Malaysia: Budget 2016 - Health Sector

Budget 2016 was announced by the Finance Minister on 23rd October 2015.


RM23.03bil has been allocated for healthcare representing 8.6% of the overall sum.

Other countries whose percentages are similar to ours include the United Arab Emirates (8.7%) and South Africa (9.1%).

On the higher end of the scale, countries like Sweden allocate 13.8% of its budget on healthcare, while Norway and Canada spend 17.9%.

Contrast this with countries such as Pakistan, with 1.3% of its annual expenditure on healthcare, Morocco (4.8%), India (3.4%) and Indonesia (6.2%).

After receiving feedback from various segments of society including NGOs, effective from 1 January 2016, the Government had agreed to forego the GST revenue on several basic necessities .

One of which is the "Zero-rating" of all types of controlled medicines under the Poisons List Group A, B, C and D as well as an addition of 95 brands of over-the-counter medicines.

With this latest development there is a double increase from 4,215 to 8,630 brands of medicines.

The medical fraternity and patients hailed these additions. However they were disappointed that the tax was not removed for all healthcare services.

Malaysian Medical Association (MMA) president Dr Ashok Zacha­riah Philip said cancer patients using newer drugs, for instance, could save RM400 to RM600 from zero-rated drugs because it could cost thousands a month.

He said GST imposition should be totally removed from all healthcare services because when imposed, doctors with taxable turnover of more than RM500,000 would add the cost to the overall cost and pass it on to patients.

He also welcomed more hospitals and clinics being built as the growth had been slow the last few years but did not agree to the building of 1Malaysia clinics as the capacity of services was limited.

Five new hospitals to be built in Pasir Gudang, Kemaman, Pendang, Maran and Cyberjaya.

Kajang Hospital to be rebuilt and upgrading of rural and urban health clinics. The RM 848mil Kuala Lumpur Women and Children’s Hospital will commence operations next October.

RM 72mil in medicine assistance, including haemodialysis, for 10,000 patients.

RM 4.6bil for medicines, consumables, vaccines and reagents to all government hospitals and clinics.

RM 52mil to open new 1 Malaysia clinics and to continue 328 others. Ministry statistics have shown that the number of people seeking the services of 1Malaysia clinics increased from 1.32 million in 2010 to 4.42 million in 2013.

RM 260mil for building and enhancing community, health and dental clinics nationwide.

 /theSTAR 24-10-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Top Glove - Annual Report 2015 & Capacity Building

Top Glove Corp Bhd has set aside RM200mil for capital expenditure next year as it ramps up its production capacity to meet strong global demand.

The company is also prepared to spend RM1bil for Mergers and Acquisitions (M&A) as it aims to acquire at least one M&A per year. “Mergers and acquisitions are a must in order to sustain growth. We must have at least one every year and we have the financial capacity for it seeing as our balance sheet is healthy,” its chairman Tan Sri Lim Wee Chai said at a briefing on the group’s results for the year ended Aug 31 (FY15).

 

Top Glove had a good run in FY15 as the weak ringgit and lower raw materials prices boost its profits to a new high.

 

“Currently, we have a global market share of 18%-20% for our nitrile gloves. We are picking up quickly in terms of quality and quantity. In the next three years, we can be top in terms of efficiency and capacity,” executive director Lim Cheong Guan said at the briefing.

 

Presently, the company has 25 factories with 484 production lines and an annual capacity of 44.6 billion pieces, which would be increased to 540 production lines with an annual capacity of 52.4 billion pieces with the expansion of three plants – F27 in Lukut, Port Dickson; F6 in Phuket, Thailand; and brand new plant F30 in Klang.

 

Top Glove is investing RM80mil-90mil on F30 after spending RM70mil on F29, another plant in Klang, which came onstream in February. By February 2017, the company would have 26 glove factories.

 

In FY15, Top Glove increased its market share in North America to 30% from 27% last year, while maintaining its presence in Europe, Asia, Latin America, the Middle East and Africa with 30%, 18%, 10%, 8% and 4%, respectively.

 

For the fourth quarter ended August 31, Top Glove posted a net profit RM103mil, jumping a whopping 122% from RM46.32mil last year, while revenue increased 22.5% to RM709.44mil.

