The 10 Commandments of Wealth and Happiness

The article appended below is worth every second of your time reading it. It is by Stacy Johnson of MoneyTalksNews

1. Thou shalt live like you’re going to die tomorrow, but invest like you’re going to live forever.
The ease of making money in stocks, real estate, or other risk-based assets is inversely proportional to your time horizon. In other words, making money over long periods of time is easy – making money overnight is the flip of a coin.
Money is like a tree: Plant it properly, care for it every so often, then wait patiently. Stare at a newly planted tree for 24 hours, and you’ll be convinced it’s not growing. Fixate on your investments the same way, and you could miss out on a game-changer.
The biggest winner in my IRA is Apple stock. I don’t remember exactly when I bought it, but I’m guessing it was in 2002 or 2003. My split adjusted price is around $8/share: As I write this, Apple’s trading at around $300/share, for a gain of 3,800 percent. Had I been listening to CNBC or some other “news” outlet that promotes constant trading, I almost certainly wouldn’t still own it.

Patience is certainly a virtue when it comes to investing. I invested a bunch of money and built my online portfolio when the Dow was hitting generational lows back in spring 2009. I had no idea where the market was going next. I was every bit as scared as the next guy.
But having lived through similar times before – I was a stockbroker during the market crash of 1987 – and since I’m only in my mid-50s, I was confident the economy would rebound sometime before I died. While the stock market has come back quite nicely since then, in many parts of the country, housing prices haven’t. That’s why I’m now looking for real estate investments. Are you?
In short, enjoy your life to the fullest every day – live like you’re going to die tomorrow. But since you’re probably not going to die tomorrow, plant part of your money in quality stocks, real estate or other investments; then hold onto them. Don’t ignore your investments entirely – sometimes fundamental things change that indicate it’s time to move on – but don’t act rashly. Patience pays.

2. Thou shalt listen to thine own voice above all others.
My job as a consumer reporter has included listening to countless sad stories about nice people being separated from their money by people who weren’t so nice. While these stories run the gamut from real estate deals to working at home, they all start the same way: with a promise of something that seems too good to be true.
And they all end the same way: It is. Just last week, I helped someone who was about to lose money by applying for a government grant.
If someone promises they can make you 3,000 percent in the stock market, they’re either a fool for sharing that information or a liar. Why would you send money to either one? When you hear someone promising a simple solution to a complex problem, stop listening to them and start listening to your own inner voice. You know there’s no pill that’s going to make you skinny. You know the government’s not handing out free money for your small business. You know you can’t buy a house for $300. Stop listening to commercials and start listening to yourself.

3. Thou shalt covet bad economic times.
Wealth is realized when the economy is booming, but that’s not when it’s created. Wealth is created when times are bad, unemployment is high, problems are massive, everybody’s freaking out, and there’s nothing but economic misery on the horizon.
Would you rather buy a house for $400,000, or $200,000? Would you rather invest in stocks when the Dow is at 12,000 or 7,000?
Obviously, nobody wants one in 10 Americans to be out of work. But the cyclical nature of our economy all but assures that this will happen periodically. If you’re one of the 90 percent who still has a job, this is the time you’ve been saving for. Stop listening to all the Chicken Littles in the media: The sky isn’t falling. Get busy – put your cash to work and create some wealth.

4. Thou shalt not work.
MSN Money’s Liz Pulliam Weston recently wrote a great story called Pretend You Won the Lottery. She asked her Facebook fans to describe what they would do if they won the lottery. From that article:
Most of the responses had a lot in common. People overwhelmingly wanted to:
Pay off all their debts.
Help their families.
Donate more to charity.
Pursue their passions, including travel.
Note that these goals are largely achievable without winning the lottery. And that was her point: Listing what you’d like to do if money were no object puts you in touch with the way you’d really like to spend your life.
My philosophy takes this concept a step further: When it comes to work, you should try to do something that you regard as so fulfilling that you’d do it even if it didn’t pay anything. In other words, the word “work” implies doing something you have to do, not something you want to do. You should never “work.”
I’ve chosen to spend nearly all of my adult life in warm climates – I lived in Arizona for 10 years and have now lived in Fort Lauderdale for nearly that long. Why? Here’s what I’ve always said: “You already spend a third of your life sleeping. Why spend another third of it freezing your tail off?”
No offense to you Northerners. I realize some people enjoy the cold. The point is that if you’re going to spend a huge part of your life working, don’t fill that time with what makes you the most money. Fill it with what makes you the most fulfilled. I made more money in 1990 managing a branch office for a Wall Street investment firm than I will this year. But I feel a lot less slimy (no offense to stockbrokers) and lot more fulfilled. You can’t put a price tag on that.

5. Thou shalt not create debt.
I’m always getting questions about debt. “Should I borrow for this, that, or the other?” “What’s an acceptable debt level?” “Is there such a thing as good debt?”
There’s way too much analysis and mystery around something that isn’t at all mysterious. Paying interest is nothing more or less than giving someone else your money in exchange for using theirs. Rule of thumb: To have as much money as possible, avoid giving yours to other people.
Don’t ever borrow money because you want something you can’t afford. Borrow money in only two circumstances: when your back is against the wall, or when what you’re buying will increase in value by more than what you’re paying in interest.
Debt also affects you on a level that can’t be defined in dollars. When you owe money, in a very real way you’re a slave to that lender until you pay it back. When you don’t, you’re much more the master of your own destiny.
There are two ways to achieve financial freedom: Have so much money that you can’t possibly spend it all (something exceedingly difficult to do) or don’t owe anybody anything. Granted, since you still have to eat and put a roof over your head, living debt-free doesn’t offer the same level of freedom as having more money than you can possibly spend. But living debt-free isn’t a matter of luck or even hard work. It’s a simple choice, available to everyone.

6. Thou shalt be frugal – but not miserly.
The key to accumulating more savings isn’t to spend less – it’s to spend less without sacrificing your quality of life. If going out to dinner with your significant other is something that you enjoy, not doing it may create a happier bank balance, but an unhappier you – a trade-off that is neither worthwhile nor sustainable. Eating an appetizer at home, then splitting an entree at the restaurant, however, maintains your quality of life and fattens your bank account.
Finding ways to save is important, but avoiding deprivation is just as important. In short, diets suck.
Whether they’re food-related or money-related, if they leave you feeling deprived and unhappy, they’re not going to work. But there’s a difference between food diets and dollar diets: It’s hard to lose weight without depriving yourself of the foods you love, but it’s easy to reduce spending without depriving yourself of the things you love.
Cottage cheese isn’t a suitable substitute for steak, but a used car is a perfectly acceptable substitute for a new one. And the list goes on: watching TV online rather than paying for cable, buying generics when they’re just as good as name brands, using house-swapping to get free lodging, downloading books from the library instead of Amazon… No matter what you love, from physical possessions to travel, there are ways to save without reducing your quality of life.

7. Thou shalt not regard possessions in terms of money, but time.
You go to the mall and spend $150 on clothes. But what you spent isn’t just $150. If you earn $150 a day, you just spent a day of your life.
Almost every resource you have, from physical possessions to money, is renewable. The amount of time you have on this planet, however, is finite. Once used, it can never be replaced. So when you spend money – especially if you earned that money by doing something you had to do instead of what you wanted to do – you’re spending your life.
This doesn’t mean that you should never spend money. If those clothes are all that important to you, by all means, buy them. But if it’s really not going to make you that much happier, don’t. Think of it this way: If you can live on $150 a day, every time you forgo spending $150, you just get one day closer to financial independence.

8. Thou shalt consider opportunity cost.
This is related to the commandment above. Opportunity cost is an accounting term that describes the cost of missing out on alternative uses for that money. For example, when I said above that not spending $150 on clothes puts you $150 closer to independence, that was a gross understatement. Because when you save $150, investing those savings gives you the opportunity to have more savings. If you’re earning 10 percent, $150 invested for 20 years will ultimately make you $1,000 richer. If you can live on $150 a day, ignoring inflation, you can now retire nearly a week sooner, not just a day.
One of the exercises in my most recent book, Life or Debt, is to go around your house and identify things you bought but probably didn’t want or need. A quick way to do this is to find things you haven’t touched in months. These were probably impulse buys. Add up the cost of these things, multiply them by 7, and you’ll arrive at the amount of money you could have had if you’d invested that money at 10 percent for 20 years rather than wasting it.
And when you do this, consider the stuff in your closet, the stuff in your garage, the rooms of your house that you heat and cool but don’t use, the new cars you’ve bought when used would have worked. The truth is that most of us have already blown the opportunity to achieve financial independence much sooner. Maybe now’s the time to stop.

9. Thou shalt not put off till tomorrow what thou can save today.
Shortly after I began my television career in 1988, I went on set with a pack of smokes, a can of soda, and a candy bar. I explained that these things represented the kind of money most of us throw away every day without thinking about it – at the time, about $5. But compound $5 at 10 percent for 30 years, and you’ll end up with about $340,000. That’s why learning to save a few bucks here and there and investing it is so important.
Fortunes are rarely made by investing big bucks, nor are they often made late in life. Wealth most often comes from starting small and early.
In short, there are limited ways to get rich. You can inherit, marry well, build a valuable business, successfully capitalize on exceptional talent, get exceedingly lucky – or spend less than you make and consistently invest your savings over time. Even if you’re on the road to any of the former, why not do the latter?

10. Thou shalt not covet thy neighbor’s stuff.
If this commandment sounds familiar, that’s because it resembles the Biblical 10th commandment:
Thou shalt not covet thy neighbor’s house, thou shalt not covet thy neighbor’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbor’s. (Exodus 20:17)
Envy may not be the root of all evil, but it is the root of much wasted money. As I’m fond of saying, you can either look rich or be rich, but you probably won’t live long enough to accomplish both. I’ve lived both ways, and trust me: Being rich is way better than using debt to look rich.
We’ll all admit that when on the verge of making a purchase decision, we’re often thinking of what our friends will say when they see it. Normal human behavior? Sure, but it’s not in your best interest, or theirs. Making your friends feel jealous isn’t nice, and feeling envy for other people’s possessions is silly. Possessions have never made anyone happy, nor will they.
Decide what really makes you happy, then spend – or not – accordingly. When your friends make an impressive addition to their collection of material possessions, be happy for them. One of the stupidest expressions ever coined was: “The one who dies with the most toys wins.” When you’re on your death bed, you won’t be thinking about the things you had – you’ll be thinking about the times you had.

