Bitcoin must not in your retirement financial planning portfolio


Bitcoin investments have undeniably become a trend among savvy investors in search of the golden goose, but one financial planner is against the use of it as part of the financial planning portfolio for retirement.

Max Growth Wealth Education Sdn Bhd managing director Nicholas Chu said one should not use bitcoin as part of the retirement portfolio and the public must be well aware of the risk in bitcoin trading before getting in.

“It is not asset-backed, it is very unsecure. It is, basically, you want to participate in the future changes. It’s not a proper financial planning way. It is just an experimental thing that you want to go through in this era, but it is not a proper investment product,” he told SunBiz.

“I definitely don’t agree if they use this for their financial planning. But for those who are able to try new ventures, they can go ahead provided they have extra money. If this doesn’t affect their existing financial planning, then I’ll leave it to them. We need to tell them the pros and cons of this investment. It’s up to the clients to do the final decision,” he said.

Chu cautioned on the uncertainties of bitcoin trading, which is driven by market forces.
“It is beyond anybody’s control, all the participants contribute to the bitcoin value. From that, I can say that there are a lot of uncertainties in the future,” he said.

Nonetheless, with the setting up of a few bitcoin exchanges, Chu noted that there will be demand and supply with tradeable markets available.

Bitcoin was the best-performing currency in 2015 and 2016, with a rise of 35.8% and 126.2% respectively.

Year to date, bitcoin prices have leaped more than three times. It stood at US$2,840 (RM12,140) as at 5pm last Friday.

Bitcoins are by the far the most popular cryptocurrency, which exists almost wholly in the digital realm and has no asset backing it. Bitcoin generation, known as mining, while open to anyone with a “mining application” on their computer, needs a great deal of computing power to solve complex algorithms which are later verified with the entire bitcoin network.

Colbert Low, founder of bitcoinmalaysia.com, said the recent spike in bitcoin prices could be partly due to the legalisation of bitcoin by the Japanese government.

He is unsure if the sharp rise in bitcoin prices will create a price bubble, but stressed that one cannot judge its price movement based on the “old economic theory”.

“This is a new economy based on a different model. It’s very hard to say,” Low opined, noting that there has been a growing number of retail outlets that accept bitcoin.

He foresees the usage of bitcoin propagating, especially in different types of payment methods.

However, Low opined that there will not be any “big movement” in the local market if the regulators do not regulate bitcoin.

“Our new Bank Negara governor is forward thinking and he is very much into fintech, technology and innovation. So there would definitely be improvement,” Low said.

The positive development of blockchain will be a catalyst for the growth of bitcoin, he added.

“Blockchain is a real thing that will change the way the IP system is architectured. We need to go down to a deeper level to see how blockchain can change the current problem and solve it.

“There are a lot of projects right now, over 500 companies are looking at this (blockchain) right now. Even IBM, HP and Microsoft are looking at it.”

Blockchain refers to distributed database that maintains a continuously growing list of records, called blocks, secure from tampering and revision. Bitcoin is just an application or software that runs on blockchain technology.

“If you look at blockchain technology, government agencies like the United Nations, the World Bank and the International Monetary Fund are looking at it. This is the best way to secure your data,” Low said, noting that the usage of bitcoin will help reduce operating cost.

Currently, there are about 16 million bitcoins in the market and the number is capped at 21 million.

Bank Negara has said that it does not regulate the cryptocurrency and advised the public to be cautious of the risks associated with the usage of such digital currency.

Source: By Lee Weng Khuen sunbiz@thesundaily.com

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China’s powerful drone ready for global market


 

China is ready to mass-produce the CH-5 reconnaissance/combat drone, the nation’s latest offering to the international military drone market.

The first mass-production CH-5 made its debut flight, in which it was airborne for more than 20 minutes, at an airport in Hebei province on Friday afternoon.

Ou Zhongming, project manager of the Caihong, or Rainbow, series of drones at the China Academy of Aerospace Aerodynamics in Beijing, said after the test that several nations, including current users of other CH models and new clients, are in talks with the academy on procurement of the CH-5, which is believed to be one of the best unmanned military aircraft in the world.

“Today’s flight means the CH-5’s design has been finalized and we are ready to mass-produce it,” he said, refusing to name potential buyers.

The China Academy of Aerospace Aerodynamics is the country’s largest military drone exporter by the number of products sold overseas. Its CH-series drones have been sold to militaries in more than 10 countries, making it the largest drone family the country has exported, according to statistics from the academy.

Shi Wen, chief designer of the CH series, said the CH-5 outperforms all of its Chinese-made counterparts when it comes to operational endurance and payload capacity. The plane is as good as the US-made General Atomics MQ-9 Reaper, a hunter-killer drone often deemed by Western analysts as the best of its kind, he added.

