Another Much Welcomed Sukuk Offering

Say what you want,Ponzi scheme, reverse pyramidal money trap or what not.

The Malaysians are wise enough. There is very remote chance for the current BN government to fall. So brave up and buy this new issuance of  RM3 billion govt sukuk fund issued by yours truly, Bank Negara Malaysia.

According to a press release from Bank Negara yesterday, those aged 21 and above who wish to subscribe to the sukuk may do so from May 20 to June 9. The minimum subscription is RM1,000 with a maximum of RM50,000 per subscriber.

The sukuk, with a three-year tenure, offers annual returns of 5%.

Profit payments would be made quarterly.

Allocation of Sukuk 1Malaysia 2010 will only take place after the close of the subscription period. All subscribers will be allocated with an amount less than or up to the amount subscribed, depending on the total number of subscribers and the total subscriptions received, so says BNM.

It added that the sukuk came with a resaleable feature providing flexibility for investors to sell and buy the instrument before the maturity date.

Beginning June 22, investors can sell and purchase the sukuk at agent banks. The purchase of sukuk is based on a first-come, first-served basis, with no maximum limit, subject to the availability of the sukuk sold by existing holders,it said.

Last year, the Government issued RM5bil worth of Sukuk Simpanan Rakyat with a three-year tenure as part of the RM60bil stimulus measures aimed at boosting the economy following the global economic slump. The entire RM5bil sukuk were fully subscribed within nine days.

Besides the sukuk, the Government has also issued Merdeka bonds, with the first bonds based on syariah principles issued in February 2004 until the eighth issuance in October 2005 when they were discontinued.

These bonds were issued again in two tranches each of RM1bil last year.

Malaysia: Outsourcing Undercuts Electronic Sales

This is the second year in a row that US electronic companies in Malaysia will face a sharp fall in export sales. The main cause is the continuing trend to outsource manufacturing processes to reduce costs.

Let us read this Reuters report.

Kuala Lumpur, May 10 — US electronics firms in Malaysia expect a second year of steep fall in export sales in 2010, an industry body said today, as firms continue to outsource manufacturing processes to cut costs.

The value of electronics shipments by the 20 members of the Malaysian American Electronics Industry group, or MAEI, will drop by nearly one-fourth to RM57.3 billion this year.

The group includes some of the world's biggest players including Dell, Intel and Motorola.

In 2009, total export sales were at RM70 billion, down 16 per cent from 2008.

The forecast sharp fall was due to “a change in manufacturing strategy from internal to outsourcing,” said MAEI chairperson Wong Siew Hai.

“Excluding this change, MAEI's export sales is expected to grow by 10.8 per cent in 2010,” Wong told reporters.

MAEI members contributed about a third of Malaysia's total electrical and electronics exports.

Since the global financial crisis two years ago, the MAEI member companies have started to outsource some of their operations to local manufacturers and other cheaper hubs such as China, said Wong, a former Intel senior executive.

He said the demand outlook for the industry remains positive after the latest data showed global semiconductors sales grew by more than half in the first quarter of 2010 from the same period in 2009.

Capital expenditure by the MAEI members are forecast to rise by nearly a quarter this year as they hire more workers and expand their operations to meet growing demand.

“Originally we thought it was an inventory restocking, but I think that was gone. I think we are past the inventory status,” said Wong.