Synergy Planners

The most exciting Market roller-coaster of 2011....so far..:)

2011-08-08T17:21:00.003+08:00

Market's REBOUNDING within the day! Faster BUY!!!

2011-08-08T15:20:00.002+08:00

Composite:

1489.58

(-34.85)

-2.29%

3 words for H2 2011 & H1 2012 : Volatile, REAL OPPORTUNITY! by Patrick Donald Archibald on Monday, August 8, 2011 at 11:54am

2011-08-08T14:22:00.001+08:00

Dear investors and jittery friends,

Like many people, you must be nursing some doubts and anxieties based on the overwhelming information on what’s happening in the US and global markets, following S&P’s downgrading US currency from AAA to AA+. I’ve attached some articles to support the following train of thought.

Let me break it down for you :

The real impact is uncertain as it will be largely sentiment-driven. Reason is S&P is merely confirming what the world has known for a long time and what China’s Xinhua News Agency coined very accurately in its editorial on Saturday:

‎"To cure its addiction to debts, the United States has to reestablish the common sense principle that one should live within its means.It hould also stop its old practice of letting its domestic electoral politics take the global economy hostage and rely on the deep pockets of major surplus countries to make up for its perennial deficits."

Good sense must prevail. The investing community need to (as the Chinese would agree) continue to STICK TO the FUNDAMENTALS of INVESTING.

Let me break it down further for you:

If you are an EPF investor, and you’re below 50, that means you have a long term horizon for your investment – THIS IS CHEAP SALE TIME. We have been waiting for this cheap sale FOR A LONG TIME. It’s time to buy now and accumulate units of your tested and proven high performance funds.
If you are an EPF investor aged 53-54 and close to retirement ie. needing your EPF invested money entirely in the next 12 months – you would already have exited the market as we would have advised you to be cautious.

Reminder: your EPF invested amount comes from your Account 1, touchable only when you’re 55.

If you are a lump sum or regular cash investor and need your cash in the next 12 months, it’s also a time to exit as caution is a better play.
If you are a lump sum or regular cash investor and your investment horizon is in 3 -5 years and above, THIS IS CHEAP SALE TIME. We have been waiting for this cheap sale FOR A LONG TIME. It’s time to buy now and accumulate units of your tested and proven high performance funds.

Recession 2011: No double-dip recession; US to emerge unscathed

WASHINGTON DC: Relax: the world is unlikely to plunge into a double-dip recession, notwithstanding the crash in global stock markets and the US loss of AAA rating from Standard & Poor's. However, the global economy is slowing down, and slow global growth may persist for years - this typically happens when a recession arises from a financial crisis.

The fall in stock markets looks more a buying opportunity than the start of another slide to recession levels. US politicians managed to increase the country's debt ceiling on August 2 just in time to avoid technical default. The stand-off between Democrats and Republicans was seen by alarmists as political paralysis with grave future portents.

In fact, it was political theatre, a variation of a similar drama that played out in 1995. Remember, the conflict between Mukesh and Anil Ambani over their industrial inheritance was terribly bitter, but nobody thought for a minute that it would lead to Reliance defaulting on its debts.

The same holds for the US: partisan battles can be bitter and can lead to gridlock, even technical default, but not to real inability to pay up. Even if the US had technically defaulted by being unable to issue cheques for a few days - as actually happened in 1995 - nobody doubted that the cheques would become cashable with a small delay.

Indeed, in the past few days global investors have exited emerging markets and rushed into dollars as a safe haven. That underlines the point that, no matter how big the problems of the US may be, no other country looks a safer haven. Investors may desire an alternative to the American dollar as the main global currency, but neither the euro nor yen look remotely capable of taking its place.

The US remains unrivalled in its innovation and academic strength. The problems of Europe are deeper. The Eurozone was created as a monetary union of European countries without a corresponding fiscal union. This has turned out to be unsustainable. One alternative is for the weaker countries of southern Europe to abandon the euro and regain flexibility over their own currencies.

The second alternative is for Eurozone countries to go for some sort of fiscal union, in which the stronger countries guarantee the debts of the weaker economies. Politicians find both alternatives too radical to contemplate, and so preferred one fudge after another.

Markets Apprehensive

The markets can see this, and so are apprehensive. Yet fudging is indeed possible for quite some time. Voters in Germany and some other northern countries are dead against repeated rescues of what they regard as the profligate and ungrateful south. So a formal fiscal union of all Eurozone countries is impossible.

But it is entirely possible for the weaker countries to be given the right to issue Eurobonds - bonds guaranteed by all countries of the European Union. Since Germany and France are among the guarantors, the bonds will be seen as safe, and interest rates will come down to sustainable levels. This fudge can continue for years before the contingent liability of the northern countries begins to look excessive.

No double-dip recession but Europe a worry: Greenspan

WASHINGTON | Sun Aug 7, 2011 1:50pm EDT

(Reuters) - Former Federal Reserve Chairman Alan Greenspan on Sunday downplayed the risk of a double-dip recession in the United States, saying its domestic economy was in better shape compared to its European peers.

A double-dip recession "depends on Europe, not the United States," Greenspan told NBC television's "Meet the Press." "The United States was actually doing relatively well -- sluggish, but going forward -- until Italy ran into trouble."

The U.S. economy stumbled badly in the first half of 2011 and came dangerously close to contracting in the January-March period, raising fears that the economy was sliding back into recession.

Those fears were calmed somewhat last week when a debt deal was agreed before the August 2 deadline as well as data showing that employers added 117,000 jobs in July. But Standard & Poor's downgrade of the country's top-notch "AAA" credit rating late on Friday to "AA+" could hurt the recovery.

"With all of this bickering going on, the economy is slowing down," Greenspan said. "You can see it in all the data. I don't see a double-dip, but I do see it slowing down."

Europe, which buys a quarter of U.S. exports and houses the operations of many American companies, would determine the course of the U.S. economy's recovery, Greenspan said.

European leaders are struggling to contain a sovereign debt crisis, which has spread to Italy, the euro zone's third-largest economy, and is causing turmoil in global financial markets.

Greenspan said Italy's troubles could contribute to destabilizing the European and U.S. economies.

"When Italy showed signs of significant weakness in selling its bonds ... it created a massive problem within Europe because Italy is a very large country that ... indeed cannot be bailed out," he said. "And that's what's causing our problem."

Greenspan said despite the S&P downgrade, U.S. Treasury bonds, unlike Italian bonds, were still a safe investment.

"This is not an issue of credit rating. The United States can pay any debt it has because it can always print money to do that. There's zero probability of default," he said. "What I think the S&P (downgrade) did was to hit a nerve. ... It's hit the self-esteem of the United States, the psyche. And it's having a much profounder effect than I conceived could happen."

Markets in the Gulf region and in Israel, among the first to trade since the U.S. credit downgrading, tumbled on Sunday amid worries the U.S. downgrade and European debt woes may trigger another global downturn.

Greenspan said the same was likely to happen worldwide when global markets open on Monday

Barclays: Some Short-Term And Long-Term Implications Of The Downgrade

Joe Weisenthal

Realistically, nobody knows exactly what impact the S&P downgrade of US sovereign credit from AAA to AA+ means.

But it'd be boring and foolish not to guess.

Here's a snip from a note from Barclays' Ajay Rajadhyaksha.

First, the near-term implications:

Investor sentiment is clearly fragile after the drop in all risky assets over the last several days. But the near-term impacts of this one-notch downgrade should be minimal for the US bond markets, in part because sentiment is so fragile.

We do not anticipate forced selling of US Treasuries from any significant investor base. Foreign central banks maintain a large share of their FX reserves in USTs because it is the deepest and most liquid bond market. This is unlikely to change due to a ratings downgrade. Mutual fund investment guidelines retain significant flexibility regarding the handling of this action. The US banking system should not be forced to sell as well because the Fed has issued a guideline noting no change in risk weights. Similarly, insurance companies are also unlikely to be forced to sell as the NAIC has already de-emphasized ratings for regulatory capital requirements.
Haircuts in the repo market may rise but since haircuts or margins are meant to protect cash lenders from daily price fluctuations in the collateral, they are more likely to depend on changes in price volatility of Treasuries, rather than just a downgrade in itself.
Similarly, in the derivatives market, most CSAs do not explicitly draw a link between the eligibility of US Treasuries as collateral and their AAA rating. In addition, given that major US banks are several notches below AAA, a single-notch downgrade should not lead to downgrades in the credit ratings of banks. Even if that were to occur, additional collateral requirements would be manageable in our view.

And then some long-term implications:

Being the world's reserve currency seems incongruous with a AA rating. The longer-term effects are driven primarily by whether markets eventually also downgrade the US. In that case, the biggest impact should be through the effect on the USD as a reserve currency.

Based on prior research, we believe that a one-notch downgrade would lead to an increase of 25bp in borrowing costs. But this is not a function of a specific rating action, but of the market downgrading the sovereign rating.
A downgrade could increase diversification away from the USD. Foreign investors have supplied 30-40% of non-financial credit creation in the US over the past few years. An increase in the pace of diversification should be an economic drag, as domestic savings would have to rise to pick up the slack

Templeton's Mobius sees high degree of uncertainty, volatility

Written by Reuters

SINGAPORE: Mark Mobius, executive chairman of Templeton Emerging Markets group, said on Sunday he sees a high degree of uncertainty and volatility in financial markets in the wake of Standard & Poor's decision to downgrade the U.S. credit rating.

Mobius warned that the U.S. dollar's role as an anchor to the global investor community was deteriorating and said emerging market currencies and stocks could become safe havens.

"The initial reaction will be a high degree of uncertainty and thus volatility since investors will not know where to turn for safety," said Mobius, whose unit oversees $50 billion in emerging market assets.

"During the sub-prime crisis safety was in U.S. Dollars and U.S. Treasuries. Now that anchor to the global community is deteriorating," he said in an email to Reuters. – Reuters

Join us @ CIMB!

2011-03-02T23:51:00.003+08:00

CWA Career Preview @ Eastin Hotel PJ 3Mar 7pm.

Special Synergy Planners edition in Kuching Hilton 9Mar 7pm.

RSVP to me for FREE GIFT!

Some cold hard FACTS on your FUTURE money.

2011-02-21T13:30:00.003+08:00

Fact # 1: EPF dividend payouts (5.8% for 2010) are LOWER than annualized unit trust returns* (8-12% per annum)

Fact # 2: Inflation is ERODING your EPF – inflation is 7-9% per annum.

Fact # 3: more and more Malaysians are getting wise & NOT DEPENDING on EPF for their retirement.

BUILD YOUR OWN separate RETIREMENT plan.

The Earlier you start, the LESS you need, and you GET MORE.

(Power of Compounding Returns).

Talk to us.

Yours faithfully,

PATRICK DONALD ARCHIBALD
Wealth Advisor (CIMB Code: 9910)

SYNERGY PLANNERS
Mobile : 012 377 1848
Office : 03-7725 6788 extn 35
Email : synergyhaven@myjaring.net

This document is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund's prospectus and if necessary, consulting with financial or other professional advisers. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice.

Good, but it could be better, groups comment on EPF dividend rate

PETALING JAYA: EPF’s 5.8% dividend rate has been lauded, but some say the amount should have been even higher, given its large investments and the higher dividends offered by other funds and unit trusts.
Consumer activist and Federation of Malaysian Consumer Associations (Fomca) adviser Prof Datuk Dr Hamdan Adnan said the increase was good as it showed the economy was picking up.
However, he said it could have been higher, given EPF’s long-term existence and the dividend performance of other funds, which were not as old as EPF.
“We are glad it is higher. But there are funds that are offering dividends of between 8% and 10%. Even Amanah Saham Bumiputra is offering almost 9%. EPF is not even giving bonuses like trust funds do.
“It is important to maintain a strong investment return even as the membership keeps growing.
“It is to help workers save for their old age and provide a decent income for their retirement,” he said.
Malaysian Employers Federation executive director Shamsuddin Bardan welcomed the higher rate but said it could be better, noting that investment institutions such as Permodalan Nasional Berhad were giving good dividends.
“EPF used to give 8% dividend before. It will be a big challenge to get back to that level but it is something that we can strive for,” he added.
Malaysian Trades Union Congress (MTUC) secretary-general Abdul Halim Mansor said they were happy with the dividend increase although they were not informed of the new rate prior to the announcement.
“Traditionally, MTUC is invited before the rate is forwarded to the Finance Ministry and officially declared, but not this time,” he said

Tame the Demon of Credit Card Debt

2011-01-21T02:02:00.001+08:00

Tame the demon of credit card debt

Written by R B Bhattacharjee

Friday, 17 December 2010 11:21

The rate of credit card defaults in Malaysia may not be anywhere near dangerous levels, but it would be sheer folly not to heed the signs of financial distress that it points to among a section of consumers.

As the latest Bank Negara Malaysia (BNM) data on credit card spending shows, some RM70.1 million in credit card debt had not been paid for six months or more as of October 2010 (see table). The amount seems quite small in comparison with the total current outstanding balance due from cardholders, which stood at RM26.80 billion at the end of October 2010.

However, there is more to the situation than meets the eye. Firstly, the figure for October 2010 is RM8 million more than that for December 2009, indicating that a higher number of card users are unable to roll their finances over and have given up servicing their credit card debt. Secondly, the current outstanding balance in December 2009, which stood at RM24.28 billion, was RM2.52 billion less than the figure for October 2010.

Two things are significant about this growing credit card debt. The maths indicates firstly that more people are using their credit cards to finance their lifestyles, although the data does not show how much goes towards paying for essentials and how much is spent on luxuries. That would be important to know in order to understand what the debt pile says about the financial health of wage earners nationwide. For instance, over a quarter of consumers seeking help from BNM’s credit counseling service report that their debt burden became unsustainable when they had to seek medical treatment for themselves or their family members.

The second inference is more worrying. The higher amount of outstanding balances shows that the government’s attempt to rein in credit card spending has failed to produce the intended results. In Budget 2010, a RM50 annual service tax was imposed on principal credit cards and RM25 for supplementary cards to discourage the excessive use of credit cards, and so to prevent consumer debt from growing to unsustainable levels.

It is true that as a result of the tax, the number of cards in circulation registered a drop of 2.1 million between December 2009 and October 2010. The amount of credit extended also eased by RM2.06 billion from RM115.87 billion at the end of last year.

However, despite the lower number of cards in circulation and the concomitant reduction in credit extended, credit card spending has escalated in the past 10 months, and with it a growing number of card holders are unable to service their credit card debt.

In October 2010, the amount in overdue balances, from less than three months to more than six months in arrears, stood at RM2.55 billion, equivalent to a tenth of the total current outstanding balance. In December 2009, the figure for payment defaults was slightly lower, at RM2.42 billion.

Even if the service tax has not curbed credit card usage, however, it is not a total loss. At least, the tax revenue accrues to the government. The issue therefore appears to be a matter of fine-tuning the regulation of credit card usage. A long standing criticism of the regulatory regime is that the eligibility requirement for applicants of credit cards has been set too low. Currently, an annual income of RM30,000 is sufficient to qualify for a card. This, it has been argued, is an invitation to financial disaster.

A more effective strategy to curb credit card dependency, some analysts have pointed out, is to impose a surcharge on card usage, so that the more one spends the costlier it is for the card user.

For the low income earner with limited or perhaps no disposable income, the lifeline that a credit card appears to give him, turns out in fact to be a trap which eventually leaves him unable to service the financing charges that pile up when he pays just the minimum amount due per month. How the authorities can allow this situation to continue, where the poor end up putting their finances into jeopardy is a question that boggles the mind.

The inequities that result from credit card dependency among the middle and lower income group, stemming from usurious interest rates and late payment charges must rank among the most unconscionable forms of oppression that the modern economy has produced, along with the Third World debt burden and the undermining of traditional economies by neo-liberal trade rules.

Although the credit card debt situation in the country is in no apparent danger of turning sour in a hurry, it may be useful to draw some lessons from the consumer credit crisis that is threatening to come to a head in the US and elsewhere in the developed world.

In the US, particularly, where domestic spending accounts for some 70% of the GDP, the economic contraction that was brought on by the bursting of its property market has had a strong impact on credit card spending. For perspective, consider that in 2005, America’s 164 million credit card holders charged US$2 trillion to their credit cards, putting themselves into a highly unsustainable debt situation.

Not surprisingly, as US property prices began to peak around that period, the number of young Americans between the ages of 25 and 35 who were living with their parents shot up at the same time that home ownership figures plunged.

Today, as the promise of a recovery continues to elude much of middle class America, a whole range of commentators are giving their fellow citizens well meaning advice on how to survive the worst economic crisis in living memory. The tips range from hoarding gold to investing in arable land, and even to buying guns, in anticipation of civil unrest from millions of disgruntled citizens.

We have not gone too far down the path of a debt-driven economy to fear such a fate, but the welfare of our people requires an honest look at where we are heading.

R B Bhattacharjee is an associate editor at the Edge.

This article appeared in The Edge Financial Daily, December 17, 2010.

2010-11-01T12:58:00.000+08:00

Dear EPF contributors: SOS Save Our Savings!

2010-10-18T11:15:00.001+08:00

Please forward to your friends

Budget 2011 has seen the 300% increase of capital outflow by EPF authorities to foreign investments, also the Sungai Buloh development project (remember Jho Low?) and the UEM buyout of PLUS. Instead of reinstating contributor's right to invest overseas (they gave this right in 2006 and removed it in 2007 if my memory serves me well) the Govt decides to help themselves to a BIGGER SLICE of the EPF PIE. Now the unionists are speaking up. Read the attached article. It's YOUR RETIREMENT MONEY. You have a CHOICE to TAKE CHARGE OF YOUR MONEY or let them spend it away.

UTILISE your ELIGIBILITY for UNIT TRUST investments & house purchases.

Call me to process your applications.

Patrick Archibald

Synergy Planners - Group Agency Manager (2011)

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Email: synergyhaven@myjaring.net

Unionists insist on ‘security net’ as EPF invests more

By G. Manimaran (Malaysia Insider)

October 18, 2010

KUALA LUMPUR, Oct 18 — Unionists are asking for guarantees on workers’ contributions to Malaysia’s largest pension fund as the Najib administration turns to the Employees Provident Fund (EPF) to invest more on the local and foreign fronts.

They say it appears that the government is dependent on EPF funds in the Budget 2011 proposals tabled last Friday where it was allowed to triple investments abroad to 20 per cent from seven per cent previously.

The pension fund is also involved in re-developing the Malaysian Rubber Board (MRB) land in Sungei Buloh and a RM23 billion bid to take toll operator Plus Expressways Bhd private with UEM Group Berhad.

National Union of Bank Employees (NUBE) secretary-general J. Solomon said while EPF funds cannot be static without investments as dividends need to be paid out, it should not invest without any controls.

“It seems that way... I am not sure about past budgets but this time, I sense that the government is depending more on EPF funds,” he told The Malaysian Insider.

“EPF has a role to play in increasing the annual dividends to its contributors,” he added.

The statutory body declared a dividend rate of 5.65 per cent last year after it achieved its highest ever net income of RM19.63 billion in 2009. Workers deduct 11 per cent of their salary for their monthly contribution while employers top up with another 12 per cent.

“A security or guarantee net is needed to assure contributors that their contributions and savings is used well, invested carefully for suitable investments that can benefit them,” Solomon said.

He also said EPF has to be transparent and provide full details for its foreign investments now that its can invest more abroad.

“Who plays a role in these investments and where are these investments have to be told to the public... EPF must be transparent about their investments, unlike now where it only gives the total investments,” said Solomon, who asked for a review of the 20 per cent cap announced by Prime Minister Datuk Seri Najib Razak in Parliament last Friday.

Najib had said the MRB land in Sungai Buloh of 2,680 acres (1,085ha) will be developed by EPF for RM10 billion and is expected to be completed by 2025 with mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities.

Malaysian Trades Union Congress (MTUC) president Syed Shahir Syed Mohamad noted that the government has been using EPF funds over the past years in order to provide returns and dividends to the contributors.

He also pointed out that the contributions are guaranteed by the government but said the Najib administration must be careful in choosing investments for EPF.

“There are risks in investments but if we don’t, it is also hard... but we must be careful and cautious in making investments,’ Syed Shahir said, referring to investments abroad.

He said EPF investments must consider the lessons from the United States and Europe where the economy has soured after the sub-prime debacle.

The veteran unionist who sits on the EPF board also said EPF must ensure the funds are not used to bail out any company facing difficulties.

Apart from the MTUC, civil service union centre Cuepacs also has a representative on the EPF board.

Cuepacs president Omar Osman questioned the rationale to increase the limit for foreign investments as the dividend payout in recent years have not been encouraging.

“We allow the investments rate to rise using EPF funds but the dividend rate is just 5.4, 5.5 per cent .. its not that high. If the investment rate is high, the dividend rate must be high but it isn’t,” he said.

Last year’s 5.65 per cent dividend was higher than the 4.5 per cent paid out in 2008.

“We agree to investments outside the country, even if its high, but it must profit the contributors. The profits should not just be enjoyed by the companies using the contributions,” Omar said, adding he will raise the matter at the next EPF board meeting.

EPF chief economist Norasikin Abdul Hamid had welcomed the increase in limit for foreign investments to 20 per cent.

“This will help the EPF to minimise market concentration risks besides diversifying its investments instruments and income,” she said in a statement after the Budget 2011 was tabled.