 

The company had also announced a final dividend of 12 sen per share, boosting its full-year payout to 20 sen per share.

 

The glove maker attributed its record-high financial performance to internal quality and cost efficiency improvements, the strong US dollar as well as weak raw material prices.

 

The company’s full-year net profit rose 55% to RM280.14mil, or 45.36 sen earnings per share (EPS) from RM180.52mil, or 29.09 sen EPS in FY14. Revenue increased by 10.3% to RM2.51bil from RM2.27bil.

 

The turnaround of its China operation, which yielded an after-tax profit of RM4.2mil for FY15 from a loss of RM9.8mil a year earlier, also added to the improvement of group performance.

/theSTAR 21-10-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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TMC Life Sciences Bhd - Financial Report 2015

TMC Life Sciences Bhd, which operates the Tropicana Medical Centre and TMC Fertility Centre, quadrupled its net profit for the quarter ended Aug 31, 2015, to RM 2.89mil.

The healthcare group, which this month changed its financial year end to Aug 31 from May 31, told Bursa Malaysia that the figure jumped 397% year-on-year on 29.8% higher revenue of RM30.07mil contributed by higher patient load arising from additional consultants recruited.

“Profitability improved due to higher revenue recorded and interest income earned,” it added.

Net profit for the last financial year ended May 31, 2015, was RM 9.92mil, a 54% increase from the previous year. This was mainly due to higher interest income of RM 2.9mil earned from warrant conversion proceeds and recognition of net deferred tax credit of RM 2mil, partly offset against one-off corporate exercise cost of RM2.5mil.

On its prospects for the current financial year, TMC said the healthcare sector’s growth prospects remained positive, fuelled by changing demographics, a more affluent society and more health-conscious lifestyles in Malaysia. It also noted the growth of medical tourism.

However, the recent foreign exchange rate movements had affected imported supplies of medicines and medical equipment along with the imposition of the goods and services tax and rising manpower costs, had impact on TMC’s operating cost structure.

“Nonetheless, the group continues to expand the breadth and diversity of our services to generate more revenue growth. With the two new wards comprising 51 beds completed on Sept 9, 2015, our hospital (Tropicana Medical Centre) in Kota Damansara now has a capacity of 200 beds,” said the company.

/theSTAR 21-10-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Ringgit: Turn around?

Since my last update on 13th August 2015, the Ringgit had plunged to its worst level against the US dollar on 29th September 2015 (min = 3.5204 (April 29) avg = 3.8866 max = 4.4618 (September 29)).

However, the ringgit had "rebounded" to its biggest one-day gain in 17 years against the US dollar on 6th October 2015. This was due to economic data that was released by the Bank Negara that helped push the battered currency on an upward trajectory against the greenback and other major currencies.

The ringgit leapt 3.7% against the greenback to RM4.216 from RM4.371 after trade data for August showed that the weak ringgit had helped fatten an increasingly squeezed trade surplus that has been eroded by poor commodity prices.

Exports had climbed for the third straight month to 4.1% in August. The ringgit, which is down 34% against the dollar year-to-date and is the worst performer in the region, got a lift when trade data showed that the weak currency had helped exports.

 

Exports rose RM2.64bil to RM66.53bil compared with August 2014. This is the highest monthly export value recorded this year. The expansion in exports was to China, the United States, the European Union, Thailand, Singapore, Vietnam, and the Philippines.

 

The impact of the weak currency was conversely shown in imports which fell by 6.1% to M56.34bil.

The total amount of trade for August was RM122.86bil. The difference between exports and imports helped Malaysia’s trade surplus ballooned to RM10.19bil in August from RM2.37bil in July.

Helping the ringgit was also the rise of crude oil prices, where the price of Brent crude oil rose 1% to US$52.44. 

 

Another contributory factor was the announcement of the agreement that Malaysia had agreed to the signing of the Trans-Pacific Partnership Agreement (TPPA), though pending final approval from the Malaysian Parliament. The TPPA is a comprehensive free trade agreement involving Malaysia and 11 other economies, which is expected to boost the economy, trade and investment agenda.

