Interviewing Catwalk Guru Benjamin Toong

After interviewing Amber Chia, the Malaysia born international supermodel, this is the second episode. For those who missed the interview, please read "Interviewing International Supermodel Amber Chia" dated 11 April 2011. In conjunction with this, Finance Malaysia Blog continue to highlight some of those successful Malaysian. We strive to bring out the hidden success story of Malaysian, and we are proud to present to you Catwalk guru - Benjamin Toong.

Some profile of Benjamin Toong:

• Founder of Runway Productions
• Crowned as the catwalk guru of Malaysia in year 2010
• 3 years experience in runway training, fashion stylist and runway choreographers
• Fashion stylist for local and international fashion magazines
• Judge and Professional Runway Trainer for Ford model Supermodel of the world Malaysia 2009
• Official stylist of Jiayu Astro CH304
• Co-founder of AmberChia Academy

The Interview

1. In Malaysia, many people perceived that modelling is of western culture. Can you tell us HOW and WHY you ventured into modelling industry?
• First of all, I would not consider modelling as a western culture. Being a good model, you need to be very disciplined! Any model that want to be at the top in the industry need to be very discipline in ALL aspects (stressed Ben again).
• How? Well, it all started when I first helped out my designer friend to arrange for a big fashion show for ONE UTAMA fashion week many years ago and realized that models at that time are not really so well trained and that comes with the following question
• Why? Oh, first and foremost of course I love this industry, and my passion in modelling industry is indescribably and I wanted to see every model that call themselves professional models are doing a great job on the runway.
• 
  

• 

  Action: Catwalk guru on Runway

2. What is your advice to those aspirant future model who want to succeed? Are there any secret for them?
• If you really want it, GO FOR IT! To be at the top, nothing is better than to be a good disciplined model. If you think you are gorgeous, tall, great body, there are many out there much more better than you. But if you have a good attitude, then everyone will remember you and will happily keep on working with you! The secret is "to be discipline in everything you do"!

• 
  

3. Beside modelling, what's your hobby during your spare time?
• My hobby is exercising whenever I have the time as I need to keep in a good shape to tell others to stay healthy and stay in good shape. My other hobbies are listening to music and watching fashion shows as I need to keep myself updated with current fashion and music.

• 

  Benjamin with his high heels

4. On money matters, do you personally invest?
• I invest a lot on high heels. (laughing...) I am not good in investment, but I have a few houses, a car, and an academy.

Although Benjamin said that he is not good at investment, but judging from his asset (few houses), Finance Malaysia believes he must be joking. Hahaha. For sure, his investment into his own business is his best investment already.

Dear readers, seriously insert the golden word of Benjamin into your soul - "Discipline". As such, we thanks Benjamin Toong for his time spent. We wish him healthy and wealthy (can buy more 7-inch high heels?).

Suitpossum does Twitter

I've just signed up for a Twitter account: http://twitter.com/#!/Suitpossum

I'll mostly use it to write haikus. I'll also flag up interesting pieces related to social & environmental finance innovation, financial activism, alternative financial systems, and international development.

MY FIRST TWITTER FOLLOWER

Please do follow @Suitpossum if you're into the Twitter lifestyle.

Financial Zones of London: How to get good coffee in Berkeley Square, Mayfair

There’s a troubling question in my mind whenever I’m in Berkeley Square: It’s the mystery of why I can’t find any good coffee here. It’s mysterious precisely because this square is the centre of the world’s largest concentration of hedge funds, and that kind of means the average person walking here commands a salary larger than…well, everyone else in the whole world. So where’s the good coffee?

BERKELEY SQUARE, MAYFAIR

Have you ever wondered what a hedge fund is? I mean, I can tell you that a hedge fund is a company registered in the Cayman Islands, and that people around the world put money into it, and then it uses that money as collateral to borrow a bunch more money, and uses that to bet on various things like company shares, commodities, bonds, and derivatives…

But does that really tell you what a hedge fund is? To know what a hedge fund is, you should try run your hand over the golden plaques on the doors around Berkeley Square. The names seem unfamiliar, but this is a ring of fire, and these companies are sorcerers channeling enormous circuits of cash. The old facades hide computer networks sending orders to transact in every market on the globe. In fact, I’d give you 2:1 odds that there’s someone in that inconspicuous building over there that’s about to execute a trade that will affect the value of Russian mining companies in Siberia.

But where’s my good coffee? I know where it is. Lansdowne House, 57 Berkeley Square, houses one of the world’s largest private equity companies – The Carlyle Group on floor 3. Those guys must have good coffee. Have you ever wondered what a private equity company is? I mean, I can tell you that a private equity company runs private equity funds, registered in the Cayman Islands, and that people around the world put money into those funds, and then those funds use that money as collateral to borrow a bunch more money, and use that to buy and sell companies.

But would that really tell you what a private equity company is? To know what a private equity company is, put on a heavy Russian accent, walk in and tell the Carlyle Group that you’ve got an ailing Siberian mining business that needs restructuring – they’ll take you to their meeting room and give you good coffee.

LANSDOWNE HOUSE, COFFEE SHOP FLOOR 3

Then you can head back to Green Park tube via Berkeley Street. You’ll pass Glencore. It’s Swiss, and it’s one of the world’s largest privately owned companies. The UK office is by the Sainsbury’s on the corner. They’re huge in the global commodity scene, and they’re only about to get bigger, with a gargantuan IPO* planned. They’ve historically not been too transparent, and, word on the street is that commodities can be a dirty business at times, with all that Siberian mining. This area looks posh, but it’s not – it’s all cowboys, assassins, and oligarchs.

