Robert Quok, Richest Malaysian Back Home


All ears: Bai Tian listening to Kuok during their meeting

 

PETALING JAYA: The return of billionaire Robert Kuok to Malaysia sends an important message that the Government is getting advice from highly-respected experts, a move that could instil confidence and optimism among the business community and the public, say economists.

Prof Dr Yeah Kim Leng said it was reassuring that the Government is listening to the views of a tycoon who has a thorough understanding of the history, as well as the economic and business landscapes of Malaysia and the region.

“We now know that whatever new policies or changes introduced would have been passed through or reviewed by Kuok and the panel of experts.

“We are in safe hands. We are able to secure the best advice. It is comforting and reassuring,” the Sunway University Business School economics professor said.

Kuok, 94, was named as a member of the Council of Eminent Persons (CEP) by Prime Minister Tun Dr Mahathir Mohamad to help shape policies and programmes to achieve Pakatan Harapan’s 100-day promises.

Headed by former Finance Minister Tun Daim Zainuddin, the CEP also includes former Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz, former Petronas CEO Tan Sri Hassan Marican and renowned economist Prof Jomo Kwame Sundaram.

Kuok, who resides in Hong Kong, returned to Malaysia to attend his first CEP meeting on Tuesday.

Speaking to reporters later, he urged Malaysians to trust the council.

Yesterday, a video of Kuok meeting Dr Mahathir was uploaded on Kelab Che Det’s Facebook page.

He was seen saluting Dr Mahathir, saying: “I salute you. You saved the country.”

Socio-Economic Research Centre executive director Lee Heng Guie said Kuok and the other eminent persons conveyed a message that the Government was bent on making Malaysia better, more competitive and credible.

“Kuok is a prominent and respected entrepreneur. We can tap into his vast experiences in the corporate world. This will benefit Malaysia,” he said.

Lee expected Kuok to give his fair advice to the Government on how to ensure foreign investors would pour in to place Malaysia in the top of the list for investments.

Meanwhile, on the Government’s decision to review projects approved by the previous government – of which a substantial number of projects involved Chinese private and government-linked entities – Dr Yeah said Kuok could serve as the bridge between both countries.

“Some of the mega projects will likely see a need for a third party to intervene. Kuok will be an excellent intermediary.

“Investors will be more comforted if we have a intermediary that is able to facilitate discussion or smoothen out frictions if there is any,” he said, adding that this was to ensure the ties remained strong and not derailed should there be any hard decisions that needed to be taken.

Separately, China’s ambassador to Malaysia Bai Tian met with Kuok yesterday.

In an official statement, Bai spoke highly of the 94-year-old billionaire’s contributions to the development of Malaysia and the progress of China-Malaysia relations.

“He expects that Kuok would continue to contribute to the future development of China-Malaysia cooperation,” the statement said.

During the meeting, both of them agreed that friendly cooperation between China and Malaysia is in the fundamental interests of the two countries and their people.

“They believe that, as an important country along the 21st century maritime silk road under the Belt and Road Initiative, Malaysia could further benefit from mutually-beneficial and win-win cooperation with China.

“They recall the sound development of bilateral relations during Tun Dr Mahathir Mohamad’s last service as Prime Minister, and are both confident that during the term of the new government, China-Malaysia relations will achieve greater progress,” it added. – The Star

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Tycoon Robert Kuok stands tall amid the bashings from Umno leaders


Well-regarded: Kuok in his office in Hong Kong. Picture taken from ‘Robert Kuok: A Memoir’.

 

DURING the two week-Chinese New Year celebrations, with the tossing of yee sang for better times ahead, the key topic of conversation among the Chinese revolved around the general election.

But the sudden eruption of high-level political attacks on Robert Kuok last weekend sent shockwaves through the community. Since then, the richest man in Malaysia has been the talk of the town.

The onslaught could not be taken lightly as Kuok is not just any ordinary businessman but someone of stature held in high esteem not only in Malaysia and China, but also by the global Chinese community.

