KUALA LUMPUR: Standard Chartered Bank Malaysia Bhd has forecast the overnight policy rate (OPR) to gradually increase to 2.75 per cent by mid-2010, said managing director and chief executive officer Osman Morad.

Currently, interest rates stood at two per cent.

“We foresee a gradual rise in interest rates starting from the end of the first quarter this year,” he told reporters after opening its newly-relocated branch at Bandar Puteri in Puchong on Tuesday.

“I think Bank Negara has released their statement to make it very clear that they are concerned about growth and we will probably see a rise in OPR.(Based on) Our own internal forecast, we’ll see a possible two to three increases,” he added.

Meanwhile, Country Consumer Banking Head Tiew Siew Chuen said the bank hoped to upgrade, relocate and renovate 30 to 35 per cent of its premises over the next three years.

She said that it was part of the bank’s efforts to focus on customers’ needs and develop long-term relations with them by offering better banking experience.

Currently, the bank has 33 branches nationwide.

She said Standard Chartered Bank had lots of plans going forward to continuously upgrade its branches across Malaysia. – Bernama

When the best of the best is merged into one amazing communication and media device, this is the outcome. Record videos with the built-in spy camera and and watch them on the beautiful 1.5 inch touchscreen, listen to your favorite songs directly from the audio player, or use the calendar, alarm and to-do list functions to keep your day organized. If you’re not already convinced, here are some more reasons to choose the Terminal:

One for the ages: With a strong stainless steel and weatherproof frame, the Terminal will last for years to come. Rain or shine, this amazing watch will be fully functional no matter where you go.
One phone, three choices: Make and receive calls directly from the watch phone itself with its built-in MIC and speaker, use the wired headest, or the wireless Bluetooth headset.
Jack of all trades: Digital watch, spy camera, FM radio, mobile phone, media player and much more. Why carry around 5 different gadgets for 5 different reasons when the Terminal is at hand every second and does it all?
Multiple call options: Control who gets through and who doesn’t with the Terminal’s extensive caller settings. Functions include caller ID, call waiting, call divert, call barring, black list and much more.
Clear input: The Terminal comes with a highly accurate touch screen and stylus hidden in the wrist strap to provide speedy and reliable input. If that’s not enough, switch to handwriting mode!
Stay connected: The Terminal’s quad-band network allows you to stay in touch from almost anywhere in the world. Heading to a foreign country? Not a problem, just buy a SIM card there and place it into your watch phone and you’ll enjoy the same great service as you did back home.

At a Glance…

• Watch, cell Phone, video camera and media player all in one
• Easy-to-use and responsive touch screen function for smooth navigating
• Full screen ciew – crystal clear viewing with our cinematic full-screen mode
• Wide range of caller options and voice mail capability
• Set ringtones and pictures for each individual caller or a whole group
• Quad band (850MHz, 900MHz, 1800MHz, 1900MHz) unlocked cellphone

This Cell Phone works with the following GSM Frequencies:

Please check that the local cell network matches the phone’s GSM standard.

Click here to view frequencies for all major worldwide cell phone networks.

Manufacturer Specifications

• Built-in 1.5 inch samsung TFT 260k color touch screen
• Handwriting: English, Chinese, and numbers (with speed and pen color options)
• Memory: 1G Micro SD card included, supports up to 4GB
• Message Types: SMS, MMS, Voicemail Server, Chat
  -SMS = Text messaging (300 message storage)
  -MMS = Picture messaging, Video messaging, Audio Messaging (200 message storage)
• Supports GPRS and WAP
• Bluetooth: YES
• Bluetooth Profiles: Handsfree, Headset, A2DP, SPP, DUN, OPP, FTP, AVRCP_T, SAP, FAX, HID, Remote Control
• Included Bluetooth Headset:
  -Description: Stereo Bluetooth Headset with Clip
  -Support: Version 1.2, Class 2 (10 Meters)
• Call Setting Options: Call Waiting, Caller ID, Call Divert, Call Barring, Auto Redial, Closed User Group, Black List
• Security Setting Options: Phone Lock, Auto Keypad Lock, SIM Lock, Fixed Dial, Barred Dial
• Phonebook Features:
  -500 Contact Storage
  -Caller Picture
  -Caller Ringtone
  -Caller Group
• Languages: English, Chinese, French, Spanish, Indonesian, Italian, Russian, German, Arabic
• Battery Type: Rechargeable Li-ion
• Battery Life:
  -Talk Time: Up to 3 hours
  -Media Playback: Up to 6 hours
  -Stand By: Up to 150 hours (depending on settings)
• Dimensions: 62mm x 51mm x 17mm (L x D x W) Watch Face, 190mm Max Wrist Circumference, 260mm with clasp open

