Moving forward with affordable housing


One way to solve housing shortage problem is to build more houses.

“If we take a look at countries with commendable housing policies such
as Singapore and Hong Kong, we notice that the government plays a very
important role in building and ensuring a sufficient supply of housing
for their people.”

THE issue of affordable housing has been a hot potato for many countries, especially for a nation with a growing population and urbanisation like ours.

In my previous article, I mentioned that there was a growing shortage of affordable housing in our country according to Bank Negara governor Tan Sri Muhammad Ibrahim. The shortage is expected to reach one million units by 2020.

According to Bank of England governor Mark Carney, one of the most effective ways to address the issue is to build more houses. There are good examples in countries like United Kingdom, Australia and Singapore, which have 2.4, 2.6 and 3.35 persons per household respectively.

In comparison, the average persons per household in our country is 4.06 person, a ratio which Australia had already achieved in 1933! To improve the current ratio, we need to put more effort into building houses to bring prices down.

If we take a look at countries with commendable housing policies such as Singapore and Hong Kong, we notice that the government plays a very important role in building and ensuring a sufficient supply of housing for their people.

For example in Singapore, their Housing and Development Board (HDB) has built over one million flats and houses since 1960, to house 90% of Singaporeans in their properties. In Hong Kong, the government provides affordable housing for lower-income residents, with nearly half of the population residing in some form of public housing nowadays. The rents and prices of public housing are subsidised by the government and are significantly lower than for private housing.

To be on par with Australia (2.6 persons per household), our country needs a total of 8.6 million homes to house our urban population of 22.4 million people. In other words, we need an additional 3.3 million houses on top of our existing 5.3 million residential houses.

However, with our current total national housing production of about 80,000 units a year, it will take us more than 40 years to build 3.3 million houses! With household formation growing at a faster rate than housing production, we will still be faced with a housing shortage 40 years from now.

Therefore, even if the private sector dedicated all its current output to build affordable housing, it will still be a long journey ahead to produce sufficient houses for the nation. It is of course impossible for the private sector to do so as it will be running at a loss due to rising costs of land and construction.

In view of the above, the government has to shoulder the responsibility of building more houses for the rakyat due to the availability of resources owned by the government. Land, for example, is the most crucial element in housing development. As a lot of land resources are owned by government, they must offer these lands to relevant agencies or authorities to develop affordable housing.

I recall when I was one of the founding directors of the Selangor State Development Corp in 1970s, its main objectives was to build public housing for the rakyat.

However, today the corporation has also ventured into high end developments in order to subsidise its affordable housing initiatives. This will somehow distract them from focusing on the affordable housing sector.

Although government has rolled out various initiatives in encouraging affordable houses, it is also important for the authorities to constantly review the original objectives of the relevant housing agencies, such as the various State Economic Development Corporations, Syarikat Perumahan Negara Bhd, and 1 Malaysia People’s Housing Scheme, to ensure they have ample resources especially land and funding to continue their mission in building affordable housing.

A successful housing policy and easy access to affordable housing have a huge impact on the rakyat. It is hoped that our government escalates its effort in building affordable housing, which will enhance the happiness and well-being of the people, and the advancement of our nation.


Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
By Alan Tong

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New Year 2018 high for Malaysia


FBM KLCI moves higher past 1,800 mark while ringgit breaches RM4 level

In a synchronised fashion, the ringgit, stock market and exports are all glowing for Malaysia. Add this to the rising price of crude oil, economists are expecting the good start to the year to continue leading up to GE14. Experts foresee these translating to lower import costs and more affordable overseas education.

 

Busa and ringgit on a high

PETALING JAYA: In a rare occurrence, the local capital markets got off to a roaring start in the first week of the new year.

US$ vs ringgit at 3.9965 

Sentiments on the stock market picked up as it sailed through the 1,800 mark, the ringgit breached the RM4 level against the US dollar and the latest trade numbers released showed that exports have hit record levels.

FBM KLCI up 14.52pts to 1,817.97

The FBM KLCI, a key benchmark for the local stock market, closed at 1,817.97, up 14.52 points yesterday – the highest since April 2015. Analysts and fund managers expect the upward momentum to continue, leading to the 14th General Election (GE14).

“The local stock market is set to continue its upward momentum, with investors in optimistic mood, lingering upon expectations of the GE14,” an analyst said.

The Malaysian stock market is now playing catch-up with key regional markets in other countries that have been moving up.

For instance, in the United States, the Dow Jones Industrial Average closed at fresh record highs above 25,000. Trading volume on Bursa has risen sharply to a high of nearly six billion shares valued at RM3.94bil. This is the highest since 2014.

“The increasing volume is an indicator of more investors joining the fray,” said the analyst.

The ringgit also perked up against the US dollar and strengthened to 3.9945 yesterday, the strongest level since August 2016.

Crude oil prices continue to climb with the Brent Crude rising above US$67 per barrel. Apart from a brief spike in May 2015, this is the highest price levels it has reached since December 2014, when the oil price started its slide down.