*(refers to initial public offering: selling shares of ownership to raise money)

Inflation och resultaträkningar!

För att tjäna pengar på att köpa och sälja aktier är det en del som förlitar sig på tur. Det är naturligtvis helt OK att göra det och en hel del framgångsrika investerare är säkert rika p.g.a. tur. Dock, för de flesta av oss är det nog förmågan att gräva fram någon ny bit information (som få andra tänkt på innan alla andra också inser informationens stora betydelse) som gör skillnad.

En självklar plats att söka information om ett bolag på är naturligvis i kvartals- och års-rapporter. Är man duktig på att läsa balans- och resultat-räkningar har man naturligtvis en edge i investerarspelet. Själv har jag aldrig ägnat mycket tid åt finansräkenskaper och den största anledningen till det är att jag vet att jag inte är speciellt duktig på det hela (jag är ingenjör och nationalekonom, ej revisor). Jag vet alltså att jag inte har någon edge!

För er som är duktiga på redovisning är följande observation inte så spännande. Och för mig som knappt läser resultaträkningar är det inte heller så intressant. Men, för den som kämpar med siffrorna i kvartalsrapporten kan det vara nyttigt att inse att hög inflation försvårar det hela! Och inflation är något vi får leva med ett tag. I BRIC-länderna ligger inflationen redan på tvåsiffriga nivåer och i flera av de utvecklade länderna är inflationstakten på uppgång.

Hur kommer inflation in i bilden? Jo, vid hög inflation kan man inteckna en “vinst” bara genom att köpa ngt för KPI den 1 januari och sälja det för KPI 12 månader senare. Och vips har man en vinst i resultaträkningen. Detta är förstås många medvetna om men frågan är vilka bolag som gör så och hur de gör det. Detta lämnar jag dock gladeligen till andra att bedöma. Som sagt, det är inte mitt område.

Slutsats: tänk på att det inte bara är Finance 101 (inflationspredikterande) som gäller för investeraren i inflationstider, d.v.s. i hög grad vid BRIC investeringar, utan även Accounting 101 (inflationstrixande)!

New Fund: CIMB-Principle Asia Pacific Dynamic Income Fund

On 25th April 2011, CIMB-Principle Asset Management Berhad launched the first Asia-Pacific fund for this year. The fund will invest in dividend-yielding stocks from the Asia Pacific (ex-Japan) region. To brings out the "dynamism" of the fund, a "color-changing dragon" was used. For sure, the company must has placed a lot of hard work to come out with the idea and I think it is a successful example which could attracts the attention of prospective investors.

"Investors are generally back to being bullish. After 2 very good years, valuations have recovered and Asia Pacific ex-Japan markets are up. Looking ahead, slower economic recovery of the developed markets will shift investors' appetite to Asia Pacific and this positive outlook will spur further stable investments. We are confident that markets will perform positively and this Fund will satisfy investors' revived sentiments and lingering concerns", said CEO of CIMB-Principal. 

Investment objective

The fund aims to provide regular income by investing primarily in the Asia Pacific ex Japan region and at the same time aims to achieve capital appreciation over the medium to long term.

How to achieve that?

Under general market conditions, the Fund's investment will focus on high dividend yielding equities of companies. In addition, the Fund may also invest in companies with good growth potential, which may adopt a strong dividend payout policy.

How about in not-so-good time?

The manager may take temporary defensive positions that may detract from the Fund's prescribed asset allocation when the manager believes that the equity markets that the Fund invests in are experiencing excessive circumstances, the Fund may invest all or a substantial portion of its assets in money market instruments and/or other fixed income investments. The manager may also utilize derivative instruments such as futures contracts to hedge the portfolio.

What is an active investment strategy that the Manager will adopt?

• combines top-down country and sector allocation with a bottom-up stock selection process
• reviewing the macroeconomic trends in Asia Pacific ex Japan economies
• analyzes the direction of GDP growth, interest rates, inflation, currencies and government policies to form the view and outlook for each country
• then, assessing their impact on corporate earnings and dividends and determine if there are any predictable trends

Investors profile:

• have a medium to long term investment horizon
• want a well diversified portfolio of Asia Pacifc ex Japan region
• willing to take moderate risks for potentially moderate capital returns over the long term
• seek regular income

What is the targeted return?

The fund is an equity income and growth fund with a target return of 8% per annum over the medium to long term. "We believe this is an achievable target even after the crisis in 2008. The demand for Asia Pacific ex-Japan equities is on the rise, with continued rapid urbanization and accompanying domestic consumption that have fueled high GDP growth in most Asia Pacific countries, which are higher than that of the US and Europe," added CEO.

Click here to download the prospectus

Source: CIMB-Principle website

When is the BEST time to buy House? (25 Apr 2011)

Last year 2010, Malaysia property market recorded the BEST year ever. Will it be another record breaking year in 2011? Many economist and property analysts opine that this year, the property market will appreciates by another 10-15%. So, should we wait some more?

Recently, many of my friends keeps on asking the same bold questions.

• Should I buy house now?
• Or, should I wait some more?
• But, when is the property downturn?

Modern Design: Swimming pool in the house.