She also pointed out the development of the MRB land would boost the economy and the construction sector.

“The EPF believes that the government’s decision in selecting EPF to enter into a joint venture with the Federal Government to develop the land has been weighed and deliberated carefully, given EPF’s strong financial position.

“This move is in line with the government’s aspiration to encourage the public-private partnership in order to reduce its fiscal burden.” Norasikin said.

The EPF said a total of 72.53 per cent of investments last year were in fixed income while 27.05 per cent was in equities, and the remaining in property.

As at 31 December 2009, EPF’s investment portfolio grew 8.55 per cent or RM29.25 billion to RM371.26 billion compared to RM342.01 billion in 2008.

COME IN NOW! New target for KLCI - 1560!

2010-10-16T13:18:00.000+08:00

Bulls will visit historical peak

TREND ANALYSIS BY K.M.LEE

REVIEW: Overnight Wall Street stocks rose to above the 11,000 mark for the first time in five months on speculation the latest data would push the Federal Reserve to launch another round of economic stimulus, lifting the blue-chip average up 57.90 points to 11,006.48 the previous Friday.

Over on the New York Mercantile Exchange, Light sweet crude for November delivery spiked 99 cents to US$82.66 a barrel on supply worries after a strike at France’s top oil port into the 12th day threatened to cut European oil products output.

Tracking the steadier Dow and commodity prices in the United States, Bursa Malaysia kicked off the week on a concrete platform, with the FBM Kuala Lumpur Composite Index (FBM KLCI) jumping 4.73 points to 1,486.14.

The strong performance in Asian equities also added to the upbeat tone, but surprisingly, the upside potential was checked, as some investors appeared taking advantage of the strength to book profit after the recent strong rally.

Hence, in range-bound to higher pattern, the key index fluctuated within an intra-day peak and bottom of 1,490.10 and 1,484.57 respectively, a pretty tight 5.53 points band throughout before closing at 1,487.41, gaining six points on Monday.

Overall, the local sentiment was very much unchanged, albeit on a wider range in the absence of compelling news the next day.

Overnight Wall Street drifted in lightest volumes of the year, with the Dow edging up a small 3.86 points to 11,010.34, as few dared to place bets ahead of key companies’ results.

Elsewhere, a retreat in the black commodity from a five-month peak also prompted the local investors to exercise extra care in their trading approach.

In mixed session, the local bourse shed 0.84 point to 1,486.57 amid profit-taking activity on Tuesday.

Nevertheless, Bursa Malaysia took a change for the better on fresh buying after a two-day sideways trading, spurred by a higher overnight Dow and the regional performance, as details from the Federal Reserve’s latest meeting indicated the US central bank may once again flood markets with cheap cash to further boost growth.

In robust trade, advances in the core heavyweights helped propel the FBM KLCI up 10.40 points to 1,496.97 in mid-week.

Thereafter, the key index extended the upward momentum, hitting a new 33-month high of 1,503.82 in early business, encouraged by more gains in overseas stock exchanges before reversing owing to an apparent profit-taking activity in the quality issues.

In choppy style, the local bourse shed 0.59 point to 1,396.38 on Thursday.

Thereafter, sellers dominated the floor, pulling the key index down 6.52 points to 1,489.86 yesterday, with sentiment dampened by the generally frail offshore tone.

Statistics: For the week, the FBM KLCI perked up 8.45 points, or 0.6% to 1,489.86 yesterday, compared with 1,481.41 at the close on Oct 8.

Weekly turnover amounted to 5.758 billion shares valued at RM9.331bil, against 5.227 billion units worth RM8.05bil done previously.

Technical indicators: The daily slow-stochastic momentum index moved out of the bullish territory after triggering a short-term sell at the overbought territory on Nov 11.

The past week witnessed the 14-day relative strength index hitting a high of 81 points before curving down to 62 points yesterday.

After “kissing” the daily signal line on Thursday, the daily moving average convergence/divergence histogram resumed the downtrend to stay bearish. It flashed a sell on Sept 23.

In stark contrast, weekly indicators were bullish, with the weekly oscillator per cent K crossing above the weekly oscillator per cent D of the weekly slow-stochastic momentum index to issue a buy at the top and the weekly MACD continuing to expand positively against the weekly signal line to retain the buy.

Outlook: In line with our expectation, the key index had successfully patched up the 1.490-1,497 points gap and based on the daily bar chart, the bulls are poised to mount a charge on the historical peak of 1,524.69, established on Jan 14, 2008, in their next move.

With the bulls already pausing for air after a strong rally, it is very unlikely to happen this week but it will certainly come by eventually.

Technically, the falling daily slow-stochastic momentum index and the curving down of the 14-day RSI, together with the weakening sign of the daily MACD suggest the local bourse will probably slip into consolidation mode in the immediate term but companies that benefit from the good budget would shine.

Support is anticipated at the 14-day simple moving average (SMA) of 1,477, 21-day SMA of 1,473, followed by the 1,455-1,456 points range and the next, at 1,445.33 points.

A push above the all-time high would propel the key index to the uncharted territory, targeting the 1,550-1,560 points band.

And if you're investing - INVEST NOW..............

2010-10-11T21:06:00.001+08:00

Shares: Slight uptrend seen ahead of Budget 2011

By ELAINE ANG
elaine@thestar.com.my

Focus will remain on property and infrastructure-related stocks

PETALING JAYA: The local bourse is expected to trade in a sideways pattern with a possible upward bias this week in the run up to the tabling of Budget 2011 on Friday, analysts said.

Jupiter Securities research head Pong Teng Siew expects a slight uptrend for the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) this week on Budget expectations.

“There may be some profit-taking activities on Friday after the tabling of the Budget as market expectations are fine-tuned,” he said.

»There may be some profit-taking activities on Friday« ANALYST PONG TENG SIEW

Nevertheless, he does not expect the Budget to have much impact on the market as it had been overshadowed by the earlier announcement of the Economic Transformation Programme.

An analyst with HwangDBS Vickers Research expects the market undertone to remain firm, with some expectations on the Budget already built in.

“Whether the expectations come true or otherwise, there will traditionally be some hype during the run up to the Budget,” the analyst said.

OSK Research head Chris Eng foresees a possibly volatile market and does not expect any significant upward movement for the index this week.

“We are not too hopeful for many positive measures from the upcoming Budget,” he said.

He expects the focus to remain on property and infrastructure-related stocks such as MMC Corp Bhd, Gamuda Bhd and Malaysian Resources Corp Bhd in anticipation of announcements of project approvals and awards as well as various incentives.

Another potential area to look at would be real estate investment trusts as there might be measures on witholding tax announced during the Budget, Eng said.

Last week, the FBM KLCI advanced 15.09 points, or 1%, to 1,484.41 on Friday.

An analyst with a local stockbroking firm said although the market was quite near to its all-time high of 1,524.69, it would find it hard to penetrate the heavy resistance level on the first attempt.

“The market will have to test the resistance level several times. If the market is bullish this week, it may test the 1,500-point level,” he said.

On the external front, the Dow Jones Industrial Average was up 1.75% to 11,006.48 points, its highest level since early May, last week. The broader S&P 500 index rose 1.65% to 1,165.15 points.

Investors expect the US government to pump more cash into the markets to boost the lagging economy after a key monthly unemployment report showed the economy shed more jobs than expected in September.

In addition, OSK’s Eng said the US results season would start this week.

“We do not foresee any excitement from this result season as expectations had been raised in the past few quarters, so there is a propensity for disappointment this season,” he added.

Quarterly earnings reports to be announced this week include those from Intel, Google, JPMorgan Chase and General Electric.

Economic data from the United States this week includes the US trade deficit on Wednesday and retail sales numbers on Thursday.

On the homefront, the Industrial Production Index data are expected to be out today.

Who DA MAN?? Who DA MAN??

2010-10-11T21:04:00.000+08:00

Top Asian investment bank award for CIMB

KUALA LUMPUR: CIMB Investment Bank has won The Bankermagazine’s top investment bank award for Asia.

CIMB said in a statement the award was arguably the most prestigious ever achievement by a Malaysian investment bank.

The group was distinguished among investment banks across Asia in terms of innovation, client benefits derived from its financial solutions, and market leadership in pioneering and originating new structures.

CIMB Group chief executive Datuk Seri Nazir Razak received the award at The Banker Investment Banking Awards 2010 ceremony in London.

“I am extremely proud to receive this award on behalf of the firm. It is a testament to how much we have achieved in capital markets across South-East Asia that we are able to win on the Asia stage,” said Nazir.

“This award also says to us that the CIMB of today can stand tall next to any investment bank in the world.

“I have always maintained that for the Asian century to materialise, a cadre of Asian financial intermediaries must be ready to take centre stage; that is now both our obligation and ambition.”

CIMB Investment Bank is the investment banking arm of CIMB Group.

This is why large amounts in the hundreds of millions should not be left in current account but INVESTED through Synergy Planners!

2010-10-11T21:02:00.001+08:00

Zeti calls for efficient intermediation in surplus funds in Asia

KUALA LUMPUR: There is an important need for a more efficient intermediation in the surplus funds in the Asian region, as high- saving economies, says Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

She said the intermediation was not only to effectively channel the funds into productive investment opportunities in the region but also to finance massive development infrastructures required.

"As part of the increased regional financial integration, there is now increased regional presence and participation in the domestic financial systems in the region.

"This phenomenon has been supported by the progressive financial liberalisation, development of domestic financial markets, greater use of domestic currency to facilitate bilateral trade activities and development of payments and settlement systems," she said in her luncheon address at the 2010 Institute of International Finance Annual Membership Meeting in Washington Saturday.

Zeti also said any effort to engineer a significant exchange rate adjustment within a short period of time carried the risk of high destabilising consequences. - Bernama

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2010-10-06T14:53:00.003+08:00

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Wealth Advisor

CWA - Synergy Planners

When your EPF is SURE to be insufficient for Hari Tua Anda.......

2010-10-04T19:44:00.002+08:00

Thumbs up for private pension funds

By LEE KIAN SEONG
lks@thestar.com.my

Insurance sector offers views to promote the initiative

KUALA LUMPUR: The initiative by the Government to set up private pension funds is expected to promote the private pension industry and retirement planning in Malaysia. However, it needs skilled insurers and fund managers that have long-term views for it to be effective.

Allianz Malaysia Bhd chief financial officer Charles Ong Eng Chow said the company supported the initiative to allow employees with EPF contributions above RM1mil to invest in and employers’ EPF contribution above 12% to be channelled to private pension funds.

“This will help to promote the private pension industry, which is small at present. This may also promote retirement planning as it will help the public to understand the importance of preparing for their retirement days,” he said.

Sophia Ch’ng ... ‘Private funds must be able to meet the objectives’

He also welcomed the suggestion of introducing an employee insurance scheme with low premiums based on the employees’ age band and administered by a consortium of insurers.

As insurance products tend to be marketed to middle and high income groups, he said the lower income population would be able to afford some level of insurance protection with the introduction of this low premium scheme.

“This can act as a safety net for the low income group.

“It will also help Malaysia to become a more adequately insured nation,” he said.

He pointed out that these initiatives would give a boost to the insurance industry as it would generate more business and help to stimulate the economy.

“Moreover, Malaysians can have better access to private pension schemes as well as low premium insurance products,” he said.

Great Eastern Life Assurance (M) Bhd senior vice-president and deputy head of finance and corporate affairs Sophia Ch’ng Sok Heang said private pension must be able to meet the objectives, which could differ before and after retirement while life insurer would be the ideal provider for private pension.

“The objective of a private pension fund is to build up sufficient retirement fund at age of retirement with capital safety,” she said.

She said the ideal fund manager for private pension funds should have characteristics like holding a long-term view, capacity to handle ever-increasing fund size and ability to design various solutions to suit different investment objectives at different life stages.

“They need to also provide automatic switch to a less risky investment strategy as retirement year approaches and have the skill of managing downside risk and capitalising on upside,” she said.

Upon retirement, she said the pension fund should be sufficient as a guaranteed income for life, not eroded by inflation and provide capital safety for retirees.

She said life insurers should gear up to provide the financial solutions, leveraging on the proposal from the financial services national key economic area.

According to a proposal under the financial services national key economic area, employees who have more than RM1mil in their EPF accounts should be encouraged to invest in private pension funds.

Employers’ contributions exceeding 12% should also be channelled towards the private pension funds, as a further step to boost the private pension industry.

In addition, an employee insurance scheme has been mooted, with low premiums based on their age band and administered by a consortium of insurers.

It was noted that about two million self employed people were not covered by EPF while most retirees exhausted their lump sums in three to five years.

Analysts see new high for Malaysia's main market index

2010-09-15T01:16:00.000+08:00

Analysts see new high for Malaysia's main market index

By IZWAN IDRIS izwan@thestar.com.my

PETALING JAYA: With four months to go before 2010 ends, a number of brokerages have unveiled their 2011 year-end targets for FTSE Bursa Malaysia KL Composite Index (FBM KLCI).

Quite a few predicted the benchmark index will reach a new high in 2011.

“Theoretically, the FBM KLCI could reach 1,578 to 1,691 by the end of 2011 purely based on our corporate earnings growth forecasts and by applying mid-cycle forward price/earnings (PE) targets of 14 to 15 times,’’ UOB Kay Hian Research said in its report yesterday.

“This assessment explicitly assumes that investors are no longer concerned over global economic and financial systemic risks,’’ it added.

The brokerage preferred to “err on the cautious side” and pegged a tentative target at 1,580 level.

The FBM KLCI reached a record 1,516.22 points on Jan 11, 2008, months before the credit crisis erupted in the United States and wreaked financial havoc across the globe.

As at yesterday, FBM KLCI closed at 1,441 points. The index was up 13.2% for the year. It is the fourth-best performing index in Asia, trailing behind Thailand, Indonesia and Phillipines.

The big markets in Japan and China are down for the year, as well as those in Europe and the United States.

It may seem that investors have ignored “warning signals” coming from developed worlds, which are struggling to revive their ailing economies.

The region’s outperformance “was partly caused by inflows of portfolio funds into emerging markets as investors switched out of developed markets,’’ RHB Research Institute said yesterday.

This, the firm said, was not a sustainable trend. “We continue to believe that the equity market may move into a phase of greater volatility in the months ahead,’’ it said.

Although it foresees a market correction, if it happens, it will not be “sharp given the ample liquidity and sustainable economic and earnings growth’’.

RHB sees a potential for the market to trade up to 1,450 points by the year-end, which is higher than its previous forecast of 1,400 points.

The research house also has the most aggressive 2011 year-end target for the index at 1,640 points – based on an estimated market value of 15 times its one-year forward projected earnings for 2012.

Local listed companies, mainly big banks, churned out a predictably strong earnings in the April-to-June quarter. Banking stocks, led by Malayan Banking Bhd and CIMB Group Holdings Bhd, accounted for a major chunk of the FBM KLCI basket.

With banking stocks’ earnings outlook upgraded at HwangDBS Vickers Research, the firm yesterday raised its current year-end target for the index to 1,500 points from 1,448 points previously.

It sees “intermittent” profit taking on the back of the FBM KLCI 14% climb since May, but believes that the index’s longer-term uptrend is intact.

But the just-ended results season may not have impressed everyone, especially those at CIMB Research and OSK Research.

Save for the banking and gaming stocks, CIMB said the August earnings season was generally below expectation and lacked “excitement”.

Propelled by rising profits at banks and gaming firms, CIMB projected that this year’s corporate profit growth would reach 30%, up from 24% it predicted three months ago.

It said banks and gaming stocks’ rapid profit increases had more than made up for the shortfalls at telecommunications, industrial, as well as oil and gas sectors.

This year’s blistering growth rate will be the fastest in the region. CIMB forecasts the pace will slow down to 13% next year.

Despite the strong recovery in earnings, CIMB kept its year-end target for the FBM KLCI at 1,450 points, and expects the index to go up to 1,520 points in 2011.

Over at OSK, the mood is equally sombre. The research house has revised its 2010 earnings growth forecast to 26% from 22% previously. However, it maintained a year-end target of 1,465 points after ascribing to a lower PE ratio of 15 times versus 16 times previously.

Given the weakening earnings trend across the board, OSK cautioned that the third quarter may see “more downgrades than upgrades’’.

However, this may be a “temporary situation” until the Government rolls out so-called mega projects that will provide the lift in the construction, steel and banking sectors.

Despite its cautious view, OSK’s 2011 year-end target for the FBM KLCI is at 1,580 points.

http://biz.thestar.com.my/news/story.asp?sec=business&file=%2F2010%2F9%2F3%2Fbusiness%2F6972547

Synergy Planners Brings More Convenience To You!

2010-09-02T12:31:00.004+08:00

Now Everyone Can Save Money Monthly!

MEPS Direct Debit for Regular Savings Plan

We are happy to announce that MEPS Direct Debit (formerly known as FPX Collection) will be made available for regular savings plan effective from 30^th August 2010.

MEPS Direct Debit is an interbank collection service that enables automated collection directly from the investor’s bank account at multiple banks with a single authorization.

Our investors who currently do not have any bank accounts with our existing auto debit banks (CIMB, MBB, RHB, EON and BSN) but have current/savings accounts with the participating banks below can now use this new service for the Unit Trust Regular Savings Plan.

No	Bank
1	Bank Islam Malaysia Berhad
2	Citibank Berhad
3	Deutsche Bank
4	Hong Leong Bank Berhad
5	OCBC Berhad
6	Public Bank Berhad
7	Standard Chartered Bank
8	HSBC Bank
9	Bank Rakyat

The MEPS Direct Debit application form IS READY!

Only need to complete part 1 of the form for each fund and submit to us for our onward transmission to the investor’s bank for authorization purpose. Please take note that the authorization process may take up to 2 months or more. Alternatively, investors may go directly to their respective banks to verify their signatures prior to submission to CWA to expedite the authorization process.

In addition, please pay attention to the following information relating to this service:

· Fee per transaction is RM 1.00 for amount less than RM5,000 and RM1.50 for amounts RM5,000 and above

· Deduction dates are 8^th or 16^th of each month

· Termination Form to be submitted (attached) if investor would like to terminate the service

Start Your Savings Plan NOW! It's SO EASY!

Do you consider yourself ELITE?

2010-09-02T12:01:00.005+08:00

Here's one way to ensure that.

CWA's Vantage Infinity Club

CWA's Vantage Infinity Club (VIC) is established with the aim to provide personal service to greatly valued clients by focusing our efforts in areas that will benefit them in the most meaningful manner, thus allowing our customers to enjoy convenience of time and to experience the ease of service through each of the communication channels that we have dedicated to serve these customers.

As an elite member of the Vantage Infinity Club, helping you to manage your investment portfolio effectively is perennially our top priority. We hope to meet your aspiration by providing you with highly personalized and tailored made solutions, be it investment management, protection planning, life goals planning or planning for financial independence. In this fast-changing economy, our dedication to enrich you with the benefits of value-enhancing integrated financial products and services remains unchanged.

Members Privileges

Members of the Vantage Infinity Club (VIC) have the pleasure of enjoying the following facilities:

Priority Customer Care Hotline

Enjoy personalized customer support and prompt service through this hotline. We have a dedicated team of customer service officers who strive to understand your needs to provide you with the necessary assistance.

Online Access to Investment Ledger

We help you maximize your valuable time for more important affairs by providing you with the flexibility of assessing your investment position at the comfort of your home or during your leisure moment.

Quarterly consolidated statement

The quarterly consolidated statement provides an update of your investment holdings, thus enabling you to align and better manage your portfolio in meeting future goals.

Priority invitation to seminars and workshops

We organize market and investment seminars featuring top-tier subject experts in the industry to guide you through the thicket of global challenges and keep you abreast of the fast-arising market opportunities. As a value-added service to rekindle your hobbies, we also host ‘interest group workshops’ from time to time to cater to the likes of different clients.

Monthly Market Report

A confluence of events may raise concerns among many investors and we aim to do our utmost best as your investment advisor, to keep you informed of any major changes in both the local and global scenes, be it economy issues, policy changes, extraordinary market circumstances and any information that may impact your investment decisions.

How to become a VIC member

You will automatically be recognized as a VIC member when the following requirements are met:

A minimum of 100,000 qualifying points based on aggregate investment holding in various holder accounts with CIMB Wealth Advisors based on NRIC.

All in-house and third party funds will be awarded 1 point for every RM1 investment holding except for the following funds:

- CIMB-Principal Money Market Fund

- CIMB Islamic Money Market Fund

- CIMB Islamic Short Term Sukuk Fund

- CIMB-Principal Xcess Cash Fund

- CIMB-Principal Xcess Income fund

Insurance

We will keep you informed as we expand the eligibility to the criteria

Welcome to the world of privileges that map your serious money to your intended objectives while you enjoy the exclusive services freely as a member of the Vantage Infinity Club.

Interested? Call 012 377 1848 Now. It's your privilege.

Patrick.

