WILL MALAYSIA ENCOUNTER ASSET BUBBLE? - AN 'ANALYSIS' BY NIK ZAFRI

Today, I am not going to write about Sub Prime Mortgage Crisis, REIT, Commercial Property Bubble etc as I've written enough. But today, I'm going to share some good articles that worth looking into.

I read Jagdev Singh Sidhu's brilliant article in the Star Thursday September 9, 2010 entitled

"Diffuse the property bubble before it is too late - Making a Point - By Jagdev Singh Sidhu"

(Nik Zafri's notes : I pray that we're not too late)

THE subject of property prices and financing has gathered momentum ever since news broke that Bank Negara is assessing the situation to determine if new measures should be instituted to cool down fast escalating property prices.

Lobby groups for the industry have been busy making their case heard, saying that any move to impose higher downpayments for houses would hurt the property market.

Their concerns come at a time as a growing number of people have complained that prices of houses, especially in the hotspots in the country such as the Klang Valley and Penang, are spiralling beyond affordability.

The last thing everybody needs is such speculation spreading to other areas where for the moment, speculative activity appears to be contained for the moment in the hotspots as 94% of houses sold in the country are priced below half a million ringgit and 85% of houses launched in the past nine months cost below RM500,000.

Dealing with speculation is tough and the last thing anyone should do is to make genuine buyers suffer, especially first time buyers.

Suggestions that houses costing below RM500,000 should not be subject to the new higher downpayment requirement makes sense.

Also first-time house buyers or owner occupied houses should be given the most ease of financing to allow them to fulfil the dream of owning a home.

It’s also hard to clamp down on speculative activity as the wealth creation process is an allure that developers, banks and policy makers might find hard to turn away.

After all, the money generated from flipping houses adds to the bottomlines of companies and the money in the hands of people could well filter down to other consumption activity that would go a long way to help spur economic activity.

But the profit from speculating activity, this time driven largely by cheap and ready financing, is unsustainable and history is full of examples of the dire consequences of a property bubble gone burst.

It’s then not surprising that the authorities in other countries in the region, where a property bubble has formed, are working hard to manage and diffuse the situation. Rules introduced in China, Hong Kong and Singapore are far more drastic that what the authorities here are reported to be contemplating.

In fact the new rules that are talked about are tame compared with what has been done in the past. In 1995, reports said that Bank Negara imposed a maximum 60% loan for residential properties priced above RM150,000 to put the brakes on the then fast rising house prices.

Furthermore, a real property gains tax of 30% was imposed on foreigners selling their properties irrespective of the holding period of the property.

Those measures were met with a huge hue and cry from the lobby groups, and developers who claimed that such draconian measures would maim the market. A couple of years later Malaysia entered its worst-ever recession, and as they say the rest is history.

The point is, just as the saying goes, those that fail to learn from history are doomed to repeat it, and for Malaysia, failing to deal with any property speculative bubble would spell trouble for the banks that have grown to rely more and more on households to drive their lending activity.

In the interest of financial stability and common sense, the move to act should be made soon.

Deputy news editor Jagdev Singh Sidhu is amazed just how much his house is “worth” in the secondary market.

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(Nik Zafri : Here's another from United States (It's old but the REIT players...you can consider the points GLG is making (but obviously it was a bit late) – BUT we in Malaysia can change it! Take Preventive Actions now!) :

if you like subprime, you'll love the commercial property bubble

August 29, 2007

• Analysis by: GLG Expert Contributor

• Analysis of: Commercial Real Estate, Come On Down

• Published at: www.washingtonpost.com

Summary

It's fine to talk about gloom and doom, but it's an ill wind that blows no good. Counter cyclical investment is worth thinking about.

Analysis

If you like subprime...you'll just LOVE the commercial property bubble! Every day we hear about a new record price for commercial property. Great news... if you're selling.

Alright, you say, here comes another gloom and doom prophecy. Nothing new about that. But let me regale you with some ancient history.

There once was a gentleman by the name of Knuppe. He pioneered mini-storage. His rule of thumb was, 'Build to yield 12% on hard cost. Sell at a capitalization rate of 10%.'

Well a few years ago I bought a self-storage REIT to yield 8%. Considering I was paying for management and getting liquidity, thought that 8% was pretty fair.

Hoped to get some increase of value with increasing rents. Well, from time to time I checked in on the stock. When I had more than doubled my money and the yield was down to 4%, wondered what the upside could be. Maybe the yield could go down to 3%? I sold. At the time that Mr. Knuppe was in his prime, normal commercial vacancy rates were on the order of 5% and capitalization rates something like 10%.

At about that time there was a very smart gentleman by the name of Michael Young. He asked what made real estate so special that investment in it got such a premium over, say, bonds or equities. Then he proceeded to figure a way to parse out credit leases like a bond strip, selling periodic payments to one buyer and reversion of the property to another. Today the ratios are just about opposite, 10% vacancy and 5% cap rate, except you might have a hard time buying to yield 5%. Capitalization rates are trying to go down to half that. What happened? Briefly, finance discovered real estate

Recommended reading: "A Demon of Our Own Design" by Bookstaber, "The Black Swan" by Taleb and "The (Mis)Behavior of Markets" by Mandelbrot.

(Nik Zafri : here comes the best part!....read on...)

Some fairly smart folks figured ways to package and sell "asset based" products without a firm understanding of the underlying assets or their markets. It is fairly well accepted that at the moment the global economy has been awash in liquidity.

As most people in normal times would rather put money to work rather than stick it in the mattress, that means that various investments are likely to receive the bounty.

The problem, as always, is that supply being roughly equal, more money being bid means higher prices. This has trickled down to real estate through various investment vehicles.

Real estate investment trusts (REITs) are an old one. Mortgage backed securities (MBS) and collateralized debt obligations (CDOs) are newer. This doesn't mention synthetic leases, which are, at least priced, a lot like bonds, or Mr. Young's "lease strips".

At one time in the Paleolithic of real estate, forty or so years ago, a debate was current as to whether the tax advantaged status of limited partnerships inflated apartment prices. More recently there has been discussion of the inflationary aspects of tax advantaged, "1031", property exchanges.

Today, however, we are talking about REAL money, that which is under management in pension and other investment funds. If the fund managers can't find a way to invest, they don't make their bonuses. Every picture tells a story. The office complex in the aerial photo (http://www.charlesbwarren.com/aerial%20services.html) is of PacificShores.

Touted as being 2/3 leased before ground was broken in late 1999, its tenants evaporated in the dot-com meltdown the following spring. For years it represented a substantial part of the office vacancy in San MateoCounty. The picture was taken mid-day, midweek in Fall, 2004.

Recently it sold for upwards of $500 per square foot. It is now reported to be 91% leased. The parking lot is a bit more full than pictured, but not 91%.

At a ULI workshop in 2006 one of the speakers opined, "The fun is gone out of this cycle. A few years ago you could buy based on capitalization rate. Then you could justify an investment based on discounted cash flow. Now the only reason to buy is price per pound."

I think that price per pound for existing property is now getting high enough to "justify" new construction... if your expectation of investment returns is low, very low. So what? How does this help? Maybe I get "told-you-so" points in a few years?

If you are just a thrill seeker, invest on the momentum and hope to get out before the roller coaster goes over the top of the hill. Or maybe you sit on your money. Earn 5% short term. When the bubble pops maybe at least some real estate might get interesting again.

Otherwise, if you're adventurous, you might try shorting REITs. Charles B. Warren, ASA urban real property San Francisco http://www.charlesbwarren.com/

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

This author consults with leading institutions through GLG

China Passes Japan as Second-Largest Economy
The New York Times - On Monday August 16, 2010, 12:20 am EDT

SHANGHAI — After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030. America’s gross domestic product was about $14 trillion in 2009.

“This has enormous significance,” said Nicholas R. Lardy, an economist at the Peterson Institute for International Economics. “It reconfirms what’s been happening for the better part of a decade: China has been eclipsing Japan economically. For everyone in China’s region, they’re now the biggest trading partner rather than the U.S. or Japan.”

For Japan, whose economy has been stagnating for more than a decade, the figures reflect a decline in economic and political power. Japan has had the world’s second-largest economy for much of the last four decades, according to the World Bank. And during the 1980s, there was even talk about Japan’s economy some day overtaking that of the United States.