Good questions though, but if you ask me when is the property downturn, I really do not know. As a rule of thumb, I will rely on the stock market to give me the indication. Commonly, property market will take a blow one year after the crashing of stock market. Example, the 2008 financial crisis gave us a good timing to invest in property market. For those who buy house during that time, you should know what I am talking about and smile.

So what? How about now?

Before answering your question, I would like to throw you back a question "Are you looking for your first house?". If YES, anytime is the best time to own a house, forget about the timing factor. Your objective to own it, not invest for return. Why bother waiting for the best time? Otherwise, you are renting while waiting, and money still running out of your pocket every month.

But if your answer is NO, and you treat it as an investment, I do not think this is a good time. Why? As you already know, the valuations is rich enough to swallow your future potential return. Given the risk reward profile, it is not worth to invest at current high level to exchange for a reasonable return. If you're renting it out, sure this is not wise move. Please bare in mind that the rental is very hard to go hand-in-hand. Prices are going way too fast for rental to catch up now.

Fun things to do in London’s Financial heartland No.1: Going on Exchange

Last week I took a London-based NGO to the London Metal Exchange. We’re kind of concerned about some issues around commodity speculation, so thought it would be worth a visit. To be fair, I sometimes go with my friend Harry just for fun, because it’s such a darn unique curiosity. If you ever want to do it, go to the LME website, fill in the booking form and send it to them.

Why would you want to go there? Because it’s the largest global exchange in industrial metals, and that makes it an interesting node in the matrix of global trade. It mostly deals with metal derivatives (futures and options contracts for future delivery of metal), but trade in physical metals for immediate delivery also occurs. I spoke to a trader outside when he was having a smoke, and he said that if you deal in the physical ‘spot’ contracts, you’ll have metal waiting for you in a warehouse within two days.

The real choice is what metal you want. There’s no useless precious metal here, it’s all useful base metals, the physical underpinnings of global industrialisation and urbanisation. Most important is copper, used in electronics and construction. Its price is a key proxy for world economic growth, especially of developing countries. Chilean mines are the largest suppliers, and Chinese companies are the largest consumers. We churn through some 50 000 tonnes of this stuff each day.

Second up is aluminum, used for cars and construction and tin foil. Then there’s zinc, mostly used for galvanising steel for the auto and construction industries. Nickel gets used in the creation of stainless steel, and batteries for hybrid cars. Normal car batteries get made out of lead, half of which is mined in China. Rechargeable batteries for mobile phones get made with cobalt, mostly produced in the Democratic Republic of the Congo, but then shipped to China. Other metals include tin, dominated by only four producing countries – China, Indonesia, Peru and Malaysia – and molybdenum, a rare earth used in steel alloys.

Every metal on the exchange is pretty much dominated by China in terms of global consumption, and, frequently, production. It thus seems something of a historical anachronism that the exchange is in London rather than Shanghai. Then again, it’s an open question about how much of the LME trade is actually related to physical metals for real-world use, and how much is purely related to the speculative activities of London-based investors.

So let’s say a hedge fund decides that things in the DRC aren’t looking favourable. They phone their local broker at the office, and request to purchase 100 cobalt futures. The broker at the office phones his floor broker on the exchange, who gives the order to the clerk. The clerk gives the order to a guy sitting on a plush red leather couch in the ring. This is the ring dealer. The ring dealer casually shouts that they want to buy 100 cobalt futures. Some other ring dealer, carrying a different order, casually agrees to sell. Deal done. The clerk relays the info back, and the phone rings at the hedge fund office, telling them that the trade is done. They now own 100 tonnes of cobalt, in a roundabout way, through the derivative.

And this kind of thing goes on all day, and the prices set in the process become the ‘official’ price of cobalt around the world, used as a benchmark for producers and users to set their own prices.

For the most excitement, you probably want to go for the ‘kerb trading’ sessions, the afternoon free-for-all where they shout at each other. The earlier sessions are kind of boring and the ring dealers just sit around and don’t seem that interested in setting the global price of metal. Keep a look out while you’re there for moments of intrigue: See if you can spot JP Morgan trying to corner the copper market.

ACEs are back. Be cautious? (21 April 2011)

Yeah... Our long lost friends are here again. These friends are in the limelight again, conquering the lists of most active counters lately. Punters are trading happily because of their relatively cheap price, higher volatility, and most importantly less coverage by analysts. Normally, investment banks did not cover ACE counters due to their not-so-clear business model, hence very hard for them to project their earnings and setting fair value. No estimated fair value means punters can set the "fair" ground themselves.

Most Active Counters in Bursa Malaysia on 21st April 2011

You Jump... I Jump

Of course, some of those ACE counters are there for certain reason, but many of them are there without any material announcement. For example, Tricubes is very active due to its participation in ETP, by investing RM50mil to develop the 1Malaysia email project. But then, why Omedia, IE, Viztel, TDEX also featured in the most active list today? Don't we have better companies to trade lately? And, even for Tricubes, a PN17 (financially-troubled) company, the future was still bleak. Still, it is a loss-making company. How did Tricubes comes out with a whopping RM50mil?

Why should we be cautious?

ACE market counters presumably are lower-graded companies, which get their ways to list in Bursa Malaysia. In fact, this is true to certain extent as Bursa Malaysia did not required past proven track records for aspirant ACE companies. Alternatively, they can be backed up by a so called "sponsor". This sponsor could be a company, investment banks, or venture-capitalist (VC). The reality is market manipulators are "doing" their job again once they see the opportunity in the market, and it is now - hot and spicy market. Of course, these scenario would not last long, maybe days. Then, they will wait for next round.

