PETALING JAYA: A proposed law to regulate trading in gold and silver has yet to be formally discussed with industry participants, according to Tomei Consolidated Bhd group managing director Ng Yih Pyng.
“There hasn't been any concrete development since the policy was announced. We hope they (Bank Negara) will consult the industry if they are to come out with anything.
“As of now, we haven't heard from them. I suppose they are doing the groundwork and will consult us when they feel it is necessary to implement certain measures,” he told StarBiz on the sidelines of the company's GoldSilver2U.com seminar recently.
Deputy Finance Minister Datuk Donald Lim Siang Chai had said last November the central bank was asked to conduct a study on the possibility of enacting fresh regulation around the domestic gold and silver markets, citing the Government's concern for the risk faced by the public when investing in the precious metals.
On another note, Ng said that Tomei, one of the country's three listed gold and jewellery retailers alongside DeGem Bhd and Poh Kong Holdings Bhd, was always on the lookout for potential business opportunities, which may include mergers and acquisitions.
While saying there were no concrete plans on the table, he added that opportunities in the market were aplenty.
“But a lot depends on the strategy, outlook and what kind of value you can create. Any acquisition (we make) will have to suit our appetite. If we cannot digest it, we won't do it.”
He also noted that the next two years could be challenging due to overall market conditions.
“Therefore, we will take a slightly more cautious approach to the business.”
On his outlook for bullion prices, Ng stressed that gold was a long-term investment.
“You don't want to (focus on) the price tomorrow, or in two or three weeks. In the medium term, gold has reason to strengthen further.
“I wouldn't suggest that anyone take a short term position.”
Ng added that the growing demand for gold investments over the past few years had led to a heavier weighting of the commodity in its inventory, but he maintained that Tomei only bought what it needed.
“We are not a trader. We will stock up when we need to, for example during festive seasons.
“But when we need less stock during low seasons, we will reduce (our holdings). We don't buy to anticipate price movements.”
As at its first quarter ended March 31, Tomei's inventories stood at RM332.24mil, down slightly from RM326.1mil in the three months to Dec 31, 2011, but notably higher than the RM270.11mil recorded in the corresponding quarter last year.
Although jewellery makes up the bulk of its stock, its holdings of gold has risen steadily as a percentage of total inventories, from 41%, or RM77.01mil, in 2007 to 49%, or RM160.64mil, in 2011, according to the company's annual reports.
Tomei's net profit in the first quarter was 8% lower to RM7.57mil against RM8.35mil a year earlier, while revenue rose 35% to RM155.69mil from RM115.24mil.
It attributed the increase in revenue to better consumer spending, but said the decline in profit was caused by fluctuations in the price of gold.
On another note, Ng said that Tomei, one of the country's three listed gold and jewellery retailers alongside DeGem Bhd and Poh Kong Holdings Bhd, was always on the lookout for potential business opportunities, which may include mergers and acquisitions.
While saying there were no concrete plans on the table, he added that opportunities in the market were aplenty.
“But a lot depends on the strategy, outlook and what kind of value you can create. Any acquisition (we make) will have to suit our appetite. If we cannot digest it, we won't do it.”
He also noted that the next two years could be challenging due to overall market conditions.
“Therefore, we will take a slightly more cautious approach to the business.”
On his outlook for bullion prices, Ng stressed that gold was a long-term investment.
“You don't want to (focus on) the price tomorrow, or in two or three weeks. In the medium term, gold has reason to strengthen further.
“I wouldn't suggest that anyone take a short term position.”
Ng added that the growing demand for gold investments over the past few years had led to a heavier weighting of the commodity in its inventory, but he maintained that Tomei only bought what it needed.
“We are not a trader. We will stock up when we need to, for example during festive seasons.
“But when we need less stock during low seasons, we will reduce (our holdings). We don't buy to anticipate price movements.”
As at its first quarter ended March 31, Tomei's inventories stood at RM332.24mil, down slightly from RM326.1mil in the three months to Dec 31, 2011, but notably higher than the RM270.11mil recorded in the corresponding quarter last year.
Although jewellery makes up the bulk of its stock, its holdings of gold has risen steadily as a percentage of total inventories, from 41%, or RM77.01mil, in 2007 to 49%, or RM160.64mil, in 2011, according to the company's annual reports.
Tomei's net profit in the first quarter was 8% lower to RM7.57mil against RM8.35mil a year earlier, while revenue rose 35% to RM155.69mil from RM115.24mil.
It attributed the increase in revenue to better consumer spending, but said the decline in profit was caused by fluctuations in the price of gold.
By JOHN LOH
johnloh@thestar.com.my
