Starbucks Malaysia falls to 287 outlets from peak of 400 [BTTV]

 By Sharen Kaur

New Straits Times, December 1, 2025 

KUALA LUMPUR: Berjaya Food Holdings Bhd (BFood) continues to streamline its retail network, with Starbucks Malaysia's store count declining to 287 outlets, following 14 net closures, according to Hong Leong Investment Bank (HLIB).

Since opening its first Starbucks in Kuala Lumpur on Dec 17, 1998, BFood had expanded to around 400 stores nationwide.

BFood chief executive officer Datuk Sydney Quay told Business Times in March this year that 20 stores were permanently closed due to business considerations and expired tenancies, while nearly 30 stores were temporarily closed, mainly in Kelantan and Terengganu.

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"Recent closures notably involved outlets in Subang Parade and Paradigm Mall, even though these are considered high-growth locations. In some cases, the decisions were driven by higher rental demands from building owners or plans to relocate to larger premises," said sources familiar with Starbucks Malaysia's operations.

"We expect Starbucks Malaysia to expand its operations in line with rising consumer spending in the country," he told Business Times.

According to HLIB, management is pursuing selective Starbucks expansion, targeting around 10 smaller-format stores, while focusing on consolidation, operational efficiency, labour productivity, and disciplined marketing.

It said that despite ongoing geopolitical tensions and intensifying competition from fast-expanding local and China-based coffee chains, same-store sales growth (SSSG) turned positive at +7 per cent for Starbucks Malaysia and +5 per cent for Brunei, indicating early signs of recovery.

Early performance from Iceland, where the group now operates two stores, has also been encouraging.

HLIB cautioned that near-term demand may remain subdued, making it challenging for Starbucks to fully reclaim lost market share.

Beyond Starbucks Malaysia and Brunei, BFood operates the Kenny Rogers Roasters (KRR) chain in Malaysia and the Paris Baguette bakery-café brand in Malaysia and the Philippines.

According to HLIB, the KRR store count fell to 37 outlets (3 closures), while Paris Baguette remained steady at 16 stores.

Reflecting early operational stabilisation and better-than-expected recovery momentum, HLIB raised its target price to 19 sen (from 15 sen). However, it maintains a SELL recommendation, citing ongoing structural headwinds and the time required for a sustained earnings recovery as limiting near-term upside.

BFood posted revenue of RM128.2 million in the first quarter of its financial year 2026 (Q1 FY26), up 11 per cent quarter-on-quarter (QoQ) and 3 per cent year-on-year, with a reduced loss of RM16.2 million versus RM33.7 million a year ago. The results exceeded both HLIB and consensus forecasts, driven by stronger same-store sales in Malaysia, growth in other Southeast Asian markets, and contributions from new Nordic operations.

Margin recovery was aided by cost-saving measures, store rationalisation, and lower depreciation. No dividend was declared.

HLIB expects FY26 and FY27 losses to narrow further to RM44.6 million and RM22.7 million, respectively, while CIMB Securities Sdn Bhd cautions that half-year losses could widen in the second half of FY26 due to competition, operating pressures, and potential marketing costs, despite short-term seasonal demand and government cash aid boosting Q2 FY26 performance.

Source: https://www.nst.com.my/business/corporate/2025/12/1327428/starbucks-malaysia-falls-287-outlets-peak-400-bttv

Berjaya Food Holdings Bhd (BFood) continues to streamline its retail network, with Starbucks Malaysia’s store count declining to 287 outlets following 14 net closures, according to Hong Leong Investment Bank (HLIB). NSTP/MIKAIL ONG

Global recession unlikely, steady growth for Malaysia expected: economists

By Sharen Kaur

New Straits Times, December 1, 2025 

Malaysia’s economy is expected to continue expanding into 2026, albeit at a slightly slower pace, with economists saying key indicators show no immediate signs of a recession despite persistent global uncertainties. NSTP/AIZUDDIN SAADl

KUALA LUMPUR: Malaysia's economy is expected to continue expanding into 2026, albeit at a slightly slower pace, with economists saying key indicators show no immediate signs of a recession despite persistent global uncertainties.

