The Star Business - 25/12/07
New launches to drive growth
Chief executives have lined up new products for next year. Mah Sing Group Bhd CEO Datuk Seri Leong Hoy Kum expects the company's new launches will be well received in a buoyant, domestic-driven economy. Guinness Anchor Bhd's MD Charles Ireland feels 2008 should be a better year as the market for malt liquor has started to stabilise. Prudential Assurance Malaysia Bhd's CEO Tan Kar Hor will cultivate new product lines like retirement planning and Islamic products
DATUK SERI LEONG HOY KUM
Managing director and CEO
Mah Sing Group Bhd
WHAT is your outlook for the property market next year?
We believe that the property market in 2008 will be robust, underpinned by a resilient domestic driven economy. Various pump-priming initiatives under the Ninth Malaysia Plan will provide a boost to propel the economy upwards and increase disposable incomes.
Malaysia’s young population, rising urbanisation, low unemployment rate and increasing wages, as well as a high savings rate will continue to contribute to the property market’s positive run.
Datuk Seri leong Huy Kum
The Government has been proactive in this manner, with several goodies announced for Budget 2008. EPF contributors will be allowed to make monthly withdrawals for financing one house effective Jan 1, 2008.
This could potentially unleash close to RM9.6bil annually into the property industry, allowing homebuyers to afford homes costing 20% more than previously.
The 50% waiver on stamp duty for purchase of homes under RM250,000 should boost demand for homes, and the Group has taken the initiative to ride on these incentives.
We are setting up a help desk to advise our buyers on the EPF withdrawals, as well as waiving the remaining 50% stamp duty for Mah Sing homes priced up to RM250,000, to ease the burden of home ownership.
Besides domestic demand, there has been increased foreign interest in our properties as they like the quality of our properties, boosted by the waiver of real property gains tax.
We have the most liberal landownership laws in the region, and now, foreigners are allowed to buy unlimited units of residential properties above RM250,000 without restriction of usage.
What are some of the opportunities and challenges for industry players going forward?
Growth corridors including the Iskandar Development Region (IDR) and Northern Corridor Economic Region have resulted in renewed interest in these areas, and improving infrastructure as well as strong economic and population growth will spur demand for housing there.
Malaysia’s increasing exposure as an international property market will attract more foreign participation. It is indeed an opportune time for foreign investors because whilst our properties may be world class, valuations still lag behind those of our regional peers.
Increases in raw material prices have increased construction costs, resulting in higher pricing for good housing projects in strategic locations.
Buyers will want to hedge against inflation by investing in assets that have potential upside.
Which property sector and development types offer the best potential for your company?
In terms of the residential market, we believe that medium to high-end gated and guarded residential properties should do well.
Demand for these properties is a reflection of Malaysians’ growing affluence and sophistication. These properties would need innovative concepts and practical layouts, as well as being supported by a strong brand.
For the commercial market, there is a shortage of good office space, especially Grade A offices in Kuala Lumpur. The limited number of good quality investment grade buildings available for sale in the market has driven up the capital value of prime offices.
Depending on the location, commercial retail buildings should do well.
What are the challenges faced by the industry and the impact on your company?
Prime land is increasingly scarce, especially land that fits our fast turnaround business model.
However, we have a proven landbanking track record, securing good land year on year to maintain our earnings visibility.
Sometimes, landowners also approach us either to sell land, or to propose joint ventures on their land to tap into our branding, experience and skills.
Our capability to appropriately manage cash flow is key to the company’s ability to capitalise on opportunities
Increases in raw material are inevitable, but we have taken steps to mitigate the effects, for example, by using step up pricing for new launches, bulk purchasing to enjoy discounts, and lowering our funding costs via shrewd negotiations.
Human capital, i.e being able to continuously recruit, train and retain good people who are willing to take the company to new heights amidst increasing globalisation, will be the key to success.
We have a very strong team which is striving to realise the Group’s vision.
What are some of the interesting property launches that can be expected from your company in the coming months?
We have started a registration exercise for our new commercial projects, which will be launched in 2008.
