HAPPY NEW YEAR 2011 EVERYONE!

I had a few interviews of my own. Many told me that factors of environmental, global economics and marketing strategies have a lot to do with the 'lagging' of export of wooden furniture. (so they claim)

Agreed, they do have but minimal effect on the export but these factors are really prerequisites if you wish to be in the business circle - so you need to think of this before you join and while you're running the wooden furniture industry. It's just some of us wish not to admit that we are actually do not seriously take into account FOREIGN rulings.

So, the issue here is about how the factors of environment, economics and marketing strategies not only to comply with the Malaysian regulations but also to comply with foreign regulations as well. So, all these has nothing much to do or does not moderate the relationship between all export marketing strategy variables and export performance. But surprisingly when you see wooden industry having ISO certification esp. EMS ISO 14001 (or even ISO 9000) you'll be surprised to see how fast they have grown domestically and internationally.

Today I'm going to talk about one such company that I found magnificently striving to comply to these rules. It makes me wonder why are investors are not thinking long term but rather wanted to listen to gossips about logging and wooden furniture industry.

I do not work or having any relationship with this company but I have confidence that this company will perform in the next few weeks or who knows in few days time prior to CNY or immediately after...

Sern Kou Resources Berhad (SKRB) is a Malaysia-based company engaged in investment holding and provision of management services. The Company, through its subsidiaries, operates in four segments: manufacturing, kiln-drying and lamination, logging and processing and others.

It subsidiaries are Sern Kou Furniture Industries Sdn. Bhd., which is a manufacturer of wooden furniture; S.K. Furniture Sdn. Bhd., which is engaged in the provision of spraying services to furniture manufacturer; Valued Products (M) Sdn. Bhd., which is engaged in manufacturing and processing all kinds of timber, wood and related products, and Souncern Timber Sdn. Bhd., which is engaged in the logging and processing of rubber wood and timber.


But I'm not going to touch too much on logging - only their finished product of wooden furniture which I am really impressed.

Led by highly experienced and robust personnel, I noticed the group operations has been generating strong positive cashflow despite the humbleness displayed by the Chairman via the Annual Report. I'm not surprised as I browse through their policies - they are very good! Based on my understanding, they are really dedicating themselves into the industry full time, well-aware and susceptible of what is happening around them.

My guess this group will become a potential performer soon. They practice cost control, product and market repositioning to place themselves back into the export market. It appears they have no fear on what is about to come - I'm certain, they know what I know.

Give it a shot fellas....support our local wooden industry. The products are much more better and cheaper. For those who are in Germany, I'm sure you've seen them at the IMM Cologne Germany (Koln) and I assume purchases have been made.

Look at these interesting items :

http://www.sernkou.com/index.html

http://www.fppsm.utm.my/download/doc_view/35-impact-of-environmental-factors-as-moderator-on-export-marketing-performance-in-wooden-furniture-ind.html

FROM ISLAMIC BANKING TO HALAL HUB - by Nik Zafri



Just like Kosher, Halal Hub has become one of the most successful global business in the world. This is because every major halal certification and religious bodies are working closely with halal manufacturers, suppliers, sellers, buyers, consumers, end users etc.. It becomes the most efficient supply chain I have ever seen myself.

In Malaysia, Halal; like Islamic Banking; has affect almost everyone's life - Muslim and Non-Muslim alike. The Halal Hub construction owned by Perbadanan Industri Halal Berhad stands as a living proof that Malaysia is really serious about Halal.

The only setback is to network more effectively with other Halal authorities to ensure whatever being imported are according to the Halal Standard (for Malaysia, it's MS 1500 (latest version recently issued) - combined with GMP dan where applicable HACCP) Two other issues need to be addressed is export and penetration to the global Islamic Market and the acceptance and recognition of FDA.

I'm aware of the Codex Alimentarius Commission thinks about Malaysia's Halal prospects.

Having Codex is a good thing but it's of not much use if everyone is having their very own standards and codes of practice especially such codes are customized according to the differents sects (Madzhab)

Thus, the Islamic World need to come out with a more comprehensive "Codex" that takes into account the circumstances of hukum based on native Islamic country which may have a certain "leeway and tolerance". If it is to be too stringent, then we may encounter a little bit of a problem of achieving the KPI of increasing the number of halal entrepreneurs. As in many cases, it's not about too many "tolerances or leeways", it is about enforcement.

What is recommended to be done besides giving the Halal certification, the most important is the authorities should have more men, not necessarily paid salary staff but even appointed from the general public. They need to be like "Rakan Cop" and report back to the authorities for further action. But first, they need to be properly trained. (perhaps such module can also be combined into short courses for handling food? - Health Inspectors? Municipal Councils? any takers?)