It is a known fact that Kuok helped to lay the groundwork for the end of communist insurgency in Malaysia, played a role in easing racial tension after the May 13 racial riots and contributed funds to Umno and MCA during elections.

His generous donations have benefited the poor and rich.

Kuok has always stood tall among everyone.

Dubbed the “Sugar King of Asia”, Kuok has set up a huge international empire with businesses spanning from commodity trading to hotels, sugar and oil palm plantations, wheat flour milling, property development and entertainment.

In Malaysia, he retains control of Shangri-La Hotels and the wheat flour business after selling his sugar and property businesses.

Hence, the Chinese community here feels hurt to see their business icon being smeared based on hearsay. They see grave injustice done to this man whose loyalty and commitment to the country is being questioned.

However, due to suspicion that the whole episode could be a politically driven scheme ahead of GE14 for various reasons, Chinese community leaders only spoke up after Kuok defended himself.

While many are aware that Kuok’s recent memoir had irked some quarters due to his disdain for the New Economic Policy (1971-90), they are perplexed by the timing of this smear campaign.

Kuok’s political revelations in his book have also earned him brickbats from some people.

This round, the criticisms against the tycoon were based on three articles posted by blogger Raja Petra Kamaruddin on the online portal Malaysia Today.

The most startling allegation made by the controversial blogger, who has a record of stirring up racial hatred towards local Chinese in past writings, was that Kuok had donated hundreds of millions to the DAP in a bid to overthrow the Umno-led government.

Without verifying the content, Malay critics and senior Umno politicians told Kuok to be grateful to the Government as the tycoon had built his early sugar, rice and flour empire based on his good ties with Umno leaders.

The remarks by Tourism and Culture Minister Datuk Seri Nazri Aziz were particularly scathing, as crude and offensive words were used. In addition, he told Kuok to surrender his citizenship.

The critics might have misconstrued earlier statements by Datuk Seri Najib Tun Razak, who had said that some of the richest people, including Kuok, owed their success to opportunities created through government policies.

“If we look at the list of names of the richest people in Malaysia, such as Robert Kuok, who gave him the key to become the rice and sugar king? It was given to him by the ruling government,” said the Prime Minister at an event in Selangor on Feb 24.

“Yes, he is driven, hardworking, industrious and disciplined – but that is not enough. Everyone still needs the key to creating these opportunities,” he added.

Although DAP leaders promptly denied receiving money from Kuok, this failed to stop the tirade of aspersions cast against Kuok.

It was obvious that Kuok had to defend himself. He issued a statement last Monday, saying all allegations against him were “untrue, unjustified and amounted to libel”.

The 94-year-old Kuok, who moved his business headquarters from Kuala Lumpur to Hong Kong in 1975, denied funding The Malaysian Insight portal or opposition parties to overthrow the Government.

He also denied that he was anti-government, a racist or a Chinese chauvinist.

While Kuok’s hint of instituting libel suits might have some deterrent effect, the proposal by MCA president Datuk Seri Liow Tiong Lai to the Prime Minister to intervene in the matter could have shut the mouths of Umno leaders.

Liow tweeted: “I have conveyed the feelings of the Chinese community to the PM. We hope that the PM will intervene to put this issue to rest. Mr Kuok has contributed greatly towards the development of the nation.”

If the vicious attacks on Kuok were allowed to continue, the first casualty in GE14 could be MCA and Gerakan, and ultimately Barisan Nasional, as angry Chinese could be provoked to vote against the coalition in GE14.

And the unintended winner from this latest episode could be the opposition side.

The question now is: Faced with so many challenges in the coming polls, could Barisan afford to sow a new seed of discontent and allow it to germinate unchecked?

The Prime Minister’s Office issued a statement, saying Kuok’s success is “an inspiration” for other entrepreneurs.

Though this brief statement and its “cooling effect” came a bit late in the political sense, it was better than nothing.

In addition, a tribute to Kuok posted by Najib’s brother Datuk Seri Nazir Razak on Instagram is also a comfort to the Chinese.

