By IZWAN IDRIS
PETALING JAYA: In a coordinated effort to contain the effect of the global financial crisis, Malaysia and Singapore have agreed to provide a blanket guarantee on all bank deposits in their respective banking systems.
All ringgit and foreign currency deposits placed with financial institutions regulated by Bank Negara will be fully guaranteed by the Government with immediate effect, the central bank said in a joint statement with the Ministry of Finance posted on its website.
The statement on Thursday also said that access to Bank Negara’s liquidity facility would also be extended to insurance companies and takaful operators.
“These measures are pre-emptive and precautionary, since Malaysia’s financial institutions are well capitalised with ample liquidity, and confidence of depositors remains intact,” it added.
“Given the soundness and strong capitalisation of Malaysia’s banking institutions, it is unlikely that these guarantees will be called upon,” it added.
The deposits are fully guaranteed through Perbadanan Insurans Deposit Malaysia (PIDM) until December 2010.
The move to reassure depositors is consistent with regional initiatives to preserve confidence in the financial systems, which have been wrecked by the huge losses suffered by some of the biggest and respected international financial institutions.
It is understood that this is part of bilateral cooperation efforts between Malaysian and Singaporean authorities to reduce the amount of contagion in the region arising from the global financial crisis.
In a similar announcement Thursday, Singapore said it would provide guarantee for all deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the Monetary Authority of Singapore with immediate effect until Dec 31, 2010.
Similar measures have been taken by Hong Kong, Indonesia, Australia and New Zealand in extending safeguard on deposits as the global financial crisis widens.
Association of Banks in Malaysia president Datuk Seri Abdul Hamidy Abdul Hafiz said that all banks operating in the country were financially sound.
“After the 1997 financial crisis, various disciplines were put in place and audits of banks were conducted all year round. Bank Negara conducted stress tests on local banks even in good times,” he said. “Our banks are well capitalised at a capital adequacy ratio of13% although the requirement is only 8%. The non-performing loan ratio is at a historical low of 2.5%,” he said.
Friday, October 17, 2008
Wednesday, September 24, 2008
Free electricity from next month if usage under RM20
PUTRAJAYA: Consumers who have monthly electricity bills of RM20 or less will not have to pay a sen from Oct 1.
A Tenaga Nasional Berhad (TNB) spokesman said such consumers would receive the rebate directly in their bills.
However, he said TNB staff would continue to conduct meter-reading in accordance with the company’s prevailing practice.
“If a consumer’s bill is less than RM20 for a particular month and there are no other arrears or outstanding amount, the bill will then be RM0, which will be stated as a ‘government rebate’,” he said here yesterday.
“Consumers are also advised to refer to the ‘Amount to be Paid’ column on their bill for the final amount due to TNB for that particular bill.”
Source: The Star
-------------------------------------------------------------------------------------
I actually wonder how many actually benefit from this... RM20... >_<
A Tenaga Nasional Berhad (TNB) spokesman said such consumers would receive the rebate directly in their bills.
However, he said TNB staff would continue to conduct meter-reading in accordance with the company’s prevailing practice.
“If a consumer’s bill is less than RM20 for a particular month and there are no other arrears or outstanding amount, the bill will then be RM0, which will be stated as a ‘government rebate’,” he said here yesterday.
“Consumers are also advised to refer to the ‘Amount to be Paid’ column on their bill for the final amount due to TNB for that particular bill.”
Source: The Star
-------------------------------------------------------------------------------------
I actually wonder how many actually benefit from this... RM20... >_<
Monday, June 30, 2008
The case for lower fuel subsidy
By MOHAMED ARIFF
Lower fuel subsidy will force consumers to pay market prices, making them more cost-conscious and raising fuel efficiency.
SUBSIDIES have long been used in many countries, both developed and developing, to encourage the production of some goods and services and/or to lighten the burden on consumers.
Many developing countries have resorted to fuel subsidies since 2004 to protect consumers from rising fuel prices. Malaysia has been subsidising liquefied natural gas (LNG) since January 1990, diesel since October 1999, and petrol since June 2005.
Fuel consumption in developed countries has been falling significantly in recent years, but rising sharply in developing countries – AFP
The main problems with price subsidy are that:
· it tends to encourage over-consumption and wastage,
· price distortions cause serious misallocation of resources, and hence economic inefficiency,
· it impedes supply and demand adjustments, and
· it is a source of strain on national budgets.
Fuel subsidy removals would force the consumers to pay market prices for fuel, making them more cost-conscious and raising fuel efficiency. One of the many causes of rising oil prices in the world today is excessive consumption attributed to fuel subsidy practised in many developing countries, including China.
Evidently, fuel consumption in developed countries has been falling significantly in recent years, but rising sharply in developing countries. The decline in developed countries has been more than offset by the rise in developing countries. If fuel subsidies are removed everywhere, fuel consumption would fall, thereby removing one of the major sources of price pressures.
It is pertinent to note that fuel consumption is taxed, not subsidised, in most developed countries, to penalise excessive consumption and to ensure fuel efficiency. Some developing countries, including India, are also taxing petrol, while subsidising diesel consumption, to be more equitable.
Abrupt removal of subsidies would cause considerable pain for consumers, especially those on tight household budgets. Since fuel is a strategic item, any sharp increase in fuel price would lead to price increases all over, with severe inflationary consequences. A gradual removal, based on a clear timeline and price formula, would do the trick.
Removal of fuel subsidies would raise costs, but since all countries across the board are affected, relative competitiveness of countries may not suffer much. Economic growth would suffer in the short run, as countries raise interest rates in the face of inflationary pressures, but economic efficiency will improve over time due to improvements in resource allocation.
The fact that Malaysia is a net exporter of oil does not really make a difference to the case for eliminating the fuel subsidy. As an oil exporter, Malaysia, of course, gains from the rising price of oil in the world market, but the point is that the oil revenue belongs to the future generation as well. Using the oil revenue to finance the fuel subsidy is tantamount to trading off the future for the present to the extent that resources are shifted from investment to consumption.
A hole in budget
Evidently, fuel subsidy has made a hole in the country’s budget, contributing to the fiscal deficit, which stood at 3.2%of gross domestic product (GDP) in 2007 when the price of petrol was at less than one-half of what it is today. One can imagine the budgetary strain fuel subsidy would cause this year at crude oil prices of about US$130 per barrel, if nothing were done to restructure the subsidy scheme.
Last year, fuel subsidy costs RM8.77bil, with crude oil prices averaging US$79. The fuel subsidy sum for 2008 was estimated at RM18.31bil based on the assumption that the price of crude oil would hover around US$105 per barrel. By the first week of June 2008, however, the price of oil had hit US$127 per barrel, way beyond earlier assumptions.
There are thus strong economic grounds for scrapping the fuel subsidy, but care must be taken to ensure that the subsidy system is undone in a gradual and orderly way so as not to impose undue hardship on people, especially the poor.
Seen in these terms, it is not difficult to understand why many governments in the region, including Indonesia, Malaysia and China, have recently resorted to subsidy cuts, which have resulted in higher retail prices of fuel.
Malaysia could have done much better, notwithstanding the fact that the Government could start with the right foot by raising fuel prices by 30 sen in February 2006 when the price of crude oil had hit US$67 per barrel. There have been talks of further price hikes as the price of crude oil soared beyond US$100 per barrel in December 2007, but there were none, presumably because the general elections were around the corner.
Lack of long term strategy
Another increase was not totally unanticipated after the general elections, given the rising trend in the price of crude oil. Early announcements had made people believe that fuel prices would be adjusted in such a way that consumers will have to pay market prices by August.
Consumers were caught unawares when the price of petrol jumped by a hefty 79 sen in the first week of June. An increase of 41% for petrol and 63% for diesel will have severe inflationary consequences. It is instructive to note that the 30 sen increase in February 2006 had led to 4.8% inflation in the following month.
It was estimated that the subsidy cutback on June 5 would yield a fiscal saving of RM13.7bil. The net saving will be much smaller after deducting rebate payments for motor vehicles that were implemented purportedly to soothe the pain.
If rebates were taken into account, the actual increase is said to be 23 sen, not 78 sen per litre. It would have been better if the increase was 30 sen with no rebates, as was the case previously.
The argument that the rebate has made the exercise more equitable is untenable, as the poor do not benefit directly from fuel subsidy in the first place, for they do not own vehicles, but do suffer from the inflationary consequences of subsidy cuts.
What is sadly missing is a long-term strategy to phase out fuel subsidy gradually, which calls for a clear time frame and a pragmatic pricing mechanism.
Emeritus Professor Datuk Dr Mohamed Ariff is the executive director of the Malaysian Institute of Economic Research.
Lower fuel subsidy will force consumers to pay market prices, making them more cost-conscious and raising fuel efficiency.
SUBSIDIES have long been used in many countries, both developed and developing, to encourage the production of some goods and services and/or to lighten the burden on consumers.
Many developing countries have resorted to fuel subsidies since 2004 to protect consumers from rising fuel prices. Malaysia has been subsidising liquefied natural gas (LNG) since January 1990, diesel since October 1999, and petrol since June 2005.
Fuel consumption in developed countries has been falling significantly in recent years, but rising sharply in developing countries – AFP
The main problems with price subsidy are that:
· it tends to encourage over-consumption and wastage,
· price distortions cause serious misallocation of resources, and hence economic inefficiency,
· it impedes supply and demand adjustments, and
· it is a source of strain on national budgets.
Fuel subsidy removals would force the consumers to pay market prices for fuel, making them more cost-conscious and raising fuel efficiency. One of the many causes of rising oil prices in the world today is excessive consumption attributed to fuel subsidy practised in many developing countries, including China.
Evidently, fuel consumption in developed countries has been falling significantly in recent years, but rising sharply in developing countries. The decline in developed countries has been more than offset by the rise in developing countries. If fuel subsidies are removed everywhere, fuel consumption would fall, thereby removing one of the major sources of price pressures.
It is pertinent to note that fuel consumption is taxed, not subsidised, in most developed countries, to penalise excessive consumption and to ensure fuel efficiency. Some developing countries, including India, are also taxing petrol, while subsidising diesel consumption, to be more equitable.
Abrupt removal of subsidies would cause considerable pain for consumers, especially those on tight household budgets. Since fuel is a strategic item, any sharp increase in fuel price would lead to price increases all over, with severe inflationary consequences. A gradual removal, based on a clear timeline and price formula, would do the trick.
Removal of fuel subsidies would raise costs, but since all countries across the board are affected, relative competitiveness of countries may not suffer much. Economic growth would suffer in the short run, as countries raise interest rates in the face of inflationary pressures, but economic efficiency will improve over time due to improvements in resource allocation.
The fact that Malaysia is a net exporter of oil does not really make a difference to the case for eliminating the fuel subsidy. As an oil exporter, Malaysia, of course, gains from the rising price of oil in the world market, but the point is that the oil revenue belongs to the future generation as well. Using the oil revenue to finance the fuel subsidy is tantamount to trading off the future for the present to the extent that resources are shifted from investment to consumption.
A hole in budget
Evidently, fuel subsidy has made a hole in the country’s budget, contributing to the fiscal deficit, which stood at 3.2%of gross domestic product (GDP) in 2007 when the price of petrol was at less than one-half of what it is today. One can imagine the budgetary strain fuel subsidy would cause this year at crude oil prices of about US$130 per barrel, if nothing were done to restructure the subsidy scheme.
Last year, fuel subsidy costs RM8.77bil, with crude oil prices averaging US$79. The fuel subsidy sum for 2008 was estimated at RM18.31bil based on the assumption that the price of crude oil would hover around US$105 per barrel. By the first week of June 2008, however, the price of oil had hit US$127 per barrel, way beyond earlier assumptions.
There are thus strong economic grounds for scrapping the fuel subsidy, but care must be taken to ensure that the subsidy system is undone in a gradual and orderly way so as not to impose undue hardship on people, especially the poor.
Seen in these terms, it is not difficult to understand why many governments in the region, including Indonesia, Malaysia and China, have recently resorted to subsidy cuts, which have resulted in higher retail prices of fuel.
Malaysia could have done much better, notwithstanding the fact that the Government could start with the right foot by raising fuel prices by 30 sen in February 2006 when the price of crude oil had hit US$67 per barrel. There have been talks of further price hikes as the price of crude oil soared beyond US$100 per barrel in December 2007, but there were none, presumably because the general elections were around the corner.
Lack of long term strategy
Another increase was not totally unanticipated after the general elections, given the rising trend in the price of crude oil. Early announcements had made people believe that fuel prices would be adjusted in such a way that consumers will have to pay market prices by August.
Consumers were caught unawares when the price of petrol jumped by a hefty 79 sen in the first week of June. An increase of 41% for petrol and 63% for diesel will have severe inflationary consequences. It is instructive to note that the 30 sen increase in February 2006 had led to 4.8% inflation in the following month.
It was estimated that the subsidy cutback on June 5 would yield a fiscal saving of RM13.7bil. The net saving will be much smaller after deducting rebate payments for motor vehicles that were implemented purportedly to soothe the pain.
If rebates were taken into account, the actual increase is said to be 23 sen, not 78 sen per litre. It would have been better if the increase was 30 sen with no rebates, as was the case previously.
The argument that the rebate has made the exercise more equitable is untenable, as the poor do not benefit directly from fuel subsidy in the first place, for they do not own vehicles, but do suffer from the inflationary consequences of subsidy cuts.