Reflection on Malaysia's recovery from global crisis

2009-12-21T11:13:00.002+08:00

Arresting Malaysia’s relative decline
Hock's Viewpoint - By Choong Khuat Hock

THE book, The global financial crisis and the Malaysian economy, written by Datuk Dr Mahani Zainal Abidin, director-general of ISIS Malaysia, and Professor Dr Rajah Rasiah, dean of the Faculty of Economics and Administration at Universiti Malaya, in collaboration with UNDP and ISIS makes interesting reading.
In particular, it highlights the declining trend in manufacturing labour productivity in Malaysia due to lack of technological upgrading, making it difficult for our manufacturing sector to compete with those in South Korea, Taiwan, China and Singapore.
It further highlights it has been difficult for existing firms to shift towards higher value-added activities due to a lack of focus on research and development (R&D). Malaysia’s R&D is pitifully low against those in Japan, South Korea, Taiwan and Singapore (see table on R&D expenditure in GDP).
The authors suggest that a combination of factors may be to blame: a scarce supply of engineers and R&D scientists and technicians, the poor quality of those leaving universities in the country, low R&D investment, and the reluctance of most qualified Malaysians to return home from foreign countries.
Lack of competitiveness

Malaysia’s lack of competitiveness is highlighted by the extremely small number of researchers and engineers per million persons in the country. The number of engineers also fell sharply over the period 2004–2006 (see table on researchers and engineers per million population).
A JobStreet.com survey shows graduates from local institutions earn 15% less than foreign graduates while in Singapore local and foreign graduates earn broadly similar salaries.
This indicates that something is indeed wrong with our education system. On paper, we seem to churn out many graduates but the poor quality of local graduates is reflected by their relatively lower salaries.
Perhaps it is our tertiary education beset by racial quotas and lax qualification standards. Applying racial quotas for university places treat the symptoms rather than the root cause. If this has not worked for over 50 years after independence, perhaps it is time we address the root cause.
The root cause probably started much earlier in the primary and secondary schooling system. The problem probably lies with an inadequate standard of teaching. For example, if teachers have a poor command of English, how can they teach Mathematics and Science properly in English?
Khazanah Nasional Bhd and government-linked companies (GLCs) have adopted 165 rural schools and proved that given sufficient teaching support, the rural Malay students can perform as well or even better than more racially mixed urban schools.

The proposal to give schools flexibility to choose their own curriculum and placing emphasis on English should be supported as it allows capable students to excel.
It is rather tragic that the rural, mainly Malay, students are left behind through inadequate teaching resources. As the pilot project on 165 rural schools has succeeded, all schools should have access to better teaching. If there is a shortage of teachers with specific skills, import them if need be, while resources are being invested to boost teaching standards.
Lastly, never compromise on qualification standards, something that may be possible if the foundation is strong. Education has an equalising effect and will serve as a long-term sustainable solution to narrow the racial and rural-urban divide.
Perhaps, another important factor that enabled countries like Sotuh Korea and Taiwan to escape the middle-income trap is the adoption of meritocracy to determine how resources are allocated.
A World Bank report highlighted that 13 economies (including Malaysia’s) managed to grow by 7% a year for at least 25 years since 1950. In Asia, growth stalled in Indonesia, Thailand and Malaysia while Singapore, Hong Kong, South Korea, Taiwan and Japan made it into the ranks of higher income countries with per capita incomes exceeding US$12,000 a year as defined by the World Bank.
Malaysia’s gross domestic product (GDP) per capita at slightly above US$5,000 a year requires a skilled workforce focusing on knowledge-based high value-added industries or services before its high income aspirations can be realised (see chart above).

Many of the successful Asian countries have interventionist policies but allowed market forces and meritocracy to reward companies that were globally competitive while culling losers. Cases in point: Proton versus Hyundai and Toyota or Perwaja versus POSCO, a successful South Korean steel company.
Malaysia has been falling behind in relative terms. The chart above shows the per capita GDP of selected countries as a multiple of Malaysia’s per capita GDP (at constant 2000 US dollar prices) since 1960.
In 1965, when Singapore separated from Malaysia, its GDP was 2.8 times higher than Malaysia’s but in 2008, its GDP was 5.4 times higher. South Korea and Hong Kong’s GDP per capita have also grown faster than that of Malaysia’s. Malaysia has performed better than countries like the Philippines but then our aspiration is to be a high-income country and not another Philippines.
Malaysia may have strong macroeconomic fundamentals like a sound banking system and a current account surplus. This may lull us into complacency as we savour the cheap subsidies arising from our depleting oil reserves. Subsidies to select groups, like cheap fuel for fishermen, have led to smuggling.
Rather than creating a complicated system of selective subsidies, a simpler system like cash for the needy would be less susceptible to abuse. Indeed in the longer term, a social safety net for all Malaysians should be considered, a financeable dream if we become a high-income nation.
Subsidies ought to be used to create new industries, e.g. wind and solar in Europe and ethanol in Brazil. In Malaysia, we cannot even get our biodiesel policy right, reducing the biodiesel target from 5% to 3% of diesel even as Brazil has successfully used incentives to run its cars purely on ethanol (alcohol). World-class industries in Malaysia like rubber glove companies should be nurtured and not be held back by the lack of natural gas supply.
1Malaysia Breakthrough
The 1Malaysia is a refreshing breakthrough concept that aims to unite Malaysia and ensure that everyone has a place under the Malaysian sun. Only when there is a sense of belonging can we expect Malaysians to invest long term in R&D and make Malaysia the preferred venue for their business and family rather than joining the brain-drain bandwagon.
Such hopes are not pipedreams; another multiracial country, America, despite all its faults and weaknesses, is still the richest and strongest nation on earth. It is a country of equal opportunity that seeks and attracts global talent and where all citizens are Americans first.
For 1Malaysia to succeed, the concept has to move from rhetoric to implementation in substance rather than form. For example, in form, courses under the National Civics Bureau (NCB) may look fine but in substance, its alleged racist overtones are divisive.
Rather than the spirit of “them versus us”, it has to be the spirit of “all of us” working together to arrest the relative decline of Malaysia, if not for us, then for our children. Only education and meritocracy can arrest Malaysia’s relative decline while treating the symptoms can only enhance dependency and mire us in the middle income trap.
Choong Khuat Hock is head of research at Kumpulan Sentiasa Cemerlang Sdn Bhd.

Mobius buys Middle East!

2009-12-14T13:54:00.000+08:00

Mobius picks Emaar, bombed-out’ UAE stocks

Written by By Shiyin Chen & Bernard Lo
Thursday, 03 December 2009 19:16
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HONG KONG: Emaar Properties PJSC is among “bombed-out” United Arab Emirates (UAE) developers favoured by Mark Mobius to rebound after a two-day slump in share prices spurred by the Dubai debt crisis. “There are many of those properties that are cash-flow rich that are doing quite well,” Mobius, who oversees more than US$30 billion (RM101.4 billion) of developing-nation assets as chairman of Templeton Asset Management Ltd, told Bloomberg Television in Hong Kong. “Not all the properties are in trouble.” The MSCI Emerging Markets Index rebounded for a third day, adding 0.8%, as concern about Dubai’s debt eased. The worst plunge in the emirate’s stocks in more than a year and record retreat for Abu Dhabi are also luring investors to telephone companies, airlines and port operators they say have become bargains.Emirates Telecom Corp, the biggest operator in the UAE, is attractive after falling to its cheapest level since July, said hedge-fund firm Gulfmena Alternative Investments. Dubai-based courier Aramex PJSC will rally after a 7.4% drop the past two days left shares at a 32% discount to the average price-to-earnings ratio since 2006, according to Duet Mena Ltd.“Now as the dust settles, a few companies in the UAE stand out,” said Rabih Sultani, a fund manager at Duet Mena in Dubai, a unit of Duet Group. Sultani said he favours shares of Emirates Telecom, known as Etisalat, Aramex and Air Arabia PJSC, the UAE’s largest low-cost carrier.The Dubai Financial Market index had tumbled 13% in the two trading sessions since Dubai World said it’s in talks to restructure debt, while Abu Dhabi’s gauge slumped 12%. Emaar, the UAE’s largest developer, plunged 19%.Dubai World has begun talks with its lenders to restructure US$26 billion of debt, less than half its US$59 billion of liabilities. That eased concern that a default would add to the US$1.7 trillion financial companies around the world have written down as the credit crisis impaired the value of their assets.The cost of credit-default swaps protecting Dubai debt against a government default fell the most in nine months on Tuesday after the central bank of the UAE said it “stands behind” lenders to the emirates and Dubai World said it had begun “constructive” talks with banks to restructure US$26 billion of debt. Dubai CDS fell 113 basis points to 457, according to prices from CMA Datavision.Dubai isn’t likely to go bankrupt and will be “bailed out”, Mobius said yesterday.The MSCI Emerging Markets Index has gained 4.3% this week, rebounding from last week’s slump, on speculation that economies from China to Brazil will continue to recover. Mobius predicted on Nov 27 that Dubai’s attempt to reschedule debt may spur a “correction” in developing-nation equities, adding that a 20% drop is “quite possible”.Some areas in China and India may become the “next Dubai”, given the liquidity in the two Asian nations, the investor said, citing the cities of Shanghai and Mumbai.“It wouldn’t be a country-wide situation, isolated pockets of disaster because of over-spending and over-leveraging,” Mobius said. “It’s not going to happen tomorrow but with the kind of money supply that’s coming in, with the IPO activity that we’re seeing, that’s definitely in the cards.”The Shanghai Composite Index has surged 80% this year as government stimulus and a credit boom revived growth in the world’s third-largest economy. China is among the emerging markets facing risks of property and commodity market bubbles, central bank adviser Fan Gang said on Nov 18.The Bombay Stock Exchange’s Sensitive Index, or Sensex, has gained 79% so far in 2009, the biggest rally in 18 years, as the economy expanded 7.9% in the three months to September, the fastest pace in six quarters. Economic growth and a price-to-book multiple of about two times for emerging-market equities mean that the rally will continue, Mobius said. The MSCI index of 22 developing nations has jumped 73 % this year, poised for its best annual rally on record.“The valuations are more or less midway between the high point in the last 10 years and the low point,” Mobius said. “So I do think we have more to go, of course with corrections along the way.” — Bloomberg

The post Maxis IPO era....effects on Bursa.

2009-11-20T10:39:00.003+08:00

So what now? Wait for the next best thing.....
It's better you plan and chart your financial course. Markets go up and will come down. Your retirement age and kid's education target won't. Better get to work on that and review it periodically.

Maxis fails to lift sentiment
Written by Insider Asia
Thursday, 19 November 2009 17:27

Stocks on the Bursa Malaysia drifted mostly sideways in lacklustre trading on Thursday, Nov 19. There were few leads from the US market overnight while equity markets in the region traded mixed.
The FBM KLCI moved in and out of positive territory in directionless trade before closing just marginally higher at 1,276.7.
The long-awaited debut of Maxis failed to spur interest in the local bourse. However, most believe that the re-listing of Malaysia’s largest cellular operator will boost market liquidity and generate greater interest from foreign investors over the longer term.
Maxis was the most actively traded stock for the day, accounting for almost 23% of total market volume. The stock closed at RM5.42, or 8.4% above its institutional price of RM5. It was the top gainer for the day.
Over 1.35 billion shares were traded Thursday. Investor interest was firmly focused on two counters. Aside from Maxis, the second most actively traded counter was the loan rights for Scomi, which ended the day down 40% at 1.5 sen. The stock accounted for 17% of total market volume for the day.
Market breadth was negative for the better part of the day. At the close, losing stocks outpaced gaining ones by a ratio of roughly two to one.
We expect investors to stay cautious in the near term. Having chalked up huge gains since the rally started in March, markets are looking for more concrete evidence on a global economic recovery. But recent economic data has been mixed. In addition to rising unemployment in the US, the latest numbers show an unexpected 10.2% contraction in housing starts and a 4% drop in building permits.
Elsewhere, commodities stayed strong on persistent concerns over the value of the greenback. Crude oil futures on the New York Mercantile Exchange hovered just under US$80 a barrel while gold is trading not much below its all-time record high of US$1,153 an ounce.

4 Pre-conditions for retirement

2009-11-19T08:55:00.003+08:00

An excellent piece of article for those who are thinking of retiring. Thanks Wendy!

HOW TO RETIRE - 4 Pre-Conditions for Retirement
I (The writer) retired in year 2000 at age 52. I am now 61, thus I can claim that I got more experience at retirement than most! I thought I should share my experience with others because I have seen too many friends and neighbors/friends who became so bored that they have become a nuisance to their spouse and children and to others!
A few of them have solved the problem by going back to work. They were able to do so because they have skill/expertise that is still in demand. The rest (and many are my neighbors/friends) live aimlessly or are waiting to die - a very sad situation, indeed.You can retire only when you fulfill these 4 pre-conditions:
1. Your children are financially independent (e.g. they got jobs),
2. You have zero liability (all your borrowings are paid up),
3. You have enough savings to support your lifestyle for the rest ofyour life, AND most importantly,
4. You know what you would be doing during your retirement.
DO NOT retire till you meet ALL 4 Pre-Conditions. And of course youshould not retire if you enjoy working and are getting paid for it!
Most retirees who have problems are those who failed to meetPre-Condition#4.
When asked, "What would you be doing during your retirement?"Some replied, "I will travel/cruise and see the World". They did that, some for 3 months and then ran out of ideas. The golfers replied, "I can golf every day." Most could not because they are no longer fit to play well enough to enjoy the game. Those who could, need to overcome another hurdle - they need to the find the"kakis" to play with them.
It's the same with mahjong, bridge, badminton, trekking and karaoke - you need "kakis"! Most could not find others who share theirfavorite game and playing/singing alone is no fun. AND when they dofind them, a few of them found that they are NOT welcomed like myobnoxious neighbor whom everyone avoids. Thus if you are into group sports or games, you must form your groupsBEFORE you retire. You need to identify your "kakis", play withthem and discover whether they "click" with you.

The less sporty "can read all the books bought over the years". Iknow of one guy who fell asleep after a few pages and ended up nappingmost of the time! He discovered that he did not like to read afterall. We do change and we may not enjoy the hobbies we had.Routine Activities to Fill Your Week
For most people, your routine work activities are planned for you ordictated by others and circumstances. When you retire, you wake up toa new routine - one that you yourself have to establish as nobodyelse would do it for you!
The routine to establish should keep your body, mind and spirit"sharpened". A good routine would comprise”
a) Weekly physical sport - you need to keep fit to enjoy yourretirement. If you are the non-sporty type, you should fire your maidand clean your home without mechanical aids. Dancing and baby sittingare good alternatives.
b) Weekly mind stimulating activity - e.g. writing, studyingfor a degree, acquiring a new skill, solving problems or puzzles,learn or teach something. You need to stimulate your mind to stayalive because the day you stop using your brain is the day you startto die.
c) Weekly social activity - choose one involving lots offriends/neighbors. Get yourself accepted as a member to at least 3interests groups. Unless you prefer to be alone, you do need friendsmore than ever as you get older and less fit to pursue your sport.
d) Weekly community service activity - you need to give toappreciate what you have taken in this life. It's good to leave somekind of legacy.
With 4 weekly activities, you got 4 days out of 7 covered. Theremaining 3 days should be devoted to family related activities. Inthis way, you maintain a balance between amusing yourself and yourfamily members. Any spare time should remain "spare" so that youcan capitalize on opportunities that come your way like responding toan unexpected request to do a job or to take advantage of cheap faresto see places or to visit an exhibition.
Mind stimulating activities
Most judges live to a ripe old age. They use their brains a lot to decide on cases. I am sure MM Lee's brain works overtime. He's 80+ and still going strong. There were reports on 2 inspiring oldies. One is a granny who learned to play the guitar at age 60 to entertain her grandchildren. She's 70+ today and those grandchildren have grown to play with her. Another is an Indian Radiologist who on retirement, qualified as an Acupuncturist. He's age 77 and still offers his services (by appointment only) including free ones to those who have no income. I guarantee you that they arehappy people who discovered a "2nd wind" to take them to the sunset with a smile on their faces.
Mind stimulating activities are hard to identify. They require your will to do something useful with the rest of your life, a mindset change and the discipline to carry it through.
Your Bucket List
Despite your busy routine, you will at times be bored. Then it's time to turn to your Bucket List.
Your bucket list contains a list of things to do before you kick the bucket. They are not routine and are usually one off activities. You need them to have something to look forward to. These include anniversaries, trips (and pilgrimages), visits to friends and relations abroad, re-doing your home, attending conferences (related to your hobbies), acquiring a new set of expertise. 4 such activities that are spaced our quarterly would be ideal.
Retirement Is a Serious Business
If you can afford to retire and want to, do prepare to live to your fullest. You need to be fit to enjoy it - therefore get into shape now. You do not want to get up on a Monday and wonder what to do each week, therefore identify your set of weekly routine activities now and try them out to confirm that they are the activities that you will be looking forward to doing each week, week after week. You bucket listof "rewards" or "projects" or "challenges" is needed to help you break away from the routine thereby make live worth living.
Start listing what you fancy and refine it as you chug along in your retirement. You will have so much fun; you would wish you were retired since your turned 21!

If it's too good to be true, IT PROBABLY IS.

2009-11-13T15:04:00.002+08:00

Securities Commission enters into largest settlement in it's history
KUALA LUMPUR: The Securities Commission (SC) has entered into the largest settlement in its history involving some RM31 million, said SC Chairman Tan Sri Zarinah Anwar.
She said the milestone payout, made possible following a consent judgment entered with two Swisscash investment scam defendants, will be used to restitute eligible investors who suffered losses from the scam.
The judgment, entered against Albert Lee Kee Sien and Amir Hassan, marked the culmination of three years of intensive efforts by the SC in pursuing the perpetrators of the Swisscash scam involving cross-border investigations, spanning seven countries and cooperation from foreign regulators, she said.
The judgment against Lee and Kevin Choo Mun Hoe and Dynamic Revolution Sdn Bhd ordered them to pay US$83 million being an estimate of total investments in the scam.
So far, some 3,000 people have lodged reports with the SC, alleging losses in the scheme, she said.
The restitution will be carried out based on a court-approved distribution, she added. - Bernama

Buffett: The WORST investment you can have is CASH!

2009-11-13T14:37:00.002+08:00

....not I say one ah.....

The world's richest men say go buy stocks, global economic panic is over
Buy attractive stocks, they say
NEW YORK: Capitalism is still alive and well, say the world's two richest men, despite lingering shocks from the longest, deepest recession since the Great Depression.
"The financial panic is behind us," said famed investor Warren Buffett, who recently made what he called an "all-in wager" on the U.S. economy by acquiring railroad Burlington Northern Santa Fe.
"The bottom has come in stocks. Don't pass on something that's attractive today."
Bill Gates, Chairman of Microsoft Corp. and billionaire investor Warren Buffett, CEO of Berkshire Hathaway, speak during a taping of CNBC television special at Columbia University on Thursday in New York. (AP Photo/Jin Lee)
Sitting facing each other in an auditorium filled with nearly 1,000 cheering people at Columbia University in New York, the CEO of Berkshire Hathaway Inc. and Microsoft founder Bill Gates fielded questions from Columbia Business School students on the recession, investing and what's the next Microsoft.
There were at first reassurances that the U.S. economy had not collapsed since the last time the two sat in front of a student audience, in Nebraska in 2005.
"We proved that we can make mistakes," said Gates.
"But the fundamentals of the system, a marketplace-driven system where we invest in education and a great infrastructure for the long-term, that's continued."
Even in the country's "darkest hour," he said, American businesses were still innovating.
"Last fall was really blindsiding," Buffett said later.
Still, "I did not worry about the overall survival of our economy."
The worst recession since the 1930s may be over, but the recovery isn't expected to be strong enough to stem job losses and get businesses hiring again.
Employers shed a net total of 190,000 jobs in October, a government survey showed Thursday.
It was the 22nd straight month of losses.
And the unemployment rate jumped last month to 10.2 percent, a 26-year high.
Buffett also commended the Bush administration's actions last September, saying "only the government could have saved things" after the collapse of Lehman Brothers triggered a freeze-up in credit markets and panic on Wall Street.
In the future, however, Buffett said "there should be more downside to the head of any institution that has to go to the federal government to be saved for reasons of the greater society. And so far, we have been better at carrots and sticks in rewarding CEOs at the top. But I think some more sticks are called for."
The two endeared themselves to the audience with tips.
Buffett exhorted students to "marry the right person" and said, "The worst investment you can have is cash."
Gates, meanwhile, said he sees big opportunities in environmentally friendly energy and medicine.
"Capitalism is great," he said.
Gates wore a suit and tie, flashing the inner red lining of his jacket as he walked to his chair. Buffett, who earned a master's degree from Columbia in 1951, wore a sweater with the Columbia insignia.
Students in the audience said they were glad the two were so confident about the economy.
"That probably weighs a lot to a lot of people to hear Buffett say we're out of the crisis," said Andrea Basche, an Earth Institute student at Columbia. - AP

More young Malaysian guys SAVING? Sudah potong (credit card)?

2009-10-24T01:51:00.004+08:00

P1 Wimax recently came out with a hilarious ad campaign, 'Sudah potong?'. So to all the guys referred to in the survey below, the same question applies....hahaha..