Multimedia

• Photo Camera
  -1.3 Mega pixel
  -Capture Format: JPEG
  -Quality: Low, Medium, High
  -Resolution: 640×480、320×240、160×120、128×128、80×60
  -Picture Settings: Quality, Timer, Continuous Shot, Zoom, Color Effect, EV, White Balance
• Video Camera
  -Capture Format: AVI
  -Resolution: 176×144
  -Picture Settings: Quality, Zoom, Color Effect, EV, White Balance
• FM Radio: YES
• Radio Features: Loudspeaker, Favorites, Use earphones as antenna
• Video Player: YES – AVI, 3GP
• Audio Player: YES – MP3, WMA, WAV, AMR
• Sound Recorder: YES – AMR, WAV

Product Notes

• Unlocked phone; can be used with any carrier and SIM card
• Stylus Provided for Precise Navigation
• Pre-loaded software tools include; Calendar, Alarm, To-Do List, E-Book Reader, Image Viewer, User Profile Manager, WAP
• Two active world clocks – keep track of time in your home city and favorite travel city (and see it on your wallpaper!)
• Built-in speaker and MIC
• This is a weatherproof model. Can be used in most weather conditions, but should not be soaked in sustained water or submerged.
• All current Bluetooth cell phone profiles are supported
• Alarm Clock special functions include vibration and/or sound options, tone or midi alarms, and multiple day schedule settings
• Great opportunities to also use as spy watch

Package Contents

• Cellphone wrist watch with stylus
• Bluetooth ear set
• Wired earphones with clip and MIC
• x2 Rechargeable li-ion batteries
• USB Wall Power Adapter (100-240v)
• USB Bluetooth Kit Charging Cable
• USB Watch Charging/Data Transfer Cable
• User Manual – English

FAQ – Frequently Asked Questions

• Is the Terminal water proof?
  No, the Terminal is weatherproof, but not waterproof.
• Why is this phone so affordable?
  Because it is coming straight from the factory to you. No “name brand” taxes are included when you buy this OEM direct model.
• How long should I charge the battery before first use?
  Before your first use, charge the battery for at least 12 hours. After that, 2-3 hours are sufficient.
• How can I access the micro SD card?
  The microSD card sits next to the SIM card both of which are accessible by removing the watch battery.

This cool gadget is priced at RM 695 /USD 205. Please drop me a message using the contact page if you are interested to get one or more.

*First come first serve due to limited stocks available

1. Test Everything

Test Everything is a web-based application for multi-purpose testing, reducing the time it takes you to use online services and validators. Test Everything is an aggregate of over 100 tools reduced to just one web page. You can validate your XHTML for web standards and accessibility, test your design in several browsers (using the Browsershots service), check page rank, and more – all in one location.

2. Pingdom Tools

Pingdom Tools is web-based application that you can use for easily testing the performance of your web pages. It can give you information on the total loading time of a web page and the total number of objects required to render the page to give you insights on things you can leave out or combine. It gives you a visualization of how page objects are loaded and you can sort the results by load order, load time (helpful in seeing what’s taking so long to load), file size, file type, and URL.

3.  ClickHeat

ClickHeat is a visual heatmap of clicks on a HTML page, showing hot and cold click zones. ClickHeat is an OpenSource software, released under GPL licence, and free of charge.