What is sadly missing is a long-term strategy to phase out fuel subsidy gradually, which calls for a clear time frame and a pragmatic pricing mechanism.
Emeritus Professor Datuk Dr Mohamed Ariff is the executive director of the Malaysian Institute of Economic Research.
Friday, June 27, 2008
Buying and selling signal
This article by Ooi Kok Hwa, tackles some basic skills needed to detect the buying and selling strength of a stock price.
THE price movement of a stock is dependent on the demand and supply of the stock, which in turn is influenced by the buyers’ buying interest and the sellers’ selling interest.
Every buyer or seller has different purposes when entering into a trade. The followings are general “rules”, which provide us with some hints on whether the stock price will probably go up or down.
Investors should not view these “rules” as a foolproof method that will hold true all the time. There are certain occasions that market manipulators might be using these “rules” to mislead the general public.
Rule 1: Buyers are showing small orders and sellers are showing big orders. However, the stock prices are holding quite well – buy signal.
When we want to purchase a stock, we will call our remisiers to check on buying or selling orders on the stock. A lot of selling orders with only a few buying orders on the stock may imply that the stock price would come down.
However, if the stock prices are holding quite well, it could mean there are some net buyers accumulating the stock.
The reason for this is buyers may refuse to show their buying orders to attract sellers to sell at the buyers’ buying price.
Showing high buying orders may delay selling interest, as sellers will wait for the buyers to buy at their selling price. Hence, it is a “buy” signal if we notice the above rule on any stock.
On the other hand, if buyers have big orders and sellers have small orders while the stock price continues to drop, it might be a “sell” signal that this stock has some big sellers that are not willing to show their selling orders but they need to sell the stock now.
Showing big selling orders may cause panic on the stock. Hence, to sell at higher prices, sellers will try to hide their selling orders.
Logically, if a stock has a strong buying interest, the stock price should go up instead of come down. Hence, the weakening stock price may imply that sellers outnumber buyers.
Rule 2: The overall market is weak but your stock price is moving against the overall market trend – buy signal.
In a down market, if a stock that you own is inching up steadily despite the overall weak stock market sentiment, this may imply that there are some net buyers on this stock.
We view this as a “buy” signal where buyers are eagerly accumulating the stock in spite of the weak market. In most instances, the stock price will move higher the moment the overall market sentiment recovers.
In contrast, if the overall market is moving up but your stock is being beaten down, it is a “sell” signal. Normally, insiders are aware of certain crucial bad news that is still not available to the market yet.
Rule 3: Stocks carry a lot of bad news and are trading at high volume but stock price remains stable – buy signal.
Sometimes a certain stock is facing huge bad news but the stock price is holding on quite well. Normally, it may imply that buyers are not worried about the market concerns on this stock. The current stock price may have discounted all the bad news.
In contrast, if a stock, despite having all the good news in the media, continues to see its price decline, this is a “sell” signal that shows there are certain sellers who have some concerns over the stock, but the overall market is still not aware of the news.
THE price movement of a stock is dependent on the demand and supply of the stock, which in turn is influenced by the buyers’ buying interest and the sellers’ selling interest.
Every buyer or seller has different purposes when entering into a trade. The followings are general “rules”, which provide us with some hints on whether the stock price will probably go up or down.
Investors should not view these “rules” as a foolproof method that will hold true all the time. There are certain occasions that market manipulators might be using these “rules” to mislead the general public.
Rule 1: Buyers are showing small orders and sellers are showing big orders. However, the stock prices are holding quite well – buy signal.
When we want to purchase a stock, we will call our remisiers to check on buying or selling orders on the stock. A lot of selling orders with only a few buying orders on the stock may imply that the stock price would come down.
However, if the stock prices are holding quite well, it could mean there are some net buyers accumulating the stock.
The reason for this is buyers may refuse to show their buying orders to attract sellers to sell at the buyers’ buying price.
Showing high buying orders may delay selling interest, as sellers will wait for the buyers to buy at their selling price. Hence, it is a “buy” signal if we notice the above rule on any stock.
On the other hand, if buyers have big orders and sellers have small orders while the stock price continues to drop, it might be a “sell” signal that this stock has some big sellers that are not willing to show their selling orders but they need to sell the stock now.
Showing big selling orders may cause panic on the stock. Hence, to sell at higher prices, sellers will try to hide their selling orders.
Logically, if a stock has a strong buying interest, the stock price should go up instead of come down. Hence, the weakening stock price may imply that sellers outnumber buyers.
Rule 2: The overall market is weak but your stock price is moving against the overall market trend – buy signal.
In a down market, if a stock that you own is inching up steadily despite the overall weak stock market sentiment, this may imply that there are some net buyers on this stock.
We view this as a “buy” signal where buyers are eagerly accumulating the stock in spite of the weak market. In most instances, the stock price will move higher the moment the overall market sentiment recovers.
In contrast, if the overall market is moving up but your stock is being beaten down, it is a “sell” signal. Normally, insiders are aware of certain crucial bad news that is still not available to the market yet.
Rule 3: Stocks carry a lot of bad news and are trading at high volume but stock price remains stable – buy signal.
Sometimes a certain stock is facing huge bad news but the stock price is holding on quite well. Normally, it may imply that buyers are not worried about the market concerns on this stock. The current stock price may have discounted all the bad news.
In contrast, if a stock, despite having all the good news in the media, continues to see its price decline, this is a “sell” signal that shows there are certain sellers who have some concerns over the stock, but the overall market is still not aware of the news.
Understanding the stock market rules
Stock Market Rules by Ooi Kok Hwa
In this article, we will highlight a few common and important ‘rules’ that are crucial to most investors.
Your purchase price is irrelevant when you consider selling a stock.
Most people always find it difficult to sell a stock at a price lower than the purchase price because this means making a loss.
For example, if you purchase a stock at 90 sen, you will not sell the stock lower than 90 sen as this means a loss to you.
You will most likely hold on to it until you are able to sell it at higher than 90 sen.
Unfortunately, your stock never remembers how much you have paid for it. You have memory of the purchase price but not the stock.
As a result, some investors end up holding on to lousy stocks with poor fundamentals.
The longer you hold on to these stocks, the higher the losses that you will incur.
Hence, the timing to sell stocks with poor fundamental will depend very much on when you are able to admit that you have made a mistake purchasing them.
Deciding whether to sell when the price is falling or continue to hold on to it with the hope it will recover and break even depends on the fundamentals of the stock.
The target selling price for a stock should be based on the future prospects of the company instead of the price that you paid for the stock.
Thus, you need to “sell the losers and let the winners run”.
For stocks with good value, you should consider holding them for a longer time.
Lately, some second liners with good fundamentals have been hammered down to very low levels. Some of them are even selling at lower than the owner’s cost (lower than book value).
However, not many investors are excited about those stocks although they are currently selling at a very cheap valuation.
Most investors worry that the price will go down further after they have bought it.
It is very hard to predict the market bottom. Based on our observation, certain fundamentally strong stocks may have temporarily found bottom despite the recent market sell down.
We think it is a good time to nibble on some good value stocks and keep them for the long term.
Even though the price will get cheaper than your purchase price tomorrow, we believe the current price should not be too far from the bottom.
Investors need to remember that the returns are based on the selling price. You may purchase the stock at a relatively higher price during a downtrend.
However, if the stock has great potential and you are patient enough to hold on and wait until the market recovers, you can still get higher returns than someone who may be lucky to purchase this stock at the lowest price but sell it too early.
As mentioned earlier, buying before the market reaches bottom is “buy low, sell high”.
However, to a certain group of investors it is safer to buy only when the market has found the bottom and started to recover rather than trying to predict where the market bottom is.
They prefer to buy the stock at a higher price because they believe they can sell it at a higher price. This is “buy high, sell higher”.
For those who prefer the “buy low, sell high” strategy, as you are buying before the market is touches bottom, you need to stagger your purchases so that you have enough bullets to average down your purchase price if the stock price drops further.
For those who prefer to “buy high, sell higher”, they need to prepare themselves mentally to buy at higher stock prices.
This might be a problem to investors as they are not willing to pay for higher stock prices as they always remember the recent lowest prices.
They may end up buying nothing but still hoping the stock price will come down one day.
In this article, we will highlight a few common and important ‘rules’ that are crucial to most investors.
Your purchase price is irrelevant when you consider selling a stock.
Most people always find it difficult to sell a stock at a price lower than the purchase price because this means making a loss.
For example, if you purchase a stock at 90 sen, you will not sell the stock lower than 90 sen as this means a loss to you.
You will most likely hold on to it until you are able to sell it at higher than 90 sen.
Unfortunately, your stock never remembers how much you have paid for it. You have memory of the purchase price but not the stock.
As a result, some investors end up holding on to lousy stocks with poor fundamentals.
The longer you hold on to these stocks, the higher the losses that you will incur.
Hence, the timing to sell stocks with poor fundamental will depend very much on when you are able to admit that you have made a mistake purchasing them.
Deciding whether to sell when the price is falling or continue to hold on to it with the hope it will recover and break even depends on the fundamentals of the stock.
The target selling price for a stock should be based on the future prospects of the company instead of the price that you paid for the stock.
Thus, you need to “sell the losers and let the winners run”.
For stocks with good value, you should consider holding them for a longer time.
Lately, some second liners with good fundamentals have been hammered down to very low levels. Some of them are even selling at lower than the owner’s cost (lower than book value).
However, not many investors are excited about those stocks although they are currently selling at a very cheap valuation.
Most investors worry that the price will go down further after they have bought it.
It is very hard to predict the market bottom. Based on our observation, certain fundamentally strong stocks may have temporarily found bottom despite the recent market sell down.
We think it is a good time to nibble on some good value stocks and keep them for the long term.
Even though the price will get cheaper than your purchase price tomorrow, we believe the current price should not be too far from the bottom.
Investors need to remember that the returns are based on the selling price. You may purchase the stock at a relatively higher price during a downtrend.
However, if the stock has great potential and you are patient enough to hold on and wait until the market recovers, you can still get higher returns than someone who may be lucky to purchase this stock at the lowest price but sell it too early.
As mentioned earlier, buying before the market reaches bottom is “buy low, sell high”.
However, to a certain group of investors it is safer to buy only when the market has found the bottom and started to recover rather than trying to predict where the market bottom is.
They prefer to buy the stock at a higher price because they believe they can sell it at a higher price. This is “buy high, sell higher”.
For those who prefer the “buy low, sell high” strategy, as you are buying before the market is touches bottom, you need to stagger your purchases so that you have enough bullets to average down your purchase price if the stock price drops further.
For those who prefer to “buy high, sell higher”, they need to prepare themselves mentally to buy at higher stock prices.
This might be a problem to investors as they are not willing to pay for higher stock prices as they always remember the recent lowest prices.
They may end up buying nothing but still hoping the stock price will come down one day.
Buy stocks with low price-to-book ratio
Personal Investing
By Ooi Kok Hwa
A fortnight ago, we elaborated on four of the seven criteria used in stock selection. In this week's article, we continue with the remaining three criteria: B for Book Value, H for Health and M for Management.
THE book value of a company is an important indicator of a company’s value as it tells us what the owner’s cost of a company is. No owner would be willing to sell a healthy and growing company at below cost unless the company has problems that are not known by general public.
Normally, we use book value per share (total shareholders’ funds divided by the outstanding number of shares of a company) to compare with the current stock price.
Price-to-book ratio is computed by dividing the stock price by a company's book value per share. It gives us the number of times the current stock is selling above or below the book value.
A ratio of lower than one means the current stock price is trading at lower than its book value.
One of the selection criteria is to select stocks with lower price-to-book ratio.
Benjamin Graham in his book entitled Security Analysis said we should consider buying stocks with price-to-book of lower than 1.5x. The number 1.5x or below implies that the maximum price that we pay for a company should not exceed 50% of the owner’s cost.
Due to the implementation of new financial reporting standards, there have been a lot of write-downs and impairment on certain assets of listed companies.
As a result, we can safely say that the current book value of these companies should reflect the owner’s real cost.
The price-to-book ratio is also frequently used in valuing banking, finance and insurance companies. In most instances, it is quite difficult to search for financial institutions that are selling at below their book values. This is because the book value is mostly in cash.
Normally owners would not accept any value that is less than the book value. This explains why most analysts use the price-to-book ratio in valuing financial institutions.
H for Health refers to the financial health of a company. We use debt-to-equity ratio (D/E ratio) to determine the level of borrowings of a company.
It is computed by taking a company's total debts and dividing it by a company's total shareholders’ funds.
A lower ratio implies that the company is using less debt but more equity to fund its operations. Even though cost of borrowing is lower than cost of equity, most investment gurus prefer companies to use less debt.
It will be even better if we are able to find companies that are cash rich and have zero borrowings.
According to Graham, a good company should have a D/E ratio of less than 0.5x. It means that for every RM1 the owner puts into the company, the maximum amount that he should borrow is 50 sen.
The rationale is to look for companies with lower financial risk - lower borrowings mean companies pay less interest expenses and face lower bankruptcy risk.
M for Management refers to companies with high management quality. It is always very difficult to determine the management quality of a company.
Almost all investment gurus, like Graham, Philip Fisher and Warren Buffett say that the management quality is one of the most important factors in stock selection.
A good management should exhibit unquestionable management integrity and try their best to maximise shareholders’ wealth through high dividend payment and capital gains.