Survey: Young M'sians plan to save more in next 6 months
KUALA LUMPUR: Younger Malaysian consumers, especially the males, are planning to save more in the next six months, according to a MasterCard survey.
It said Malaysians aged between 18 and 30 (28 per cent) are planning to save more in the next six months compared to their older counterparts of 31 to 45 years (19 per cent), 46 to 55 years (22 per cent) and 56 years and above (15 per cent).
In a statement, MasterCard said the survey found consumers in the Asia-Pacific, Middle East and Africa are saving up for a rainy day and that those below 30 are saving more compared to the older consumers.
The survey, conducted between March 23 and April 18, 2009, involved 9,211 consumers in 21 markets.
Among the highlights for Malaysia are male consumers (24 percent) who proposed to save more compared to their female counterparts (23 per cent) in the next six months.
The economic uncertainties too had caused 70 per cent of Malaysian consumers to either maintain or increase their savings level in preparation for unforeseen emergency expenditures.
Among the different age groups, consumers in the 46-55 age bracket (79 per cent) are most concerned about saving for rainy days.
Malaysian consumers are also saving for investments (59 per cent), retirement (52 per cent) and buying property (28 per cent).
The majority of Malaysian consumers (31 per cent) planned to save between 1-10 per cent of their income in the next six months.
The survey also indicated that in eight of the 21 markets across the region, the majority of consumers are looking to save more in the coming six months.
Topping the list of savers are in Vietnam at 52 per cent, India (47 per cent), United Arab Emirates (47 per cent), South Africa (47 per cent), New Zealand (46 per cent), Philippines (45 per cent), Qatar (44 per cent) and Australia (43 per cent).
The survey also showed Egypt has the highest percentage of 63 per cent of consumers planning to save less
Meanwhile, economic uncertainties and the need to be prepared for unforeseen emergency expenditures (71 per cent) is the top reason cited by consumers who are planning to maintain or increase their savings level in the next six months.
Thailand (95 per cent) has the highest proportion of consumers concerned over the economic uncertainties compared to China (48 per cent) with the lowest proportion among markets in the region.
Besides having an emergency stash, the other main reasons for savings are for investment (46 per cent), retirement (45 per cent) and buying property (40 per cent).
The main reasons for consumers saving less are because they feel they don't earn enough to save (61 per cent), high inflation (34 per cent) and simply because they believe in enjoying life (29 per cent). - BERNAMA

Six Words To Discover Your Purpose

2009-09-08T08:47:00.002+08:00

Are you living your passionate purpose? Are you moving in a clear direction?Are you a leader in inspiring those around you?Would you like to have more confidence every day in all you do?

Here is a short, easy process to help you discover your purpose and to value your unique contribution to humanity. In just a few minutes, you can create your own purpose statement to give yourself inspiration and focus. Anytime you need some clarity, direction, and inspiration, do this simple exercise:

First of all, get out a pen and take a minute to brainstorm all of your best qualities. Make a list. When you look at the list, pick just three of those qualities which you believe are your three best qualities. List those three qualities and condense each quality into one word. For example, your quality words could be words like gentleness, positivity, empathy, enthusiasm, and honesty.

Now, after you have chosen your three quality words, write down three ways you enjoy expressing those qualities with others, using one action word for each of the three ways. For example, some of the action words or verbs you might use for ways of expressing might be words like inspiring, empowering, nurturing, etc.

The final step is to plug in the 6 words you have written down into the following purpose statement:

My purpose is to express my ____(quality 1)_______, ___(quality 2)___________, and _____(quality3)______to __(action 1)________, __(action 2)_________, and___ (action 3)______ (with) others.

As an example, my current purpose statement today is:My purpose is to express my inspiration, interest, and initiative to inspire, empower, and connect with others. I find I like to tweak it every once in awhile to bring my purpose in line with my evolving direction. In this way, I don’t worry about getting it perfect – I know my purpose is a work in progress, continually growing and shifting like almost everything else in life.

I recommend you write out your purpose statement clearly and post it somewhere easily visible where you can read it often. It will affirm your value and your uniqueness. It will give you energy and vision to live your passionate purpose each day, inspiring others as you do.
Always remember to have fun and enjoy the process!

If you find you want to give (and get) more out of life, join us as a Wealth Advisor! Training provided, no finance background required, lots of personal development and the money is good!
Call 012 377 1848 Patrick for an interview.

CIMB: Our brag for the weekend

2009-09-05T14:35:00.001+08:00

CIMB chief youngest to get award

KUALA LUMPUR: CIMB Group chief executive Datuk Seri Nazir Razak became the youngest recipient of the Lifetime Achievement Award byFinanceAsia at a dinner in Hong Kong on Thursday.

Nazir, 42, received the award due to his contribution to Asian banking and finance, said the group in a statement yesterday.

Datuk Seri Nazir Razak ... was awarded the Lifetime Achievement Award

FinanceAsia editor Laura Wozniak said Nazir had demonstrated true reflection of success and leadership over the years.

Nazir joined CIMB in September 1989 as an entry-level executive and worked up the ranks of the organisation until he was appointed chief executive officer in June 1999.

Under his stewardship, CIMB has been transformed from a leading Malaysian merchant bank into a South-East Asian universal bank with assets of over RM220bil and a market capitalisation of about RM36bil.

The CIMB group took home five additional Country Awards for Achievement as Best Investment Bank, Best Bond House, Best Broker, Best Foreign Exchange Bank and Best Private Bank. — Bernama

2009-08-31T11:54:00.002+08:00

I've highlighted two facts for you (scroll down)- the first you're already familiar with...the second is a little known fact. I suggest you take a look at this article.

Patrick Archibald

Understanding different pension models

By WOON TAI HAI

This is the second in KPMG’s three-part series on A Penchant for Pensions? Part 1 appeared last Friday.

IN the first article, we discussed the public pension model and why it is considered by many as an unsustainable, standalone model. Today, we will be looking at two other models.

The private, occupational pension model

This model is mooted on the concept of instilling and rewarding employees’ loyalty.

Employers value the loyalty of their employees and in return endeavour to look after the welfare of their employees upon retirement.

Often, companies would offer pensions and other benefits such as healthcare, share option schemes and medical expenses, and in a unionised environment, this would be in consultation with the workers’ unions.

However, in the recent bankruptcy filing by General Motors (GM), a private, occupational pension model could be self-defeating if managed poorly. Moreover, in the event that the organisation collapses completely, the savings are effectively wiped out. Fundamentally, the sustainability of such a pension model depends largely on the continuous success of the company.

Even then, such a model will strain the company’s financial resources and eat into profits, especially if the number of people covered under this scheme burgeons.

Worse, what happens if the company stops growing or run into tough times, for instance during a financial downturn?

This was when things started unraveling for GM. Faced with obligations to cough out significant pension amounts yearly (that ran into billions of US dollars) and the inability to service its debt obligations, the once highly regarded US automaker and employer of choice finally buckled under the weight of such a scheme.

Even in Malaysia, some companies that previously offered such pension schemes and/or retirement lump sum payments are now trying to re-negotiate with their staff in lieu of the high annual maintenance costs involved or have dropped this scheme completely for new staff.

Instead, many Malaysian employers prefer to opt for an increase in employer’s contribution to the Employees Provident Fund (EPF) by a certain percentage (typically 3%-5%), which is above the minimal statutory requirement of 12% of the employees’ wages.

Instead of trying to manage their staff’s pension system, they are effectively outsourcing the management to another party and that brings us to the next model.

Provident fund model

The provident fund, better known as the EPF to Malaysians, has been in existence for many decades.

Like its peers in a number of developing countries in Asia, Africa and the Pacific, provident funds are inherently linked to employment and are obligatory for employers with more than a specified number of employees.

Characteristically, an employee makes continuous contributions at specified percentage rates of their wages and this is commonly supplemented by employer contributions.

In the past, the provident fund model itself is often not likened to a pension scheme but over the last few years, many provident funds now also offer a pension-like option as well as a lump sum option.

Similarly, our EPF offers such a scheme with the EPF Flexible Age 55 Withdrawal option to retirees.

The scheme is somewhat comparable to a pension model with a monthly withdrawal option alongside the choice of withdrawing all or a hybrid combination (a large sum and a fixed monthly payment), upon reaching one’s retirement age.

A recent report has indicated that the number of applicants who opted for this in the second quarter this year improved by 105.45% compared with the same quarter in 2008.

However, this is still overshadowed by those preferring large sum withdrawals with a ratio of 3:1.

Interestingly, governments are beginning to encourage more retirees to consider taking the monthly option as findings have shown that those who take out all their savings at once typically exhaust their monies entirely within a short duration.

In Malaysia’s case, a recent survey by EPF revealed that over 70% would exhaust their total contributions within three years of withdrawing a lump sum at the retirement age of 55. This is an alarming fact considering that many Malaysians now have a longer life expectancy.

Perhaps more worryingly, 90% of the 5.7 million active members of EPF have less than RM100,000 in their accounts.

One recently mooted model is a “private pension” scheme and this is the final model that we will be discussing tomorrow in the concluding part of our series.

The writer is executive director of KPMG Business Advisory Sdn Bhd.

Pension or Lump-Sum..it's the AMOUNT that MATTERS!

2009-08-28T09:08:00.003+08:00

Before you get over-excited about private pension funding, consider this: In essence, pension is a different way of distributing the same amount of money - perhaps just a slightly higher amount (since the balance of the drawdown is kept invested) - but that's just it.

Pension (private or public) doesn't make you financially free - in fact you have to survive with whatever they give you in your retirement. It's sort of a pre-determined salary when you're out of employment.

The key is to get your retirement fund to the highest amount at 55. Then, whether it's pension payment or lump sum payment, depends on your big bill management (pay off house/kid's education - a normal coincidence at retirement) and the balance is your retirement survival.

I've had the unique pleasure recently of calculating & assuring my client that his retirement is well taken care of. All factors considered. The smile on his face - priceless.

Wanna join him? Call me.

Pension models and the pitfalls

The first of a three-part series by KPMG on ‘A Penchant for Pensions?’ looks at various pension models around the world and outlines some of the pitfalls, especially during implementation

IF we mention “retirement planning” to the man in the street, we will probably draw wide-eyed blanks from them but mention the word “pension” and many will immediately think of public servants receiving their monthly income after retirement.

Not too long ago, civil servants who initially switched to an Employees Provident Fund (EPF) system were thankful to be allowed to revert to a pension scheme. Though we hear occasional complaints from the current batch of pensioners, many have now started to realise the benefits of the current public pension scheme.

Therefore, it was not too surprising when the EPF offered a scheme akin to a monthly pension where private sector contributors can opt for a regulated monthly withdrawal of their savings as opposed to a lump sum payout. Some studies have also shown that retirees who opted for lump sum payment often spent all of it in two to three years.

Pensions attracted more attention recently when the Government took a greater interest in this subject by commissioning a study about the implementation of a private pension scheme to cater for those who are self-employed.

We believe that the penchant for pensions is justified and that our government is rightfully concerned with the welfare of the ageing Malaysian public. If nothing is done and with spiraling medical and support costs for the elderly looming, Malaysia will soon be finding herself paying a hefty price of being a welfare state. It will also mean burdening the future generation with this colossal bill of supporting an ageing population.

Similarly in other countries, like in Britain and even our neighbour, Singapore, governments are fine-tuning pension schemes on an ongoing basis to cater for an expected larger group of senior citizens over the next few decades.

In the first of this three-part series on pension models, we will endeavour to look at the various pension models around the world and hopefully have a better overall view of the evolving “pension” trend and also some of the pitfalls, especially during implementation.

The public pension model

By and large, public pensions is the most common model in developed countries and predominantly exists to cater for the social insurance, social assistance and universal pensions for citizens who are no longer in employment.

The initial model envisioned was a generic welfare state that caters not just for the elderly but to any citizen with a need, typically the disabled, the sick, the impoverished and the unemployed. This model is workable provided that the economy (and the employed) is able to sustain the costs of maintaining this system.

Yet, as most countries have discovered, this model is no longer “workable” in the 21st century. With increasing life expectancy, declining birth rates, and rising health costs coupled with the recent economic downturn, the social and economic costs of maintaining this model are hampering its sustainability.

For instance, the Social Security concept in the US is starting to buckle under the strain of escalating expenditure. Funded by taxpayers, it currently takes up the largest chunk of government expenditure and yet it helps to keep about 40% of all Americans aged 65 or older out of poverty.

Increasingly, the solvency of the programme is being called into question, as it worsened with the fallout of the financial crisis that required the government to increase spending to boost its flagging economy in the midst of high unemployment.

Even in some countries with budget surpluses such as New Zealand, where monies are being rechanneled to support the welfare of its citizens, this cannot be expected to carry on endlessly.

Similarly in Malaysia, we cannot be relying on our current resources to subsidise the cost of living in this country. Once these resources are depleted, there will be a significant impact to the nation, especially when faced with a growing ageing population. The strain will be apparent in the public healthcare sector and also a ballooning government budget.

In the long run, this will no longer be tenable with Malaysia’s birth rate having declined to a new low of 2.2 per couple, according to a study by Universiti Putra Malaysia. The working population of today needs to be awakened to the reality that we can no longer rely on the Government (i.e. future taxpayers’ money) alone to provide a safety net for our old age.

Therefore, what are the alternative initiatives that the Government can pursue?

In the second part of the series, we will look into the alternative models such as the private pensions and provident funds and how these are employed successfully in certain countries.

l Part 2 will appear on Monday.

Updates from CIMB & Synergy Planners

2009-08-27T12:47:00.004+08:00

Dear investors and valued friends.

You would have noticed the market rally to it's current 1170ish position. We hope it will breach 1200 and stay there through to 2010. We hope.

Ears to the ground, the general feeling is that everyone just wants to MOVE ON and leave the recession behind us, after 2 or so depressive and sluggish years. Any break in the clouds will send the market bull running and investors have started shopping for a while already.

Is it too late to come in? In no way. We are nowhere close to the levels we were at. Sure, some diligent and obedient investors have recovered their losses in the last few months by following our advise, but by no means have we peaked.

One reason: MAXIS.

Estimated re-listing by December (MOF will probably fast track this) it exited the market at RM15 (?) and may re-list lower, and perhaps with more units. This will set the market off another run.

Don't wait. Get re-positioned and get re-invested already. If I don't call you, please forgive me and give me a call and ask for a review. Its part of the reason this email is going out to you; you matter and I want you to be informed.

The signs are all there already. US markets are recovering, Malaysia has lowered its GDP deficit, The Asian dragon is awakening. Don't be left behind.

GOING HOME

On a separate note, do you notice how resolute we are about getting home after work? I mean, when you consider that it sometimes rains, sometimes the traffic jams are crazy (especially 5-6pm during puasa month); whatever it is, 'if we gotta get home, we gotta get home'.

Guess what?

Whether markets are up or down, 'when you gotta retire, you gotta retire'; 'when your kid gets to college and 'when fees need to get paid, they need to get paid'. Whether it rains or theres jams, whether markets are up or down.

Introducing Total Financial Freedom, a smart way to plan your future - based on defined objectives. For Peace of Mind.

Here's an example : the green bars show the financially ok years after retirement (55-64) Age 65 onwards are not good for this person - he's gonna need some planning to make his retirement work.

We provide consultancy on Retirement Planning, Education Planning, Wealth Accumulation, Protection Planning and Estate Planning.

Covering Family Plans and Business Plans, we review your asset value (properties, shares, unit trusts, FDs, etc.) and liabilities coverage (insurance & medical plans) so that you are sufficiently (not over or under) prepared for your present and future financial goals.

The consultancy is free, the plan (of course) is not.

We have a simple-to-understand and comprehensive approach,

1) Assess current asset and liability standing

2) Determine your financial goals by ringgit value and time span

3) Ascertain your risk profile

4) Map out possible options to reach goals based on available resources

5) Decide on options and fill out the forms

6) Review periodically target vs actual.

Many who have seen this approach have applied it and are on the smart road to financial freedom. Peace of mind.

Call me if you'd like to join them.

Serving you,

Patrick Donald Archibald

Agency Manager

CIMB Wealth Advisors.

What price family life?

2009-08-09T11:51:00.000+08:00

What price family life?
Yap Mun Ching Updated: 10:02AM Thu, 06 Aug 2009

A FAVOURITE commercial directed by late filmmaker Yasmin Ahmad was aired in2006. The scene opens in a yard where four elderly women are sharing a mealand discussing their offspring. The first boasts of her successful lawyerdaughter and businessman son whose clients include Hongkong star Andy Lau.The second pooh-poohs this and tells of her London-based surgeon son whomakes £20,000 an operation. The third brags of her auditor son who makesRM450,000 a year. The happiest woman turns out to be the one whose sondrives an Iswara but loves his mother so much that he would not dream ofcelebrating the season without her.Yasmin’s clip cannot but make us think about our lives. What is the rightbalance between striving for wealth and living life? Can we do both withoutsacrificing some part of ourselves or abandoning our values?These are some of the questions that are being contemplated with much moreseriousness now that the recession has exposed the unreliability of a lifeplan based on chasing riches. Where I am in the City of London, bankers andtraders often earn six-figure annual salaries. But even in this financialNeverland, reality has begun to sink. More and more young professionals arefacing possible bankruptcy after living beyond their means.Life in the city often means regularly meeting for drinks, meals atexpensive restaurants and shopping at any hour of the work day. But as manyhave discovered, life catches up all the same. For some, it is a quietrequest by human resources not to return to work the next day. Last month, a24-year-old socialite trader who received such an order leapt to his deathfrom a rooftop restaurant.As if to reinforce this lesson of the recession, another discovery that Imade recently is the unhappy fact that all but two of my friends who work inthis city suffer from some form of stress-related illness. Back pains, jointaches, migraines, nausea – all of which defy treatment. As we try to discussthe triggers of their symptoms, we always come to the same conclusion: theyare aware that their work-life balances are skewed in the wrong directionsbut none feel able to change things."Why not?" I demand. "Because I may be the next one out," some answer. Thelucky ones feel too pressured by their dependence on their salaries, perksand the lifestyle that comes with the job. The less fortunate ones stressabout simply staying employed. The other things they have in common aretrips to counsellors and the occasional pill to keep the blood pressuredown.So perhaps Yasmin is right. Career isn’t everything, neither is money. Justbefore I left my last job a year ago, three colleagues pulled me aside for achat. "Remember, career is important but make sure you don’t forget to maketime to have a family," they tell me. Looks like I have to take themseriously after all.

Answer to question : Where's my EPF invested in?

2009-07-30T00:02:00.002+08:00

I got this from MalaysiaToday.net. I hope that after this, you'll be more resolute to invest your EPF with CIMB.
Patrick
SJPP - EPF To Foot Loan Defaults
Last Friday, I wrote an article titled 'SJPP; Another PKFZ In The Making' in which I belief that the taxpayers may have to eventually foot the bills of loan defaulters for loans guaranteed by SJPP. That may end up being a massive RM10 billion.And today, Malaysian Insider posted on their site the following from Reuters:EPF To Loan RM5bn to ProkhasKUALA LUMPUR, July 28 — A government agency which is administrating two schemes under the first economic stimulus package is in talks with the employees’ pension fund for a RM5 billion, a business daily said.
The Malaysian Reserve, citing an unidentifed source today, said the Employees’ Provident Fund (EPF) was ready to fund the loan at an undisclosed rate to Prokhas, the government-owned special purpose vehicle.
The source added that Prokhas was also looking at other financing options including government bonds, private debt securities or a term loan that may give more competitive rates.
Malaysia announced its first stimulus package of RM60 billion in March to shore up the export-reliant economy against the global economic crisis.
Prokhas manages two schemes under the package and was allocated 5 billion ringgit each, known as Working Capital Guarantee Scheme and the Industry Restructuring Loan Scheme, which is under the Ministry of Finance.
EPF’s talks with Prokhas may draw some criticism, as loans to government agencies and corporations have in the past been called bailouts for poorly performing local companies by critics and the resurgent opposition.
In 2008, the government said it would transfer RM5 billion from the EPF to state owned fundmanager Valuecap to be invested in undervalued Malaysian stocks. — Reuters
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Note:
Extracted from The Star (24 July 2009)
"... SJPP is managed by Prokhas Sdn Bhd and both are wholly-owned units of the Minister of Finance Inc."
At one read, this looks like a usual business deal for EPF. But let's digest this news a little.
First, EPF is being used as the source of fund again. Whenever the government needs money to bail out anyone, it is always EPF who forks out the money. I am not sure if preferential interest rate is charged - I hope not. But again, the government is using our money as though it is theirs. This BN government has never stop squanderring our tax money and EPF savings, and there is no end in sight.But that is nothing shocking in Malaysia. We are so used to it by now.What intrigues me is - isn't the guarantee scheme a guarantee? If it is a guarantee, wouldn't payment need to be made to the bank if and only if the bank has exhausted all means to recover the loan from the company who took the loan? Why is there a need for cash now?The article said that EPF is ready to 'fund the loan'. What loan? Aren't the banks the ones who are giving out the loans while SJPP stands as 80% guarantor? I don't understand. Or is it that the banks are not willing to extend the loans (and bear the 20% exposed risk) and as such the government is pumping the money into the banks only to be disbursed i.e. disguised as loans by the banks when in actual thruth it is EPF who loans the money to the distressed 'eligible' companies? Is someone trying to mask something here? This is fishy. RM5,000,000,000 of EPF money is at stake. A lot of rakyat's savings is going down the drain.And the balance of another RM5,000,000,000 will be funded via government bonds, private debt securities or a term loan. Hey this strengtens my above suspicions even further? Why need the entire RM10,000,000,000 ready in cold hard cash. SJPP is supposed to be a guarantor only. Are they that sceptical that the loanees will not even repay a single sen?Oi! Nothing seems to jive here. What is happening?Is this a RM10 billion handout? Fucking hell! Someone better come clean on this. These are the 3 directors of Prokhas Sdn. Bhd. (taken from SJPP's website). And they should know the truth.1. Y. Bhg. Dato' Puteh Rukiah Abdul Majid, Deputy Secretary General (System and Control) Ministry of Finance2. Y. Bhg. Datuk Latifah Datuk Abu Mansor, Deputy Secretary General (Policy) Ministry of Finance3. En. Fazlur Rahman Ebrahim, Managing Director of Prokhas Sdn. Bhd.

