Billionaire Factory

Nowhere can you manufacture billionaires that fast except in China. Within a short period of inviting capitalism into its national abode, the country is teeming with its unfair share of billionaries!

The Straits Times has this report today (14 Oct). I have parapharased wherever necessary for the purpose of brevity.

"The China’s super-rich have bounced back from the financial crisis with a vengeance, and the country now has more known dollar billionaires than any other country except the United States, according to a new report.

The annual Hurun Report released yesterday said China has 130 known US dollar billionaires, up from 101 last year.

The number in the US is 359 while Russia has 32 and India 24, according to Forbes magazine.

A Warren Buffett-backed car entrepreneur worth US$5.1 billion (RM17.2 billion) has surpassed a disgraced appliance tycoon to become the richest person in China.

Huang Guangyu, the richest man in China last year, dropped to 17th on the list this year with a worth of US$3.4 billion, after he resigned as chairman of the country’s biggest appliance chain while under investigation for alleged economic crimes.[This is a very serious offense in China]

Car mogul Wang Chuanfu, as chairman of BYD Co, made big strides in the past year to become the first carmaker to launch the mass production of a plug-in hybrid electric vehicle.

The company also secured backing from US billionaire investor Buffett, whose MidAmerican Energy Holdings has a 9.9 per cent stake in the Hong Kong-traded company.

With help from a growing domestic car industry, Wang’s 27.8. per cent stake in BYD elevated him 102 places in Hurun Rich List’s 2009 rankings.

Second place went to Zhang Yin and family, owner of paper recycler Nine Dragons Paper, while in third place was Xu Rongmao and family, owner of Shimao Property Holdings.

China’s rich are also getting richer, with the average wealth on the list standing at US$571 million, up almost one-third from last year, said compiler Rupert Hoogewerf.

“With the greatest wealth destruction in the West of the last 70 years, we’ve seen China buck the trend and the wealth seems to be still growing,” Hoogewerf told Reuters on the sidelines of an event to unveil the 2009 rich list.

“They’ve put the credit crunch behind them,” he said. “The key driver has been urbanisation. You’ve got all these cities being built, and that requires property developers, iron and steel manufacturers. The latest thing is cars.”

Hoogewerf also said the actual number of billionaires could be higher than estimated.

“Either they are super-discreet, or perhaps they haven’t come to the surface,” he said. “Having said that, the transparency of wealth... is now very much in the open. There’re many more listed companies.”

He said that among the people who probably should have been listed are Liu Chuanzhi, chairman of the world’s No. 4 PC maker Lenovo, and Chen Feng, founder of Hainan Airlines.

They are not on the list because it is not known how rich they really are."

Suffice to say here,that it is simply getting involved in urbanisation industries from cars to recycling to property can can put you into the mould of a billionaire.

So what are you waiting for? Your cloud is here;so look for its silver lining!

A Rush of Investment Adrenalin for India

How true is the proverbial saying-"Every Cloud has its silver lining." And so it came true for India in the second quarter of 2009.

The New York Times has this to report today. I have paraphrased certain sections to make it more concise.

"MUMBAI, Oct 14 — Six months ago, it looked as if India was in for a bumpy recession. Factories were laying off workers and construction sites were grinding to a halt as foreign investment slowed to a trickle.

But in the last few months India has hit a gusher, as investors around the world have turned away from the dollar, the global refuge during the crisis, and rediscovered their optimism in the world economy and India’s place in it.

There is palpable optimism here. Major stock indexes have roughly doubled from their March lows. Companies are advertising initial public offerings on television. And articles about bonuses and corporate expansion plans have started replacing news about layoffs and deferred projects on the front pages of newspapers.Walla!

Nearly US$7 billion (RM23.7 billion) more foreign direct investment flowed into India's economic arteries than left the country in the second quarter, from April through June. This is nearly twice as much as in the previous six months combined.

Including cash invested in the stock and bond markets, India received about US$15 billion in foreign investment, the most it has received in any quarter except the last three months of 2007, according to Macquarie Securities.

If the current surge continues — and skeptics doubt that it can — the Indian economy could start growing at 8 to 9 per cent a year as early as 2010, far sooner than forecasts by the International Monetary Fund (IMF) and many independent analysts.