We shouldn't adopt the attitude wait for report to be lodged, wait for witness, wait for evidence of non-conformity etc, then we'll take action. Halal is not about firefighting, it's about adequate follow-up & surveillance.

I also notice the "Sharie Council" is focussed more on popular fast food chain rather than the slaughtering house. I recommend there should be at least one religious officer to control a certain zone of halal manufacturers from some sort like a kiosk or something like that.

The other challenge is about talking more on OTHER food products rather than focussing "too much on meat and slaughtering issue" I take an example, Artificial White Wine Non-Alchoholic Drink - many Muslims are having "was-was" about the product as well. The attitude need to be changed.

There is also a dire need for the global Halal Authorities to compare within such Codex (perhaps in the Annexure), the difference between Halal and Kosher as well - what can and what cannot be taken.

Despite this "Islamic Codex" may be a bit thicker but I'm sure judging by the success of Islamic Banking with all the thick "codes of practice", I'm confident that Halal can also dominate but playing a harmonic role with Kosher.



-----------------------
A bit about GMP from SGS

Good Manufacturing Practices Certification or GMP Certification provides independent verification and certification necessary for the implementation of an effective Hazard Analysis Critical Control Point (HACCP) food safety program.

GMP is a sanitary and processing requirement applicable to all food processing establishments. Many food industry companies have implemented the GMP certification scheme for food processing as the foundation upon which they have developed and implemented other food quality assurance systems and food safety management systems, such as HACCP, SQF 2000, ISO 9001 and ISO 22000.

Certifying your food management system against the GMP standard will bring the following benefits:

Enhancement of your food safety management system;
Demonstration of your commitment to producing and trading safe food;
Prepare you for HACCP certification;
Increase in consumer confidence in your products; and
Prepare you for inspection by regulatory authorities and other stakeholders (food processing regulation compliant).

*If you are required to have your management systems certified against a multiple international safety or quality standard, you can combine the parallel requirements with good manufacturing practices and cover them cost effectively with a single food audit.

GREEN OCEAN CORPORATION SDN. BHD. (GOCEAN) - GO GREEN, BE GREEN, SELL GREEN - PERSONAL VIEWS BY NIK ZAFRI


(Latest Development! 10.15am - 30/12/2010
STOP PRESS : Plantation related stocks up"

As forecasted - with news that CPO will go up from RM3k-3.5k/metric tonne, today - as I speak - around 9.30am, 30/12/2010 - till now, GOCEAN is experiencing major changes in its price. Congratulations GOCEAN.)



Disclaimer : I do not represent the corporation in this article. Whatever being expressed is solely the author's opinion. Please refer their official website for further information.

I've been looking into some 'sleeping giants' for a long time.



And today I wish to speak on a corporation that attracts my attention for the last 2 weeks of trading. I hope everyone will share my enthusiasm.

(Please don't base your views on their current performance of shares...just read on)

The company was formerly known as Online One Corporation Berhad and changed its name to Green Ocean Corporation Berhad in April 2009. Green Ocean Corporation was incorporated in 2003 and is based in Petaling Jaya, Malaysia.

Green Ocean Corporation Berhad (GOCEAN), an investment holding company, engages in the development of biotechnology products in Malaysia.

As we all know, GREEN is now associated with almost all industries in this world. We have LEEDS Certification (Green Building), EMS ISO 14000, Sustainability, Big Campaigns and various environmental awards for corporations practicing GREEN as part of their corporate responsibility. GOCEAN is definitely one of them - with its strong motto - BUY GREEN, BE GREEN, SELL GREEN.

So to all GREEN lovers out there (yes I'm one of them), here's your chance to save the EARTH!

The company involves in crushing palm kernel, refining palm oil and palm kernel oil, and producing palm kernel expellers and cooking oil.

Despite some quarters felt that maintaining the neutral call on the Malaysian palm oil sector due to current 2 year old palm oil price upcycle, and that Malaysia is continuing with a plan to mandate a 5% palm-oil-based methyl ester blend in conventional diesel by June 2011 (next year), I still somehow notice significant changes in Bursa Malaysia Derivatives’ star product, the Crude Palm Oil Futures contract, or better known by all of us as the FCPO contract which has been cited as the MOST actively traded derivatives contracts and has been the GLOBALLY PREFERRED BENCHMARK FOR THE PRICING OF CPO.

If this is the case, then, GOCEAN and their counterparts will definitely see some significant changes next year. Let's say it's June, 2011, at least they can still prepare themselves for the changes.