But while Japan’s economy is mature and its population quickly aging, China is in the throes of urbanization and is far from developed, analysts say, meaning it has a much lower standard of living, as well as a lot more room to grow. Just five years ago, China’s gross domestic product was about $2.3 trillion, about half of Japan’s.

This country has roughly the same land mass as the United States, but it is burdened with a fifth of the world’s population and insufficient resources.

Its per capita income is more on a par with those of impoverished nations like Algeria, El Salvador and Albania — which, along with China, are close to $3,600 — than that of the United States, where it is about $46,000.

Yet there is little disputing that under the direction of the Communist Party, China has begun to reshape the way the global economy functions by virtue of its growing dominance of trade, its huge hoard of foreign exchange reserves and United States government debt and its voracious appetite for oil, coal, iron ore and other natural resources.

China is already a major driver of global growth. The country’s leaders have grown more confident on the international stage and have begun to assert greater influence in Asia, Africa and Latin America, with things like special trade agreements and multibillion dollar resource deals.

“They’re exerting a lot of influence on the global economy and becoming dominant in Asia,” said Eswar S. Prasad, a professor of trade policy at Cornell and former head of the International Monetary Fund’s China division. “A lot of other economies in the region are essentially riding on China’s coat tails, and this is remarkable for an economy with a low per capita income.”

In Japan, the mood was one of resignation. Though increasingly eclipsed by Beijing on the world stage, Japan has benefited from a booming China, initially by businesses moving production there to take advantage of lower wages and, as local incomes have risen, by tapping a large and increasingly lucrative market for Japanese goods.

Beijing is also beginning to shape global dialogues on a range of issues, analysts said; for instance, last year it asserted that the dollar must be phased out as the world’s primary reserve currency.

And while the United States and the European Union are struggling to grow in the wake of the worst economic crisis in decades, China has continued to climb up the economic league tables by investing heavily in infrastructure and backing a $586 billion stimulus plan.

This year, although growth has begun to moderate a bit, China’s economy is forecast to expand about 10 percent — continuing a remarkable three-decade streak of double-digit growth.

“This is just the beginning,” said Wang Tao, an economist at UBS in Beijing. “China is still a developing country. So it has a lot of room to grow. And China has the biggest impact on commodity prices — in Russia, India, Australia and Latin America.”

There are huge challenges ahead, though. Economists say that China’s economy is too heavily dependent on exports and investment and that it needs to encourage greater domestic consumption — something China has struggled to do.

The country’s largely state-run banks have recently been criticized for lending far too aggressively in the last year while shifting some loans off their balance sheet to disguise lending and evade rules meant to curtail lending growth.

China is also locked in a fierce debate over its currency policy, with the United States, European Union and others accusing Beijing of keeping the Chinese currency, the renminbi, artificially low to bolster exports — leading to huge trade surpluses for China but major bilateral trade deficits for the United States and the European Union. China says that its currency is not substantially undervalued and that it is moving ahead with currency reform.

Regardless, China’s rapid growth suggests that it will continue to compete fiercely with the United States and Europe for natural resources but also offer big opportunities for companies eager to tap its market.

Although its economy is still only one-third the size of the American economy, China passed the United States last year to become the world’s largest market for passenger vehicles. China also passed Germany last year to become the world’s biggest exporter.

Global companies like Caterpillar, General Electric, General Motors and Siemens — as well as scores of others — are making a more aggressive push into China, in some cases moving research and development centers here.

Some analysts, though, say that while China is eager to assert itself as a financial and economic power — and to push its state companies to “go global” — it is reluctant to play a greater role in the debate over climate change or how to slow the growth of greenhouse gases.

China passed the United States in 2006 to become the world’s largest emitter of greenhouse gases, which scientists link to global warming. But China also has an ambitious program to cut the energy it uses for each unit of economic output by 20 percent by the end of 2010, compared to 2006.

Assessing what China’s newfound clout means, though, is complicated. While the country is still relatively poor per capita, it has an authoritarian government that is capable of taking decisive action — to stimulate the economy, build new projects and invest in specific industries.

That, Mr. Lardy at the Peterson Institute said, gives the country unusual power. “China is already the primary determiner of the price of virtually every major commodity,” he said. “And the Chinese government can be much more decisive in allocating resources in a way that other governments of this level of per capita income cannot.”

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Nik Zafri says : "I've been saying it...for many-many years"...Here's a reminder :

CHINA GOING DOWN? NO WAY!!

K-ECONOMY, K-MANAGEMENT, K-ORGANIZATION,HUMAN CAPITAL, ICT – YOU'RE STILL CONFUSED? (BY NIK ZAFRI)

The battle of defining knowledge management is a never ending story.

(Cummon guys....it's 2010 now..what? you wanna wait till 2020..gosh)

To me KM; having working with bluechips that have proven themselves worthy to be called a KM and KE (Knowledge-Based Economy) – based organizations, I would still agree that :


“KM is a organizational-wide collecton of practices and approaches to generate, capture, disseminate the know-how and others relevant with the perspective of business sustainability and profit”

This is the best definition I see so far.

To those who are or has directly been involved in organizational KM will understand exactly what this definition mean.

The definition has; to a highest degree; harmoniously combined both organizational empirical PROVEN VALUES with ICT as enablers. (Mind you - please do not provide me hypotheses in your counter comments to this article as what I've said herein have been substantiated with proof. )

KM in these organizations is no longer a buzzword, lip-service or trendy – KM is a MUST to them in order to cope up with rapid changes as we are no longer absorbed to the ancient story “who moved my cheese”.

I've seen companies' thrill of victory - making billions due to proper applicaton of KM. Unfortunately; due to certain constraint; I can't reveal any of the companies name as these are their secret recipes of success – trust me (so don't ask)

But on the other hand, I've also witnessed companies' agony of defeat being closed even go bust – due to WRONG applications used and wrong way of 'hybriding' management systems. In the end, the practitioners themselves tend to be CONFUSED themselves.

Communication has evolved rapidly due to the phrase 'knowledge sharing'. It helps in the context of maintaining the 'one captain in one ship' and 'one (management) game plan'. Grapevine at its best!!

We are no longer alone!

If we have to collaborate, then do so!
If we have to be a smart partner or associate, then be one!
If we have to merge; merge then!

(But why the defensive and protective attitude..you wanna go global - don't you, you wanna grow bigger, don't you?)


K-Economy unlike P-Economy (although productivity is still an inevitable issue) everything and everyone in any organization will have a certain impact on the overall economy itself.

Better – these organizations can still 'make money' during recession. (yes, this is what I'm talking about – bearish during good times and bullish to make a comeback during 'bad times')

Face it - Today - economy NO longer depends solely on the "conventionals" such as movement of composite index in the stock market, inflation/deflation, candlestick/technical charts, oil price, USD, political & psychological sentiments, bull or bear, speculation or hedging etc.

BUT

rather we are seeking a more convincing story like PROPER JUSTIFICATIONS or 'COHERENT FACTORS' to JUSTIFY of WHY are there economical fluctuations? or WHY are the charts indicating erratic trends or probably WHAT has political sentiments got to do with the stock market etc. (in laymen terms - not limited only to economist but people at large as well regardless of who they are or where they come from)

(I recalled the The Oracle advising Neo in Matrix Reloaded:

“You didn't come here to make a decision, you already made the decision, now you need to understand WHY you make such decision” (something like that)

So, these justifications require KNOWLEDGE – proper KNOWLEDGE from your own skills, competencies, experience etc. Even paper qualifications are no longer a priority.


“Today – Nik, if there is no control on qualifications being issued, one day you throw a stone in the air, it will definitely hit on a Master Degree Holder's head”

– quoting what the-then Prime Minister, the living legend – Tun Dr. Mahathir once said to me in 1995 when doing the site-walk during the construction of KLCC Petronas Towers.

Tips :

Understand first the scope of service or product provision that your company is doing.

Draw up the core business process

Decide what sort of ICT application or system to be used to expedite operation.

What did you say? I don't understand - well, Bill Gates said that something like this


"KM doesn't even START with a software or application!"

REAL ESTATE INVESTMENT TRUST (REIT) - BY NIK ZAFRI

I've noticed these few days that major corporations in Malaysia are racing into Real Estate Investment Trust (REIT) - or is it M-Reit? (Whatever...)

