What a year…

The Malaysian Reserve looks at some of the developments which have shaped people, communities, businesses and outlook

By TMR / Graphic By TMR

The country’s corporate and business world has served some of the most interesting narratives this year.

The traditional quarterly growth announcements, corporate results, national budget, equity and bond market are the bread-and-butter highlights.

But the intricacies and developments in the country’s economy weave deeper than just growth and trade surpluses figures.

Myriads of the unexpected coloured what was a year filled with happenings, pockets of anxiety, despair and undercurrents.

Mydin and Hypermarket Story

Mydin Mohamed Holdings Bhd recorded a huge loss for its financial year ended March 2016 (FY16), the first fall in 60 years, said MD Datuk Wira Dr Ameer Ali Mydin.

The head of one of the country’s largest hypermarket operator had said the retail group would be “lucky” to maintain the same figures this year.

The country’s largest hypermarket chain had been profitable with tremendous growth since its inception in 1957, generating an annual revenue of up to RM3 billion.

“So, in 2015, for the first time in Mydin’s history, we reported a massive loss,” he was reported as saying

Mydin was not the only hypermarket to feel the strain. Other operators had an uphill battle in 2017.

The supermarket and hypermarket subsector plunged 5.2% in the third quarter of 2017 (3Q17) against a 0.8% increase in 2Q17, the largest contraction among retail subsectors for the quarter.

Consumer spending was muted.

Careful spending had force many to seek their shopping for daily needs at sundry shops, leaving giants like Mydin to fight for every dime of consumer spending.

Mara Digital Mall

The Mara Digital Mall was established as an outlet for Bumiputera information communications technology (ICT) retailers in December 2015.

But sales have been challenging despite the grand launch.

Designed as an alternative to an already successful ICT mall — Low Yat Plaza — Mara Digital Mall was reported to face declining sales and lower footfall.

Although Mara Digital Mall is located near the “local hotspots” of Sogo Mall and Jalan Tunku Abdul Rahman, it is still struggling to establish itself as the digital mall.

Launched in December 2015, the project was proposed by the Rural and Regional Development Ministry after a dispute at Low Yat in July 2015. Also known as “Low Yat 2” before it was rebranded Mara Digital Mall.

The relevant authorities, however, denied the drop in business and patronage, while promising to boost promotion efforts and bring the crowd back to the mall.

The growth of online shopping and drop in spending had impacted the whole retail sector chain this year.

Will Malaysia Airlines Return to its Glory Days

Malaysia Airlines Bhd (MAB) is one of the biggest news-maker this year.

The now refreshed national carrier is undergoing its most comprehensive transformation, axing thousands of staff and revisiting thousands of contracts with suppliers.

The carrier was also in the limelight for its aircraft acquisition plans, including the purchase of 16 new Boeing Co aircraft.

Former MAB CEO Peter Bellew, at the time, said large global leasing firms and lenders will purchase the aircraft and then lease the planes to MAB based on an operating sale and leaseback agreement.

“These aircraft will not be owned by Malaysia Airlines, but are planned to be on operating leases, which is a norm in modern airlines,” he said then in an internal memo which was sighted by The Malaysian Reserve (TMR).

But Bellew’s shock resignation in October took much of the wind out from the carrier.

Bellew had denied his departure was due to interferences from the government or the sole owner, Khazanah Nasional Bhd.

“It is very simple, I just want to ‘balik kampung’,” said Bellew.

Bellew’s exit followed his predecessor, Christoph Muller, who left the carrier after a year into the job.

Motorcycle Taxis Failed to Lift Off

Motorcycle ride-sharing service Dego Ride made headlines as another Uber, but on two wheels.

Dego founder and CEO Nabil Feisal Bamadhaj said the two-wheeled ride-sharing platform was not competing against the likes of Grab, Uber or traditional cabs, but instead is focusing on labourers, working individuals and students as the key markets.

The company had managed to garner an average of 1,000 users per day as the local start-up tried to replicate the success of other shared economy gig.

“At the end of the day, everyone has their own right to their preferred mode of transport,” Nabil told TMR.

Dego’s philosophy was built around empowering lower income earners on how to manage their livelihood, providing opportunities for self-generating income and creating entrepreneurship opportunities.

“Dego should be seen as an empowering factor for this group,” he said.

However, the authorities did not share his philosophy and the act related to ride-sharing had omitted two-wheel vehicles, practically spelling the end to Dego Ride’s short-lived journey.

Empty Malls and More Empty Malls

It was a difficult year for mall owners who are desperate to fill vacant lots at their premises.

Some malls have even abandoned the “screening standards” for choosing tenants, as the glut in the commercial segment reached unprecedented levels.

Some mall owners have already thrown in additional incentives like free renovation and rental for a specific period to get tenants to set up business in the shopping complexes.

The Klang Valley had witnessed a surprising increase in malls, creating a glut and leaving many of these malls empty.

The industry is still grappling on how to address the issue.

For now, it would remain empty for some of the malls unless consumers return in big numbers.

Confusion Over Bed Tax as Implementation Date Delayed

The bed tax was its own narrative. The initial idea of charging hotel occupants under the tourism tax had faced unending backlashes.

The government had initially planned to impose the bed tax — ranging from RM2.50 to RM20 per night based on the hotel’s rated grading.

However, the plan had to be shelved after much criticism, even from the Sabah and Sarawak state governments.

The levy implementation date was postponed several times.

The Tourism and Culture Ministry had expected to collect RM654.62 million with a 60% occupancy rate from the over 11 million hotel rooms in the country.

Finally, after much consideration, only foreigners are charged RM10 per night starting September.

The bed tax raised RM600,000 in the first month.

The Story of Kampung Baru

The “refresh” of Kampung Baru is still stuck over ownership issues, which continued to drag its development.

Seen as the last enclave in the bubbling Kuala Lumpur City Centre, Kampung Baru lags other areas in Malaysia’s capital.

Development of the 121.8ha Malay enclave in Kuala Lumpur is estimated to be worth billions.

But it has been dogged by overlapping title claims over the last 30 years.

This decades-old problem could delay the realisation of a modern and 21st century “Kampung Melayu” in Kuala Lumpur.

Kampung Baru could become one of the most expensive real estate deals in Kuala Lumpur.

But decades of complications are not expected to go away easily.

It remains to be seen if Kampung Baru remains as a “kampung” in the decades to come. — TMR