“Clearly after the big shock of last year, things are back on track,” said a spokesman of Oxus Research and Investments, based in New Delhi. “People are seeing the recovery to be lot more robust than what many of the naysayers are saying.”

While many say the good times are here to stay, some analysts worry that the renewed ebullience will be fleeting if global financial markets take another turn down.

Confidence in India’s potential could also falter if the government does not address some long-standing problems, namely, improved infrastructure, investment in education and economic reforms, as it has promised to do so, to lift hundreds of millions out of poverty.

Another big concern is that the foreign money might re-inflate bubbles in stock and real estate markets.

Indian stocks are less than 20 per cent shy of their 2008 peak, even though corporate profits and the economy as a whole are growing more slowly now.

“Because we are a fairly large attractor of capital, the possibilities of bubbles building up in sectors like real estate are very real,” said an economist at HDFC Bank, who is nonetheless upbeat about the economy.

“It has clearly happened in China and there is some of that sort of problem here, as well.”

For a country that quarantined its economy from the rest of the world for much of the last 60 years, India has increasingly relied on foreign investment in recent years.

It has helped bridge the gap between domestic savings and the growing capital needs of the private sector and the government, which is borrowing money to pay for welfare programs and subsidies.

In the India’s fiscal year, which ended in March, growth slowed to 6.7 per cent, from 9 per cent a year earlier, in part because of lower foreign cash flows.

Most analysts estimate the economy will grow more than 6 per cent this year, but some optimists say growth will be as high as 8 per cent.

Rising foreign investment should help offset some of the economic impact of erratic monsoon rains. The agricultural sector makes up about 17 per cent of India’s economy but sustains more than half its population.

India’s economy lacks some of the handicaps present in other countries.

For instance, domestic demand never collapsed to the extent it did in the United States, and yet consumer spending is picking up now. Car sales were up 13 per cent in the five months that ended in August, compared with the same period last year.

Builders say sales of affordable apartments — priced from US$10,000 to US$30,000 — are up, too.

Even retailers, who were forced to close hundreds of stores last year after over-expanding, are talking about opening new outlets.

Some Western companies are eager to get a piece of this market. Last month, Ford Motor said it would build and sell a new hatchback here.

McDonald’s announced that it would open 120 more restaurants. And Baltimore-based T. Rowe Price, according to local news reports, is in talks to buy a stake in an Indian mutual fund firm.

At the same time, thanks to strong overseas demand for Indian stocks and bonds, companies here are raising billions of dollars. In a recent initial public offering for Oil India, a government-owned company, demand outstripped available shares by 31 times.

“There is a large amount of liquidity in the world,” said an executive director at Icici Securities. The money is flowing here, because “people see that India and China are the two growth areas.”

Still, the rising flow of foreign funds poses challenges.

India’s currency has appreciated 11 per cent since early March, to 46.13 rupees (RM3.37) to the dollar, because of rising demand for rupees and the broad decline in the dollar. That will make Indian garment and jewelry exports less competitive on the world market at a time when those industries are still recovering.

“That is a cause of worry,” said the Chairman of India’s Gem and Jewelry Export Promotion Council, about the appreciating rupee.

“Profit margins are being squeezed, and in such a period we cannot expect to raise prices.”

The governor of the Reserve Bank of India recently said that to control inflation, his central bank might have to raise interest rates before developed countries , where rates are at historic lows. But he said that doing so could encourage overseas investors to move even more money into India, driving the rupee even higher.

And that could be too much of a good thing."

Neighbouring China had used the market policy of interest rate quite efficiently to deflate the enthusiasm for stocks and properties.

But will India upped its interest rate,if they have to control bubbles?

Malaysia-A Likely 3.7% Growth Rate for 2010

Much quoted think-tank, Malaysian Institute of Economic Research (MIER) expects Malaysia’s economy to grow 3.7 per cent next year with inflation seen at 2.3 per cent. It said this in a news release on Oct 14 by Reuters.

Of all the economic scenario builders, MIER is by far the most accurate because the current leadership speaks their mind, without fear or favour.