So..what do we do now?

2009-07-02T14:12:00.002+08:00

Dear eager investors and wide-eyed friends,

I just enjoyed a delicious roti canai at Letchumitrah Curry House (just near my house), i am also utilising their Wifi services and plug point. My Streamyx failed me (again!). But that's not what I wanted to share with you today.

Do you remember not so long ago how mamak/indian restaurants were run? BEFORE the aluminium food warmers/chairs? BEFORE the uniformed staff and organized menu and order taking? BEFORE the raking in of millions in revenue?

Get the point?

Change is good. There's always a point when a decision to change is made, and research is done and action is taken. That action will bring good results.

I just heard that a large local hypermarket chain in Malaysia is currently SPENDING RM60million for state-of-the-art IT system.....imagine that! RM60million by this local retailer just for IT! In a recession! Is it any wonder some people get richer while others watch....they make decisions and take action at the right season! Cheap sale season!
I'm sure the RM60million will buy them better value service and products as everyone wants their money, right? Whether it's RM60million or RM60,000, it's all money.

Get the point?

Market update: The market has run it's bull run from the March till now, it's corrected to 1030 range and now it's back to the 1070 range. While we are still in recession, the buy cheap option is still there. We can rest assured there's not gonna be a global meltdown, just a SLOW recovery.

As in all things, quit waiting to take action.
1. DO IT and DO IT NOW.
2. DO IT REGULARLY
3. DO IT FOR LONG TERM.

Procrastinating about a difficult decision is understandable. We’ve all experienced situations where problems lingered or opportunities passed us by because we waited, too long. The expression “let me sleep on it” can be a responsible approach to the decision-making process. But it can also be used as a convenient excuse for indecision.

“Procrastination is one of the most common and deadliest of diseases and its toll on success and happiness is heavy.”
Wayne Gretzky (1961- ), Canadian professional ice hockey player.

Your Wealth Advisor,

Patrick & Hazel Archibald

cf. Asian Investor

Myths and mistakes of investing
By Rita Raagas De Ramos, 4 June 2009

Read this article online at:
http://www.asianinvestor.net/article.aspx?CIID=146768

AMP Capital's Shane Oliver shares what he thinks are wrong assumptions that lead investors to make mistakes.
Many investors make use of the massive amount of information available about financial markets, assets, and products when making investment decisions. And because there are numerous possible sources of information, investors tend to make their own decisions based in large part on common sense and simple rules of thumb.

While this is reasonable, Shane Oliver, Sydney-based head of investment strategy and chief economist at AMP Capital Investors, points out why in many cases these can result in either investors missing opportunities or losing money.

In a recent report, Oliver highlights common myths and mistakes that investors make:

Shane Oliver

Myth #1: High unemployment will prevent an economic recovery.

This argument is wheeled out every time there is a recession, but if it were correct then economies would never recover from recession but simply spiral down, Oliver says. He notes that the impact of lower interest rates on lower mortgage bills, and subsequently, higher household discretionary income eventually offsets the fear of unemployment for the bulk of people still employed. It is normal for unemployment to keep rising during the initial phases of an economic recovery as businesses are slow to start employing again, he adds.

Myth #2: Business won't invest when capacity utilisation is low.

Capacity utilisation is low in a recession simply because spending -- including business investment -- is weak, Oliver says. So when demand turns up, profits improve and this drives a pick-up in business investment which in turn drives up capacity utilisation, he adds.

Myth #3: Corporate CEOs, being close to the ground, should provide a good guide to where the economy is going.

Senior business people are often overwhelmingly influenced by their own sales figures but have no particular lead on the future, Oliver says. He notes that in the latter stages of the recessions in the early 1980s and early 1990s, anecdotal comments from Australian CEOs were generally bearish just as recovery was about to take hold.

Myth #4: The economic cycle is suspended.

A common mistake investors make at business cycle extremes is to assume that the business cycle won't turn back the other way, Oliver says.

Myth #5: Crowd support for a particular investment indicates a sure thing.

This safety in numbers concept has its origin in crowd psychology. The only problem with it is that while it may work for a while it is usually doomed to failure, Oliver says. If everyone is bullish and has bought into the asset there is no one left to buy in the face of any more good news, but plenty of people who can sell if some bad news comes along, he notes.

Myth #6: Recent past returns are a guide to the future.

This is another classic mistake that investors make which is again clearly rooted in investor psychology. Reflecting the difficulty in processing information, short memories and wishful thinking, recent poor returns are assumed to continue and vice versa for strong returns. The problem with this is that combined with the safety in numbers myth, it results in investors getting into an investment at the wrong time when it is peaking and getting out of it at the wrong time when it is bottoming, Oliver says.

Myth #7: Strong economic growth and strong profit growth are good for stocks and poor economic growth and falling profits are bad.

This is generally true over the long term and at various points in the economic cycle, but at cyclical extremes it is usually very wrong, Oliver says. The big problem is that share markets are forward looking, so when economic data is really strong -- measured by strong economic growth, low unemployment -- the market has already factored it in, he notes.

Myth #8: Strong demand for a particular product produced by a stock market sector should see stocks in the sector do well and vice versa.

While this might work over the long-term and for a while it suffers from the cyclical nature of demand, Oliver says.

Myth #9: Budget deficits drive higher bond yields.

The logic behind this is simple supply and demand. If the government is borrowing more (higher budget deficits) then this should push up interest rates (the cost of debt) and vice versa. But Oliver says it often doesn't turn out this way because periods of rising budget deficits are usually associated with recession and thus, weak private sector borrowing and falling inflation and interest rates so that bond yields actually fall not rise.

Myth #10: Having a well diversified portfolio means that an investor is free to take on more risk.

A common strategy has been to build up more diverse portfolios of investments less dependent on equities and with greater exposure to alternatives such as hedge funds, commodities, direct property, credit, infrastructure, or timber. This generally led to a reduced exposure to truly defensive asset classes like government bonds. So in effect, Oliver notes, investors have actually been taking on more risk helped by the comfort provided by greater diversification.

Myth #11: Tax should be the key driver of investment decisions.

There is no point negatively gearing into an investment so as to get a tax refund if it always makes a loss, Oliver says.

Myth #12: Experts can tell you where the market is going.

Economic and investment forecasts are often seen as central to investing, but sometimes they are badly flawed, Oliver says. Forecasts for economic and investment indicators are useful, but need to be treated with care, he adds.

"The myths might appear logical and consistent with common sense, but they all suffer often fatal flaws which can lead investors into making the wrong decisions," Oliver says. "The trick to successful investing is to recognise that markets and economies are highly complex, that they don't go in the same direction indefinitely, that markets are usually forward looking and that avoiding crowds is healthy."

2009-05-11T11:23:00.002+08:00

Dear profiting investors and sideline friends,

(By now some of you might be wondering why my greetings sound like they do, it's because my blog is read by my clients and my non-investing friends - remaining at the sidelines)...so there.

It's not always that I precede the highly awarded Mark Mobius with the same advise;....but it happened. Read the last few lines of the article at the bottom of the page.

There's still time to invest now as the levels have not come close to the 1400 CI benchmark it was before. For current investors, you can still average down now; if you're on the EPF track and your eligibility is not up yet, you should start a cash savings plan NOW.

Doctor: Take two Panadols and call me in the morning (even medication needs TIME to work).

Me (Your Wealth Advisor) : Invest More Now and we'll review in a year's time.

By the way, we are offering a FREE Review of your Insurance & Medical Plans for your whole family. Most of you have your policies stashed somewhere and may not know who much & under what cirsumstances you are covered.

Let us help you sort that out.

Will writing? Estate Planning? We also do for you.

Your friendly neighbourhood Wealth Advisor,

Patrick Archibald

012 377 1848

Bull run ‘breakout’ at year end
SINGAPORE, May 11 — Templeton Asset Management’s veteran fund manager Mark Mobius is so bullish on emerging markets that he thinks the recent dramatic stock market surge is barely the beginning.
He believes the “breakout” for emerging market stocks has not yet happened.
The money manager said the bull run could start in earnest at the end of this year and could even breach the highs that were seen about two years ago. “It could go higher than (in) 2007, as we’re now in a different era. A lot of companies are much stronger, with stronger balance sheets,” he said in a recent interview.
Mobius’ confidence comes as many market analysts are urging investors to be careful as the current rally may be a false dawn. For example, economist Andy Xie has cautioned that this is a bear market bounce that will end in tears.
But why the bearish outlook?
Mobius, who in 2006 was named one of the Top 100 Most Powerful and Influential People by Asiamoney magazine, explained: ‘Because they lost so much money in the downfall, they are very bearish. They said “never again”.
“You’ll find all kinds of doom scenarios out there. Some will say it’ll get worst and that the markets will go down further, while others say that there’ll be a depression greater than (in) the 1930s.”
Mobius, who is bullish on commodities as well as companies that cater to emerging market consumers, thinks this economic downturn is “not as bad” as the Great Depression of the 1930s in the US.
“During the Great Depression, there were no guarantees on bank deposits...People had bank deposits and they didn’t get one cent back. And there was no social security system,” he said.
Mobius said China’s rapid growth would spur demand for consumer goods, and Chinese consumers, in spite of their high propensity to save, would continue to spend.
“Their savings rate is high, but per capita income is going up, so they are able to devote a high proportion to not only saving but also spending,’ he added.
“The Chinese government is also subsidising purchases, giving rebates, and that should drive more consumption.”
Reiterating what he told investors earlier this year, he said: “We’re building a base for the next bull market.”
But Mobius cautions investors not to put all their money into the markets right away, but to dollar cost average (invest regularly with small amounts) over, say, a year.
“You’ll have the jagged movement up and down...and lots of volatility. Until all the bears are out and confidence has returned, then you’ll see a breakout. When that happens, it’s anyone’s guess, but we’re looking at the end of this year, possibly,” he said. — The Straits Times

Late Retirees Die Sooner - says survey

2009-05-06T11:24:00.006+08:00

Here's an interesting survey.

I hope (for your sake) that after reading this, you are decisive in planning your retirement.

For those of you who have seriously looked into it : i know who you are and I heartily congratulate you. You are disciplined, prepared and don't take what God has blessed you with for granted.

My advise to those of other schools of thought: don't leave it to chance or fate or (worst excuse for not planning) God. After all, God helps those who help themselves.

A bit heavy, but it's heavy with concern for you also.

Optimum Strategies for Creativity and Longevity

By Sing Lin, Ph.D. 林星雄博士

Member of National Council of Chinese Institute of Engineers – USA/Greater New York Chapter, and Member of Board of Director of National Taiwan University Alumni Association – Greater New York
March 2002

1. Most Creative Years in the Life

The Nobel Laureate, Dr. Leo Esaki, delivered the distinguished lecture entitled "Innovation and Evolution: Reflections on a Life in Research" in the University of Texas at Dallas in the afternoon of Feb. 23, 2002 during the 2002 US National Engineering Week. In this lecture, Dr. Esaki indicated that most of the great discoveries and innovations by the Nobel Laureates occurred at the average age of 32 even though the Nobel prizes were awarded 10 or 20 years afterwards. Furthermore, Dr. Esaki indicated that the peak creativity of most scientists occurred around the age range of 20 to 30 years. As one gets older, the experience increases but the creativity decreases steadily with the age.

It is, therefore, very important to stimulate, encourage and cultivate many young people to get interested in science and engineering at their young age and to provide the optimal R&D environment for these very powerful young scientists and engineers to unleash their very strong creativities during their most precious and creative years around the age of 32.

2. Longevity Vs. Retirement Age

The pension funds in many large corporations (e.g., Boeing, Lockheed Martin, AT&T, Lucent Technologies, etc.) have been “Over Funded” because many “late retirees” who keep-on working into their old age and retire late after the age of 65 tend to die within two years after their retirements. In other words, many of these late retirees do not live long enough to collect all their fair shares of pension money such that they leave a lot of extra-unused money in the pension funds resulting in the over-funded pension funds.

Dr. Ephrem (Siao Chung) Cheng provided the important results in the following Table 1 and the associated chart from an actuarial study of life span vs. age at retirement. The study was based on the number of pension checks sent to retirees of Boeing Aerospace.

Table 1 and the chart indicate that for people retired at the age of 50, their average life span is 86; whereas for people retired at the age of 65, their average life span is only 66.8. An important conclusion from this study is that for every year one works beyond age 55, one loses 2 years of life span on average.

The Boeing experience is that employees retiring at age of 65 receive pension checks for only 18 months, on average, prior to death. Similarly, the Lockheed experience is that employees retiring at age of 65 receive pension checks for only 17 months, on average, prior to death. Dr. David T. Chai indicated that the Bell Labs experience is similar to those of Boeing and Lockheed based on the casual observation from the Newsletters of Bell Lab retirees. A retiree from Ford Motor told Dr. Paul Tien-Lin Ho that the experience from Ford Motor is also similar to those in Boeing and Lockheed.

The statistics shown in the Pre-Retirement Seminar in Telcordia (Bellcore) indicates that the average age that Telcordia (Bellcore) employees start retirement is 57. Therefore, people who retire at the age of 65 or older are minority as compared to the number of early retirees.

The hard-working late retirees probably put too much stress on their aging body-and-mind such that they are so stressed out to develop various serious health problems that forced them to quit and retire. With such long-term stress-induced serious health problems, they die within two years after they quit and retire.

On the other hand, people who take early retirements at the age of 55 tend to live long and well into their 80s and beyond. These earlier retirees probably are either wealthier or more able to plan and manage their various aspects of their life, health and career well such that they can afford to retire early and comfortably.

These early retirees are not really idling after their early retirements to get old. They still continue doing some work. But they do the work on the part-time basis at a more leisure pace so that they do not get too stressed out. Furthermore, they have the luxury to pick and chose the types of part-time work of real interest to them so that they can enjoy and love doing that “fun” work at a more leisure pace.

The late retirees are small in number, tend to die quickly after retirement and disappear from the population of old people beyond the age of 70. Late retirees, therefore, have very little weight on the statistical average life expectancy of the population of “old people” dominated by the early retirees.

Several years ago, a Japanese friend of mine told me that most Japanese people retire at the age of 60 or earlier. This may be one of the factors contributing to the long average life span of Japanese people.

3. Changing Trend of US Pension Plans

The traditional pension plans of many major US companies used to place a lot of value on the experience of long-term older employees by increasing the pension money rapidly and nonlinearly for long-term employees as their age + service year increases beyond the threshold of the rule of 75. Most long-term employees cross this critical threshold at about the age of 55. On the other hand, the early retirees incur very heavy penalty in pension and in other associated retiree benefits (e.g., employer paid medical insurance, employer paid life insurance, death benefits for family, etc.) when they retire before they meet the rule of 75.

However, in recent few years, many large US corporations are switching from their traditional retirement pension plans to the new portable Cash Balance Plans. The new portable cash balance plans are much more favorable to the younger employees but are very unfavorable to the long-term older employees. Some older long-term employees found that when their employers switched from the traditional pension plans to the cash balance plan, their pensions were reduced by 30% to 50%.

One of the implications of this trend towards the new cash balance plan is that the US corporations are now placing more value on the higher creativity and adaptability of younger employees and less value on the experience of the older employees. This is consistent with the accelerating pace of innovations and technology advances. The creative and dynamic younger employees are better positioned, than the older employees do, to keep up with the faster pace of technology advances.

4. Conclusion and Recommendations

The most precious, creative and innovative period in your life is the 10-year period around the age of 32. Plan your career path to use this precious 10-year period wisely and effectively to produce your greatest achievements in your life.

The pace of innovations and technology advances is getting faster and faster and is forcing everybody to compete fiercely at the Internet speed on the information super-highways. The highly productive and highly efficient workplace in USA is a pressure-cooker and a high-speed battleground for highly creative and dynamic young people to compete and to flourish.

However, when you get older, you should plan your career path and financial matter so that you can retire comfortably at the age of 55 or earlier to enjoy your long, happy and leisure retirement life into your golden age of 80s and beyond. In retirement, you can still enjoy some fun work of great interest to you and of great values to the society and the community, but at a part-time leisure pace on your own term.

On the other hand, if you are not able to get out of the pressure-cooker or the high-speed battleground at the age of 55 and “have” to keep on working very hard until the age of 65 or older before your retirement, then you probably will die within 18 months of retirement. By working very hard in the pressure cooker for 10 more years beyond the age of 55, you give up at least 20 years of your life span on average.

Power of Numbers FREE Workshop - Sat 2-5pm Dsara Perdana

2009-04-27T15:48:00.004+08:00

I've gotten some tickets for the above session which I am GIVING to my dear investors and values friends, kindly call me for a seat (or more).

POWER of NUMBERS -The 1st of its kind. Never before revealed.
FIRST COME FIRST SERVE!

Dr Oliver Tan will personally teach you the newly discovered method of calculation, just by taking your Date & Month of Birth, to help you realise your true self, discover your hidden potential and understand yourself better and that of your loved ones. You will be amazed with this ‘NEVER BEFORE REVEALED’ Metaphysics science.

Dr Oliver says : This is NOT fortune telling. It’s all about the SCIENCE OF NUMBERS.

While I may not necessarily agree with Dr Oliver, I think that some of you may find his session interesting. So do call me 012 3771848 for a complimentary seat. FYI in Singapore he charges S$100 per seat for his seminars.

Winners of 850s - Do Your Homework, or Follow Your Advisor...

2009-04-25T08:02:00.005+08:00

Yesterday a reporter replied to our blog entry 'Who to believe'. He said the reason there was conflicting reports on the ASM response from Star and NST was that the Star reporter covered the bank scene in SS2 which was hot while the NST reporter covered the quiet PNB HQ at Jln Tun Razak...since the response was different at both locations, hence the opposite reports.

He said they should have simply gone to more places to get a more balanced and accurate reading.

It just goes to show how taking one point of view can color the entire reality of some people. The winners are those who 'do the homework' and get several opinions of the situation. Then they would get the big and true picture. Then they would know how to respond.

Get advise from a professional. A full-time professional.

We engage Mr Dass' firm, a tax consultancy, to do our tax classification and submission every year without fail. Why do we bother paying for a service which we can do personally over the Internet? Our tax submission is smaller than some family submissions I've seen, claiming for this and that from all the kid's expenses and grandmother's medical bill etc.

What we benefit from is the advise from Mr Dass every year on how best to maximise our tax submissions in our tax bracket. He is in the best position to advise us on this. We do our homework by finding out from our industry (our peers and from reports) and we discuss it with him, but we trust his input and heed his recommendations. We also recommend his firm to our clients as we are confident of his services. We know he has our interests at heart.

Another example: When we are ill, some of us tend to do the 'Rambo' thing first: drink lots of water and 'Body, heal thyself'. If that fails, then we go to the pharmacy and ask for drugs. Then when the problem persists, we are forced to the clinic to see the DOCTOR or, worse still, the HOSPITAL.

Wouldn't it be better to save time and pain by getting a FAMILY DOCTOR in the first place? One who has your whole family's medical history and has your family health at heart? And then you can just get on with life?

Anyway, the reason for this entry is to acknowledge the winners....yes, you who continued to enter the market while it was in the 850s just a few months ago. Especially those who entered it with larger investments. We don't know if it's gonna reach those levels again, as we see the CI pushing 1000 around the corner. Most of the funds have staged a recovery from the losses of the last 6 months, though it's not fully recovered.

IT IS STILL TIME TO AVERAGE YOUR COST! As long as your fund is in the red, YOU CAN STILL BUY CHEAP NOW and improve your portfolio cost price.

Who to believe?

2009-04-22T14:36:00.002+08:00

Which do you believe?

Today's Star :
Investors in rush to snap up ASM shares : http://thestar.com.my/news/story.asp?file=/2009/4/22/nation/3745498&sec=nation

or

Today's NST :
Quiet opening at ASM sale : http://www.nst.com.my/Current_News/NST/Wednesday/National/2537694/Article/index_html

Both cover the same story, same event....2 opposing spins. Opposing, not even different! Look at the choice of words.

It goes to show how important it is for us to be thinking as we read and not blindly accepting what's given to us.

Patrick

2009-04-22T11:58:00.002+08:00

Dear committed investors and economized friends,

There is a shift in market sentiment that has warranted a review. It seems that there is a possible upswing sooner than expected (initially thought of to be end of the year). With an influx of ‘hot money’ into our market, the KLCI has moved up over 20points and is stabilizing at 960 range since Najib took over as Prime Minister and announced the new Cabinet. This may have given some sense of political stability and attracted FDIs to Malaysian shores. Also contributing is the strong China consumption, lowering unemployment rate and the strong global push for recovery.

After conversations with our fund managers and some remisier friends, there is a PROBABLE YES to the worst being behind us (though I’d still keep some conservativity in my portfolios) and TIME TO TAKE POSITION for an upswing of close to 1000 points (there is remote possibility of 1050). Also downward risk of 920

So the 2 golden questions are : How much higher and until when?
Answer: The estimated run-up with the capital influx indicates a potential between 5-10% for the next 6 months which will translate to equivalent in growth in your portfolio.
(Will there be a big drop after this? There's no crystal ball prediction - but there are trillions of dollars flooding the market in stimulus plans, and billions of people desperate to move on from the recession, coupled with a VERY HUNGRY CHINA, so what do you think?)