“I may not agree with all his views but he (Kuok) is a patriot, the icon of Malaysian business and a first-class gentleman,” said Nazir, the chairman of CIMB Group Holdings Bhd last Wednesday.

However, the injustice done to Kuok on such a scale is unlikely to be forgotten soon, as this incident has also stirred up some debates.

Is there any hidden political agenda to vilify Kuok before GE14? Do successful businessmen owe their allegiance to ruling political parties? Is it morally wrong to change your political stand?

Dr Oh Ei Sun, former political secretary of Najib, offers some explanations to Sunday Star: “Robert Kuok has shown his contempt for the NEP in his book. This may be seen as questioning Malay supremacy and this attitude must be nipped in the bud.”

He adds that Kuok may not be forgiven for stating the obvious, which many Chinese have wanted to voice out but could not for fear of losing business opportunities.

In his memoir, Kuok stated that although the Chinese have played a significant role in the economic development of Malaysia and other South-East Asian nations, many did not receive just and fair treatment.

Sin Chew Daily, quoting unnamed Barisan sources, says the bashing of Kuok also carried a warning message to the business community to think twice before they contribute election funds to opposition parties.

“These attacks also sent a message to the Malay community that they must be united to support Umno, which is being ditched by others it has helped to prosper,” said the Sin Chew report last Thursday.

Although a life member of the MCA, businessman Tan Sri Lee Kim Yew believes people owe no loyalty to political parties.

He tells Sunday Star: “A businessman is expected to be loyal to his country, not to ruling parties. Politicians and political parties come and go.

“Whoever becomes the government has a duty to create a conducive environment for the people to prosper and live harmoniously. If politicians are not worthy of support, people are free to switch their political stand in a democracy.”

Apart from ordinary people, the business community is also watching developments linked to Kuok with concern.

“If the issue on Robert Kuok is not handled properly, there will be a negative impact on the sentiment of investors. We are all following these developments,” says a businessman at a CNY dinner.

by Ho Wah Foon, The Star

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Rage against hill road plan: We don’t want that road, says Penang residents


Long and winding road: This satellite picture from Google Earth Pro shows five planned interchanges of the Teluk Bahang-Tanjung Bungah paired road. The road starts at (1) Lembah Permai corner near Sri Vazhikattum Muniswarar shrine. The three interchanges in the middle are (2) at Jalan Sungai Emas, (3) at Persiaran Sungai Permai and (4) near Chin Farm Waterfall. The road ends (5) about 200m from the Teluk Bahang roundabout near the Toy Museum.

 

GEORGE TOWN: Alarm bells rang among Tanjung Bungah residents after they realised the proposed new road from Teluk Bahang to their neighbourhood entails de- forestation and construction on slopes with gradients steeper than 25 degrees.

They want the project scrapped and demand that the state government think of alternatives.

Through the Tanjung Bungah Residents Association (TBRA), 400 of them signed a petition against the project known as North Coastal Paired Road (NCPR).

TBRA chairman Meenakshi Raman said the environmental impact assessment (EIA) report showed that 3.34ha of gazetted forest reserves would be cleared for the road.

“Tracts of the Teluk Bahang Forest Reserve and Bukit Kerajaan Forest Reserve will be deforested. How can this be allowed?

“These reserves are gazetted as water catchment areas too,” she said in a press conference at the Tanjung Bungah market yesterday.

She said the EIA report revealed that 46% of the proposed road would be on slopes with gradients higher than 25 degrees.

“The EIA is clear that slope instability risks will be high. Mitigation measures are suggested but haven’t we learned enough about Penang’s development? Landslides occur often here,” she said.

The residents urged the Depart-ment of Environment (DoE) in writing not to approve the EIA. A copy of the letter was forwarded to Chief Minister Lim Guan Eng on Aug 21.

The NCPR is a 10.53km four-lane road from near SK Teluk Bahang until the L-shaped bend of Lembah Permai at Sri Vazhikattum Munis-warar shrine.

This is part of the Penang Transport Master Plan (PTMP) and is under the purview of Consortium Zenith Construction.

It is one of three new roads planned as the traffic dispersal system of the Penang Undersea Tunnel project.