Affin Bank chief economist Alan Tan Chew Leong said, while global risks, including pressures from the US economy, geopolitical tensions, and shifting trade tariffs, have intensified, traditional early-warning signals do not point to an imminent global or domestic recession.

One of the most important gauges of recession risk, the Purchasing Managers' Index (PMI), remains above the 50-point expansion threshold, he said at the National Economic Outlook Conference organised by the Malaysian Institute of Economic Research (MIER) last week.

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Tan explained that sustained PMI readings below 50 signal contraction in manufacturing and weaker export guidance, which could indicate a global slowdown or recession.

PMI, reflecting real-time sentiment in the manufacturing sector, remains a reliable early indicator of potential economic stress.

He added that major central banks still have ample policy space to stabilise economies if growth softens, providing a buffer against a recessionary spiral.

For Malaysia, recession risks are mitigated by a diversified export base, steady domestic demand, and rising construction activity, particularly from data centre investments. Manufacturing remains resilient, while the tourism sector is expected to gain momentum ahead of Visit Malaysia Year 2026.

Overall, economists forecast Malaysia's GDP growth to range between 4.3 per cent and 4.7 per cent in 2026, following a 4.7 per cent expansion in the first nine months of 2025.

Sunway University economics professor Dr Yeah Kim Leng told Business Times that while Malaysia is on track to avoid a slowdown in 2025, the global economy remains fragile due to high debt levels, climate risks, and geopolitical tensions.

"Malaysia is equipped to weather the risks with ongoing fiscal strengthening efforts and initiatives to improve household income and strengthen investor confidence," he said.

"The 4.3 per cent to 4.7 per cent forecast for 2026 is realistic but we should be ready for a bumpy ride as uncertainties remain elevated."

Meanwhile, Dr Apurva Sanghi, World Bank lead economist for Malaysia, said 2026 will be the "real test" of whether domestic demand can continue anchoring growth, particularly as the revised US tariff framework comes into play.

Under the Malaysia–US deal signed on October 26, the US will maintain a 19 per cent tariff on Malaysian goods, though 1,711 product lines are set to receive reduced or zero tariffs once legal ratification is completed, expected within 60 days.

A fund manager told Business Times that while the headline tariff is 19 per cent, the effective tariff burden for Malaysian exporters is closer to 12–13 per cent.

"This lower rate reflects preferential trade agreements, exemptions, and adjustments in applied duties. Compared with other regional exporters facing higher effective tariffs, Malaysia's exporters enjoy a competitive edge, helping cushion the impact of trade tensions," he said.

Source: https://www.nst.com.my/business/economy/2025/12/1327426/global-recession-unlikely-steady-growth-malaysia-expected

Economist calls for reverse income tax to fix pension crisis, boost wages

By Sharen Kaur

New Straits Times, December 1, 2025 

Solving Malaysia’s pension crisis and raising wages are the most urgent social protection reforms, and both could be addressed through a reverse income tax model of universal basic income, said economist Dr Geoffrey Williams.

KUALA LUMPUR: Solving Malaysia's pension crisis and raising wages are the most urgent social protection reforms, and both could be addressed through a reverse income tax model of universal basic income, said economist Dr Geoffrey Williams.

"It's good that the need for structural reforms in social protection and the labour market has finally been highlighted by policymakers, although this is not normally the domain of a central bank," he said.

Dr Williams was responding to a recent news report quoting Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour, who said Malaysia is making steady progress with strategic and structural reforms to achieve its aspiration of becoming a high-income, developed nation.

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Abdul Rasheed emphasised that beyond fiscal and investment measures, advancing social protection and labour market reforms is essential to strengthening long-term economic resilience.

He noted that given current socio-economic and socio-political realities, a gradual and cautious approach may be necessary, emphasising the importance of avoiding policy flip-flops.

Dr Williams said step-by-step approaches are not the best way to deal with social protection and labour market reforms.

"The best approach is intervention first and measured deregulation. By taking a step-by-step approach, you inevitably delay helping those most in need. You also allow the process to be stopped as new governments are elected. This means you might never reach the aim of policy reform," he told Business Times.

