Rowsley

Rowsley: Counter down 5% to $0.30 this morning, possibly over the new property tightening measures announced over the weekend at Malaysia's 2014 Budget. The measures were widely anticipated, mainly to curb excessive speculative activity. Briefly, the three measures were: i) Real property gains tax to be increased to 30%, 20% and 15% for disposal within 3, 4 and 5 years. Foreigners will have to pay a flat 30% RPGT for disposal within 5 years effective 1 Jan 2014. ii) Raise the minimum price of property that can be purchased by foreigners from Rm0.5m to Rm1.0m. iii) Developer Interest Bearing Scheme (DIBS) is no longer allowed. Market watchers feel that to mitigate this, developers may instead opt to offer credit notes or cash rebates to subsidize interest during the construction period. Technically, support for the counter is at the psychological $0.30 level.