Residents are also confounded by the cost.

Meenakshi said that in 2011, the estimated construction and land acquisition cost of the NCPR was expected at RM1bil.

She said the EIA stated that at an average speed of 70kph, motorists would save 14 minutes of travel time compared with the current coastal road.

“Spending such a huge amount to save 14 minutes is a colossal waste of public resources,” she added.

She felt that the EIA should have included a cost-to-benefit analysis.

“For RM1bil, can’t we think of other alternatives to the traffic problem?”

In response, state exco member Lim Hock Seng clarified that the clearing of the forest reserves was studied in the EIA as a requirement but the state was planning to avoid forest clearing.

“The first phase of NCPR is from Batu Ferringhi to Tanjung Bungah. That is the most urgent.

“The Teluk Bahang stretch, where the forest reserves are, won’t be built so soon.

“We do plan to continue examining alternatives to avoid deforestation.”

Lim said the main road in Batu Ferringhi could not “take it anymore during the holiday season” and the NCPR was vital to relieve traffic jams in the area.

Also, he said SRS Consortium, the state’s PTMP project delivery partner, was planning a viaduct from Lembah Permai to Seri Tanjung Pinang.

“So we are not dumping traffic or leaving a bottleneck at the Vale of Tempe Road with the NCPR.

“Motorists can choose between the winding coastal road or the NCPR depending on where they are going.

“This project will help reduce traffic,” he said.

Meenakshi also expressed shock that the EIA stated that NCPR would have 10 proposed interchanges.

But Lim and also Consortium Zenith chairman Datuk Zarul Ahmad Mohd Zulkifli said there would be only three interchanges in the middle of the road.

“They will be between Teluk Bahang and Tanjung Bungah, in Jalan Sungai Emas, Persiaran Sungai Permai and near Chin Farm Waterfall,” said Zarul Ahmad.

Penang Water Supply Corporation chief executive officer Datuk Jaseni Maidinsa gave an assurance that the NCPR’s route would not affect water catchment because the road would be downhill of Teluk Bahang Dam or any other reservoir.

Source: The Star by Arnold Loh

Call to scrap proposed road



Troubled spot: Aerial view of Jalan Lembah Permai in Tanjung Bungah, where the North Coastal Paired Road from Teluk Bahang will end in the L-shaped bend of the road. 

GEORGE TOWN: Tanjung Bungah residents want the proposed new road from Teluk Bahang to their neighbourhood scrapped after realising it entails deforestation and construction on slopes with gradients steeper than 25 degree.

Through the Tanjung Bungah Residents Association (TBRA), 400 of them signed a petition against the North Coastal Paired Road (NCPR).

TBRA chairman Meenakshi Raman said the environmental impact assessment (EIA) showed that 3.34ha of gazetted forest reserve will be cleared for the road.

“Tracts of the Teluk Bahang Forest Reserve and Bukit Kerajaan Forest Reserve will be deforested. How can this be allowed?” Meenakshi said during a press conference at the Tanjung Bungah market yesterday.

She said the EIA revealed that 46% of the proposed road would be on slopes with gradients higher than 25 degrees.

“The EIA is clear that slope instability risks will be high. Mitigation measures are suggested, but haven’t we learnt enough about Penang’s development? The island is sensitive to landslides,” she said.

The residents urged the Department of Environment (DoE) in writing not to approve the EIA. A copy of the letter was also forwarded to Chief Minister Lim Guan Eng on Aug 21.

The NCPR is a 10.53km four-lane road that is part of the Penang Transport Master Plan and is under the purview of Consortium Zenith Construction. It is part of the traffic dispersal system of the Penang Undersea Tunnel project.

The residents are also confounded by the cost. Meenakshi said in 2011, the estimated construction cost and land acquisition cost of the NCPR was RM1bil.

She felt the EIA should have included a cost-to-benefit analysis and “for RM1bil, can’t we think of other alternatives to the traffic problem?”

In response, state exco member Lim Hock Seng clarified that the clearing of the forest reserves was studied in the EIA as a requirement, but the state is planning to avoid it.