Considering this latest development, here’s our recommendation:
(pardon some directness on my part, as it may be required to make a point)

1) For those who have preserved their portfolio in MMF (to prevent a further slide), it’s time to come out of the shade into the sun with PART of your portfolio. 3% is chargable.
SWITCH part of your MMF into Large Cap Equity funds (PCF, DALI, DALI Theme).
REASON: to start RECOVERING last year’s drop in value.

2) For those who’ve been holding out – WAITING FOR THE CHEAP SALE, YOU MAY HAVE MISSED IT. DELAYING FURTHER MAY POTENTIALLY CAUSE YOU TO NOT RECOVER AT ALL IN THIS RECESSION.

Why the seriousness? 2008 has wiped out a large part of equities and waiting alone will take longer for you to recover.

Note that all funds have recovered by 10 – 20%, ie you can see that your 40% losses from early this year has reduced to just -30% or -20%. Please average down on your cost price otherwise it will take longer to recover.
INVEST MORE SIGNAL WITH YOUR EPF & CASH
REASON: Dollar cost averaging effect is reducing

3) For those who want GUARANTEE and CERTAINTY, and rather not look at either the above recommendations – here are 4 options you can consider:

Option 1: CIMB Guaranteed Returns – Income & Savings Plan (available till end Apr 09)

Plan 1: Save for 8 years, earn Guaranteed 5% of SUM ASSURED till you are 88yrs old. (Free insurance & TPD included)
Tip: Buy for your child and get maximum tenure!

Plan 2: Save for 10 years, earn Guaranteed 4% of SUM ASSURED till you are 88yrs old (Free insurance & TPD included)
Tip: Buy for your child and get maximum tenure!

Plan 3: Save for 15 years, earn Guaranteed 5.5% of SUM ASSURED till you are 88yrs old (Free insurance & TPD included)
Tip: Buy for your child and get maximum tenure!

Option 2: CIMB Principal China Recovery Structured Fund
Investment Objective :
Aims to provide investors with regular income over the tenure of the Fund linked to the performance of China equities.
Asset Allocation:
At least 95% in the China Recovery Structure to be issued by CIMB Bank Berhad; Up to 5% in liquid assets for liquidity purposes
Benchmark:
CIMB Bank 1-year Fixed Deposit Rate
Structure:
(5)-year China Recovery Structured Product (“China Recovery Structure”) issued by CIMB Bank Berhad
•The Fund will consist of two (2) components –money market instruments and OTC options.
•The Fund will receive potential annual dividend payments linked to the performance of China equities as represented by the CIMB Isovol China Index

Investment Period : 5 years
Application Fee: 1.50%
Initial Offer Price Per Unit : RM0.5000
Application Fee: 1.50%
Distribution Policy : Annual
Trustee Fee : 0.08%
Withdrawal Fee : NIL
Management Fee : NIL
Minimum Investment : RM10,000
Offer Period : 45 calendar days

Invests in:
China Construction Bank
China Life Insurance Co
Industrial & Commercial Bank Of China
Petrochina Co Ltd
Bank Of China Ltd
Bank Of Communications Co
China Petroleum & Chemical
China Shenhua Energy Co
Ping An Insurance Group Co
China Telecom Corp Ltd

Option 3: Sukuk Simpanan Rakyat 2009
The sukuk, which will be scriptless and based on Shariah principles, is an additional investment instrument for Malaysian citizens who are 21 years and above. The RM2.5 billion sukuk, which has a 3-year tenure, offers a return of 5% per annum and provides the flexibility for early redemption before the maturity date.
Option 4: ASM/ASW2020
Categorised as an equity fund for investors looking for income.
Capital protected with buying and selling price of units fixed at RM1.00 per unit.
The fund invests 95% of its value in equities and another 5% in other capital market instruments and liquid assets. Examples are stocks, debentures, units of unit trust fund, deposits at call with financial institutions, bankers’ acceptances, negotiable certificate of deposits.
The strategy employed by the fund managers are such that it will preserve the capital of the fund for the long term.
The fund’s financial year end is on March 31 of every year.
Standing instructions can be incorporated with ASM.
No sales charges are charged but the deed does allow a sales charge of up to a maximum of 10% of the NAV per unit of the fund.

CAUTION: The biggest mistake and most often committed in investments is not in making a wrong decision, but in not making any decision and staying idle.

…….you can call me now. 012 377 1848.

Use Your Head and Not Your Heart

2009-04-19T16:45:00.005+08:00

RED ALERT! - INVEST MORE SIGNAL!

Especially for many who have been waiting. Why? Cos' most of your average cost are still higher than the current prices.

Remember buy low and sell high - can only happen if your average cost is lower than your selling price. So what are you waiting for - call Pat (012-3771848) or Hazel (012-3251848) today to set an appointment soon.

Enjoy reading the article below... may help you take action NOW.

Have a fantastic and blessed day,
Hazel Ong-Archibald
(all the way from Miri - at least till Tues night)

Use wisdom of psychology to counter irrationality
COMMENTBy TAY HAN CHONG

COMMON sense need not be common practice. I picked up this phrase from a fellow speaker at a recent seminar and I am in total agreement. In all aspects of life, even in personal finance and investing, one may be expected to be at least reasonably rational. But in reality, it is seldom so.

If there are different opportunities to make the same amount of profit, we should expect investors to be indifferent as to which opportunity they opt for. The reverse should also hold true for potential losses.

Logical? Not quite. In fact, where money is concerned, sometimes an investor actually prefers an option that gives a slightly lower expected profit! For this seemingly ironical analysis, I tap on the wisdom of Nobel laureate Daniel Kahneman, a professor of psychology.

Let me illustrate with a game, starting with Round 1:
·Door A – 100% chance of winning RM800
·Door B – 80% chance of winning RM1,000

Which door would you choose? Mathematically, there should be no difference as the expected gains in both cases are identical – RM800. So if we test a large group of people, we should have roughly the same number of people choosing Door A and Door B.

Funnily, that doesn’t quite happen. When I test this in seminars, invariably about 80% or more choose Door A! Even when I up the prize of Door B by 10%, more people still choose Door A. This reflects a preference for certainty despite Door B being a superior option when the prize is increased. Rationality fails.

Let’s reverse the game and consider losses instead, in Round 2:
·Door C – 100% chance of losing RM800
·Door D – 80% chance of losing RM1,000

Again, the mathematical results are the same behind both doors, that is, the expected loss is RM800. You probably guessed it, most people (in fact, almost 100%) choose Door D. When faced with the certainly of losing, it is in our nature to bet on a chance of not losing any money at all.

People are loss-averse.
In a nutshell, people are not as rational as we expected. I would not be so audacious as to call everybody irrational, but certainly we are not always rational because of our emotions. The heart can and does confuse the head!

Let’s push the boundary a bit more, in Round 3:
·Door E – 100% chance of winning RM1
·Door F – 0.1% chance of winning RM900

When the prize money is reduced to a relatively “insignificant” amount that does not matter to most people, the results are actually reversed from those of Round 1! In Round 3, more choose Door F! A rational investor should actually choose Door E as the expected returns of Door E is RM1, while the expected returns on Door F is only 90 sen. Most people preferred the “inferior” option!

This explains why even conservative investors would bet on lottery or gamble regularly, despite knowing that the odds are against them.

In application, it is very tough to make rational choices because we have to fight strong emotions such as fear and greed, and love and hatred. When it comes to your hard-earned money, how can you remove all emotional factors?

I suggest fighting emotions with emotions. If you start to hate equities, I would prescribe some love. If you start to fear investing, I would recommend some greed.

Here’s my approach. How would you like to be able to play golf, go fishing and play with your kids or grandchildren every day for the next three to five years without any worries? A lot of love is generated with that imagery.

And how much would you “pay” and invest for a chance to realise this love? You must be prepared to completely forgo this pot of money. According to Kahneman, you probably would not worry if the amount is not more than 10% of your total wealth.

So what if this investment goes off tangent? There’s still the 90% or the bulk of your wealth. To

him, this amount of money is not as affected by your emotions and can be more rationally invested.

Without the emotions, the rational choice is more optimal.

The psychology professor argues that if a person is worth (including all assets) RM1mil, then he can set aside RM100,000 (and forget about it for three to five years!).

For that RM100,000, or whatever that 10% amounts to, here is some advice on investing:

(1) Choose a high-risk market in which you have long-term confidence. It can be the Malaysian stock market, China, oil, properties or whatever. Of course, this is subject to your own risk profile, as some people are so conservative that they are not suitable for investing in any high-risk markets.

(2) Take this 10%, either through a lump sum or over a period of months, and invest in the chosen market, without any further thoughts or feelings.

(3) Don’t worry, go and play golf, until three to five years later. This also means that you do not check your statements.

A caveat though. I am not suggesting timing the market, or that three to five years is what it takes for markets to recover. However, I believe in learning from the wisdom of such an eminent scholar to prescribe practical pointers.

Our “destructive” emotions can often prevent us from choosing a superior investment option. It can inhibit us from looking beyond today to weed out short-term shocks. So we must counter such emotions with emotions to hopefully arrive at a more rational approach to investing that is superior in the long run.

·Tay is senior vice-president and senior head of UOB’s personal financial services division

2009-04-10T12:17:00.002+08:00

Dear beloved investors and jittery friends,

This Friday morning as I sip my coffee and eat some Hot Cross Buns from last night’s Maundy Thursday’s Mass, I thought I’d debunk 2 arguments about EPF investment.

1.“I’ll keep my money in EPF until the RIGHT TIME TO INVEST”

The phrase ‘right time to invest’ is an oxymoron, to begin with. There is NO right time to invest, just like there is no such thing as unicorns. It’s a fairy tale we tell ourselves.

The statement also has a wrong assumption. Fact is, EPF doesn’t allow you to take out as much as you want, when you want it. There’s a strict guideline to follow.

WITH EACH PASSING DAY, YOUR EPF ELIGIBILITY to INVEST YOUR EPF REDUCES.

This is because it’s age based. EPF guidelines encourage younger people to invest and older people not to.

So the best solution to grow your EPF is to do the following:

1) USE YOUR FULL ELIGIBILITY EVERY 3 MONTHS

2) PARK IT IN A MONEY MARKET FUND – this fund functions like Fixed Deposit and is meant as a temporary place. Your money earns a little here.

3) SWITCH INTO EQUITIES AS THE OPPORTUNE TIME COMES. When is this? WHENEVER YOUR AVERAGE COST of the fund IS HIGHER THAN THE MARKET PRICE (NAV) of the fund. This is the truly RIGHT TIME TO INVEST. J

Therefore the wise investor KEEPS HIS EYES FIXED on his portfolio, looking to reduce his average cost, while the foolish investor is ONLY LOOKING at the MARKET.

The MOST WISE of INVESTORS will call me now and invest, of course. J (just thought I’d slip that in……the coffee is working)

2.‘EPF is paying me dividend on the balance. So my money is earning anytime it’s in EPF’

Dividends are calculated for the opening balance on 1st Jan every year and for monthly contributions only.

You don’t earn anything for keeping all your savings in EPF throughout the year.

Shocker? Believe it. See the EPF website part I’ve copied out for you at the end of this posting.

So………..the Best strategy to apply:
1) Make sure you have maximum amount in EPF on Jan 1 every year
2) Start withdrawing on Jan 2 for investment throughout the year
3) Push it all back into EPF before 31 Dec

The only thing wrong with this picture is: there’s no investment worth going into (with consideration to RISK involved) that lasts less than 1 year.
The counter offer to this wrong is that : over 5-10year period, investments done properly in unit trusts have outperformed EPF TREMENDOUSLY.

What is the desired result?
AT YOUR 55th BIRTHDAY, YOU WILL HAVE A MUCH BIGGER CHECK FROM YOUR UNIT TRUST COMPANY THAN FROM EPF.

Copied from the official EPF website : www.kwsp.gov.my (highlighted parts are for your attention)

Dividend
Your EPF savings are your long-term savings for retirement. The EPF ensures that the savings are secure and earn reasonable dividends. To achieve this, EPF invests your savings to obtain optimum returns. The returns on investments will be appropriated to you in the form of dividends, which are derived from the net income of the EPF

Dividends on Current Contribution
The dividends given to you are:
• Dividend On Opening Balance
This dividend is calculated based on the opening balance of your savings as at 1 January of the year. The formula used is:

Opening Balance x Dividend Rate = XXX
OB x DR = XXX
• Dividend On Monthly Contributions
This dividend is credited to your account based on the monthly contributions received for the year. The formula used is:
Monthly Contribution x Dividend Rate x Period = Dividend
MC x DR x [(12 - CM) / 12] = Dividend
OB = Opening Balance
MC = Monthly Contribution
DR = Dividend Rate
Period = [(12 - CM) / 12]
CM = Contribution Month
Example:
Assumed Dividend Rate = 4.25%
Balance of the savings at 1 January = RM1,000.00
Monthly contributions received every month = RM100.00

Dividend Calculation
Opening Balance RM 1,000.00 x 4.25% x 12/12 =RM42.50
January RM 100 x 4.25% x 11/12 = RM 3.90
February RM 100 x 4.25% x 10/12 = RM 3.54
March RM 100 x 4.25% x 9/12 = RM 3.19
April RM 100 x 4.25% x 8/12 = RM 2.83
May RM 100 x 4.25% x 7/12 = RM 2.48
June RM 100 x 4.25% x 6/12 = RM 2.13
July RM 100 x 4.25% x 5/12 = RM 1.77
August RM 100 x 4.25% x 4/12 = RM 1.42
September RM 100 x 4.25% x 3/12 = RM 1.06
October RM 100 x 4.25% x 2/12 = RM 0.71
November RM 100 x 4.25% x 1/12 = RM 0.35
December RM 100 x 4.25% x 0/12 = RM 0.00
Total Monthly Dividend = RM23.38
Assumed Annual Dividend Rate of 4.25% A Year = RM65.88

At your service,

PATRICK ARCHIBALD
Wealth Advisor - Synergy Planners
CIMB Wealth Advisors

Mobile : 012 377 1848
Office : 03-7725 6788
Fax : 03-5192 9137
Email : synergyhaven@myjaring.net

Visit us at http://synergyplanners.blogspot.com

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An interesting perspective on your EPF 4.5% dividend

2009-03-18T16:08:00.003+08:00

After reading this, call 012 377 1848 to arrange an appointment with me to save your EPF.

This commentary from stocktube.blogspot.com does make for food for thought for your retirement future.

After all, if you don't take charge of your future, someone else will. :) Valuecap perhaps? :)

EPF’s 4.5% Dividend – Your Cheese Eaten by ValueCap?

Nobody likes to hear that their hard-earned money “invested” in EPF is earning pathetic dividend. I mentioned the word invested because your money was “forced” out from your pocket before you can even smell the aroma of the money and both of you (money and you) were cruelly separated on the same day you received your pay-slip. It’s another way to say that your money is working for you (does that make you feel better?) so that when you retire you won’t die a hungry ghost *really?*. And EPF is your custodian because it was deemed that all of you do not have the discipline in saving, let alone the knowledge to grow your money. So it was fair that the caring EPF took the huge burden of this responsibility. And we should be grateful to EPF because they know best on how to invest your money *grin*.

And so the EPF was performing exceptionally well from 1950s to 1980s - the highest dividend ever declared was 8.50% in the golden period of 1983 till 1987. Thereafter the dividend yield has been plunging from the roof. In fact the great era of dividend was fast losing its shine after the 1993 Super Bull-Run. We may never experience the 1993 Super Bull-Run again in many decades to come. Heck, the country has never recovered to the pre-1997 Asia Economic Crisis even until today and we’re already entering the recession again of which our politicians were saying otherwise. Did you notice how the Second Finance Minister Nor Yakcop panicked when asked by reporter about the rumor that EPF was about to declare dividend of only 4.5%? He was almost speechless and was mumbling directionless.

The Employees’ Provident Fund (EPF) Board declared a 4.5% dividend for 2008 yesterday for its members, lower than 5.8% declared in 2007. That’s 1.3% lower (than 2007) or 22.41% decrease year-on-year. As usual the blame was on the global economic crisis. However the fact remains that EPF recorded the highest ever earnings of RM20 billion in “gross income” for 2008, an increase of 9.36% over the previous year's gross income of RM18.29 billion. But the “net income” (surprisingly) for 2008 was RM14.26 billion, a decrease of 15.47% over 2007 net income of RM16.87 billion. It’s here where EPF needs to explain – why the 15.47% decrease in net profit despite the 9.36% increase in gross profit? The EPF earned RM6.67 billion from equities in 2008 compared to RM5.37 billion in 2007 so the blame cannot be on stocks investment. So which part of the overall investment portfolios went wrong?

Gross income: 2007 = RM18.29 billion ; 2008 = RM20 billion (9.36% increase)
Net income: 2007 = RM16.87 billion ; 2008 should be = RM18.45 billion(9.36%)?
But now 2008’s net income = RM14.26 billion, short of RM4.2 billion?

The above is of course the dummy way of deriving where the money has gone. Assuming the cost of doing business is the same the above average-Joes calculation reveals more than RM4 billion has disappeared into the thin air. If not what expenses or losses equal to this amount has EPF incurred? This is not RM4 million or RM40 million but a whopping RM4.2 billion we’re talking about here. EPF acknowledged that it was doing fine up until September last year but not thereafter. Could that same amount of money loaned to Valuecap Sdn Bhd (RM5 billion),coincidently occurred at the same period of time, was written off from the accounting book hence the EPF members are getting only 4.5% dividend?

In short, can we assume that the 12 million members’ “dividend money” was used for Valuecap’s so-called equity investment programme? Can the members’ hard-earned money loaned to Valuecap be returned to the rightful owners thereafter then, together with interest of course *boy, I am stupid for asking such question*? You can’t simply take away contributors’ money, presume everything is in order, everyone will forget about it after some grumbling and blame it on global financial meltdown, can you? For God’s sake, we need to have some transparencies here because the money is our only retirement fund. No matter where the money has been siphoned to (if any), EPF contributors are still the victims (or rather suckers) ultimately. Let’s hope the EPF’s total investment funds of over RM342 billion (as at Dec 31, 2008) still exists and this is not another big-time Ponzi-scheme *grin*.

Equities the way to go, investors told

2009-03-18T15:51:00.002+08:00

Equities the way to go, investors told

By Laalitha Hunt

The Star, 18 March 2009

Investors can expect double digit returns on an annualised basis over the next three to five years by increasing their exposure to equities now, said CIMB Private Banking co-head Alan Inn.

Investors should gradually shift their allocations to equity markets from cash and fixed income assets despite the current negative newsflow, he said.

“Many stocks are now trading at historical lows and for investors who can ride the volatility, now is the time to gradually accumulate the right stocks for long-term performance,” he told StarBiz.

It was futile to “time the market” as no one could predict the absolute bottom, he said, highlighting the importance of taking a long-term view.

Carolyn Leng, another co-head of CIMB Private Banking, is recommending China’s H-Shares, which are listed on the Hong Kong Stock Exchange and is a component of the Hang Seng Index.

“China is observed to have high foreign reserves and a healthy fiscal surplus. It is likely to rebound faster than any other markets due to the various stimulus packages introduced by its government,” Leng said.

Inn reckoned that China could help offset the slowdown in the US economy over the next three to five years.

“China may be able to pick up the slack as an export market as its government has been focusing on boosting its domestic consumption.

“Other export-dependent countries would benefit as well, as China starts to consume more,” he said, adding that CIMB Private Banking might launch a China-themed fund this year to capitalise on its potential rebound.

CIMB Private Banking was also looking to launch funds linked to commodities as there was a lot of liquidity in the global financial system now due to the lowering of interest rates, Inn said.

“On the basis that the world economy would recover, the liquidity could create a potent situation of the rise in commodity prices,” he said, adding that he expected prices of commodities other than gold and crude oil to take up to three years to stage a rebound.

On its business outlook, CIMB Private Banking said it was aiming to achieve a 20% growth for assets under its management from RM3.9bil as at the end of last year, on the back of asset acquisitions and a bigger client base.

Unit Trust Set to Rebound this year - Bargain Hunting!

2009-03-17T12:51:00.001+08:00

THE unit trust industry is set to do better this year as the stock market stabilises, after a 20 per cent fall in value last year, its first drop in eight years.

"In my opinion, I don't see much downside (in the stock market)," said Tunku Ya'acob Tunku Abdullah, president of The Federation of the Malaysian Unit Trust Managers (FMUTM).

Tunku Ya'acob, who spoke to reporters at a briefing in Kuala Lumpur yesterday, believes the Kuala Lumpur Composite Index (KLCI) will stay at its current level. The market was around this level about four years before it spiked two years ago.

The benchmark KLCI index closed at 850.37 points yesterday. It fell some 40 per cent in 2008 on fears about the global economic health.

Big Drop in EPF dividend! Way below inflation!

2009-03-17T12:22:00.000+08:00

EPF declares 4.5% dividend for 2008

PETALING JAYA: The Employees’ Provident Fund (EPF) Board declared a 4.5% dividend yesterday for its members, blaming the lower rate of returns on the global economic crisis.

EPF declared a 5.8% dividend in 2007.

However, despite the financial meltdown, EPF recorded its highest ever earnings of RM20bil in gross income last year, up 9.36% from the RM18.29bil recorded previously.

