Malaysia: Risking Lives in a Faraway Country

You have to see them scaling the heights of all those multi-storeyed buildings. Without harnesses, hard-hats and industrial boots, they are there on the scaffolding and on the skeletal frames of buildings.


My salute to these Indonesia workers. They have to take so much risk to earn so little. And to die by falling off these tall buildings far away from home if indeed tragic.


Lately, a majority of these Indonesian construction workers have mostly gone home as the economy is getting better there at home. Armed with new skills acquired through the Malaysian experience, they know that they can now earn better at home than before.


And that,my friend, is the silver lining.

Malaysia: Reprieve for Existing Credit Card Holders

At least there is now some direction from the authorities. A Minister has just announced that only applicants issued with new cre­dit and charge cards next year will have to pay the RM50 service tax upfront.

For existing card holders, the charge will be im­­posed on the anniversary date of cards.

Second Finance Minister Ahmad Husni Hanadzlah confirmed this yesterday.

“Existing cardholders will only be charged the ser­vice tax through their issuing banks upon the aniversary date of the card.

“For example, if the card’s anniversary date is in January, then you pay the tax in January. But if the date is in April, then you only pay the tax in April,” he added.

The minister’s clarification puts to rest nagging doubts among the millions of credit card holders in the country who have been raising queries since Prime Minister Najib an­­nounced the new tax when he unveiled Budget 2010 in October.

There are currently some 11 million credit cards circulating in the country. Obviously these are official data.

There has been so much card surrender since the announcement of this punitive tax that I guessed that perhaps we should accept that only 60% or so of cards are now in circulation.So the government's pipe dream of collecting RM550 million from this tax seems to be "half dead in the water"!

Malaysia: Third Rate Taxi Service

A Minister likened Malaysian taxi drivers to have "toilet" mentality. According to him their taxis are equally dirty! Think he is being cheeky and antagonistic?

No, third parties have bailed him out.

Complaints about taxis are so rife that they spawn dedicated threads on expatriate forums. As many Malaysians drive their own cars, expatriates and tourists are among the most frequent taxi users in the country.

In a survey published last year by local magazine The Expat, some 200 foreigners from 30 nations rated Malaysia the worst among 23 countries in terms of taxi quality, courtesy, availability and expertise.

They labelled Malaysian cabbies, among other things, “a national disgrace”, “extortionists” and “a serious threat to tourists”.

On Aug 1 this year, a long-awaited taxi fare hike was introduced, in the hope of improving services.

Under the new rules, the flag-down rate is RM3 instead of RM2. More significantly, the meter jumps more quickly when cabs stop moving, which is a common occurrence in Kuala Lumpur, given the heavy traffic.

The fare adjustment would have increased cabbies' income by about 30 per cent, and it did ease some problems, according to feedback from regular taxi users — but not enough.

The Expat magazine's group editor, Douglas Williams, told The Straits Times that one major bugbear continues to plague the industry — taxi touts still prowl the usual tourist spots.

Among the problem areas: the popular Suria KLCC shopping complex located at the iconic Petronas Twin Towers; the shopping belt along Bukit Bintang, Kuala Lumpur's equivalent of Singapore's Orchard Road; and the long-distance bus interchange at downtown Puduraya.

At Suria KLCC, a prominent sign placed at the entrance of the mall urges shoppers not to accept taxi rides from touts. Yet, barely 50m away, touts continue to ply their trade every day, grabbing any tourist who emerges from the mall. So where are the Commercial Vehicle Licensing boys? They must surely be deaf until the KLCC authorities have to put up such a 'sad reflection' of a sign!

Touts could be fined RM300 and lose their taxi licence, but they continue to flout the law. It is easy to see why they are prepared to take the risk.

Williams, 40, said he is charged anything from two to five times the metered fare whenever he takes taxis from tourist spots — which significantly outstrips the 30 per cent fare increase following the adjustment in August.

“Meeting a bad taxi driver leaves tourists with a poor first impression,” said the Scot, who moved to Malaysia 1½ years ago.

“Taxis in any halfway-developed city really should go by the meter all the time.”

Indeed, with expats now ensconced in many other Asian cities, Kuala Lumpur's taxis are increasingly being measured against higher benchmarks. Thailand and China are just two of the countries that are said to have more reliable cab services.

Another common grouse from foreigners is that Malaysian taxis are dirty and old. In addition, foreigners say grievances are seldom redressed by the authorities.

However, those in the industry say errant drivers form only a small proportion of all cabbies.