The prototype CH-5 was first flown in August 2015. The drone is made of composite materials and has a wingspan of 21 meters. Twice as big as its predecessors in the CH family, the drone can stay in the air for 60 hours, almost three times that of other Chinese models. Its maximum operational range is designed at 10,000 kilometers, according to Shi.

The drone’s 1-metric-ton payload capacity enables it to bring as many as 24 missiles on a single mission, strong enough to take out a convoy of armored vehicles.

The unmanned aircraft is also able to carry an airborne early warning system to act as a platform for regional surveillance and battlefield command and control. It also can carry electronic warfare instruments to collect electronic intelligence and to jam enemy communications or radar.

Moreover, the CH-5 can detect underwater targets such as submarines when mounted with certain devices, Shi said.

The CH-5 can also use high-resolution cameras, radar and radio transmitters to serve a wide range of civilian and public sectors.

Source: (China Daily)

Stop denying the undeniable high engineering consultancy fees for 3 Penang roads, says minister



The works minister, Datuk Seri Fadillah Yosof says compared to what the JKR recently paid for pre-construction consulting fees for a project in Johor (RM19mil of pre-construction consulting cost represents 2.67% of RM718,570,500 for roads totalling 30km in length), the Penang government’s consultancy fees for the three roads project is exorbitant to the total RM220mil pre-construction fees that was already fully paid by the Penang government, which represented 11.06% of the RM1.99bil construction cost for the three roads totalling 20km in length and has yet to start construction despite a three-and-a-half-year delay.”

PETALING JAYA: The Penang government has been urged to “stop denying the undeniable” over the exorbitant consultancy fees for the three roads project.

Works Minister Fadillah Yusof said the Public Works Depart­­ment (JKR) recently paid RM19 million in total for pre-construction consulting fees for a paired road highway project in Jo­­hor.

He compared this with the exorbitant consultancy fees for the three roads project in Penang.

“The fees comprise all required services and include the fees for all surveys, soil investigation, preliminary environmental impact assessment and all civil, structural, electrical and mechanical designs,” The Star quoted Fadillah as saying.

He said the RM19 million of pre-construction consulting cost represents 2.67% of RM718,570,500 for roads totalling 30km in length.

He added that in accordance with the Board of Engineers Malaysia’s (BEM) guidelines, not all of the fees for the project were paid before construction began as a quarter of the payment was withheld for the tendering and construction stages.

“Compare this to the total RM220 million pre-construction fees that was already fully paid by the Penang government, which represented 11.06% of the RM1.99 billion construction cost for the three roads totalling 20km in length and has yet to start construction despite a three-and-a-half-year delay,” Fadillah said.

The three paired roads are meant to be the traffic dispersal system of Penang’s proposed undersea tunnel project.

The cost of the consultation fees for the three paired roads has been a point of contention between the state and federal government, whereby the latter says that the Penang government has significantly overpaid the fees.

The Penang government has maintained that the fees paid is not excessive. – FMT news, The Star

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Wall and awning collapsed in house near construction site


Brought down: A view of the fallen backyard wall and awning of the house.

 

Penang MCA: Guan Eng must explain cause of incident in house near construction site

GEORGE TOWN: Penang MCA is seeking an explanation from Chief Minister Lim Guan Eng on the collapse of a perimeter wall and an awning of a house in Jalan Bagan Baru 1, Butterworth.

Its organising secretary Dr Tan Chuan Hong said the house owner believed the collapse could be due to nearby construction carried out by Penang Development Corpora-tion (PDC), of which Lim is the chairman.

The area is also under the Bagan parliamentary seat which Lim is the MP.

Dr Tan said the house owner had earlier complained to PDC after seeing cracks on the wall at his backyard about one year ago.

He said PDC was carrying out piling works then for its two affordable housing projects.

“Luckily, nobody was hurt in the incident but the authorities came forward only after the wall fell,” he said when contacted yesterday.

“That is against their ‘competency, accountability and transparency’ policy.”

Dr Tan urged the state to conduct a safety review on the projects.

When contacted, Sungai Puyu assemblyman Phee Boon Poh said the awning and wall collapsed due to soil movement during the construction of a drain at the projects.

He said that after being told of the incident, he went for a site inspection with Seberang Prai Municipal Council president Rozali Mohamud, representatives from PDC and the contractor.

“I told the house owner that the state would take full responsibility.He will be fully compensated and repairs will be done soon.”

He added that the council issued a stop-work order for the drain construction pending investigation.

“Our geo-technical expert will do a soil test while PDC and council safety officers will investigate the incident,” he said.

Source: The Star  by Crystal Chiam Shiying

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The ugly side of the digital economy


ALMOST everybody is addicted to the digital world of connectivity. Only a handful can dare say that they are not dependent on the Internet or the connectivity that comes with the digital age.

To those not convinced that they are addicted to technology and the Internet, they should try asking themselves a few questions.