It is almost impossible for each listed company to consistently show high profit during all periods, especially in a weak economy.
However, a good management will make sure that they are able to perform better than their peers even in the toughest business environment.
By Ooi Kok Hwa
A fortnight ago, we elaborated on four of the seven criteria used in stock selection. In this week's article, we continue with the remaining three criteria: B for Book Value, H for Health and M for Management.
THE book value of a company is an important indicator of a company’s value as it tells us what the owner’s cost of a company is. No owner would be willing to sell a healthy and growing company at below cost unless the company has problems that are not known by general public.
Normally, we use book value per share (total shareholders’ funds divided by the outstanding number of shares of a company) to compare with the current stock price.
Price-to-book ratio is computed by dividing the stock price by a company's book value per share. It gives us the number of times the current stock is selling above or below the book value.
A ratio of lower than one means the current stock price is trading at lower than its book value.
One of the selection criteria is to select stocks with lower price-to-book ratio.
Benjamin Graham in his book entitled Security Analysis said we should consider buying stocks with price-to-book of lower than 1.5x. The number 1.5x or below implies that the maximum price that we pay for a company should not exceed 50% of the owner’s cost.
Due to the implementation of new financial reporting standards, there have been a lot of write-downs and impairment on certain assets of listed companies.
As a result, we can safely say that the current book value of these companies should reflect the owner’s real cost.
The price-to-book ratio is also frequently used in valuing banking, finance and insurance companies. In most instances, it is quite difficult to search for financial institutions that are selling at below their book values. This is because the book value is mostly in cash.
Normally owners would not accept any value that is less than the book value. This explains why most analysts use the price-to-book ratio in valuing financial institutions.
H for Health refers to the financial health of a company. We use debt-to-equity ratio (D/E ratio) to determine the level of borrowings of a company.
It is computed by taking a company's total debts and dividing it by a company's total shareholders’ funds.
A lower ratio implies that the company is using less debt but more equity to fund its operations. Even though cost of borrowing is lower than cost of equity, most investment gurus prefer companies to use less debt.
It will be even better if we are able to find companies that are cash rich and have zero borrowings.
According to Graham, a good company should have a D/E ratio of less than 0.5x. It means that for every RM1 the owner puts into the company, the maximum amount that he should borrow is 50 sen.
The rationale is to look for companies with lower financial risk - lower borrowings mean companies pay less interest expenses and face lower bankruptcy risk.
M for Management refers to companies with high management quality. It is always very difficult to determine the management quality of a company.
Almost all investment gurus, like Graham, Philip Fisher and Warren Buffett say that the management quality is one of the most important factors in stock selection.
A good management should exhibit unquestionable management integrity and try their best to maximise shareholders’ wealth through high dividend payment and capital gains.
It is almost impossible for each listed company to consistently show high profit during all periods, especially in a weak economy.
However, a good management will make sure that they are able to perform better than their peers even in the toughest business environment.
Stocks fall, oil at record US$140
By JOSEPH CHIN
KUALA LUMPUR: Stocks opened sharply lower Friday as investors’ sentiment took another round of battering, weighed down by the fall on Wall Street as oil spiked to a new record high of US$140.39.
At 9.30am, the KLCI was down 16.75 points to 1,187.14. Turnover was 37 million shares valued at RM83.88mil. There were 25 gainers, 224 losers and 71 counters unchanged.
Asian markets fell, with Japan’s Nikkei 225 down 280 points or 2.03% to 13,542.27, Singapore’s Straits Times Index lost 1.73% to 2,929.51 while Shanghai’s A Sahre index opened 3.58% lower at 2,935.23.
In New York, US stocks plunged Thursday, with the Dow sliding about 360 points to a 21-month low as oil hit a record and Wall Street powerhouse Goldman Sachs urged investors to sell bank and automaker shares, escalating concern about the outlook for profits.
Reuters reported that oil surged above US$140 a barrel in New York trading, compounding fears that soaring inflation will hamper a global economy already on the ropes.
General Motors' stock sank to its lowest level in 53 years, after Goldman warned that the big US automaker could have to raise capital and cut dividends in a brutal slowdown for the auto industry.
The Dow Jones industrial average slid 358.41 points, or 3.03%, to 11,453.42, putting it within the grasp of a bear market.
At Bursa, the major losers were BAT and DiGi, down 50 sen each to RM43.25 and RM23.90, TM International 35 sen lower to RM6.35, KL Kepong 30 sen to RM17.20 while Genting lost 25 sen to RM5.55 and Public Bank and IJM 20 sen each to RM10.30 and RM5.25.
Luxchem, which made its debut, fell 16.5 sen to 93.5 sen.
Aictively-traded AirAsia fell 2.5 sen to 82.5 sen while Resorts and Gamuda gave up three sen each to RM2.68 and RM2.30 respectively, MRCB shed two sen to RM1.14.
KUALA LUMPUR: Stocks opened sharply lower Friday as investors’ sentiment took another round of battering, weighed down by the fall on Wall Street as oil spiked to a new record high of US$140.39.
At 9.30am, the KLCI was down 16.75 points to 1,187.14. Turnover was 37 million shares valued at RM83.88mil. There were 25 gainers, 224 losers and 71 counters unchanged.
Asian markets fell, with Japan’s Nikkei 225 down 280 points or 2.03% to 13,542.27, Singapore’s Straits Times Index lost 1.73% to 2,929.51 while Shanghai’s A Sahre index opened 3.58% lower at 2,935.23.
In New York, US stocks plunged Thursday, with the Dow sliding about 360 points to a 21-month low as oil hit a record and Wall Street powerhouse Goldman Sachs urged investors to sell bank and automaker shares, escalating concern about the outlook for profits.
Reuters reported that oil surged above US$140 a barrel in New York trading, compounding fears that soaring inflation will hamper a global economy already on the ropes.
General Motors' stock sank to its lowest level in 53 years, after Goldman warned that the big US automaker could have to raise capital and cut dividends in a brutal slowdown for the auto industry.
The Dow Jones industrial average slid 358.41 points, or 3.03%, to 11,453.42, putting it within the grasp of a bear market.
At Bursa, the major losers were BAT and DiGi, down 50 sen each to RM43.25 and RM23.90, TM International 35 sen lower to RM6.35, KL Kepong 30 sen to RM17.20 while Genting lost 25 sen to RM5.55 and Public Bank and IJM 20 sen each to RM10.30 and RM5.25.
Luxchem, which made its debut, fell 16.5 sen to 93.5 sen.
Aictively-traded AirAsia fell 2.5 sen to 82.5 sen while Resorts and Gamuda gave up three sen each to RM2.68 and RM2.30 respectively, MRCB shed two sen to RM1.14.
Wednesday, June 4, 2008
Time to change spending pattern, says Fomca
By PAUL CHOO
KUALA LUMPUR: Malaysians have been told to evaluate their lifestyles to meet the inevitable rise in petrol prices.
Federation of Malaysian Consumer Associations president Datuk N. Marimuthu said the rakyat must understand that the price increase stems from a global issue of soaring oil prices, and not a Malaysian issue.
“We must re-evaluate ourselves in terms of spending to prepare for the inevitable increase. It is not only us who are suffering. Other countries are faring even worse than Malaysia. So we should not just blame the Government in the event of price increases,” he said when contacted yesterday.
He advised consumers to take into account any avenues to reduce costs, such as using less electricity, having more meals at home and having a thorough financial plan.
National Consumer Complaints Centre director Darshan Singh, who did not want to comment until the announcement on a new fuel subsidy scheme was made, said: “Consumers definitely must bear in mind that they need to be prepared for any eventuality, and that includes a sudden soar in petrol prices.”
A CAP spokesman agreed that consumers would have to change their lifestyle, but at the same time urged the Government to divert some of the fuel subsidies into public transportation.
“On average an individual spends 30% of his salary on petrol and car repayment, which is why if a new fuel subsidy is to be announced, some of it should be diverted into public transportation,” said the spokesman.
“This move would work towards encouraging more people to save on their travelling by using public transportation.”
KUALA LUMPUR: Malaysians have been told to evaluate their lifestyles to meet the inevitable rise in petrol prices.
Federation of Malaysian Consumer Associations president Datuk N. Marimuthu said the rakyat must understand that the price increase stems from a global issue of soaring oil prices, and not a Malaysian issue.
“We must re-evaluate ourselves in terms of spending to prepare for the inevitable increase. It is not only us who are suffering. Other countries are faring even worse than Malaysia. So we should not just blame the Government in the event of price increases,” he said when contacted yesterday.
He advised consumers to take into account any avenues to reduce costs, such as using less electricity, having more meals at home and having a thorough financial plan.
National Consumer Complaints Centre director Darshan Singh, who did not want to comment until the announcement on a new fuel subsidy scheme was made, said: “Consumers definitely must bear in mind that they need to be prepared for any eventuality, and that includes a sudden soar in petrol prices.”
A CAP spokesman agreed that consumers would have to change their lifestyle, but at the same time urged the Government to divert some of the fuel subsidies into public transportation.
“On average an individual spends 30% of his salary on petrol and car repayment, which is why if a new fuel subsidy is to be announced, some of it should be diverted into public transportation,” said the spokesman.
“This move would work towards encouraging more people to save on their travelling by using public transportation.”
Petrol dealers brace for tough times
By M.KRISHNAMOORTHY
KUALA LUMPUR: Petrol dealers are expecting fuel prices to go up and will face tough times when that happens.
Petroleum Dealers Association of Malaysia (PDAM) acting president Abdul Wahid Bidin said operating costs would go up when the price of petrol increases.
This was because most people would pay for their purchases with credit cards and the amount of commission paid to credit card companies would eat into the dealers' profits.
“If the petrol price goes up we will suffer because we will need extra working capital by about 30% if the increase is by about 30%.,” he said.
Abdul Wahid said that for every litre of petrol sold, the dealers would have to pay 1% of the sale amount to the credit card company in commission.
And, another 1% is lost in the evaporation of petrol.
Abdul Wahid wants the Government to get the consumers to share the burden of the credit card commission.
On an average, if a dealer gets an income of RM40,000 a day, he would have to pay out RM300 per day as commission to the credit card companies.
To resolve this problem, he proposed that the Government introduces a two-tier pricing system, one for cash sales and other for credit card users.
“The price for using a credit card will be higher and cash sales may be a few sen lower. This would discourage people from using credit cards,” he said.
KUALA LUMPUR: Petrol dealers are expecting fuel prices to go up and will face tough times when that happens.
Petroleum Dealers Association of Malaysia (PDAM) acting president Abdul Wahid Bidin said operating costs would go up when the price of petrol increases.
This was because most people would pay for their purchases with credit cards and the amount of commission paid to credit card companies would eat into the dealers' profits.
“If the petrol price goes up we will suffer because we will need extra working capital by about 30% if the increase is by about 30%.,” he said.
Abdul Wahid said that for every litre of petrol sold, the dealers would have to pay 1% of the sale amount to the credit card company in commission.
And, another 1% is lost in the evaporation of petrol.
Abdul Wahid wants the Government to get the consumers to share the burden of the credit card commission.
On an average, if a dealer gets an income of RM40,000 a day, he would have to pay out RM300 per day as commission to the credit card companies.
To resolve this problem, he proposed that the Government introduces a two-tier pricing system, one for cash sales and other for credit card users.
“The price for using a credit card will be higher and cash sales may be a few sen lower. This would discourage people from using credit cards,” he said.
Petrol to cost RM2.70 from midnight
KUALA LUMPUR: Prime Minister Datuk Seri Abdullah Ahmad Badawi on Wednesday announced price hikes for petrol, diesel and electricity.
He said the new price for petrol is RM2.70 a litre, effective midnight tonight. The price goes up by 78sen from the current RM1.92, a hike of 40%.
Abdullah also announced that the price of diesel would be increased by RM1 from RM1.58 to RM2.58.
He also said that Tenaga Nasional Bhd would be raising electricity rates by 18% for homes and 26% for business users.
The announcements are part of the new fuel subsidy plan.
Abdullah also announced a RM625 annual cash rebate per vehicle, for owners of private vehicles with engine capacities of up to 2,000cc, as well as pickup trucks and jeeps with engine capacities of up to 2,500cc.
Owners of private motorcycles with engine capacities of up to 250cc will receive RM150.
Payment will be made via Money Order upon renewal of road tax, from July 1.
For owners of private vehicles with engine capacities exceeding 2000cc, road tax will be reduced by RM200.
Owners of private motorcycles with engine capacities above 250 cc will get RM50 reduction in road tax.
He said the new price for petrol is RM2.70 a litre, effective midnight tonight. The price goes up by 78sen from the current RM1.92, a hike of 40%.
Abdullah also announced that the price of diesel would be increased by RM1 from RM1.58 to RM2.58.
He also said that Tenaga Nasional Bhd would be raising electricity rates by 18% for homes and 26% for business users.
The announcements are part of the new fuel subsidy plan.
Abdullah also announced a RM625 annual cash rebate per vehicle, for owners of private vehicles with engine capacities of up to 2,000cc, as well as pickup trucks and jeeps with engine capacities of up to 2,500cc.
Owners of private motorcycles with engine capacities of up to 250cc will receive RM150.
Payment will be made via Money Order upon renewal of road tax, from July 1.
For owners of private vehicles with engine capacities exceeding 2000cc, road tax will be reduced by RM200.
