No more subsidy for foreign students from July

As Idris Jala rambles on about subsidy and belt tightening, he forgot the leakage of subsidising foreign students. What gives? In classic salesman's parlance. "Tell your would-be customer what they need to know only.Don't tell them what they do not need to know!"

So, now Nordin spills the beans!

"Starting July this year, foreign students in Malaysia will have to pay their course fees in full because the government no longer subsidise them," Higher Education Minister Mohamed Khaled Nordin said.

Then,he put out an assurance as well saying local students will continued to be subsidised.

'This would mean that the amount of fees to be paid by foreign students would be the same as those imposed by private institutions of higher learning,' he added.

'I would like to assure the people that we have no plan to abolish the subsidy for local students in public higher learning institutions'.

"For foreign students, however, we no longer allow the provision of any kind of subsidy," he told reporters after presenting the letter of approval to Inti International University here today.

Mohamed Khaled said previously, some public higher learning institutions offered subsidised fees to attract international students.[You got to be joking seriously!]

"However, these universities have now grown in strength and are able to attract international students on their own without the subsidy. These students need to pay the fees in full," he said.

On the elevation of Inti University College to Inti International University, Mohamed Khaled said the institution fulfilled the criteria to be elevated into a university. [ I guess this is the right thing to do if they have actually achieve such standards. [Was an international academic audit been done on Inti to ensure enduring standards?]

He said that the recognition given to the university would help make Malaysia a higher education hub.

Inti International University, located in Nilai, Negri Sembilan, was set up in 1998 and has 5,500 students.

Morbid Month of May for Stocks

Most investors are looking forward to the month of June - and for good reason. The Dow Jones Industrial Average posted its worst May since 1940. [I think most markets did not fare any better after the May drubbing,no thanks to Greece!]

For the month, the Dow fell 7.9 per cent, the S&P shed 8.2 per cent and the Nasdaq lost 8.3 per cent. The declines were the worst for the Dow and S&P since February 2009 while the Nasdaq suffered its worst monthly drop since November 2008.

Europe was equally stung. The Dow Stoxx 600 hit an eight-month low on May 25, and Friday's decision by Fitch to downgrade the credit ratings of Spain suggests more tough times lie ahead.

Fitch cutting Spain by one notch to AA+, assigning it a "stable" outlook, according to a statement from London on Friday couldn't come at a worst time. It was double jeopardy! Spain has held the top rating at Fitch since 2003. Standard & Poor’s lowered Spain’s ratings to AA on April 28. The cut came days after Spanish lawmakers approved a round of austerity measures by a single vote.

"The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term," Brian Coulton, Fitch’s head of Europe, Middle East and Africa sovereign ratings in London, said in the statement.

The downgrade set aside news from a day earlier that China continued to view Europe as a key investment area, comments which sparked rallies across Europe and on Wall Street. [This speculative interpretation also worsened market situation!]

Yet, in keeping with the wild swings in volatility that seem to have become the norm recently, investors on Friday opted to sell.

The Dow Jones industrial average dropped 1.19 per cent. The Standard & Poor's 500 Index fell 1.24 per cent. The Nasdaq Composite Index declined 0.91 per cent.

For the week, the Dow slid 0.6 per cent. The S&P 500 gained 0.2 per cent and the Nasdaq added 1.3 per cent.

"Up until now it's been mostly Greece and the threat of Spain and Portugal and Ireland," Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania, told Reuters.

"With Fitch actually downgrading Spain, it seems as if it is no longer a hypothetical, the contagion is now real."

Finance ministers and central bankers from the Group of 20 wealthy and developing economies will gather in South Korea this week to review Europe's debt crisis, financial reforms and efforts to rebalance the global economy. The meeting will lay the groundwork for a summit of G20 leaders in Toronto later in June.

With both the UK and US markets closed on Monday because of holidays, many investors will have a few more days to think about where to place their next bets.

In terms of the economic outlook, the US recovery appears to be shifting back a gear after rebounding at a faster pace earlier in the year.

This week there’s a glut of US data.

On Tuesday, there will be a report on construction spending in April and the ISM manufacturing index for May.

Wednesday's reports include Challenger layoffs data for May and US pending home sales for April with the latter seen rising 3.3 per cent, according to a Reuters poll.

Thursday's data includes the ADP national employment report, forecast to show an increase of 51,000 and the government's weekly initial jobless claims.

Later that day, April factory orders, expected to rise 1 per cent, and the ISM services index for May, expected at 55.6, will be released.

The US non-farm payrolls data will round out the week on Friday. The government report is expected to show 425,000 new jobs for the month, up from 290,000 in April, with the unemployment rate falling to 9.8 per cent from 9.9 per cent.

The US dollar is expected to fall against the euro in the coming week with investors betting that most of the bad news on European fiscal woes is already priced in with the single currency's 7 per cent decline in May.

Euro zone sovereign debt concerns remain in spite of a near US$1 trillion safety net set up by European officials to ward off any contagion from Greece, but investors are willing to bet that at least for now, the euro has touched solid support.

This was so particularly after China's Central Bank this week discounted a Financial Times report that Beijing was concerned about its euro zone bond holdings.

And though the monthly US jobs report is scheduled for Friday, investors are only likely to take their focus from Europe if tensions on the Korean Peninsula explode into conflict.

"It's probably dollar down a little bit with the fire put out for now in Europe," said TJ Marta, chief market strategist at Marta on the Markets in Scotch Plains, New Jersey.

"The euro could see a short covering rally but all bets are off if there is more risk." The euro last traded at US$1.2347.

For the week, the euro fell 1.6 per cent against the U.S. dollar, while the U.S. dollar rose 0.7 per cent against the yen. For the month, the euro fell 7.2 per cent against the U.S. dollar, while the U.S. dollar fell 3.2 per cent against the yen.

Any escalation from rhetoric to a border skirmish in Korea would rattle investors and prompt a flight into the relative safety of the US dollar. The yen would also gain, analysts said, with investors seen selling euro against yen.

Axiata: Upward Momentum

Axiata Group Bhd was upgraded to “buy” from “hold” at HwangDBS Vickers Sdn Bhd, with a raised share forecast of RM4.50.

The research house said in a report today it also increased the mobile phone company’s earnings estimate by 46 per cent for its 2010 financial year and by 39 per cent for 2011.

Its shares climbed 1.1 per cent to RM3.73 at 9:04 am local time, set for their highest close since May 19.-- Bloomberg

Rice Sufficiency:Another Neverending Issue

Sure we are. There is the fertiliser subsidy and other indirect subsidies. A clear example of indirect subsidy is the minimum price the government agency in this case Bernas must pay the farmers.As to the problems in this industry, it is too numerous that most smart people have got out of the industry.

At one time, we were aiming for self-sufficiency in case there is a security need. However, as usual, the government agencies lost track of their target. so, a lot of padi land were converted into mixed development and residential housing. Rice bowls are now almost gone in many states as housing developers encroached  on the diminishing padi hectarage.

 Now we have a Deputy minister asking an 'if' question. As if it is an issue to deal with rocket science!