1. Camtasia Studio (link to site)

Camtasia Studio is a screen video capture program, published by TechSmith. The user defines the area of the screen or the window that is to be captured before recording begins; it is also possible to capture the entire screen area. You can also talk, and use a videocam.

PC World described Camtasia Studio as “the premier screencasting tool”, which, though “powerful,” can be “a little overwhelming at the start”. In an evaluation of Camtasia Studio 6, IT Reviews commented that it made “producing professional screen tutorials much more convenient than before.”

2. Demo Creator (link to site)

Wondershare DemoCreator is a handy screen recording software to make software tutorials, Website demos and instructional videos for Web sharing and technical support. Now, DemoCreator 2.8 comes with powerful audio editor and up to 7 video publishing formats!

KUALA LUMPUR: Bank Negara’s move to potentially raise interest rates in the near future should be viewed as a “normalisation” process, rather than an act of “tightening” monetary policy, said governor Tan Sri Dr Zeti Akhtar Aziz.

She emphasised the need for the markets to make a distinction between normalisation and tightening, pointing out that the significant reductions in interest rates implemented by the central bank last year were just an emergency position that the country had to take to avoid a fundamental recession.

“We need to look towards the normalisation of interest rates at some point. It should not be seen as tightening,” Zeti told reporters yesterday after a public lecture by Dr Abbas Mirakhor, the first holder of the International Centre for Education in Islamic Finance Chair.

Zeti voiced her concern that if interest rates were kept too low for too long, people would turn away from the conventional banking system in search of other instruments to enhance their returns on savings, and that could possibly involve them taking excessive risks without realising it.

“That could create a problem later on.

“We don’t want to wait for something to happen and then only take action,” she added, while pointing out that there was no sign of asset bubble forming or excessive leverage by consumers in the country yet.

“Borrowings of households are still at prudent levels,” she said.

On Tuesday, Bank Negara kept its overnight policy rate unchanged at a record low of 2%, but indicated that it could not keep the rate too low for a prolonged period as the local economy strengthened, otherwise, there would be a build-up of financial imbalances in the system.

The markets took that statement as a hint that the central bank would raise interest rates sooner than expected.

According to Zeti, the central bank could not tell when it would raise interest rates and by how much, but she said the monetary policy committee would continue to assess the prevailing economic trends to decide on the right quantum and timing to do so.

The next meeting of the monetary policy committee at Bank Negara is scheduled for early March.

“Anyhow, our stance is still to remain accommodative to support growth, especially in an environment where inflation is going to remain modest,” Zeti said.

The Government has targeted to hit a 5% gross domestic product growth this year, although the official forecast is for between 2% and 3% growth this year.

The iPad is a tablet computer developed by Apple Inc. It features multi-touch interaction with print, video, photo, and audio multimedia, internet browsing, and runs most iPhone OS apps. The device has an LED-backlit 9.7-inch (25 cm)color LCD display and uses a virtual keyboard for text input.

This week’s iPad launch brought publishing’s future back to many media minds; we asked two agency thinkers to argue the pros and cons of the device’s potential for reviving a sagging industry. Arguing pro is Hill Holiday’s Greg Winter; con is Hill Holiday’s Ilya Vedrashko.

Pro: It might take time and some tweaks along the way, but yes, the iPad is going to save the publishing industry.

1. Do or die time
Magazines and newspapers have been giving their product away for far too long. Over the past few years we’ve seen newsrooms shrink and magazines and newspapers disappear. And it’s not necessarily because of declining numbers. More people than ever before are reading news, they just don’t pay for it. Consumers get news content online for free. Good journalism should and will cost something. Or it will disappear. And we need good journalism — it’s part of our democracy (but that’s a completely different story). Also, there are tens of thousands of publishing and news jobs at stake today, and there’s nothing like the survival instinct to spur innovation and action.

2. A new business model
In the same way that Apple helped to create a fair and reasonable pricing and distribution structure for the sale of music, they will help figure out how printed content can be sold. With very small distribution costs (eliminating printing and shipping), the iPad offers a new way for publishers to deliver their content to consumers at greatly reduced costs. The New York Times’ metered payment model planned for 2011, announced last week, was no coincidence.