Sixth-sense tells Finance Malaysia that the market momentum is dying slowly, which could spark a sell-off in the market soon. Would it happened on Good Friday tomorrow?

New Fund: MAAKL-HDBS Shariah Progress Fund

MAAKL Mutual today announced the launch of the MAAKL-HDBS Shariah Progress Fund, an Islamic equity small-cap fund, that gives investors the opportunity to invest in Shariah-compliant growth companies in Malaysia.

CEO of MAAKL said:"The investment objective of MAAKL-HDBS Shariah Progress Fund is to provide unit holders with steady long-term capital growth at a reasonable level of risk by investing in a diversified portfolio of small to medium capitalized Shariah-compliant equities and equity-related instruments."

Investment Style & Strategy

The fund will invest primarily in a diversified portfolio of small to medium size Malaysian equities which comply with Shariah requirements. The fundamental investment process will be geared towards identifying and investing mainly in growth companies listed on Bursa Malaysia which are not part of the FTSE Bursa Malaysia KLCI Index constituents.

Various tools will be used to facilitate the valuation process, including price over earnings ratio, the discounted cash flow model and enterprise value over earnings before interest, depreciation and taxation. Meanwhile, Islamic money market instruments are only used to maintain liquidity position and also as a short-term alternative should the equity market become extremely volatile. These include term Shariah-based deposits, Islamic repo and short-term cash placements with financial institutions.

Does this fund suits you?
This is an equity fund, and it is suitable for investors who:

• are willing to accept a higher level of risk
• seek to maximize long-term capital appreciation from their investments
• have a low income stream requirement
• have a medium-to-long term investment horizon (3 - 5 years)

Who is the fund manager?

In this collaboration, MAAKL has appointed HwangDBS Investment Management Berhad as the fund manager for this fund.

Source: MAAKL Mutual
Click here to read the prospectus

Goodbye Really Free School

It’s with sadness that I discover the Really Free School has shut down. It was one of the most original responses to education cuts, a band of misfits occupying buildings to host voluntary lecture programmes, taking a grand piano with them wherever they went.

Back in February I joined forces with Corporate Watch, in presenting a primer on the financial crisis at the school. It took place in an old mansion in Bloomsbury Square, in an upper-floor room with a projector. I had a double-sided A5 page of notes. On the one side was written ‘Credit; Ownership; Currency; Commodities; Derivatives’. On the other side was written “Commercial banks, investment banks, interdealer brokers; Institutional investors, hedge funds, private equity”. I started by holding it up and saying, “On this side is all the stuff the financial sector deals with, and on this other side, is all the people that deal with it.”

That’s not entirely accurate, but I’m a believer in establishing simple frameworks around complicated topics. It at least allows listeners to feel in control, rather than the panic brought on when someone raps about abstract evils and twisted theories. In the audience was a zonked-out cat called Andy – he’d worked for a hedge fund, and subsequently progressed into a life of squatting and community work. People think that’s strange, but I don’t think so at all: The hedge-fund hounds are often individuals on the borderline, interesting people with crazy ideas. We got chatting afterwards about financial activism, a fascinating topic I'll develop on in later blog posts.

I went back to the school several times. I took notes at a workshop on internet security. I watched a film about a feminist revolution. I saw a lady called Barb Jacobson give a talk about alternative monetary systems. I arrived for a session on setting up a ‘Timebank’, but nobody pitched up to give it. I attended an amazing poetry session, got drunk and recited my favourite haiku: “Oh avocado, how tasty you are to me, all green and mushy.”

There was some stuff of questionable quality. Like part 3 of that film Zeitgeist, utterly shite. And then there was the talk by a guy who’d written a paper on tax havens. He spoke endlessly about critical theory, rather than tax havens, and used words like ‘aporia’ and ‘bios’. At some point I lost it and had to leave.

But, when push comes to shove, that was the real beauty of the Really Free School. If you wanted to contribute, you really were free to do so, and if you wanted to leave, you could. The real question is whether it ever had the internal impetus to keep going. Perhaps it needed a more directed education programme, a process of strategically commissioning talks rather than relying on organic volunteering. The idea of a travelling school materialising in old buildings is catchy, but you need substance to complete it.

Real Property Gains Tax (2011)

Malaysia is known as "tax heaven" of the world. Why? Because Malaysia does not impose tax on any capital gains derived from investment, such as shares, unit trust... But, there is only one type of capital gains that attracted tax - property.

PARC @ One South, Seri Kembangan

Real property gains tax (RPGT) is a form of capital gains tax. RPGT is charged on gains arising from the disposal of real property in Malaysia. These so called real property is defined as:

• any land situated in Malaysia and any interest, option or other right in or over such land; or
• shares in a real property company

How much?

Actually, we have RPGT in our tax system many years ago until 31 March 2007, when government abolished RPGT to attract foreigners to invest in Malaysia. But then, from 1 January 2010, RPGT is re-imposed at the rate of 5% on gains arising from disposals of chargeable assets in respect of real properties that are disposed within 5 years of owning.

What is real property company?

It is a controlled company holding real property or shares in another real property company as a major asset. And, the "major asset" here refers to defined value > 75% of the value of its total tangible assets.