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Source: Money Talks (http://s.tt/12mMw)

TDM Good Yield Good Growth

For the latest quarter ended 30.9.2011, EPS equals 21.88 sen. This is indeed commendable. It is 95% better than the previous corresponding period, and 71% better than the preceding quarter. Review of performance of the group reads as follows:

Plantation Division Our Plantation Division reported a 95% increase in profit before tax for the first nine month ended 30 September 2011 compared to the same period last year mainly due to:
i) Higher production of CPO & PK by 12% and 7% respectively. ii) Higher average CPO & PK prices by 32% and 78% respectively:
Healthcare Division Healthcare Division registered higher revenue and profit before tax by 16% and 15% respectively due to increase in number of patients being treated at our hospitals by 8% .
Food Division (Discontinued operation) Food Division recorded profit of RM2.0 million due to increse in average prices of livebird by 20%.

Based on the prevailing CPO and PK prices, the outlook for financial year ending 31 December 2011 remains favourable. Barring unforeseen circumstances, the Group is expected to continue to record satisfactory performance in the current financial year.

Going forward, the group will become more and more profitable as more and more of its lands in East Kalimantan mature. Besides that, its healthcare business is also doing well. The group is cash-rich and has the potential to take opportunity to grow as and when an opportunity arises.

For the year ended 31.12.2011, its EPS is likely to exceed 71 sen. Based on EPS of 71 sen, and on the basis of being traded at 10 times earnings, the stock is worth RM7.10 per share.

At RM3.45, the forward PE works out to be 4.86 which is undemanding. This means the stock is not overvalued.

Disclaimer: As a result of this article, whether you buy, sell or hold TDM, you do so at your own risk absolutely.

Tit for Tat

Son: Father, I am in love with 3 girls who are all in love with me. I want to marry one of them. They are all from Kampong Lovers, the town in the neighborhood.

Father: Sorry son, but I have to tell you this. You can't marry any of them because they are your half-sisters.

The son was greatly annoyed by this sudden turn of event. He went to his mother and told her what his father had said. Upon hearing it, the mother smilingly said, "Don't worry son. You can marry any of them; you are not his son."

Oil palm sector on alert of bud rot disease threat

Monday, November 21, 2011
Oil palm sector on alert of bud rot disease threat

KUALA LUMPUR: Malaysia’s oil palm industry is on alert for the bud rot disease that has killed millions of trees in South America. The disease is estimated to have wiped out some 50,000ha of oil palm estates in South America, said planters from Colombia, the world’s fifth largest oil palm producer in the world.


Although no cure has yet to be found, Malaysian planters should not panic, said Dr Ahmad Kushairi Din, Malaysian Palm Oil Board (MPOB) deputy director-general.

“We’re taking proactive measures from prevention to control, should there be any contamination. Our stringent quarantine controls have always been in place,” he told Business Times on the sidelines of an international seminar held here last Friday.

Malaysia is the world’s second largest palm oil producer and exports from this industry is forecast to hit RM80 billion this year, its second straight record year. The country will soon be sending a team of agronomists to South America to study the disease.

Kushairi, who is also International Society For Oil Palm Breeders president, explained that the bud rot disease is caused by a microbe called phytophthora palmivora. “Based on our initial study carried out more than 10 years ago, we find that the bud rot disease can spread very quickly because this pathogen is able to swim in the water. It thrives in a very humid and cloudy environment,” he said.

MPOB has also signed a research agreement with Cenipalma, the research institute of the Colombian Palm Oil Growers Association.

Colombia, the oil palm hub in South America, has 350,000ha planted with oil palms. It is the fifth largest oil palm country in the world after Indonesia, Malaysia, Thailand and Nigeria.


Jorge Corredor, a Colombian oil palm smallholder attending the seminar, revealed the bud rot disease had wiped out all 3,200ha of his oil palm estates in just two years.

“We tried sanitation, it didn’t work. Even the replanted Dolly Partons we sourced from Malaysia died. Until today, we have not found the cure,” he said.

Malaysia’s oil palms are affectionately called Dolly Partons by planters because the trees are short and produce very big fruit bunches compared to the original palms brought in from West Africa, a hundred years ago. In the last 50 years, our agronomists have been marrying the Dura and Psifera palms (DXP) to get the Dolly Parton hybrids that bear voluptuous fruit bunches.

Corredor said the bud rot disease is not just in Colombia as it has spread to Panama, Suriname, Brazil and Ecuador. "So many of our mills have closed down and many people have lost their jobs. My country and your country is situated along the tropical belt of the globe, we share the same weather. I'm telling you, this bud rot disease is a serious threat."

"I have nothing to gain from talking about what has happened to the oil palm industry in my country. This is something I would not wish upon planters in other countries. This is potentially a global problem," Corredor said. He thinks that the world could face a shortage of cooking oil if the disease finds it way to Southeast Asia.

Palm oil may rise to RM4,000/ton: Mistry

2011/11/17

Malaysian palm oil may rise to RM4,000 per metric ton by June amid rising demand for the commodity, said Dorab Mistry, director of Godrej International Ltd.

Demand for palm oil and biofuels are “buoyant,” he said in a Bloomberg TV interview in Singapore today.

Palm oil supplies will fall as trees enter a “flat” output cycle, he said. -- Bloomberg

Buy When There's Blood In The Streets

by Daniel Myers, CFA, CFP (Contact Author | Biography)
Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

This is contrarian investing at its heart - the strongly-held belief that the worse things seem in the market, the better the opportunities are for profit.

Most people only want winners in their portfolios, but as Warren Buffett warned, "You pay a very high price in the stock market for a cheery consensus." In other words, if everyone agrees with your investment decision, then it's probably not a good one.

Going Against the Crowd
Contrarians, as the name implies, try to do the opposite of the crowd. They get excited when an otherwise good company has a sharp, but undeserved drop in share price. They swim against the current, and assume the market is usually wrong at both its extreme lows and highs. The more prices swing, the more misguided they believe the rest of the market to be. (For more on this, read Finding Profit In Troubled Stocks.)

Bad Times Make for Good Buys
Contrarian investors have historically made their best investments during times of market turmoil. In the crash of 1987, the Dow dropped 22% in one day in the U.S. In the 1973-74 bear market, the market lost 45% in about 22 months. The September 11, 2001, attacks also resulted in a market drop. The list goes on and on, but those are times when contrarians found their best investments.

The 1973-74 bear market gave Warren Buffett the opportunity to purchase a stake in the Washington Post Company (NYSE:WPO) - an investment that has subsequently increased by more than 100-times the purchase price - that's before dividends are included. At the time, Buffett said he was buying shares in the company at a deep discount, as evidenced by the fact that the company could have "… sold the (Post's) assets to any one of 10 buyers for not less than $400 million, probably appreciably more." Meanwhile, the Washington Post Company had only an $80 million market cap at the time. (For more on Buffett's strategy, read Think Like Warren Buffett and What Is Warren Buffett's Investing Style?)

After the September 11 terrorist attacks, the world stopped flying for awhile. Suppose that at this time, you had made an investment in Boeing (NYSE:BA), one of the world's largest builders of commercial aircraft. Boeing's stock didn't bottom until about a year after September 11, but from there, it rose more than four-times in value over the next five years. Clearly, although September 11th soured market sentiment about the airline industry for quite some time, those who did their research and were willing to bet that Boeing would survive were well rewarded.

Also during that time, Marty Whitman, manager of the Third Avenue Value Fund, purchased bonds of K-Mart both before and after it filed for bankruptcy protection in 2002. He only paid about 20 cents on the dollar for the bonds. Even though for awhile it looked like the company would shut its doors for good, Whitman was vindicated when the company emerged from bankruptcy and his bonds were exchanged for stock in the new K-Mart. The shares jumped much higher in the years following the reorganization before being taken over by Sears (Nasdaq:SHLD), with a nice profit for Whitman. Thanks to moves like this, the Third Avenue Value Fund has earned a market-beating 14.3% return since Whitman founded the fund in 1990.

Sir John Templeton ran the Templeton Growth Fund from 1954 to 1992, when he sold it. Each $10,000 invested in the fund's Class A shares in 1954 would have grown to $2 million by 1992, with dividends reinvested, or an annualized return of about 14.5%. Templeton pioneered international investing. He was also a serious contrarian investor, buying into countries and companies when, according to his principle, they hit the "point of maximum pessimism." As an example of this strategy, Templeton bought shares of every public European company at the outset of World War II in 1939, including many that were in bankruptcy. He did this with borrowed money to boot. After four years, he sold the shares for a very large profit. (To learn more about Templeton and other great investors, see the Greatest Investors Tutorial.)

Putting It On the Line
But there are risks to contrarian investing. While the most famous contrarian investors put big money on the line, swam against the current of common opinion and came out on top, they also did some serious research to ensure that the crowd was indeed wrong. So, when a stock takes a nosedive, this doesn't prompt a contrarian investor to put in an immediate buy order, but to find out what has driven the stock down, and whether the drop in price is justified.

Conclusion
While each of these successful contrarian investors has his own strategy for valuing potential investments, they all have the one strategy in common - they let the market bring the deals to them, rather than chasing after them.

by Daniel Myers, CFA, CFP (Contact Author | Biography)

Daniel Myers has earned the CFA designation, the CFP certification and has managed money for investors since 1998. Read more about him at his company's website, King Capital Management, LLC.

More Singaporeans crossing over for cheaper medical treatment

Sunday November 13, 2011

SINGAPORE: When Goh Chai Gek wanted to deliver her baby boy, she decided it would be cheaper to head across the Causeway.

The total cost of her caesarean section delivery was about RM8,190, including three nights.

It would typically have come up to about S$5,840 (RM14,333) in a hospital here, meaning she enjoyed savings of about 40%.