3. Consumer behavior can, will and does change
The way that consumers purchase and interact with music and video has radically changed over the past few years. ITunes revolutionized music and saved the industry from virtual collapse. It also made Napster obsolete. YouTube and Hulu provide viewers with the opportunity to watch content when, where and how they want. It may be a shift for consumers to pay for and download the Wall Street Journal or an issue of Sports Illustrated to the iPad, but it’s completely realistic.

4. Targeted advertising
Here is an outstanding business angle. The iPad offers the opportunity for a metered payment model for newspaper and magazine content. Would a reader pay 25 cents for a Paul Krugman column? It’s not a stretch. It also offers the opportunity for targeted content based on reader profiles and locations. The built-in GPS capability allows for location-specific advertising messages and offers. All politics is local. And maybe all advertising messages will be on the iPad.

5. Enhanced experience
Today, there are basically two ways that we read a newspaper or magazine article. We can read a printed newspaper or magazine hardcopy or we can lean forward into a laptop or desktop and scan. Laptop reading is an active and often clumsy experience if one is laying on the sofa or in bed. At 1.5 lbs, the iPad offers the potential for a more laid-back, passive and natural reading and viewing experience. The actual content — book, newspaper or magazine — can be delivered in an enhanced and more visually compelling way. For example, a book on botany can be visually constrained by the cost of printing a specific number of high-quality pictures. This constraint virtually disappears with an iPad.

6. It’s Apple
If anyone can figure this out, it’s Apple. Apple has attracted some of the world’s top engineers and creative technologists. They have a track record of solving content distribution and payment model problems (iTunes) and creating leap-frog innovations in existing categories (iPhone). With sleek and simple design and the ultimate in usability, Apple can create an entirely new way for people to consume “print” media. We have seen consumer behavior transform very quickly, in a short period of time. And it’s about to happen again.

Con: The iPad is a life-raft at best and isn’t going to save the publishing industry.

For a long time, lifesavers in Russia used to be adorned with a cheerful slogan that could be roughly translated as “saving the drowning man is nobody’s business but his own.”

This sums up about how I feel about the argument that iPad will single-handedly save traditional periodicals. It’s not enough for the publishers to be thrown a life raft; they will also have to figure out how to last for days without water and how to avoid getting eaten by the sharks (or by each other, for that matter). The iPad, with all of the undeniable advantages that Greg mentions, is just a raft. The rest is nobody’s business but the publishers’.

Conventional wisdom has it that the 125 million credit-card carrying iTunes customers who are used to paying money for small bits of content — music, videos, games, apps and, soon, e-books — are an equally willing customer base for newspaper and magazine content delivered electronically. I don’t think they are. I don’t think people will be willing to pay for newspaper articles the same way they pay for everything else in the iTunes Store for two reasons.

One is that unlike music, videos or even apps, there is no existing price anchor for individual articles. With music, if a CD album costs $15, one fifteenth of it should cost about a buck, and it does, and the sales go briskly. If the second season of “Californication” costs about $20 for DVDs on Amazon and $20 for iTunes downloads, then the only the choice consumers have to make is which format fits their lifestyle better.

No such system of reference exists for buying mainstream newspaper content piecemeal. If an entire newspaper costs 50 cents on the newsstand and has 100 articles in it, what is a single article worth to you? Half a cent? Ten cents? A dollar? So each time you want to buy a newspaper article on iTunes, you will have to make this mental calculation.

The other problem with getting people to pay for individual articles is that, unlike music, books, videos, games or even imaginary animals on Farmville, articles have little perceived replay value. You pay a buck for the latest Lady Gaga hit to enjoy it over and over. How often do you expect you will need to refer back to the latest op-ed piece to justify its price?