Southgate Commercial Centre offers investors the opportunity to own offices in the heart of Kuala Lumpur, as opposed to just leasing the offices in most new buildings.
There will be food and retail outlets to support the offices. Southbay City in Batu Maung, Penang will be a new “must-visit” destination, integrating leisure, commercial and retail offerings near the upcoming Second Bridge on the island.
Our existing residential projects are Perdana Residence, Kemuning Residence, Hijauan Residence and Aman Perdana in the Klang Valley, and Sierra Perdana, Austin Perdana and Sri Pulai Perdana in South Johor within the IDR.
We shall continue our sales from these projects, mainly semi-detached homes and bungalows within gated and guarded communities.
What are your expectations of project take-up rate, sales revenue and earnings for the company next year?
We believe 2008 will be another good year and we should be able to achieve another year of uninterrupted profitability and good take-up. This will be underpinned by our unbilled sales exceeding RM1bil, which is twice our revenue in 2006.
We have a remaining Gross Development Value (GDV) of RM3.042bil, representing a total GDV of RM4.119bil, which will ensure earnings visibility for seven years.
We expect another year of good sales, especially with the implementation of the Employees Provident Fund withdrawals next year. We will continue to focus on the lifestyle medium to high-end residential and commercial segments, which have given us very good results.
Charles Ireland
CHARLES IRELAND
Managing Director
Guinness Anchor Bhd
WHAT is your outlook on consumer spending for 2008?
The Malaysian economy seems to us to be in pretty good health. When the Ninth Malaysian Plan’s spending kicks in, we hope that the present growth rate of 6% will be sustainable throughout 2008.
Within the malt liquor market (MLM), we are extremely supportive of the Visit Malaysia Year initiatives and are delighted that it has been extended to 2008. This is because we know that generally, tourists enjoy relaxing with a beer at the end of the day when on holiday, and that other spending that they do will further support the Malaysian economic growth.
While we are optimistic for 2008, we are also not discounting that several other factors can impact consumer spending, such as inflationary pressures and the external environment, like high oil prices and the US subprime mortgage market as well as the accompanying credit crunch.
As for the MLM, we were spared another year of excise duty increase in the recent Budget 2008 and the market is slowly beginning to stabilise, registering a marginal growth year-on-year.
How was consumer spending in 2007?
The malt liquor industry had a tough year with a 1.4% contraction in the market.
Consumers were, not surprisingly, still careful in their spending on beer given the very high prices due to us having the second highest excise duty in the world.
I am pleased to say though that despite this, GAB performed very well. Our revenue breached the RM1bil mark to reach RM1.07bil while pre-tax profits stood at RM152.16mil.
Our success was due to our continued focus on our people, brands and performance. We launched several innovative marketing initiatives to attract consumers to our brands, increased our budget allocation for employee training and improved operational efficiency to strengthen our financial performance.
This, together with continuous support from our consumers and trade partners, has helped us open up a clear lead over the competition.
What is your expectation of spending at the higher end? Please define “higher end” in your industry.
Whilst GAB proudly boasts a full diverse portfolio of brands, we have the best “higher-end” beer brands in Malaysia. As such, a good performance in this segment is critical to our success.
Higher-end outlets for us are modern pubs and clubs, white table restaurant and hotels. We expect that this sector will continue to perform as Malaysia transitions into more of a service economy and there is further growth in middle-to-higher income jobs.
Furthermore, the Visit Malaysia Year initiatives will hopefully continue to bring additional affluent consumers to the country.
GAB is well positioned to grow in this segment. Consumers regularly choose our brands as part of their evening. Whilst we are the clear market leader overall, we have over 90% market share of this “higher-end” segment.
How have the tourism dollars helped to boost consumer spending, what further measures can be introduced to boost tourism?
Tourism is very important in bringing in tourist ringgit into the country, helping boost the economy and, consequently, consumer spending.
The price of beer and stout is one factor that tourists consider in making a choice of holiday destination. We also know that beer prices in Malaysia are the highest in the region and believe that this may lead to tourists choosing neighbouring countries over Malaysia.