Mon't Kiara

Withholding of RPGT

With effect from 1 January 2010, an acquirer of chargeable asset must withhold 2% of the total value of the acquisition price to be paid to the Inland Revenue Board within 60 days from the date of disposal.

Are there any exemptions?

• an amount of RM10,000 or 10% of the chargeable gain, whichever is greater, accruing to an individual (w.e.f 1 January 2010)
• gain arising on disposal as a result of compulsory acquisition of property under law
• gain accruing to an individual who is a citizen or a permanent resident in respect of the disposal of one private residence

In other words, everyone of us have one "Free RPGT" card in hand. This is the ONLY card that the government gave us, and we can decide to use it or not, and when to unveil the card. You can saved it for another day, because it is not compulsory to use it for your first disposal.

G-20 Demonstrations: Two Years On

On Thursday the Guardian reported on a High Court ruling, holding that the Metropolitan Police were unlawful in ‘kettling’ protesters during the G-20 demonstrations in April 2009.

Two years ago, I took this photo. It was some three hours after the police line came like a running of the riot bulls down Bishopsgate, randomly trampling flower-children in a startling display of the arbitrary powers of the state. The bulldozing was sanctioned for some official reason not quite understood by anyone present, especially considering they’d chosen to target the hippies rather than the anarchists, but apparently it was necessary, for some reason, unknown to anyone present. Note the Financial Times in the foreground. There was an article in it by Martin Wolf entitled ‘The urgency of now: Why tomorrow’s G-20 summit will fail to deal with the big challenges.” It made for interesting reading while the police deployed their state-of-the-art kettling strategy.

This guy in the photo was employed as a wall of silence, but I chatted to him, and he made thoughtful comments like “I am not authorised to answer questions on the situation.” I took a piss under a big metal door, kind of an attempt to have my say in the face of this deprivation of voice. A high-spirited dude with overalls came over with his hand in the air. “Hey man,” he shouted, “high five, you came disguised as a banker!” We slapped hands, and I said, “Actually I’m a derivatives broker”. He froze on the spot. “Oh right, I’ve got a friend who’s an accountant.” I had to laugh at the suggestion that there was some similarity between an accountant and a broker. “Really, accountants are not nearly as bad as derivatives brokers man. Accountants can only really distort numbers, whereas we can distort entire markets.” He stood there uncomfortably, but I suppose it’s not usual to have this kind of conversation at a rally united by an apparent stand against the excesses of financial capitalism.

I guess the whole kettling strategy was a massive success. By inciting anger that didn’t originally exist, the police forces justified their presence in a self-fulfilling feedback loop. It was a loop that got unstable though, and one that jeopardised their ability to extricate themselves from the situation. They were on the verge of losing the psychological edge and spontaneous forms of coherent rebellion were starting to emerge. Nothing brings out the ‘fuck you’ in people like arbitrary power, and sooner or later, people get together and override it. At that point, bringing in the snapping dogs only makes people angrier.

So, after six hours, they let us out. Some of the cops looked as if they were about to cry. I walked past one of the guys and said, “Thanks man, you did a good job tonight.” He almost choked. “Thank you, that’s the nicest thing anyone has said to me all day.”

He did do a good job, but it was a job in the service of an utterly pointless attempt to stifle a necessary part of the workings of a democratic society. Good to see that the high court has recognised that.

MRT at Iskandar: Is it Viable?

When everyone talk about mass rapid transit (MRT) system at KL, it's reasonable given the terrible bumper to bumper traffic jam every working days. Certainly, it creates a buzz in Malaysia with its RM50 billion price tag. Maybe because of the buzzing topic, Iskandar Regional Development Authority (IRDA) also looking at the possibility of implementing a 500km MRT within the region which would also provide a direct link to Johor Bahru. The project is scheduled for completion by 2020. What's your reaction?

I believe many people will think the same with me - unbelievable. My jaw drops down the floor thereafter. We do not have to perform  those sophisticated calculation to judge whether the Iskandar MRT is viable or not. I came out with these 3 points.

3 Stupid Questions to ask our-self

1. Population
• KL is capital of our country, while Iskandar is a region which encompass the capital of a state
• Do you think that Iskandar has more people than than the capital of KL?
• Some more, Iskandar is 3x larger than Singapore, but with much lesser population
2. New vs Old
• KL is an not well planned city, which contributes to traffic problems now
• However, Iskandar is a new city with ample of land, with ample of time to plan. Why not take your land and time as an advantage to plan ahead?
• We don't have choice in KL, we're forced to resort to MRT
3. Alternative ways
• Well, everyone knows that MRT system is an extremely expensive project. Thus, we should source for other ways first, before considering MRT.
• With ample of vacant lands still available now, why straightaway jump to MRT?
• Also, population are not there yet, what's the urgency to build MRT now?
• Instead, we should consider the following system first: Roads, Bus, Highways, LRT, then only MRT. MRT should be the last due to higher cost.

The 5 flagship zones of Iskandar Malaysia, namely Johor Bahru City (A), Nusajaya (B), Western Gate Development (C), Eastern Gate Development (D), and Senai-Skudai (F)

Wait... What am I using? Common sense, man (without calculator in my hand).