“I could also claim the amount from Medisave,” said the 30-year-old accountant.

Lured by savings of up to 50%, growing numbers of Singaporeans and PRs are travelling to Malaysia for medical treatment. It comes after the Singapore Government relaxed rules in March last year to allow Medisave to be used to pay for hospitalisation and day surgery treatment in 12 hospitals there.

Those crossing the Causeway for hospital treatment will soon have more choice, when a S$2bil (RM4.9bil) medical hub a joint project between billionaire Singa-pore investor Peter Lim and the Johor royal family opens in 2015.

Before the liberalisation, Medisave could be used only in Singapore, or for emergency treatment overseas.

Health Management International (HMI) and Parkway Pantai Group are currently the only two healthcare groups here accredited to refer patients to Malaysia.

An HMI spokesman said yesterday that 120 patients had used Medisave overseas for their medical treatments to date.

HMI has two hospitals in Malaysia the Regency Specialist Hospital in Johor Baru and Mahkota Medical Centre in Malacca.

Most of the cases are obstetrics and gynaecology. Cardiology, colorectal surgery, ophthalmology and orthopaedic surgery are other commonly sought treatments. - The Straits Times / Asia News Network

KL-Singapore high-speed rail project on track

By Sharen Kaur and Zuraimi Abdullah
bt@nstp.com.my
2011/11/09

It is believed that up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM Group to vie for the project.

Kuala Lumpur: The high-speed rail system linking Kuala Lumpur and Singapore could take shape by next year, with three groups leading the early race to win the multi-billion ringgit job, people familiar with the plan said.

The Land Public Transport Commission (SPAD) is expected to start a feasibility study on the project early next year.

The commission had already completed a pre-feasibility study, SPAD chief development officer Azmi Abdul Aziz told Business Times.

SPAD will undertake a feasibility study next, which should take six to 12 months to complete, Azmi added.

If feasible, the project is estimated to cost as much as RM12 billion, with the interested parties offering either European or Chinese technologies.

It is believed that up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM Group to vie for the project.

Ravindran controls Skypark Terminal, which recently received an offer from the government to undertake a RM1.5 billion rail project.

The project is to connect the Keretapi Tanah Melayu Bhd (KTMB) station in Subang Jaya, Selangor, to the Skypark Terminal at the Sultan Abdul Aziz Shah Airport.

Business Times understands that the Ravindran-UEM venture made a presentation to the government early this year, specifically on the more than 300km high speed rail line.

Sources said they planned to lay railway lines parallel to the North-South Expressway from Kuala Lumpur, Seremban and Malacca to Johor Baru, before connecting to Singapore.

Others said to be in the running for the job are China Infraglobe Consortium-Global Rail Sdn Bhd and YTL Corp Bhd.

China Infraglobe-Global Rail consortium last made a submission for the job in 2009.

To date, it has yet to make a revised proposal to the government, a company official said.

YTL group managing director Tan Sri Francis Yeoh Sock Ping, who is in New York, declined to comment when asked if the company had made a fresh submission.

YTL, operator of the KLIA Express, first mooted the idea to build a high-speed rail in the late 1990s and again in 2006.

The project was put on hold in April 2008 due to high cost, which was estimated at RM8 billion.

In the middle of 2009, YTL expressed hope that the government would relook at the proposal.

It said it would build the rail line on the coastline of Peninsular Malaysia, rather than that mooted in an earlier proposal of building on the existing track.

Last year, the government said it would revive the project.

It was highligted as a high impact project in the government's Economic Transformation Programme roadmap in a bid to increase economic activities.

Yesterday, the government reiterated that it may go ahead with the project.

Transport Minister Datuk Seri Kong Cho Ha said it would wait for feedback from its Singaporean counterparts as the track would go into its land.

Germany's Siemens had previously offered its solutions to the project.

It proposed the use of its Velaro trains, which have a top speed of 350kph.

Rising tide of China investments in Malaysia

By Bilqis Bahari
bt@nstp.com.my
2011/11/04

Kuala Lumpur: Cash-rich Chinese are splurging their money on Malaysian assets and equities in recent weeks.
The move comes just after Malaysia witnessed a wave of Japanese companies buying up local assets.

During the past couple of months, Japanese investors bought some RM4.48 billion worth of Malaysian assets.

Among the notable acquisitions from them were the purchase of CI Holdings Bhd's Permanis Sdn Bhd for RM820 million, Motor Trader and Autocar Asean magazines for RM109.7 million, Khazanah Nasional Bhd's 30 per cent stake in Integrated Healthcare Holdings Bhd for RM3.3 billion and HPI Resources Bhd for RM258 million.

Now the new trend seems to be originating from China and to a lesser extent, Taiwan.

"Investors from China accumulated a lot of cash in the last couple of years and they are looking for a place to put their cash to work," said Pong Teng Siew, Jupiter Securities head of research.

Indeed, Malaysia has seen many Chinese investors, be it from mainland China, Hong Kong or Taiwan, aggressively investing in local stocks, properties and projects.

"Some people think that it is because these investors are worried that the booming China market will fall, and that is why they are moving their funds to other markets, including Malaysia," an industry observer said.

Chinese companies invested some RM3.1 billion in recent period. They include investments made by Wenzhou Foreign Trade and Economic Cooperation Bureau in the East Coast Economic Region (ECER)'s special zone in Kuantan, Zhuoda Real Estate Group in an Iskandar Malaysia project, as well as a Chinese firm, which partnered Mah Sing Group Bhd in the Icon Residence Mont' Kiara project, to name a few.

On Bursa Malaysia, Chinese investors purchased shares in several listed companies. They include Hong Kong-based Christian Kwok-Leun Yau Heilesen, who today controls some 24 per cent of GPRO Technologies Bhd.

Heilesen also bought a combined 19.9 per cent shares in DVM with Raymond Yip Wai Man in August this year. However, he sold his stake in less than three weeks.

This month, two Chinese nationals - Xu Sheng and Jiang Chuan Yi - have emerged as substantial shareholders in Envair Holdings Bhd, controlling some 13.5 per cent of the company.

They each bought eight million shares in Envair at between 27.3 sen a share and 35 sen apiece.

In August, Fong Shu Cheong, a Chinese national in Hong Kong, became a subtantial shareholder of Cybertowers Bhd by buying 12.11 million shares, or 12.11 per cent, of the company last Friday.

Analysts said Chinese firms or businessmen investing in Malaysia is not unusual since it is only natural for them to forge links with foreign businesses.

"The primary motivation for them to invest in other countries is to establish linkages with overseas businesses. They could tap into the market by importing or exporting their products or our products," Pong said.

Edmund Tham, head of research at Mercury Securities, said the reason for the Chinese to invest depends on the value of the business or investment.

He added that as long as Malaysian businesses relate to their core business and there is value in the investment, they will come to Malaysia.

"The question of why Malaysia (being a preferred destination) depends on the business opportunity whether it is suitable for their business, if there is high risk for them and if the returns are good.

"They evaluate this on a case-to-case basis. Therefore, they don't just invest only in Malaysia, but other countries as well," Tham added.

With the influx of funds from Japan and China buying into Malaysian assets, properties in Malaysia will appreciate and continue to appreciate.
Investors should pay attention to property counters now.

Investors leave Singapore office empty-handed

2011/11/03

SINGAPORE: Retail investors in Singapore trying to salvage their doomed investments from the local MF Global office were left frustrated and empty-handed yesterday after they were told their trading positions were closed and their funds were frozen.

Dozens of worried local investors lined up at the MF Global office throughout the day seeking to recoup their money, but all they received was a form to complete after being told no money would be disbursed until liquidators wound down the bankrupt US brokerage.

"Of course I'm afraid I may not get back anything, that is why I am here," said Andre Chia, a 32-year-old pilot. "I'm waiting for the liquidation, MAS (Monetary Authority of Singapore), maybe I'll end up at the Speakers' Corner," he added, referring to the only place in Singapore where protesters can gather without a permit.

In the wake of the collapse of Lehman Brothers in 2008, hundred of Singaporeans gathered at Speakers' Corner to protest their losses from mini-bonds linked to the failed US bank.

Liquidators from KPMG have assured MF Global customers in Singapore that they are working to ensure all money in client accounts is returned to them.

However, several investors vented their anger that they were closed out of trading positions at a loss, with no option to wait for the market to turn. "I feel uneasy, I don't know how much I will lose. If I have to cut losses, I have to know how much I will lose," said 57-year-old John Wong, who had invested around S$8,000 (RM19,680) with the brokerage.

Around 20 investors went to the office yesterday afternoon, while local media reported that at least 60 people converged on the premises that morning. - Reuters

Dealing with a foreign broker firm you are not familiar with can be disastrous.
BETTER BE SAFE THAN SORRY. Luckily for Malaysians, MF Global has not been in Malaysia.

It's the Management that makes the difference

Do you know why companies have different destiny? While some are able to grow and prosper, others have failed miserably. Logic tells us that it's the management that makes the difference.

The CEO is the most important person in a company. If this person is competent and has integrity, the company is bound to grow. Competency without integrity is disastrous. You may see the money, but it does not go to you. Of what use is cash if you can't get your hands on them.

In the stock market, everything is not what it appears to be. You have to be very careful. Misleading statements, fraud accounting, manipulation, such as "pump and dump" or "short and distort" are common traits. Although the SEC is here to see law and order, it can never do enough to protect the laymen from being cheated. Take care to note the names of those CEOs in failed companies. This will go a long way to save you from getting involved with people who have no integrity. I am not saying that every CEO in failed companies is bad. But it's better to mix with people who succeed rather than those who fail.
Get close to black ink, and you will be black; get close to gems, and you will shine.

You must upgrade yourself all the time just to stay in play. Time and again, you may feel that you have become proficient only to realize later that once again you are at the wrong end of the bargain.

The world is forever changing. You need to stay focus on your job and stay well informed on what is happening locally and abroad as well.

The present flooding in Thailand, the worst in the last 50 years, is causing great havoc to the country. Malaysia needs to be careful. Obviously, climatic change is one of the factors. Malaysia should find out the causes and take preemptive steps to prevent such flooding if possible.