Dr Williams also noted that the government has made progress in fiscal reform, subsidy rationalisation, reducing wastage and leakages, and anti-corruption efforts, saving RM15.5 billion per year in subsidies and another RM15.5 billion in the last two years in anti-corruption efforts.

"The problem is that people are not seeing the benefits of this. "STR-SARA payments are frozen for example," he noted.

Looking ahead, Dr Williams said as Malaysia moves towards a digital economy, the introduction of an e-payments tax (EPT) is feasible.

A small one per cent levy on QR code, e-wallet, or card transactions could raise RM28.8 billion, he said.

"If you adopt a step-by-step approach for example, you have BR1M introduced in 2012 but still, 13 years later, the problem of low income has not been stopped."

Meanwhile, Dr Oh Ei Sun, Senior Fellow at the Singapore Institute of International Affairs, said policy reforms must be paired with tangible, visible rewards to secure public support.

"Reforms should also be tied with specific and tangible "rewards" that are low-hanging fruits. For example, new taxes are to be used for building or improving more schools and hospitals, something that people can touch and feel and thus think is "worth" the sacrifice," he told Business Times.

He added that as taxes rise and subsidies are rationalised, Malaysians must experience improved government efficiency, including reduced red tape and better service delivery. He cited how the United States used tariff revenues to compensate farmers affected by China's boycott of American soybeans.

Dr Oh said enhancing the ease of doing business, such as improving licensing processes and tackling corruption and monopolistic practices, requires sustained political will.

He also noted that easing restrictions on online expression could encourage creativity, pointing out that Malaysia has tightened regulations on content deemed undesirable in recent years.

Source: https://www.nst.com.my/business/corporate/2025/12/1327424/economist-calls-reverse-income-tax-fix-pension-crisis-boost

RM135bil in e-wallet at risk of going unclaimed [BTTV]

 By Sharen Kaur

New Straits Times, December 1, 2025 

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KUALA LUMPUR: Malaysians are estimated to hold RM135 billion in digital funds in local e-wallets, which could become the next wave of unclaimed assets without proper digital estate planning, said Sampul.co chief executive officer and co-founder Arham Merican.

He warned that without careful planning, these digital assets may be inaccessible to beneficiaries if the account holder passes away, highlighting the importance of incorporating digital asset management into traditional financial planning.

"Malaysia reportedly has RM13.3 billion in unclaimed funds and RM90 billion in frozen assets, showing how widespread this issue already is," he told Business Times.

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An e-wallet, or digital wallet, is an online service that allows users to pay for goods and services electronically. Payments can be made online or at physical stores using smartphones, other mobile devices, or computers. Funds can be preloaded or linked directly to a bank account, and wallets can also securely store items such as driver's licenses, health cards, loyalty cards, and other IDs.

In Malaysia, e-wallets are increasingly popular as cashless payments gain traction. Leading platforms include Touch 'n Go eWallet, widely used for tolls, public transport, and retail purchases; Boost, offering bill payments, QR code payments, and loyalty rewards; and GrabPay, integrated into the Grab app for ride-hailing, food delivery, and retail transactions. Other widely used options such as ShopeePay, Maybank QRPay, and BigPay cater to both daily payments and online shopping.

Sunway University professor of economics Dr Yeah Kim Leng said that Malaysia's RM90 billion in frozen estate assets is a substantial sum, equivalent to nearly 5 per cent of the country's 2024 GDP, illustrating how much productive capital is effectively "locked away" at any given time.

He added that if these assets were fully invested or channelled into productive sectors, such as small businesses, infrastructure projects, or capital markets, they could contribute roughly 1.25 per cent to GDP growth, based on an incremental capital-output ratio of four, which is typical for developing economies.

"Unlocking these resources could not only stimulate broader economic activity but also generate employment, raise household incomes, and increase consumption, creating a multiplier effect that benefits both communities and the government through higher tax revenues," he told Business Times.

Dr Yeah said unresolved inheritance disputes effectively trap wealth in the system, leaving assets unutilised and preventing them from contributing to economic growth.

He explained that when assets, whether in cash, property, or digital holdings, remain idle due to legal or administrative delays, the circulation of capital slows.