When was the last time they accessed the computer to search for something through Google? When was the last time they accessed Facebook or Whatsapp to stay connected? How long have they gone without getting “an anxiety attack” without having their handphones with them?

If an uneasy feeling creeps into them without having their computers or mobile phones with them, then the chances of them being reliant on the digital world is high. If they are lost at work without “Mr Google” and feel handicapped, then they are hooked on the digital world.

From the hundreds of people I know, only two do not carry a mobile phone with them. One is a seasoned lawyer while the other is a retired factory manager. They are exceptions to the norm.

The digital age is here to stay and grow. The advantages of digital connectivity in terms of accessing instant information and staying in touch with others seamlessly are just too great to be without.

These days, even people in their late 50s and 60s are active users of Facebook, which they see as critical touch points of their lives with others. The instant response to their postings is a gratification of sorts.

These are new touch points that they would normally not be able to enjoy without digital connectivity. However, there is a downside to this digital addiction in both the social and economic sense.

There is a book going into the details of how more people are depressed without digital connectivity, how people have gone berserk without having access to Internet connectivity. This is one of the many social downsides of the digital age.

However, more shocking is the unconventional work ethics, sexual harassment and culture of idolising individuals that have become rampant with the rise of the digital economy.

Last week, the former chief executive of the Malaysian Global Innovation and Creativity Centre (MaGIC), Cheryl Yeoh, revealed that she was a victim of sexual assault by a venture capitalist, Dave McClure, three years ago.

The revelation only came after The New York Times reported that McClure had stepped down from 500 Startups following allegations of sexual harassment against him.

500 Startups is a Silicon Valley-based early-stage venture fund and seed accelerator. Generally, the principals of venture funds tend to exert their influence over those seeking their money.

It is rampant in the world of the new economy where funding from banks is not easily available. Banks would want to see profits and a strong balance sheet before they lend money to start-ups. Start-ups in the digital economy rarely have both financial elements.

Yeoh said that she did not come public with the incident earlier fearing that many would not believe her. She also did not want to jeopardise the business venture between MaGIC and 500 Startups.

McClure is not the only venture capitalist who has faced the brunt of unethical work practices. Travis Kalanick, the founder and prime force behind ride-hailing app company Uber, has also been forced out by shareholders after a series of scandals in the company.

Among those who complained against the work culture of Uber was software engineer Susan Fowler Rigetti, who in her blog posting stated that the company’s work environment was hostile towards women, leading to many of them leaving.

The hostility went beyond sexual harassment. It was even to the point of the women not getting leather jackets as their numbers were small compared to the men who had received theirs from the company.

Because the number of women working in Uber was small, the company, which is touted as the most valuable unlisted new economy entity, could not get the discounts required and hence did not order the leather jackets.

In a company engaged in the old economy of brick-and-mortar businesses, such reasoning would not have been tolerated. But it has happened in Uber, where Kalanick held a position so strong that the way he managed the company was not questioned.

Hero-worshipping the founders is quite common in new-economy companies. Whatever the founders decide is not questioned. It has come to the point where even when deals are concluded at lofty valuations, hardly any murmurs are raised.

No questions asked: Jeff Bezos of Amazon purchased a grocery chain, Whole Foods Market, for US14bil two weeks ago and nobody batted an eyelid or raised any questions. – AFP

Jeff Bezos of Amazon purchased a grocery chain, Whole Foods Market, for US$14bil two weeks ago.

Nobody batted an eyelid or raised any questions as to why a new-economy heavyweight was buying into a matured company in an industry that was facing huge challenges because of Amazon.

Amazon, with its online shopping platform for anything from books to groceries and even movies, has disrupted the retail industry. The likes of Wal-Mart and Tesco are reeling from the growing dominance of Amazon.

So, why is Amazon buying into a grocery chain operating in the industry that it is destroying?

Nobody knows the answer. They only rely on the faith that Bezos can do no wrong. Blind faith is the biggest downside to the digital economy.

Digital economy companies tend not to give dividends and spend a lot on research and development under the excuse that the business is still growing and needs all the financial resources.

Investors believing that mantra follow blindly. They are encouraged by the rising share prices even though there are little fundamentals.

One day, such blind faith will lose its lustre and the price will fall. Only then will investors realise that the old-fashioned way of valuing companies is still way better.

The alternative view by M.Shanmugam

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China’s Baidu taps Partners for Driverless Car Project


Growth strategy: A fleet of vehicles equipped with Baidu’s autonomous driving technologies conduct road testing in Wuzhen, Zhejiang Province. Widely considered the Google of China, Baidu is hoping research into artificial intelligence will create a new generation of products to help revive revenue growth.

https://www.bloomberg.com/api/embed/iframe?id=bf6ae8a1-432c-4499-a8aa-47932c408ae0

  • Partners include Bosch, Continental, Chinese automakers
    Company also showed off a voice-activated speaker device
  • Partners include Bosch, Continental, Chinese automakers
    Company also showed off a voice-activated speaker device

Baidu Inc has enlisted more than 50 partners for its Apollo driverless project, signing up major players in areas from mapping and ride-sharing to automaking to aid the Chinese search giant’s foray into AI-powered vehicles.