Owners of private motorcycles with engine capacities above 250 cc will get RM50 reduction in road tax.
Friday, May 9, 2008
Crisis equals opportunity?
PERSONAL INVESTING
By OOI KOK HWA
As a result of the recent market crashes, a lot of retailer players have been staying away from the stock market. Although the present market may be showing some uptrend, not many retailers are confident about investing.
ACCORDING to Stephen Vines in his book titled Market Panic, there are four types of market panic – phoney panic, end-of-cycle panic, contagious panic and real panic.
Phoney panic refers to that caused by some negative events which have no impact on the fundamentals of companies or the overall economy. For example, even though such panic causes heavy selling, it is short-lived and will recover within a short time, as the crash does not cause changes to the economic fundamentals.
End-of-cycle panic refers to panic selling as a result of the end of a market rally. This is a healthy pullback, as the market needs to consolidate before it can resume its upward momentum. However, such panic normally takes time to recover.
Nevertheless, if the crash is confined to the local market, it will be less severe compared with contagious panic.
Contagious panic usually refers to cross-border and international contagion.
For example, the terrorist attacks on World Trade Centre on Sept 11, 2001 led to the crash in the US market spreading throughout the world markets, including Malaysia.
The KL Composite Index (KLCI) tumbled more than 100 points within four days of the attacks. Nevertheless, it recovered to the pre-crash level three months after the crash.
The last type of panic – also the most dangerous – is real panic, which is triggered by the possibility of an economic recession, corporate failures or financial crisis.
The market will take longer to recover from these crashes as they are due to worries over economic recession and company fundamentals.
For instance, if the Fed did not cut interest rates on Jan 22 (before the market opened), we might have ended up with a global market crash, as the Asia-Pacific as well as European markets had already experienced big crashes before the US market opened.
Even though this crash relates more to real panic, it was also the result of end-of-cycle panic plus contagious panic, combining all three types of panic.
Buying panic
James L. “RevShark” DePorre, in his book Invest Like A Shark, introduced a new investing approach called “shark investing”. He says we need to invest like sharks because sharks have certain characteristics that can keep them away from danger and yet they are highly efficient eating machines.
Sharks are patient while they wait for opportunities. Given that the recent market panic may take longer to recover, we need to wait for opportunities. Unless we encounter strong buying opportunities that enable us to buy good quality stocks at very cheap prices, we need to be patient in waiting for the right timing.
Sometimes, the best buying opportunities arise when the outlook is at its worst. Unfortunately, except for institutional investors, most retailers will shy away from the market.
For example, not many investors would dare to buy when our market tumbled more than 100 points after the recent general election results. Most of them believed then that shares could get cheaper in the following few days.
Sharks plan their attacks. We should consider buying stocks when certain companies are selling far below their intrinsic value or their businesses are temporarily facing business difficulties and should correct them over time. Capital gains mean buy low, sell high.
For good quality stocks, we can only buy low when there is a lot of bad news. Unfortunately, most analysts focus on the bad news and seldom look at long-term prospects.
Lastly, sharks are risk-averse and do not hesitate to swim away when danger lurks. If our economy falls into recession (although most experts say it is quite unlikely), we need to hold more cash than stocks and wait until the worst is over.
However, we should hold on to good quality stocks that pay good dividends. We should not liquidate all stocks while waiting for the market to crash further as we will never know whether we have seen the worst.
By OOI KOK HWA
As a result of the recent market crashes, a lot of retailer players have been staying away from the stock market. Although the present market may be showing some uptrend, not many retailers are confident about investing.
ACCORDING to Stephen Vines in his book titled Market Panic, there are four types of market panic – phoney panic, end-of-cycle panic, contagious panic and real panic.
Phoney panic refers to that caused by some negative events which have no impact on the fundamentals of companies or the overall economy. For example, even though such panic causes heavy selling, it is short-lived and will recover within a short time, as the crash does not cause changes to the economic fundamentals.
End-of-cycle panic refers to panic selling as a result of the end of a market rally. This is a healthy pullback, as the market needs to consolidate before it can resume its upward momentum. However, such panic normally takes time to recover.
Nevertheless, if the crash is confined to the local market, it will be less severe compared with contagious panic.
Contagious panic usually refers to cross-border and international contagion.
For example, the terrorist attacks on World Trade Centre on Sept 11, 2001 led to the crash in the US market spreading throughout the world markets, including Malaysia.
The KL Composite Index (KLCI) tumbled more than 100 points within four days of the attacks. Nevertheless, it recovered to the pre-crash level three months after the crash.
The last type of panic – also the most dangerous – is real panic, which is triggered by the possibility of an economic recession, corporate failures or financial crisis.
The market will take longer to recover from these crashes as they are due to worries over economic recession and company fundamentals.
For instance, if the Fed did not cut interest rates on Jan 22 (before the market opened), we might have ended up with a global market crash, as the Asia-Pacific as well as European markets had already experienced big crashes before the US market opened.
Even though this crash relates more to real panic, it was also the result of end-of-cycle panic plus contagious panic, combining all three types of panic.
Buying panic
James L. “RevShark” DePorre, in his book Invest Like A Shark, introduced a new investing approach called “shark investing”. He says we need to invest like sharks because sharks have certain characteristics that can keep them away from danger and yet they are highly efficient eating machines.
Sharks are patient while they wait for opportunities. Given that the recent market panic may take longer to recover, we need to wait for opportunities. Unless we encounter strong buying opportunities that enable us to buy good quality stocks at very cheap prices, we need to be patient in waiting for the right timing.
Sometimes, the best buying opportunities arise when the outlook is at its worst. Unfortunately, except for institutional investors, most retailers will shy away from the market.
For example, not many investors would dare to buy when our market tumbled more than 100 points after the recent general election results. Most of them believed then that shares could get cheaper in the following few days.
Sharks plan their attacks. We should consider buying stocks when certain companies are selling far below their intrinsic value or their businesses are temporarily facing business difficulties and should correct them over time. Capital gains mean buy low, sell high.
For good quality stocks, we can only buy low when there is a lot of bad news. Unfortunately, most analysts focus on the bad news and seldom look at long-term prospects.
Lastly, sharks are risk-averse and do not hesitate to swim away when danger lurks. If our economy falls into recession (although most experts say it is quite unlikely), we need to hold more cash than stocks and wait until the worst is over.
However, we should hold on to good quality stocks that pay good dividends. We should not liquidate all stocks while waiting for the market to crash further as we will never know whether we have seen the worst.
Wednesday, May 7, 2008
Picking Stocks With Long-Term Prospects
Personal Investing by OOI KOK HWA
This first of a two-part article looks at the criteria for selecting the right stocks
Q: I don’t know how to select the right stocks for long-term investment. Do you have any systematic way for stock selection?
Lately, readers have asked us whether there are basic, systematic ways to select stocks for long-term investment. We find that it’s quite difficult to answer this question as there are many ways to pick stocks. Different fund managers have different methods of picking the right stocks for their funds.
Even though there are no short cuts in screening stocks, we can broadly group our selection according to seven criteria, namely SGPDBHM. “S” stands for sales, “G” – growth, “P” – price-earnings ratio (PER), “D” – dividend yield, “B” – book value, “H” – health and “M” for management.
In this article, we will look at the first four criteria: sales (S), growth (G), PER (P) and dividend yield (D).
S – Annual sales of at least above RM500mil
Our first criterion is to select companies that have total annual sales of RM500mil and above. The main purpose for this is to select big companies for investment. Normally, a company with total sales of above RM500mil is considered well established and is less dependent on its owner.
In most instances, it will be one of the market leaders commanding a certain market share in its industry. Although we are not saying that companies with annual sales of less than RM500mil are not good for investment, less established companies face stiffer competition and have more uncertainties in their future compared with more established companies.
This explains why the majority of our research houses prefer big companies to small companies. At present, if you are holding shares in a lot of small companies (although they have good fundamentals), the majority of them are not performing in terms of stock prices despite the current high stock market valuations.
This may be due to the same worries as well as analysts not paying much attention to those stocks.
G - growth in sales
We need to select stocks with strong sales growth. Higher growth in sales implies that a company is expanding fast.
According to Benjamin Graham in his book entitled “Security Analysis”, a growth company’s business can move faster than its stock price.
Given that our returns depend only on capital gain or dividend income, if a stock never pays any dividend, we need to make sure that we can get capital gains from the stock.
Unless we are able to catch them at cheap prices, we need to make sure that the company has very strong sales growth.
Higher sales will contribute to higher profits and higher stock prices.
P - Low PER stocks
To get a high margin of safety (MOS), we need to find stocks with low PER. For a stock that has a PER of 20 times, you would need to wait 20 years to get back your money, assuming that it can achieve the same earnings per share (EPS) over the next 20 years.
Hence, we should select stocks with low PER, especially lower than the overall stock market or its own industry average.
Given that the current market PER is about 15 times, if you can find a stock that is selling lower than 15 times, we can say that it is selling at a cheaper valuation than that of the overall market.
D- dividend yield of at least equal to fixed deposit rate
A good company needs to pay dividend. We believe this is the best way to rewards shareholders.
There are some listed companies that are making good profits but refuse to reward their shareholders with high dividends as they claim that they need to retain the profits for future expansion.
However, we believe “a bird in the hand is worth two in the bush”.
There are cases where companies are able to generate good returns from every dollar that they retain, but in most cases, some fail in their expansion programmes. To retail investors, there are too many uncertainties over returns from these investments.
We believe that companies that are unable to reward their shareholders with good dividend need to reward them with higher stock prices.
According to Warren Buffett, this is called the one-dollar premise, whereby every dollar that the company retains needs to translate into one dollar in stock price.
Given the present weak stock market, if a company is able to provide a dividend yield that is equal to the fixed deposit rate of 3.7% will attract investors to put their money into their stock instead of in the bank.
This first of a two-part article looks at the criteria for selecting the right stocks
Q: I don’t know how to select the right stocks for long-term investment. Do you have any systematic way for stock selection?
Lately, readers have asked us whether there are basic, systematic ways to select stocks for long-term investment. We find that it’s quite difficult to answer this question as there are many ways to pick stocks. Different fund managers have different methods of picking the right stocks for their funds.
Even though there are no short cuts in screening stocks, we can broadly group our selection according to seven criteria, namely SGPDBHM. “S” stands for sales, “G” – growth, “P” – price-earnings ratio (PER), “D” – dividend yield, “B” – book value, “H” – health and “M” for management.
In this article, we will look at the first four criteria: sales (S), growth (G), PER (P) and dividend yield (D).
S – Annual sales of at least above RM500mil
Our first criterion is to select companies that have total annual sales of RM500mil and above. The main purpose for this is to select big companies for investment. Normally, a company with total sales of above RM500mil is considered well established and is less dependent on its owner.
In most instances, it will be one of the market leaders commanding a certain market share in its industry. Although we are not saying that companies with annual sales of less than RM500mil are not good for investment, less established companies face stiffer competition and have more uncertainties in their future compared with more established companies.
This explains why the majority of our research houses prefer big companies to small companies. At present, if you are holding shares in a lot of small companies (although they have good fundamentals), the majority of them are not performing in terms of stock prices despite the current high stock market valuations.
This may be due to the same worries as well as analysts not paying much attention to those stocks.
G - growth in sales
We need to select stocks with strong sales growth. Higher growth in sales implies that a company is expanding fast.
According to Benjamin Graham in his book entitled “Security Analysis”, a growth company’s business can move faster than its stock price.
Given that our returns depend only on capital gain or dividend income, if a stock never pays any dividend, we need to make sure that we can get capital gains from the stock.
Unless we are able to catch them at cheap prices, we need to make sure that the company has very strong sales growth.
Higher sales will contribute to higher profits and higher stock prices.
P - Low PER stocks
To get a high margin of safety (MOS), we need to find stocks with low PER. For a stock that has a PER of 20 times, you would need to wait 20 years to get back your money, assuming that it can achieve the same earnings per share (EPS) over the next 20 years.
Hence, we should select stocks with low PER, especially lower than the overall stock market or its own industry average.
Given that the current market PER is about 15 times, if you can find a stock that is selling lower than 15 times, we can say that it is selling at a cheaper valuation than that of the overall market.
D- dividend yield of at least equal to fixed deposit rate
A good company needs to pay dividend. We believe this is the best way to rewards shareholders.
There are some listed companies that are making good profits but refuse to reward their shareholders with high dividends as they claim that they need to retain the profits for future expansion.
However, we believe “a bird in the hand is worth two in the bush”.
There are cases where companies are able to generate good returns from every dollar that they retain, but in most cases, some fail in their expansion programmes. To retail investors, there are too many uncertainties over returns from these investments.
We believe that companies that are unable to reward their shareholders with good dividend need to reward them with higher stock prices.
According to Warren Buffett, this is called the one-dollar premise, whereby every dollar that the company retains needs to translate into one dollar in stock price.
Given the present weak stock market, if a company is able to provide a dividend yield that is equal to the fixed deposit rate of 3.7% will attract investors to put their money into their stock instead of in the bank.
Money for votes?
TERESA KOK (DAP-Seputeh) said the prime minister’s reply to her question on money given by the Barisan Nasional to Kelantan voters to return to cast their ballots in the March 8 general election is “amazing”.