 

It was not just against the US dollar that the ringgit had strengthened. The currency appreciated against the pound sterling and the Singapore dollar. It was at 6.4521 to the pound sterling from 6.6311 the previous day, and at 2.9810 to the Singapore dollar from 3.0208. The ringgit ended stronger against other regional currencies too.
 

The strengthening of the currency also boosted the FTSE Bursa Malaysia KL Composite Index, with the local bourse closing the day up 26.74 points to 1,689.25 on a volume of 2.69 billion shares.
 

There is a lot of money parked in foreign currency accounts in Malaysia. StarBizWeek had pointed out, about a week ago, that foreign currency deposits held by business enterprises had reached RM71.47bil as of July 2015 from RM59.9bil in January this year. Will this currency be reinvested back into the Country?

It is hoped that the Ringgit continues to strengthen against the other currencies due to the strong underlying fundamentals. 

/theSTAR 08-10-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Malaysia: Ringgit falls to a new low

China’s central bank adjusted the yuan downwards for the second consecutive day, sending markets and currencies reeling.

The ringgit continued its fall against the US dollar, hitting a new low of RM4.0275, in the morning, largely due to the devaluation of the yuan.

All currencies in the region also continued with their decline against the US dollar.

On a year-to-date basis, the ringgit is the worst performer among its Asian peers, and is down 13.33%. This is followed by the Indonesian rupiah, South Korean won and Thai baht at 9.88%, 8.35% and 6.99%, respectively.
Comparatively, the yuan is now down approximately 4.61%.

The impact on the ringgit is worse compared to other countries because Malaysia is viewed as a net exporter of energy and prices are depressed now – hovering below the US$50 per barrel mark.

Stock markets across the region fell with the Jakarta Composite Index leading the pack by falling 3.1% followed by Hong Kong’s Hang Seng Index which dropped 2.38%. There was a “bloodbath” on Bursa Malaysia where about 90% of the 1,000-odd stocks listed closed lower.

The benchmark KLCI fell for the fifth consecutive day, shedding 26.8 points yesterday to close at 1609 points. Since last Thursday, the index has been down by 116 points.

On Tuesday, the People Bank of China (PBOC) moved the guiding rate for the yuan 2% downwards and yesterday it set it at 1.6% lower. The guiding rate is the band within which the yuan is allowed to trade.

The downward movement is viewed as a devaluation of the yuan and the biggest currency movement for the world’s second largest economy since 1994. Although China abandoned its currency peg in 2005, the central bank manages the yuan in a tight range.

The devaluation of the yuan has sparked concerns that China’s economic slowdown was more severe than anticipated and the central bank had to devalue the currency to export its way out of the situation.

/theSTAR 13-08-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Malaysia: Economy grew 4.9% in Q2, 2015

Malaysia’s economic growth slowed to 4.9% in the Q2 of 2015, compared with 5.6% in the preceding quarter, as exports decelerated.

The growth rate, nevertheless, was slightly higher than market expectation of a 4.8% expansion for Malaysia’s gross domestic product (GDP) in the three months to June.

 BNM governor Tan Sri Dr Zeti Akhtar Aziz said on Thursday the economy was projected to remain resilient and on a steady growth path.

Zeti, who will remain as governor until her term ends next year, said headline inflation was higher in the second quarter, growing at 2.2%.

“Inflation is expected to be higher before moderating towards second half of 2016,” she said.

During the quarter in review, the services sector expanded 5%, supported by growth in the wholesale & retail trade and information & communication sub-sectors, while the manufacturing sector grew at a moderate pace of 4.2%, supported by electrical, electronic & optical products.

Growth of the mining & quarrying sector, which accounted for 9.1% of Malaysia’s economy, moderated to 6%, compared with 9.6% in the preceding quarter due to the decline in production of natural gas and slower production of crude oil.

Bank Negara data showed that private consumption expanded 6.4% in the second quarter of the year, compared with 8.8% in the first quarter, supported by growth in the consumption on food & beverages, housing & utilities, communication and transportation.

Gross fixed capital formation eased to 0.5%, from 7.9% in the preceding quarter due to the deceleration in machinery & equipment sector.