Fire and water have no emotion. They can really punish you when they are the masters at their fury.

How To Effectively Investigate A Stock

Thanks to the internet, there is an information overload when it comes to investigating stocks. Simply type in a ticker symbol in any search box, and within seconds you have dozens of articles and related links on that particular stock. Properly navigating through the haystack of information and determining how to use it can be daunting and intimidating, and while there are no shortcuts to properly evaluating a stock, investors can eliminate a lot of unnecessary or repetitive effort by knowing how to effectively investigate a company.

TUTORIAL: Investing 101 For Beginner Investors

Basics First: What is a Stock?
As elementary as it sounds, many investors know what a share of stock is, but often ignore what it means. Stock is an equity claim on the business. Specifically, owning stock is defined as having a residual claim on the business. A stock investor's claim on a company is residual by debt holders and preferred stock holders.

Balance Sheet
Because of this residual claim, the very first place investors should go when investigating a stock is the balance sheet. The balance sheet is one of three principal financial statements of any company, with the other two being the income statement and the statement of cash flows. The balance sheet gives a snapshot of the company's financial position at a specific moment in time. As such, it is more important than the income statement. (For more information, see 5 Tips For Reading A Balance Sheet.)

Often, investors first examine the income statement in order to determine profitability. Profits are extremely valuable, but the balance sheet shows you how healthy a company is. A profitable unhealthy company is a disaster that many investors fail to consider. A quality balance sheet protects a company when times get bad. Consider the various recessions in the U.S. in the past 50 years; most of the companies that failed to make it through had a balance sheet problem.

When looking at the balance sheet, you want to examine the indebtedness of a company. Evaluate the debt in relation to total assets and equity value. Consider the quality of the company's assets. How do current assets stack up against current liabilities? How much cash is on the balance sheet in relation to debt? How much goodwill or other intangible assets are on the balance sheet? Under tough operating environments, goodwill and intangibles are usually worth very little for most companies.

Once a balance sheet has been examined, it can be connected with the other financial statements. Look at the interest expense line item on the income statement and compare it to the company's earnings before interest and taxes. Is the company comfortably making its interest payments?

Management
Once you get a handle on the financials, investigate management. An effective way to do this is by reading a company's annual proxy statement (DEF 14A), which can be found on the company's website or at the Securities and Exchange Commission website. A proxy statement will show you insider ownership levels and management pay, two good metrics for evaluating management. (For related reading, see SEC Filings: Forms You Need to Know.)

Investigate Industry
If you are still comfortable with the company, it's time to investigate the industry. One quick way to do this is to compare numbers between competitors. Some great numbers to investigate:

1. Operating Margins
Does one company have significantly higher or lower margins than the others? Is this a long-term occurrence or a one-time benefit?

2. Debt to Equity Levels
Is the industry characterized by high or low levels of debt? How does the company stack up?

3. Capital Expenditures
Found on the cash flow statements. Is the industry capital intensive? If so, this could be a problem during weak environments.

4. Competition
Is there a lot of competition? Coca-Cola only competes with a couple of companies. Teen retailer Abercrombie and Fitch has lots of competition. A great deal of competition can make it difficult for a company to consistently earn profits, as these businesses have to compete on price.

Detective Work
Once you have done all the above, the detailed detective work begins. Now you should go back and read the company's financial releases and get a feel for the how the company is looking at growing and creating value for the business. Examine the company's additional SEC Filing, including 13D filings which show if other major investors are taking stakes in the company.

If the particular company you are looking at has operations in your area, go visit them. Some of the best analysis on a company is not found in documents, but visible through the day to day operations.

Conclusion
In the end, this investigative work will give you your unbiased insight into the company. As a result, you are far more likely to make better investment decisions based on quality data and analysis. (For related reading, also take a look at Blending Technical And Fundamental Analysis.)


by Sham Gad (Contact Author | Biography)

** This article and more are available at Investopedia.com - Your Source for Investing Education **

Thumbs up for home-grown RFID system

2011/10/03


THE impending deployment of a radio frequency identification (RFID) tag system by the Royal Malaysian Customs at all its checkpoints nationwide to facilitate trade and security is a potential plus for Malaysia in giving peace of mind to investors.

Prior to the soft launch in Penang last week by its developer Smartag Solutions Sdn Bhd, the RFID-based security and trade facilitation system has been given the thumbs up by local and foreign logistics players that participated in a three-month trial-run, which ended in August.

The project, which is set to be financed by newly-listed Smartag Solutions, is one of 12 initiatives under the government's Economic Transformation Programme.

From Saturday and over the span of two years, the home-grown RFID system will be implemented in stages at more than 200 customs checkpoints and 600 high-value bonded warehouses nationwide.

Some of participants of the project, which essentially allows users to secure their containers (whether by air, land or sea) with RFID seals and track their movements electronically while entering, leaving or moving within the country, were DHL, TNT, Federal Express, Western Digital and Priority Cargo.

For these companies, whose reputation is built on speed, reliability and just-in-time delivery, the introduction of the RFID system is most welcome since it has the potential to increase customs clearance efficiency, along with paperless clearance and processes.

RFID is a generic term for technologies using radio waves to identify people or objects and has been available since the World War Two when the British army used it to recognise, among other things, friendly aircraft.

It is not every day that a logistics giant like TNT Express Worldwide NV comes forward and lends it endorsement to the Malaysian Customs for introducing this project.

The pilot run of the project was a collaboration between the Royal Malaysian Customs, industry users and Smartag, with facilitation by the Performance Management and Delivery Unit.

The company's regional network manager (Asia Road Network), Dinesh Kanapathy, said at the soft launch that his company had accrued a time-reduction savings of at least 50 per cent for customs clearance when participating in the trial run.

Other global names have also endorsed the RFID tag, as it has been proven to work in favour of safe logistics.

Penang investors remember only too well the international embarrassment caused to the country in 2006 by a RM50 million computer chip heist at the Batu Maung Free Commercial Zone, near the Penang International Airport.

The world's biggest chipmaker Intel Corp - whose investment presence in Penang spans close to four decades - said it was a victim of the microchip robbery, which left everyone in the state spooked over the lack of security measures in the movement of high-value goods.

By making available to investors, both local and foreign, the option of a cost-effective resource to save time, reduce labour requirements and afford better visibility of moving goods and services, Malaysia can only improve its position as a preferred site for doing business.

Depending on how successful efforts by Smartag Solutions are in convincing importers, exporters and their suppliers on the value of adopting RFID-based security systems, the field is wide open in Malaysia and elsewhere for other sectors - such as the judiciary and healthcare industry - to adopt this system of profiling, tracking and communicating.

Eat That Peanut

New Rules New Confidence

Effective from next year, companies listed in Bursa will have to be more transparent. Because of new rules, they have to reveal more.

In their quarterly reports, they will have to give a detailed analysis of their businesses, and inform investors how the current world scenario will affect the present and future development of their companies.

More revelation means less possibility for the management to cook their books. Corruption, cheating and fraud will also be made more difficult.

If the new rules are effectively implemented, Bursa Malaysia will get a much-needed boost. This means that not only foreigners will like it but local investors will like it as well.

Transparency and integrity are essential traits for any stock exchange to flourish. Stringent rules to curb fraud and misleading statements when introduced without fear or favor will result in Bursa getting more investment, be it local or foreign.

The public love a level-playing field. Bursa will do well to ensure they have one.

Smartag Potential of a Ten-Bagger

Mention any ACE counter, and you'll probably get a repulsive response. This is to be expected because most if not all, the ACE counters at Bursa have been performing poorly even before the recent downturn. Nonetheless, there is one stock in this category that has caught my fancy. It's Smartag.

The company has just successfully completed its pilot trial with the Royal Malaysian Customs. The article appended below is a must-read if you believe that RFID is the right technology of the present and the future:

Smartag Solutions and Customs completed successful pilot trial
- -
Security and Trade Facilitation using Radio Frequency Identification (“RFID”) deployed in Royal Malaysian Customs’ Checkpoints nationwide

Pilot commercial trial was successfully conducted from 1 June till 31 August 2011, achieve cost saving to the industry, and increase efficiency of Customs process by 9 times.

Pulau Pinang, Malaysia: 26 September 2011 – Total RFID solutions provider Smartag Solutions Berhad (“Smartag”, the “Group”, “智能电子标签解决方案有限公司”) together with Royal Malaysian Customs (Jabatan Kastam Diraja Malaysia or “JKDM” or “Customs”) announced the successful completion of the trial run of the RFID-based Security and Trade Facilitation System at Royal Malaysian Customs Checkpoints in the country.

Speaking at a press conference during the soft launch of the Security and Trade Facilitation System (or the “System”) at the Second Air Cargo Complex Penang, Smartag announced that JKDM jointly with Smartag have successfully completed the trial run of the Security and Trade Facilitation System and have obtained positive results and feedback from the industry users.

Under the trial, the users will be able to use the RFID seal to secure their containers when entering, leaving, and moving within the country. With the usage of the System, the users will be able to automatically identify the containers’ movement electronically via the RFID seal to the RFID readers that are set up by Smartag at the various Customs checkpoints across the country.

During the trial run, participants were able to achieve 50% reduction on time taken for customs clearance, and have obtained cost savings from the usage of the system. During the trial run, JKDM is able to increase its efficiency by 9 times as compared to using the manual process. At the same time, the system deployed is able to solve “hanging” K8 forms.

According to the Chairman of the Air Freight Association of Malaysia, Mr. Walter Culas “The industry welcomes the usage of the system as we value speed, efficiency, and time. The system demonstrated its potential to increase customs clearance's efficiency, and paperless clearance and processes. The industry is fully supportive of the project, and the nationwide implementation."