“It’s money politics ... I have all the photographs of voters receiving RM200 from the BN posted on my blog. How could the Anti-Corruption Agency (ACA) say the evidence did not qualify for an offence under the Anti-Corruption Act 1997?” she asked at a press conference at the Parliament lobby.
“Despite what have been reported in the papers, the ACA did not do anything. This is definitely not in line with the prime minister’s promise to curb corruption with an independent commission against corruption, just like in Hongkong.”
R. Sivarasa (PKR-Subang) also expressed disappointment with the prime minister’s reply. He said the Coalition for Clean and Fair Election (Bersih) had held a press conference on March 17 to make the issue public.
“The ACA does not need an official complaint to initiate an investigation as long as it receives the information from known or anonymous sources.
“So, why is the ACA saying now that it did not receive an official complaint and, therefore, it could not find sufficient evidence?” he said.
Sivarasa also questioned the response of the Election Commission, which said it did not have any information nor knowledge on the issue raised by Kok.
Source: theSun
“It’s money politics ... I have all the photographs of voters receiving RM200 from the BN posted on my blog. How could the Anti-Corruption Agency (ACA) say the evidence did not qualify for an offence under the Anti-Corruption Act 1997?” she asked at a press conference at the Parliament lobby.
“Despite what have been reported in the papers, the ACA did not do anything. This is definitely not in line with the prime minister’s promise to curb corruption with an independent commission against corruption, just like in Hongkong.”
R. Sivarasa (PKR-Subang) also expressed disappointment with the prime minister’s reply. He said the Coalition for Clean and Fair Election (Bersih) had held a press conference on March 17 to make the issue public.
“The ACA does not need an official complaint to initiate an investigation as long as it receives the information from known or anonymous sources.
“So, why is the ACA saying now that it did not receive an official complaint and, therefore, it could not find sufficient evidence?” he said.
Sivarasa also questioned the response of the Election Commission, which said it did not have any information nor knowledge on the issue raised by Kok.
Source: theSun
When the witness becomes the accused
The police officers started investigations after a report was lodged in Kajang based on the article which was published on April 28. The least they could have done was to read and digest the contents. If they had done so, they won’t be asking questions on Yeo and his famous quote.
by R. Nadeswaran
EVER WONDERED why the police force is unable to close files and solve crimes? Do you know why witnesses to crimes do not want to come forward? Why do witnesses suddenly have memory lapses and declare: “I did not see anything.” I got the answers yesterday. Two police officers from the Commercial Crime Division of Bukit Aman gave an insight into how investigations are carried out and I can tell you with a clear conscience that it was an exercise in futility because their line of questioning would have insulted the intelligence of any rightthinking person.
Assistant Superintendents Wan Zainal Wan Mat and Albany Hamzah turned up at the office and said that they needed to record my statement in relation to police investigations into the transfer of funds from Balkis. To say that they came ill-prepared would be an understatement. To say that they never read any of the reports in theSun or any other newspaper would be the bitter truth. They are supposed to be investigating the transfer of RM9.9 million, and yet had no clue as to how to go about doing the job. This is because they came with pre-conceived notions and pre-prepared questions, perhaps drafted by their superiors, in the hope that this writer would shoot himself in the foot by implicating himself.
After the caution was administered under the Criminal Procedure Code and the usual questions on my qualifi cations and my career, it was crystal clear they wanted me to reveal my sources and wanted documents in my possession. Not that I had run foul of the Official Secrets Act because none of the documents cited were classified, but they came on a fishing expedition to get me to expose my hand and to find out what is going to be published in the future. They expected me to sing like a canary!
Terence Fernandez and I looked at each other in despair when asked: Merujuk kepada petikan yang terdapat dalam artikel berkaitan dengan memetik kenyataan Yeo Yang Poh (former president of the Bar Council), dari manakah sumber petikan berkenaan diperolehi? (Your article had a quote from former Bar Council president Yeo Yang Poh. What is the source of the quote?) If only the two officers had cared to read the first paragraph of my report which was in front of their eyes they would have known where it came from – the Malaysian Bar website. But no, they had read nothing. What has Yeo’s comments got to do with their investigations?
They wanted to know if “I was instructed to write” and wanted to know if I had read the constitution of Balkis. If they had read all the reports on Balkis, they would have known that I quoted its constitution extensively. But no, they just cast the line hoping for a bite. The next question: Adakah kamu ada menyimpan perlembagaan Balkis. (Are you keeping a copy of the constitution) Did they expect a “Yes” from me? Even if I had it, does it make it an offence unless of course they thought they are putting the fright into me?
Are you in possession of a letter from the Registrar of Societies dated April 14 addressed to the mentri besar? Well, that’s not a classified document and even if I had it, would they have expected me to say: “Yes, I have it.”? They showed their hands too early and they thought they trumped me by asking: “You write that “according to documents sighted by theSun”, can you tell me what the documents are. My curt reply: “I cannot tell you because it is unethical for journalists to reveal what (documents) they saw or read.”
By which time, they had no more cards to play. They threw in the sai-lang card: “Dimanakah kamu dapat dokumen-dokumen berkenaan?” (Where did you get the documents from?”) Was this an investigation into Balkis or a probe to trace the source of my documents?
When they asked the final question, I blew my top because it not only became harassment but also bordered on stupidity. I was asked: Adakah kamu tahu siapa hakim bertindak sebagai penasihat undang-undang kepada Bakti sebagaimana yang dinyatakan oleh akhbar theSun? (Do you know the identity of the judge who acted as the legal adviser of Balkis?)
I asked the relevance of such a question. The answer was: ‘When the case goes to court, we need to answer all these questions”.
Don’t they read the newspapers? Didn’t theSun name the judge after which the Bar Council and the former UN Special Rapporteur on the Independence of Judges and Lawyers commented on it? My answer: “This was previously reported in theSun. Please refer to the papers.”
-------------------------------------------------------------------------------------
PBT issue goes to RoS
by Opalyn Mok
GEORGE TOWN: The wives of the Pakatan Rakyat assemblymen and MPs in Penang will be filing a formal request with the Registrar of Societies (RoS) regarding the status of Persatuan Bunga Tanjung (PBT) today.
Chief Minister Lim Guan Eng, who disclosed this yesterday, declined to give further details except that the wives of the assemblymen and MPs will hold a press conference about it.
Asked to comment on former PBT president Puan Sri Chui Kah Peng’s allegations that Lim had insulted and demeaned women by his statement “leave the poor lady alone”, Lim said it was just an English expression which means “don’t make it hard for her”.
“There is nothing derogatory about it. I think they know what I meant,” he told reporters.
Lim also read out a transcript of what he had said: “Maybe we need the former chief minister to clarify. I do not want to mention Puan Sri. She may not be familiar with the rules required to follow. I do not want to blame her. She may get advice from the adviser. Otherwise, why do we need advisers? I don’t think we should go for the poor lady. Let’s leave the poor lady alone.”
He said he just meant to say “do not put too much pressure on her”.
“I was only trying to say that maybe she has been wrongly advised. If she’s wrongly advised, then you ask the adviser to explain,” he said.
“They are making an issue of nothing. It is now more important to address the issue at hand rather than talk about such personal attacks, which distract attention from the real issue.
“We should address the issue as to whether the members had the right to dissolve the organisation and distribute the money. This body was established for the wives of assemblymen and MPs, except from the Opposition.
“By refusing to address this issue, I think the people can judge for themselves. Why is it that they do not want to address this issue when the PBT constitution clearly states that this association is for the wives of the state government’s wakil rakyat and had expressly excluded the Opposition.”
theSun reported that PBT had followed Balkis, the association of wives of assemblymen and MPs in Selangor, in transferring its funds to Bakti, the federal association of wives of ministers and deputy ministers, an action the RoS is now scrutinising.
In reply, Chui said PBT donated the RM590,665 which was in its account before its dissolution. It gave RM350,000 to Bakti, RM220,000 to the Bureau on Learning Difficulties, and RM20,665 to the Penang Cheshire Home, Mental Health Association and Mount Miriam Hospital.
Jelutong MP Jeff Ooi then questioned the details of the donations. He alleged that checks showed Mount Miriam Hospital had yet to receive any amount greater than RM2,572.63, which was paid on April 1.
He also alleged that the Cheshire Home and Penang Mental Health Association received only RM1,000 each, while referring to the PBT members as “desperate housewives”.
On May 1, Chui called a press conference declaring that the former PBT members were not desperate housewives and issued a challenge to Lim and Ooi for an open debate over the handling of the group’s funds and its contentious dissolution.
They gave Lim and Ooi 48 hours to respond to the challenge.
Lim declined the challenge and invited Chui for a private meeting with him instead.
Chui then issued a media statement threatening to “take appropriate measures to defend our integrity and dignity”, and Lim’s political secretary, Ng Wei Aik, issued another statement, reiterating the invitation to Chui to meet with Lim.
PBT has turned down the invitation and declared that it will no longer engage in a war of words through the media with Ng or Lim.
On the state government’s next course of action, Lim said he will let the RoS decide.
Lim also said:
» he will chair the Penang Tourism Council, which will be set up within two weeks;
» there is a need for closer cooperation between the state and federal governments to develop the tourism industry in the state for mutual benefits;
» the tourism sector, which is the second largest income earner for the state, has remained stagnant for the past 10 years;
» Penang International Airport needs to be upgraded and the state hopes the federal government will upgrade it for the sake of the tourism industry.
by R. Nadeswaran
EVER WONDERED why the police force is unable to close files and solve crimes? Do you know why witnesses to crimes do not want to come forward? Why do witnesses suddenly have memory lapses and declare: “I did not see anything.” I got the answers yesterday. Two police officers from the Commercial Crime Division of Bukit Aman gave an insight into how investigations are carried out and I can tell you with a clear conscience that it was an exercise in futility because their line of questioning would have insulted the intelligence of any rightthinking person.
Assistant Superintendents Wan Zainal Wan Mat and Albany Hamzah turned up at the office and said that they needed to record my statement in relation to police investigations into the transfer of funds from Balkis. To say that they came ill-prepared would be an understatement. To say that they never read any of the reports in theSun or any other newspaper would be the bitter truth. They are supposed to be investigating the transfer of RM9.9 million, and yet had no clue as to how to go about doing the job. This is because they came with pre-conceived notions and pre-prepared questions, perhaps drafted by their superiors, in the hope that this writer would shoot himself in the foot by implicating himself.
After the caution was administered under the Criminal Procedure Code and the usual questions on my qualifi cations and my career, it was crystal clear they wanted me to reveal my sources and wanted documents in my possession. Not that I had run foul of the Official Secrets Act because none of the documents cited were classified, but they came on a fishing expedition to get me to expose my hand and to find out what is going to be published in the future. They expected me to sing like a canary!
Terence Fernandez and I looked at each other in despair when asked: Merujuk kepada petikan yang terdapat dalam artikel berkaitan dengan memetik kenyataan Yeo Yang Poh (former president of the Bar Council), dari manakah sumber petikan berkenaan diperolehi? (Your article had a quote from former Bar Council president Yeo Yang Poh. What is the source of the quote?) If only the two officers had cared to read the first paragraph of my report which was in front of their eyes they would have known where it came from – the Malaysian Bar website. But no, they had read nothing. What has Yeo’s comments got to do with their investigations?
They wanted to know if “I was instructed to write” and wanted to know if I had read the constitution of Balkis. If they had read all the reports on Balkis, they would have known that I quoted its constitution extensively. But no, they just cast the line hoping for a bite. The next question: Adakah kamu ada menyimpan perlembagaan Balkis. (Are you keeping a copy of the constitution) Did they expect a “Yes” from me? Even if I had it, does it make it an offence unless of course they thought they are putting the fright into me?
Are you in possession of a letter from the Registrar of Societies dated April 14 addressed to the mentri besar? Well, that’s not a classified document and even if I had it, would they have expected me to say: “Yes, I have it.”? They showed their hands too early and they thought they trumped me by asking: “You write that “according to documents sighted by theSun”, can you tell me what the documents are. My curt reply: “I cannot tell you because it is unethical for journalists to reveal what (documents) they saw or read.”
By which time, they had no more cards to play. They threw in the sai-lang card: “Dimanakah kamu dapat dokumen-dokumen berkenaan?” (Where did you get the documents from?”) Was this an investigation into Balkis or a probe to trace the source of my documents?
When they asked the final question, I blew my top because it not only became harassment but also bordered on stupidity. I was asked: Adakah kamu tahu siapa hakim bertindak sebagai penasihat undang-undang kepada Bakti sebagaimana yang dinyatakan oleh akhbar theSun? (Do you know the identity of the judge who acted as the legal adviser of Balkis?)
I asked the relevance of such a question. The answer was: ‘When the case goes to court, we need to answer all these questions”.
Don’t they read the newspapers? Didn’t theSun name the judge after which the Bar Council and the former UN Special Rapporteur on the Independence of Judges and Lawyers commented on it? My answer: “This was previously reported in theSun. Please refer to the papers.”
-------------------------------------------------------------------------------------
PBT issue goes to RoS
by Opalyn Mok
GEORGE TOWN: The wives of the Pakatan Rakyat assemblymen and MPs in Penang will be filing a formal request with the Registrar of Societies (RoS) regarding the status of Persatuan Bunga Tanjung (PBT) today.
Chief Minister Lim Guan Eng, who disclosed this yesterday, declined to give further details except that the wives of the assemblymen and MPs will hold a press conference about it.