Exports in November rise to RM83.50bil

Exports hit record high of RM83.5bil in November – Business News …

Adding to the optimism, the country’s latest trade data for November showed that exports exceeded expectations and rose to a monthly high of RM83.5bil. This is an increase of 14.4% from last year.

The head of UOB Kay Hian Malaysia Research, Vincent Khoo, expects global and local conditions to be favourable for the local stock market as sentiment builds up for the GE14.

“Malaysia has been a laggard and now it is reversing its underperformance. Liquidity is strong locally and internationally as there is more foreign funds participation.

“Economic numbers are strong and export momentum continues to be solid,” Khoo said.

Socio Economic Research Centre executive director Lee Heng Guie said there were continued optimism and positive sentiments on the global economy and markets.

He said the tax reforms in the US would beef up corporate earnings while central banks around the world were raising rates.

The impending GE14, he added, spurred investors’ interest in the stock market and the recovery in oil prices continued to lift the demand for ringgit.

He said the ringgit had a good rally since the last Bank Negara meeting and the upcoming meeting on Jan 29 might see the central bank review its overnight policy rates (OPR) upwards.

The OPR now is 3.25% and many are expecting it to increase, a move that would spur banks to raise their interest rates.

Additionally, Lee said trade data was better than expected and as long as the macro numbers and earnings deliver, it would lift sentiments on market.

Nonetheless, he said investors might be a bit cautious when the dissolution of Parliament was announced.

Meanwhile, Oanda head of trading Asia-Pacific Stephen Innes said Bursa Malaysia was playing catchup as the ringgit remained undervalued in a lot of fund managers’ portfolio.

“But I think the current run will take us to 3.90 (against the US dollar) but at this stage, I think the market is starting to factor in the Bank Negara rate hike in January.

“So we may see a slower appreciation of the ringgit and we should expect profit taking ahead of the rate decision (by BNM) later in the month,” he added.

On the external front, Inness said the global equity market rally was benefiting from higher commodity prices in general and specifically oil prices.

“The recent supply disruptions are having a much more significant impact on prices given Opec’s (Organisation of the Petroleum Exporting Countries) recent production cut and the market is certainly much tighter than it has been in the past.

“Rising oil prices bode well for the FBM KLCI given that oil and gas constituents play a big role in the KLCI make-up. However, I don’t think this is strictly an isolated oil play but it is also rallying on the global growth narrative which is supporting export-oriented firms,” Innes said.

By leong hung yee The Staronline

Bursa and ringgit on a high

 

FBM KLCI moves higher past 1,800 mark while ringgit breaches RM4 level

PETALING JAYA: In a rare occurrence, the local capital markets got off to a roaring start in the first week of the new year.

Sentiments on the stock market picked up as it sailed through the 1,800 mark, the ringgit breached the RM4 level against the US dollar and the latest trade numbers released showed that exports have hit record levels.

The FBM KLCI, a key benchmark for the local stock market, closed at 1,817.97, up 14.52 points yesterday – the highest since April 2015. Analysts and fund managers expect the upward momentum to continue, leading to the 14th General Election (GE14).

“The local stock market is set to continue its upward momentum, with investors in optimistic mood, lingering upon expectations of the GE14,” an analyst said.

The Malaysian stock market is now playing catch-up with key regional markets in other countries that have been moving up.

For instance, in the United States, the Dow Jones Industrial Average closed at fresh record highs above 25,000. Trading volume on Bursa has risen sharply to a high of nearly six billion shares valued at RM3.94bil. This is the highest since 2014.

“The increasing volume is an indicator of more investors joining the fray,” said the analyst.

The ringgit also perked up against the US dollar and strengthened to 3.9945 yesterday, the strongest level since August 2016.

Crude oil prices continue to climb with the Brent Crude rising above US$67 per barrel. Apart from a brief spike in May 2015, this is the highest price levels it has reached since December 2014, when the oil price started its slide down.

Adding to the optimism, the country’s latest trade data for November showed that exports exceeded expectations and rose to a monthly high of RM83.5bil. This is an increase of 14.4% from last year.

The head of UOB Kay Hian Malaysia Research, Vincent Khoo, expects global and local conditions to be favourable for the local stock market as sentiment builds up for the GE14.

“Malaysia has been a laggard and now it is reversing its underperformance. Liquidity is strong locally and internationally as there is more foreign funds participation.

“Economic numbers are strong and export momentum continues to be solid,” Khoo said.

Socio Economic Research Centre executive director Lee Heng Guie said there were continued optimism and positive sentiments on the global economy and markets.

He said the tax reforms in the US would beef up corporate earnings while central banks around the world were raising rates.

The impending GE14, he added, spurred investors’ interest in the stock market and the recovery in oil prices continued to lift the demand for ringgit.

He said the ringgit had a good rally since the last Bank Negara meeting and the upcoming meeting on Jan 29 might see the central bank review its overnight policy rates (OPR) upwards.

The OPR now is 3.25% and many are expecting it to increase, a move that would spur banks to raise their interest rates.

Additionally, Lee said trade data was better than expected and as long as the macro numbers and earnings deliver, it would lift sentiments on market.

Nonetheless, he said investors might be a bit cautious when the dissolution of Parliament was announced.