“The first phase of NCPR is from Batu Ferringhi to Tanjung Bungah. The Teluk Bahang stretch, where the forest reserves are, won’t happen so soon.

“Although it is studied in the EIA, we do plan to continue examining alternatives and avoid deforestation,” said Lim. – The Star

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Invest in the future



IT has always interested me to see how the different selection of words sent varied messages to readers and listeners.

Of late, I’m intrigued with the use of oxymorons, a combination of words that have opposite meanings and which usually produces an incongruous, seemingly self-contradictory effect.

Some daily expressions such as “open secret”, “seriously funny”, “deafening silence” and “pretty ugly”, are good examples on how the completely opposite meanings of words create dramatic effect.

Among other oxymorons come an expression often heard among condominium owners to their management corporations (MCs) and management offices: “We want you to lower costs and improve quality.”

Just like any other oxymoron phrases, the statement above makes me puzzle and ponder. It is prudent to manage costs, but unrealistic cost cutting over the long run will lead to decline in the quality of facilities and services.

Based on my experience, quality always comes with cost especially in property management. It is impossible to achieve higher quality standards by reducing expenditure.

I have heard of occasions where homeowners’ representatives in MC set high benchmark for the property management team, but expect them to cut down on the number of workers and cleaners in order to reduce spending. Needless to say, we can imagine what the outcome would be without looking at the property itself.

In reality, MC and homeowners must invest, not spend less for better quality. While developers and property managers play the important role of ensuring the upkeep of properties, the property owners themselves are the main stakeholders in deciding the fate of their properties. They are the party who can approve the budget and usage of their service charge and sinking funds.

In my previous article, I mentioned it is important for homeowners to participate in property management, such as attending AGMs and EGMs to exercise their right to raise concerns and approve the budget during such meetings.

In addition, homeowners and MCs must be bold in making decisions to invest in their properties with the reserved funds they have in their account.

Hence, while it is important to manage cost, it is also important to spend wisely for the future. Inflation is a fact of life, so MCs and homeowners should factor the inflation rate into their service charges, and use the real inflation rate, typically higher than the officially sanctioned rate anywhere in the world.

Typically, service charge is used for the general maintenance of the building. Sinking fund, on the other hand, can be used for the painting and the repainting of the common property, acquisition of movable property, the replacement of any fixture or fitting, the upgrading and refurbishment of the common property, and any other capital expenditure deemed necessary.

Managing a strata property is like maintaining a car. We must service our car regularly and replace its parts when they are due for change according to mileage. If a car is serviced less often, it gets more expensive to fix later when the equipment falls apart, and sometimes it may be too late to change.

Hence, when we reduce spending on maintaining a property, the decline of quality may be slow but sure. It takes time and additional cost when homeowners want to re-invest to restore the property later.

Invest in the future is just like doing exercise. It is hard to do, but if done regularly it will build health, strength and happiness.

To invest in a strata property means to increase, not cut down services such as cleaning, maintenance, security and landscaping. It also means to spend the sinking fund regularly not just on replacements, but also on upgrades, as the world doesn’t stand still. New projects would make existing projects old and even obsolete if we don’t manage our property well.

Investor’s nightmare

How well a property is managed can make or break the value of the property. A quality property management will allow the value to increase; while poor management could translate into an investor’s nightmare.

Active management and upgrading of properties is an important approach to protect our homes and investments. As such, whenever homeowners or property management companies tell me they are able to increase quality and cut cost at the same time, I would wonder whether, “Is this a short-term gain at the detriment of long-term benefits?”

By Alan Tong

Datuk Alan Tong 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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Good time to invest in property now


Better upside: (from left) Knight Frank Sdn Bhd international project marketing (residential) senior manager Dominic Heaton-Watson, Knight Frank Asia-Pacific research head Nicholas Holt, Sarkunan and capital markets executive director James Buckley at the event

KUALA LUMPUR: The slowdown in the local property market has bottomed out, with prices seen picking up later this year, according to property consultancy firm Knight Frank Sdn Bhd.