Asked to comment on former PBT president Puan Sri Chui Kah Peng’s allegations that Lim had insulted and demeaned women by his statement “leave the poor lady alone”, Lim said it was just an English expression which means “don’t make it hard for her”.
“There is nothing derogatory about it. I think they know what I meant,” he told reporters.
Lim also read out a transcript of what he had said: “Maybe we need the former chief minister to clarify. I do not want to mention Puan Sri. She may not be familiar with the rules required to follow. I do not want to blame her. She may get advice from the adviser. Otherwise, why do we need advisers? I don’t think we should go for the poor lady. Let’s leave the poor lady alone.”
He said he just meant to say “do not put too much pressure on her”.
“I was only trying to say that maybe she has been wrongly advised. If she’s wrongly advised, then you ask the adviser to explain,” he said.
“They are making an issue of nothing. It is now more important to address the issue at hand rather than talk about such personal attacks, which distract attention from the real issue.
“We should address the issue as to whether the members had the right to dissolve the organisation and distribute the money. This body was established for the wives of assemblymen and MPs, except from the Opposition.
“By refusing to address this issue, I think the people can judge for themselves. Why is it that they do not want to address this issue when the PBT constitution clearly states that this association is for the wives of the state government’s wakil rakyat and had expressly excluded the Opposition.”
theSun reported that PBT had followed Balkis, the association of wives of assemblymen and MPs in Selangor, in transferring its funds to Bakti, the federal association of wives of ministers and deputy ministers, an action the RoS is now scrutinising.
In reply, Chui said PBT donated the RM590,665 which was in its account before its dissolution. It gave RM350,000 to Bakti, RM220,000 to the Bureau on Learning Difficulties, and RM20,665 to the Penang Cheshire Home, Mental Health Association and Mount Miriam Hospital.
Jelutong MP Jeff Ooi then questioned the details of the donations. He alleged that checks showed Mount Miriam Hospital had yet to receive any amount greater than RM2,572.63, which was paid on April 1.
He also alleged that the Cheshire Home and Penang Mental Health Association received only RM1,000 each, while referring to the PBT members as “desperate housewives”.
On May 1, Chui called a press conference declaring that the former PBT members were not desperate housewives and issued a challenge to Lim and Ooi for an open debate over the handling of the group’s funds and its contentious dissolution.
They gave Lim and Ooi 48 hours to respond to the challenge.
Lim declined the challenge and invited Chui for a private meeting with him instead.
Chui then issued a media statement threatening to “take appropriate measures to defend our integrity and dignity”, and Lim’s political secretary, Ng Wei Aik, issued another statement, reiterating the invitation to Chui to meet with Lim.
PBT has turned down the invitation and declared that it will no longer engage in a war of words through the media with Ng or Lim.
On the state government’s next course of action, Lim said he will let the RoS decide.
Lim also said:
» he will chair the Penang Tourism Council, which will be set up within two weeks;
» there is a need for closer cooperation between the state and federal governments to develop the tourism industry in the state for mutual benefits;
» the tourism sector, which is the second largest income earner for the state, has remained stagnant for the past 10 years;
» Penang International Airport needs to be upgraded and the state hopes the federal government will upgrade it for the sake of the tourism industry.
No commission paid: Najib
‘SCORPENE AND SUKHOI PURCHASES MADE ACCORDING TO PROCEDURES’
by Tim Leonard
KUALA LUMPUR: No commission was paid by the government to any party for the purchase of the RM4.5 billion Scorpene submarines and the RM3.2 billion Sukhoi jets, Deputy Prime Minister Datuk Seri Najib Abdul Razak said yesterday.
Najib, who is also the defence minister, said allegations of corruption and cronyism were baseless as all these transactions were made in keeping with proper procurement procedures.
He was responding to calls by Opposition Leader Datin Seri Dr Wan Azizah Wan Ismail in the Dewan Rakyat on Monday to the prime minister to set up an independent commission to probe these purchases for which, she claimed, large amounts of commission were paid.
Speaking to reporters after presenting excellent service awards to Defence Ministry personnel in conjunction with Workers Day, Najib advised those who make such allegations to check their facts first.
The Defence Ministry also issued a statement that allegations that the ministry had paid RM540 million to Abdul Razak Baginda (an accused in the Altantuya Shaariibuu murder trial) as commission to secure the Scorpene deal were without basis.
It said a local company, Perimekar Sdn Bhd, was awarded a contract worth 114.96 million euros to provide support and coordination services for a period of six years. This was the amount that was misconstrued as “commissions”.
The company’s job scope included preparing accommodation facilities for 27 families and 156 submarine crew in France and Spain, preparing offices and health insurance policies for staff and crew, paying daily allowances of 50-60 euros a person and buying return flight tickets for the crew three times a year.
Perimekar is a joint venture company among Lembaga Tabung Angkatan Tentera, Boustead Holdings Bhd and KS Ombak Laut Sdn Bhd.
The ministry also clarified that the purchase of Sukhoi SU30MKM fighter jets was made through direct negotiations with Russian company Rosoboronexport and the Russians had engaged a Malaysian company to facilitate their business transactions here at their own prerogative.
“But the ministry is not involved and has no interest whatsoever in any company appointed by the Russians,” the statement read.
Asked about DAP chairman Karpal Singh’s recent comments on the Sultan of Perak that some quarters deemed seditious, Najib said it is up to the Attorney-General’s Chambers to decide if they want to press charges against him.
“His comments were seen as seditious and challenging the constitutional right of the Ruler, but it depends entirely on the A-G’s chambers to decide what to do next,” said Najib.
Karpal had recently claimed that the Sultan of Perak had no jurisdiction over the transfer of Datuk Jamry Sury from the Perak Religious Department.
Perak Umno Youth lodged a police report against him on Monday.
In Sungai Buloh, Umno vicepresident Tan Sri Muhyiddin Yassin said Karpal’s statement was an act of “rudeness”.
He said questioning the action of the Ruler openly was not the Malaysian custom and that the MP for Gelugor should have expressed his dissatisfaction in a more “courteous” and “polite” manner.
“We in the BN (Barisan Nasional) government had never expressed our views on such matters and if we have any (dissatisfaction), we will seek an audience and convey our views politely. So this (action by Karpal) lacks finesse,” Muhyiddin, who is also the international trade and industry minister, said at a press conference after visiting a furniture factory.
“We must respect (the monarchy). It’s not that we want to fight with anyone. Sometimes he (Karpal) thinks that after being in Parliament for 26 years, he knows everything, so there is no need to give respect to others, especially the Rulers.”
-------------------------------------------------------------------------------------
Sukhoi and Scorpene deals ‘properly made’
Source: The Star
KUALA LUMPUR: The purchase of Sukhoi jets and Scorpene submarines was done according to proper Government procurement procedures, said Datuk Seri Najib Tun Razak.
Perimeker Sdn Bhd, which is said to have received a commission for the deals, is a joint venture between Lembaga Tabung Angkatan Tentera, Boustead Holdings Bhd and K S Ombak Laut Sdn Bhd.
“I have already made statements previously. The purchase of the submarines was not something that was done without following acquisition procedures.
“The accounts of the joint venture companies were audited and people can look at it,” he told reporters after the Workers Day celebrations at the Defence Ministry level yesterday.
Najib said this when asked to comment on Opposition Leader Datin Seri Wan Azizah Wan Ismail call in Parliament on Monday for the Government to set up an independent commission of inquiry into the purchase of Scorpene submarines and Sukhoi jets.
She said the purchase of the two Scorpene submarines worth RM4.5bil through negotiated tender had attracted attention as a commission exceeding RM540mil had been paid to Perimeker Sdn Bhd, which she claimed was owned by Abdul Razak Baginda who was an adviser to Najib.
Wan Azizah also alleged that for the purchase of the Sukhoi jets worth RM3.2bil, IMT Defence Sdn Bhd, a company controlled by former Malacca chief minister Datuk Adib Adam, was paid a RM380mil commission.
Najib said in the case of the Sukhoi jets, the Russian Government had the right to appoint the agent.
“Don’t make wild allegations. You must focus on facts,” he said.
Asked to comment on a media report that the Anti-Corruption Agency was probing Padiberas Nasional Bhd and the Agriculture and Agro-based Industry Ministry regarding the import of rice, Najib said: “I’m not sure about the truth of the report. It is up to the ministry to look into it.”
On whether there was any mismanagement in Bernas over the creation of a stockpile, Najib said: “Bernas is a public listed company. Creating a stockpile would be beyond its means.
“That is why the Government announced two days ago about the approval of RM2.5bil for the food security programme. Part of the money will be used to purchase rice under the stockpile scheme.”
by Tim Leonard
KUALA LUMPUR: No commission was paid by the government to any party for the purchase of the RM4.5 billion Scorpene submarines and the RM3.2 billion Sukhoi jets, Deputy Prime Minister Datuk Seri Najib Abdul Razak said yesterday.
Najib, who is also the defence minister, said allegations of corruption and cronyism were baseless as all these transactions were made in keeping with proper procurement procedures.
He was responding to calls by Opposition Leader Datin Seri Dr Wan Azizah Wan Ismail in the Dewan Rakyat on Monday to the prime minister to set up an independent commission to probe these purchases for which, she claimed, large amounts of commission were paid.
Speaking to reporters after presenting excellent service awards to Defence Ministry personnel in conjunction with Workers Day, Najib advised those who make such allegations to check their facts first.
The Defence Ministry also issued a statement that allegations that the ministry had paid RM540 million to Abdul Razak Baginda (an accused in the Altantuya Shaariibuu murder trial) as commission to secure the Scorpene deal were without basis.
It said a local company, Perimekar Sdn Bhd, was awarded a contract worth 114.96 million euros to provide support and coordination services for a period of six years. This was the amount that was misconstrued as “commissions”.
The company’s job scope included preparing accommodation facilities for 27 families and 156 submarine crew in France and Spain, preparing offices and health insurance policies for staff and crew, paying daily allowances of 50-60 euros a person and buying return flight tickets for the crew three times a year.
Perimekar is a joint venture company among Lembaga Tabung Angkatan Tentera, Boustead Holdings Bhd and KS Ombak Laut Sdn Bhd.
The ministry also clarified that the purchase of Sukhoi SU30MKM fighter jets was made through direct negotiations with Russian company Rosoboronexport and the Russians had engaged a Malaysian company to facilitate their business transactions here at their own prerogative.
“But the ministry is not involved and has no interest whatsoever in any company appointed by the Russians,” the statement read.
Asked about DAP chairman Karpal Singh’s recent comments on the Sultan of Perak that some quarters deemed seditious, Najib said it is up to the Attorney-General’s Chambers to decide if they want to press charges against him.
“His comments were seen as seditious and challenging the constitutional right of the Ruler, but it depends entirely on the A-G’s chambers to decide what to do next,” said Najib.
Karpal had recently claimed that the Sultan of Perak had no jurisdiction over the transfer of Datuk Jamry Sury from the Perak Religious Department.
Perak Umno Youth lodged a police report against him on Monday.
In Sungai Buloh, Umno vicepresident Tan Sri Muhyiddin Yassin said Karpal’s statement was an act of “rudeness”.
He said questioning the action of the Ruler openly was not the Malaysian custom and that the MP for Gelugor should have expressed his dissatisfaction in a more “courteous” and “polite” manner.
“We in the BN (Barisan Nasional) government had never expressed our views on such matters and if we have any (dissatisfaction), we will seek an audience and convey our views politely. So this (action by Karpal) lacks finesse,” Muhyiddin, who is also the international trade and industry minister, said at a press conference after visiting a furniture factory.
“We must respect (the monarchy). It’s not that we want to fight with anyone. Sometimes he (Karpal) thinks that after being in Parliament for 26 years, he knows everything, so there is no need to give respect to others, especially the Rulers.”
-------------------------------------------------------------------------------------
Sukhoi and Scorpene deals ‘properly made’
Source: The Star
KUALA LUMPUR: The purchase of Sukhoi jets and Scorpene submarines was done according to proper Government procurement procedures, said Datuk Seri Najib Tun Razak.
Perimeker Sdn Bhd, which is said to have received a commission for the deals, is a joint venture between Lembaga Tabung Angkatan Tentera, Boustead Holdings Bhd and K S Ombak Laut Sdn Bhd.
“I have already made statements previously. The purchase of the submarines was not something that was done without following acquisition procedures.
“The accounts of the joint venture companies were audited and people can look at it,” he told reporters after the Workers Day celebrations at the Defence Ministry level yesterday.
Najib said this when asked to comment on Opposition Leader Datin Seri Wan Azizah Wan Ismail call in Parliament on Monday for the Government to set up an independent commission of inquiry into the purchase of Scorpene submarines and Sukhoi jets.
She said the purchase of the two Scorpene submarines worth RM4.5bil through negotiated tender had attracted attention as a commission exceeding RM540mil had been paid to Perimeker Sdn Bhd, which she claimed was owned by Abdul Razak Baginda who was an adviser to Najib.
Wan Azizah also alleged that for the purchase of the Sukhoi jets worth RM3.2bil, IMT Defence Sdn Bhd, a company controlled by former Malacca chief minister Datuk Adib Adam, was paid a RM380mil commission.
Najib said in the case of the Sukhoi jets, the Russian Government had the right to appoint the agent.
“Don’t make wild allegations. You must focus on facts,” he said.