Is it safe to say that this a sign of real estate and development industry in Malaysia may have successfully prevented the 'sup-prime mortgage crisis' from hitting Malaysia? Fascinating...

Well to start with, from 2007-2008, I've noticed profit from rental income were being distributed in form of dividend to its holders. Well, I think this also has something to do with the pivotal role played by Security Commission issuing guidelines on property trust funds - making more and more REIT companies listed in Bursa Malaysia.

But, the norms are happening again, I went to this small coffee shop known only as 'Peter' in Taman Sri Gombak near the place I'm staying and asked around 'MIC' (mind you - it's Malays, Indians and Chinese) on REIT. Only one or two answered correctly but the rest blinked at me and replied :

"Huh? What? Unit Trust?"

Once again, I think information is not well-disseminated. No wonder new establishments (newly completed office buildings) nearby are not being rented yet.

Well, I'm going to do my bit now...information dissemination :

To start with,

a) REIT is different from Unit Trust

b) REIT works like stock-trading in Bursa Malaysia...giving investors returns via capital appreciation from dividends and change of price... (aaaah, some of "MICs" said and nodded their head in agreement) -

c) REIT's benchmark is on Market Demand & Supply to ascertain its' stock price (Unit Trust is on NAV - value of its assets less liabilities & calculated daily by unit trust companies)

d) you can buy from remisiers/stockbrokers as well but NOT Unit Trust Agents and Banks (so be careful)

f) There is equity REIT (the common one), mortgage REIT (a bit complex - profit based on mortgage loans after procuring mortgage backed securities) - Well you can also go for both,

e) Yes...based on regulations or tax incentives, at least 90% taxable profit of REIT goes away as dividends. (Non-Residents are subject to approximately 30% tax - I think...)

f) high yield

g) If you're not sure, start with small investment

h) Eye for good & strategic places for assured Return of Investment (this is important!!)

i) Don't worry about fluctuations - do a lot of reading on REIT.

And most important, ASK AROUND or ASK the information counter where you're buying.

GOOD LUCK!

Good Service Tax - in the eyes of the consumer and end users - Nik Zafri

We all have heard and know that the Good Service Tax will be introduced either 2011 or 2012. Already, not only the reactions are coming from business/corporate entitites, accountants, auditors, SSM, Customs, Banking and Financial Institutions, Ministry of Domestic Trade & Affairs, FOMCA, political parties - both opposition/government etc are - both positively and negatively, there are also other entitites as well; naming some - SMIs, cottage industries, traders, sundry shops, retail, suppliers, end-users, consumers, etc. are also having their very own opinion as well - and some are already noting this issue by making some 'things dissapear' and hoping that a higher price (controlled price in the end) will be imposed so that they can make some quick buck.

I'm not against anything nor I'm not blaming anyone or any party for this but I think once again, information is not well-disseminated.

Having said that, I'm not going to talk about GST as there are so many sources on the internet but based on my observations, here are my conclusion : (and please don't only react or response or counter comments to my notes over here in facebook cos' not everyone is reading them)

I think the Government should do some explaining on the interrelationship for the following issues:

a) Which party/What product will be absorbing or not absorbing the GST?

i) Who will be bearing the ultimate cost?
ii) Where is the end of the 'absorption'?

b) Is there any special list or directory of 'GST incurred products/services or non-GST ones' that we can refer to?

c) There will be major changes in the accounting system - yes, some say, it's minor but I doubt that very much - due to this 'new counter-reference list to the non GST and GST incurred products/services' that needed to be incorporated in the accounting system (softwares and applications especially) - thus, this factor will definitely gave some major impacts on the bank and financial insitutions, accounting sofwares/system/application development in Malaysia, various Businesses etc.

Will 2 years or 1.5 years from now be adequate?

d) The withdrawal of sales tax and replaced by GST,

e) The withdrawal of subsidy on core consumer (food) products

f) Inflation or Deflation?

How will this 6 things fit together.

I think THIS is what people are concerned now.

Here are my soft reminders - you can lend your ears or you can choose not to. Please guys:

a) Don't ask the people to attend some seminars or conferences on GST (not many can afford anyway) -perhaps seminars are good for accountants,auditors,bankers, CEOs etc.

Have someone to come down to the field and kampungs to explain in laymen terms what is this GST is all about...it's not so tough to send down someone - isn't it?

b) Find a way not to make the price or GST compliant accounting systems applications/softwares much more expensive - I know this is 'good money' for you but consider the quantity of business you're going to get - so some discount should in place?

p.s. to many people - they would always say this :

"aaah..another tax? gosh" :-)

FINALLY

Congratulations from Nik Zafri to :

SPNB (esp. Datuk Idris Haron, Datuk Azian)
Datuk Seri Azmi and Dr Tan Seng Giaw of PAC,
Finance Minister II Datuk Seri Ahmad Husni
and PKMM

See how easy problem-solving are when everyone work together! With the ringgit getting strong, we could now have a cushion to fall on...probably getting rid of the sub-prime mortgage crisis effects.

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Source NST
SPNB completes 77 stalled projects
2010/05/11

SEREMBAN: Syarikat Perumahan Negara Bhd (SPNB) has so far revived and completed 77 stalled projects involving 24,326 housing units nationwide.

The development cost totalled RM480 million, Chairman Datuk Idris Haron told reporters after the handing over of keys to owners whose houses in the abandoned Taman Pelangi scheme had been completed here today.

He said SPNB had revived 23 projects involving 11,081 housing units covering a total of 191.16 hectares by providing financial assistance while the other 54 projects involving 13,245 housing units through advisory services.

"SPNB is presently resuscitating 11 projects under the 2009 Economic Stimulus Package involving 3,713 housing units with a restoration cost if RM381 million and all these projects involve land areas totalling 199.26 hectares," he said.

In Negeri Sembilan alone, he said, SPNB had revived nine projects including the Taman Senawang Jaya and Taman Seri Bayu projects.

Besides, SPNB was also involved in the affordable housing programme under which 9,046 housing units involving 143.37 hectares had been completed, he said. In Negeri Sembilan, three projects involving 1,717 units had been implemented under the programme.

For the Rumah Mesra Rakyat programme, Idris said the response was very encouraging.

Since the programme was introduced in 2001, SPNB had received 42,148 applications to date and had built 14,568 units valued at RM840 million.

"Under the scheme, an applicant needs to pay only RM150 a month for 26 years.
"SPNB remains committed to the national housing agenda by focusing on the development of affordable houses priced below RM100,000," he said.

The Taman Pelangi project was abandoned in 1990 and was taken over by SPNB for restoration in 2007 involving RM10 million.

The 11.5 hectare project comprises 257 low cost single storey terrace units (RM25,000-RM35,000) and medium cost single storey terrace unit (RM44,000-RM63,000). Each unit has three bedrooms and two washrooms. - Bernama
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PKMM and SPNB reach truce
Both parties agree to collaborate on future housing projects
NAJIAH NAJIB

Tuesday, February 2nd, 2010 10:51:00

PETALING JAYA: The Malaysian Malay Contractors Association (PKMM) and Syarikat Perumahan Negara Berhad (SPNB) have apparently reached a "truce" on the matter of the latter’s non-payment to the former.

Speaking to The Malay Mail, PKMM president Datuk Mokhtar Samad said both parties have agreed to collaborate on future housing projects.

He said this was agreed during a meeting between PKMM and SPNB at the latter’s office on Jan 27.

"The meeting we had with SPNB was a regular one. We discussed many issues, with the non-payment issue being one of them. On Class 'A' Bumiputera housing projects, SPNB said some of the projects were conducted via joint ventures with the contractors. If some of the projects experience slow sales, then SPNB, in turn, would also receive its payment late. It's merely a matter of slow cash flow," said Mokhtar.

"This is not to say that our contractors have not been paid at all."

However, Mokhtar said most of the contractors who had worked on smaller Class 'S' projects (housing for the poor) were duly paid by SPNB.

He added that slow or non-payment was also due to year-end finances.

"SPNB is wholly-owned by the Finance Ministry. We understand that it is very common for payments to be slow during year-end until early in the year, around February or March. This is very common, not just in Malaysia but in many other parts of the world."

He said PKMM also accepted the national housing company’s reason that the latter is currently understaffed and, therefore, things may not happen as fast as they should.