And if publishers are hoping to find in the iPad a channel to sell new subscriptions, then the story of the music industry should serve as a cautionary tale. The iTunes Store hasn’t really eliminated illegal downloading — even by the most optimistic estimates, there are still as many pirates as there are upright citizens. What really happened, though, is those people who used to pay for and hoard CDs are now paying for and hoarding MP3s, with CD sales predictably on a steep downward slope. Likewise, the most enthusiastic paying subscribers to the iPad version of the New York Times will be the ones who are now getting the actual paper plopped on their front steps every morning.

The real solution to publishers’ woes lies in rethinking the nature of their now largely commoditized product. I don’t know what the successful formula will look like. Maybe what will get people to pay is a curated stream of all important articles on a single topic, regardless of their source. Maybe it will be something else. But whatever it is, it’s up to the publishers to figure out, not Apple.

Source: http://adage.com/digitalnext/article?article_id=141817

PETALING JAYA: Benchmark interest rates are set to gradually rise by 25 to 75 basis points before year-end after Bank Negara signalled its readiness to normalise interest rates in due course as a pre-emptive move to prevent the build-up of financial imbalances, say economists.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said although the overnight policy rate (OPR) was maintained on Tuesday, the central bank had signalled its discomfort over holding interest rate too low and for a long period of time.

“As exemplified by the US subprime mortgage and housing market crisis, which some analysts attributed to overly low interest rates being stayed too long, loose monetary policies inevitably spawn overleveraging, excessive risk-taking and asset bubbles,” he told StarBiz yesterday.

At 2% currently, the OPR was lower than the average 2.5% to 2.8% seen in the year following the country’s most severe recession in 1998, he said.

“Depositors and savers are currently bearing the brunt of a low interest rate environment, which is aimed at spurring domestic demand,” he added.

With headline inflation or consumer price index turning positive in December, Yeah expected the upward adjustment to take place in the first quarter of this year, but the quantum would likely be gradual given that domestic demand was not expected to accelerate strongly as global economic recovery, especially growth in the advanced economies, remained sub-par and tentative.

“We expect a 25-basis point adjustment to bring the interest rate level to a more ‘normal’ level which we define as one that remains low and supportive of domestic financing and other economic activities,” he said.

However, he noted that the case for a 50-basis point hike was less compelling unless both domestic and external demand surged in the coming months.

“Nonetheless, a 50-basis point adjustment cannot be ruled out as a front-loaded measure to normalise the interest rate for the rest of the year,” he added.

Meanwhile, Malaysian Rating Corp Bhd chief economist Zahidi Alias noted that it was imperative that the quantum of any OPR hike take into consideration the growth of the economy relative to its potential output.

“One must bear in mind that at this juncture, policymakers might not be aggressive in hiking rates to ensure that the economy continues to pick up pace, and households do not become unduly burdened by heightened debt-repayment amounts,” he told StarBiz.

Nevertheless, if the economy persistently expanded more than its potential rate which the International Monetary Fund estimated to be around 4.25%, interest rate hikes were likely to happen to prevent the economy from overheating, Zahidi added.

Maybank Investment Bank Bhd (Maybank IB) chief economist Suhaimi Illias said in a note Maybank IB was prompted to revise its OPR forecast to a 50 to 75-basis point hike compared with no change previously following Bank Negara’s latest indication.

“Still, the expected magnitude of increase in OPR this year is less than the 150-basis point cuts between November 2008 and February 2009. This should still keep the monetary policy stance accommodative to spur private sector demand (consumer and business spending) as the Government aims to trim its deficit spending, hence public sector demand, in the medium term starting next year, to RM40.5bil (5.6% of GDP) from RM51.1bil (7.4% of GDP) last year, and eventually to -3% of GDP by 2015,” he said.

Meanwhile, Kenanga Research said although the sudden change in the central bank’s tone would likely be interpreted as a signal that it may soon raise rates, the research house believed that it generally reflected Bank Negara’s genuine concern and way of managing market expectations.

“The current unsettling global financial environment as well as the modest recovery trend outweighs any inflationary concern or unchecked asset bubble at the moment. Hence, we expect the OPR to be raised incrementally from mid-2010, from 25 to 50 basis points to 2.5% by year-end,” it said.