GOCEAN also provides information communication technology solutions, including software, and third party hardware and software; implementation and integration services; business continuity outsourcing solutions; and business intelligence solutions.

Being a self-ICT-literate person myself, GOCEAN has definitely invested on the right product. The setback however is unexpected - perhaps GOCEAN is too ahead of time with this plan. Unless the corporation has something to do with government contracts (which I think they will be heading towards that direction) and in the future, taking in many ICT professionals in the field (during expansion), then I know in my heart that ICT is a GOOD Investment. Who knows, GOCEAN might hit the jackpot.

Apart from the abovementioned, GOCEAN offers financial services solutions, infrastructure services, business service management, and information security solutions.

Further, it engages in the research and development of palm oil related industries; and sales, marketing, and distribution of enzyme, conjugated linoleic acid, and direct fed microbials, as well as the marketing and distribution of storage solutions.

Now, can anyone tell me that GOCEAN has no potentials in 2011? I have also noticed some 'reengineering' are being actively done in the company - so someone inside GOCEAN is smart enough to prepare itself for 2011 - for the BEST. We can expect the Q3 2011 results next February. (aah you need tips : Look at the 'expected book value' and 'the future market value' based on my article herein - also look into debt/equity ratio...do some homework 'lah')

Figures might not look so interesting but it's the indicators in the figures that will tell investors what is the future for them. (I've read their past annual reports - I personally think that it's a highly potential company to invest in the long run)

I like to quote Yang Amat Berbahagia Tun Mohamed Dzaiddin Abdullah, Chairman of Bursa Malaysia in the recent 21st Palm & Lauric Oils Conference

"Whether it is for the physical or futures markets, in managing volatility, mitigating risk factors and ultimately ensuring that the industry remains vibrant, price trends are important for palm oil players."

MALAYSIA is a melting pot. A lot of people still do not realize it yet

SHORT NOTE : COMMODITY PRICE CORRELATION TO OIL, GOLD AND CURRENCY - BY NIK ZAFRI



What is the next move?

This is one of the most important question being asked to me by traders as everyone wants to make money.

"I've attended wealth seminars and attempted my level best to follow everything that has being taught. It works to a certain level but after a while, it's already too late for me to turn back. I made losses later"


I told the traders that making money is easier said than done.

Those who are involved in currency trading need to take into account a lot of things rather than be "sitting at your pc, laptop or any other gadgets and look at the charts" (and 'look like a professional' and hope that passers by looking at you would deem highly of you while you're sitting at Starbucks or some 5 Star Hotel Lobby wearing smartly using free wi-fi facility without buying any refreshments)

Economy still and will play an important role - all rules apply - export, demand and supply, growth, interest rates, GDP etc. Without all these (FX + Economy), then the next step would probably be is - to justify how politics play a role in what we termed as "sentiment".

All sentiments have a justification. Without justification - the sentiment is equivalent to a rumour or turned against you as speculation and irrational hedging.

Understand that commodity can play a big role in the market.

Once you see that a certain currency has a weaker correlation (with commodity price), then put them aside immediately. Don't take any further risk. (in short - don't try to be a hero)

What about Oil and Gold?

Yes, two of the most popular benchmark. Here's the deal :

Fluctuation of Commodity Price = Sudden surge of oil price

Sudden Surge of Oil Price is most likely TEMPORARY (trust me) - yes, at least a year or so, it will plummet back.

Gold hit a high price (again TEMPORARY) = and again hit a low price also in a year or so (every year I see this trend)

Once again the price of commodity; taking into account - global recession; plays a role in understanding the bearish and the bullish situation.

USD and oil are closely related but the correlation tends to break on daily basis - but it becomes stronger in the long run. This however requires patience and no panicking. USD is an inverse trading instrument thus making the 'strangest' thing happening - USD go down, oil price goes up - vice versa.


(Japan)

(I need to point out that whenever oil price skyrocketted will make some countries suffer for example Japan. A fully industrialized nation but depending on the imports for primary energy. Just look at the trading history of USD against Yen - it's important that that oil price 'to fall' to ensure break a certain level to hit lower)


Which Currency correlated with Gold in a harmonious way?



You don't need 3 guesses for that - it's definitely Australian Dollar. (it's not surprising that they are the top 3 gold producers) Australian dollar appreciates as much as the rising of gold prices. New Zealand is getting advantage out of Australia's prosperity and NZ never had much problem exporting its goods. Again seeing the fine commodity trend in Australia, I'm not a bit surprised that they will always be the FIRST to be out of the recession. So again, commodity!


Political Sentiment?