“We predict a stable rate in 2017 and we will possibly see better upside towards the end of the year or early next year,” Knight Frank managing director Sarkunan Subramaniam said.

“The market has had a few years of contraction and we feel that this year, what will clear up one of the major concerns of most investors is the political uncertainty,” he said at the launch of Knight Frank’s 2017 Wealth Report here yesterday.

According to the report, “political uncertainty” was among the top concerns of its respondents in Asia at 25%.

“We’re going to have elections possibly this year. Once they have cleared, there will be positive movement in the market and that’s why I feel now is a good time to buy property in Malaysia.

“Once the elections are out, the economy will generally start picking up and sentiments will improve. Capital will also start coming in,” he said.

According to the wealth report, potential fall in asset values was the highest concern among its Asian respondents at 30%, followed by rising taxes and tighter controls on capital movement at 28% and 27% respectively.

Going forward, Sarkunan said affordable homes would primarily drive the local property market.

“Affordable homes will still be a driver to an extent, but medium-to-high end properties will also pick up again. Also, when the mass rapid transit (MRT) lines come into the city, it will drive the commercial market there as well.

“We’ve had a lot of decentralisation push over the last 10 years and the MRT will bring office workers to the city.”

Sarkunan pointed out that locations with light rail transit (LRT) and MRT lines, such as Damansara Heights, have bucked the trend in terms of condominium values.

“Prices have actually increased compared with some of the other areas in Malaysia. Transport hubs or transport-orientated developments, such as Kota Damansara, have also seen improvements in prices.”

The Knight Frank 2017 Wealth Report tracks the value of luxury homes in 100 key locations worldwide, including 19 destinations from Asia Pacific.

According to the report, values rose globally by 1.4% on average last year, compared with 1.8% in 2015. Asia was the second best performing world region last year, with prices rising 5.1%.

Australasia was the strongest performing world region with prices rising 11.4% year-on-year.

Source: BY EUGENE MAHALINGAM The Star/ANN

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What Trump means for Asian investors?


In the lead-up to January 20 when Donald Trump becomes US president, Asians are guessing about the outlook for their savings.

Trump is particularly difficult to read because he made so many wild statements on the campaign trail. Everyone accepts that campaigning politicians promise heaven and deliver mostly hell, but when they win elections, most become much more sober. So far, it looks like Trump’s policy will follow his campaign threats.

The Trump presidency will be bi-polar – either highly successful if he reboots American dynamism, or one that may bankrupt the country trying, including getting involved in another war.

His rise to power has been accompanied by wild swings in investor mood as markets yo-yo from hesitation to rally, with the Dow currently peaking.

So far, Trump family members appear to have more clout than was the case with any previous , with perhaps the exception of President Bill Clinton.

Disappointingly, the favourite to be Trump’s treasury secretary is ex-Goldman Sachs banker Steven Mnuchin, which means Wall Street would have another insider running the status quo. It remains to be seen whether he can simultaneously deliver the promised spending on infrastructure, tax cuts for the rich and containment of effects of a stronger dollar.

All signs are that the dollar will strengthen, bringing echoes of the famous phrase, “my dollar, your problem”. In its latest health check on the US economy, the International Monetary Fund reported in June that “the current level of the US dollar is assessed to be overvalued by 10-20 per cent and the current account deficit is around 1.5-2 per cent larger than the level implied by medium term fundamentals and desirable policies”. The IMF thinks that the risk of the dollar surging in value is high, and estimates a 10 per cent appreciation would reduce American GDP by 0.5 per cent in the first year and 0.5-0.8 per cent in the second year.

Trump is likely to be highly expansionary in his first year because the Republicans, having control of the Congress, Senate and the White House, must revive growth and jobs to ensure voters give them a second term. Note carefully that Trump’s election promises of stopping immigration, scrapping the Trans-Pacific Partnership (TPP) trade deal, imposing sanctions on China and cancelling the North American Free Trade Agreement (NAFTA) are all inflationary in nature.