The central bank said the momentum of gross fixed capital formation was led by private-sector investment, grew 3.9%.

In the three months to June 2015, Malaysia’s exports contracted 3.7%, reflecting the subdued performance in the shipment of goods and services. Imports, on the other hand, fell 2.8% due to a contraction in the country’s demand for foreign goods.

Bank Negara Malaysia (BNM) said growth in the second quarter was supported by continued expansion in services and a turnaround in agricultural production.

/theSTAR 13-08-15

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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Non-Traditional Model to Product Launch-Dengue Vaccines

Reproducing, in relevant parts, herewith an interesting article, lifted out from a news article, by SURESH KUMAR, Executive Vice President External Affairs of Sanofi viz:

Innovative medicines are traditionally developed and launched first for at-risk populations in the US and Europe. Later, once innovation costs have been paid for, the new medicines are then made available to endemic nations.

This model works but it has some serious limitations: namely, a delay in access to innovation in these endemic nations. There is also the risk that unmet medical needs in these countries are left neglected as they are not driving the innovation agenda of the pharmaceutical industry.

As of today, dengue remains on the World Health Organisation’s list of neglected diseases, despite the fact that it threatens half the world’s population.

Clearly, a new solution is needed – particularly for emerging markets and middle-income countries that have the capacity technical expertise, as well as disease knowledge to participate in clinical development programmes and also approve and regulate new medicines for use by their citizens.

Dengue provides a particularly well-suited case in point, since it is not a public health threat in the US and Europe but it is a major priority in endemic countries in South-East Asia and Latin America.

About 20 years ago, Sanofi set out to develop an innovative vaccine against dengue, one that would be effective in preventing the illness caused by all four dengue strains. Since then dengue has spread from a handful of countries to being endemic in over 120 worldwide and is recognised by the WHO as the fastest growing mosquito-borne disease in the world today.

The WHO has also called for a dengue vaccine to be used in conjunction with other dengue prevention efforts like vector control and education to help achieve its objectives to reduce dengue mortality by 50% and morbidity by 25% by 2020.

Sanofi set out to do both, develop and launch its dengue vaccine first in endemic countries where it could have the greatest impact on disease burden and quickly achieve these WHO objectives.

To be able to realise this “flipping the model” approach to new vaccine access, the company invested 300mil euros to build a dedicated production facility for the dengue vaccine that would eventually attain a full capacity of 100 million doses annually.

The company made this investment in 2009, at considerable risk given that the results of its Phase III clinical development programme were not yet known. Now, the Phase III programme has successfully reached its efficacy endpoints and the dengue vaccine candidate is currently under regulatory review in a number of endemic countries both in Latin America and in South-East Asia.

This is in keeping with the company’s long-standing commitment to launch the vaccine first in these nations rather than in Europe or the US, where its traditionally done.

But forging a new access model is not something that a pharmaceutical company can do on its own.

In order to be successful, Sanofi has worked hard to collaborate with endemic governments and public health bodies, as well as the global development and vaccine policy community, to build acceptance and support for this new approach.

If the dengue vaccine introduction model is to succeed, it will be necessary for Sanofi to be able to make the vaccine available, upon approval, for a fair and equitable price that balances innovation costs against sustainable access in endemic countries.

New ways of funding access to such an innovation in these countries, as well as mechanisms to help strengthen their healthcare infrastructure to be able to successfully implement the vaccine, will be needed.

Sanofi intends to work closely with governments, funding bodies and the vaccine policy universe to broker the successful introduction of the dengue vaccine upon approval. We know that more is at stake here than the launch of the world’s first dengue vaccine.

If this model succeeds, industry as a whole may be more inclined to be proactive in addressing the unmet medical needs of low and middle-income countries as a priority rather than as a second phase of medical innovation access.

Diseases like dengue disrupt economic growth and development of endemic countries and investments in controlling and eliminating this disease burden can help to further the economic stability and growth potential of these nations.

/theSTAR 08-08-2015

Disclaimer: Views or opinions expressed are solely those of the Author and should be used with discretion. The Author shall not be held liable for any acts or omissions arising from the use of the information. The user will be personally liable for any damages or other liability arising hereof.

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