The program aims to open up part of Baidu’s autonomous car software in the same way that Google released its Android operating system for smartphones. By encouraging more companies to build products using them, Baidu hopes to fine-tune its nascent systems and overtake rival research efforts by the likes of Google parent Alphabet Inc.’s Waymo.

Baidu listed four Chinese carmakers, suppliers Robert Bosch GmbH and Continental AG and technology companies including Microsoft Corp. as part of the Apollo alliance. Southeast Asian ride-hailing giant Grab and mapping systems company TomTom NV are also joining the program, which aims to get fully autonomous vehicles on city streets as early as in 2018.

Widely considered the Google of China, Baidu is hoping research into artificial intelligence will create a new generation of products to help revive revenue growth. It has a stated goal of releasing a driverless car by 2018 with mass production to begin by 2021, but some analysts believe its technology still lags that of competitors like Waymo. At a Baidu conference Wednesday, developers showed off the Chinese search provider’s personal assistant, DuerOS.

Baidu’s shares traded in New York rose 2.7 percent to $184.76 at 10:14 a.m. The stock has risen 12 percent so far this year.

The raft of Apollo agreements unveiled Wednesday at Baidu Create cover virtually every automotive field. Dutch company TomTom said in a statement it will help Baidu with high-definition mapping in the U.S. and Western Europe. Several of Apollo’s members already have separate cooperation agreements in place with Waymo and other driverless car providers.

“As we and our partners contribute to the platform in our areas of specialty, we all gain more, with the results far greater than just our own,” Baidu group president Qi Lu said in a statement.

— Bloomberg News With assistance by David Ramli

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Never-ending money games – from fixed return to split schemes


The allure of money game schemes (or money games) seems not to have diminished despite the collapse of many recently.

Instead, there has been a switch in investors’ focus from fixed-return games to split games, which are deemed “more sustainable”.

Fixed-return schemes generally refer to those that give a consistent percentage of return every month or week. However, most of them have collapsed lately.

Investors’ attention is now centred on split games, even though this means they have to wait for a longer period in order to get back their capital.

Mcoin, which is undertaken through MBI International Sdn Bhd and MFace International Sdn Bhd, is an example of a split game based on units of which the value keeps increasing and then split after a certain time.

However, with the raid of MBI’s flagship mall – M Mall in Penang – by the regulators recently, its days look to be numbered, and the sustainability of such schemes is now a big question.

Another prominent split game – Mama Captain, which has a similar business model to that of Mcoin – has also been red-flagged by Bank Negara last Thursday under the Financial Consumer Alert List. An additional 14 companies have been added to the list, bringing the total number of unapproved and unlicensed companies/schemes to 334 as at June 29.

Besides the local ones, there are several foreign schemes in the market, which investors expect to have more staying power than the fixed-return schemes. Two such schemes from China – Smart Traders Ltd and Centennial Coin of Prosperity – have been in operation in Malaysia since last year. However, it is understood that they have stopped distributing returns to their investors.

This, however, appears not to have deterred those who are lured by the promise of fast money. This is evidenced by the huge crowd seen at an event organised by a split game company a few weeks ago in Shah Alam. It was estimated that over 2,000 participants were present and most of them were Chinese investors.

A number of booths were set up at the venue, and investors were able to redeem a variety of stuff, including vouchers, health products, apparels and many more.

An investor whom SunBiz spoke to at the event said he is unfazed by the collapse of money games and is optimistic about the prospects of the split game that he is involved in.

The investor said he has been in the scheme for more than nine months and now it has started to bear fruit.

“Generally, it takes about two months to split once and we can start generating money after it splits for four times. Now I start to get money from the scheme. While you’ve to wait for some time before getting any return, I think it is still worth to join,” he opined.

It is understood that the scheme has tied up with a few product operators to increase its attractiveness.

Another investor, Alan Mu, said he was amazed by the event. “The gala dinner is so grand and there are so many products that I can redeem by participating in this scheme,” he said.

Another scheme that has caught the market’s attention is SV International (SVI), a company that Yong Tai Bhd has denied having links to. Yong Tai alleged that SVI circulated photos taken during a signing ceremony on SVI’s website as well as the social media, for which there was no official agreement entered into between the two parties thereafter.

Yong Tai also refuted speculation that SVI has a stake in its Impression City and Impression Melaka projects.

By Lee Weng Khuen sunbiz@thesundaily.com

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