To this end, we believe that it was a good decision by the Government not to increase excise duties this year to give the rest of the world a chance to catch up.
We further believe that the industry should play its part in boosting tourism. The Ministry of Tourism’s initiatives should be commended and complemented by us.
We are currently thinking of how we can support the ministry in its efforts and have started dialogues with them on how we can help.
What are the new challenges at a time when consumers are said to be spoilt for choice?
One of the wonderful things about a business is that there are always challenges and the trick is to turn these challenges into opportunities.
Over the past six years, GAB has been successful.
We believe that by working hard with our great people and fantastic portfolio of brands to deliver performance, we are able to continue to grow to deliver ahead of shareholders' expectations.
Tan Kar Hor
TAN KAR HOR
CEO Prudential Assurance Malaysia Bhd
IS your company on track toward achieving the risk-based capital (RBC) framework by 2009?
Insurance companies in Malaysia have known for a long time about the impending introduction of a risk-based capital framework. The possibility of such a framework being introduced was highlighted as early as 2001 in the Financial Sector Masterplan.
Since 2004, Bank Negara has also been working closely with the insurance industry to draw up the framework that is applicable for Malaysia, and there have been several rounds of refinement of the proposed framework following discussions between the central bank and the insurance industry.
This has allowed insurance companies, including Prudential, to test the impact of the proposed framework on their financial positions and to strategise in areas such as product development, investment decisions and efficient capital management.
As far as Prudential is concerned, we are on track to implement the RBC framework by 2009.
What are the current initiatives and processes put in place or being undertaken to achieve the RBC framework?
With the impending introduction of the RBC framework, there will be higher demand for professionals with specialised skills such as actuaries and risk managers.
This is especially so because the RBC framework uses statistical science to make explicit provisions for uncertainties in an insurer’s future financial position, for example, the amount of claims and the market view of investment return.
As a leading insurer in Malaysia, Prudential is fortunate to be able to attract and retain people with specialised skills. We focus a lot not only on attracting and retaining the right people, but also training them.
The new framework also gives insurance companies more opportunities and flexibility to demonstrate good internal governance and risk management systems and practices. We are further strengthening these areas to cope with the new framework.
Being part of a large global financial services group (UK-based Prudential plc), we are also fortunate that our group head office supports us by providing their experience on new developments in the regulatory regimes in other countries in which we have operations as well as training to update the skills of our specialised staff.
Are mergers and acquisitions (M&A) on the company’s agenda in view of the deadline for RBC compliance getting closer?
At present, we are not considering any mergers and acquisitions.
What steps are your company taking to gain a larger foothold in the sector?
The launch of our sister company, Prudential BSN Takaful, last year was a significant milestone that enabled us to widen our product range to include syariah-compliant insurance plans. We expect strong contribution from our takaful business given the huge market potential.
We will continue our efforts to expand our agency force, improve their productivity through rigorous training programmes and leverage on IT to enhance their efficiency.
We are also aggressively broadening our insurance solutions to meet our customers’ needs.
Retirement is one of the key focus areas as the market is ripe for financial solutions that can help customers proactively plan for retirement and be able to live comfortably through their golden years. We are building our strength and expertise in this area, supported by our market leadership in investment-linked products and deep understanding of the retirement space through consumer research and vast experience worldwide.
Besides retirement, healthcare remains a major concern as one gets older. We will continue to develop even more innovative insurance plans to ensure our customers are well protected against escalating medical costs.
With all these initiatives in place, Prudential is well positioned to deliver sustainable, profitable new business growth in the coming year.
Will financial advisor be one of the important distribution channels for the company going forward, judging by its success in developed countries?
Developing our agents to be financial advisors is an important step to cater for customers who are nowadays more financially-savvy and require solutions that can meet various financial needs.
Training programmes that our agents undergo increasingly emphasize on customer needs analysis, the provision of financial advisory services and proper advice to customers as a way to increase their skills and professionalism.
We will also continue to synergise the strengths and competencies of Prudential’s insurance, takaful and fund management businesses in Malaysia to deliver innovative financial solutions that cater to customers’ needs.