This is why if the Fed does not raise interest rates in December this year, it may be under pressure next year not to take any action to slow a Trump economic recovery. The Fed’s independence will be called into question, since Trump’s expansionary policy will put pressure on his budget deficit and national debt, already running at 3 per cent and 76 per cent of GDP respectively. A 1-per-cent increase in nominal interest rates would add roughly 0.7 per cent to the fiscal deficit, making it unsustainable in the long run.

Those who think that recovery in US growth would be good for trade are likely to be disappointed. So far, the recovery (which is stronger than in either Europe or Japan) has led to little increase in imports, due to three effects – lower oil prices, the increase in domestic shale oil production and more onshoring of manufacturing. The US current account deficit may worsen somewhat to around 4 per cent of GDP, but this will not improve unless sanctions are imposed on both China and Mexico, which would in turn hurt global trade.

Why is a strong dollar risky for the global economy?

The answer is that the global growth model would be too dependent on the US, while the other economies are still struggling. Europe used to be broadly balanced in terms of current account, but has moved to become a major surplus zone of around 3.4 per cent of GDP. Germany alone is running a current account surplus of 8.6 per cent of GDP in 2016, benefiting hugely from the weak euro.

Japan has moved back again to a current surplus of 3.7 per cent of GDP, but the yen remains weak at current levels of 107 to the dollar. I interpret the Bank of Japan’s QQE (qualitative and quantitative easing) as both a financial stability tool and also one aimed at ensuring that the capital outflows by Japanese funds would outweigh the inflows from foreigners punting on a yen appreciation.

The Bank of Japan’s unlimited buying of Japanese government bonds at fixed rates would put a cap on losses for pension and insurance funds holding long-term bonds if the yield curve were to steepen (bond prices fall when interest rates rise). Japanese pension and insurance funds have been large investors in US Treasuries and securities for the higher yield and possible currency appreciation.

In short, the capital outflow from Japan to the dollar is helpful to US-Japan relations. Prime Minister Shinzo Abe was the first foreign leader to call on Trump and likely dangled a carrot: Tokyo will fund Trump’s expansionary policies so long as Japan is allowed to re-arm.

From 2007 to 2015, US securities held by foreigners increased by $7.3 trillion to $17.1 trillion, bringing its gross amount to 94 per cent of GDP, official figures show. Japan already holds just under $2 trillion of US securities and, as a surplus saver, has lots of room to buy more.

The bottom line for Asia? Don’t expect great trade recovery from any US expansion. On the other hand, Asian investors will continue to buy US dollars on the prospects of higher interest rates and better recovery. This puts pressure on Asian exchange rates.

Of course, it’s possible that US fund managers will start investing back in Asia, but with trade sanctions and frosty relations between US-China in the short-term, US investors will stay home. If interest rates do go up in Asia in response to Fed rate increases, don’t expect the bond markets to improve. The equity outlook would depend on individual country responses to these global uncertainty threats.

In short, expect more Trump tantrums in financial markets.

Think Asian By Andrew Sheng, a former central banker, writes on global issues from an Asian perspective.

 

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Bank Rakyat Chairman, Abdul Aziz nabbed over embezzlement probe


Video: //players.brightcove.net/4405352761001/default_default/index.html?videoId=5103483590001

http://www.thestar.com.my/news/nation/2016/08/30/macc-picks-up-bank-chief-abdul-aziz-questioned-over-rm15mil-case-after-md-held/

MACC picks up bank chief 

PETALING JAYA: Bank Rakyat chairman Jen (ret) Tan Sri Abdul Aziz Haji Zainal has been detained for questioning over a RM15mil case, the second top level person from the bank to be hauled up by the MACC.

The bank’s managing director, Datuk Mustafha Abd Razak, was detained on Thursday and has since been remanded.

MACC investigation director Datuk Azam Baki confirmed that the commission had moved in yesterday.

“I confirm the arrest. It is to facilitate the ongoing investigation,” he said, declining to elaborate further.

A source told The Star that the chairman was detained at his office in Jalan Rakyat at about 1.15pm yesterday.