Aslah Abdullah, president of the Federal Territory and Selangor Taxi Operators Association, said many cabbies had started using the meter since the fee hike — a trend also noted by regular taxi commuters that The Straits Times spoke to.

What Aslah feels is lacking is adequate enforcement of the rules.

Government agencies such as the Road Transport Department and Commercial Vehicle Licensing Board are responsible for keeping errant cabbies in check, but effective policing is needed.

The most common reason given by the authorities for the lax policing? A lack of manpower. Until that problem is settled, errant drivers will continue to pose a problem, said Aslah.

So where are the police? As usual, this is a rhetoric question!

Malaysia: How to Steal a Jet Engine

There is a saying in Malaysia. It is much touted among politicians but it has been used in jest by the common folks. The slogan is "Malaysia Boleh!". Translated into English, it means "Malaysia Can!"

There are many things that can happened in Malaysia.You have a disappearing private investigator,interesting judicial decisions,the ingenious use of C4 explosives and much, much more. The theft of a Royal Malaysia Air Force (RMAF) fighter jet engine takes the nyonya-cake!

According to Defence Minister Zahid Hamidi, low-ranking officers were in cahoots with civilians in the well- planned theft and sale of the RM50mil engine.

He added the thieves sold the engine to an international company based in South Africa that hired an agent to bring it out of the country.

Apparently the international company was interested in buying the engine because it was cheap as best of all, it was categorized as faulty spare part and was to be under repairs.Also missing was its maintenance and service record.

The Minister intends to take legal action at the international level to go after the company involved as well as against RMAF personnel involved for betraying the country.

This is a true case of "Malaysia Boleh". Can we have one that will soon top this as well? Surely we can, after all, this is Malaysia where everything that can happen, does happen!

The WOW Holiday English Camp

And so I was roped in to replace Vickie on 16 and 17 December to help out in conducting a two-day camp on the various language skills. I had to give them a brief lecture on what is public speaking and the do's and don'ts.

Believe me, trying to communicate with a group of children ranging from 8-17 is one mammoth task. Most of the participants were from shelters and homes such as Good Hope and St. Agatha's. Some of the seniors were eager to learn. The younger ones were more interested in creating mayhem, disrupting class presentations and occasionally fighting among themselves.

Sandwiching guitar lessons between Public Speaking for the students just do not work. I do hope Vickie and the other organising parties will find a better way to ensure there is no disruption of English just because of a few music lessons.

A 10 year old girl called Navitha was selected as the best speaker. She received her prize from one of the organisers.

Malaysia: Expect Price Escalation in 2010

For those intending to buy houses in 2010, this is a good indicative article from Lee Wei Lian,writing for the Malaysian Insider.

She reports on the possible housing scenario in 2010 basing on the expert comments of REHDA and also the outcome of a property price survey among its members.

Let's read her article for whatever it is worth.

"House hunters will likely face higher prices next year as pent up demand and gains from the stock market boost the property sector.

Houses on the secondary market could also be hit by an additional five per cent increase in prices as owners looking to sell try to cover the real property gains tax (RPGT) which comes into effect in January.

According to the Real Estate and Housing Developer’s Association (Rehda), slightly over half the respondents in a survey of its members expect property prices to increase up to 20 per cent over the next six months.

About 30 per cent of the respondents expect prices to remain stable, while less than five per cent expect prices to decrease.

The stock market has made substantial gains this year and investors who benefitted will likely be looking to put their money in property.

“Six to nine months after the stock market increases, it goes into brick and mortar,” said Rehda deputy president Datuk Michael Yam at a briefing today on the property outlook for next year.

On the positive side, interest rates remain low and banks continue to be flush with extra funds, therefore making the arrangement of home financing easier.

Yam, however, stressed that there was still a relatively low barrier to home ownership in Malaysia and ticked off a list of factors in the home-buyer’s favour, including interest rates as low as BLR (base lending rate) minus 2.3 per cent; margins of financing up to 100 per cent; zero lock in period; stamp duty exemptions; and repayment periods extended to thirty years or up to the age of 75.

“Even I can qualify for a (30 year) loan now,” he quipped.

According to REHDA officials at the press conference, the average value of homes transacted in 2009 is estimated to be between RM200,000 and RM250,000 when excluding low cost homes, and about RM168,000 when taking into account low cost houses.

Fresh graduates, however, could face difficulty buying properties in the city where prices are much higher.

Yam said that there were no official figures available for the average price of link homes in the Klang Valley but said that there were terrace houses in some suburbs available for about RM400,000, as compared with RM200,000 in smaller towns and cities like Kluang and Kuantan.