Meanwhile, Oanda head of trading Asia-Pacific Stephen Innes said Bursa Malaysia was playing catchup as the ringgit remained undervalued in a lot of fund managers’ portfolio.

“But I think the current run will take us to 3.90 (against the US dollar) but at this stage, I think the market is starting to factor in the Bank Negara rate hike in January.

“So we may see a slower appreciation of the ringgit and we should expect profit taking ahead of the rate decision (by BNM) later in the month,” he added.

On the external front, Inness said the global equity market rally was benefiting from higher commodity prices in general and specifically oil prices.

“The recent supply disruptions are having a much more significant impact on prices given Opec’s (Organisation of the Petroleum Exporting Countries) recent production cut and the market is certainly much tighter than it has been in the past.

“Rising oil prices bode well for the FBM KLCI given that oil and gas constituents play a big role in the KLCI make-up. However, I don’t think this is strictly an isolated oil play but it is also rallying on the global growth narrative which is supporting export-oriented firms,” Innes said.

Experts see good tidings in firmer currency

Back in favour:People queuing to change the ringgit for US Dollar at a money exchange outlet in Bangsar, Kuala Lumpur.

PETALING JAYA: Lower import costs and more affordable overseas education are among the benefits brought about by a firmer ringgit and bullish stockmarket.

National Chamber of Commerce and Industry of Malaysia (NCCIM) president Tan Sri Ter Leong Yap said the rise in the ringgit is a sign of growing confidence in the nation’s economy.

“These are good signs which have set a feel-good mood for the market. What is most important is for the ringgit to remain stable as business needs this rather than having to hedge on the foreign exchange,” he said.

However, a stronger ringgit could act as a “double-edged sword”, Ter added, as exports would now cost higher.

“Exporters may not make the windfall profit as before but they had adjusted to this,” said Ter, who is also Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) president.

Malaysia Retail Chain Association (MRCA) president Datuk Garry Chua said a stronger ringgit bodes well for retailers that rely heavily on imports.

“In the end, the shoppers will benefit as cost of products would be lower due to the exchange rate,” he said.

Chua said the positive stock run was also good news for retailers and consumers.

“People tend to spend more due to easy earnings from the market and this is good for business,” he said.

Malaysia Associated Indian Chambers of Commerce and Industry (MAICCI) president Tan Sri Kenneth Eswaran said the positive developments showed that the nation’s economic transformation is on the right track.

“The ringgit breaking the RM4 barrier and the stock market climb are signs showing the Government’s economic transformation plans are bearing fruit. Traders and consumers will now enjoy lower import costs,” he said.

Taylor’s University deputy vice chancellor Prof Dr Pradeep Nair said the ringgit’s rally is expected to continue and strengthen below the RM4 region.

“For the education sector, this will be beneficial for parents who wish to send their children abroad to do part or whole of their studies to countries like the US, UK and Australia, should the trend continue,” he said.

He said a firmer ringgit would not have a major impact on incoming foreign students.

“We are still relatively cheaper than other countries that use English as the medium of teaching and we will remain one of the preferred destinations for foreign students looking for affordable, quality education,” he said.

Sunway Education Group senior executive director Dr Elizabeth Lee said some parents would be more willing to send their children abroad for further studies.

“I sense that enthusiasm in parents who enrolled their children with us. They are more confident of supporting their higher education throughout,” she said.

By martin carvalho The Staronline

Ringgit boost for investors, importers 

Companies which lost out during a low ringgit recouping fast

Ringgit on uptrend: People queuing up to change money at a money changer. The ringgit has broken past the crucial 4.00 level.

THE New Year is in, tides are changing and the ringgit is recovering from the past two year’s extreme blues.

The long-awaited reprieve has finally come for certain consumer companies that import intermediary goods for their production cycle.

Foreigners who have taken advantage by accumulating and buying into the equity and/or bond market when the ringgit was at a weaker level last year, would be firmly in the money now.

Analysts see the local currency as now being on a cruise control climb mode moving to new highs in the past week and possibly in the near future.

They note that the foreign buyers would see two-way gains and would be able to realise their gains if they choose to.

“If they liquidate and take the money out they will realise the gains and benefit. Last year the ringgit strengthened by almost 10.4%. Ringgit already broke the crucial 4.00 level, assuming that they make money from the market and take it out, they will also pay less to convert to US dollar,” Socio Economic Research Centre’s executive director Lee Heng Guie tells StarBiz Week.

The ringgit had seen a gain of 0.64% after we entered the New Year, adding to its gains that was achieved in the past two months of 5.63%.<

Currency strategists agree that the next crucial psychological mark would be the 3.80 level that is the infamous currency peg level some years after the 1997 Asian Financial Crisis.

The recovering oil prices with the lifting of equity markets due to strong global sentiment aided gains in the ringgit, Lee says.

The FBM KLCI saw a strong upward move as investors celebrated Christmas and ushered in the New Year thereafter.

The benchmark index had gained some 4.6% since Dec 19 to yesterday’s close at 1,817.97.

Meanwhile, the other companies that will stand to gain are consumer-driven companies especially those that have imported intermediary goods to manufacture or complete end products.