Neutrality and Uncertainty of Politics do play a big role in correlating gold prices and the currency.

Here's my simple formula :

1) A healthy politics (in the eyes of the traders) will usually turn gold as a support a certain currency

2) Unhealthy politics will usually switch the trading of that particular currency to another currency which is backed up by gold during 'healthy politics'.

The only thing that can break this relationship is decoupling (refer 09/2005 when USD decoupled from gold price movements)

Closing

Smart experienced traders tend to switch commodity and currency or vice versa. The earn interest with high margin but taking into account countries having interest rates. Again, I didn't say that there is no risk.

e.g.

3% from e.g. Central Bank
= amount earned subtract 0% rates paid (shorting USD for e.g.)
= 10X leverage (underleveraged rates).
= surge of interest income whenever net of exchange rate changes.

But don't count on this - you will see how dangerous this situation to you when the trade turns against you.



Play safe : Although the effects are slow, commodity prices can still be used as a benchmark on gold, oil and currency market.

WHAT'S DRIVING GOLD?

(A)

Cause :

Growth in World Money Supply

Years of easy monetary policies by central banks and now the trillions of dollars in economic stimulus to fight the global recession

Effect :

Inflationary Pressures

Excess cash in marketplace eventually tends to bid up prices for goods and services

Possible Ramifications

Declining Confidence in Paper Money

The prospect of inflation lowers confidence in Paper money a a store of value leading may investors to buy gold to preserve their wealth

(B)

Cause :

Volatile Stocks and Oil Prices

After several bull market years, stock and commodity markets turned down dramatically in 200 as the global economy slid into recession. While markets have partially recovered from their low, they remain volatile and many investors remain focused on capital preservation

Effect

Safe Haven Appeal

With other hard assets like real estate and commodities losing value, there was a revived appreciation of gold as a safe haven for investors seeking to protect themselves during difficult times.

Possible Ramifications

Increased Demand for Gold

The recession of 2008 created a large new class of gold investors. The strong demand exerted by this group, along with traditional gold buyers, drained the global inventory of gold coins and gold bars, thus driving up the price of bullion at a time of shrinking worldwide production.

(C)

Cause :

China

Gold has long been prized in China, which is one of the world's largest producers and consumers. Increasingly China's gold market has become more liberalized

Effect :



Trade Surplus

China has a huge trade surplus with the U.S. and Europe that generates vast quantitites of foreign currency. China also has one of the world's highest savings rates.

Possible Ramifications

China buys a considerable amount of U.S. Government debt, but it is diversifying its reserves by increasing its holdings of gold. In addition, China is pursuing investments to recycle its dollars into natural resource projects.

(D)

Cause :

Low Gold Price in 90s

After climbing as high as $850 an ounce in 1980, gold dropped as low as $252 an ounce in 1999.

Effect :

Cuts in Exploration

Low prices and environmental controls discouraged mining companies from spending the money to find new supplies of gold

Possible Ramifications

Falling Production

The lack of investment during the low-price years means new supplies of gold have not kept pace with gold demand

(E)

Cause :

Low Interest Rate

When real interest rates are low many investors turn away from paper assets with declining value and instead turn towar assets with real value, like gold.

Effect :

Hedging Curtailed

When interest rates are low, there is little incentive for hedging. As a result, gold is removed from the market.

Possible Ramifications

A decline in hedging shrinks short-term gold supply, creating a market imbalance during a time of escalating demand.

(F)

Cause :


Credit Crisis

The U.S. economy has been hurt by tighter liquidity associated with heavy losses in the key housing and financial sectors

Effect :

Interest Rate Cuts by Fed

The Federal Reserve has cut interest rates effectively to zero in an effort to lift the economy out of recession

Possible Ramifications

Weaker U.S. Dollar

Rate cuts drive down returns for currency investors. Many of those investors will buy gold as an alternative reserve asset, thus driving up demand.

World economic growth in year 2011



According to the information contained in the new report by the IMF’s World Economic Outlook, the world’s GDP at the end of 2010 could grow by 4,2% (January forecast reported 3.9% growth). With regard to this indicator for 2011, compared to January, it has not changed and remains at 4.3%. According to IMF chief economist Olivier Blanchard, a global recession has been avoided, so that a gradual recovery of world economy is present.

Due to the fact that the world economy recovers faster than planned, evaluation of losses of the global financial sector during the crisis was reduced by 533 billion dollars. Initially it was assumed that the cancellation of bank assets amount to about 2.8 trillion, however, economic recovery has reduced that figure to $ 2.28 trillion. Losses of the U.S. banking system decreased from 1.03 trillion to 885 billion dollars. The total score of bank loan losses decreased by 13%.