So he said that Malaysia may continue to import rice if the cost of expanding the “Rice Bowl” areas in the country is higher than the cost of importing the commodity. Isn't this obvious?

Currently, the country was importing 30 per cent of the rice needs and the government was studying from the various aspects whether imports would be continued or otherwise. Who is studying may I ask? Another committee? A few PTD officers without field experience  or some agricultural officers without policy experience?

“We are studying whether to produce 100 per cent of our rice consumption or to continue importing 30 per cent of the national consumption, " he waxed lyrical.

At the moment, he said, emphasis would be given to efforts at upgrading the areas under the Muda Agricultural Development Authority (MADA) to produce better quality rice. This has nothing to do with quantity, my good man!

“Under the 10th Malaysia Plan, the ministry is allocating RM140 million to upgrade the areas under MADA. It includes giving compensation to residents because the rivers and canals in the MADA area are located on their land,” he said.

But where if the beef, my good man?

Are Sellers Tired at Wall Street?

Wall Street, still wracked by the eurozone crisis, has a long holiday weekend to recover from a miserable May before facing a packed economic calendar capped by the monthly jobs data.

"There's been a spike of jitters, but sellers are a bit worn out," said Gregori Volokhine of Meeschaert New York.

The market "is stabilizing. Volatility remains high, but no longer at crisis levels," he said.

"The crisis of confidence in the market is over."

Over the past week, the blue-chip Dow Jones Industrial Average fell 0.56 percent, to 10,136.63 ponts.

By contrast, the tech-rich Nasdaq composite gained 1.26 percent at 2,257.04 and the Standard & Poor's 500 index, a broad measure of the general market, edged up 0.16 percent to 1,089.41.

In May, the Dow plunged 7.9 percent, its worst monthly performance since February 2009 and its worst May since 1940.

The week got off to a rocky start as investors continued to fret about the developing financial crisis in the eurozone after Greece's close call with collapse.

Attention focused on Spain, where the central bank rescued a regional savings bank, CajaSur.

The fiscal strains in the eurozone sparked concerns that they could morph into a global financial crisis like the one that the followed the 2008 bankruptcy of US investment bank Lehman Brothers.

A huge blow came Wednesday, when the Financial Times reported shortly before the market closed that China, the world's largest holder of foreign-exchange reserves, was reviewing its eurozone debt holdings.

The euro plunged below 1.22 dollars, near a four-year low, and the Dow closed below the psychologically sensitive 10,000-point threshold for the first time since early February.

China dismissed the report Thursday, easing eurozone fears and sending the Dow up 2.85 percent.

On Friday, Fitch cut its credit rating on Spain, sending the market plummeting before it fought back to close off intraday lows.

Despite the whipsaw action, "this week has been far more healthy than we have seen in the last three or four weeks," said Marc Pado at Cantor Fitzgerald.

"A big part of this decline was to unwind positions that were representing higher risk for portfolios," he said.

"When you bounce it's important that the right stuff bounces: technology, retail, financial, those are the drivers of the economy, and that's what started to happen."

After the May maelstrom, investors have a long weekend -- with markets closed Monday in observance of the Memorial Day holiday -- to catch their breath.

They face four days of key economic indicators, including construction spending on Tuesday, auto sales on Wednesday and factory orders the following day.

But key labor data Friday promise to stir the most interest as investors try to gauge the sustainability of the fledgling recovery from the worst recession since the 1930s.

Most analysts expect the Labor Department to report nonfarm payrolls rose 500,000 in May, after a gain of 290,000 in April.

The expected jump in job creation would be largely due to temporary government hiring for the 2010 Census, analysts said.

The unemployment rate was forecast to slip a notch, to 9.8 percent, from 9.9 percent.

"We've had slightly more mixed data recently, so the jobs figure will be the test to see the strength of this economic recovery," Volokhine said, adding "there's always a risk of bad news"

Kill or be Gored

So, it has come to pass. Kill animals wantonly and you will also pay the price.

This matador is paying.

Where Eagles Dare!

Utmost respect to this " Women of the Year"! Bravo!

Which one is the blonde?

See just how observant you are!

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She got the wrong leg up!

Stocks and Money: The Empire Strikes Back!

After being hammered and pummeled for weeks, the empire finally strikes back.

Asian stocks rallied for a third straight day on May 28 as China’s pledge to remain invested in Europe lifted sentiment though the euro surrendered some of its gains after rebounding from near four-year lows the previous day.

Higher yielding currencies like the Australian and New Zealand dollars surged on demand for riskier assets and the Japanese yen, which benefits from risk aversion, lost ground, boosting exporter shares in Tokyo.

Japan’s benchmark Nikkei, rebounding from a six-month low yesterday, rose over 1.7 per cent to its highest this week while the recovery in commodities support a rally in the Australian stock market.

“The phase of sharp erosion in sentiment may now be behind us, though unstable stock moves will likely continue for a while,” said Tsuyoshi Segawa, an equity strategist at Mizuho Securities in Tokyo, adding seasonal position unwinding in May by hedge funds would add to the volatility.

The MSCI index of Asia Pacific stocks outside Japan rose 1.9 per cent adding to the previous day’s 2.2 per cent gains. It is on track for its biggest weekly percentage gain since early March.

The Korea Composite Stock Price Index (KOSPI) climbed 0.7 per cent as foreigners turned net buyers of stocks after a nine-session selling streak, which was the longest since March 2009.

The People’s Bank of China said yesterday a Financial Times report that Beijing's concerns about its euro-zone bond holdings due to the European debt crisis was groundless.

The report had driven the euro to a near four-year low against the dollar and near an 8½-year low against the yen, and soured risk appetite globally as investors worried that Europe’s debt woes would grow into a larger financial crisis.

Beijing’s denial fuelled a rally on Wall Street, with the benchmark S&P 500 rising  by the biggest percentage gain in nearly three weeks.

In Asia, energy and financial services sectors were the main outperformers while defensive sectors like utilities were laggards.

The euro initially got a major lift from short-covering following China’s denial, but slipped back as worries about Europe’s debt problems returned to haunt investors who sold into the single currency’s strength.

In Asian trade, the euro was down 0.6 per cent from late New York at US$1.2292 against the dollar and is down 0.5 per cent against the yen at 112.02 yen.

“In our view, uncertainty remains in Europe and the sources of worries could resurface,” said a note from Credit Agricole CIB.

“It could come from the negative economic impact of the fiscal adjustment or from the sometimes difficult coordination between the Eurozone’s members. There could also be market talks coming back about the issue of government debt restructuring.”

The improved market sentiment supported the Australian dollar and the New Zealand dollar, which held on to yesterday’s steep gains of 3.5 per cent and 3.1 per cent against the dollar, respectively.

Metals were steady to marginally higher with copper hitting a two-week high on the heels of the flight to riskier assets while the jump in oil prices was additionally helped by speculations about supply disruptions due to the Atlantic hurricane season.

On the whole, things should appear fair on the horizon, though there may be some choppy waters to prevent a smooth sail back to better times!