Lee says the strengthening ringgit, if it is sustained, would eventually help to boost the consumer sentiment index (CSI).

In the latest reported third quarter of 2017, the Malaysian Institute of Economic Research (Mier) said the CSI continued to remain weak with the index having retreated further to 77.1.

“Anxieties over higher prices grow and (there are) burly spending plans amid waning incomes and jobs,” the Mier said at the release of third quarter CSI figures then.

Any CSI level below the 100 indicates weakness on the consumer front.

Lee says he is hopeful the stronger ringgit would help eventually translate to additional cost savings to the consumer in the form of lower prices.

Meanwhile, MIDF Research’s consumer stocks analyst Nabil Fithri says not all consumer companies would automatically gain from the strengthening ringgit.

He notes that the gainers among the consumer companies would mainly be those which derive their sales from the local market and have imported intermediary goods in the supply chain.

“On average, the companies that import their raw materials lock in the prices through forward contracts for the upcoming six months. So, if there are any gains to their profit margins, it would be seen in the second half of the year,” he says.

Among the companies that stand to gain from this trend are the major consumer food companies such as Fraser & Neave Holdings Bhd (F&N), Nestle (M) Bhd and Dutch Lady Milk Industries Bhd.

Strong gains: The Dutch Lady Milk Industries
factory in Petaling Jaya. The company’s stocks had been making strong
gains since last year.
Better profit: Nestle Malaysia is one of the companies gaining from a strong ringgit.

All three stocks have been making strong gains in their share prices last year despite their high base.

Observers note that a common theme today that belies these stocks are that they derive their sales from the local market, with minimal or zero exports. Hence they will benefit from strong gains should the local currency appreciate further.

“Their raw materials that form a big part of their production are ingredients such as milk, coffee and sugar which are not readily available locally. They need to be imported and these are denominated in US dollar,” an analyst with a local research outfit says.

Two of those stocks that were mentioned above topped the gainers list on Friday: Nestle rising by RM1.20 to a new historical high of RM103.80 and F&N hitting an alltime high of RM27.82.

Investors may also want to train their sights on the smaller-capitalised consumer stocks some of which had been at a disadvantage earlier due to the weakened ringgit.

The stocks in this space include Apollo Food Holdings Bhd, Hup Seng Industries and Berjaya Food Bhd.

Apollo Food, the maker of packaged confectionery products see a big part of their sales being derived locally and their food is usually stocked in the school canteens.

The stock is trading at a current price to earnings ratio (PER) of 23.6 times and forward financial year 2018 ending April 30 (FY18) PER of 18.96 times.

The company’s second quarter profit had dropped by 11.1% to RM3.82mil primarily due to the lower ringgit then compared to the same quarter a year ago.

When the ringgit was trading above the 4.00 level then, the company had said in its prospectus that its operating environment was more challenging due to the increase in costs of raw materials.

Meanwhile, Berjaya Food Bhd could see further gains ahead as the ringgit continues its ascent.

The company owns half of the popular Starbucks franchise in Malaysia beside owning the worldwide Kenny Rogers Roasters franchise after acquiring KRR International Corp of the US in April 2008.

AmInvestment Bank Research said last month that it believed the worst is over for Berjaya Food with KRR’s robust same store sales growth following the disposal of KRR Indonesia.

The research house had highlighted that Berjaya Food would benefit from a stronger ringgit.

AmInvestment Research maintained its buy recommendation on Berjaya Food with fair value of RM1.91 per share.

“Valuations are pegged to a PER of 25 times FY19 forward, reflecting a 20% premium to its historical valuations. We think that it is justified as Berjaya Food has significantly enhanced earnings visibility following the disposal of KRR Indonesia, attractive growth off a low base and a stellar Starbucks brand,” it says.

By daniel khoo TheStaronline

Forex losses by Bank Negara Malaysia, Facts were concealed; Mahathir, Anwar and Nor Mohamed implicated: RCI


Important report: RCI Secretary Datuk Dr Yusof
Ismail speaking to media after submitting a police report over Bank
Negara forex trade losses in Putrajaya.

THE Royal Commission of Inquiry into the foreign exchange losses suffered by Bank Negara Malaysia (BNM) back in 1990s has recommended that three people be probed over their involvement and liability.

They are former prime minister Tun Dr Mahathir Mohamad, his then finance minister Datuk Seri Anwar Ibrahim and ex-Bank Negara advisor Tan Sri Nor Mohamed Yakcop, whom the report also named as “principally liable for criminal breach of trust”.

The 524-page report also called out Tun Daim Zainuddin, who served as finance minister from July 14, 1984 to March 15, 1991, for having aided and abetted Nor Mohamed by leaving BNM “to its own devices”.

The commission found that the Cabinet in the 1990s was not given the full picture by Anwar on the forex losses, adding that he had “deliberately concealed facts and information and made misleading statements”.

“The Commission is of the opinion that there was deliberate concealment as BNM’s annual reports did not state the actual losses incurred from the forex dealings from 1992 to 1994.

“It is also of the opinion that the then prime minister (Dr Mahathir) had condoned the actions of the finance minister,” it said.