"This reduction in liquidity weakens the money multiplier effect, the mechanism through which each ringgit in the financial system generates additional economic activity, and leads to subpar growth and diminished wealth creation for both families and the broader community.

"For instance, properties left in limbo or unclaimed bank balances cannot be reinvested, sold, or used to generate income, limiting their potential contribution to the economy," he said.

Dr Yeah further noted that beyond macroeconomic effects, the freezing of assets also has real-life consequences for families.

Without access to inherited wealth, households may struggle to meet educational, healthcare, or business financing needs, perpetuating financial stress and reducing opportunities for upward mobility.

"Inheritance is an essential intergenerational transfer that preserves family wealth and social mobility. When families cannot pass on assets, it risks widening inequality," Dr Yeah said.

Probate Delays Leave Families Cut Off from Funds

Arham said Malaysia's probate process remains largely manual and paper-based, often taking 12 to 24 months. Throughout this period, a deceased person's bank accounts and assets are frozen, cutting off families from essential funds.

Many Malaysians, he added, underestimate the administrative and legal hurdles involved, from securing death certificates to obtaining probate orders, until they experience a loss themselves. Missing nominations, incomplete wills, or the absence of Hibah structures can prolong financial hardship.

Arham emphasised that the system has not kept pace with Malaysia's fast-evolving digital banking ecosystem, creating a gap between how quickly money moves in life and how slowly it moves after death.

Analysts agree, saying Malaysia faces a "structural lag" in estate governance. While digital adoption has outpaced the region, estate administration processes remain fragmented across Amanah Raya, civil courts, and Syariah courts. Required documentation—including asset verification, debt settlement, Faraid calculations, and court certifications—creates multiple points of delay; even minor errors can add months.

Court backlogs, limited public awareness, and reliance on intermediaries such as lawyers and trustees further add time and cost, Arham told Business Times. Incomplete or outdated wills and missing information on digital assets, including e-wallets and crypto holdings, commonly stall proceedings.

"These layers of delay prevent families from resolving matters efficiently and add emotional strain during an already difficult period," he said.

Regarding frozen assets, Arham said that straightforward cases can take 6–12 months to settle, while more complex cases may remain frozen for two years or longer.

Arham explained that financial institutions are legally required to freeze accounts immediately once notified of the account holder's passing.

No withdrawals or transfers are allowed until the Grant of Probate (for those with wills) or Letter of Administration (for those without) is issued. Even joint accounts may face temporary freezes depending on bank policies, he said.

Arham said that this challenge is expanding into the digital realm.

"Assets held in digital banks, e-wallets, and crypto wallets risk remaining inaccessible or unclaimed if the owner's details are not properly recorded or linked to an estate plan."

He added that collaboration between financial planners, licensed trustees and technology platforms like Sampul.co, a cradle-backed startup, is essential to create a trusted and complete estate planning ecosystem.

Source: https://www.nst.com.my/business/corporate/2025/12/1327420/rm135bil-e-wallet-risk-going-unclaimed-bttv

Malaysians are estimated to hold RM135 billion in digital funds in local e-wallets, which could become the next wave of unclaimed assets without proper digital estate planning, said Sampul.co chief executive officer and co-founder Arham Merican.

Malaysia eyes Top 20 Global AI Ranking by 2030; I-Berhad leads corporate tech drive

 By Sharen Kaur

I-Bhd has launched its 2025–2030 strategic roadmap to build Malaysia’s first billion-ringgit intelligent ecosystem, combining property, AI, and robotics within a self-learning urban platform.

KUALA LUMPUR: Malaysia is on track to join the world’s top 20 artificial intelligence (AI) economies by 2030 under the National AI Roadmap 2021–2025, with AI expected to contribute more than RM60 billion to the nation’s gross domestic product (GDP).

Investor confidence is gaining momentum, particularly in data centre development, as industry experts note that AI has moved beyond hype to become a genuine economic driver — positioning Malaysian companies for sustained long-term growth.

As Malaysia accelerates its AI ambitions, corporate innovators like I-Bhd demonstrate that integrating AI and robotics with traditional industries can create scalable, resilient, and future-ready ecosystems — setting the stage for the country to become a leading AI economy in the region.