To support my view, below is what written by OSK Research:

"We feel that the chances of the Iskandar MRT being implemented anytime soon is slim. Based on IRDA's estimated cost of RM30m/km, the entire project will work out to RM15bn which is certainly a huge sum. Although an efficient public transport network is a crucial element of Iskandar to emerge as a thriving metropolis region, we think that it is still too soon for an MRT to be built. At this juncture, we believe that the Federal Govt is probably going to focus more on the KL MRT, LRT extension and various other ETP projects to ensure that it kicks off on time before considering the Iskandar MRT."

Source: IRDA, Iskandar Malaysia website

Sarawak state election 2011: BN to lose 2/3 majority?

Coming this Saturday, 16th April 2011, the Sarawak state elections will be held and Malaysians will be watching closely on the outcome. Of course, I do not know the outcome yet. In fact, I am afraid to predict it, as the "not so good" result will jeopardize my share investments. I am not a Sarawakian either, what should I gauge against? As Chinese said, outsiders tends to be clearer than insiders. As such, Finance Malaysia refer to the following article taken from Credit Suisse as a reference, a view from foreigners.

BN's 'fixed deposit' will be put to test?

The Sarawak state elections will be a key barometer for Prime Minister Najib to gauge the support for Malaysians for the incumbent Barisan Nasional (BN). While previous state elections were seen to be non-events, as Sarawak has always been BN stronghold, these particular polls will likely be the most hotly contested. This round, for BN to lose the 2/3 majority, it will need to lose 24 seats or an additional 15 seats.

4 Disadvantages to BN

1. "Bible"
• On the surface, the 'Bible' issue has been resolved, but this issue could have hit a sour note with the Christian voters. To recap, the row over the use of Malay-language Bibles centers on the use of word 'Allah' for God.
• 43% of Sarawakians are Christians
2. "Native customary rights"
• There are supposedly over 200 pending cases over the 'native customary rights' land problems. These cases are seeking to overturn the directive made by the Minister for Resources Planning in Sarawak to extinguish their native customary rights and revert the land to the Sarawak government.
• 56% of total voter population in Sarawak are natives
3. Taib's alleged immense wealth
• Chief Minister of Sarawak, Taib has ruled Sarawak for 30 years. The opposition has highlighted Taib family's alleged immense wealth and businesses. The key Chinese party in Taib's stable, SUPP, will likely be taking the brunt of the Chinese's hostile sentiment towards Taib.
4. Poverty in Sarawak
• Accusations of money politics and corruption could surface during the Sarawak state elections, as the level of poverty is one of the highest in Malaysia, although Sarawak is one of the riches states in natural resources (oil, gas, timber and palm oil).

What would be the outcome?

BN currently has 87% of the state seats. Credit Suisse believe that BN will lose more seats but will unlikely lose the 2/3 majority. This suggests that BN will hold the General Elections in 2012 (and not 2011), which is good news for the stock market, as the government will have to dish out more 'goodies' and continue spending.

What if there's a political tsunami?

It would be a buying opportunity. If the voters swing significantly to the opposition, we look to the 8 March 2008 general elections to gauge the impact on the stock market. If the unexpected happens, we conclude that a knee-jerk downward reaction would provide a buying opportunity for fundamentally-strong stocks as they should outperform once the shock wears off.

Credit Suisse Top Picks

PetChem, CIMB, Axiata, Genting, Gamuda, AirAsia, IJM Corp, UEM Land and RHB Cap.

Source: Credit Suisse

Hans top-ranked, twice!

I was recently informed that I actually top the ranking list of the (all-time) most downloaded research papers at the University of Technology, Sydney working papers series in Finance! My paper Merton for dummies: a flexible way of modelling default risk has apparently been downloaded 2683 times. See the figure or go here. I wrote that paper while working at University of Technology, Sydney in 2002-2004, that’s why it appears on their working paper series.

I was particularly happy about hearing this since I already top the ranking list of the (all-time) most downloaded research papers at Lund University working papers series in Economics with another paper. My paper Credit Default Swaps and Equity Prices: The iTraxx CDS Index Market has been downloaded 4276 times. See the second figure or go here. Notice the distance to the second most downloaded paper..... :)

I am not naïve enough to equate this in any way with these two papers being the best pieces of research coming out of these two institutions but, nonetheless, I enjoy the fact that so many people has made the decision to download (and hopefully read) my pieces of research. It is simply a nice acknowledgment of ones effort.... What a pity, though, that I am not paid per download!

KLCI: What the Hell is going on? + Invest Malaysia 2011

Thinking that yesterday's 13points drop is enough? Today, KLCI slumps again for the 2nd day in a row. Are you expecting it? Personally, I don't think most of us can predict the future. But, what I can say is that many investors like me would positioning our money very well, anticipating some good announcements during Invest Malaysia 2011 Conference today and tomorrow. If you're thinking the same way, Good Luck!!!

TheStar picture

Any BAD news?

Excluding foreign news, NO bad news at all in Malaysia. But, investors see the opposite side now - no good news = bad news!

Profit-taking activities set in on Malaysia market beginning this week. If you're not the one who cash out yesterday, you would probably forced to stay on holding until the "tsunami" is over. Money is washing away from the market, flowing overseas (capital outflow by foreign funds). That's why banking stocks, Genting, Petronas Chemicals took a beating today, pulling down KLCI as a result.