“Graduates may have a problem without help from their parents,” he said.

“They earn maybe RM3,000 to RM4,000 a month, which means they can borrow only RM150,000 to RM200,000. It is not possible to buy a terrace house [with that level of income] but maybe an apartment.”

He added that developers might have to consider building smaller units for the fresh graduate market segment, in the region of 600 sq ft apartments that sell for RM300 per sq ft.

A long term boom is also expected for the housing industry that could put upward pressure on prices as Yam said that slightly over half of the population is below 24 years of age and would later enter the home-buyers market.

“These people will be pushing to enter the property market,” said Yam.

Housing prices in some parts of the world such as China, Singapore, Hong Kong and Australia have risen dramatically over the two years, prompting a public outcry.

Prices of private homes in Singapore reportedly rose by 16 per cent in the third quarter and there are concerns of a speculative asset bubble building in Hong Kong.

According to Ratings Agency Malaysia economist Kristina Fong, asset bubbles were not evident in Malaysia and an over-supply of units on the Malaysian property market is likely to cap price escalation.

Picking winners: Unit Trusts funds

Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting. He has written an article on choosing unit trusts to buy. I attached his article unabridged.

"UNIT trust funds offer an attractive alternative to retail investors, especially those looking for the benefit of diversification with a small pool of capital while enjoying the possibility of earning higher returns compared with conventional savings.

However, a lot of people have the misconception that the diversification nature of these funds means that the risk of investing in unit trust is low and they can just close their eyes and simply pick any of the funds that come along.

This misconception has led to many paying high prices in learning that as in any type of investments, investing in unit trust funds requires some basic understanding and research before we commit our hard earned money to it.

In general, we can classify the unit trust funds in the market into two major categories: income funds and growth funds.

·Income funds usually are characterized as providing consistent income to the investors. These funds invest in income-producing stocks or bonds or a combination of both. Bond funds, equity income funds and money market funds are included in this category.

·Growth funds generally are more aggressive than income funds but have the possibility of earning higher returns by focusing on the objective of long-term capital appreciation rather than income producing or short-term gain. Examples of growth funds are small-cap funds, commodity funds, index funds and gold funds.

Before we start evaluating the funds to invest in, there are two main considerations which are our investment objectives and risk tolerance level.

Every investor invests for his own purpose. If you are investing for your retirement and are already close to retirement age, you should look for income funds that are more predictable.

However, if you are still young and want to save for your children’s higher education, which will be 10 or 15 more years, you may want to look for growth funds that generate higher return but with higher level of risk.

Once we are clear on what we are looking for in the investment, we can narrow down our selection to either income or growth category and move to the next step of identifying the most suitable funds within the selected category.

Here are a few key factors to look into when evaluating unit trust funds:

·Investment strategy, policy and holdings: Every fund has its own investment profile. Investors should have a clear understanding of the investment strategy taken in each fund that they are considering to ensure it is consistent with their personal investment objective and risk tolerance level.

Even the funds within the same category may have significant differences in risk exposure due to the difference in the investment holdings.

For example, the risk exposure in large-cap growth companies is definitely much lower than for penny stock funds.

·Past performance: Investors may look into the past performance trend of the fund to gauge its future performance.

However, do bear in mind that good past performance may not be repeated in the future and we should not be overly excited to see one year of good results if the fund is only newly established.

A good fund should be the one that has been consistently out-performing its peers, be it during good or bad times.

·Cost: Investors must be aware that when they buy or sell the funds, there are fees and expenses embedded in every transaction.

For example, the expense ratio of a small fund tends to be higher than a large fund while a regional or global fund usually will carry higher costs compared with a domestic fund.

·Fund management: The fund management is very important to ensure continuity and consistent performance.

If a fund changes management too frequently, it will be very difficult for us to gauge the performance of the fund as different managers will have different styles which may affect the performance of the fund.

For example, if the manager tends to have higher portfolio turnover, then the expense ratio of the fund may increase even though the nature of the fund holdings remains the same.

By having good understanding of the above factors, we may be able to make meaningful comparisons among funds that we are interested in to identify the ones that suit us most."

I have ventured into some unit trust funds. So far, not very good, more misses than hits!

Again, there is this peculiar feature called capital protected or 'guaranteed capital return" in some funds. Sadly on hind sight, this protection do not appear to be so. Most unsuspecting investors were sold a 'pup' and had to pay dearly because of marketing misrepresentation'.