Global research by McKinsey & Co forecasts that AI will be a primary catalyst for rising data centre demand, with Malaysia’s AI market projected to expand tenfold over the next six years. Key growth areas include natural language processing, computer vision, AI robotics, and generative AI, all expected to register annual growth rates exceeding 40 per cent.

Moody’s Ratings has highlighted the surge in investment in semiconductors and data centres but cautioned that returns may take time to materialise, warning of potential overcapacity risks reminiscent of the late-1990s tech cycle.

Digital Minister Gobind Singh Deo emphasised that Malaysia must move beyond debating whether to adopt AI and focus on both adoption and execution, noting that these complementary strategies are essential for fostering innovation and trust in the digital ecosystem. Minister of Science, Technology and Innovation Chang Lih Kang echoed the sentiment, describing AI as a national imperative for Malaysia’s economic future.

Despite progress, AI adoption among Malaysian manufacturers remains at an early stage. A Federation of Malaysian Manufacturing survey shows that only 26 per cent of companies have implemented AI solutions, while the majority remain in awareness or exploratory phases.

Corporate innovators, however, are accelerating AI integration. Datuk Paul Khong, group managing director of Savills Malaysia, told Business Times that forward-looking developers are increasingly embedding AI and robotics into new projects to enhance efficiency, sustainability, and user experience.

                                          Tan Sri Lim Kim Hong, I-Bhd chairman (right)

At the forefront is I-Bhd, whose i-City development exemplifies the fusion of technology and modern living. Through partnerships with tech firms, universities, healthcare providers, and logistics operators, I-Bhd is creating an open, scalable ecosystem that combines robotics, AI-driven wellness, and urban analytics.

“I-Bhd’s strategy generates new revenue streams grounded in a strong real-asset foundation, creating a resilient model for long-term growth,” said Tan Sri Lim Kim Hong, I-Bhd chairman. “Our model rests on three pillars: a stable real-asset base ensuring steady cash flow, a capital-light partnership structure for scalability, and the upside potential of accelerating AI adoption.”

Lim highlighted that I-Bhd has evolved from digital appliances to establishing i-City as Malaysia’s first Digital City, and is now positioning itself as the country’s first intelligent ecosystem operator, integrating real estate, robotics, and AI into a connected platform.

 I-Bhd's initiatives include AI Tower, AI & Robotics World Experience Centre, AI World, and Robotics-as-a-Service.

Under its 2025–2030 strategic roadmap, I-Bhd aims to build Malaysia’s first billion-ringgit intelligent ecosystem, with flagship initiatives including AI Tower, AI & Robotics World Experience Centre, AI World, Robotics-as-a-Service (RaaS), AI Wellness Subscriptions, and the i-City SuperApp. These projects aim to shift revenue from property-centric to a balanced portfolio driven by digital services, AI-led operations, and platform-based engagement — akin to a “Tesla of Cities” approach where data and analytics continuously monetise customer interactions.

Lim noted that post-pandemic, I-Bhd has significantly diversified its business. Non-property segments, including investment properties, digital infrastructure, leisure, and hospitality, now complement its property base, creating recurring revenue streams and a platform for continuous AI and robotics innovation.

Unlike traditional developers that sell and exit, I-Bhd retains and manages assets, maintaining a billion-ringgit portfolio that funds ongoing technological enhancements without burdening property owners. The model delivers value across three dimensions: enhancing resident experience, improving operational efficiency, and generating recurring digital revenue.

On a national scale, AI adoption is accelerating. An AWS report shows that approximately 2.4 million Malaysian businesses — around 27 per cent of enterprises — have embraced AI, with benefits emerging across healthcare, precision farming, logistics, and manufacturing.

 Standard Chartered Malaysia found that nine in ten corporate leaders prioritise foundational systems such as cloud computing, with AI (68 per cent) and automation and robotics (62 per cent) identified as key drivers of trade digitalisation.

However, challenges remain. Implementation hurdles (66 per cent), regulatory barriers (58 per cent), and interoperability gaps (50 per cent) continue to slow progress, leaving many trade processes reliant on paper-based systems.