“While last year was challenging due to the unprecedented global financial crisis that has impacted economies worldwide, EPF’s investment portfolio for the year performed better at the gross income level compared to 2007.

“But due to the sharp decline in the equity markets, a large provision has to be made, resulting in marked reduction in net income,” said its chairman Tan Sri Samsudin Osman.

The dividends will be credited into members’ accounts on March 23.

Are you saving ENOUGH.,,and r u saving RIGHT?

2009-02-19T15:24:00.002+08:00

we can tell you....ask me how.

Survey: Malaysians not saving enough

By LEONG HUNG YEE

KUALA LUMPUR: Malaysians are not saving enough and they are not prepared to face a financial meltdown should they lose their job or be retrenched.

According to the latest findings from Citi’s Financial Quotient (Fin-Q) 2008 survey, only two in five (39%) Malaysians actually save and less than one-in-three (28%) make and stick to a monthly budget.

Timothy Johnson

Citibank Bhd head of segment and marketing, retail bank Timothy Johnson said the results from Malaysia show an average Fin-Q score of 51 points out of a possible 100 points, with 54% of Malaysians scoring 50 points and below.

A majority of Malaysians reported in the survey saved up to 20% of their monthly income - excluding the 11% in the Employees’ Provident Fund - and 12% said they do not save anything at all.

In the event of a job loss but with continued regular expenses, one-in-five indicated their savings would last for only four weeks.

On average, Malaysians reported having 11 weeks of savings in reserve,

“Against the backdrop of the current challenging economic environment, these findings are quite worrying,” Johnson said in a briefing yesterday.

He said although the Fin-Q scores in seven of the 11 subject areas have shown improvement, it was not.

“We believe that a lot more needs to be done to ensure Malaysians are truly financially savvy as the detailed survey results revealed that there is still room for improvement,” he added.

The Citi Fin-Q survey comprised 500 online interviews of 40 questions each, rolled out to determine the level of understanding among Malaysians about their personal finances and financial practices. The survey was conducted from Oct 15 -30.

Johnson said more Malaysians were taking an interest in their finances and the recent economic crisis had made saving for emergencies an important element for them.

According to the survey, 56% are somewhat better off now than they were a year ago. Nevertheless, 37% were worried about their financial future. While 86% of Malaysians attempt to follow a budget, less than one-in-three (28) actually stick to the budget.

The Fin-Q also revealed that 30% Malaysians indicated they would “know exactly” and 60% have a “good idea” what to do if they were given six months salary to invest. There was also a 6% increase in the number of Malaysians who have a formal retirement plan and 56% are confident or somewhat confident that their savings will lead to a comfortable life in retirement.

Asked how much would be needed for retirement, Johnson said it was very subjective. He said the answer required thorough thinking and planing as the amount of money you need in retirement had a direct correlation to the style of living you wish to have.

“If you want to retire in Bahamas, you will need a bigger amount compared to living in a house in suburban area,” he said, adding that to gauge the figure, one should look at the current expenses and estimate how they might at retirement.

Johnson also pointed out a fascinating finding in the survey. He said 35% Malaysians believed that money can buy happiness.

He said the Fin-Q was a snapshot of our current level of financial literacy and what we all need to do to better control our finances. Malaysians needed to be disciplined and have good financial management to ensure enough savings, he said.

“I believe Malaysians should provide additional focus on developing and enhancing their level of financial literacy, more so given the current challenging environment.”

We're in the Right Side of the World

2009-02-12T13:12:00.000+08:00

Emerging Markets Last In, First Out of Recession, JPMorgan Says

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By Chen Shiyin

Feb. 12 (Bloomberg) -- Emerging markets are the last to slip into the global recession and will be the first to recover as governments in China and other developing countries introduce measures to stimulate their economies, JPMorgan Chase & Co. said.

Interest-rate cuts and fiscal spending will help emerging- market economies recover eventually, even as growth and corporate profits continue to weaken in early 2009, analysts led by Adrian Mowat, JPMorgan’s chief Asian and emerging market equity strategist, said in a report today. They favor so-called early cyclical stocks such as financial, domestic consumer discretionary and consumer technology companies.

The MSCI Emerging Markets Index fell 0.3 percent to 552 as of 10:12 a.m. Singapore time, taking its losses this year to 2.6 percent and extending 2008’s record 54 percent slump. The benchmark index will probably fluctuate between 500 and 600, the analysts predicted, without giving a timeframe. The MSCI World Index dropped 8.2 percent this year.

“Emerging markets were the last into the recession and will be the first out as the move to pro-growth monetary policy will work,” the report said. “Chinese economic momentum is key to this view.”

China on Nov. 9 announced a 4 trillion yuan ($585 billion) stimulus plan in a bid to bolster growth, including measures for low-rent housing, infrastructure in rural areas, as well as roads, railways and airports. Premier Wen Jiabaopledged last month to increase the package to create employment and support industries, while the central bank has cut the key lending rate five times since September.

Interest Rate Cuts

The Bank of Korea cut its main interest rate to a record-low 2 percent today, joining central banks from Malaysia to Taiwan in lowering borrowing costs to revive economic growth.

“Interest rate expectations in emerging markets are changing fast,” the analysts wrote. “The drivers are falling inflation and the need to stimulate growth.”

Investors should use good-till-canceled limits to “exploit the weakness and volatility” in markets, JPMorgan said in the report. These are orders to buy or sell securities at a specific price that lasts until the order is completed or terminated.

China Construction Bank Corp., Brazil’s Banco Itau Holding Financeira SA andState Bank of India are among the brokerage’s top picks for companies that benefit from falling interest rates, the report said.

Wal-Mart de Mexico SAB, Latin America’s largest retailer, and Maruti Suzuki India Ltd., the nation’s largest carmaker, are also stocks that may benefit from increased government spending, the analysts wrote.

It's time to BUILD YOUR FUTURE NOW!

2009-02-10T17:42:00.000+08:00

Investment poser for retirees

By LAALITHA HUNT

Higher returns come with higher risks compared with safe but low-yielding FD

PETALING JAYA: Choong Mun Fook, 58, a retiree, intends to invest in unit trusts and investment-linked insurance using his savings.

This is because these investments now offer attractive opportunities as considerable value has emerged from the downward spiral in asset values.

He also plans to pick up some of the blue chips in the stock market which have been battered in terms of valuation due to the global financial crisis.

Loke ... early financial planning Unit trust, investment-linked insurance plan or fixed deposit? can help retirees avoid stres

“Although this form of investment is considered risky for my age, it is a good alternative over the medium term compared with fixed deposits (FDs), which offer such low yields,” Choong told StarBiz.

He added that the current market situation was a rare opportunity for investors to obtain better returns since the KL Composite Index had fallen by more than 40% since the beginning of last year.

Choong said Bank Negara’s plan to offer bonds as a form of savings exclusively to citizens aged 56 and above was a better option than FDs due to its higher returns of 5% per year.

“But, the investment is limited to RM50,000 per applicant which is a bit low. It would be more reasonable if it were capped at RM200,000 per investor,” he said.

Grace Matthews, 62, a former civil servant, purchased unit trusts using her gratuity upon retirement.

According to her, the unit trust market proved to be a profitable venture initially but her investments were badly affected last year.

“I also put some of my savings into the New Zealand and Australian foreign currency deposits but have made losses as well recently,” she said.

Foo ... retirees should take a diversified approach

She said her savings were now mainly placed in Amanah Saham Nasional Bhd’s fixed-priced equity-based unit trust funds namely Amanah Saham Wawasan 2020 and Amanah Saham Malaysia, which offer consistent average returns of about 7% yearly.

Meanwhile, Cheah Kay Eng, 78, believes that FDs still present the least amount of risk compared with other financial instruments in the market.

“Although they are not substantial, returns from FDs still give me a bit of pocket money every month,” he said.

However, MyFP Services Sdn Bhd financial planner and managing director Robert Foo said the level of risk associated with financial products was relative.

“If you think FDs and savings accounts in banks are safe, you can see that last year’s financial turmoil caused financial giants such as Citibank, Lehman Brothers, Merrill Lynch and Northern Rock to either go bankrupt or bailed out by the government,” he said.

Foo said many people had the wrong perception that savings entailed investing in just one particular product.

“The right way for a retiree would be to take a diversified approach to risk so that he is not too exposed to a particular risk sector. Then, he has to determine what is the combined risk taken and monitor the risk exposure over his investment time horizon so that it is reasonable to the returns he wishes to get,” he said.

According to Great Eastern Life Assurance (M) Bhd executive vice-president and chief marketing officer Loke Kah Meng, early financial planning would help retirees avoid the stress of dealing with insufficient retirement funds or seeking additional means to ensure financial stability.

“We can plan ahead with investment-linked plans to counter the effects of inflation – many retirement plans are built with flexibility in mind, allowing you to decide and control how much to set aside each month,” he said.

In addition, investment-linked insurance plans would also supply medical coverage for retirees who are no longer entitled to medical benefits previously provided by their employers.

Time to consider WEALTH ADVISORY as a second career!

2009-02-02T14:13:00.000+08:00

More M’sians seek additional sources of income

By LAALITHA HUNT

PETALING JAYA: Tay, 46, a sales manager at a local manufacturing company, has been forced to take unpaid leave for a week this month.

“My salary has been reduced by about 25% as a result of the unpaid leave and benefits such as handphone, petrol and entertainment allowances have been cut by half,” he told StarBiz.

Nirmala Paramaswaran

Tay, who declined to give his full name, said that with demand not showing any signs of recovery in the near term, he was prepared to accept further pay cuts.

“My wife recently took a course and just started a part-time business offering nail art and treatment services from home. This additional income proves useful at times like these,” he added.

Like Tay’s wife, more Malaysians are seeking additional sources of income to cope with the current economic slowdown and higher cost of living.

Nirmala Paramaswaran, 27, a team leader at an IT outsourcing company in Cyberjaya, is selling food items such as nasi lemak and sandwiches.

“Demand from my colleagues has been great and the extra income is handy as daily necessities have become more expensive,” she toldStarBiz.

Nirmala, who enjoys cooking, said the venture had also been a good learning experience as she was able to improve her culinary skills based on her customers’ feedback.

Many people are also drawn to seek a second income to sustain a comfortable standard of living.

Samantha Chin, 28, a technical support executive at an insurance company who aspires to buy an apartment for her family, earns up to RM1,000 a month providing Web page design services to small and medium-scale enterprises.

Leigh Howard

“The additional income has increased my savings considerably and would enable me to make my purchase much sooner than I had hoped for. However, orders have fallen slightly in recent times,” she said.

Meanwhile, Great Eastern Life Assurance (M) Bhd senior group sales manager Reginald Yoganathan Hunt said a good part-time insurance agent with more than five years of experience can make up to RM6,000 in recurring commission.

“The insurance business can yield lucrative income even on a part-time basis, provided the agent is commited,” he said, adding that he had 16 part-time agents in his group.

Talent2 International Ltd director for South Asia Leigh Howard said the current job market in Malaysia was definitely slowing.

“Several multinational corporations have blanket hiring freezes although they would continue hiring for specialist skills,” he said, adding that the manufacturing sector appeared to be having a tough time as retrenchments loomed, but they were still looking for higher-grade skills as well.

“The current economic climate may also see wages stalling while the cost of living continues to rise,” he added.

Howard said that it was possible for employees to seek a second income but they should first check their current employer’s policies.

G. Rajasekaran

“Specific permission may be required and potential conflict of interest declared. It depends on the situation. The rule is, make sure a second job would not jeopardise your current one,” he said.

On the downside, a part-time job could be tiring and leave one with less time to spend with family and friends, Howard said.

“Also, look out for hidden expenses such as transport costs,” he added.

Malaysian Trades Union Congress secretary-general G Rajasekaran said there was no restriction on workers pursuing part-time jobs except for certain key or high-risk employment positions.

“In fact, in view of the rising cost of living, it was recently announced that government staff would be allowed to take on part-time jobs, but for a limited number of hours per day,” he said.

Protect sources of wealth first, then invest

2008-12-20T15:10:00.001+08:00

Protect sources of wealth first, then invest

By FINTAN NG

IN times like these, where a combination of the credit crunch and the economic slump has affected the private wealth of many individuals and families, the need to preserve the sources of wealth becomes more urgent.

Whitman Independent Advisors Sdn Bhd managing director Yap Ming Hui, whose clients are mainly business owners, says the most important thing to do in times like this is to make sure the business cashflow is preserved.

“In this situation they have to review their position, maybe do a stress test analysis depending on how much revenue is coming down and think about how to protect their assets,” he says.

Yap says these individuals need to protect themselves first before they make more money.

He says for business owners, insolvency becomes an issue in such times especially if they stand personal guarantee for loans their companies take.

Yap says one sure way of preventing wealth being wiped out in the event of a bankruptcy is to move part of an individual’s or family’s wealth into a trust managed by a professional.

“In the event of a slump in revenue, which is inevitable at this point, standing personal guarantee for business loans becomes an issue because the person may not be able to repay,” he says.

Yap: Diversifying investments is more important at any time but even more so now

Yap says a business owner may have to also worry about any credit or loan policy changes when times are bad.

“A change like this, usually by tightening the rules on lending or pulling back of credit lines, can have an adverse domino effect on one’s business and bankruptcy may follow,” he adds.

Yap says many business owners are unaware that when they take loans, there is a “material adverse market condition clause” in which a bank may reduce or place more stringent conditions for its lending facilities.

He says for those who transfer part of their wealth to family members, they must ensure that those family members are not directors or partners in the company as they will be liable.

“It’s always better to have a trust but if they don’t have a professional managing their wealth, then maybe its time to review their protection plan,” Yap tells StarBizWeek.

From safeguarding the sources of wealth, he says individuals can then think about investing.

However, Yap says investors will have to set aside at least six months to a year of funds for everyday expenses and the occasional splurge before they start looking to what or where to invest.

He says the remainder can then be used for investing as long as its not needed for anything else such as sending kids off to college.

“Cash is king but investors must know to seize the opportunity when they see it, especially where investment opportunities are abundant in this kind of environment,” Yap says.

He says of all the investment choices out there, the one that is most obvious will be the equity markets due to the deep discount although investors will have to invest in “deep-blue chip” stocks for three to five years to see any sort of decent returns.

“These are the stocks that will always be investment targets by funds, even though they may have exited for now, but when things pick up, they’ll always be the first to move,” Yap says.

He says the more sophisticated investors will look to invest in the equity markets abroad for the reason that the discount is even bigger.

“The investor will have to be able to hold for a time, its not for the faint of heart,” Yap says.

Which brings him to the question of the time horizon. “I always believe that wealthy individuals do not have to put themselves at risk by growing their wealth exponentially within a short period of time via speculation,” Yap says.

He says as long as wealth grows above the inflation rate by 2% or 3%, it is good enough. “You’ll have done justice to your wealth,” Yap says.

He says diversifying investments is important at any time but even more so now.

“Diversification may mean sacrificing some returns but it will reduce risk,” Yap says.

He says always put cash in several different banks and if taking up a life policy, try to spread it over several policies.

“When I advised people five years ago about this, everybody thought it was troublesome, that it was going by the book, but look at the number of bank failures now, look at AIG,” Yap says.

Ultimately, he says any time is a good time to plan ahead when managing personal wealth.

“Don’t wait for times like this, because if you ask me, it may be too late if you’re planning for the downturn to come,” Yap says.

He says the best way an individual or family can solve personal wealth management issues is to have an updated plan so that they will know where they stand when adverse news of the type that is so prevalent in the media now comes up.

“They must know whether the bad news is relevant to them, whether it will affect their wealth in any way, it may be bad news to others but good news to them, they cannot also assume that opportunities highlighted in the media or through other channels of information are opportunities suited to them,” Yap says.

KL mart may hit bottom early 2009: Citi

2008-12-19T11:34:00.000+08:00

KL mart may hit bottom early 2009: Citi

Citi Investment's top buys are AMMB, BCHB, IGB Corp, KLCC Property, Tanjong plc and IOI Corp while its top sells are Public Bank and Maybank.

"With the macro risk rising, the market could fall below the 1.4 times price-to-book ratio (P/B) it hit during the 2000-01 recession ... taking a more cautious approach, we are now using our benchmark the average Asia P/B of 1.2 times - implying a further decline to 691 points," Citi Investment Research said in its report last Friday.

The research house expects the bear market to hit the bottom as early as the first quarter next year.

"In three of the last four recessions, the bear market ended in or immediately after the worst quarter of GDP growth. Our CITI Investment Research expects the benchmark Kuala Lumpur Composite Index (KLCI) to fall by another 18 per cent to 691 points, as earnings per share (EPS) growth expectations continue to fall amid the uncertain market.

economist forecasts GDP to bottom at around two per cent in the first quarter 2009, down from 2.6 per cent in the fourth quarter of 2008. If history repeats itself, first quarter 2009 is the earliest the market could bottom," it said.

It also revised downwards its projections on EPS for 2009. Companies in the utilities sector are expected to see a 23.7 per cent decline in EPS, banks (-8.3 per cent), telecoms (14.4 per cent), plantations (-20.6 per cent) and tobacco (-10.5 per cent).

It advised investors to go for stocks that has low P/B or with high earnings visibility.

"Be they cyclical or defensive, stocks trading at trough P/Bs or have strong earnings visibility are on our top buys list - AMMB, BCHB, IGB Corp, KLCC Property, Tanjong plc and IOI Corp. Our top sell ideas are Public Bank and Maybank," it added.

Interesting article - EPF better than stock market??

2008-12-03T12:49:00.000+08:00

Today I read with much interest the article in the Star 'EPF better than stock market'. The writer claims that leaving your money in EPF is better than investing it in the stock market, and he sums it up as due to the risk involved.

I can appreciate his standard deviation approach, so if we paraphrase his advise, we can deduce that:

'Last Raya, there were thousands of accidents and hundreds of deaths on the road, so SELL YOUR CAR AND STAY INDOORS.'

Risk is part and parcel of life. In life there are no guarantees (even EPF only dare guarantee 2.5% returns for you, the biggest firms in the US also suffered losses and they did give guarantees too).

My advise is : mitigate risk with knowledge, not just with one fact (or one article) but with all the facts. Otherwise, get someone who is fully committed to your financial interest to do it for you.

Real risk is not knowing what you are doing.

Also what he fails to point out is 2 things:

1) that EPF is primarily fixed income and stock market is wholly equities. You cannot compare the two that way. It's like comparing male and female. You need both. Can you say only male is important? That is why I (and all financial planners and sensible investors) constantly speak of diversification. Have a portfolio of different asset classes. Actively managed portfolio utilising free switching facility.

2) that EPF and Bank Negara statistics also point out that leaving your money in EPF alone, will risk you as 7 of the 10 people whose EPF doesn't last beyond 3 years of your retirement.

Your trusted advisor.

Patrick & Hazel

Synergy Planners.

Develop A Simple Financial Plan NOW!

2008-12-01T11:56:00.000+08:00

Dear investors,

With all that's happened, you may be concerned if you can reach your financial goals with your investments. Let's put that concern to rest by doing the math.

I'm attaching a tool here for those of you who prefer to D-I-Y. This tool is simple to use. Download and run the flash program. Rest assured it's safe for your computer, and no information will be sent anywhere.

http://rapidshare.com/files/169059725/cimb_calculator_19apr2008.exe.htm

If you would rather I do the math for you, just let me know (email or sms) - anyhow I am calling all my clients to offer this, and there's quite a list, but I will entertain first come, first serve basis; so if you call me before I call you, we'll set a sooner appointment.

Yours sincerely,

Patrick

CIMB tops at AsiaMoney2008

2008-11-27T12:03:00.000+08:00

Thursday November 27, 2008
CIMB is top brokerage
PETALING JAYA: CIMB group swept the Asiamoney 2008 Brokers Poll in the second straight year as it was named top local brokerage in Malaysia
CIMB group took the top spots for best overall country research, overall sales service, execution, sales trading, most improved broker over the past 12 months and best for organising roadshows and company visits.

In the best research coverage coverage, it took the top spot in six out of the eight categories, which were strategy; macroeconomcis; capital goods; consumer services; utilities; and the food, beverage and tobacco.
OSK was adjudged best research coverage for the small capitalised companies category and UBS for banks.
CIMB head of research Terence Wong was named best analyst, followed by Prem Jearajsingam of Macquarie and Teoh Su Yin of Deutsche Bank.

More EPF members withdraw to invest

2008-11-27T02:24:00.000+08:00

More EPF members withdraw to invest

2008/11/26

KUALA LUMPUR: The Employees Provident Fund (EPF) saw a 42.9 per cent rise in withdrawals for investment in the third quarter of this year, due to the higher number of members eligible for this withdrawal.

A total of 107,564 EPF members applied for investment withdrawals compared with 75,239 applications in the same period last year.

Despite the higher number of applications, the disbursed amount was lower at RM808.53 million, compared with RM874.44 million in the third quarter of 2007.

"The fact that the number of approved applications is higher but the amount withdrawn is lower is due to many younger members taking up this withdrawal.

"The introduction of Basic Savings as part of our Beyond Savings strategic initiative has enabled many more members, especially younger ones, to be eligible for the Members Investment Withdrawal," EPF chief executive officer Datuk Azlan Zainol said in a statement yesterday.

Launched in February 2008, Basic Savings is an amount of savings to be put aside in Account 1 progressively at various pre-determined age levels to enable members to accumulate a minimum savings of RM120,000 upon reaching age 55.