“There are glimmer signs that the global downturn has stabilised somewhat, but the recovery is expected to be sluggish and uneven,” it said,adding that “the technical recession in the first half of 2009 is likely to continue into the third quarter before the economy could exit from it in the fourth quarter.

So, it looks like 3.7% would be a good guide for planning in 2010.

Leos on the Loose

They cannot but wait for Thursday 15th October to come by. Much of their future apparently is in the hands or 'tongues' of the MCA Central committee members. Will this small coterie of the potential out-going President's men and women hijack the will of the entire MCA membership and do appointments instead to short circuit the need for another EGM?

The MCA roulette wheel has been spun. What will the outcome be?

Just within less than 24 hours to another fateful D-Day,as MCA members await new developments, listless Leos are on the loose.

At best, they are the little leagues of Malaysian politics. Cherubs,no match for the UMNO leadership,are fighting for support.

Let us read this report. I have taken liberty to paraphrase where required.

"With the posts of MCA president, deputy president and two vice-presidencies potentially up for grabs tomorrow, various parties in the MCA central committee are said to be jostling for them.

Apparently Liow Tiong Lai and Kong Cho Ha have struck a bargain to be the new Number One and Two respectively.Another version has it that Wee Ka Siong and Ng Yen Yen should not be written off as yet. They are still in the running. A third version says Liow and Wee are said to be one team while Kong and Ng are said to be another. That Liow and Kong have settled the top two posts are apparently rumors and a “camouflage”.

As usual the "I" is stronger than the "We" in MCA. It has been like that after Tun Tan Siew Sin passed on the baton. And so as the rumour went,Kong and Ng felt they are more senior and that Liow and Wee can wait. Such pettiness continues to be evident.

There have also been some bargaining over who in the central committee would be elevated to become vice president should Liow, Kong, Wee or Ng become president and deputy.

On the outside, are those clamoring for fresh polls. These included political has-beens, rejected outright by Central delegates. Here,we have the likes of Fong Chan Onn and Donald Lim and newly reinstated MCA member,Dr. Chua Soi Lek, the apparent cause of all this imbroglio.

Opponents of fresh polls, however, say that an election would consume much time and resources and the party can ill-afford another bruising leadership battle.

Proponents for an election,however, say that it is the cleanest and only solution to renew MCA.

In less than a day, we will know whether selfishness or selflessness rules the roost in MCA. Will it spell a fresh new beginning for MCA or will it doom the already weakening party further?

The Millionaire Club-Are you In or Out?

Sad stories not only affect the poor. They also puncture the ego of the rich. And so as it goes, the global recession has also trimmed down the inclusive numbers in the Millionaire Club.

A Straits Times report circa Oct 14 unequivocally tells the story.

"The Asia-Pacific millionaires club has taken a hit in the face of the global economic downturn.

The number of high net worth individuals (HNWIs) in countries such as Japan, China and Australia — those who hold at least US$1 million (RM3.39 million) in investable assets — shrank by 14.2 per cent to 2.4 million last year, according to the Asia-Pacific Wealth Report released by Merrill Lynch and Capgemini yesterday.

Their wealth shrank 22.3 per cent to US$7.4 trillion.

As for the super-rich, the financial crisis dealt an even larger blow to their wealth. The report said that the ultra-high net worth individuals, with investable assets of at least US$30 million, saw their wealth shrink 35.1 per cent.

Those belonging to this well-heeled group in Asia-Pacific numbered 14,300 — a fall of 29.6 per cent. Japan, China and Australia are home to about three-quarters of Asia-Pacific’s high net worth individuals.

Japan has the biggest number of these individuals, with 1.37 million HNWIs, followed by China with 364,000.

The publication reports that wealthy Asians have staged a flight to safety in the face of economic uncertainty, allocating their wealth to ‘safer’ cash-based investments and demonstrating a lower appetite for riskier asset classes.

They have also favoured more familiar territories, choosing to invest in home regional markets instead of markets in Europe or North America.

Arvind Sundaresan, head of sales for Asia-Pacific at Capgemini’s financial services global business unit, said: “As markets recover and risk appetite returns, we expect Asian-Pacific (high net worth individuals) to adopt a more balanced investment approach and gradually increase their allocations to other regions.”