Asked to comment on a media report that the Anti-Corruption Agency was probing Padiberas Nasional Bhd and the Agriculture and Agro-based Industry Ministry regarding the import of rice, Najib said: “I’m not sure about the truth of the report. It is up to the ministry to look into it.”
On whether there was any mismanagement in Bernas over the creation of a stockpile, Najib said: “Bernas is a public listed company. Creating a stockpile would be beyond its means.
“That is why the Government announced two days ago about the approval of RM2.5bil for the food security programme. Part of the money will be used to purchase rice under the stockpile scheme.”
Friday, May 2, 2008
No ‘approval to tint’ given, explains JPJ
MARANG: The Road Transport Department (JPJ) has not given written approval to any operator of car accessories to tint vehicles.
JPJ's Corporate and Research Department director Zairi Mat Ali said no such approval was given to any of the operators by the department to tint or use any type of films to filter ultraviolet light.
“What we have done is to set the standard for tinted films that could be used and that’s all,” he said after the closing of a JPJ community project in Alur Limbat on Wednesday.
Zairi was commenting on the complaints by vehicle owners that they received summonses from JPJ enforcement despite assurance by the accessory companies that they had received the necessary approval to tint.
He explained that all newly-registered vehicles had been affixed with tint films that could filter ultraviolet rays up to 20%.
Zairi said the JPJ standard for tinting is 70% for the front and 50% for the side and rear windows of a vehicle.
“Therefore, with the 20% standardised requirement, an owner is only allowed to increase the capacity to additional 30% for the side and rear windows,
“What is happening now is that the operators are overlooking the standardised requirement and the tinting reaches almost 100%,” he added.
Zairi said the vehicles failed the test on tinted glasses during checks by enforcement departments due to improper advice from operators.
Source: The Star
JPJ's Corporate and Research Department director Zairi Mat Ali said no such approval was given to any of the operators by the department to tint or use any type of films to filter ultraviolet light.
“What we have done is to set the standard for tinted films that could be used and that’s all,” he said after the closing of a JPJ community project in Alur Limbat on Wednesday.
Zairi was commenting on the complaints by vehicle owners that they received summonses from JPJ enforcement despite assurance by the accessory companies that they had received the necessary approval to tint.
He explained that all newly-registered vehicles had been affixed with tint films that could filter ultraviolet rays up to 20%.
Zairi said the JPJ standard for tinting is 70% for the front and 50% for the side and rear windows of a vehicle.
“Therefore, with the 20% standardised requirement, an owner is only allowed to increase the capacity to additional 30% for the side and rear windows,
“What is happening now is that the operators are overlooking the standardised requirement and the tinting reaches almost 100%,” he added.
Zairi said the vehicles failed the test on tinted glasses during checks by enforcement departments due to improper advice from operators.
Source: The Star
Wednesday, April 30, 2008
Bank Negara leaves OPR unchanged at 3.5%
PETALING JAYA: Bank Negara has decided to leave the overnight policy rate (OPR) unchanged at 3.5% after evaluating the downside risks to growth and the upside risks to inflation.
The central bank said the latest available data indicated that major industrial economies were experiencing a moderation of economic activities, which was likely to lead to slower global growth in the months ahead.
“While the slower external demand will have some moderating impact on the Malaysian economy, growth continues to be supported by an expansion in domestic demand,” it said in a statement issued yesterday following a meeting of its monetary policy committee.
The central bank said the strong imports of capital goods, manufacturing investment approvals and foreign direct investment inflows indicated sustained investment activity.
It said despite the global financial turmoil, domestic credit conditions were still favourable as demand for financing was underpinned by ample liquidity in the financial system.
Bank Negara said domestic food prices had risen due to the increase in global prices. The food price increase, it added, was a structural phenomenon that required measures to ensure adequate supply, the creation of appropriate incentive structures to promote higher food production, and making the production and distribution chain more efficient.
“The bank’s forecast of 2.5% to 3% average inflation in 2008 has built in some administered price adjustments,” it said.
Source: The Star
The central bank said the latest available data indicated that major industrial economies were experiencing a moderation of economic activities, which was likely to lead to slower global growth in the months ahead.
“While the slower external demand will have some moderating impact on the Malaysian economy, growth continues to be supported by an expansion in domestic demand,” it said in a statement issued yesterday following a meeting of its monetary policy committee.
The central bank said the strong imports of capital goods, manufacturing investment approvals and foreign direct investment inflows indicated sustained investment activity.
It said despite the global financial turmoil, domestic credit conditions were still favourable as demand for financing was underpinned by ample liquidity in the financial system.
Bank Negara said domestic food prices had risen due to the increase in global prices. The food price increase, it added, was a structural phenomenon that required measures to ensure adequate supply, the creation of appropriate incentive structures to promote higher food production, and making the production and distribution chain more efficient.
“The bank’s forecast of 2.5% to 3% average inflation in 2008 has built in some administered price adjustments,” it said.
Source: The Star
Tuesday, April 29, 2008
28 Ways To Save For A Rainy Day
Try these easy, down-to-earth ideas for cutting expenses and spending. Then use the freed-up cash to boost your emergency fund.
By Bankrate.com
Perhaps you've intended to start an emergency fund. The barrier has simply been a lack of funds left over at the end of the month to put aside.
To break the paycheck-to-paycheck cycle that's leaving your checking account balance low, examine your everyday expenses and look for ways you could slash unnecessary spending. Start by writing down all your expenses for a month. At the end of the month you'll likely see several money drains that you could plug.
Once you've identified the causes of your dwindling account balance, consider these tips for slashing your spending and freeing cash for your emergency fund. Bank any money you save in a high-yield savings account.
Cut down on phone extras
1. Get back to basics. Consider canceling services such as call waiting, caller ID, call forwarding and three-way calling on your land line. Do the same with your cell phone, cutting expensive frills.
After all, the point of a telephone is to make calls.
2. Call 411 for free. Do you make a lot of directory-assistance calls from your cell phone? Typically, cell phone providers charge a fee every time you call 411.
Instead, you can call 1-800-GOOG-411 (1-800-466-4411) to get the listing you want for free. Another free service, 1-800-FREE-411 (1-800-373-3411), requires you to listen to a short ad before you get your number.
3. Stop going the distance. Drop your long-distance carrier if you make infrequent long-distance phone calls. Instead, use a prepaid phone card, a dial-around service or even your cell phone if you've got the minutes.
4. Examine cell-phone usage. Are you exceeding your allotted monthly cell phone minutes each month or using far fewer minutes than your plan allows? Re-evaluate your calling plan and make changes to suit your needs. If you're paying for a household of users, consider whether everyone really needs his or her own line.
Learn feel-good financial tricks
5. Nix the huge tax refund. That annual $2,400 tax refund may feel great, but you're depriving yourself of $200 every month of the year. (See "Why I hate income-tax refunds.")
Don't give Uncle Sam an interest-free loan. Adjust your withholding allowances so that you're keeping an appropriate amount of money for yourself each month. Put the extra money in a high-yield savings account to make it work for you throughout the year.
Talk back: Do you have an emergency fund?
6. Pay in cash. Unless you're in the habit of paying your credit card bills in full each month, don't use the cards for anything you can eat or wear. Try to pay in cash to make yourself aware of how much you're spending. (See "Your 5-minute guide to credit cards.")
7. Live one pay raise behind. Rather than spending that 3% cost-of-living raise, add it to your emergency fund. And the next time you get a raise, increase your disposable income by the amount of your last raise.
Stretch your clothing budget
8. Shop smarter. Select articles of clothing you can use to make multiple outfits, in versatile colors that are easy to mix and match.
Stay away from trendy clothes, shoes and accessories you won't wear after they're no longer in fashion. Buy items that serve a dual purpose, such as work and weekend wear, if possible.
9. Minimize tailoring and dry-cleaning costs. Stick to buying wash-and-wear clothes when you can, and save the dry-clean-only clothes for special occasions. If possible, try not to buy clothes that need alterations, as those costs can add up, too.
10. Turn unworn clothes into money. Take the clothes you or other members of your family no longer wear -- that are still in good condition -- to a consignment shop. Or hold a yard sale.
Rev up auto savings
11. Plan your errands. Combine errands into one trip and plan your stops for the most efficient route. You'll save yourself time and money.
12. Buy retread tires instead of new tires. Retread tires are cheaper, safe and environmentally friendly. To learn more about retread tires and locate a local supplier, visit the Environmental Protection Agency's Web site.
13. Take it easy. Your vehicle will burn less gas if you accelerate and brake gradually.
Save on insurance costs
14. Analyze your homeowners coverage. Check if there's any coverage you have that you can do without. Consider raising your deductible to save money on premiums.
15. Compare health plans. Working couples can reduce out-of-pocket medical expenses and premiums by carefully comparing the costs of the benefits offered by each employer to find the best deal.
16. Get a break on car insurance for good behavior. Ask about discounts if you've gone a certain number of years without an accident or ticket, store your car in a garage or drive fewer than a certain number of miles each year.
17. Keep a good credit rating. Many insurance companies use your credit rating to determine whether to insure you and how much to charge.
18. Get rid of private mortgage insurance. If you have 20% equity in your home, you could qualify to start saving that money.
19. Adjust your auto coverage. If the kids have left for good, take them off the policy. If they are simply away at college, ask about a distant-student credit. Usually it applies if your child is a full-time student, has gone at least a certain distance to college and hasn't taken one of the family cars to campus.
For students who keep cars on campus, some insurance companies offer "good student" discounts to those who maintain a certain grade-point average.
Eat well for less
20. Keep your eyes open for new restaurants. They typically offer grand-opening specials.
21. Hunt for discounts. Check your local newspapers for advertisements of lunch and dinner specials, as well as early-bird specials. Look for coupons, too.
22. Cut back on your caffeine costs. Stop buying coffee at the chichi coffee joint down the street from work. Bringing coffee from home in a Thermos or brewing it in the break room will actually improve the quality of your morning shot of energy, as well as cut its cost dramatically. You can get 40 cups of coffee from a pound of beans.
Even gourmet beans can be purchased for $8 per pound. If you're spending $2 per day on coffee -- easy to do in most workplaces -- you'll go from spending $500 a year to about $50 by making your own. For the best savings (and flavor), buy whole beans and grind them yourself. Packaged ground coffee can cost a few dollars extra.
23. Bring your own bottle. Take cans of soda or bottled water to work instead of buying them out of a vending machine. Bottled water sells for 14 cents a bottle at a big-box grocery store, and soda is 16 cents a can (less for off-brands). Compare that with the 75 cents or more that you'll spend at the machine and it's a no-brainer.
You can go even further by cleaning your small plastic water bottles and replenishing them with drinking water from a gallon jug or from a household tap. (It's an environmentally friendly move, too.)
Entertain yourself on the cheap
24. Have fun staying home. Tell friends to each bring over a dish and host a potluck, game or movie night.
25. Read not, waste not. Cancel subscriptions to magazines and newspapers you haven't been reading. Or see if the publication has an online version you can access for free or less than a printed copy.
26. Evaluate your cable package. Do you really need 300-plus channels? Do you have time to watch those movie channels you're paying a premium price for? You can always rent movies when you want to watch a particular flick. Switch to basic cable and save a bundle each month.
27. Rent movies economically. Cut down the number of times you rent movies or try an online rental service that charges a flat rate each month to rent a certain number of movies. Shop around to find the best deal that suits your needs.
If you buy movies, check out the "pre-viewed" movies section at the video rental store, which offers previously viewed DVDs at a discount. You might find the same movie at a better price or get deals if you're buying several at a time.
28. Use the library. Besides books, you can borrow movies, music CDs and even exercise videos from the library. Check the selection available at your local library and keep yourself entertained for free.
-------------------------------------------------------------------------------------
There are no fixed rules that you must follow. Just choose whichever that's practical to you.
By Bankrate.com
Perhaps you've intended to start an emergency fund. The barrier has simply been a lack of funds left over at the end of the month to put aside.
To break the paycheck-to-paycheck cycle that's leaving your checking account balance low, examine your everyday expenses and look for ways you could slash unnecessary spending. Start by writing down all your expenses for a month. At the end of the month you'll likely see several money drains that you could plug.
Once you've identified the causes of your dwindling account balance, consider these tips for slashing your spending and freeing cash for your emergency fund. Bank any money you save in a high-yield savings account.
Cut down on phone extras
1. Get back to basics. Consider canceling services such as call waiting, caller ID, call forwarding and three-way calling on your land line. Do the same with your cell phone, cutting expensive frills.
After all, the point of a telephone is to make calls.
2. Call 411 for free. Do you make a lot of directory-assistance calls from your cell phone? Typically, cell phone providers charge a fee every time you call 411.
Instead, you can call 1-800-GOOG-411 (1-800-466-4411) to get the listing you want for free. Another free service, 1-800-FREE-411 (1-800-373-3411), requires you to listen to a short ad before you get your number.
3. Stop going the distance. Drop your long-distance carrier if you make infrequent long-distance phone calls. Instead, use a prepaid phone card, a dial-around service or even your cell phone if you've got the minutes.
4. Examine cell-phone usage. Are you exceeding your allotted monthly cell phone minutes each month or using far fewer minutes than your plan allows? Re-evaluate your calling plan and make changes to suit your needs. If you're paying for a household of users, consider whether everyone really needs his or her own line.
Learn feel-good financial tricks
5. Nix the huge tax refund. That annual $2,400 tax refund may feel great, but you're depriving yourself of $200 every month of the year. (See "Why I hate income-tax refunds.")