"Since members can only withdraw up to 20 per cent of the excess amount in their Account 1 funds, younger members will naturally have less funds to withdraw for investment," said Azlan.

The EPF also saw a rise in members applying for education withdrawals to 16,663 applications, which saw RM85.01 million being paid out.

This compares with 15,877 applications in the third quarter of 2007, valued at RM87.14 million.

EPF's Lump Sum Age 55 Withdrawal remained the popular option for members reaching age 55, with 29,054 applications approved in the third quarter of this year, with total withdrawal of RM1.24 billion.

This compared with 30,832 applications approved in the corresponding period last year which saw RM1.59 billion being disbursed under this withdrawal.

Approved applications under Flexible Age 55 Withdrawals totalled 7,154, with total withdrawal of RM403.51 million.

The number of members applying for Age 50 Withdrawal in the quarter under review was relatively unchanged at 26,449, against 25,960 a year ago.

A total of RM685.99 million was withdrawn compared to RM680.65 million a year ago.

However, withdrawals for housing dropped by 19.6 per cent to 108,573 applications worth RM1,577.24 million in the third quarter of 2008, from 135,065 for RM1,960.32 million a year ago.

The drop was attributed to the economic slowdown.

In the quarter under review, the average processing time for housing withdrawals improved to 96.6 per cent of withdrawal applications processed within 21 days compared with 84.9 per cent a year ago.

Dun play2! Returns without protection is dangerous. Ask Your Wealth Advisor.

2008-11-23T18:30:00.000+08:00

Profitable land banking scheme or clever scam?
By : Tan Choe Choe NST

2008/11/23

KUALA LUMPUR: Some 2,000 Malaysians have invested over RM50 million in foreign land banking schemes.

The Companies Commission of Malaysia (SSM) is investigating three of these companies.

They offer plots of land in foreign countries for investment, notably in England and Canada, and promise extremely high rates of return, some as much as over 800 per cent.

SSM raided the offices of the three companies on Oct 24 after months of surveillance and seized "relevant assets including ICT equipment and documents" to assist in its investigations.

"We decided to take action against these companies because of recent developments in Britain.
"One of these three companies' parent company is facing winding-up action by the British authorities," said SSM deputy chief executive Rokiah Md Noor.

"We are concerned about the interests of their investors here, as well as investors who have put money into similar companies offering land banking schemes."

Land banking companies buy up land in areas which have not yet been granted planning permission and subdivide them for sale, according to the Financial Services Authority in Britain.

These plots may be located in greenfield or greenbelt zones.

(Greenfield refers to previously undeveloped land, in a city or rural area, which is currently used for agriculture, landscape design, or just left to nature. Greenbelt is a designation used in land use planning to retain areas of largely undeveloped, wild, or agricultural land surrounding or neighbouring urban areas.)

On its website, FSA said the operators of these schemes offer to handle the planning permission application process for the plot-owners.

"They claim that once owners are granted planning permission they can sell the whole site to a developer for a substantial profit."

In June, FSA asked the British High Court to wind up the country's largest land banking company, UKLI Limited, for operating as an illegal collective investment scheme and denying its investors protection for their money.

In its press release, FSA said over 4,500 investors had paid some STG69 million (RM385 million) to buy the land, but none of the land sold was ever granted planning permission.

UKLI's business was deemed illegal because it operated as a collective investment scheme and should have been authorised by FSA.

"The lack of authorisation means investors are not entitled to make a complaint to the financial ombudsman service or claim compensation from the financial services compensation scheme," it said in the release.

FSA has been granted an interim freezing and restraining order against UKLI to protect its assets for creditors, including investors, and to prevent it from continuing to operate as an illegal collective investment scheme.

FSA does not regulate land as an investment, but collective investment schemes, including those concerning land, are subject to regulation.

Similarly, land transactions per se are not under the purview of SSM. But, the investment deals offered by land banking companies are structured like an interest scheme, and as such come under SSM's purview.

Potential investors as well as current investors can contact SSM at 03-40476111/6222 or email enquiry@ssm.com.my to verify the status of schemes that they are interested in.

EPF will Automatically reduce your contribution -

2008-11-07T09:12:00.000+08:00

so you may SUDDENLY have SOME cash for Regular Savings Plan! And even upgrade your current plan!

Call me now to start your paperwork, while the market's still cheap!

Patrick (012-377 1848)

www.synergyplanners.blogspot.com

EPF to adjust members' contributions to 8% from January

PETALING JAYA: Employees Provi dent Fund (EPF) members will be able to benefit from the three percentage point reduction of their monthly contribution rate from January.

In a statement yesterday, EPF said the reduction of the employees’ contribution from 11% to 8% would be made automatically for the ease of members and to facilitate implementation measures.

“This arrangement will be implemented until the December 2010 wage,” said EPF public relations senior manager Nik Affendi Jaafar in a statement yesterday.

However, members who wish to maintain their 11% contribution rate can still do so by filling up Form KWSP 17A (AHL) and handing it to their employers for submission to EPF.

Finance Minister and Deputy Prime Minister Datuk Seri Najib Tun Razak announced recently that members could reduce their monthly contributions from 11% to 8% to give them more disposable income. The announcement was part of a stimulus package to help boost economic growth.

“The decision to reduce members’ statutory contribution rate was taken twice before in 2001 and in 2003 as part of economic stimulus packages,” said Nik Affendi.

EPF would be issuing a new monthly contributions schedule accordingly, he said.

“Members and employers may obtain the new schedule and Form KWSP 17A (AHL) from all EPF branches or download them from our website atwww.kwsp.gov.my from Dec 1 onwards,” he added.

A better point of view : a review of today's Star article

2008-11-06T13:27:00.000+08:00

Dear investors and valued friends,

This is an interesting perspective published in today's Star papers. The writer, Soo Ewe Jin, offers his opinion that the meagre 3%cut from each EPF contributor will have little to affect the nation's retail consumption, which is true.

The tax perspective is also interesting, which I agree, that a tax cut would serve the purpose better. however, it'll only be a shot in the arm for sometime next year, which isn't a desired effect of the stimulus package. His suggestion to waive the RM8,000 ceiling for insurance taxation is applaudable too.

Having said that, one needs to be a discerning reader to notice that he made some mistakes in his article. Unit trust is invested from Account 1, not Account 2! I pity/find fault with his consultant; no wonder he has a hard time convincing Soo to invest! Wrong information leads to wrong analysis leads to wrong decision!

My earlier blog suggests that contributors who find that their paycheck has increased, DON'T SPEND IT! SAVE IT! BUY COMPANIES instead of cosmetics or car accessories!

SAVE MORE NOW! ASK ME HOW!

Enforced savings needed

COMMENT BY SOO EWE JIN

AS someone who is ill disciplined when it comes to saving money for a rainy day, I am thankful that the EPF remains a solid bastion of enforced savings for ordinary salaried workers like me.

The EPF likes to remind us that its main role is to manage the retirement savings of its members, including the type of withdrawals made as governed under the EPF Act 1991.

So I am actually happy when the mandatory contributions are increased and hugely disappointed when the dividends are reduced. In my opinion, what we have in the EPF must always remain at the maximum possible, based on our earning power.

Even though certain withdrawals are allowed, I feel we should only use those that are absolutely essential, such as when my wife and I withdrew from both our accounts to help buy our first house.

Withdrawing to buy a computer, for example, is a no-no. Although I do invest in unit trusts, my consultant finds it very hard to convince me to take out more money from Account 2 on a regular basis despite all the forms I had pre-signed.

If it is so difficult for me to even use part of my EPF savings for pre-retirement needs as allowed by the law, why then would I volunteer to reduce my monthly contributions as suggested in the economic stimulus plan?

Perhaps the policy makers, taking a macro viewpoint, are convinced that the total sum that can be technically added to the market if everyone were to volunteer to take a three percentage-point cut, will make a difference.

They may imagine all of us heading to the shopping malls to spend, spend and spend. Or at least head to the teh tarik stall each evening to do our bit for the local economy.

But it will take much more to convince me that I will be helping to boost the national economy with about RM200 extra in my pay packet each month if I were to volunteer to make the cut.

I wonder what difference it would make to the majority of contributors who will have even less of the extra cash to spend each month.

Considering the cost of living has gone up and our purchasing power has been significantly reduced in recent times, there is little this magical three percentage points can do for the individual per se.

And another thing, there is now a tax-free limit on EPF savings and insurance premiums amounting to RM8,000.

If, by reducing our contributions, we go below the limit, it can also have implications on our tax bracket.

Unless we are those who truly know how to manage our funds to make our money grow, I will certainly not interfere with what I have in my EPF. I would rather the taxman take less from me each month. That would be a reason to go on a spending spree.

● Soo Ewe Jin is deputy executive editor, The Star. He believes God never gives us more than we can handle, even in money matters.

Lower EPF contributions mean MORE MONEY to BEGIN A REGULAR SAVINGS PLAN!

2008-11-06T13:19:00.000+08:00

What to do with the extra cash from your EPF contributions? BUY COMPANIES with a Unit Trust Regular Savings Plan!

Let that money Earn 8-12%p.a. instead of EPF's 5-6%!

Grow Your Money Now! Ask Me How!

Patrick (0123771848)

Synergy Planners

Here is a review from Bizweek.

It may be a good idea to have a mandatory cut in EPF deductions. This will ensure workers have more disposable income. On the other hand, some would prefer to maintain their rate of contributions.

LOWERING the rate of employees’ contribution to the Employees Provident Fund (EPF) temporarily is part of the Government’s bag of tricks to rouse the economy. We saw this in 2001 and 2003, for one-year periods, and we are seeing it again with the stimulus package announced on Tuesday.

This time around, an employee can reduce his EPF contribution from 11% of his salary to 8% for two years from Jan 1. The idea is to boost private consumption by putting more money in workers’ pockets.

Unlike the last two occasions, the next rate cut will be on a voluntary basis. The Government has estimated that RM4.8bil a year will be freed up for spending in the economy if all EPF contributors opt for the rate cut.

Under the stimulus package, an employee can reduce his EPF contribution from 11% of his salary to 8% for two years from Jan 1.

That will not happen. It may even be over-optimistic to expect half of the contributors to make that election. It is likely that the majority will stick to the status quo given the choice.

We do not know yet the exact mechanism that will facilitate the rate cut.

One possibility is that the reduction will be instituted automatically unless the employees instruct otherwise. That does not quite fit the definition of voluntary and it will be an administrative hassle for employers and the EPF.

It may be a good idea for the Government to reconsider the proposal. Why not make it a mandatory two percentage-point cut across the board?

We are clear about the argument that increasing workers’ disposable income is good for the economy.

If a lower contribution rate helps us all, why the need to leave it to our discretion? Do the authorities make it optional when they raise or lower taxes and interest rates?

Macroeconomic management is already hard enough because of the imprecision and lack of predictability.

A compulsory two percentage-point rate cut ensures that the economy will get a RM3.2bil injection. This is far better than hoping that we can have enough of the EPF contributors agreeing to contribute 3% less.

We should bear in mind that the lower EPF contribution rate simply means we have more money in our hands and not that our money is being taken away. It is up to us what we want to do with the extra cash.

Besides, how many times have we heard about the difficulties EPF faced in investing the billions of ringgit it is managing? And how often have we griped about the relatively low dividends?

Of course, there will be those who still want to have their money under EPF’s stewardship. That avenue is still open.

The EPF Act 1991 allows contributors to deposit amounts exceeding the statutory rate. It requires a bit more effort and time, but if setting aside money for a rainy day is important to you, this is a minor hurdle.

If we really believe in the merits of saving for our old age, we need not be legally compelled to do so. But more to the point, what does it say about us if we can’t even trust ourselves to put the extra money to good use when handed back 2% of our salary that would have otherwise gone into our EPF accounts?

● Errol Oh is deputy editor, BizWeek. He is glad that his wife is far more financially disciplined than he is.

EPF 'SCAM' on Account 2???

2008-10-30T13:32:00.001+08:00

Dear investors and valued friends,

Recently an email has been circulating, it's even on some blogs, about a SCAM by EPF in managing the account 2 withdrawal for housing loan repayment. I've been asked about it several times, so I've decided to nip it in the bud by floating it here. I've also included the scam email text at the end here.

I've personally called EPF call centre 03-8922 6000. The EPF officer highlighted that in fact, upon approval of the Account 2 withdrawal for monthly loan repayment, the whole amount of Account 2 is transferred to an Account 12 (yes, each contributor will be assigned an Account 12, don't ask me why not leave it in Account 2, or what happened to Accounts 3 to 11). From this Account 12, monthly deductions will be made for a specified amount to the contributor's account for the purpose of loan repayment.

So will the balance left in Account 12 get the annual dividend payment? YES.

Why isn't Account 12 reflected in the statement? System limitation. They are working on this.

How can i be sure? Call EPF yourself (the number above) or visit the office. I understand that you can't see it on the EPF kiosk either.

I hope this helps. For those of you responsible for forwarding the scam email, be more responsible by forwarding this mail. And even better, forward my contact as referral for all your financial needs :)

Patrick Archibald
012 377 1848
Synergy Planners
www.synergyplanners.blogspot.com

Here's the email text:

Subject: SCAM by KWSP / EPF / 401K

This is another method for KWSP to steal our money!

Remember during Budget 2008 announcement last yr, our Finance Minister (cum PM) announced that in order to assist KWSP members to reduce the burden in housing load repayment, KWSP will allow monthly withdrawal from members' A/C II for the purpose?
Sounds like a nice goodies!
When you apply for the monthly withdrawal, you only need to provide KWSP yr housing loan & instalment details
from yr bank and the bank a/c # you like KWSP to bank the monthly
withdrawal into it. KWSP will approve yr
application based on the available amt in yr A/C II and compute the withdrawal period by dividing the approved amt with the monthly instalment amt. Application process takes about a month and you will receive the monthly payout promptly into yr bank a/c!
Well everything appear to be nice and good. It was indeed a noble plan until you take to close look at yr KWSP Statement!

The withdrawal plan is actually a SCAM!

This is how the KWSP SCAM works.......

Assuming you have RM100,000 in yr A/C II and yr housing loan's monthly instalment is RM2000/mth.
KWSP will approve yr application of withdrawal from yr A/C II of RM100,000 and pay you RM2000/mth for the next 50mths.
Everything appears to be in order BUT.......

What KWSP didn't highlight to you is that when the application was approved, the TOTAL AMT (RM100,000) is removed from yr A/C II! It appears to be transfered to an unknown a/c to effect the monthly payment from therein.

The impact to the member are as follows :-
1. You just lost RM100,000 from yr A/C II. Assuming the KWSP Dividend is 5%, you will lose >RM4,000 in dividend during the 1st year. Based on the above example you will will lose >RM10,000 over the 50 mths period!
2. There is no statement to account for the amt approved vs amt paid, hence you would need to keep the monthly payment voucher to reconcile against the approved amt over the 50mths period to ensure there is no missing amt!

Assuming there are 100,000 members who innocently fell prey to this SCAM, based on the above example, KWSP would have cheated the members of 100,000 X RM10,000 = RM1,000,000,000 (that's RM1 BILLION) over the period!

Furthermore, if you discovered this SCAM early and intend to stop the plan, KWSP would not allow any cancellation of the plan until at least 1 year. That would mean, once the application is approved, based on the above example, you would have lost >RM4,000.
100,000 members would have lost 100,000 X RM4,000 = RM400,000,000 (RM400 MILLION) in One Year!!!

If you're a victim of this KWSP SCAM, would suggest you call yr MP to raise hell in Parliament! (BN MPs won't do it)
For others who have not fallen into this SCAM, pls continue to watch out and alert yr family & friends about this.

Edgeworth, UKLand, Profitable Plots RAIDED!

2008-10-30T13:29:00.000+08:00

Companies Commission Raids Three Companies Over Illegal Land Investments

KUALA LUMPUR, Oct 24 (Bernama) -- The Companies Commission of Malaysia (SSM) today raided three companies suspected of offering investments in illegal land investment schemes.

The raids were conducted simultaneously at the UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (Malaysia) Sdn Bhd.

The companies had allegedly contravened sections 94 and 363 of the Companies Act 1965.

In a statement, SSM said it had conducted surveillance on the companies over the past couple of months.

It said the companies offered the public to purchase and invest in plots of land in foreign countries, notably England and Canada, and used attractive marketing strategies, among others, promising extremely high rate of returns.

"Any company offering investments in interest schemes must comply with Division 5, Part IV of the Companies Act and other relevant provisions of SSM's Policy Guidlines and Requirements before they can start offering such investments to the public," added the statement.

Non-compliance of Division 5 Part IV of the Companies Act is an offence under section 94 (1) of the Companies Act and carries a penalty of imprisonment for five years or RM100,000 fine or both whilst section 363 (5) entails a penalty of 10 years imprisonment or RM250,000 fine.

The statement advised the public to verify the status of schemes by contacting SSM at 03-40476111/6222 or fax at 03-40476317 and via e-mail to enquiry@ssm.com.my.

-- BERNAMA

Synergy Planners

The most exciting Market roller-coaster of 2011....so far..:)

Market's REBOUNDING within the day! Faster BUY!!!

3 words for H2 2011 & H1 2012 : Volatile, REAL OPPORTUNITY! by Patrick Donald Archibald on Monday, August 8, 2011 at 11:54am

Join us @ CIMB!

Some cold hard FACTS on your FUTURE money.

Tame the Demon of Credit Card Debt

Dear EPF contributors: SOS Save Our Savings!

COME IN NOW! New target for KLCI - 1560!

And if you're investing - INVEST NOW..............

Shares: Slight uptrend seen ahead of Budget 2011

By ELAINE ANGelaine@thestar.com.my

Who DA MAN?? Who DA MAN??

Top Asian investment bank award for CIMB

This is why large amounts in the hundreds of millions should not be left in current account but INVESTED through Synergy Planners!

Zeti calls for efficient intermediation in surplus funds in Asia

Are you 50 and above? Medical condition denies you insurance? CALL ME NOW.

Guarantee Issue Whole Life (GIWL) offers AFFORDABLE premium for a Senior policy WITHOUT MEDICAL CHECKUP!

When your EPF is SURE to be insufficient for Hari Tua Anda.......

Thumbs up for private pension funds

By LEE KIAN SEONGlks@thestar.com.my

Analysts see new high for Malaysia's main market index

Analysts see new high for Malaysia's main market index

Synergy Planners Brings More Convenience To You!

Do you consider yourself ELITE?

Reflection on Malaysia's recovery from global crisis

Mobius buys Middle East!

The post Maxis IPO era....effects on Bursa.

4 Pre-conditions for retirement

If it's too good to be true, IT PROBABLY IS.

Buffett: The WORST investment you can have is CASH!

More young Malaysian guys SAVING? Sudah potong (credit card)?

Six Words To Discover Your Purpose

CIMB: Our brag for the weekend

CIMB chief youngest to get award

I've highlighted two facts for you (scroll down)- the first you're already familiar with...the second is a little known fact. I suggest you take a look at this article.

Understanding different pension models

By WOON TAI HAI

Pension or Lump-Sum..it's the AMOUNT that MATTERS!

Before you get over-excited about private pension funding, consider this: In essence, pension is a different way of distributing the same amount of money - perhaps just a slightly higher amount (since the balance of the drawdown is kept invested) - but that's just it.

The key is to get your retirement fund to the highest amount at 55. Then, whether it's pension payment or lump sum payment, depends on your big bill management (pay off house/kid's education - a normal coincidence at retirement) and the balance is your retirement survival.

I've had the unique pleasure recently of calculating & assuring my client that his retirement is well taken care of. All factors considered. The smile on his face - priceless.

Wanna join him? Call me.

Pension models and the pitfalls

Updates from CIMB & Synergy Planners

What price family life?

Answer to question : Where's my EPF invested in?

So..what do we do now?

Late Retirees Die Sooner - says survey

Power of Numbers FREE Workshop - Sat 2-5pm Dsara Perdana

Winners of 850s - Do Your Homework, or Follow Your Advisor...

Who to believe?

Use Your Head and Not Your Heart

An interesting perspective on your EPF 4.5% dividend

After reading this, call 012 377 1848 to arrange an appointment with me to save your EPF.

This commentary from stocktube.blogspot.com does make for food for thought for your retirement future.

After all, if you don't take charge of your future, someone else will. :) Valuecap perhaps? :)

EPF’s 4.5% Dividend – Your Cheese Eaten by ValueCap?

Equities the way to go, investors told

Unit Trust Set to Rebound this year - Bargain Hunting!

Big Drop in EPF dividend! Way below inflation!

EPF declares 4.5% dividend for 2008

Are you saving ENOUGH.,,and r u saving RIGHT?

we can tell you....ask me how.

Survey: Malaysians not saving enough

By LEONG HUNG YEE

We're in the Right Side of the World

It's time to BUILD YOUR FUTURE NOW!

Investment poser for retirees

By LAALITHA HUNT

Time to consider WEALTH ADVISORY as a second career!

More M’sians seek additional sources of income

By LAALITHA HUNT

Protect sources of wealth first, then invest

Protect sources of wealth first, then invest

By FINTAN NG

KL mart may hit bottom early 2009: Citi

KL mart may hit bottom early 2009: Citi

Interesting article - EPF better than stock market??

Develop A Simple Financial Plan NOW!

By ELAINE ANG
elaine@thestar.com.my

By LEE KIAN SEONG
lks@thestar.com.my