OSK Research in a latest update concurred that Bank Negara would hold interest rates steady till June in its efforts to boost liquidity as the Malaysian economy was still finding its footing with third quarter GDP still contracting at 1.2% and unemployment coming in at 3.6%.

“However, we do not discount a potential hike in interest rate in the second half of 2010 as the economy gains traction and inflation exerts its influence.

“Even if there is a hike, we believe it would be on a gradual basis, for example by 25 basis points per policy meeting, to ensure the sustainability of economic recovery,” it added.

CIMB Research also expects interest rates to be raised at a measured pace, and possibly sooner than expected in the first half of the year.

It has revised its OPR target for the year to 2.5% from 2% for 2010.

“As this will still be lower than the historical OPR since 2004, the rate move will not have a significant impact on demand,” it said.

PETALING JAYA: Financial institutions, in particular banks, have in general agreed to raise mortgage lending yields, which will have an impact of increasing their net interest margins (NIMs).

An analyst with OSK Research said banks with strong mortgage lending growth would be the key beneficiaries, while the eventual increase in benchmark interest rates would benefit all banks on a greater scale as loan assets tended to re-price faster than deposits.

He said higher home loan rates were imminent and expected housing loan rates to trend upwards in the not-so-distant future as the banking industry moved towards risk-based pricing in determining more sustainable interest rates for the industry.

The upswing in home loan rates is inevitable as economic conditions improve.

“The pricing war among banks earlier this year had brought housing loan interest rates to a level that was below or near the cost of funds and was not sustainable. With early signs of economic recovery, the rates are bound to increase,” he noted.

The average lending rate (ALR) rose to 4.91% in September from 4.9% in August. The current average base lending rate (BLR) is 5.51%. With home loan rates improving, OSK Research has maintained an “overweight” call on the banking sector.

“We are maintaining an ‘overweight’ call on the sector on the grounds that non-performing loans are likely to be benign.

“Meanwhile, the downtrend in provisions and strong capitalisation positions should provide future earnings and capital management upside surprises, which may not be fully reflected in banks’ valuations,” he said.

The analyst said the banking sector was currently trading at a mid-cycle price-to-book value of 1.68 times.

An analyst with HwangDBS Vickers Research also said mortgage rates needed to be increased to remove irrational price competition.

“Rate hikes are positive for banks,” he said, adding that for now, the price change would mainly affect the secondary property market, leaving the primary market unscathed.

“Pricing power depends on banks’ cost structure and incidences of default. We believe banks will price products based on risk,” he said, adding that margins were now extremely thin.

The analyst said banks were barely breaking even with irrational competitive pricing for mortgage products. “At BLR minus 2.4%, it effectively takes banks at least two to three years to break even. The BLR now stands at 5.55%, while average cost of funds for banks was about 2%.

“Taking into account implied costs set aside for credit default ranging from 20 basis points (bps) to 30bps, coupled with overhead costs (agent’s commission and fees) another 30bps, net yield gain on a mortgage loan was merely 1%.

“Rate levels are already at an all-time low. We believe it is a matter of time before rates pick up,” he noted.

The HwangDBS analyst said pricing power was within the perogative of the individual banks.

“Every bank will price products based on their respective cost structure and also incidences of default.

“While we agree that mortgage pricing has reached a level of irrationality, we believe banks will price products based on risk,” he said.

For instance, if a customer had a healthy credit profile, it was possible for the bank to offer him an attractive rate, he said, adding: “From our checks, we understand the pricing change affects the secondary market, while the primary market is left unscathed at this juncture.”

On the evolving banking landscape, the analyst said the overnight policy rate was anticipated to rise in the third quarter of 2010. This is in line with the stronger-than-expected growth (HwangDBS forecast of 5% versus official forecast of just 2% to 3%) as well as inflation trending toward 2.3% to 2.5% by July 2010.

“We are looking at 25bps in the third quarter 2010 and another 25bps in the fourth quarter. With the re-pricing of loans quicker than deposits, the impact would generally be positive on NIM,” he said.