To overcome this problem, Mokhtar said the two parties have agreed to combine efforts in terms of manpower, at the suggestion of PKMM.

"For example, if there is a project in Pahang and SPNB find it difficult to send a technical adviser there from its headquarters to oversee the project, we will offer our help by sending one of our members there. This is not a problem for us as our members are located nationwide. Hopefully, this would help to speed up project completion as well as payments."

In the event of similar slow payments in the future, Mokhtar said PKMM had informed its members to seek the advice of the association first.

"Whoever has issues, we will try our best to sort them out. We will sit down with the contractors and re-evaluate the situation, check with them how many per cent of the projects have been completed, what were the problems encountered while carrying out the project and the like," he added.

"We understand that at times, SPNB can’t be blamed entirely. It is typical to jump and complain first rather than take the necessary steps to evaluate the entire situation."

Mokhtar clarified that earlier reports in the media on the national housing company not paying 34 Class 'A' Bumiputera contractors for completed housing projects were not accurate.

"According to the SPNB chairman (Datuk Azian Osman), the reported amount (RM500 million) was incorrect. He also refuted that he had given a deadline to pay all contractors by year-end," he said.

"This may be the problem when information comes from sources, as you just don’t know how credible they are. Many times people say things out of emotion. This is a business, it cannot be handled that way. In business, you need facts and figures to support whatever you’re claiming."

Aside from Mokhtar and Azian, the meeting last Wednesday was attended by 22 nationwide representatives from PKMM and four SPNB officials.

Previously, The Malay Mail reported that SPNB had, on Oct 30, 2009, promised to pay the 34 Class 'A' Bumiputera contractors by Dec 31. Though sources had claimed the amount owed was about RM500 million,

Azian had said the figure was less than RM300 million.

Azian had blamed the economy and poor housing sales as reasons the contractors have not been paid.

Subsequently, Finance Minister II Datuk Seri Ahmad Husni Hanadzlah told The Malay Mail that SPNB would rely on its land, unsold houses and other financing solutions to settle the debt.

Ahmad Husni had also said the ministry would not bail out SPNB as the situation was viewed as part of a business cycle.

The matter also caught the attention of the Public Accounts Committee (PAC) which expressed concern over SPNB's affairs after receiving numerous complaints about the national housing company.

PAC deputy chairman Dr Tan Seng Giaw had said PAC was expected to haul up SPNB soon to probe allegations of "money wastage" and order it to explain the circumstances.

However, no action has been taken by PAC thus far.

WHAT KIND OF WORLD WE'RE LIVING TODAY? - LITTLE BLOG BY NIK ZAFRI

We are now living in the world full of uncertainty. With the fast pace of globalization, we too are trapped within the dimension of the unknown and unprecedented.

The word 'Power' now is in the game.

Power has always been linked to two things and two things only - good and evil - mostly evil for those who choose to abuse it. Innocent human beings; without realizing what is happening; continue to live in oblivion (mind you...not the video-game) because of the continuous misappropriation of power occurring everywhere around the globe.

The chain effect becomes faster and greater when you; readers; and I; writer says that :

"Aaaah..that's life, so what? Just shut-up and move along - as long as we don't disturb one another, we'll be fine".

Ironically this is still too far from the truth and the reality. Look around you!!

Whenever we say these words, we tend to be lead astray with such rethorical and nonsensical philosophy. When?

When our own planet being colonized, our resources, our lands, our houses, our money etc by unscrupulous illogical human beings who thinks that possessing such 'Power' and 'Influence' will be eternal. And what do they say to you?

"This is Progress...this is Development.... Learn to live with it" and by a blink of an eye, your backyard becomes a development project. If you're lucky enough, you will be given some money and you're gone - shifting from one place to another.

Behind you, the actual words would be :

"You're backwards, you're uneducated, you're dumb, you're anti-progress etc"

Yes, I'm 'anti-progress' because I'm against people who cut trees or destroy greeneries

Yes, I'm 'uneducated' because I say "wow...is this global warming..so burning hot!!
....while walking from my house to the stall just 700m away - perspiring heavily and rapidly dehydrated - not even a single car wish to stop and give a ride - such jerks!!

And Yes, I'm 'dumb' for not following the current so-called destructive trends

Am I the only one who's reacting unexpectedly to the climate changes?

Does climate-shift has something to do with my erratic behaviours?

As I see the progress in the human chronicles - I see :

a) wireless technology evolutionizing itself - WAP, Bluetooth, 3G, 4G etc, PAN, Wi-Fi, Wi-Max, Broadband, X-Max etc.

But I also see some human beings using 'sophisticated gadgets' are smiling ironically when they see me using a normal conventional mobile phone (Man..you're no where to me)

b) people working and walking in KL, New York, London and other big cities – not having much time to talk to one another - perhaps they are too busy.

But I also see people who are working/walking rarely cares for others - say...when they see accidents happening right in front of their eyes or pickpockets forcibly steal other people's property or hearing arguments which may end fatal,

And I also witnessed people who are too busy rarely looking at elements of poverty amidst the city hustles.

Ultimately, I now see elements of the dark sides forming - betrayals, ruined marriages, self-centred attitudes, ruined families, liars, swindlers, cheaters, robbers, thieves, gangsters, racists, extremists etc.

So, this is what we have become – more complex under the pretext of “the new way of life” ? or "This is trendy"??

Well..to add up - we see diabetes, hypertension, cardiac arrests, aches here and there etc.

1) So, what modern economics say about equal distribution of wealth are simply lip service?

2) People are telling me about renewable energies – has it been equally distributed?

3) How about politics nowadays? Where is it heading?

4) I wonder; in the near future; will I still see tranquility in flora and fauna, beautiful sandy beaches, orchards etc.

5) Will the earth be healed of so much wounds caused by homosapiens?

6) Why are the teenagers today have their own styles, their own terminologies etc.?

7) Will I be left behind and be accused of 'lack of progress' or 'not following the current trend?'

8) Where did innocent little children learn how to swear, curse etc. (visit a cybercafe and look at the kids who are playing games..what do they say when they loose?)

9) Some people fantasizing and delusioning that "he/she is the MOST popular person in the world" or "he/she is the SAVIOR", "he/she is the fairest, most handsome of all", "he/she is the richest of all", "he/she is the most glamorous of all"...gosh.... :-)

10) People who claim that they're so educated and advanced thinking YET fall for online scams, get rich quick scheme, money laundering, pyramid scheme, urban-legends etc.

11) People who are not thankful for what or who they are - naturally. One who sees, ignores, hates and overlooks the local culture and tried to blend with 'other people's culture' and dare to claim that this 'new culture' are theirs since they were born...this is the BIGGEST JERK OF ALL!

What would be the solutions? Have you got the answer?

HEDGE FUND - PROPER REGULATIONS REQUIRED NOW!! (ALERT) - By Nik Zafri

Article 1 about Hedge Funds (Facebook Version) and Article 2 about Hedge Funds (Blogger Version)

Many disagreed with me at that time -- Yes...because it was written in 2009. (too early) - FYI - I was monitoring the European (EC) market at the time I wrote that article - I saw signs that there is a need to tighten up the loose ends especially on the subject hedge funds which I believe will become a talk in Malaysia (next week - May, 2010)
--------------------------------------------
Here's latest news from Singapore (Courtesy of Bloomberg) :

Singapore Reviews Hedge, PE Funds as Regulators Boost Oversight
By Netty Ismail

April 22 (Bloomberg) -- Singapore said it will review rules for its investment management industry, including hedge-fund and private-equity managers, as regulators increase oversight globally.

Hedge funds and private-equity firms are under scrutiny from regulators and lawmakers worldwide, who say they are partly to blame for the worst financial crisis in a generation. Singapore’s hedge-fund industry has grown into Asia’s second biggest behind Hong Kong as the government lured investment management professionals with tax incentives and grants.

Hedge funds worldwide posted net outflows of $285 billion last year, leaving assets at $1.6 trillion, according to Hedge Fund Research Inc., a Chicago-based research firm.

The regulator has set up the Investment Intermediaries Department to supervise intermediaries, including alternative investment managers, and to “drive regulatory policies” governing the industry, according to yesterday’s statement.

“MAS adopts an open and consultative approach with the industry, and remains committed to building Singapore as a fund management and alternative investment hub,” the regulator said.

