:33 expected to have a material effect on the group's consolidated EPS and net assets per share or
04:39 gearing for the financial year ending January 31, 2024. GoShop started in 2015 as Astro's first
04:46 foray into the e-commerce domain, enabling Malaysians to shop anytime, anywhere 24/7 and
04:52 is also present in Singapore and Brunei. According to Astro's 2023 annual report, the group had fully
04:58 impaired its cost of investment in GoShop, amounting to $48.1 million following the subdued
05:03 consumer sentiment, changes in consumer behaviour as customers returned to physical stores,
05:08 and continuing losses during FY2023.
05:11 Budget 2024, which is slated to be tabled in Parliament next week, will be a prime opportunity
05:22 for the government to undertake fiscal consolidation reforms to avoid running off a fiscal cliff.
05:28 With the growing burden on Putrajaya's coffers, Social Economic Research Centre Executive Director
05:33 Lee Heng Wee said, "Budget 2024 serves as a window of opportunity for the government to
05:38 unveil a measured pace of fiscal reform so that the following years running up towards the 16th
05:43 general election can be utilised to quell discontent from voters over unpopular policy moves."
05:50 Lee said it is crucial for the government to come to "political sense and economic sanity"
05:55 to avoid a fiscal cliff, namely conflict over constant increases in the debt ceiling due to
06:00 an unsustainable budget deficit as seen in the US currently. In view of this,
06:05 Lee foresees that Budget 2024 will focus more on operating expenditure and will be characterised by
06:11 the introduction of "necessary but unpopular" measures, including targeted petrol subsidies,
06:17 as well as scheduled implementations of the previously announced capital gains tax on
06:21 non-listed shares and luxury goods tax. Lee also notes that a reform of the civil service must be
06:28 done to "improve the quality and value of public services-based performance and productivity-linked
06:33 salary systems." Towards this, he shared his disagreement with the government's previously
06:37 announced plan to detail a civil servant salary rise in Budget 2024, as he said things of this
06:43 nature should only be done until the ongoing "cooperative study of salary and retirement
06:48 schemes is completed in 2024." Another of Lee's hopes for Budget 2024 is a 12-month pre-announced
06:55 reintroduction of the GST at a lower introductory rate of 4-5%, compared with 2015's 6% towards
07:03 addressing the nation's unsustainable tax base.
07:11 Shares in Baustat Plantations fell as much as 27 cent, or 18.5%, in the morning session,
07:17 ahead of the second cut-off date of October 6 for the proposed acquisition of the Armed
07:22 Forces Fund Board-owned group by Kuala Lumpur-Kepung. B-Plant was among Bursa Malaysia's
07:27 topmost active, with over 46 million shares traded, as the counter ended Monday 13% lower
07:33 at RM1.27. Following the steep decline, Bursa suspended its proprietary day trading,
07:39 and intraday short-selling of B-Plant shares for the rest of Monday. The sell-off sparked
07:44 concerns that KLK's acquisition of the plantation group could be facing hurdles. Both KLK and LTAT
07:50 declined to comment when contacted. The cut-off date for the proposal was first extended to
07:55 September 22 from the original September 11 deadline. It was then extended again for another
08:01 two weeks to October 6. The deal has been in the spotlight as opposition leaders claim that
08:06 the deal does not fit with the government's aim of achieving the Bumiputra corporate equity target
08:12 of 30% by 2025, as underlined in the 12th Malaysia Plan. In response, Defence Minister
08:18 Datuk Syir Mahmad Hassan said that during the bidding process, Tradewinds Corp, controlled by
08:23 Taekun Tan Sri Said Mokhtar Al-Bukhari, was the only Bumiputra company that had ultimately submitted
08:29 a bid, which eventually turned out to be too low.
08:32 [Music]