This synergy will further solidify our brand name and position as a significant retail financial solutions provider in the market.
What will be your investment in IT infrastructure and other expansion plans?
We have put in great efforts to transform our agents to be more receptive to technology in conducting their business.
Many of them are already using notebooks and mobile devices such as Treo smart phones and BlackBerry equipped with customised insurance solutions that give them the flexibility to conduct their business while on the move.
Besides real-time accessibility to customer information, these devices also allow our agents to prepare quotations and provide on-the-spot response to customer enquiries.
These efforts are part of our ongoing commitment to innovative services and products, and transforming our agency force into the most ‘well-connected’ in Malaysia.
Prudential will continue to leverage on technology to further improve agents’ efficiency and customer service delivery. In the pipeline is the development of Sales Force Automation (SFA), which will give our agents instant access to customer data and enable them to issue policies right in the customers’ homes.
------------
Here's my version of summary (Nik Zafri)
1. Property market demand will depend many factors
a. Future - Malaysia’s young population, rising urbanisation, low unemployment rate and increasing wages, as well as a high savings rate
b. Current - EPF withdrawals
2. Future - the Development Regions
Current - Volatile construction raw materials pricing ' still need further assistance'
3. Buyers are recommended to hedge against inflation by asset investments that have potential upsides
Potential upside relates to :
- spread ratio/yield result in order to get risk/return ratio. In short, take additional risk to benchmark the current risk. Only then a decision can be obtained to know if additional pick-up of yield is worth in terms for 'taking additional risk' (huh?) It's kinda 3D thinking in asset management.
Again 'potential' means 'Future'.
4. Future : Landowners should work together with Developers instead of selling land.
5. Current : Tourism is still the most popular 'profit generator'.
6. Future : Risk Based Capital to (Future) Risk Weighted Assets ratio of x%.
Current : Impact testing on Product development, investment decisions and efficient capital management.
7. Current : Competent Human Resources, Knowledge Workers etc. still being hunted.
8. Current and Future : ICT will still rule!
New launches to drive growth
Chief executives have lined up new products for next year. Mah Sing Group Bhd CEO Datuk Seri Leong Hoy Kum expects the company's new launches will be well received in a buoyant, domestic-driven economy. Guinness Anchor Bhd's MD Charles Ireland feels 2008 should be a better year as the market for malt liquor has started to stabilise. Prudential Assurance Malaysia Bhd's CEO Tan Kar Hor will cultivate new product lines like retirement planning and Islamic products
DATUK SERI LEONG HOY KUM
Managing director and CEO
Mah Sing Group Bhd
WHAT is your outlook for the property market next year?
We believe that the property market in 2008 will be robust, underpinned by a resilient domestic driven economy. Various pump-priming initiatives under the Ninth Malaysia Plan will provide a boost to propel the economy upwards and increase disposable incomes.
Malaysia’s young population, rising urbanisation, low unemployment rate and increasing wages, as well as a high savings rate will continue to contribute to the property market’s positive run.
Datuk Seri leong Huy Kum
The Government has been proactive in this manner, with several goodies announced for Budget 2008. EPF contributors will be allowed to make monthly withdrawals for financing one house effective Jan 1, 2008.
This could potentially unleash close to RM9.6bil annually into the property industry, allowing homebuyers to afford homes costing 20% more than previously.
The 50% waiver on stamp duty for purchase of homes under RM250,000 should boost demand for homes, and the Group has taken the initiative to ride on these incentives.
We are setting up a help desk to advise our buyers on the EPF withdrawals, as well as waiving the remaining 50% stamp duty for Mah Sing homes priced up to RM250,000, to ease the burden of home ownership.
Besides domestic demand, there has been increased foreign interest in our properties as they like the quality of our properties, boosted by the waiver of real property gains tax.
We have the most liberal landownership laws in the region, and now, foreigners are allowed to buy unlimited units of residential properties above RM250,000 without restriction of usage.
What are some of the opportunities and challenges for industry players going forward?