World Effort

World leaders, including the Group of 20 countries that make up most of the world’s economy, have called for stricter oversight of the pools of private capital in the wake of the global financial crisis.

Funds won’t be able to get investment from U.S. banks, under proposals announced in January by President Barack Obama. The European Union’s Directive on Alternative Investment Fund Managers is currently being debated, with the European Parliament scheduled to vote on a final draft this year.

The “business and regulatory environment remains conducive to both traditional and alternative managers” in the city-state, MAS said.

MAS, also Singapore’s central bank, said last year it will fine-tune its “regulatory approach as appropriate,” after moves to make it easier for hedge funds to set up shop in Singapore than in other Asian cities such as Hong Kong and Tokyo helped fuel the industry’s growth in recent years.

Growing Industry

Hedge-fund managers are currently exempt from holding a capital-markets services license, provided they manage funds on behalf of 30 or fewer of what MAS describes as “qualified” investors. “I believe that the exempt fund-manager status should be replaced with light regulation,” said Albert Ee, founder of Singapore-based hedge-fund firm Pilgrim Partners Asia Pte. “As a financial centre, it’s important that hedge funds in Singapore should be run by experienced managers with good risk management processes and strong corporate governance.”

Singapore’s hedge-fund industry has grown to 138 single- strategy hedge-fund managers employing more than 800 professionals from near zero in 1997, according to a survey by the local chapter of the Alternative Investment Management Association. The industry oversees at least $34.9 billion, excluding assets managed by several of the large global firms, it said, making it Asia’s second biggest.

Local Rules

The island-state’s “lighter regulatory touch” has enabled hedge-fund managers to set up business “relatively quickly,” without risking any delay in getting the necessary licenses from the regulator, according to an overview of the industry published by AIMA.

Hedge-fund managers in Singapore are still subject to local rules on securities and futures trading as well as money laundering.

The size of Singapore’s asset management industry shrank about 26 percent to S$864 billion ($630 billion) in 2008 from a year earlier because of the global financial crisis, the authority said in its latest survey released in September.

--Editors: Andreea Papuc
-----------------------------------

Nik Zafri's 'Unqualified' Comments (so don't quote me on this)

Yeap, I think Singapore is going somewhere. I did mentioned in one of my 'analysis' that Singapore will boom first and followed by Malaysia. But most definitely; as I said; this issue will become the next talk, next week (May 2010) So, just in case...

On Hedge Funds - fellas, I am not against it - Here's some excerpts :

Excerpt 1

I still think that Malaysia (in particular SC) should keep a close surveillance by having a revised version of regulations to monitor private equity company's especially.

Excerpt 2

European policymakers said:

"They (Hedge Fund Managers) many have exacerbated it by fueling bubbles with leveraged investments in the good times and then offloading assets by the bucket-load in the bad times"

Excerpt 3

Initial proposal from Nik Zafri to anyone out there reading my blog - who wish to listen :

You (Hedge Fund Managers) must first reveal your plan :

(To the proper authorities..I don't know..maybe SC, Inland Revenue, BNM) on:

a) managing level of capital,
b) managing risk,
c) valuation of assets and most important
d) your strategy in doing business.

2nd - STOP NOW if you're involved in any trade relating to MONEY LAUNDERING!! (so, is this the thing you're being discreet about?) Get out now before it's too late!

3rd - It's time to pay based on gains not losses!! Otherwise, we will go back to square 1...make money during down market..gosh...

Having this sort of regulations may help our economic recovery further but of course if the regulations are not strict enough and having loopholes...definitely there can be abuse - some people in the market will always creatively found a way to do 'evasive maneuvers'

FDI, GLOBAL BONDS, PRIVATIZATION ETC. ETC. (SNEAK PREVIEW BY NIK ZAFRI)

Excerpts from Bernama :

October 23, 2009 18:25 PM

BUDGET: Companies Under MOF Inc And Other Viable Agencies To Be Privatised

KUALA LUMPUR, Oct 23 (Bernama) -- The government will gradually reduce its involvement in economic activities, particularly in areas where it is competing with the private sector, said Prime Minister Datuk Seri Najib Tun Razak.

Najib, who is also the Finance Minister said to ensure this, the government will privatise companies under the Minister of Finance Inc (MOF Inc) and other viable government agencies.

"The second wave of privatisation will aim to enable the companies and agencies to operate more efficiently and expand their activities.

"This will reduce their financial dependence on the government," he said when unveiling the Budget 2020 in Parliament on Friday.

According to Najib,the public-private collaboration would be enhanced to enable the private sector to spearhead economic growth.

"High impact projects by the private sector will be undertaken jointly with the government.

"The role of government is to facilitate the provision of basic infrastructure to ensure project viablily," he said.

Among the projects to be implemented in 2010 include the development of an Integrated Customs and Quarantine Complekx (CIQ) in Bukit Kayu Hitam, construction of six UITM campuses and the development of the Matrade Centre.

Najib said the private sector contribution in driving the economy would be intensified.

Towards this end, he said the government would give priority to enhancing domestic investment while encouraging local companies abroad to remit their profits and reinvest in the country.

Currently, he said the nation faced stiff competition from neighbouring countries in attracting limited foreign direct investments (FDI).

As such, he said aggressive and inovative measures must be taken, to attract and increase FDI inflow.

On another note, the Prime Minister said the government would address structural issues to provide a more conducive business environment and be a market-oriented economy.

On this, he said, local authorities would take immediate steps to facilitate registration of businesses and expedite the issuance of development orders.

He said the government had established two Commercial Division Courts to expedite the hearing of commercial cases and resolve them within nine months, compared with a longer duration previously.

"To ensure an effective delivery system, individuals and companies are only required to use a single reference number in their dealings with government agencies.

"For individuals, the initiative known as MyID, uses the MyKad number, while for companies, the MyCoID utilises the Companies Commission of Malaysia (CCM) business registration number," he explained.

On the shift towards a high-income economy, Najib said: "We need a strong foundation in research, development and commercialisation (R&D&C) activities."

Therefore, he disclosed, to strengthen R&R&C activities, the government among others will undertake measures to rationalise all research funds and grants to be more effective to achieve set targets.

The government will also establish a National Innovation Centre supported by a network of innovation excellence centres under the Ministry of Science, Technology and Innovation in collaboration with the Ministry of Higher Education.

Other measures include integrating R&D activities with patents, copyrights and trademarks registration to ensure R&D&C processes are implemented more effectively while providing small and medium enterprises (SMEs) with a tax deduction on expenses incurred in the registration of patents and trademarks in the country.

The cooperation between patent and research agencies will expedite the commercialisation of research findings.

-- BERNAMA
---------------------


Nik Zafri's comments :

At the current state, I boldly say, Malaysia have enough domestic savings to finance private investment. But to mobilize the private sector further, there is also a need to increased access to foreign savings. This is true that based on my findings since mid 90s, private sector have boosted up its funds in global equity markets.

I foresee the 2nd wave of privatization can lead to growth in portfolio equity investment and FDI.

After Malaysia decided to :

a) relax/liberalize the foreign equity participation (for FDI - it's still on case to case basis) and
b) Disbanding of FIC by EPU,

2nd wave of privatization is now relevant and paving its way, I foresee there is a possiblity of growth in foreign investors portfolio equity investment.

We can also expect to see growth in :

a) international fund managers (few have established Islamic funds currently)
b) more foreign stock brokerage,
c) futures brokerage
d) hiring of foreign dealers,

(some are owning 100%!! So, what's the fuss?? I think perhaps information is not properly transmitted.)

To me 2nd wave of privatization is also an indicator of Government's efforts & commitment to encourage private sector development.

This will also lead to reduction of fiscal deficit and less intervention of government in economy.

Newly privatized firms is expected to be able to finance their investment by having better access to equity markets and private debts.

On global bond issue, the best statement so far I see is from BNM's Governor Tan Sri Dr. Zeti in Bloomberg interview -who said clearly that Malaysia should make a comeback to the global bond market after 8 years of 'dissapearance' whether in conventional or sukuk bonds.
===================
So, now, having said the abovementioned, what would be the setbacks?

The usuals - political stability - one of the most key points that foreign investment will look into...I ain't saying anything but I'm sure everyone knows about it - with only one click. It's so difficult to get everyone to agree to play a one game plan. Even the plan has been agreed uninanimously, it is still subject to scrapping.