The RM31.5bil losses, it said, were hidden using “unconventional accounting treatments”, such as booking losses to reserves in the balance sheet and the absorption of the remaining losses by the transfer of shares from the Government to BNM as well as the creation of a “Deferred Expenditure” to be repaid in instalments over a decade.

“All the actions to conceal the losses were discussed and approved by the board of directors before the accounts were signed off by the Auditor-General.

“No further action was taken by the Finance Minister and Treasury secretary-general (as a board member) despite being informed by the Auditor-General on the losses and the unusual accounting treatments,” said the report.

Anwar, noted the Commission, had been informed about the actual forex losses suffered by BNM.

Dr Mahathir, it said, was informed by Anwar together with then Treasury deputy secretary-general Tan Sri Clifford Francis Herbert in late 1993 that BNM had suffered estimated losses of RM30bil on the forex dealings for 1992 and 1993.

However, in the extract of minutes from three Cabinet meetings on March 30, April 6 and 13 in 1994, Anwar had made “no mention of the actual losses of RM12.3bil for 1992 and RM15.3bil for 1993.”

Anwar had chaired the March 30 meeting as the deputy prime minister. The losses for 1993 were reported as RM5.7bil.

“The prime minister, who chaired the meeting on April 6, did not correct or offer more information when the forex losses for 1993 were recorded as only RM5.7bil,” it pointed out.

“The Commission is of the view that it is the finance minister’s responsibility to inform the Cabinet the significant financial affairs about BNM as the Cabinet has collective responsibility with the finance minister and the prime minister for the country’s affairs.”

Dr Mahathir, it said, claimed to have no knowledge of the real amount of losses, which was untenable with his meticulous nature, as well as that under the law, BNM was the banker and financial agent to the Government with the remainder of its net profit to be paid into the Federal Consolidated Fund.

The report said as pointed out by Herbert, he had expected Dr Mahathir to be outraged but his reaction was quite normal with him uttering “sometimes we make profit, sometimes we make losses”.

“His reaction to and acceptance of the huge forex losses suggest that he could have been aware of the forex dealings and its magnitude,” said the report.

The RCI also found Dr Mahathir’s claim that he could only remember the amount of RM5bil forex losses when informed about it in a meeting with Anwar and Herbert in late 1993 to be “questionable”.

It said this was because based on testimonies of other witnesses and documentary evidence, the RM5.7bil only surfaced when Bank Negara’s 1993 annual report was presented to the Cabinet on March 30, 1994.

“Despite his denials, the Commission is of the opinion that a thorough investigation should be carried out to determine the extent of his involvement and liability,” said the report.

By Martin Carvalho, Hemananthani Sivanandam, Loshana K. Shagar, and Rahmah Ghazali The Star

Police set up taskforce to probe possible criminal offences over Bank Negara’s forex losses

Inspector-General of Police Tan Sri Mohamad Fuzi Harun says police will
open investigation paper following a report that was lodged by Royal
Commission of Inquiry (RCI) secretary Datuk Dr Yusof Ismail. (Image is
for illustration purpose only).

KUALA LUMPUR: Police have set up a taskforce to investigate possible criminal breach of trust and cheating which may have been committed during Bank Negara Malaysia’s foreign exchange losses in 1990s

Inspector-General of Police Tan Sri Mohamad Fuzi Harun said police would open investigation paper as the forex Royal Commission of Inquiry (RCI) had lodged a police report this afternoon.

“A taskforce has been formed and it will lead the investigation. We are investigating the case under Section 409 of the Penal Code for criminal breach of trust,” he told the New Straits Times when contacted.

RCI’s secretary Datuk Dr Yusof Ismail, who is the Finance Ministry Strategic Investment Division director, had lodged a report at Putrajaya police headquarters at 4.10pm asking police to start an official investigation.

In the police report, it was stated that those who were involved in the alleged wrongdoings were Bank Negara Malaysia (BNM) officers, BNM Board of Members, National Audit Department, Finance Ministry and the prime minister who served during the period.

Royal Commission of Inquiry (RCI) secretary Datuk Dr Yusof Ismail seen
leaving the Putrajaya police headquarters after lodging a report. Pic by
AHMAD IRHAM MOHD NOOR

The RCI, in its 528-page report that was tabled in Parliament today, said it believed that Datuk Seri Anwar Ibrahim, who was Finance Minister at the time, had misled the government and concealed the actual losses suffered by BNM.

RCI also said it believed that the prime minister at the time, Tun Dr Mahathir Mohamad, had approved Anwar’s “misleading statements”.

The commission also revealed that the losses were far larger than that what was initially reported by the central bank, RM31.5 billion as against RM5.7 billion, in the period of three years.

Yusof spent almost 40 minutes at the police headquarters and later spoke to reporters who were waiting outside.

He said in the report, the commission had requested the police to start a official investigation on the possible criminal breach of trust, forgery and other wrongdoings which may have been committed during the forex activities.

“Our report is basically requesting the police to start investigation and for the Attorney-General Chambers to take action based on the findings by the police,” he said.