Growth corridors including the Iskandar Development Region (IDR) and Northern Corridor Economic Region have resulted in renewed interest in these areas, and improving infrastructure as well as strong economic and population growth will spur demand for housing there.
Malaysia’s increasing exposure as an international property market will attract more foreign participation. It is indeed an opportune time for foreign investors because whilst our properties may be world class, valuations still lag behind those of our regional peers.
Increases in raw material prices have increased construction costs, resulting in higher pricing for good housing projects in strategic locations.
Buyers will want to hedge against inflation by investing in assets that have potential upside.
Which property sector and development types offer the best potential for your company?
In terms of the residential market, we believe that medium to high-end gated and guarded residential properties should do well.
Demand for these properties is a reflection of Malaysians’ growing affluence and sophistication. These properties would need innovative concepts and practical layouts, as well as being supported by a strong brand.
For the commercial market, there is a shortage of good office space, especially Grade A offices in Kuala Lumpur. The limited number of good quality investment grade buildings available for sale in the market has driven up the capital value of prime offices.
Depending on the location, commercial retail buildings should do well.
What are the challenges faced by the industry and the impact on your company?
Prime land is increasingly scarce, especially land that fits our fast turnaround business model.
However, we have a proven landbanking track record, securing good land year on year to maintain our earnings visibility.
Sometimes, landowners also approach us either to sell land, or to propose joint ventures on their land to tap into our branding, experience and skills.
Our capability to appropriately manage cash flow is key to the company’s ability to capitalise on opportunities
Increases in raw material are inevitable, but we have taken steps to mitigate the effects, for example, by using step up pricing for new launches, bulk purchasing to enjoy discounts, and lowering our funding costs via shrewd negotiations.
Human capital, i.e being able to continuously recruit, train and retain good people who are willing to take the company to new heights amidst increasing globalisation, will be the key to success.
We have a very strong team which is striving to realise the Group’s vision.
What are some of the interesting property launches that can be expected from your company in the coming months?
We have started a registration exercise for our new commercial projects, which will be launched in 2008.
Southgate Commercial Centre offers investors the opportunity to own offices in the heart of Kuala Lumpur, as opposed to just leasing the offices in most new buildings.
There will be food and retail outlets to support the offices. Southbay City in Batu Maung, Penang will be a new “must-visit” destination, integrating leisure, commercial and retail offerings near the upcoming Second Bridge on the island.
Our existing residential projects are Perdana Residence, Kemuning Residence, Hijauan Residence and Aman Perdana in the Klang Valley, and Sierra Perdana, Austin Perdana and Sri Pulai Perdana in South Johor within the IDR.
We shall continue our sales from these projects, mainly semi-detached homes and bungalows within gated and guarded communities.
What are your expectations of project take-up rate, sales revenue and earnings for the company next year?
We believe 2008 will be another good year and we should be able to achieve another year of uninterrupted profitability and good take-up. This will be underpinned by our unbilled sales exceeding RM1bil, which is twice our revenue in 2006.
We have a remaining Gross Development Value (GDV) of RM3.042bil, representing a total GDV of RM4.119bil, which will ensure earnings visibility for seven years.
We expect another year of good sales, especially with the implementation of the Employees Provident Fund withdrawals next year. We will continue to focus on the lifestyle medium to high-end residential and commercial segments, which have given us very good results.
Charles Ireland
CHARLES IRELAND
Managing Director
Guinness Anchor Bhd
WHAT is your outlook on consumer spending for 2008?
The Malaysian economy seems to us to be in pretty good health. When the Ninth Malaysian Plan’s spending kicks in, we hope that the present growth rate of 6% will be sustainable throughout 2008.
Within the malt liquor market (MLM), we are extremely supportive of the Visit Malaysia Year initiatives and are delighted that it has been extended to 2008. This is because we know that generally, tourists enjoy relaxing with a beer at the end of the day when on holiday, and that other spending that they do will further support the Malaysian economic growth.
While we are optimistic for 2008, we are also not discounting that several other factors can impact consumer spending, such as inflationary pressures and the external environment, like high oil prices and the US subprime mortgage market as well as the accompanying credit crunch.