2nd most important - the bumiputera issue. Most sensitive. More participation is required

Let's say If the plan goes well, the growth will provide a bigger pie for everyone even the bumis.

But again, this is only my personal opinion.

TALAM CORPORATION BERHAD
Symbol & Code : TALAM (2259) Board : Main Industry : Properties

Put aside politics and please do not read this article if you're think I'm into politics. No way!

Taking over Talam by the Selangor Government with Tan Sri Khalid at helm for debt recovery exercise is something unexpected by many quarters.

I was curious during the preliminary stage of takeover of Talam with so much debts, disgruntled buyers of stalled housing projects, negative rumours and speculations, PN17 etc. but yet why did Tan Sri decided that this is fine by his standards? I think everyone knows who Tan Sri is and how vast is his corporate experience in the market (yes, I did take that into account as well - I noticed the familiar management styles are still maintained)

So, I keep monitoring with some assistance from friends (analysts) then, things started to move, I must say, I'm quite impressed - in such a short time - they keep the good things coming, I now see prospects of turnaround.

1) Selangor Government recovered RM50mil of the RM391.7mil owed to Talam and the money will be channelled via Qardhul Hassan Islamic Banking - an Islamic mechanisme to assist the poor among others - teaching them business and managing money via microcredit schemes.

2) 10% set aside for sand mining project

3) Bonus for more than 6500 village heads

4) Efforts to solve problems of abandoned projects by working together with private sector and government and form up a special task force, (some have been solved!! - yes there will still be dissatisfied buyers but at least something has been done which is better than nothing at all)

5) entering agreement with Menteri Besar Selangor (Inc) to settle RM241.4mil owing to the latter via disposal of properties and RM12.7mil cash - settlement is expected within six months.



Ok..is everything in order?

No...not necessarily.

I browse through the corporate website and found out whatever I've written herein or in the dailies are not included in their 'annoucement' (or was it Newsroom?)

I wonder why....news of this magnitude should have been updated in their website as the investors are looking into it but again Talam may have other strategies.

a) Low profile?
b) Sleeping giant awaiting for the right time to wake up?
c) or just too busy to update?

Whatever the case maybe, Talam is worth monitoring.

CHINA COMING DOWN? NO WAY!! - NIK ZAFRI



This is up to 2005...look at the figures..you all can calculate - can you not?


Once again, some speculators are trying to 'underestimate' China. Last time it was Dubai - now it goes further. The 'bubbly' thing again...there will be bubble in China? What would they think of next? Relive the decoupling theory?

Some people didn't read figures or not bothered with figures and I find this less surprising as these so-called forecasters are not from China. I do not know if the speculators have actually been in China to see for themselves what's happening - US bluechips are coming into China even GM besides than Hewlett Packard & Intel.

Memory serves - In 2009 - China's GDP almost 14% - and this surprised every major banks of the world!! - this year 2010 - it's gonna get BIGGER. The figures originally forecasted by "smart Alexes" were a lot lower and now - they are wrong and still wrong!

One thing I can tell you all that most developing East Asia countries like to stay 'below radar detection' - not to distract too much publicity. China is definitely one of them. They are actually much bigger (as big as Russia) than the formal economists estimation or calculations.

It would not be proper for me to say that China will stay strong in its growth; as well as to other EA countries as well. There may still be minor subprime mortgage crisis elements (I'm saying 'maybe') but China will emerge.

One thing I learn from China's economic aspirations is that the conventional economics 'supply and demand' + 'equilibrium' or 'elasticity' point of view still work on them - where there should be less government intervention (not that we do not need them at all) but to let the market correct by itself. I also share the following views :

a) that (accurate) data collection, analysis and action plan based on these datum are so important,

b) organizations must adopt true corporate governance principles - that is....transparency,

c) bribery must be reduced or better - eliminated!,

d) all taxes must be paid,

e) Work attitude need to be changed - not the system - the system is fine. Don't come out with good figures or window dressings to impress the top management or to get stimulus packages but come out with the REAL figures based on data collection & analysis.

f) Wireless technology/e-commerce/B2B/B2C and all the likes are assets not foes.

g) White Collar Crimes need to be reduced - not on the dumb ones/scapegoats/pawns but on the 'smart ones' abusing their skills

PIAWAIAN SUMBER TENAGA DAN KAWALAN EMISI KARBON

Oleh Nik Zafri Abdul Majid - Januari, 2010

Seluruh dunia kini sedang memberikan perhatian yang serius kepada isu emisi karbon. Secara rambang hampir seluruh premis di dunia menyumbang kepada 50% penggunaan tenaga - ini termasuklah Malaysia. Isu emisi karbon dijangka akan mencetuskan pula fokus kepada kod dan piawaian tenaga - ini bermakna jika kita tidak mempunyai kod/piawaian atau ada kod piawaian tetapi tidak mencukupi, maka usaha untuk menaikkan taraf kod/piawaian yang sedia ada atau mewujudkan kod/piawaian yang lebih komprehensif perlu diadakan.

Mewujudkan atau menaiktaraf kod/piawaian adalah selaras dengan cadangan YB Dato' Seri Ong Ka Ting, Menteri Sumber Asli dan Alam Sekitar dalam Mesyuarat ke 3, Penggal 2, Parlimen 12 yang meminta satu pelan induk perlu digariskan oleh Kerajaan Malaysia untuk memastikan paras pengeluaran karbon di Malaysia benar-benar tidak menaik dan dapat dikawal sehingga ianya tidak lebih daripada paras tahun 2005 menjelang satu tempoh masa daripada sekarang.

Setakat artikel ini ditulis, saya mendapati satu standard (pada asalnya diterbitkan pada tahun 2004) dikenali sebagai 90.1 iaitu piawaian ASHRAE memberikan satu panduan untuk mencapai 30% penjimatan tenaga (draf standard ini dijangka terbit pada bila-bila masa dalam tahun 2010. Selain itu, standard seperti LEEDS (Green Building) and EMS ISO 14000 juga boleh dijadikan panduan kepada kawalan emisi karbon menerusi penjimatan tenaga.

Standard ini begitu penting pada Malaysia sebagai langkah awal mengawal pembaziran tenaga di samping emisi karbon. Jabatan Alam Sekitar, Jabatan Keselamatan dan Kesihatan Pekerjaan, Suruhanjaya Tenaga dsb. juga boleh bekerjasama dalam mewujudkan standard yang dimaksudkan.

Antara perkara-perkara yang boleh diambilkira ialah :

a) Keperluan penggunaan peralatan penyejuk (cooling/refrigeration) dan pemanas (heater/heating equipments) dalam semua jenis industri termasuk rumah kediaman yang mungkin berbeza mengikut cuaca/iklim negara berkenaan. Justifikasi cadangan saya ini ialah menghala kepada kesan ekonomi penggunaan peralatan berkenaan serta cara-cara penjimatan boleh dilakukan ke atas peralatan contohnya mengadakan alat penjimat tenaga secara 'built-in' kepada peralatan yang dimaksudkan.

b) Perkara-perkara yang kompleks seperti syarat-syarat untuk mendapat Sijil Layak Menduduki sesebuah bangunan juga perlu diambilkira - contohnya memberikan kelulusan kepada mereka yang mengutamakan penjimatan tenaga dan penjagaan alam sekitar atau konsep 'bangunan hijau' mengikut standard yang berkaitan.

c) Latihan, siri-siri ceramah dsb. bagi memastikan kefahaman atau mencetuskan kesedaran masyarakat atau kakitangan betapa pentingnya tahap emisi karbon dan penjimatan tenaga kepada mereka dalam bentuk wang ringgit.

Saya berharap agar standard/piawaian tenaga yang bakal dikeluarkan akan mengketengahkan syarat-syarat yang agak ketat supaya ianya dipatuhi demi trend semasa pasaran global dan suasana ekonomi yang sedang mengalami perubahan dalam konteks pembekalan tenaga.