Souce: Yahoo! Finance

While many investors are waiting for the goodies during Invest Malaysia 2011 conference, it seems like the party is over without much excitement. First, let's us summarize the announcements made today:

1. 2nd Capital Market Masterplan (CMP2) to swell the value of the capital market to RM5.8 trillion through greater internalization from RM2 trillion now
• New dual licensing scheme to make it easier for dealers in the equity market to become licensed to trade in the derivatives market
• Increasing the number of day traders by almost 3x to enable more dealer representatives to become specialized traders
• New private retirement scheme is introduced
2. Listing of Felda Group's sugar business expected in July 2011
3. In attracting Malaysian professionals to returned, flat 15% income tax rate for 5 years is introduced

What is lacking?

Surprisingly, the Pos Malaysia's stake which is being divested by Khazanah still remained a mystery. Who would be the winner? PM:"The disposal of Pos Malaysia is now in final stage". Maybe due to this news, DRBHicom (the main contender who tipped to win the stake) falls sharply from recent high of RM2.50 to closed RM2.24 today.

Can we turnaround in 2nd-half?

1st-half (today), the impact had undeniably failed. Let's monitor the 2nd-half (tomorrow). As reported by various analysts, tomorrow's session will highlights the Greater Kuala Lumpur related projects. As such, the Mass Rail Transit (MRT) project should take to the stage, and updated on the progress of project. MRCB and Gamuda should be in focus tomorrow. But, would these counters facing the same DRBHicom's fate too?

Interviewing International Super Model Amber Chia

Finance Malaysia is very pleased to be able to interview Malaysia's Super Model Amber Chia, who had already making a name for herself in Modeling. When given the chance to interview, Amber Chia had always been Finance Malaysia's mind. In fact, Amber is an icon of the industry nowadays. She even forays into international scene, bringing Malaysia's image with her.

Amber's Story

From her small town roots in East Malaysia to her domination of the local modeling scene, Amber Chia embodies the classic fairy tale rise to fame. After moving to Kuala Lumpur at the early age of 17, Amber was quickly able to make a name for herself within the local modeling scene. Her charming personality and distinct look hastily ensured her place amongst the countries elite. Amber proved her international appeal by securing a contract with Guess Watches International in 2004 and has since used this as a platform to propel herself into other mediums such as movies and television. (AmberChia.com)

The Lovely Interview...

1. Being a Model, TV Host and Actress, which one do you think that is the most challenging task for you? And, why?
• Basically, everything new to me sometime would be challenging. If you really want me to select, I would say being a model. Why? This is because modeling is the first task that I faced the world, be it on the stage, in front of TV and camera. In fact, being a model had gained me different experiences which could then be useful for being a TV host and actress. Yes, modeling is my answer.
  
2. You had ventured into business and started Amber Creations and AmberChia Academy. What drives you to become a businesswoman?
• I am not young anymore. Haha. I wanted to plan for my future too. I love this entertainment industry, and before venturing into business, I had been in this industry for 14 years. I started Amber Creations (event management company) and AmberChia Academy, and these are not new to me either. These businesses closely related to what I am practicing all this while. And, this is the best of me.
  
   
  
• AmberChia Academy was set up with the aim of grooming the next top super model. I am very passionate about it, and hopes to nurture ones talent just like Amber Chia did.
  
3. The following questions touched on your personal money matters. What is your view on Insurance
• For me, insurance is something compulsory, it's not optional. My insurance plans includes everything ranging life, medical, accidental and retirement. You must be mindful of your loved ones when something unfortunate event happens to you. Insurance is very important to us, especially if a family was set up.
  
4. How about Investment?
• On investment, I had started planning, and started my baby education fund. I am investing in properties. As usual, location location location is the most important rule in property investing. All of my investment is in Malaysia. I don't invest in overseas because I only did what I knew best. For me, I am not confident in overseas investing.
  
5. Any words for our readers?
• Dear readers, we must save money for our future. We should save, invest and spend on essential items. Do not overspend. Learn and enhanced our skills and knowledge in personal money management is crucial. Good luck.

Finance Malaysia takes this opportunity to thanks Amber for her time spent on this interview, and wishes her good luck in her career and businesses. We hope that this article could inspire Malaysians to excel further in their future.

Still not enough on Amber Chia?

Click here

Personal Income Tax 2010: Residential Property

With effective from Year of Assessment (YA) 2009, Malaysian resident who acquired any residential property are given the specially designed tax relief of up to RM10,000 a year for 3 consecutive years from the first year the interest is paid.

Residential property means a house, condominium unit, apartment or flat which is built as a dwelling house. This kind of tax relief was given by the Government to counter the property market downturn, or to spur the property mart after the 2008 global financial crisis. It has proven to be a success in Malaysia for the past 2 years, where property prices skyrocketed to a not so comfortable level for most of Malaysians. People are crying foul on the high price to own a house nowadays.

What is the Terms and Conditions?

To qualify for the tax relief, the following conditions must be met:

• the taxpayer is a Malaysian citizen and a resident;
• limited to one residential unit;
• the sale and purchase agreement is signed between 10th March 2009 and 31st December 2010;
• the individual has not derived any income in respect of that residential property

How about Joint-Ownership property?

Yes. You still will entitled for the interest expended tax relief where:

• 2 or more individuals are eligible to claim relief for the same property; and
• where the total interest expended by those individuals exceeds the allowable amount for that year, each individual is allowed an amount of relief for each year based on the following formula:

 

In other words, the total interest expended would be RM10,000 per house, and it can be proportionate in accordance to the number of individuals. Example, Alex and Esther purchased a house, and the finance interest incurred for that year of assessment amounts to RM30,000. Alex only pays 30% of the installments while Esther paid the remaining 70%.