As for the MLM, we were spared another year of excise duty increase in the recent Budget 2008 and the market is slowly beginning to stabilise, registering a marginal growth year-on-year.
How was consumer spending in 2007?
The malt liquor industry had a tough year with a 1.4% contraction in the market.
Consumers were, not surprisingly, still careful in their spending on beer given the very high prices due to us having the second highest excise duty in the world.
I am pleased to say though that despite this, GAB performed very well. Our revenue breached the RM1bil mark to reach RM1.07bil while pre-tax profits stood at RM152.16mil.
Our success was due to our continued focus on our people, brands and performance. We launched several innovative marketing initiatives to attract consumers to our brands, increased our budget allocation for employee training and improved operational efficiency to strengthen our financial performance.
This, together with continuous support from our consumers and trade partners, has helped us open up a clear lead over the competition.
What is your expectation of spending at the higher end? Please define “higher end” in your industry.
Whilst GAB proudly boasts a full diverse portfolio of brands, we have the best “higher-end” beer brands in Malaysia. As such, a good performance in this segment is critical to our success.
Higher-end outlets for us are modern pubs and clubs, white table restaurant and hotels. We expect that this sector will continue to perform as Malaysia transitions into more of a service economy and there is further growth in middle-to-higher income jobs.
Furthermore, the Visit Malaysia Year initiatives will hopefully continue to bring additional affluent consumers to the country.
GAB is well positioned to grow in this segment. Consumers regularly choose our brands as part of their evening. Whilst we are the clear market leader overall, we have over 90% market share of this “higher-end” segment.
How have the tourism dollars helped to boost consumer spending, what further measures can be introduced to boost tourism?
Tourism is very important in bringing in tourist ringgit into the country, helping boost the economy and, consequently, consumer spending.
The price of beer and stout is one factor that tourists consider in making a choice of holiday destination. We also know that beer prices in Malaysia are the highest in the region and believe that this may lead to tourists choosing neighbouring countries over Malaysia.
To this end, we believe that it was a good decision by the Government not to increase excise duties this year to give the rest of the world a chance to catch up.
We further believe that the industry should play its part in boosting tourism. The Ministry of Tourism’s initiatives should be commended and complemented by us.
We are currently thinking of how we can support the ministry in its efforts and have started dialogues with them on how we can help.
What are the new challenges at a time when consumers are said to be spoilt for choice?
One of the wonderful things about a business is that there are always challenges and the trick is to turn these challenges into opportunities.
Over the past six years, GAB has been successful.
We believe that by working hard with our great people and fantastic portfolio of brands to deliver performance, we are able to continue to grow to deliver ahead of shareholders' expectations.
Tan Kar Hor
TAN KAR HOR
CEO Prudential Assurance Malaysia Bhd
IS your company on track toward achieving the risk-based capital (RBC) framework by 2009?
Insurance companies in Malaysia have known for a long time about the impending introduction of a risk-based capital framework. The possibility of such a framework being introduced was highlighted as early as 2001 in the Financial Sector Masterplan.
Since 2004, Bank Negara has also been working closely with the insurance industry to draw up the framework that is applicable for Malaysia, and there have been several rounds of refinement of the proposed framework following discussions between the central bank and the insurance industry.
This has allowed insurance companies, including Prudential, to test the impact of the proposed framework on their financial positions and to strategise in areas such as product development, investment decisions and efficient capital management.
As far as Prudential is concerned, we are on track to implement the RBC framework by 2009.
What are the current initiatives and processes put in place or being undertaken to achieve the RBC framework?
With the impending introduction of the RBC framework, there will be higher demand for professionals with specialised skills such as actuaries and risk managers.
This is especially so because the RBC framework uses statistical science to make explicit provisions for uncertainties in an insurer’s future financial position, for example, the amount of claims and the market view of investment return.
As a leading insurer in Malaysia, Prudential is fortunate to be able to attract and retain people with specialised skills. We focus a lot not only on attracting and retaining the right people, but also training them.