Carbon Emission/Standards Malaysia need to come out with Master Plan and Codes of Practice on Carbon Emission/Energy Savings Agree but all parties must cooperate with the Government Disagree - our country is not at the critical level yet view results

PELAN PERNIAGAAN

Kajian : Nik Zafri (Kajian asal 1998)

Pelan perniagaan yang baik ialah yang berwibawa, mudah difahami dan menarik perhatian golongan sasaran yang tidak begitu biasa dengan sesuatu jenis perniagaan. Walaubagaimanapun, pelan perniagaan tidak menjamin kejayaan tetapi ianya dapat meminimakan kegagalan.

Fakta :

1) Terdiri dari sasaran perniagaan - justifikasi kenapa ianya boleh dicapai dan bagaimana untuk mencapainya

2) Mempunyai maklumat organisasi yang akan memastikan sasaran ini tercapai
2.1) Antara sasaran yang penting ialah sasaran kewangan - ramalan keuntungan dengan analisa yang logik

3) Untuk semua jenis organisasi - tidak kira kerajaan mahupun swasta tetapi mempunyai sasaran kewangan yang berbeza.

3.1) Kerajaan/sektor awam/agensi biasanya menumpukan kepada keseimbangan KPI dan marjin atau 'mengoptimakan 'revenue' (hasil bersih ditolak perbelanjaan selepas pembekalan perkhidmatan - umpamanya kutipan cukai, fi perkhidmatan dsb)

4) Juga dipanggil pelan pemasaran. Dalam konteks ini, kadangkala pelan perniagaan atau pelan pemasaran biasanya diaplikasikan bukan sahaja sebelum perancangan membuka sesuatu perniagaan tetapi juga semasa operasi contohnya dalam kes pengenalan kepada produk baru, penjenamaan dan diversifikasi perniagaan.

5) Perlu ditumpukan kepada faktor luaran dan faktor dalaman.
5.1) Faktor Luaran - pemegang saham, pelanggan, pengguna sasaran.
5.2) Faktor Dalaman - komunikasi, latihan dan pembangunan, dasar, objektif, pengurusan strategik, analisa pemasaran, sumber manusia, 'balance scorecard', produk/perkhidmatan, sumber (seperti ICT, Pejabat dll) dll.

5) Dalam faktor 4 di atas, terdapat juga lain-lain pelan yang dipanggil pelan operasi. Bergantung kepada jenis perniagaan/industri - contohnya pembinaan, kadangkala ianya dipanggil sebagai Pelan Kualiti Pembinaan yang menjadi salah satu syarat kontrak oleh pihak Klien kepada Kontraktor Utama.

6) Pelan perniagaan merupakan mekanisma membuat keputusan. Sebenarnya tidak ada sebarang format khusus kerana ianya bergantung kepada siapakah golongan sasaran dan jenis objektif yang telah dirancang.

7) Paling popular, pelan perniagaan diperlukan untuk tujuan mendapatkan pinjaman (jenis pelbagai) atau pembiayaan (contohnya pembiayaan ekuiti) dari institusi perbankan dan kewangan - di mana penumpuan diberikan kepada cara dan keupayaan pembayaran kembali, sumber yang sediada, prospek pembangunan, faktor persaingan dan 'market survival' dll.

8) Penyediaan pelan perniagaan memerlukan pelbagai kemahiran, pengetahuan dan pengalaman untuk memastikan keberkesanann jenis disiplin perniagaan yang dihuraikan. Antara perkara yang diutamakan ialah kewangan, sumber manusia, harta intelek, rantaian pembekalan (supply chain), operasi dan pemasaran.

9) Cara persembahan yang sesuai

9.1) format persembahan mestilah ringkas, menarik dan munasabah - penumpuan kepada ringkasan eksekutif, graf, ringkasan kewangan, KPI/Objektif, perkhidmatan/produk (demonstrasi jika perlu) dll yang perlu
9.2) 'pitching' suara yang sesuai - fakta lisan yang dipersembahkan mestilah dapat menarik perhatian pembiaya, pelanggan dan rakan kongsi.
9.3) persembahan yang berjaya biasanya akan menarik interaksi yang positif - ini biasanya adalah satu tanda kejayaan dalam sesuatu persembahan,
9.4) Siapkan salinan ringkas persembahan untuk pembiaya, pelanggan dan rakan kongsi supaya mereka dapat merujuksilang di samping melihat persembahan
9.5) Semakin tinggi pengetahuan mereka yang mempersembahkan, semakin tinggi prospek kejayaan persembahan berkenaan.

Struktur tipikal pelan perniagaan (pra-perniagaan)
- muka hadapan dan kandungan, ringkasan eksekutif, keterangan perniagaan, analisa persekitaran, latarbelakang industri, analisa persaingan, analisa pemasaran, pelan pemasaran, pelan operasi, faktor pengurusan, kewangan dan lampiran/jadual.

12 November 2009, 10:00 AM EST

The economic rebound in East Asia and the Pacific has been surprisingly swift and very welcome, but take China out of the equation and the regional picture is less rosy, says the World Bank's half-yearly assessment of the economic health of the East Asia and Pacific region.

Ivailo Izvorski, Lead Economist and author of the report, and Vikram Nehru, Chief Economist for the East Asia and Pacific region, were online on Thursday, November 12 to answer your questions.

NIK ZAFRI ABDUL MAJID: I beg to differ with the statement. I think growth are quite moderate but progressing in East Asia (EA) and Pacific Region. We're still shocked by the 2009 global financial crisis and very careful in making critical decisions. The impacts of the recent global financial crisis did affect the stability in the cost of living, policies concerning eradication of poverty and most importantly employment. I'm talking about soon to be developed countries such as Malaysia - not to mention the underdeveloped ones. Even if China is included, the slow growth in the neighbouring countries have somehow affect the industrial production and export.

My question :

Is there a posibility that the World Bank amend its current fiscal strategy on Pacific and EA by focussing on the underdeveloped countries first rather than the developed and potentially developed ones? (These are the countries that are really needing to receive advise/consultancy from WB in terms of infrastructure investments and socio-economic matters. If they are affected, even China and India won't sustain long)

http://www.nikzafri.blogspot.com

Vikram Nehru: Dear Nik Zafri – the World Bank doesn’t concentrate on poor or rich countries, it concentrates on the poor. When measured at the $1.25 a day international poverty line, there are more poor in the middle income countries of East Asia than there are in the region’s low income countries!! In many large middle income countries (China and India included), some provinces are bigger than most countries, and these provinces have very high poverty rates. The Bank’s objective is a world without poverty – and to achieve that, we must work equally hard in low income and middle income countries alike.



Mr. Vikram Nehru is the Director for Poverty Reduction, Economic Management, and Private and Financial Sector Development and Acting Chief Economist in the East Asia Region of the World Bank. Earlier he was Director of the World Bank’s Economic Policy and Debt Department – the department responsible for covering developing country macroeconomic and debt issues, including growth diagnostics, sub-national development, fiscal analysis, HIPC implementation, low income country debt sustainability, and middle income country debt dynamics. An Indian national, Mr. Nehru completed his graduate and postgraduate degrees at Oxford University before working with the Government of India for four years. He began his career with the World Bank in 1981 through the Young Professionals Program. Since then, he has worked in several capacities and on a number of countries, including Indonesia, Malaysia, Nigeria, Ghana, and China. His latest papers cover such issues as exogenous shocks, debt sustainability, and the development challenges in Indonesia and China. He has also had extensive research experience on issues of economic growth, capital stock measurement, financial sector policy, industrial and trade policy, and on the implications of global trends and developments on the economic prospects of developing countries.

THE SUN NEVER SETS ON DUBAI WORLD?

According to their website, Dubai World is Dubai's flag bearer in global investments. As a holding company it operates a highly diversified spectrum of industrial segments and plays a major role in the emirate's rapid economic growth. Its primary aim is to play the role of a growth engine that powers development both locally and internationally.

Dubai World's investment spans four strategic growth areas of 21st Century commerce namely, Transport & Logistics, Drydocks & Maritime, Urban Development and Investment & Financial Services.

Its portfolio comprises some of the world’s best known companies and a number of outstanding projects. This includes DP World, one of the largest marine terminal operators in the world; Drydocks World & Dubai Maritime City designed to turn Dubai into a major ship-building and maritime hub; Economic Zones World which operates several free zones around the world including Jafza and TechnoPark in Dubai; Nakheel the property developer behind iconic projects such as The Palm Islands and The World among others; Limitless the international real estate master planner with current development projects in various parts of the world; Leisurecorp a global sports and leisure investment group, reshaping the industry by unlocking value across investment, development and brand opportunities; Dubai World Africa which oversees the regional development and portfolio of investments in the African continent.; and Istithmar World, the group's investment arm that has a global footprint in finance, capital, leisure, aviation and various other business ventures.