“Nearly RM1mil of the suspect’s cash in his bank account has been frozen pending the probe. We went to his office to detain him,” he said.

Jen (ret) Tan Sri Abdul Aziz Haji Zainal

The source added that the MACC did not rule out the possibility of freezing other assets belonging to the 65-year-old if the funds were found to be connected to any shady dealings.

“The commission will submit a request tomorrow morning (today) to remand the suspect,” the source said, adding that the graftbusters were aiming to obtain a lengthy remand.

The source said the duo were the only individuals from the bank who were being questioned by MACC over the case.

The chairman and the 48-year-old managing director were detained over a multi-million-ringgit book publishing contract and a project to upgrade the bank system.

The Star reported yesterday that a second banker was being sought by the MACC over the publishing contract and the upgrading project.

It is believed the RM15mil was given to a publishing company to come up with a coffee-table book about a prominent political figure. The deal was for the publisher to print about 20,000 copies but the number printed is said to have been much lower.

A source said that several bank accounts, totalling about RM10mil, have been frozen by the MACC in connection with the case.

Top executives: Mustafha (left) and Abdul Aziz.
Top executives: Mustafha (left) and Abdul Aziz. Datuk Mustafha Abd Razak

Another source told The Star that the MACC suspected several people of collaborating in the project.

“The MACC also wants the mastermind behind this,” the source said.

The MACC has been on crackdown against graft in high places in recent days.

On Aug 15, three government officers – one with the title “Datuk” and another “Datuk Seri” – were arrested by the MACC for graft, misuse of power and money laundering.

All three men, who were employed at a government department, a local authority and a government-linked company, were detained in Kuala Lumpur, Malacca and Kelantan respectively.

All accounts belonging to them – with deposits totalling more than RM13mil – were frozen.

It is not known if the cases are related.

By Nadirah H. Rodzi The Star

Bank Rakyat chairman remanded over RM15mil graft case to be held for seven days

 

 

PUTRAJAYA: Bank Rakyat chairman Jen (ret) Tan Sri Abdul Aziz Haji Zainal has been remanded for seven days to help in the investigation into an alleged corruption case involving RM15mil.

Magistrate Nik Isfahanie Tasnim Wan Ab Rahman granted the request by the Malaysian Anti-Corruption Commission (MACC) for the remand to run until Sept 5.

The 65-year-old is one of three people from the financial institution to be questioned over a multimillion-ringgit book publishing contract and a project to upgrade the bank’s system.

Nearly RM1mil of Abdul Aziz’s cash in his bank account has been frozen pending the probe.

It is learnt that two others from a publishing company have also been further remanded until Friday.

However, the bank’s managing director Datuk Mustafha Abd Razak and a former procurement officer, and another two owners of the publishing company have been released by MACC as investigations against them have been completed.

In the case, RM15mil was believed to have been awarded to the publishing company to come up with a coffee-table book about a prominent political figure.

The deal was for the publisher to print about 20,000 copies but the number produced was said to have been much lower.

In another case involving the alleged abuse of power over a multi­million-ringgit oil pipeline project, six people – five contractors and an officer from an oil-and-gas company – have had their remand extended until Friday.

Two others – a contractor and another officer from the same oil-and-gas company – were released.

Magistrate Nik Isfahanie also allowed for a 27-year-old man, who is the son of a contractor implicated in the case, to be remanded for five days until Saturday.

He was detained at the MACC headquarters when he showed up to give a statement at 5pm yesterday.

MACC has frozen 17 bank accounts, with deposits totalling RM5.5mil, in connection with the case.

It also seized a double-storey house, some jewellery, several luxury cars including four Rolls-Royce, a Ferrari, a Toyota, a Mercedes and a Volkswagen, as well as two motor­cycles.

The managing director of the oil-and-gas company is alleged to have taken a bribe from a sub-contractor for appointing him and approving a falsified invoice for the RM76mil project.

By  Martin Carvalho, Hemananthani Sivanandam, Royce Tan, Joash Ee De Silva The Star/Asia News Network

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