Putrajaya OCPD Asst Comm Rosly Hassan who confirmed that the report was made, said a special unit in Bukit Aman would investigate the case.

By TEOH PEI YING and HASHINI KAVISHTRI KANNAN New Straits Times
Related Links:

 PROBE NOR MOHAMED, DR Mabatbjr, ANWAR – PressReader

It recommends that they be investigated for possible CBT, fraud

FILE PIC
Former finance minister Tun Daim Zainuddin after giving his statement to the Royal Commission of Inquiry in September.
THE RCI believes Datuk Seri Anwar Ibrahim had concealed Bank Negara’s actual forex losses from the cabinet, and that Tun Dr Mahathir Mohamad condoned his actions. The panel, in confirming that RM31.5 billion was lost, says there are grounds to investigate them for criminal breach of trust and fraud.
THE Royal Commission of Inquiry (RCI) into Bank Negara Malaysia’s (BNM) foreign exchange (forex) losses in the 1990s has recommended investigations against former prime minister Tun Dr Mahathir Mohamad and his one-time deputy, Datuk Seri
Anwar Ibrahim.
The RCI, in its 528-page report that was tabled in the Dewan Rakyat yesterday, said the duo had
concealed facts from the cabinet.
It also recommended that Dr Mahathir and Anwar be investigated for criminal breach of trust and fraud.
“There is a basis for an official police investigation into BNM board of directors, National Audit Department, then finance minister and prime minister for criminal breach of trust and fraud in the performing of the speculative forex transactions and in hiding the losses from the cabinet and Parliament,” the report said.
Former BNM adviser Tan Sri Nor Mohamed Yakcop was also implicated as the commission found that he was responsible for the billions of ringgit in losses.
RCI had recommended that Nor Mohamed be investigated for alleged criminal breach of trust and for allegedly contravening the Central Bank Ordinance 1958.
The commission also found that former finance minister Tun Daim Zainuddin had allegedly abetted Nor Mohamed. Daim was finance minister until 1991 before he was replaced by Anwar.
BNM lost RM31.5 billion in forex trading between 1992 and 1994. Nor Mohamed was
in charge of several portfolios in BNM at the time, including the management of external reserves.

 

BN and Opposition reps at loggerheads over report – Nation

RCI says Dr M helped in concealing RM31.5bil forex losses 

RCI says Dr M helped in concealing RM31.5bil forex losses …

‘Probe Nor Mohamed for possible CBT’ – Nation

Royal commission recommends CBT probe on Nor Mohamed over ..

RCI: Daim abetted Nor Mohamed in committing CBT | Free Malaysia …

Royal commission recommends criminal probe against Anwar …

Related posts:

Recalling Bank Negara’s massive forex losses in 1990s

The Asian financial crisis – 20 years later

Malaysia must retool education, skills to adapt to knowledge economy

Angry & frustrated investors lodged report, tell off staffs trying to buy time!

JPMorgan CEO warns he will fire any employee trading Bitcoin for being “stupid.”


 
Tough stand: Dimon has warned that he will fire JPMorgan traders who traded in bitcoin ‘in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.’ — AFP

NEW YORK: JPMorgan Chase & Co chief executive officer Jamie Dimon said he will fire any employee trading bitcoin for being “stupid.”

The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JPMorgan trader began trading in bitcoin, he said: “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

Bitcoin has soared in recent months, spurred by greater acceptance of the blockchain technology that underpins the exchange method and optimism that faster transaction times will encourage broader use of the cryptocurrency.

Prices have climbed more than four-fold this year – a run that has drawn debate over whether that’s a bubble.

Bitcoin initially slipped after Dimon’s remarks. It was down as much as 2.7% before recovering.

Last week, it slumped after reports that China plans to ban trading of virtual currencies on domestic exchanges, dealing another blow to the US$150bil cryptocurrency market.

Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels.

That didn’t end well.

In bitcoin’s case, Dimon said he’s sceptical authorities will allow a currency to exist without state oversight, especially if something goes wrong.

“Someone’s going to get killed and then the government’s going to come down,” he said.

“You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful.

Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses.

The best argument he’s heard, he said, is that it can be useful to people in places with no other options – so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said.

“So there may be a market for that, but it’d be a limited market.”— Bloomberg

 

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Too good to be true? Think twice


 

HAVE you ever grabbed an offer without any hesitation, simply because the price is too cheap to resist?

Many of us have this experience especially during sales or promotional campaigns. We tend to spend more at the end or buy things which we are uncertain of their quality when the deal seems too good to say no.

It may be harmless if the amount involved is insignificant. However, when we apply the same approach to big ticket items, it can cause vast implications.

Recently, I heard a case which reinforces this belief.

A friend shared that a property project which was selling for RM300,000 a few years ago is now stuck. Although the whole project was sold out, the developer has problem delivering the units on time.

The developer is calling all purchasers to renegotiate the liquidated and ascertained damages (LAD), a compensation for late delivery.

One of the homeowners said he is owed RM50,000 of LAD, which means the project is 1½ years late. When we chatted, we found that he purchased the unit solely due to its cheap pricing without doing much research in the first place.