“Based on our internal cost and benefit analysis has shown that the trial demonstrated that TNT will be able to have at least 50% reduction of time taken for customs clearance and all these benefits will create multiplier effect to the economy in the country", according to Mr. Dinesh K. the Regional Network Manager Asia Road Network for TNT Express Worldwide N. V.
“PEMANDU is pleased that the Security and Trade RFID Facilitation System will be used commercially at Royal Malaysia Customs checkpoints throughout the country. This is a clear indication that the ETP is being implemented, since its launch in October 2010,” said Dr. Fadhlullah Suhaimi Abdul Malek, Director Communications, Content and Infrastructure NKEA and Business Services NKEA.

This project was one of the 12 initiatives announced by YAB Dato’ Sri Najib Tun Razak at the fifth Economic Transformation Programme Update in April. Amongst other objectives, the implementation of the project is targeted at improving the efficiency of container clearance using paperless RFID approach, enabling automatic detection of compromised or tampered containers, and facilitating faster and more transparent trade.

About Smartag Solutions Berhad (ACE: 0169)
Smartag Solutions Berhad (Smartag) is a track and trace solution provider that utilizes Radio Frequency Identification (RFID) and other wireless technologies to enable users to have visibility, transparency and security. For more information on Smartag, go to www.smartag.my
Smartag was lasted traded at 26 sen per share. At this price, the stock is an excellent bet. I have this intuitive feel that this stock has the potential to be a ten-bagger over time.

As usual, please remember, that whatever action you take, you do so at your own risk absolutely.

Gold, silver and other commodities tumbled

The Associated Press, On Thursday September 22, 2011, 4:37 pm EDT
NEW YORK (AP) -- Gold, silver and other commodities tumbled amid a global sell-off in financial markets.

Gold fell $66.40, or 3.7 percent, to finish at $1,741.70 an ounce on Thursday. Silver, a precious metal that has wider demand for industrial production, plummeted $3.89, or 9.6 percent, to $36.58.

Analysts said that much of the selling was driven by margin calls for hedge funds and other big investors. "We're seeing hedge funds that have to raise cash, and to do that they have to sell what has been working for them so far this year," said Ryan Detrick, senior technical strategist at Schaffer's Investment Research.

Analysts also said that silver had a harder fall because about half of its demand comes from industrial uses. "If the economy contracts at all, there's going to be a lot of excess silver that's sitting in the supply chain," said Phil Streible, senior market strategist at MF Global.

Gold is up about 22 percent for the year. Silver is 16 percent higher than at the start of the year.

Copper, a metal that closely tracks the economic cycle, fell 27.6 cents, or 7.3 percent, to $3.4885. It is down 23 percent for the year.

Oil, wheat and other raw materials fell significantly because of increased fears that a recession would cut demand. Benchmark crude fell $5.41, or 6.3 percent, to $80.51. It was the biggest drop for oil since Aug. 8, when it fell 6.4 percent after Standard and Poor's downgraded the credit rating of the U.S. Oil has dropped 29 percent since April as global growth has slowed.

Wheat contracts fell 33 cents, or 5 percent, to $6.3375 a bushel. Corn lost 35.75 cents, or 5.2 percent, to end at $6.50. Sugar dropped 1.1 cents, or 4.3 percent, to 24.81 cents. And soybeans fell 37.5 cents, or 2.8 percent, to finish at $12.83.

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The Trading Doctor - Master Yourself Master the Markets

We come nearest to the great when we are in great humility... Rabindranath Tagore

Traders and investors alike—we are all guilty.

We have all committed the cardinal sin of exhibiting arrogance towards the markets. We must never ever think that we know more than the markets or that we can predict or that the markets care what we think. The markets do not even know who we are—let alone what we think.

If we approach the markets with pride, we will be punished swiftly and without compassion. The markets have no compassion. They want our dramas, our overconfidence, our rat-brained thinking and our money. They will gladly take our needs to suffer, be accepted, be loved, be hated or be punished--- and fulfill them without mercy and with often brutal consequences. The result is a shattered emotional and financial landscape of wealth distribution where the few take from the many. Read more.

Carson Block of Muddy Waters

This guy may have cost John Paulson RM500 million in 24 hours. Read more here.

Current estimated 1-to-16 ratio will narrow

M'sia's Iskandar plan may aid S'pore housing market 12 AUGUST 2011 , BY CHANNEL NEWS ASIA

Malaysia's ambitious Iskandar development in southern Johor may have a spin-off effect that would eventually aid Singapore's crowded housing market.

It may even help cool prices, as foreign investment meets increased demand for services and homes.

A plan for seamless connectivity from Johor Baru, Malaysia, to Woodlands in Singapore by 2018, is an attractive allure for investors.

Funds are pouring in, in the hope the development will yield economic benefit.

Singapore has invested some US$153 million (RM 463 million) into the services, education and health sector of the Iskandar Malaysia development, and analysts say further down the line, this will have a positive impact on the Singapore economy.

CIMB Research economist Song Seng Wun said: "If we do have at our doorstep an increased pool of qualified knowledge based labour force, we may be able to tap on that pool, bring them to Singapore and add to Singapore's productivity growth prospect, going forward.

"So if those two investments in those two areas were to work out over the near term, I think it could lead to more significant investment from the Singapore side.

"So I think while the outlook is positive, there are still perhaps many hurdles along the way before we can say we are going to get a significant upgrade with regard to property being moved to a higher plain in Johor.

"That could mean the pressure on property in Singapore could be alleviated because there is certainly now a much more viable option in Johor as a result of the improved communication, logistic network, the whole landscape as an alternative for Singaporeans to base themselves in Johor either for home or for business."

Singapore has already implemented measures to cool booming property prices, and the government may get some help in calming the market, now that the Iskandar project is open for investment.

Credit Suisse analyst Tan Ting Min said Malaysia will benefit from stronger investments from Singapore while Singapore could operate out of Iskandar, which has good infrastructure, and relatively cheaper land and labour.

"Hence, we expect the land price arbitrage to narrow from the current estimated 1-to-16 ratio.

"How quickly this land price arbitrage narrows depends very much on how quickly Singaporeans adopt the idea of moving their manufacturing bases to Johor," Tan added.

"I think we are realistically talking about something that is still in the works, perhaps a decade or more before we can really talk about Johor as a real hinterland," Mr Song said.

KPMG corporate finance partner Vishal Sharma said: "I think in terms of the land price arbitrage I expect you would see the Iskandar land prices going up.

"I don't particularly envisage Singapore land prices... coming down so the arbitrage will narrow but I don't think that it is ever going to go away. But yes, I expect that the arbitrage is going to narrow."

Why only palm oil?

By Zaidi Isham IsmailPublished: 2011/08/31


THE next time you go to the shopping mart to buy a food item, take a look at the ingredients label.

Chances are it will say the generic term vegetable oil rather than soyabean, rapeseed or palm oil.

Labelling of vegetable oils in the US, Europe and Malaysia has been accepted as the industry norm due to health reasons.

However in other parts of the world, such as Australia and New Zealand, the vegetable oils labelling is not carried as there are no laws requiring food manufacturers to do so.

Since 2009 however, some of Australia's lawmakers have been taking steps to change all that. They want to ask food manfucturers to specify the vegetable oil content, especially palm oil.

This has riled up Malaysia, which sees the move as unfair and discriminatory and can be seen as a non-tariff barrier on palm oil.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said it is okay to label palm oil on food products but Australia must compel other vegetable oils to do the same.

The playing field must be fair.

"Why just palm oil? What about the other oils? if you just single out palm oil, people will be asking, what's wrong with this product? We want to put things right from the start. Palm oil poses no danger to health at all."

Isn't it good to label palm oil? The oil is already known for its health benefits. So what is there to fear?

No problem, if the labelling is based on health grounds.

But Malaysia sees the whole labelling issue as a front by the non-governmental organisations to weed out which food manufacturers use palm oil and which do not.

Once it is able to identify the company which uses palm oil, it will launch an attack on the food company to stop its imports, like what they did to Cadbury and Kit Kat.

Their campaigns were so intense that both companies have stopped using palm oil.

NGOs will also link palm oil to forest degradation and the destruction of orang utan habitats.

It is because of this, Dompok led a 10-day trade mission last July to woo Australian parliamentarians not to support the initiative.

The Australian Parliament is due to convene this September to debate the "The Truth in Labelling - Palm Oil Bill", passed last month by the senate and is now on its way to the house of representatives.

The Bill is spearheaded by the independent senator Nick Xenophon and has received strong support from the Greens, the World Wildlife Fund, Zoos Victoria and Greenpeace as well as crucial backing in the senate from the coalition.

Dompok said the Malaysian Government will continue to negotiate with Australia's lawmakers by sending envoys in the coming months to talk them out of it.

Dompok said the Bill threatens the livelihood of 570,000 smallholders in plantations and a further 290,000 in downstream industries.

Out of the four million hectares of oil palm estates in Malaysia, 40 per cent is handled by smallholders.

"The industry has helped a lot of our people to come out of poverty. We have almost reached the point where we can't go much further with palm oil plantations," said Dompok.

He said Malaysia, which has national parks and world heritage sites, is very conscious of its need to preserve its own forests, which cover 55.7 per cent of its total area, well above the 50 per cent it guaranteed to retain at the 1992 Rio de Janeiro Earth Summit.

Besides arguments by NGOs that it destroys the habitat of Malaysia's 11,000 orangutans are baseless as the primate can only be found in Southeast Sabah and Southern Sarawak, which has been gazetted as forest sanctuary and are far from oil palm estates.

There are no orang utans in Peninsular Malaysia.

Malaysia's land used for agriculture, including for palm oil, is governed by strict laws and must be registered and licensed by the Malaysian Palm Oil Board.

"The move to label and and penalise palm oil has the potential to reverberate globally," said Dompok.

He said the labelling will also be cumbersome to Australia's food makers which can cost up to A$60,000 (RM186,000) just to label palm oil on a single food item.

Dompok said the government is deeply disappointed that the Liberal, National and Greens parties and Senator Xenophon have chosen to put politics ahead of the mutually advantageous relationship between Malaysia and Australia.

"This legislation undermines the spirit of our co-operation, especially now when our two countries have forged an asylum seeker deal."

All is not lost for Malaysia however. Should the Bill be passed, Malaysia can take up the battle at the World Trade Organisation where Malaysia can present its case against Australia's discriminatory move on palm oil.