The analyst said banks with positive impact on rate hikes were Hong Leong Bank Bhd and RHB Capital Bhd by virtue of their higher proportion of variable rate loans.

However, he said, Public Bank Bhd’s mortgage loan volumes might dwindle but the reseach house expected higher rates should more than neutralise this impact.

On the property sector, a HwangDBS property analyst said the rate hike had a double whammy. “The mass developers should not be adversely impacted due to resilient demand.”

However, with banks standardising mortgage rates and eliminating zero-entry cost packages for secondary market transactions, it will dent sentiment.

The analyst said the banks had agreed to end the mortgage price war. “We understand some banks have started to raise mortgage rates for new applications since this week.

“Mortgage rates have been standardised to BLR minus 1.8% from BLR minus 2.3%, while banks are no longer funding upfront costs such as legal fees and other costs.”

PETALING JAYA: Potential house buyers are still wary about making property purchases despite lower mortgage rates as the economic outlook remains uncertain, analysts said.

Average mortgage rates have fallen to about 3.5%, but at the same time banks have been more stringent on the approval of loans. The average mortgage rate is obtained from base lending rate (BLR) of 5.55% minus 1.5% to 2.4% for housing loans (or effective annual rates between 3.15% and 4.05%), depending on the amount and tenure of loans, and the package customers sign up for.

OSK Research said the attraction of lower mortgage rates had been superseded by fears of income security amid a deteriorating economic outlook.

“For those who are still financially sound, most would rather wait a while longer to snatch up better bargains a few more months down the road. Some are hoping for developers to come up with more creative and attractive perks and some are also waiting for prices to drop further, if any, before they are convinced to buy,” the OSK analyst told StarBiz.

The research house said downside risk for landed properties appeared limited compared to luxury condominiums, with the demand for landed properties expected to return by year-end.

“Most of the homebuyers in this segment are cash-rich and not highly leveraged. Given the accommodative interest rates today, any forced-selling or foreclosures of properties like the one we saw during the 1997/98 Asian Financial Crisis will be limited in this downcycle,” it said.

OSK Research expects the demand for luxury condominiums to decline by 30% to 40% in 2010 from 2008, with luxury condo prices already currently down by 15% to 20%.

An analyst from Kenanga Research agrees that the bearish economic outlook is making potential buyers hesitant about buying properties now.

“What if this (sign of market recovery) is just one-off data? What we need is for the sentiment to improve,” she said, noting that only 60% of bookings had been translated to actual sales compared to almost 100% previously due to more stringent loan requirements.

Jupiter Securities Sdn Bhd head of research Pong Teng Siew said that with the mortgage rates of 3.5% and effective cost of funds of 1.5%, banks net interest margin should be about 2% now.

“But cost of funds for smaller banks such as EON Capital Bhd, RHB Capital Bhd, AMMB Holdings Bhd are higher (slightly over 2%) because of higher interest bearing liabilities,” he told StarBiz.

A house buyer contacted by StarBiz said his current mortgage loan interest rate was 3.15% for the first two years and 3.45% for the remaining tenure.

He recently signed up for a 20-year conventional home loan from Alliance Bank Malaysia Bhd for the purchase of a double-storey house.

He is paying about RM1,700 per month for his RM300,000 loan.

His loan package included a one-time payment of RM2,500 for mortgage reducing term assurance, legal fees and stamp duty.

Other banks are offering similar mortgage rates.

For example, RHB Bank is charging BLR minus 2.1% for housing loans that range from RM250,001 to RM500,000, while Hong Leong Bank Bhd is offering BLR minus 2.2% for a RM300,000 mortgage loan.

Malayan Banking Bhd uses a property’s location as one of the criteria to determine interest rate, but is still offering rates in the region of BLR minus 2%.

All these banks have BLR of 5.55%.

Article: By K.C. LAW

Source: http://biz.thestar.com.my/news/story.asp?file=/2009/4/29/business/3793031&sec=business