The incident is a real-life example of paying too low for an item which can leave us as losers, especially when it involves huge sum of investment, such as property.

To many, buying a house maybe a once-in-a-lifetime experience, a decision made can make or break the happiness of a family.

A good decision ensures a roof over the head and a great living environment, while an imprudent move may incur long-term financial woes if the house is left uncompleted.

Nowadays, it is common to see people do research when they plan to buy a phone, household item, or other smaller ticket items.

Looking at the amount involved and implication of buying a house, we should apply the same discretion if not more.

It is always important for house buyers to study the background of a developer and project, consult experienced homeowners regarding the good and bad of a project before committing.

I have seen many people buy a house merely based on price consideration.

In fact, there are more to be deliberated when we commit for a roof over our heads. The location, project type, reputation of a developer, the workmanship, the future maintenance of the property etc, are all important factors for a good decision as they would affect the future value of a project.

Beware when a discount or a rebate sounds too good to be true, it may be just too good to be true and never materialised. If the collection or revenue of a housing project is not sufficient to fund the building cost, the developer may not be able to complete the project or deliver the house as per promised terms. At the end of the day, the “price” paid by homeowners would be far more expensive.

In general, the same principle applies elsewhere. It is a known fact that when we pay a premium for a quality product from a reliable producer, we have a peace of mind that the product could last longer and end up saving us money. Some lucky ones will end up gaining much more.

For instance, when we purchase a car, we should consider its resale value as some cars hold up well, while others collapse after a short period. Other determining factors include the specifications of the car, the after sales service, and the availability of spare parts.

Quality products always come with a higher price tag due to the research, effort, materials and services involved.

In addition to buying a house or big ticket items, other incidents that can tantamount to losing huge sums are like money games, get-rich-quick scheme, or the purchase of stolen cars or houses with caveats.

When an offer or a rebate sounds dodgy, the “good deal” can be a scam.

Years of experience tells me that when what is too good to be true, we should think twice. I always remind myself with a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher. “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.

“The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Food for thought by Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Malaysia must retool education, skills to adapt to knowledge economy


KUALA LUMPUR: Malaysia needs to reinvent its education system to adapt to the knowledge economy, which has led to a sharp reduction in unskilled jobs and spike in demand for data analysts.

Tan Sri Andrew Sheng, Distinguished Fellow of Asia Global Institute, University of Hong Kong, said Malaysia needs to retool its education and skills, and experiment across the spectrum, in positioning itself in the new economy.

“Formal education is outdated because of the speed of new knowledge. Companies do not spend on ‘on the job’ training, because of cost cuts and staff turnover,” he said during his presentation at the NCCIM Economic Forum 2017 yesterday.

Between 2007 and 2015, the loss of unskilled jobs was 55% relative to other jobs while demand for data analysts over the last five years has increased 372%.

In the global supply chain, old economy companies are quickly losing their edge as digitisation moves faster than physical goods while unskilled jobs will be quickly replaced by robotics due to the fast adoption of artificial intelligence (AI).

“Moving up the global value chain is about moving up knowledge intensity. If you don’t get smarter you won’t get the business.

“We are already plugged into the global value chain. We are very successful in that area but we cannot stay where we are. Remaining still is no longer an option. We need to move from tasks to value added growth to high value added production. In order to do that, we need to learn to learn.”

Sheng said the Malaysian economy is doing well but faces many challenges, including subdued energy prices, growing trade protectionism, geopolitical tensions and is still very reliant on foreign labour.

“Are we ready for the new economy? The way trade is growing is phenomenal but the new economy’s challenges are great and very complicated politically because technology is great for us as it gives us whatever we want but at the cost of our jobs,” he said.

When education fails to keep pace with technology, the result is inequality, populism and major political upheaval.

“What the new economy tells us is that robotics or AI (artificial intelligence) calls for Education 4.0, which means that we have to learn for life,” he said.

Sheng noted that Malaysia has successfully moved quietly into education services, medical tourism, higher quality foods, all through upgrading skills, branding and marketing.

“But formal education has become bureaucratised, whereas we are not spending enough on upgrading our labour force, prefering to hire imported labour,” he said.

Although Malaysia cannot compete in terms of scale and speed, especially against giants such as China, it can compete in terms of scope with strength in diversity, soft skills and adaptability.

“We are winners … but have we got the mindset?” Sheng questioned.

He said Malaysia must upgrade its physical technology through research and development, harness its unique social technology and digitise its business model in order to create wealth.

While the government can help, he added, true success comes from community self-help irrespective of race or creed, and retired baby boomers who have wealth of experience must mentor the youth to start thinking about the new economy.

Eva Yeong, sunbiz@thesundaily.com
Related Links:

 Andrew Sheng – Institute for New Economic Thinking

Andrew Sheng
is a distinguished fellow at Fung Global Institute, chief adviser …
member of Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia.

MALAYSIA should leverage on social technology, which is its true strength, … Tan Sri Andrew Sheng, who is a distinguished fellow at Asia Global Institute, … the new economy as it involves lifelong learning to adapt, innovate and create. … To enhance the skills of the civil service, he pointed out Singapore’s …

Andrew Sheng – Project Syndicate

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable …

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The Asian financial crisis – 20 years later




East Asian Economies Remain Diverse

 

It is useful to reflect on whether lessons have been learnt and if the countries are vulnerable to new crises.