Adventa: The Rubber Glove Play

OSK Research has retained its "buy" recommendation on glove- maker Adventa Bhd (7191), after the company reported a first-quarter results that were within expectations.

The company's first-quarter net profit for the period ended January 31 almost tripled to RM9.35 million, from RM3.23 million a year ago, helped by additional capacity. Its revenue also grew by 12.5 per cent to RM76.64 million during the quarter.

Growth were mainly contributed by continuously strong demand for examination gloves.

The company also regained entry into the Latin American market and resumed exports to Brazil in November 2009.

"Going forward, we expect demand for its examination gloves to remain firm given Adventa's niche in surgical and dental gloves.

"(We) maintain a "buy" (call), with our target price maintained at RM5.37 based on a PER (price-earnings ratio) of 15 times 2011 financial year EPS (earnings per share)," said OSK.

"Our target price for Adventa is based on a PER valuation of 15 times financial year 2011 EPS. We like the company's market leadership in surgical gloves as well as niche in the dental glove segment," the research house added.

It is now RM3.07. Will it move up to its old trajectory?

Given the growing health industry world-wide, Adventa looks poised to take on a bigger market chunk with additional capacity in place.

Malaysia's Sukuk Foray Overseas

Malaysia plans to sell a benchmark-sized 5-year US dollar sukuk at 190 basis points over US Treasuries, pushing ahead with its first global bond in eight years, sources involved in the deal said.

Malaysia is looking to raise US$1 billion (RM3.3 billion) from the sale and the order book, following a global roadshow. It has already drawn interest of US$3.25 billion, they said.

Final pricing could take place later today in London or New York, one of the sources said.

Malaysia’s ijara sukuk, the fourth sovereign global bond in the region this year, comes as global financial markets wrestle with the impact of Europe’s debt crisis.

“Timing is not exactly perfect but there is actually no perfect timing,” said a fixed-income analyst with a Malaysian bank. “I expect they’ll come out with a relatively interesting pricing level.”

Market reaction to the Greek crisis has already impacted new issues in Asia.

The government held investor meetings in Hong Kong last Thursday, Jeddah on Saturday, Riyadh on Sunday and London and Dubai on Monday.

It concluded the roadshow in New York yesterday but held talks with Middle East investors after that, another source with direct knowledge of the deal said.

CIMB, HSBC Holdings and Barclays are deal managers.

Standard & Poor’s has given the sukuk an ‘A-’ preliminary long-term issue rating and Moody’s has assigned an A3 foreign currency rating with a stable outlook.

The sale of Islamic bonds allows Malaysia to tap a wider investment base, although investors can demand a higher return on sukuk because of the lack of a secondary market.

Prime Minister Najib Razak said on May 19 that the deal was designed to set a pricing benchmark for future sukuk and conventional bond issues.

Malaysia last tapped the global bond market in 2002 when it raised US$600 million from the sale of its first international sukuk.

This month, Saudi Electricity Co raised 7 billion riyals from a 7-year sukuk at 95 basis points above Saudi Interbank Offered Rate (Sibor).

The yield on the issue was below the 160 bps above Sibor at which the Gulf’s largest power utility priced its previous sukuk issue of the same size. — Reuters

Sime Darby posts first ever quarterly loss

 KUALA LUMPUR, May 27 — The writing on the wall is plain to see. Sime Darby, the country’s second-biggest listed company was set to post its first ever quarterly loss after massive cost-overruns bled its energy division. And it did!

The loss, the first since its formation in 2007 was overwhelming. [It was merger with two other government-controlled plantation groups.]

Sime Darby posted a January-March net loss of RM308.6 million, compared with a 150.6 million ringgit profit a year ago.

The group is set to miss its own net profit target of RM2.5 billion for this year because of the losses.

Sime Darby this month removed its chief executive officer after an internal probe into energy and utilities projects which resulted in provisions of almost US$300 million (RM995.25 million).

The provisions were mainly for cost overruns in four key projects, including its Bakun hydroelectric dam project and the Maersk Oil Qatar project.

The company said the figure may not be final as the investigation is still going on. [They may be more,so it seems].

The energy and utilities division, which contributed only 0.7 percent to the group’s total operating profits in fiscal 2009, posted a loss of RM1.02 billion in the nine months to March. It did not provide a quarterly figure.Sime Darby shares hit at 10-month low of RM7.47 today ahead of the earnings report.

The losses at Sime Darby has put the Najib administration under heavy pressure to revamp the management as well as the board of directors.

Former Prime Minister Tun Dr Mahathir Mohamad had said action should be taken against all those involved in Sime Darby Berhad’s cost overruns for the Bakun project and not just chief executive Datuk Seri Ahmad Zubir Murshid.

Ahmad Zubir was asked by the board to take a leave of absence prior to the expiry of his contract in Nov 26, 2010 after the discovery of RM964 million in cost overruns from four energy and utilities projects, including the Bakun dam project, racked up by the company during his tenure.

Sime Darby chairman Tun Musa Hitam has also said he will resign if necessary following the conglomerate’s huge losses of nearly RM1 billion for this quarter arising from cost overruns in the four projects.

Well, for the sake of PNB and the Amanah Saham shareholders, the full board must go, including some former  board members who put the group in the wrong direction in the first place!

Worth of Malaysia’s 40 richest soars 42pc to US$51b

SINGAPORE, May 27 —

Malaysia’s top 40 richest are worth US$51 billion (RM168 billion), up from US$36 billion a year ago, and higher than the previous record of US$46 billion registered in 2008.

According to Forbes Asia in its Malaysia Rich List 2010 released today, their combined wealth has risen by 42 per cent, spurred by the country’s economic expansion.

The overall increase in wealth was also in line with the 32 per cent rise in the Kuala Lumpur Composite Index, and the ringgit’s 11 per cent gain against the US dollar over the past 12 months, Forbes said.


Topping the rich list again is Tan Sri Robert Kuok who has held the pole position since 2006 when Forbes Asia began ranking the 40 richest Malaysians.

Forbes said the biggest gainer in dollar terms this year, the 86-year-old tycoon’s net worth increased to US$12 billion, a gain of US$3 billion over last year.

Top telecommunications tycoon Tan Sri T. Ananda Krishnan remains in second place with US$8.1 billion, an increase of US$1.1 billion from a year ago.

His Maxis Communications, Malaysia’s largest mobile phone service provider, went public last year and raised US$3.4 billion in the country’s largest-ever IPO.

Unchanged at third position is Tan Sri Lee Shin Cheng with US$4.6 billion, up from US$3.2 billion last year.

The 71-year-old heads IOI Group, one of the world’s leading operators of palm oil refineries. The company is reportedly investing US$300 million to expand.

Forbes said the top three tycoons were not the only ones who saw gains in their wealth, 27 others on the list also registered growth in their net worth, particularly notable is technology tycoon Goh Peng Ooi, ranked No. 16, who enjoyed the biggest percentage jump.
His fortune increased to US$425 million from US$112 million previously, a massive jump of 280 per cent.

Forbes said this year a minimum net worth of US$110 million was needed to qualify for the list, up from US$90 million last year.
It said the number of billionaires had also increased, with now 10 tycoons with a 10-figure net worth, compared with nine a year ago.