So, for that YA, Alex would entitle for RM3,000 interest relief while Esther would get RM7,000. If both of them already married, and if Esther elects for joint assessment, then RM10,000 would be given to Alex.

Source: Inland Revenue Board website

Related Posts:

Personal Income Tax 2010

Personal Income Tax: Child Relief

Introduction

In 2008 I embarked on an unusual experiment in gonzo urban anthropology. I left the world of radical left-wing academia, and went to London with two goals in mind. Goal one: To break into the financial sector at the heart of one of the most powerful centres of the global economy and to see first-hand how it worked, to learn by doing, not by reading. Goal two: To shatter the complacent intellectual comfort zone I’d found myself in, and to learn to move in and out of different worlds like a chameleon. It was an exercise in critical thought, backed by real action.

ADVANCED TIE SKILLZ

That’s how I found myself on the 36th floor of the Lehman Brothers offices in Canary Wharf, four weeks before the company collapsed, and how I found myself in the subsequent financial crisis, trying to pitch esoteric inflation derivatives, property derivatives, and longevity derivatives, aboard a mad raft with an oddball crew of old rogues and young rats, fighting against the odds to stay afloat. It’s a pretty interesting story, and I hope to tell it some time.

In the mean time, I’m completely broke, in a room in Brixton, with a pile of business cards and a stack of ideas, most of which don’t add up. Sometimes I help unusual people to get to grips with conceptually challenging things, like what the financial system might be. I look at how financial concepts might be channeled creatively, through the fledgling world of social and environmental finance, and consider why all this might matter in issues of social and environmental justice.

Sometimes I look at bizarre curiosities, like new currencies and new units of time, Islamic finance, Hawala systems and financial crime. I delve into the way the financial sector tries to reconcile our views of the future in the present.

Sometimes I hang out with people who call themselves anarchists, but who are mostly just concerned about a world they perceive as offering them nothing but bland complacency and treadmill materialism. They hack conventions and set up bases in old abandoned buildings, but are still daunted by the seemingly intractable, impenetrable and arcane financial structures around them. I urge them to try engage more, to spend less time throwing rocks at things, and more time subverting their own preconceptions. They look at me weirdly, but I think there’s a lot to be said for a new activist philosophy.

I play a lot of guitar. I once busked on the New York Underground. I have a pricing model on my hardrive that can tell you what rate to charge for a bet on how long people live for. I lifted it from an investment bank, and one day, when I learn to use it, I'm going to create a rock 'n roll financial opera.

I once went to a fancy university, got an MPhil in Development Studies, wrote some papers. Sometimes I hang out with development people and talk trade policy, agricultural subsidies, and NGOs. Other times I hang out with finance peeps, and talk about things like sugar and carbon.

New Fund: OSK Indonesia Equity Growth Fund

To join in the Indonesia Theme bandwagon, OSK launched its own version of Indonesian Equity Growth Fund, which aims to achieve medium to long term capital appreciation through investments in securities of companies with high growth potential that are listed on the Indonesian Stock Exchange and/or companies listed on other exchanges whose business are substantially in Indonesia.

This fund is suitable for investors who:

• wish to participate in the potential and investment opportunities of the Indonesian economy
• are willing to accept higher risk in their investments in order to achieve potentially higher returns in the medium to long term
• seek capital appreciation rather than income

8 Answers to "WHY invest in Indonesia?"

1. Impressive equity market performance
• Jakarta Composite Index gained 46% in 2010
• The 7th year in which Indonesia has outperformed Asia ex-Japan over the past 9 years (Source: CLSA Research January 2011)
2. Strong economic growth
• Expected growth of 5.7% to 6% in year 2011
• Growth is driven by domestic consumption, currently stands at about 65% of Indonesia GDP
3. Favorable demographics
• 4th largest population in the world
• Middle and upper-middle class households is expected to increase from 29% currently to 41% by 2012
4. Resources rich
• World's biggest CPO producer
• World's biggest Thermal Coal exporter
• World's biggest Tin exporter
5. Government projects and infrastructure development
• 2011 budget is pro spending, especially in infrastructure development
• Development expenditure expected to increase 29% in 2011
6. Equity market remains attractive
• Currently trading on 13x PE with 22% earnings growth and 25% ROE
• Indonesia has the 2nd lowest Equity Market Cap / Nominal GDP ratio in the region
7. Outlook on Rupiah to strengthen
• Lagged regional currencies in the past 10 years
• Improving outlook for Rupiah makes Indonesia attractive to foreign investors

Investment Approach

1. Combination of "top-down" and "bottom-up" approach
• An investment strategy that is not mutually exclusive but closely inter-twined between asset allocation and stock specific selection
2. Value driven approach
• Stocks are then selected for their value
3. Emphasis on growth
• Stocks are further selected for their growth potential

Investment Approach

Portfolio Strategy

OSK sees several investment opportunities including

1. Banks
• Strong loan growth (+25%) driving revenues
• Low penetration of key financial services and credit
2. Infrastructure
• Total investment needed for infrastructure projects 2010 - 2014 will reach USD34.14 billion
3. Commodities
• Medium term outlook for thermal coal positive due to increasing demand from China, India and Indonesia
4. Consumption
• Low consumption in categories such as cars, motorcycles, cellular phones and cement

Source: OSK-UOB unit trust management berhad

Click here to read the prospectus