IT’S been 20 years since the Asian financial crisis struck in July 1997. Since then, there has been an even bigger global financial crisis, starting in 2008. Will there be another crisis?

The Asian crisis began when speculators brought down the Thai baht. Within months, the currencies of Indonesia, South Korea and Malaysia were also affected. The East Asian Miracle turned into an Asian Financial Nightmare.

Despite the affected countries receiving only praise before the crisis, weaknesses had built up, including current account deficits, low foreign reserves and high external debt.

In particular, the countries had recently liberalised their financial system in line with international advice. This enabled local private companies to freely borrow from abroad, mainly in US dollars. Companies and banks in Korea, Indonesia and Thailand had in each country rapidly accumulated over a hundred billion dollars of external loans. This was the Achilles heel that led their countries to crisis.

These weaknesses made the countries ripe for speculators to bet against their currencies. When the governments used up their reserves in a vain attempt to stem the currency fall, three of the countries ran out of foreign exchange.

They went to the International Monetary Fund (IMF) for bailout loans that carried draconian conditions that worsened their economic situation.

Malaysia was fortunate. It did not seek IMF loans. The foreign reserves had become dangerously low but were just about adequate. If the ringgit had fallen a bit further, the danger line would have been breached.

After a year of self-imposed austerity measures, Malaysia dramatically switched course and introduced a set of unorthodox policies.

These included pegging the ringgit to the dollar, selective capital controls to prevent short-term funds from exiting, lowering interest rates, increasing government spending and rescuing failing companies and banks.

This was the opposite of orthodoxy and the IMF policies. The global establishment predicted the sure collapse of the Malaysian economy.

But surprisingly, the economy recovered even faster and with fewer losses than the other countries. Today, the Malaysian measures are often cited as a successful anti-crisis strategy.

The IMF itself has changed a little. It now includes some capital controls as part of legitimate policy measures.

The Asian countries, vowing never to go to the IMF again, built up strong current account surpluses and foreign reserves to protect against bad years and keep off speculators. The economies recovered, but never back to the spectacular 7% to 10% pre-crisis growth rates.

Then in 2008, the global financial crisis erupted with the United States as its epicentre. The tip of the iceberg was the collapse of Lehman Brothers and the massive loans given out to non-credit-worthy house-buyers.

The underlying cause was the deregulation of US finance and the freedom with which financial institutions could devise all kinds of manipulative schemes and “financial products” to draw in unsuspecting customers. They made billions of dollars but the house of cards came tumbling down.

To fight the crisis, the US, under President Barack Obama, embarked first on expanding government spending and then on financial policies of near-zero interest rates and “quantitative easing”, with the Federal Reserve pumping trillions of dollars into the US banks.

It was hoped the cheap credit would get consumers and businesses to spend and lift the economy. But instead, a significant portion of the trillions went via investors into speculative activities, including abroad to emerging economies.

Europe, on the verge of recession, followed the US with near zero interest rates and large quantitative easing, with limited results.

The US-Europe financial crisis affected Asian countries in a limited way through declines in export growth and commodity prices. The large foreign reserves built up after the Asian crisis, plus the current account surplus situation, acted as buffers against external debt problems and kept speculators at bay.

Just as important, hundreds of billions of funds from the US and Europe poured into Asia yearly in search of higher yields. These massive capital inflows helped to boost Asian countries’ growth, but could cause their own problems.

First, they led to asset bubbles or rapid price increases of houses and the stock markets, and the bubbles may burst when they are over-ripe.

Second, many of the portfolio investors are short-term funds looking for quick profit, and they can be expected to leave when conditions change.

Third, the countries receiving capital inflows become vulnerable to financial volatility and economic instability.

If and when investors pull some or a lot of their money out, there may be price declines, inadequate replenishment of bonds, and a fall in the levels of currency and foreign reserves.

A few countries may face a new financial crisis.

A new vulnerability in many emerging economies is the rapid build-up of external debt in the form of bonds denominated in the local currency.

The Asian crisis two decades ago taught that over-borrowing in foreign currency can create difficulties in debt repayment should the local currency level fall.

To avoid this, many countries sold bonds denominated in the local currency to foreign investors.

However, if the bonds held by foreigners are large in value, the country will still be vulnerable to the effects of a withdrawal.

As an example, almost half of Malaysian government securities, denominated in ringgit, are held by foreigners.

Though the country does not face the risk of having to pay more in ringgit if there is a fall in the local currency, it may have other difficulties if foreigners withdraw their bonds.

What is the state of the world economy, what are the chances of a new financial crisis, and how would the Asian countries like Malaysia fare?

These are big and relevant questions to ponder 20 years after the start of the Asian crisis and nine years after the global crisis.

But we will have to consider them in another article.

By Martin Khor Global Trend

Martin Khor (director@southcentre.org) is executive director of the South Centre. The views expressed here are entirely his own.
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