The new framework also gives insurance companies more opportunities and flexibility to demonstrate good internal governance and risk management systems and practices. We are further strengthening these areas to cope with the new framework.
Being part of a large global financial services group (UK-based Prudential plc), we are also fortunate that our group head office supports us by providing their experience on new developments in the regulatory regimes in other countries in which we have operations as well as training to update the skills of our specialised staff.
Are mergers and acquisitions (M&A) on the company’s agenda in view of the deadline for RBC compliance getting closer?
At present, we are not considering any mergers and acquisitions.
What steps are your company taking to gain a larger foothold in the sector?
The launch of our sister company, Prudential BSN Takaful, last year was a significant milestone that enabled us to widen our product range to include syariah-compliant insurance plans. We expect strong contribution from our takaful business given the huge market potential.
We will continue our efforts to expand our agency force, improve their productivity through rigorous training programmes and leverage on IT to enhance their efficiency.
We are also aggressively broadening our insurance solutions to meet our customers’ needs.
Retirement is one of the key focus areas as the market is ripe for financial solutions that can help customers proactively plan for retirement and be able to live comfortably through their golden years. We are building our strength and expertise in this area, supported by our market leadership in investment-linked products and deep understanding of the retirement space through consumer research and vast experience worldwide.
Besides retirement, healthcare remains a major concern as one gets older. We will continue to develop even more innovative insurance plans to ensure our customers are well protected against escalating medical costs.
With all these initiatives in place, Prudential is well positioned to deliver sustainable, profitable new business growth in the coming year.
Will financial advisor be one of the important distribution channels for the company going forward, judging by its success in developed countries?
Developing our agents to be financial advisors is an important step to cater for customers who are nowadays more financially-savvy and require solutions that can meet various financial needs.
Training programmes that our agents undergo increasingly emphasize on customer needs analysis, the provision of financial advisory services and proper advice to customers as a way to increase their skills and professionalism.
We will also continue to synergise the strengths and competencies of Prudential’s insurance, takaful and fund management businesses in Malaysia to deliver innovative financial solutions that cater to customers’ needs.
This synergy will further solidify our brand name and position as a significant retail financial solutions provider in the market.
What will be your investment in IT infrastructure and other expansion plans?
We have put in great efforts to transform our agents to be more receptive to technology in conducting their business.
Many of them are already using notebooks and mobile devices such as Treo smart phones and BlackBerry equipped with customised insurance solutions that give them the flexibility to conduct their business while on the move.
Besides real-time accessibility to customer information, these devices also allow our agents to prepare quotations and provide on-the-spot response to customer enquiries.
These efforts are part of our ongoing commitment to innovative services and products, and transforming our agency force into the most ‘well-connected’ in Malaysia.
Prudential will continue to leverage on technology to further improve agents’ efficiency and customer service delivery. In the pipeline is the development of Sales Force Automation (SFA), which will give our agents instant access to customer data and enable them to issue policies right in the customers’ homes.
------------
Here's my version of summary (Nik Zafri)
1. Property market demand will depend many factors
a. Future - Malaysia’s young population, rising urbanisation, low unemployment rate and increasing wages, as well as a high savings rate
b. Current - EPF withdrawals
2. Future - the Development Regions
Current - Volatile construction raw materials pricing ' still need further assistance'
3. Buyers are recommended to hedge against inflation by asset investments that have potential upsides
Potential upside relates to :
- spread ratio/yield result in order to get risk/return ratio. In short, take additional risk to benchmark the current risk. Only then a decision can be obtained to know if additional pick-up of yield is worth in terms for 'taking additional risk' (huh?) It's kinda 3D thinking in asset management.
Again 'potential' means 'Future'.
4. Future : Landowners should work together with Developers instead of selling land.
5. Current : Tourism is still the most popular 'profit generator'.
6. Future : Risk Based Capital to (Future) Risk Weighted Assets ratio of x%.
Current : Impact testing on Product development, investment decisions and efficient capital management.
7. Current : Competent Human Resources, Knowledge Workers etc. still being hunted.
8. Current and Future : ICT will still rule!
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