Newcomers making the rich list this year included brothers Datuk Shahril and Shahriman Shamsuddin who shared the No. 23 spot with a net worth of US$270 million.They have equal stakes in Sapura Group, founded by their father.Shahril is chief executive of its affiliate SapuraCrest Petroleum, the listed oil and gas contractor that makes up the bulk of their fortune.

Another new face is self-made building contractor Datuk A.K. Nathan, 54, who is ranked No. 24 and worth US$250 million.His company, Eversendai, has been involved in some of the most high-profile buildings in the Middle East including Dubai’s Burj Khalifa, the world’s tallest building.

Forbes said three people were back on the list after having fallen off previously, and the most notable is Datuk Seri Nazir Razak, Prime Minister Datuk Seri Najib Razak’s brother and head of financial services firm CIMB. He is ranked No. 32 with a net worth of US$145 million.

Malaysia: Net Oil Importer Beginning 2011?

Malaysia is likely to become an oil importer as early as next year at the current rate it is consuming petroleum,so says  Idris Jala, Minister in the Prime Minister’s Department as reported by Bernama today.


Malaysians continue to be among the highest fuel consumers per capita in the world fuel consumption habits pattern which generally has remained relatively unchanged despite increased oil prices in 2008.

He also said that approximately 70 per cent of the government’s liquefied petroleum gas (LPG) subsidy goes to commercial concerns and not the intended households. [Ask yourself,why is this so?]

About 30 per cent of the cooking oil subsidy is also abused, he said. [Ditto above]

He said the government is proposing to phase out the petrol subsidy gradually in line with its move to strategically position Malaysia’s economy on a stronger footing to realise the aspirations of Vision 2020, which is to achieve a developed, high-income nation status.

“Subsidies are an inaccurate representation of trade,” Idris said when officiating the Subsidy Lab Open Day here to receive feedback from the public on subsidies.

“In addition, they pose a fiscal burden that emerging economies such as Malaysia should move away from. As such, we desperately need an exit strategy for subsidies, as they are unsustainable,” he said.

“In order to save the country, we need to increase our GDP, Malaysians need to be aware we are giving the highest subsidies — 4.6 per cent of GDP, even higher than Indonesia (2.7 per cent) and the Philippines (0.2 per cent),” said Idris, who is also chief executive officer of the Performance Management and Delivery Unit (Pemandu).

Malaysia is one of the most subsidised nations in the world. Its total subsidy of RM74 billion in 2009 is equivalent to RM12,900 per household.

This covers the areas of Social (RM42.8 billion), Fuel (RM23.5 billion), Infrastructure (RM4.6 billion) and Food (RM3.1 billion).

“All savings to reduce these savings are intended to reduce our deficit and debt of RM103 billion in five years,” he said.

Meanwhile, studies by Bank Negara have shown that inflation will rise to four per cent (2011-2012) and three per cent post-2013.

Subsidies only result in market distortion and they drain the government of much-needed funds that could be better used for more strategic and pressing development projects for the rakyat, Idris said.

“The time for subsidy rationalisation is now,” he said.

“We are reviewing the possibility of introducing a floating price mechanism, mitigation measures and assistance needed to put in place.”

“We do not want to end up like Greece with a total debt of 300 billion euros.

Our deficit rose to record high of RM47 billion last year.

“If the government continues at the rate of 12 per cent per annum, Malaysia could go bankrupt in 2019 with total debts amounting to RM1,158 billion,” he cautioned.

Look, who's talking?

Malaysia: Cut Off Subsidies or be Greece

The Federal Government says it will save RM103 billion over the next five years if it starts to cut subsidies now. 

Datuk Seri Idris Jala , who is in charge of the Government Transformation Plan (GTP), said today Malaysia had a whopping RM362 billion debt and must start reducing subsidies amounting to RM74 billion last year to avoid becoming a bankrupt nation by 2019.

“We do not want to end up like Greece,” the minister in the Prime Minister’s Department told a packed hall at the government’s open day to rationalise subsidies here this morning.

But my friend, how about seriously trimming down a bloated civil service, wiping out corruption and preventing wastage at the same time?

So kawan, let us have a more holistic approach to save Malaysia from financial ruin, okay?

Subsidies alone is not the culprit...............

Praise to the 'Sinner' Class

In days of old, tax collectors rank on equal footing as doctors and grave diggers. They were considered as  the ' sinful class' for the jobs they do. Today,except for the grave-diggers,the doctors have become a most favoured worker category and now tax collectors are even exalted and paid bonuses.

This latest accolade to Malaysian tax collectors is sufficient testimony.

" The Inland Revenue Board (IRB) has taken home a RM1mil incentive for winning the Prime Minister’s Innovation Award.

The reward, said Prime Minister Datuk Seri Najib Tun Razak, could be used in any way deemed meaningful by the board – including for training purposes or to be given out as bonus.

Najib hoped the award would be a strong encouragement for the department – all the way from the head of department to the lowest level of staff – to want to perform even better.

The Prime Minister presented the award at a ceremony yesterday.

IRB chief executive officer Datuk Hasmah Abdullah said the department had always been negatively perceived by the public, but this would not dampen its determination to keep improving.

“Many people have the common perception that paying taxes is burdening. Our key to innovation is to make tax payment easy and we have done it successfully,” she said after receiving the award from Najib.

Earlier in his speech, Najib said Malaysia had no choice but to be willing to embrace change in this globalised era. The public sector must be able to think out of the box and be creative to bring about development.

“We need to engage new methodology and approach because other countries which were not our competitors before have changed and are competing against us,” he said.

He added that the Government sector had taken a big leap when it introduced the National Key Result Areas and Key Performance Index to ensure that the country was not lagging behind when others were moving forward.

“There must be innovation in the government administration to ensure that its outcome will please and satisfy the rakyat,” he said."

To my mind, the IRB has definitely improved particularly in electronic submissions and tax refunds.

Syabas, IRB!

Mah Sing Turning Magical

Mah Sing Bhd posted a net profit of RM27.9mil in the first quarter ended March 31, 2010, 23.2% higher compared with the same period last year.

In a filing with Bursa Malaysia, the group said its revenue rose 58.5% to RM238.3 in the quarter under review.
It said the result was mainly driven by better performance of its property and plastic divisions.

“Apart from property development, our plastics division also contributed positively to the quarter’s earnings,” it said.

The group achieved strong sales of RM601mil in the first quarter, which is 60% of the full year target of RM1bil.

It said the group would continue its innovative marketing strategies to promote quality properties with good concepts in prime locations.

As at March 31, the group has unbilled sales of about RM1.1bil, giving them significant earnings visibility.

This may be a stock to watch as it is now a potential boutique developer like SP Setia and Sunrise.

Remote Service from the Civil Service

We do hope this is not another motherhood statement. As the saying goes," If wishes were horses, beggars will ride them".

According to the Chief Secretary,the government is working on several initiatives to make public service delivery accessible and mobile for the people.