By the looks of the above statement, I don't think one big entity like this can fall in one day just because of one story about debts.... I believe this issue is about some financial deal that didn't go well. Dubai World, as I know it is one place where the organization will try to safeguard their reputation and they will put their best effort to ensure that whatever problems they have will be solved amicably - YES..even with the banks and creditors. As I speak now, I'm sure Dubai World plans on heavy corporate debt restructuring as they have assets that are worth a lot more than their debts.

I know that there have been denials by the emirate's goverment that the conglomerage had long operated as a standalone entity but again a project of this magnitude will definitely in the knowledge of the government - otherwise it wouldn't exist!! Yes, some analysts (or speculators) proudly saying that banks will suffer but I think the statement is incorrect.Lemme put it straight, banks (esp. in Abu Dhabi) can still ABSORB such losses.

After this news broke out, stocks in UAE plunged but I think it's temporary. But one senior official of the Dubai Government was too hasty in giving out statements and denials...I think he should rethink his statements again.

Being in Malaysia, I've read MUCHabout Dubai World that has always been (as still would be) the future hub for finance and tourism in the region.

Back to Dubai World's plan on CDRC, by the looks of it, the situation of 'plunging' is temporary. Every investor is waiting clarification not dumping the stocks. Restructuring of $26 billion (USD) and $6 billion sukuk bond are not petty deals. I'm sure the banks will find this a good deal and they will see the stocks jumps up the next few days and Dubai World will back on its feet.

Global effects???? NO...I don't think so.

"THE SUN NEVER SETS ON DUBAI WORLD"
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STOP PRESS

When I wrote this article today - December 2nd, 2009 and posted it on Facebook, this is what I got back from UAE :

Syed Muhammad SyedAbdullah Al-Husayni wrote :

Assalaamua'aleykum Habeeb Nik, I think this is the 1st time I wrote on your wall. Never had much time. Yes, I agree with your opinion on Dubai World. I also think that the current recovery of oil prices (>USD76/barrel) despite the weakening dollar will assist recovery. I just receive news that UAE esp. Abu Dhabi is helping Dubai. We are also expecting commodities and equities market will be correcting. I don't know if you read the latest news, Dubai World has successfully dealt with the banks as you have predicted. And you are right too - now FTSE has risen - almost 2.0%. Keep up the writing and Shukran from me - a distant relative.

My response was :

Wa'alaikumussalam Sayyid. Thank you for your valuable comments. I think everyone is being matured nowadays...they don't panic easily. Yes, I have also received words saying that Dubai World has managed to calm the market.May I also concur with you on your views regarding oil prices but with all due respect, I think commodity and equity may only serves as back-up in case the other plans fail...am I right? Keep commenting...

Your distant brother

Nik Zafri

Read it all on Facebook

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Nik Zafri says :SEE...I TOLD YOU SO!!!

SOURCE

Dubai's $10B bailout by Abu Dhabi calms fears


AP - Two men talk to each other as they look to the Gate building, center, of the Dubai International ...


Abu Dhabi feeds Dubai $10 billion to cover debt on deadline, calming financial worries for now - By Adam Schreck, AP Business Writer - On 2:22 pm EST, Monday December 14, 2009

DUBAI, United Arab Emirates (AP) -- Oil-rich Abu Dhabi pumped $10 billion into its indebted neighbor Monday, sending stocks soaring while sparing Dubai and the rest of the Emirates federation the humiliation of an imminent default by one of the struggling Arab boomtown's star companies.

The bailout was about more than petrodollar transfers from one United Arab Emirates sheikdom to the other. Dubai officials seized on the news to try to repair damage done by weeks of uncertainty stemming from their unwillingness to fully stand behind Dubai World as the conglomerate looked to restructure some of its $60 billion in debts.

Investors cheered Monday's news. Dubai's main index shot up 10.4 percent at the close and markets elsewhere rose modestly.

Prior to the crisis, most investors had assumed the Dubai government itself, possibly with Abu Dhabi's help, would guarantee debts amassed by its chief growth engine.

Dubai authorities are scrambling to reshape the business hub's battered image, vowing that the city-state is committed to "transparency, good governance and market principles." Officials outlined a new legal framework that promised to increase openness and protect creditors in future dealings with the conglomerate, offering lenders succor in a country where formal bankruptcy proceedings are largely untested.

"We are here today to reassure investors, financial and trade creditors, employees and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices," Sheik Ahmed bin Saeed Al Maktoum, chairman of the Dubai supreme fiscal committee, said in a statement.

Some $4.1 billion of the funds released Monday will go toward meeting a deadline to repay Islamic bonds issued by Dubai World's Nakheel property arm. The conglomerate, whose sprawling holdings range from the oceanliner Queen Elizabeth 2 to luxury retailer Barney's New York, will use the rest.

The move, however, carries broader implications as UAE officials have looked to assure the market the country's economy was on solid ground. Their assurances gave voice to a silent concern that the whole country would be hit by the same investor mistrust that Dubai now faces.

The bailout bought Dubai, itself saddled with more than $80 billion in debts including Dubai World's, time it desperately needs.

"This is a very significant development," said Marios Maratheftis, head of regional research at Standard Chartered Bank. "It shows once again there is a one-country approach in dealing with the crisis, which is positive."

But it was unclear if the news -- assurances and funding alike -- would prove to be more than a temporary salve.

Standard & Poor's, which along with other credit rating agencies has aggressively cut its outlook on Dubai state-run companies, called Monday's move "a step towards rebuilding confidence." But it warned that the government's ability to bail out other firms remains uncertain.

Fitch Ratings, another credit agency, also urged caution, saying Abu Dhabi's bailout was "tactical in nature as opposed to a reversal of recent rhetoric regarding state support."

Abu Dhabi, which controls the UAE's presidency, has directly and indirectly provided Dubai with $25 billion over the past year, mostly by buying Dubai bonds. In all, Dubai's known debts are roughly equal to its total economic output last year. The full extent of its liabilities is uncertain, however, with some analysts putting the total at $100 billion or more.

The aid package is key for Dubai, which despite its international celebrity has little of the oil wealth held by Abu Dhabi. Dubai's ruler is the UAE's vice president and prime minister.

Dubai created Dubai World -- which has interests in seaports, real estate, tourism and retail -- to diversify its economy and boost its international clout. Much of the growth was fueled by easy credit. As the bills came due, the emirate struggled to repay as its economy was battered by the global economic downturn.

Nakheel, a property developer and hotel operator best known for building manmade islands in the shape of palm trees and a map of the world off Dubai's coast, was among those Dubai World companies that relied heavily on that easy money.

Plenty of questions remain, especially as Dubai works to salvage its reputation and the conglomerate tries to deal with the rest of its debts.

Dubai World, while welcoming the financial support, said it was nonetheless pushing ahead with talks to convince lenders to agree to a "standstill" -- effectively a delay -- on repaying part of its debt.

"This announcement constitutes a specific bailout of Nakheel, suggesting that as an entity (it) was deemed to be 'too big to fail,'" said Fahd Iqbal, a Dubai-based analyst at Middle East investment bank EFG-Hermes. "It does not, however, constitute a bailout of Dubai Inc. or Dubai World as a whole and this is important to highlight."

Officials introduced a reorganization law that could be used in case Dubai World is "unable to achieve an acceptable restructuring of its remaining obligations."

A person close to the Dubai government said the new law provided a legal framework for addressing corporate debt, though it did not mean a bankruptcy filing by state-owned companies was certain.

"The current bankruptcy law is untested," the person said, insisting on anonymity as a condition for briefing reporters on a conference call. "Dubai World needed a legal process to go through. The government was very focused on creating something that would be fair and transparent to everybody."

It was not immediately clear what, if anything, Abu Dhabi would expect in exchange for Monday's funding. Analysts had said an Abu Dhabi bailout could result in it exerting greater influence on its high profile neighbor going forward.

But the individual close to the Dubai government said the money came with no strings attached.

"Let me be clear: Dubai has not given anything up. There have been no conditions on the funding," he said.