The report predicts that growth in Asia-Pacific’s wealth will pick up as market conditions improve. The region’s economies have shown signs of recovery and are forecast to grow at more than twice the pace of the global economy next year, it states.

The combined wealth of Asia-Pacific’s millionaires is estimated to grow at an annual rate of 8.8 per cent until 2018, faster than the global average of 7.1 per cent, the report said.

This increase will be led by China and India and will be fueled by their robust domestic consumption and growing number of affluent individuals.

In Singapore, the combined wealth of its millionaires shrank 29.4 per cent to US$272 billion during the year — the third-largest erosion of wealth in the region after Hong Kong and Australia.

In Singapore, cash-like assets rose 11 per cent to 33 per cent last year as investors headed to safer ground after regional stock markets plummeted.

Almost a quarter of the financial assets of local HNWIs were found to be in real estate last year.

However, a 5 per cent decline in the value of assets allocated to real estate is forecast by next year as market uncertainty causes investors to remain on the sidelines.

Despite the local stock market rallying almost 50 per cent since the beginning of this year, head of Singapore and Malaysia research at Merrill Lynch, Melvyn Boey, said that wealth generation through the stock market had a way to go before it reached its peak.

“With the assumption that portfolio wealth remains the same across asset classes, it is a reasonable assumption that the wealth of high net worth individuals is not back at levels we saw at the peak prior to the financial crisis,” he said.

Boey added that a recovery of 100 per cent was required before the local stock market returned to the position it occupied prior to the economic downturn.

He has seen a return to asset classes such as equity and fixed income and a decrease in the popularity of cash-based assets although investors still remain cautious.

Merrill Lynch anticipates 6.5 per cent real GDP growth for Singapore next year, citing positive investor sentiment and continued capital inflows".

Scarlett Has Come of Age

Scarlett Johanssen as you have never seen before. Coy and fabulous.



I never knew she got married to Ryan Reynolds as she has been romantically linked to both Josh Harnett and Benecio Del Toro.

Asiapacific to Outpace the World

A Bernama Report today (13 October)opines that the Asia Pacific will likely experience a faster economic recovery than the global economy in 2010; with gross domestic product (GDP) growth speculated to expand by 3.5 per cent versus the forecasted 1.6 per cent growth for the world.

For this year, the region’s GDP was expected to contract by 0.9 per cent, less than the 2.7 per cent contraction forecast for the world, said the Asia Pacific Wealth Report released by Merril Lynch Global Wealth Management and Capgemini.

The report said there were signs that the region was emerging relatively quickly from the global slump and will ultimately suffer less severe detrimental effects from the crisis than other regions of the world.

Stronger-than-average growth in emerging Asia, notably China and India, the report said was likely to lessen the effect of global economic crisis in the region this year and significantly contribute to its overall growth next year.

“The 2008-2009 government policy response of both China and India, particularly fiscal stimulus, is expected to lend significant support to those economies in 2009-10.

“However, growth in India could be undermined by drought,” it said.

Below-normal monsoon rains this year have pushed around 40 per cent of the country’s districts into drought-like conditions, which are likely to affect farm output and trigger a sharp rise in food prices.

The report stated that the overall business outlook for the region also remained promising. The business environment in China and India were likely to improve significantly during the period of 2009-13.

For example, according to the Economist Intelligence Unit’s Business Environment Ranking, China ranked 11 places higher for the 2009-13 forecast period than it did for 2004-08.

Unemployment in the region was also expected to be lower than the global average. The report explained that efforts to increase employment were under way across the region, helping to underpin its independent economic recovery.

“Domestic-demand growth in Asia Pacific region is likely to outpace the average domestic-demand growth in the world consistently during the period of 2009-2013, and would help in faster economic recovery of the region,” the report said.

It said this demand was likely to be experienced by China and India, forecast to grow at a compound annual growth rate of 9.7 per cent and 7.9 per cent respectively during the same period.

Moving forward, the region could further focus on domestic-demand growth by building stronger social protection systems and reducing the pressure on individuals to save for their health, education and retirement needs.

Such efforts, the report added would help to increase consumer confidence and stimulate private consumption and enable domestic currencies to appreciate.

Will Asiapacific economies live up to this expectation? Let the next quarter of 2009 tell the story.