These include the e-Land system, Local Authority System (ePBT), AgriBazaar, e-Syariah and school management system and many more initiatives which extend into the various sectors -- economic, social, infrastructure and security.

“Mobile government means customers can transact with the government from where they are, not where we, the provider, are,” he said.

“Hence the need for a new kind of technology understanding. A technology and an innovation that can be so simple that people do not even notice they have been served. That, to me, is the ultimate service.”

“It is about getting done what you need done in the simplest, shortest and most efficient manner,” he added.

“If we can do that, at all and every level of our internal and external transactions, using the best that technology and innovation combined can bring, we would have taken public service delivery to a whole new level altogether, not only in Malaysia, but globally setting new benchmarks.”

Sidek said the government has earmarked e-Government as one of the seven flagships of the Multimedia Super Corridor and the use of technology has seeped into among others, human resource management,electronic procurement,bill payment to licence applications and project monitoring system.

He said with increasing cyber attacks and security fears, another entrapment of technology is the rise of protectionism and firewalls.

“As a result, we fall back yet again into the ‘Tragedy of the Commons’. Rampant e-mail bouncing, servers reject mails, legal addresses are seen as spam,” he said.

“All these affect the very thing technology is supposed to effuse which is speed, ease, accessibility and connectivity.”

Sidek said businesses and governments need to face some fundamental questions relating to speed, access, security and privacy as they invest more and more into digitising service, raising access to information and broadening connectivity of societies and communities.

Well,well, well, I think all of these are great but at the same time,let us not forget too the value of a smile when we have to do some counter service. So, those manning these counters must have a ' quick to smile' attitude, don't you agree?

Organics: Are We taken for a Ride?

Consumers who opt for organic foods often believe they are improving their health but there is currently no strong evidence that organics bring nutrition-related health benefits, a new research review finds.

A “disappointingly small” number of well-designed studies have looked at whether organic foods may have health benefits beyond their conventional counterparts, according to the review by researchers with the London School of Hygiene and Tropical Health in Britain.

Moreover, they found, what studies have been done have largely focused on short-term effects of organic eating — mainly antioxidant activity in the body — rather than longer-term health outcomes.

Most of the antioxidant studies failed to find differences between organic and conventional diets. The review, published in the American Journal of Clinical Nutrition, adds to findings reported last year by the same research team.

In that study, the researchers combed through 162 articles published in the scientific literature over the last 50 years, and found no evidence that organic and conventional foods differ significantly in their nutrient content. For the current review, the researchers were able to find only 12 published studies that met their criteria for evaluating the health effects of organic foods.

“A surprising and important finding of this review is the extremely limited nature of the evidence base on this subject, both in terms of the number and quality of studies,” wrote Dr Alan Dangour and his colleagues.
Research in the area does appear to be increasing, Dangour’s team noted, with 4 of the 12 studies they reviewed published in 2008 or 2009. But in the future, the researchers add, studies -- both in humans and animals — need to be better-designed.

Of the 12 studies the researchers identified, 6 were short-term clinical trials that looked at whether specific organic foods changed markers of antioxidant activity in participants’ blood.

Those trials showed no strong evidence that organic eating boosted antioxidant activity, but the studies were also very limited in scope as they were small — with the largest including 43 men — and lasted no longer than a few weeks. Out of the other 6 studies, one found an association between organic foods and a lower risk of the allergic skin condition eczema among nearly 2,800 Dutch children age 2 or younger.

In that study, parents were surveyed several times about their children’s diet and any episodes of eczema over the first two years of life. Researchers found that children who consumed strictly organic dairy products showed a lower risk of eczema than those consumed conventional dairy foods. However, the study had several key limitations, including its reliance on parents’ reports of eczema and the basic design of the study does not allow for any conclusions about whether children’s consumption of organic dairy was the reason for the lower eczema risk.

While questions remain as to whether organic foods have any extra nutritional value, people buy organic for a number of other reasons as well.

Organic foods are made without the use of conventional pesticides, synthetic fertilizers, antibiotics or hormones — which could potentially reap benefits for people’s health and the environment.

The current review, Dangour and his colleagues point out, did not look for studies on the possible health benefits of reduced exposure to those substances nor did it address the environmental impact of organic food production. — Reuters

Conversations on Competitiveness

Let us read this discourse in mysinchemw.com yesterday. It gives us an idea what competitiveness is, how to be so and what is a competitiveness ranking actually would mean to a nation and its people.

MAY 24 —  Dear Tay, 
 
It is said that Malaysia has been ranked 10th place in a world’s competitiveness report.
I would like to ask how many countries have been included in the list. Are there more than 10 countries? 

Perhaps, it is a conspiracy of foreigners to make us feel “Malaysia Boleh”? 

And what is actually the so-called competitiveness?
Regards, 

Reader Ah Bang

Dear Ah Bang,

First of all, I think you are spoiling the joy!

Malaysia has not been receiving good news for long. Even the 2010 Thomas Cup cheered us for only one day.

But now, we have been ranked among the top 10 most competitive countries in the world. Oh, this is not a corruption, largest rice dumpling or longest sarong ranking. Instead, it is a competitiveness ranking!

And certainly, more than 10 countries have been assessed. In fact, I have checked the data and found a total of 58 countries and regions have been assessed. The ranking is limited to “top students” only!

Malaysia can actually be ranked among the top 10 countries, including Singapore, Hong Kong, the United States, Australia, Switzerland, Canada and Taiwan. Even though we are ranked the bottom in the top 10 list, we are still in the “gifted class”! Have you been in a gifted class before?

Moreover, the ranking was conducted by the International Institute for Management Development (IMD), an internationally-renowned management institution.

I do not think it is a conspiracy either as IMD does not receive money.

Okay, I do agree that I am not sure why Malaysia is competitive and how it can be ranked among the top 10 competitive countries.

However, I have read a book, a very thick book, written by Harvard Business School Professor Michael Porter. He pointed out a few concepts in the book.

1. Do what you know how to do and what you can do well. That is what we called competitive advantage;
2. Open up, so that talents, capital and information will come to you;
3. Innovate, keep reforming and developing to stay ahead;
4. The government, as well as the people must be efficient.

Porter’s competitiveness theory used to be popular in the world. Many countries invited him to be their honoured national advisor by offering him a minimum pay of millions of dollars.

However, he stopped making new arguments later. His market and status dropped and recently, he was paid US$250,000 (RM800,000) to give a talk in Taiwan. It was only an ordinary talk on the co-operation between China and Taiwan.

He himself has actually portrayed the competitiveness concept, namely one will fall behind if he does not move forward. Malaysia is ranked among the top 10 today but how about next year and the year after next?

The initial purpose of the IMD World Competitiveness Yearbook is to help us understand how a country could enhance its social progress by using its overall resources and competitive conditions.
The question is, what kind of progress do we need?

Some countries need to get rid of poverty while some countries that have already gotten rid of poverty are facing the pain of growing gap between rich and poor, as well as unfairness and injustice in the society.
To be honest, I am really happy to see Malaysia being ranked among the top 10.

