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What is uncertainty? These few things, maybe?

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After I published this article: Uncertainty is never good for any market yeah, someone asked me if there are any uncertainties in Malaysia. Frankly? Yes. Recently, I was at Dato’ Seri Gavin Tee’s Property Forecast Talk 2019 and someone (a property investor) I spoke to thought High Speed Rail (HSR) has been cancelled. I corrected him that it’s not cancelled but merely delayed for 5 years or more. (Sigh…). Then, we spoke about ECRL and he thought this has been cancelled too. In fact I think he thought everything has been cancelled, somehow. No wonder he was so negative about the property market! In property investment, the 4Ps (People, Price, Policy and Preference) are very important. Uncertainty is usually due to the 3rd P (Policy). Since ECRL was mentioned, let’s look at recent statements just on ECRL.

24th Jan: Our PM, Tun Dr. Mahathir said, “I am not sure whether the contract has been ended or not. I am not aware [whether it has been terminated]. I just came back from overseas.” (Article here)

26th Jan: Our Economic Affairs Minister Datuk Seri Azmin Ali said, “The Cabinet made the decision because the cost to develop ECRL is too high, and we do not have the financial capability at this moment. And if this project is not terminated, the interest that the government would have to pay reaches to nearly half a billion ringgit. Article here.

26th Jan: Our Finance Minister Lim Guan Eng said he was shocked by the announcement by our Economic Affairs Minister. He said, “I am acting under the instruction of Tun [Prime Minister Tun Dr Mahathir Mohamad] and the cabinet.” He clarified that perhaps the Economic Affairs Minister was not privy to the decision made by Tun.”

28th Jan: Our Deputy Prime Minister Dr Wan Azizah Wan Ismail said, “I was abroad when the conflicting statements were issued. I will ask the Cabinet why this happened.”  

Okay, the question of everyone’s mind is just these few as far as I am concerned. #1 Is ECRL cancelled? #2 Whether Yes or No, what’s the actual reason behind the decision. #3 If it is to proceed, please provide more details. #4 Can everyone stop issuing statements if it’s not a decision by the Cabinet? (Since Cabinet is supposed to be making the decision jointly?) I believe a final statement will be issued soon and hopefully ECRL status will now be finalised, whatever it may be for the benefit of all stakeholders.

Just in case everyone’s wondering about MRT3, it is also NOT cancelled, merely postponed until the country could afford it. This was shared by our Transport Minister Anthony Loke. Article here. As for HSR, it is also NOT cancelled, merely postponed. This was shared by our Economic Affairs Minister earlier. Construction is off until 2020. Article here. The connectivity catalyst for JB – SG which is RTS is also NOT cancelled. It may be delayed. Earlier article here: RTS starting only 2024?

As an optimistic Malaysian, I am very sure all these uncertainties will become a certainty very soon. WHEN is a very good question to be answered because investments whether within Malaysia or Foreign Direct Investments always depend on future returns. We need to provide the certainty so that all of them could make a firm decision. This is like the latest RPGT for all transactions even after 5 years. Sellers and buyers may be affected but if this decision is firm, sooner or later it will become a norm and the buyers and sellers would come back to their senses. The property transactions will continue. However imagine if it’s on and then off and then on and then off? Happy understanding that investments are always for the long term. Decision to invest meanwhile depends on circumstances including uncertainties.

written on 28 Jan 2019

Next suggested article: Property investment: Low risk = low returns? Think again

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