Malaysian Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron said Malaysia has to fight all the way as NGOs are using Australia and New Zealand as their testing ground to see whether the Bill can be passed.

"Should it be passed, the NGOs know that if they can do it in Australia, it can also be done in the US and Europe," said Yusof.

Good money for good governance

By Adeline Paul Raj
Published: 2011/08/31
Share
Kuala Lumpur: Institutional investors are keen on companies with good corporate governance (CG) and are willing to pay top dollar to invest in them but sadly, few fit the criterion in Malaysia, says Aberdeen Asset Management, one of the country's top investment firms.


"We care about things like GCG because a company with sound governance policies will outperform over the longer term. We don't mind paying a premium for CG because we know there'll be a board that will always be watching our backs," said Abdul Jalil Rasheed, its head of equities, who helps manage US$2.5 billion (RM7.5 billion) of assets at the firm.

He said CG is a key criterion for Aberdeen when analysing companies to invest in.

"If it fails our CG test, we won't invest in the company," he remarked.

Jalil, who has been with Aberdeen for eight years, said the firm visits at least 100 companies a year in each key country in its quest to find undervalued stocks with good fundamentals to invest in.

"It's not as easy as you'd think," he shared. "We're long-term, fundamental, bottom-up investors ... so investing in the right company is key."

In Malaysia, Aberdeen's major investments include AEON Co (M) Bhd (15 per cent stake), Public Bank Bhd (5 per cent), CIMB Group Holdings Bhd (5 per cent), British American Tobacco Malaysia Bhd (5 per cent), Guinness Anchor Bhd (about 7 per cent) and Pos Malaysia Bhd (6 per cent).

Aberdeen has some RM11 billion invested in 29 companies here, Jalil said.

At a recent accounting-related conference held here, he shared his views on what institutional investors like Aberdeeen want to see in companies, especially on the matter of CG.

"We ask if a company will still be in the same business in 20 years' time. And if it's got a good track record, is it run fairly for all shareholders, and are they transparent? How independent are the board of directors?

"What we want are directors that are knowledgeable of the industry. We want experienced and really independent people. There are some companies out there where the independent directors are former employees of the company - it's not wrong, but it's not right in the spirit of corporate governance," he remarked.

Jalil noted that boards play a key role in setting the CG tone for the company, and so directors shouldn't be sitting on boards for too long as investors would then find it difficult to see them as being truly independent.

"Changing board members is a good thing ... it brings a rejuvenation of the board. Younger board members would bring in new perspective," he voiced.

Another problem commonly seen by investors is companies providing sparse information in their quarterly financial reports.

"They should at least have a performance commentary on how the company has done in the past quarter. We see similar words being used in almost every quarter," he lamented.

Jalil said institutional inves-tors like Aberdeen would also like to see a more transparent voting process at shareholder meetings, like a poll voting system.

He noted that Singapore has made it mandatory to vote by poll and have the results audited by an independent auditor. "I hope this is something we can move to," he said.

Jalil said it would also be good for independent directors to be given a few minutes to explain the operations of the company to shareholders at annual general meetings. "We have seen this in Thailand, and to a certain extent in Singapore.

"In Malaysia, they are rather quiet ... it would be nice if they were given a bit of airtime," he suggested.

Jalil opined that in Malaysia, companies do the bare minimum when it comes to CG. "It's more about form than substance, a mere box-ticking exercise, and I think that's wrong. If you want to adopt CG, you've got to do it in the right spirit," he said.

TM commits to returning excess cash, sees jump in UniFi take-up

Tags: First half results | Telekom Malaysia Bhd | Zamzamzairani Mohd Isa
Written by Cindy Yeap   
Thursday, 25 August 2011 13:55

KUALA LUMPUR: Telekom Malaysia Bhd (TM) announced an average interim dividend with its 1HFY11 earnings release yesterday, but group CEO Datuk Zamzamzairani Mohd Isa promised the company will return any excess cash it has after assessing its needs.

“It’s expensive to keep extra cash. We’ve always said we would return any extra,” Zamzamzairani told The Edge Financial Daily on the sidelines of its earnings briefing. “Active capital management will continue,” he told reporters earlier.

Expectations TM would make a special payout rose after the company fattened its coffers by some RM468.3 million (about 13 sen per share) last month with proceeds from the sale of its remaining stake in Axiata Group Bhd.

TM’s cash pile stood at RM2.7 billion as at June 30, 2011, down from RM3.5 billion at end-2010, having just made a RM1.04 billion (29 sen per share) capital distribution in May. 

That was on top of the 26.1 sen per share dividend (13 sen interim and 13.1 sen final) paid for FY10. In FY09, TM made a 98 sen per share capital repayment, on top of 23 sen in regular dividends (10 sen interim and 13 sen final)

Analysts are forecasting dividend per share to be between 20 sen and 49 sen for FY11, averaging at 26.5 sen per share. TM has a policy of distributing at least RM700 million cash back to shareholders a year, or up to 90% of its normalised profits, whichever is higher.

TM announced an interim dividend of 9.8 sen per share yesterday, which represents a RM350.6 million payout. This was after saying earnings for 1HFY11 ended June 30 fell 18.5% to RM311.7 million from RM382.4 million in 1HFY10, even as revenue rose 2.5% to RM4.38 billion over the same period, shored up by higher revenue from Internet, multimedia and data services.

Take-up of the UniFi service has exceeded TM's expectations.
The reduced bottom line is primarily due to higher operating costs and lower foreign exchange gains on translation of foreign currency borrowings, which fell to only RM49.5 million in the current period against RM180.5 million in the same period last year. 

Net profit of RM137 million in 2QFY11 was smaller than the RM174.7 million booked in 1QFY11, but 4.2% above the RM131.5 million booked in 2QFY10.
Excluding non-operational items like translation gains, 2Q earnings would have increased by 20.8% year-on-year and be up by 10.4% quarter-on-quarter, TM said.

“Overall, we’re very pleased with the performance, which shows continued operational improvement,” Zamzamzairani said, adding that strong demand for its UniFi high-speed broadband (HSBB) service “has exceeded expectations and the momentum we saw at the beginning of the year”.

UniFi’s subscriber base jumped from 63,541 in 1Q11 to 109,019 in 2Q11 on the back of 904,000 premises passed. As at Aug 18, TM has installed UniFi to more than 142,000 customers on the back of more than 973,000 premises passed covering 76 exchange areas with 46 IPTV channels. “This shows a ramping up of the take-up rate from 12% as at June 30 to 14% to date, exceeding our initial expectations of 8% to 10% take-up for the first two years, Zamzamzairani said.

TM is on-track with its plan to cover 1.1 million premises by end-2011 and 1.3 million premises by end-2012, it said.  

While capital expenditure to revenue ratio improved from 18.8% to 17.1% in 1HFY11, with total capex falling from RM804 million in 1HFY10 to RM749 million in 1HFY11, group CFO Datuk Bazlan Osman said capex on HSBB is likely to be higher in 2HFY11. “Overall capex was about RM1.6 billion last year. This year’s capex will be about the same, if not slightly higher,” he said.

Foreseeing a challenging outlook ahead, Zamzamzairani said TM will continue to spend where necessary while keeping a tight watch on costs. “We hope the momentum of revenue growth we are seeing will continue,” he said.

Based on its headline KPI guidance for FY11, TM is expecting 2.5% revenue growth this year against 2.1% in FY10, with momentum picking up further to 3.5% to 4.5% in FY13. Guidance on earnings before interest, tax, depreciation and amortisation (Ebitda) margins, however, is at 32% for FY11 against 33.1% in FY10, before rising to the “mid-30s” in FY13. 

TM rose eight sen or 1.95% to RM4.18 yesterday, after trading between RM4.11 and RM4.18.

At press time, it had nine brokers calling it a “buy” against 13 “holds” and seven “sells”. Target prices range between KAF Seagroatt & Campbell’s RM3.23 and CIMB Research’s RM4.92.


This article appeared in The Edge Financial Daily, August 25, 2011.

EPIC Offered 3.10 a share Not a fair price

Shares of EPIC belonging to Ahmad Zaki Resources were sold to the Trengganu Government at RM3.10 a share on Nov 4, 2010. At that time, EPIC was traded at around RM2.10 per share.

EPIC was last traded at RM2.93. Thus the offered price should be higher than RM3.10. In my opinion RM3.30 per share would be a fairer price.