It shows that we have our merits. However, we must be careful as we may fall from the gifted class to the low-grade class if we excessively indulge in the competitiveness ranking while ignoring and not improving problems that we have been facing for long.

So, are we more enlightened now?

Humanity and the Law

I think we must practice humanity in whatever we do. As such laws, particularly statutory law should reflect such values as it shows truly a society that is civilized, matured and developed.

The Bar Council' request for  witnesses  to be accorded the same rights as the accused is worthy of mention and the MACC's directive that investigations be carried only during office hours is i nth right direction.

Let us read the following news item.

"The Bar Council has called on the Government to give witnesses the same rights as accused persons.
Its chairman Ragunath Kesavan said witnesses who help enforcement agencies in investigations should be given the same protection and rights as the accused.

“Those accused have the right to be allowed adequate rest which is guaranteed by Rule 20 of the Lockup Rules 1953,” he said in a statement yesterday.

Ragunath was commenting on the recent Federal Court decision in the Tan Boon Wah case where it was held that the Malaysian Anti-Corruption Commission (MACC) could continue to interrogate witnesses beyond office hours.

Ragunath said the decision bore testament that the courts had failed in playing their role as the arbiter of disputes between individuals and the state while serving as a checks-and-balance mechanism.

He added that the decision permitted the MACC to compel witnesses to be questioned, including for long periods of time, with no option for them to decline.

He urged the Government to take immediate steps to protect the rights of witnesses and promote transparent and accountable investigations.

Meanwhile, he welcomed MACC chief commissioner Datuk Seri Abu Kassim Mohamed’s statement that MACC officers had been directed to conduct their investigations during office hours."

A big salute to the Bar Council and MACC.

It was also stated that the officers would have to provide justification for “taking evidence after office hours”.

Spain Goes under IMF's Scrutiny

Well it looks like the focus is on Spain next.

According to the IMF,Spain must make far-reaching, comprehensive reforms, including labour market reforms, and its economic recovery remains fragile.

“The challenges are severe: a dysfunctional labor market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anemic productivity growth, weak competitiveness, and a banking sector with pockets of weakness,” the IMF said in a report following a regular review of Spain’s economy.

“This needs to be complemented with growth-enhancing structural reforms, building on the progress made on product markets and the housing sector, especially overhauling the labour market,” it said.

After a weak and fragile recovery the economy would grow by 1.5-2.0 per cent in the medium term, it said.
“Our central scenario is one of continued adjustment of the various imbalances with growth rising gradually to 1.5-2 per cent in the medium term,” the report said.

The report was released as Spain struggles to cut a large budget deficit and convince investors it will face no Greek-style debt crisis.

The IMF said in April it sees Spain’s economy contracting 0.4 per cent in 2010 from a year earlier and growing 0.9 per cent in 2011, more pessimistic than the government’s own forecasts of a 0.3 per cent contraction in 2010 and 1.8 per cent growth in 2011.

Stronger export growth would help offset a slow recovery in domestic demand. It said private demand was weighed down by uncertainty and the need to reduce indebtedness, the IMF said.

Other factors weighing on potential growth and underlining the importance of growth-enhancing structural reforms included slowing population growth, high unemployment and weak investment.

KrissAssets: On a Mall Acquisition Trail

KrissAssets Holdings Bhd, operator of The MidValley Megamall, will set aside up to RM2 billion to acquire foreign retail malls in the UK and the US.

Its group managing director, Robert Tan Chung Meng, said this was necessary as the mall has reached its maximum capacity and the contracts of some anchor tenants would be ending within two years.

"Even though the mall is doing positively year by year, we need to improve our revenue. We cannot increase the size of the mall as it will affect other tenants, that's why we have to resort to acquisitions," he told a media briefing after the company's annual group meeting here today.

Tan said the main attractions would be in New York, Chicago, California or even Florida," he said.
Its pre-tax for financial year ending Dec 31, 2009 rose 56.5 per cent to RM180.5 million from RM115.3 million in the same period last year.

Revenue rose to RM227.9 million from RM216.6 million previously.

Things are definitely looking good for KrissAssets as it goes global.

Subsidising Malaysians

The Government is going back to the people on its plan to cut subsidies, which ballooned to a staggering RM74bil last year.

Malaysians will have a chance to have their say in an open day organised by the Government this Thursday to gather feedback on the inevitable reduction in subsidies on items including sugar and petrol.

The open day on subsidy rationalisation will be held at Hall 4 and 5 of the Kuala Lumpur Convention Centre from 9am to 2pm.

Subsidies - the total of which averages RM12,900 per household every year - will have to be gradually cut beginning this year, which is then expected to affect the prices of petrol, natural gas, food, medication, toll and healthcare.

The huge sum in subsidies has resulted in Malaysia having cheaper cooking oil, flour and sugar than Singa-pore, Indonesia and Thailand.

The open day is similar to the ones held last year for the Government Transformation Plan.

“Cutting subsidies is a foregone conclusion. The question is not about the amount of reduction, but the technique of reducing,” said a high-ranking official.

Recommendations from the Perfor-mance Management and Delivery Unit (Pemandu) subsidy rationalisation lab will be publicly displayed during the open day.

The lab will then re-examine the findings based on the feedback before making a final recommendation to the Prime Minister.

An analysis from the lab, made available to The Star, stated that it was important to act immediately if the country were to reduce the subsidies gradually.

Otherwise, it said, the Government might end up having to remove subsidies in bigger increments as Treasury reserves ran lower. It also argued that the current mechanism of subsidising was no longer sustainable as government debt was at RM362bil last year or 54% of the GDP.

That is much higher than Indonesia's 28%, and is approaching The Philippines' at 62%.

“In five years, we may reach 100% if no changes are implemented,” said a source familiar with the issue.
There is no need to panic, however, as the Government will continue to provide assistance in critical fields such as education, agriculture and fisheries, healthcare and welfare.

The main aim is to reduce wastage or abuse, mainly due to the subsidies being passed on to the wrong beneficiaries or over-consumption.

“Why should the people in Sabah and Sarawak subsidise for toll that is mainly used by people in the Klang Valley? Also, foreigners are enjoying the RM1 consultation fee at government clinics. That has to be addressed,” said the same source.

It is understood that one of the lab's proposals is to raise medical consultation from RM1 to RM3, thus keeping the fee affordable to all.

YTL Power operations in Singapore to Expand

 Singapore's second largest utility firm PowerSeraya Ltd, together with Malaysian parent YTL Power, is seeking to expand its operations, which could include selling utilities, fuel trading, and oil storage, in the region.
”We're looking for expansion opportunities in the utility arena, which could include power, electricity, water, tank management, fuel trading,” chief executive officer John Ng told the Reuters Energy Summit.

”If there are opportunities, we will certainly work together with our parent, YTL Power, within this region, and even outside this region,” he said, adding there were no immediate plans or targets on the company's horizon at this time.

Malaysia's construction to power conglomerate YTL Corp, bought PowerSeraya from Singapore state investor Temasek Holdings in December 2008 for S$3.8bil.

YTL Power International Bhd's businesses include power generation in Malaysia and Indonesia, power transmission in Australia and provision of water and sewage services in the UK.