For developing countries, where the formation of the market only occurs, they have restored after the world crisis quicker. The highest rate of growth is in Asia, where they make up 8.7% in 2010. The highest recovery rate – China, India, Brazil and Mexico. The growth of Chinese economy in 2010 will amount to 10% and in 2011 – 9.9%. The Indian economy will grow in 2010 by 8.8% in 2011 – by 8,4%. Brazil show 5.5% growth in 2010 and 4,1% 0 in 2011, while Mexican GDP will grow by 4.2% in 2010 to 4.5% – in 2011.



The Russian economy will recover faster than expected. Specifically, in 2010 an increase of 4% instead of the planned 3.6% in January. GDP growth in 2011 somewhat slowed down to 3.3% (in January was a figure of 3.4%). However, qualitative growth of the Russian economy will be small – it has been forecasted before.

The U.S. economy compared to European and Japanese will develop more dynamically. In 2010 the U.S. GDP will grow by 3.1% in 2011 – 2.6%. Japan also will add to its GDP 1.9% in 2010, and in 2011 – 2.0%. As for the euro zone, where the pace of economic development leaves much to be desired, not exceeding in 2010 of 1%. Thus, the strongest European economy – German – to grow as a result in 2010 only 1,2%, and in 2011 – by 1.7%. Somewhat better position in the UK from outside the eurozone. They GDP in 2010 could grow by 1.3%, and in 2011 – even at 2.5%.

Source: abforex.ru

Nik Zafri's current status : (23 September, 2010)

I feel uneasy when some 'powerful quarters' wanted to do business with China but at the same time demanding, questioning and even try to dictate terms regarding China's (Reminbi) exchange rate policy.(Why after 10 years? - only now some 'people' started to complain) They say Reminbi being undervalued (1% appreciation).China is smarter...don't push them - they might consider PEGGING the Reminbi (like what Malaysia did) and the powerful ones will now know that China means BUSINESS.

Not long after I've posted this, here is China's stand :

NO BASIS FOR MAJOR APPRECIATION OF YUAN : CHINA PM - (AFP) – 2 hours ago (9.58AM Malaysia Time - 23/09/2010)

NEW YORK — China's premier has said that there is no basis for a drastic appreciation of the yuan, responding to increasingly angry claims in the United States that Beijing was keeping its currency low.

"There is no basis for a drastic appreciation of the renminbi (yuan)," Prime Minister Wen Jiabao said in a speech before the US-China Business Committee in New York.

"If the renminbi appreciates by 20 to 40 percent according to the requests of the US government, we do not know how many Chinese companies will go bankrupt and how many Chinese workers will be laid off and how many rural workers will go back to their homes and there will be major turbulence in the Chinese society," he said, according to a translation of his speech.

Washington has been toughening its rhetoric over China's currency handling in recent weeks, accusing Beijing of keeping its currency artificially low against the dollar to make its exports more competitive.

Speaking earlier Wednesday, Wen called for "large-scale" trade cooperation with the United States.

The United States and China -- the world's top two economies -- should "positively carry out large-scale economic and trade cooperation," Wen said, while warning that mutual trust was the precondition for such a move.

Wen said a "sound and stable Sino-US economic and trade relationship is in line with the fundamental interests of both countries," in comments carried by China's official Xinhua news agency.

The "structure of Sino-US investment and trade" was to blame for the massive US trade deficit, not the value of the Chinese currency, the Chinese leader said.

Wen spoke at a meeting of "celebrities from the US economic and financial community," Xinhua reported. Former US secretary of state Henry Kissinger and former Treasury secretary Robert Rubin were among those invited.

Members of a key US congressional panel are due to vote Friday on legislation that would call on the US Commerce Department to punish Beijing for allegedly manipulating its currency and distorting trade.

President Barack Obama warned earlier this week that the yuan "is valued lower than market conditions would say it should be," and called on the Chinese to do more to promote "fair" trading conditions.

"What we've said to them is, you need to let your currency rise... you're getting wealthier, you're exporting a lot, there should be an adjustment there based on market conditions," Obama said during a town hall style-meeting on CNBC television.

"They have said 'yes' in theory, but in fact they have not done everything that needs to be done," said Obama, who will meet Wen in New York on Thursday.

US Treasury Secretary Timothy Geithner also complained last week that it was "past time for China to move" on the yuan and lift trade barriers.


Copyright © 2010 AFP. All rights reserved.

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.

------------------------

(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.”

--------------------

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.

---------------------
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
---------------------------------
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
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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'