The Hidden Dangers in Safe Havens

by Paul Sullivan
Monday, August 22, 2011


As Europe's debt troubles intensified earlier this month and United States debt was downgraded, many people rushed into gold and Treasury securities as a safe haven. It was the latest sign that in uncertain times, investors act in ways that can hurt them in the long run.
"They fled the perceived risk of falling stock prices right into the assured risk of overvalued assets," said G. Scott Clemons, chief investment strategist for the wealth management division at Brown Brothers Harriman.
What drove those decisions was not logic but fear — fear of a repeat of September 2008. And that fear may only have intensified when markets dropped again late this week, sending yields on 10-year Treasury notes to record lows and the price of gold above $1,800 an ounce.
Even if the fear is understandable, however, acting on it may not be the best long-term strategy.
"If you were right about the timing decision to get out, you're going to have to be right again about when to get back in," said Joseph W. Spada, managing director at Summit Financial Resources in Parsippany, N.J. "Even professionals have trouble doing it. If that's not going to be your strategy, then don't do it once."
But now that people have done it once, what are the risks of holding on to large positions in gold and Treasuries?
TREASURIES While the economy may seem bad to many people, it would not take much improvement for investors to lose money quickly on their investment in Treasury bonds.
A week and a half ago, the 10-year Treasury note was yielding only 2.10 percent, after Standard & Poor's downgraded the United States' credit rating. Since the yield of a bond moves in the opposite direction of its price, this meant demand for 10-year Treasuries was high.
If over the next six months, the yield were to move up another half of a percentage point to 2.60 percent, however, investors owning those bonds would have a negative 6.25 percent return, said Barbara Reinhard, chief investment strategist at Credit Suisse Private Banking in New York. If the yield curve were to move up a full percentage point during that time, the loss would be 14 percent.
She said such a quick increase could easily happen, as it did from October 2010 to January 2011 when the Federal Reserve began its second round of large-scale purchases of government debt, the program known as quantitative easing.
Now, plenty of people buy bonds with the intention of holding them until maturity. In doing that, it would seem that they would earn a return of 2.10 percent. But they would actually lose 1.5 percent, when the most recent inflation rate of 3.6 percent is factored in.
"That's assuming inflation doesn't rise," Ms. Reinhard said. "Right now, you're betting inflation will fall below 2.10 percent. You're betting against history because inflation has been around 3 to 4 percent historically."
This is not the brightest picture for people who added to their allocation of Treasury bonds. But many felt it was the only safe place.
J. D. Montgomery, a managing director at Canterbury Consulting, an investment consulting firm in Newport Beach, Calif., said he had a client who wrestled with where to put $5 million that he needed to keep safe. The client chose a three-month Treasury note, even though the interest was only $1,000.
There was at least some logic behind this. Most people who bought Treasuries were abandoning their investment strategy, and wealth advisers say that is more troubling than paltry returns.
"The risk of changing your strategy when it's being tested as opposed to changing it when it's not being tested is you risk derailing your long-term investment plan," said Gregg Fisher, president and chief investment officer of Gerstein Fisher, a wealth management firm in New York.
So what should nervous investors have done? Selling Treasury bonds when everyone else was buying them would have been a start. But that might have taken too much discipline. Moving to cash was the top option because at least investors would have money ready when they felt comfortable returning to the markets.
GOLD Investors in gold are a different breed. They often have a passion for the metal that goes beyond returns. And they are not going to be swayed by arguments that gold, hovering around $1,800 an ounce, is overvalued.
"When you buy gold you're saying nothing is going to work and everything is going to stay ridiculous," said Mackin Pulsifer, vice chairman and chief investment officer of Fiduciary Trust International in New York. "There is a fair cohort who believes this in a theological sense, but I believe it's unreasonable given the history of the United States."
As for the nonbelievers who piled into gold, they need to think practically now. Only about 11 percent of gold has an industrial use. While gold can get lost or buried, it does not get used up like oil or natural gas. And its actual cost is between a third and half of where it is trading. Dan Denbow, co-manager of the USAA Precious Metals and Minerals Fund in San Antonio, said it cost about $600 to produce an ounce of gold, but that rises to about $1,000 when all the costs of mining are factored in.
Yet a bigger risk may come from exchange-traded funds for gold. While they let small investors buy gold easily — the price of one share of the GLD exchange traded fund is roughly one-tenth the price of an ounce of gold — that same ease of buying means investors can just as quickly sell their shares in a panic.
No one I spoke to would venture a guess as to how high gold would rise before it hit its peak. But most stressed that people forgot that gold's value was driven by sentiment.
"Gold doesn't have any intrinsic value," said Larry M. Elkin, president of the Palisades Hudson Financial Group in Scarsdale, N.Y. "It's this era's wampum. At one point you could buy Manhattan for beads."
(Mr. Elkin said what bothered him the most about investing in gold was how irrational it was, unlike buying a blue-chip stock whose value rises and falls based on what the company produces.)
That said, having gold in a portfolio is still a good buffer against swings in other markets. Mr. Fisher calculated that over a 43-year period ending in June 2011, the average annual increase for gold, accounting for inflation, was 3.82 percent compared with 4.92 percent for the Standard & Poor's 500-stock index. Gold, however, was 28 percent more volatile.
"The smoother the ride, the more likely the investor is going to stay in his strategy," Mr. Fisher said. "That produces a better result."
He said that from the perspectives of both return and volatility, a better strategy would have been to put 10 percent in gold and split the rest 60-40 between stocks and five-year Treasury bonds. Rebalancing the portfolio to maintain those ratios would have meant an average annual return of 4.66 percent, with more than half of the volatility of gold alone.
For those who fled to gold and Treasuries, the hardest part will be deciding when to get back into other securities. The best way in uncertain markets may be to go slowly in small chunks — a practice known as dollar-cost averaging.
"There are real and psychological benefits to it, because getting someone to take that first step is the hardest," said Christopher Wolfe, chief investment officer for the private bank and investment group at Bank of America. "With a five-year time horizon, it makes a big difference. You might get one of those wicked big down days you could benefit from. But if you have a 30-year time horizon it doesn't matter."
Of course, if people had thought on such a long time horizon they might not have rushed to buy gold and Treasuries in the first place.

Is the generosity of Genting at the expense of the minority shareholders? You be the judge

Genting gives big payout to directors published: 2011/08/16

KUALA LUMPUR: Genting Bhd topped the list with a big payout of RM111.48 million to its board, up 21 per cent from RM92.11 million previously.

The company also has the highest remuneration band of RM106.65 million to RM106.70 million for a single director, says the Malaysian Business in a statement today.

The company, however, did not name who the director was. The top executive listed is its executive chairman and chief executive Tan Sri Lim Kok Thay.

According to the business magazine's annual survey of the "Highest-Paid Directors", listed companies paid out substantially higher remuneration to their directors last year compared to 2009 on the back of an improved economic climate.

Some companies, however, lowered their boardroom remuneration last year, including CIMB Group Holdings Bhd.

The second largest bank paid RM18.51 million or 13 per cent less to its board members and lower remuneration to its group managing director and group chief executive officer Datuk Seri Mohd Nazir Razak.

He received RM12 million last year as opposed to RM14.5 million in 2009.

IOI Corporation Bhd came in second with a total payout amounting to RM56.29 million, 71 per cent more from a year ago, said the Malaysian Business.

Meanwhile, with three companies -- YTL Corp, YTL Power International and YTL Cement -- Tan Sri Yeoh Tiong Lay received a combined remuneration of RM13.10 million.

Interestingly, out of 630 companies, 95 companies with huge losses are still rewarding their directors with huge payouts.

The survey lists a total of 630 companies with a remuneration band of RM300,000 and above as stated in the company's annual report.

Of these, only a handful of the companies were transparent in stating the exact remuneration of their top executives. -Bernama


Read more: Genting gives big payout to directors http://www.btimes.com.my/Current_News/BTIMES/articles/20110816165524/Article/index_html#ixzz1VBO8toXp

Malacca becomes Malaysia´s first smoking-free city

KUALA LUMPUR: The Malaysian world heritage city of Malacca will be smoke-free from June 15, a first for the country, the health minister said Monday.

The move was to bring in more tourists and help stamp out smoking in a country where the habit is widespread, Liow Tiong Lai told AFP, insisting it would also help preserve the city.

"The idea is to create fresh air and a clean environment for tourists and Malaysians alike to enjoy the historic city," he said.

"It will also aid in preserving the old monuments and buildings as the ban will reduce pollution in the area and promote a healthy lifestyle."

The no-smoking area covers the entire 4.2 square kilometres (1.6 square miles) of the city and four other areas in the southern state of Malacca.

"These areas will be free from cigarette smoke and make Malacca city the first smoking-free city in the country," said the minister.

"Those caught will be hit with a fine of 300 ringgit (100 dollars) although the maximum penalty is 5,000 ringgit."

Malacca chief minister Mohamad Ali Rustam told the Star daily that the state was also serious about declaring more tourist destinations in the state smoke-free zones.

With more than 500 years of trading and cultural exchanges between East and West, Malacca's multi-cultural heritage is seen its ornately designed government buildings, churches and forts.

It is where the Malay sultanate originated in the 15th century, before being invaded by the Portuguese and Dutch in the early 16th century.

In 2008, UNESCO included Malacca and Georgetown, on the resort island of Penang, in its world heritage list but there have been recent concerns that the southern port city could be de-listed because of redevelopment in its historic quarter.

Malaysia is hoping the heritage listing will boost tourism, which is a key foreign exchange earner.

Warren Buffett buying in down market

NEW YORK - Warren Buffett has been buying amid this week's sharp declines in the market, and has not yet seen anything that suggests another downturn is emerging, the legendary investor told Fortune magazine.

In an interview published on Thursday, Buffett also told the magazine he understood why Standard & Poor's lowered its outlook on the credit rating of his conglomerate Berkshire Hathaway, but said he disagreed with the underlying premise - the downgrade of the United States' credit rating.

The 80-year-old "Oracle of Omaha" is known for his love of a good deal, which is why his company made an unsolicited offer below book value for reinsurance company Transatlantic Holdings last weekend, and why Berkshire sold $2 billion of senior unsecured notes this week at historically low rates.


In that vein, Buffett told Fortune Managing Editor Andy Serwer the market declines have not fazed him.

"The lower things go, the more I buy. We are in the business of buying," he said, adding that he had "never been better."

Buffett also told the magazine that he was not seeing fresh indications of the economy turning bad again, though things could change if market conditions do not improve.

"Up until right now, all of our businesses have been coming back - even Europe isn't doing that badly - except for businesses relating to home construction which is on its rear end," Buffett said.

TDM Doing Well

TDM, considered one of the cheapest plantation stocks in Malaysia, closed up nearly 3 per cent to RM2.92 yesterday. Its net profit more than doubled to RM32 million for the quarter ended June 30 2011.

The improved stock performance of the Terengganu state government outfit was in line with other plantation stocks on the market, which collectively increased by 121.54 per cent yesterday.

Plantation stocks are in the limelight this results season as companies like TDM post stellar profits on higher crude palm oil (CPO) prices.

TDM posted a net profit of RM32 million on revenue of RM126.9 million for its second quarter due to higher crude palm oil production, which increased 26 per cent.

Hong Leong Investment Bank said TDM is one of the laggard plays within the plantation sector and was worth a second look due to a clearer business strategy, improving financial performance and standing, as well as continued dividend payouts.

"We are projecting TDM's net profit to rise from RM92 million in 2010 to RM129.1 million, RM105.2 million and RM100.2 million in 2011, 2012 and 2013 respectively, mainly on the back of higher CPO price assumptions of RM3,200 a tonne in 2011 and RM3,000 a tonne in 2012-2013," it said in a research report.