PowerSeraya, which owns a 10,000 cubicmetre Seawater Reverse Osmosis Desalination Plant and a 3,100megawatt power plant, is in the last stages of commissioning a new S$800mil 800 MW CoGeneration Combined Cycle Plant. The unit, which will come on line by end June, will generate both electricity and steam.

It also operates a 20 tank oil storage farm with a total capacity of about 1 million tonnes, including two new blending tanks that were completed at the end of 2009 for S$20mil.

”The new tanks complement our fuel oil supply and trading business,” Ng said.

PetroSeraya, the company's physical trading arm, employs a handful of fuel oil traders. It more than doubled its net profit to S$12.2mil for the year ended March 31, 2009, despite volatile oil prices. Total traded volumes were 900,000 tonnes, with sales of S$673.6mil.

When asked if the company planned to build more tanks, Ng said: “What we have right now is sufficient for our needs for the next couple of years. We're constantly looking at markets around Singapore, to see whether there's a need for us to invest further.”

PowerSeraya, a market leader in the Singapore electricity generation market with a 28% share, uses piped natural gas to generate power, besides fuel oil and diesel.

It has committed to buy liquefied natural gas (LNG) from BG Group once the S$1.5bil Singapore LNG Terminal is completed in 2013.

”From two feedstock options, we're moving into three,” Ng said.

Asked if PowerSeraya would venture into gas trading, Ng said it was too premature to draw conclusions.
”Asia has no gas trading hub. Will Singapore develop into a gas trading hub? It's early days yet. If there is a market for gas trading, we will not rule out exploring this opportunity,” he added.

”We are constantly exploring what we can do with the underlying commodity that we use.”

For the financial year ended March 31, 2009, PowerSeraya reported a net profit of S$171.9mil, on revenues of S$3.58bil. It had cash and cash equivalents of S$248.4mil at the end of the period. The company is moving to a new financial year that ends on June 30, 2010. - Reuters

So YTL looks like it is doing fine in Singapore.

Be a Contrarian: Buy When It's Down

Gerald Ambrose ... 'Markets are now operating on a trampoline. The safety net doesn't work anymore.'

Thomas Yong ... 'Risk aversion will remain for now and everyone will be cutting positions.'

They say never waste a crisis. Fund managers are cautious but see an opportunity in the midst of global markets tumbling on the back of Europe's tumultous debt problems.


Emerging markets are always known to be more volatile. As its ups and downs are always more extreme, would it be wiser to rejig one's portfolio or brace through the storm?

Fortress Capital Asset Management Sdn Bhd chief executive officer CEO Thomas Yong, who started trimming his position three weeks ago, is no longer selling, but waiting to see how things pan out.

“We are in a position to buy (in Malaysia), but it would be premature to act now. Risk aversion will remain for now, and everyone will be cutting positions,” he said.

He opined that Europe might not be as quick as the United States in implementing measures, hence uncertainty would continue to dominate sentiments for the time being.

Aberdeen Asset Management managing director Gerald Ambrose is a buyer of the market, and is in fact buying some of the stocks he could not previously buy because it had moved too fast. “For instance, the rubber gloves have done very well and have gone up a lot. With this correction, they also fall faster. Here's an opportunity,” he said.

He added that volatility was irrelevant, and Aberdeen's investment was not based on market volatility.
“Markets are now operating on a trampoline. The safety net, which had been the interest rates and financial stimulus used by central banks, have been used so much that it doesn't work anymore. Now that the safety net has been removed, there is a possibility that things could go really wrong,” Ambrose said.
Ambrose likes gold, and said it was the only insurance against the follies of the authorities of the world.

Meanwhile, HwangDBS Investment Management Bhd chief investment officer David Ng said that in view of what's happening in the euro zone, they had reduced the risk in their portfolios by cashing in on the less liquid stocks.

“Moving forward, we are still cautiously optimistic about the market as we expect the economic recovery to continue even if it might be reduced by the events in Europe. However, the market will need to further re-price this slower growth outlook before we opt to increase our invested levels,” he added.

On Thursday, BNP Paribas' Cliver McDonnell said that the euro zone crisis signalled that markets were about 40% through the crisis.

“We believe we are in the fear phase, don't buy stocks until capitulation is reached,” he said.
He added that for Asian equities, the two biggest worries were negative earnings translation due to euro weakness and the impact of a slowdown on euro-zone demand.

McDonnell listed his 10 steps to capitulation, four of them which he said had already occurred. These included worst recession, loss of investment-grade status, drying up of liquidity, and further de-rating of the euro-zone banks.

He said the next likely step was the nationalisation of a bank in southern Europe, as he thought it was improbable that not a single bank had racked up significant losses related to non-performing loans and trading losses as a result of the recent economic downturn and wild swings in markets.

Text, Don't Talk

This came from AFP/Relaxnews.

"Do you often have the urge to chat with a friend while stuck on a train, subway or waiting on a never-ending line? In a new study,Cornell University researchers are saying you should resist the urge to dial as it irritates and distracts all the people around you — yes, even if you whisper.

For those stuck by a chatty Kathy feeling frustrated and annoyed with the distraction, well that is completely normal according to Michael Goldstein, assistant professor of psychology at Cornell University and Lauren Emberson, PhD candidate in psychology at Cornell University in their research to be published in the June edition of the journal Psychological Science.

Eavesdropping cannot be avoided and someone else’s very important minutia or hot gossip becomes an irritant not because the person is loud but rather because only half the conversation or “halfalogue”, can be heard and understood. This rattles the brain coupled with the inability to ignore the chatter.

Apparently even your meditation mantra won’t do the trick. Emberson explained, “Hearing half a conversation is distracting because we are unable to predict the succession of speech. We believe this finding helps reveal how we understand language in conversation: We actively predict what the person is going to say next and this reduces the difficulty of language comprehension.”

“People are often more irritated by nearby cell phone conversations rather than conversations between two people who are physically present. Since halfalogues really are more distracting and you can’t tune them out, this could explain why people are irritated.”

So be kind, text don’t call, or read, take photos, play a game, surf the web, catch-up on emails — there are so many ways to keep you distracted with your smartphone’s applications that you do not need to distract everyone in your vicinity.

Also the results of the Interphone study, a multi-centre international control case study, published their findings in the advance online edition of International Journal of Epidemiology on May 17.

The researchers concluded that there is not enough conclusive research to support that cell phone use causes or doesn’t cause brain cancer — why not err on the side of caution since the participants of the study were not classified as long-term heavy-use mobile phone users"


so be kind to your neighbours on a journey, text don't talk.

The Pain Before the Gain

The US is confident the world will ride the current turmoil emanating from Greece and the fall of the Euro.

Though undergoing much pain, US Treasury Secretary  Geithner said a strengthened global economy is now in better shape to handle the strains emanating from Europe’s crisis.

“You see some of the challenges in Europe now. But I think we are in a much stronger position to manage those challenges,” he said en route to China.

Geithner also said the dollar was on the rise because confidence was growing about the strength of the US recovery.

The US Treasury chief was due to arrive in Beijing on Sunday for meetings of the Strategic and Economic Dialogue, co-chairing the US side with Secretary of State Hillary Clinton.

The economic component of the Monday and Tuesday talks are expected to explore ways to better balance the two countries’ US$400-billion (RM1.32 trillion) trade ties, steering clear of an open clash about the yuan’s peg to the dollar.

The United States still has the world’s largest economy and China has the fastest-growing one, so Geithner said cooperation between the two was vital for healthy global growth.

“China and the United States are doing what we need to do to help contribute to a broader global economic recovery,” he said.

The US administration is going to tackle the deficit situation very seriously, Geithner said. As he tries to reinvigorate the US economy, President Barack Obama has set a goal of doubling exports in five years, which can be met only with a big increase in sales to China.

Geithner said both the US and Chinese economies have undergone a major transformation in recent years and struck a theme that he is expected to pursue by praising rising levels of domestic consumption in China.

The Obama administration has been urging China to rely less on exports, and more on increased consumer spending at home, to fuel its economic growth. Geithner also noted that the US economy’s expansion now was being led by investment and exports, rather than consumer spending, and that savings were rising.

Europe concern

Europe’s debt crisis has become an issue of concern, partly for fear that it might spread to other regions but also because it means a diminished market for exports from countries like China.

That has led to speculation that Beijing will be less likely to let its yuan currency rise in value, as the Obama administration was urging, since the euro’s decline has made Chinese products more expensive in its top export market.

A US$1 trillion safety net, provided by EU nations and the International Monetary Fund to stabilise the euro zone — following a rescue of debt-ridden Greece — has not stopped the bloc’s currency tumbling.

Several euro zone governments have followed Athens in announcing or planning austerity measures to shore up their credit ratings and avoid having to seek a Greek-style bailout.

How long the hemorrhaging of stock and commodities is going to last  is anybody's guess. for now, those with cash in hand can make .hay while the sun shines'

Maverick Merkel and Market Jitters

First, protect yourself, then move in to isolate the culprits. And that is what Merkel has done. The after effects is the collapse of stocks,bonds, commodities and all world-wide.  What a shame, Merkel!

This Reuters report tells of its effects and strategies to adopt.

"BERLIN, May 22 — Germany’s parliament approved yesterday a US$1 trillion (RM3.32 trillion) safety net to stabilise the euro as fears swirled that Europe’s debt crisis and tougher financial regulation may choke economic recovery.

European Union finance ministers, meeting in Brussels, backed a German call for tougher sanctions in future against states that flout the bloc’s budget rules, to prevent any repeat of Greece’s debt crisis, which required a euro zone/IMF bailout.

Worries persisted that Greece’s debt troubles would spread to other indebted nations, dragging down Europe’s economy and curtailing trade to the United States and Asia.[The European contagion is just as deadly as the currency debacle in Asia in the late 1990s.]

“The Greek debt crisis and its ripple effects are bad news for all corners of the world and there is a strong collective interest in containing the problem,” said Eswar Prasad, senior fellow at the Brookings Institution in Washington.

European officials were eager to show they were committed to bringing down deficits without smothering a still-fragile recovery. European Central Bank President Jean-Claude Trichet sought to calm nervous markets by declaring the euro was not in danger.

Both chambers of parliament approved Berlin’s contribution of up to €148 billion (RM617 billion) in loan guarantees, deeply unpopular with voters, on top of an equally divisive €22.4 billion in bilateral loans for debt-ridden Greece.

The bill passed the lower house by 319 votes to 73 with 195 abstentions after the opposition Social Democrats and Greens abstained and 10 members of Chancellor Angela Merkel’s (pic) centre-right coalition rebelled, highlighting the domestic pressure she faces.

The vote was not enough to stop the fall in European shares, which lost a further 0.5 percent on the day after Asian stock markets slid again. Japan’s Nikkei average closed 2.5 per cent down for a loss of 6.5 per cent on the week, mostly due to worries about the euro zone.

“It doesn’t make any difference what Germany does. It doesn’t make any difference what the financial reform is. Traders and investors are frightened here, and they just want out,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

But Wall Street rebounded, led by financial shares, after the Dow Jones industrial average briefly fell below the symbolic 10,000 point level following US Senate adoption two days ago of a sweeping financial reform bill after months of fierce debate.

Merkel said the parliamentary vote was a clear German message of support for Europe. But she failed to secure the broad backing she sought to ease public hostility to bailing out weaker euro zone states, despite unilaterally banning speculative trade in some financial instruments on Wednesday.

The surprise German ban on naked short-selling of sovereign euro bonds and some financial shares sent stocks and the euro plunging this week and drew sharp criticism from EU partners, including close ally France, which were not consulted.

HARSHER SANCTIONS

In Brussels, EU finance ministers debated how to tighten the bloc’s tattered budget discipline rules and improve economic policy coordination in the 16-nation euro zone, drawing lessons from the Greek crisis.

As expected, they reached no immediate decision, but European Council president Herman van Rompuy, who chaired the task force meeting, said there was broad support for Berlin’s demand for harsher sanctions on deficit laggards.

“One of the conclusions of our debate is that it is very clear that there is a broad consensus on the business of having financial sanctions and non-financial sanctions,” he told reporters.

However, he indicated that only Germany was pressing for a longer-term insolvency procedure for states crippled by debt.

German Finance Minister Wolfgang Schaeuble and his French counterpart, Christine Lagarde, told a joint news conference the EU should focus on strengthening fiscal discipline in the short term before looking at possible changes of the EU treaty, which would be harder and slower to agree and ratify.

Several euro zone governments have followed Athens in announcing or planning austerity measures to shore up their credit ratings and avoid having to seek a Greek-style bailout.

But doubts remain about their ability to push through savage spending cuts in the teeth of public opposition.

The head of Spain’s largest union, Comisiones Obreras (CCOO), said it could call a general strike to protest against planned austerity measures, probably for one day, although analysts regard Greek-style unrest as unlikely.

Efforts by France and Germany, the euro’s founders, to patch up differences on the debt crisis and financial regulation, along with short-covering, helped push the euro up as high as US$1.26 yesterday from a four-year low of US$1.2143 on Wednesday.

Euro zone policymakers brushed aside any talk of intervention to steady the single currency, which has lost 12 percent against the dollar this year.

ECB President Trichet told the Frankfurter Allgemeine Zeitung: “Let us be clear, it is not the euro that is in danger, but the fiscal policy of some countries that has to be, and is being, addressed.

Luxembourg Prime Minister Jean-Claude Juncker, chairman of the Eurogroup of euro area finance ministers, and Ewald Nowotny, a member of the European Central Bank’s governing council, both dismissed worries about the euro’s level.

With the United States increasingly involved in trying to contain the euro zone crisis, US Treasury Secretary Timothy Geithner will visit Europe next week, on his way back from a trip to China, and will meet the head of the European Central Bank and Germany’s finance minister.

Beijing also warned the crisis was creating global uncertainty. — Reuters"

I guess most economies are in dire straits right now because of the market meltdown, no thanks to Merkel and the Godless Greeks!