The above article is an excerpt from Business Times

Sweet Victory for Malaysia

By Rupa Damodaran

KUALA LUMPUR: Palm oil industry players, in lauding the move by the Australian Senate committee to reject a mandatory palm oil labelling bill, say the battle is far from over for the commodity to gain wider market access in international markets.


The decision from Canberra spelt a sweet and significant victory for Malaysia's important commodity against the unjust and misleading anti-palm oil campaigns by environmental non-government organisations (NGOs), they added.

Malaysian Palm Oil Council (MPOC) CEO Tan Sri Yusof Basiron said while the report is seen as a significant repudiation of environmental NGOs' anti-palm oil campaigns, the industry must continue to fight against global efforts to require mandatory labelling.

Efforts must continue to ensure producers retain market access across the globe and consumers, such as those in Australia, continue to benefit from the use of a low-cost vegetable oil.

"We appreciate the committee's professionalism, especially taking into consideration a rigorous scientific evaluation instead of relying on the NGOs (in drafting a bill), which if allowed, can lead to zero trade," he said yesterday.

Yusof led a team when presenting Malaysia's case to the Senate hearing in Canberra on the mandatory labelling of palm oil proposed under the Truth in Labelling - Palm Oil Bill in April.

In Malaysia's case, Yusof pointed out, the palm oil industry has been a pillar of economic growth and societal advancement as smallholders account for 39 per cent of palm oil production, while producers enjoy incomes four times above the national poverty level.

The industry is also committed to conservation efforts through initiatives like the Malaysian Palm Oil Wildlife Conservation Fund.

Meanwhile, United Plantations executive director of corporate affairs Datuk Carl Bek-Nielsen welcomed the news, saying it was a decision made based on facts and figures and not "emotional exaggeration".

"It's a positive development for Malaysia in terms of how palm oil is viewed abroad - which not everything thrown by the NGOs are swallowed hook, line and sinker.

"We consider it a fair and just decision, not only to the industry, but to smallholders. Had it (the Bill) gone through, it would have put in more wind to the detractors out there to tarnish palm oil," he commented.

Bek-Nielsen, who was also present at the Senate hearing, said some of the comments from the organisations on the planting of oil palm were based on wild exaggeration.

He said palm oil producers in Malaysia and Indonesia should not be afraid to take on battles (against the crop) as long as there is injustice taking place and counter them.

Understanding S&P's downgrade of the United States

NEW YORK - The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday, a move that will affect the country's borrowing costs and investor opinion of U.S. assets. Here is a Q+A on what the downgrade means for investors, consumers and to the country.

WHAT IS A DOWNGRADE?

Standard & Poor's, one of the three major credit rating agencies that assign scores to debt issued by institutions, municipalities, and governments, said there is a heightened degree of risk in holding debt issued by the United States. So it lowered its rating from the AAA, the highest possible level, by one notch to AA+. It also said the outlook is negative.


WHY DID IT LOWER THE RATING?

The credit rating agency believes the outstanding debt of $14.3 trillion and projected deficits for coming years in the United States no longer warrant the top-tier rating that it had assigned to the United States since 1941. It also said that the political environment does not build confidence that the United States can agree on how to lower the deficit in a meaningful way any time soon.

DOES THIS MEAN THAT U.S DEBT IS NO LONGER SAFE?

No. At AA+, the U.S. is still considered to have a "strong" ability to meet its obligations. In fact, only a handful of countries now have the AAA rating - among them Canada, Germany, France and the United Kingdom. In addition, Treasuries have rallied this week, driving the yield on the benchmark 10-year note to 2.34 percent, its lowest level in about 10 months. This suggests people still view the U.S. as a safe place to invest.

BUT WASN'T A DEBT DEAL JUST SIGNED IN CONGRESS?

Yes, but the savings from this are projected at $2.1 trillion. S&P has said that a larger level of savings is needed - at least $4 trillion either through spending reductions or tax increases - are needed in order to start lowering U.S. deficits in coming years.

WHAT IMPACT DOES THE DOWNGRADE HAVE?

Over time, a lower rating will cause investors who buy U.S. government debt to demand a higher interest rate to hold that debt to reward them for the risk. If that is the case, benchmark long-term interest rates will rise. Most major rates, including the debt of corporations, mortgages purchased by investors, and other types of loans, are priced in relation to the U.S. Treasury benchmark. That means borrowing costs across a number of spectrums over time will rise, making loans and bonds more expensive. The more an individual or company is devoting to interest payments, the less they have for other activities.

SO WHAT WILL IT COST?

The downgrade could add up to 0.7 of a percentage point to U.S. Treasuries' yields, increasing funding costs for public debt by some $100 billion, according to SIFMA, a U.S. securities industry trade group.

WHO OWNS U.S. DEBT?

Other than the U.S. Federal Reserve, the most recent data from the U.S. Treasury shows that China, with $1.16 trillion in U.S. Treasury securities, is the biggest holder of our debt. China has repeatedly warned of the unsustainable trend of U.S. deficits and has talked of diversifying its holdings to other economies. But because China maintains the value of its currency through buying of U.S. dollars, it is likely to continue to be a major holder of Treasury securities for some years ahead.

WILL MY MONEY MARKET FUND HAVE TO SELL ITS TREASURY DEBT?

Not likely. The credit rating change affects long-term debt - the short-term credit rating of the U.S. is A-1+, the highest short-term rating. Money market funds with short-term debt are unlikely to be affected.

WILL INVESTORS PREFER DEBT FROM HIGHER RATED COUNTRIES?

This is possible. Some large investors, such as William Gross of PIMCO, have said other markets such as Canada offer more value. But the U.S. market retains significant appeal because its bond market was more than $35 trillion at the end of March 2011, according to SIFMA. No other bond market is close to that size.

NOW THIS HAS HAPPENED, IS U.S. SAFE FROM OTHER DOWNGRADES?

No. To begin with Standard & Poor's has assigned a "negative" outlook to the US long-term credit rating. That means another downgrade was possible in the next 12 to 18 months if it does not see an improvement in debt reduction.

The other ratings agencies, Moody's and Fitch, currently still have a AAA rating on U.S. debt, which they just affirmed. But both of those agencies have suggested the U.S. could also be downgraded if projected government deficits are not reined in. Moody's currently has U.S. debt on review for possible downgrade.

HOW LONG HAS THE U.S. HAD AN AAA RATING?

S&P has maintained a AAA rating on the U.S. since 1941. Moody's has had an Aaa rating on the U.S. since 1917; Fitch's top-tier AAA rating dates to 1994.

Breast-touching Festival is on in China

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The Daily Chilli
Friday, Aug 05, 2011
The Chinese have entered the seventh month of the Lunar calendar, known as the Hungry Ghost month, which began July 31.

This period is considered unlucky for many Chinese as they believe that the ghosts are allowed to return to the human realm as the Hell Gate opens throughout the month.

While the Buddhists and Taoists prepare offerings for the homeless ghosts, a minority tribe in China have their own interesting celebration.

The Yi people in Ejia town of Yunnan province, who are still singles, will head to the streets for Breast-Touching Festival (Monai Jie) on the 14th, 15th and 16th days of the month.

On these days, the men are welcome to touch the women's breasts.

Legend has it that the festival began around the Sui Dynasty (AD 581 - 619) when most of the teenagers of the Yi tribe were forced into the army and died in wars.

The people then carried out prayers to commemorate the dead, and it happened that the ceremony was held in the seventh month.

According to the wizards, the dead were unrest because they had not touched a woman before.

And so, they wanted 10 "pure and untouched" ladies to accompany them in the afterworld.

In a move to prevent them from being chosen, the single women - aged 15 and above - then asked the men to touch their breasts, and the custom is past down for generations.

M'sia, S'pore and HK picked as top spots for investments

SINGAPORE: Pacific Star Group, one of Asia's leading real estate investment houses, says commercial properties in Asia will continue to do well in the second half of 2011.
Within the commercial sector, its top pick is retail real estate, while the top three destinations in the region for retail property investment are Hong Kong, Singapore and Kuala Lumpur.
The group's senior vice-president and head of research and strategic planning Leslie Chua said Hong Kong was supported by tourist spending especially from outbound mainland Chinese visitors.
“Singapore likewise is enjoying a surge in visitors attracted especially to its integrated resorts.
“Over in Malaysia, domestic factors are at play. Strong wage growth and positive retail sentiment have boosted retail spending and real estate fundamentals in Kuala Lumpur,” he said, commenting on the group's biannual Asia Property Outlook and Strategy report here yesterday.
According to the report which highlights its key investment themes in regional real estate markets, the shine of Asian real estate environment continues despite greater global uncertainty, as it is supported by favourable economic fundamentals and positive consumer sentiment in most markets.
It says capital values have risen on the back of solid rental growth as regional economies continue their strong expansion, and the economic recovery in the region is moderating to a more sustainable rate which should provide steady support for Asian real estate.
The key factors supporting retail properties are tightening employment conditions, which are driving buoyant retail spending, and rising tourism inflows to Asia, which are becoming an important source of revenues for some cities.
After retail, the group favours office properties, as the region's rapid economic growth is fueling a steady upturn in the office sector.
Demand for office space in Asia has been driven mainly by corporate expansions, upgrading as well as relocations with financial, insurance, real estate and information technology tenants leading the way.
Pacific Star's top destination for office property investment is Singapore. Singapore continues to exhibit strong fundamentals in several key drivers including services outlook, political stability, and ease of doing business.
Although fundamentals for Asian residential real estate remain intact, the group is less sanguine on the residential sector citing a disproportionate amount of policy risk and rising interest rates as the key threats.
Taking into consideration loan structures, incomes and home prices, the group expects home buyers in Seoul and Ho Chi Minh to be the hardest hit in the region.
It says Kuala Lumpur will be least affected because policy risk is relatively low and economic conditions are generally healthy.
The biannual Pacific Star Asia Property Outlook and Strategy report surveys Bangkok, Beijing, Ho Chi Minh, Hong Kong, Kuala Lumpur, Seoul, Shanghai, Singapore and Tokyo. Bernama