Don't give Uncle Sam an interest-free loan. Adjust your withholding allowances so that you're keeping an appropriate amount of money for yourself each month. Put the extra money in a high-yield savings account to make it work for you throughout the year.
Talk back: Do you have an emergency fund?
6. Pay in cash. Unless you're in the habit of paying your credit card bills in full each month, don't use the cards for anything you can eat or wear. Try to pay in cash to make yourself aware of how much you're spending. (See "Your 5-minute guide to credit cards.")
7. Live one pay raise behind. Rather than spending that 3% cost-of-living raise, add it to your emergency fund. And the next time you get a raise, increase your disposable income by the amount of your last raise.
Stretch your clothing budget
8. Shop smarter. Select articles of clothing you can use to make multiple outfits, in versatile colors that are easy to mix and match.
Stay away from trendy clothes, shoes and accessories you won't wear after they're no longer in fashion. Buy items that serve a dual purpose, such as work and weekend wear, if possible.
9. Minimize tailoring and dry-cleaning costs. Stick to buying wash-and-wear clothes when you can, and save the dry-clean-only clothes for special occasions. If possible, try not to buy clothes that need alterations, as those costs can add up, too.
10. Turn unworn clothes into money. Take the clothes you or other members of your family no longer wear -- that are still in good condition -- to a consignment shop. Or hold a yard sale.
Rev up auto savings
11. Plan your errands. Combine errands into one trip and plan your stops for the most efficient route. You'll save yourself time and money.
12. Buy retread tires instead of new tires. Retread tires are cheaper, safe and environmentally friendly. To learn more about retread tires and locate a local supplier, visit the Environmental Protection Agency's Web site.
13. Take it easy. Your vehicle will burn less gas if you accelerate and brake gradually.
Save on insurance costs
14. Analyze your homeowners coverage. Check if there's any coverage you have that you can do without. Consider raising your deductible to save money on premiums.
15. Compare health plans. Working couples can reduce out-of-pocket medical expenses and premiums by carefully comparing the costs of the benefits offered by each employer to find the best deal.
16. Get a break on car insurance for good behavior. Ask about discounts if you've gone a certain number of years without an accident or ticket, store your car in a garage or drive fewer than a certain number of miles each year.
17. Keep a good credit rating. Many insurance companies use your credit rating to determine whether to insure you and how much to charge.
18. Get rid of private mortgage insurance. If you have 20% equity in your home, you could qualify to start saving that money.
19. Adjust your auto coverage. If the kids have left for good, take them off the policy. If they are simply away at college, ask about a distant-student credit. Usually it applies if your child is a full-time student, has gone at least a certain distance to college and hasn't taken one of the family cars to campus.
For students who keep cars on campus, some insurance companies offer "good student" discounts to those who maintain a certain grade-point average.
Eat well for less
20. Keep your eyes open for new restaurants. They typically offer grand-opening specials.
21. Hunt for discounts. Check your local newspapers for advertisements of lunch and dinner specials, as well as early-bird specials. Look for coupons, too.
22. Cut back on your caffeine costs. Stop buying coffee at the chichi coffee joint down the street from work. Bringing coffee from home in a Thermos or brewing it in the break room will actually improve the quality of your morning shot of energy, as well as cut its cost dramatically. You can get 40 cups of coffee from a pound of beans.
Even gourmet beans can be purchased for $8 per pound. If you're spending $2 per day on coffee -- easy to do in most workplaces -- you'll go from spending $500 a year to about $50 by making your own. For the best savings (and flavor), buy whole beans and grind them yourself. Packaged ground coffee can cost a few dollars extra.
23. Bring your own bottle. Take cans of soda or bottled water to work instead of buying them out of a vending machine. Bottled water sells for 14 cents a bottle at a big-box grocery store, and soda is 16 cents a can (less for off-brands). Compare that with the 75 cents or more that you'll spend at the machine and it's a no-brainer.
You can go even further by cleaning your small plastic water bottles and replenishing them with drinking water from a gallon jug or from a household tap. (It's an environmentally friendly move, too.)
Entertain yourself on the cheap
24. Have fun staying home. Tell friends to each bring over a dish and host a potluck, game or movie night.
25. Read not, waste not. Cancel subscriptions to magazines and newspapers you haven't been reading. Or see if the publication has an online version you can access for free or less than a printed copy.
26. Evaluate your cable package. Do you really need 300-plus channels? Do you have time to watch those movie channels you're paying a premium price for? You can always rent movies when you want to watch a particular flick. Switch to basic cable and save a bundle each month.
27. Rent movies economically. Cut down the number of times you rent movies or try an online rental service that charges a flat rate each month to rent a certain number of movies. Shop around to find the best deal that suits your needs.
If you buy movies, check out the "pre-viewed" movies section at the video rental store, which offers previously viewed DVDs at a discount. You might find the same movie at a better price or get deals if you're buying several at a time.
28. Use the library. Besides books, you can borrow movies, music CDs and even exercise videos from the library. Check the selection available at your local library and keep yourself entertained for free.
-------------------------------------------------------------------------------------
There are no fixed rules that you must follow. Just choose whichever that's practical to you.
Price trading rules for Bursa?
By LOONG TSE MIN
Some retail investors believe counters with low share price and lacklustre trading should be de-listed.
PETALING JAYA: Trading volume in a number of lower liners has risen, with penny stocks such as Pilecon Engineering Bhd, PECD Bhd and Mesdaq-listed Wimems Corp Bhd now suspended from trading, having been heavily sold down to below 10 sen per share.
The feeling among some retail investors is that counters with low share price and lacklustre trading should be de-listed.
Apparently, the New York Stock Exchange (NYSE) has a “quantitative continued listed standard” rule to make it possible to de-list a stock that is trading below US$1 for 30 consecutive trading days.
So why not on the local bourse?
Bursa Malaysia Bhd chief regulatory officer Selvarany Rasiah said there was currently no policy on Bursa Malaysia to de-list penny stocks or securities that are trading below certain price levels.
“The present de-listing criteria are not based on price but on major non-compliance on the listed companies’ part with the Listing Requirements,'' she told StarBiz.
“The three listed issuers named are classified under PN17 and GN3 as the case may be, as having poor financial condition.”
Selvarany added that Bursa would continue to monitor developments domestically and internationally.
“Changes and improvements to the rules will be made as and when necessary, to keep pace with the changing market environment,” she added.
At present, Bursa has set several criteria and parameters, which if triggered, may result in the de-listing of a listed company.
These include failure to comply with specific rules stipulated in PN17/GN3 and PN16/GN2 (Cash Companies), and undercapitalised companies that have paid-up capital that is below the prescribed minimum paid-up capital of the respective boards.
Companies that fail to issue financial statements or other major non-compliance with the Listing Requirements may also trigger action to de-list.
Aseambankers Equity Research head Vincent Khoo told StarBiz he was not in favour of a de-listing criteria based on price or trading volume.
“It should be a matter of not meeting certain financial benchmarks and management (behaviour),” he said, adding that he personally felt that it was more up to the company rather than an issue of regulation.
“Since they are already trading on the exchange, it should really be up to the company directors to weigh the high cost of maintaining a listing versus the benefit, which is not so much if the share does not perform,” he added.
KSC Capital director of research Choong Khuat Hock said while it was true that there were price trading rules in the US market, a low trading price in Malaysia might not be a reflection of lower quality.
“They (Malaysian companies) are very clever in making share splits and bonus issues etc. which bring down the trading price.
“There is a perception here that with a lower share price, there is more interest in the stock,” he said.
Choong said when the market fell, many counters would inevitably trade below 10 sen per share, which might not necessarily reflect lower stock quality.
Some retail investors believe counters with low share price and lacklustre trading should be de-listed.
PETALING JAYA: Trading volume in a number of lower liners has risen, with penny stocks such as Pilecon Engineering Bhd, PECD Bhd and Mesdaq-listed Wimems Corp Bhd now suspended from trading, having been heavily sold down to below 10 sen per share.
The feeling among some retail investors is that counters with low share price and lacklustre trading should be de-listed.
Apparently, the New York Stock Exchange (NYSE) has a “quantitative continued listed standard” rule to make it possible to de-list a stock that is trading below US$1 for 30 consecutive trading days.
So why not on the local bourse?
Bursa Malaysia Bhd chief regulatory officer Selvarany Rasiah said there was currently no policy on Bursa Malaysia to de-list penny stocks or securities that are trading below certain price levels.
“The present de-listing criteria are not based on price but on major non-compliance on the listed companies’ part with the Listing Requirements,'' she told StarBiz.
“The three listed issuers named are classified under PN17 and GN3 as the case may be, as having poor financial condition.”
Selvarany added that Bursa would continue to monitor developments domestically and internationally.
“Changes and improvements to the rules will be made as and when necessary, to keep pace with the changing market environment,” she added.
At present, Bursa has set several criteria and parameters, which if triggered, may result in the de-listing of a listed company.
These include failure to comply with specific rules stipulated in PN17/GN3 and PN16/GN2 (Cash Companies), and undercapitalised companies that have paid-up capital that is below the prescribed minimum paid-up capital of the respective boards.
Companies that fail to issue financial statements or other major non-compliance with the Listing Requirements may also trigger action to de-list.
Aseambankers Equity Research head Vincent Khoo told StarBiz he was not in favour of a de-listing criteria based on price or trading volume.
“It should be a matter of not meeting certain financial benchmarks and management (behaviour),” he said, adding that he personally felt that it was more up to the company rather than an issue of regulation.
“Since they are already trading on the exchange, it should really be up to the company directors to weigh the high cost of maintaining a listing versus the benefit, which is not so much if the share does not perform,” he added.
KSC Capital director of research Choong Khuat Hock said while it was true that there were price trading rules in the US market, a low trading price in Malaysia might not be a reflection of lower quality.
“They (Malaysian companies) are very clever in making share splits and bonus issues etc. which bring down the trading price.
“There is a perception here that with a lower share price, there is more interest in the stock,” he said.
Choong said when the market fell, many counters would inevitably trade below 10 sen per share, which might not necessarily reflect lower stock quality.
Balkis' accounts not finalised before funds transferred out
By DHARMENDER SINGH
KLANG: The external auditors for the Wives of Selangor Assemblymen and MPs Welfare and Charity Organisation (Balkis) said yesterday they were not consulted before the body transferred its RM9.9mil funds.
Yee Choon Kong & Co principal Yee Choon Kong said the firm was never consulted by Balkis president Datin Seri Zahrah Kechik, its executive committee members or former Mentri Besar Datuk Seri Dr Mohd Khir Toyo prior to the transfer.
He said the organisation’s financial statements remained unaudited till now and the firm had not issued a signed Audit Report on Balkis’ conduct and financial affairs for the financial year ending Dec 31, 2007.
“My firm had on a number of occasions called the organisation’s treasurer Datin Suraimi Sapuan to send the financial records including bank statements, official receipt books, payment vouchers, supporting documents, fixed deposit receipts, minutes of meetings and the details of membership and subscription for 2007,” he said in a statement yesterday.
He said Balkis ignored the requests, adding that contrary to press reports, the accounts had not been finalised before the funds were transferred out.
Yee was commenting on a recent statement by Dr Khir that Balkis had consulted its auditors and legal advisors before transferring the funds to the Association of Wives of Ministers and Deputy Ministers (Bakti) and there was no “hanky panky” involved.
Balkis has come under fire from the Selangor Government over its controversial dissolution and the transfer of RM9.9mil from its coffers several days after Pakatan Rakyat came into power.
Yee said the firm was appointed as Balkis’ external auditor at the body’s last AGM held on June 30, 2007, in accordance with its constitution which required an external auditor licensed by the Finance Ministry to be appointed as its statutory auditor.
He added that he had no knowledge if a new auditor was hired by the body but pointed out that the law stipulated that any new firm hired was obliged to seek the reasons for the change from the previously hired firm.
Yee said the company had not received any such enquiry.
Selangor senior executive councillor Teresa Kok also questioned the validity of the Balkis emergency meeting on March 11.
She said Clause 12(c) of the Balkis constitution stipulated that the secretary must issue letters to members at least 14 days before holding the meeting.
“As the meeting was held on March 11, then the letters must have been sent out towards the end of February, which seems quite impossible as it was election campaigning time,” said Kok.
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Penang goes Balkis’ way
by R. Nadeswaran and Terence Fernandez
PETALING JAYA: Penang has joined the ranks of Selangor – transferring money from the wives’ association for “safekeeping” with Bakti, the federal Association of Wives of Ministers and Deputy Ministers.
Although the amount is small compared to the RM9.9 million which was transferred by the Association of Wives of State Assemblymen and Members of Parliament in Selangor (Balkis), its Penang equivalent – Bunga Tanjung – could only spare RM350,000. But it’s the principle involved.
In an immediate response, Penang Chief Minister Lim Guan Eng said he was shocked by the turn of events and asked for the relevant documents, adding that the state government was seeking legal advice.
“This is a charitable organisation and not a Barisan Nasional organisation or a sendirian berhad. I want Bakti to return the money as soon as possible plus interests. After all, it is in an interest-earning fixed deposit account,” he told theSun.
The minutes of a Bakti council meeting, a copy of which was obtained by theSun, among others, say: With the formation of Opposition State Governments in Penang and Selangor, action has been taken to dissolve the associations to prevent them from being taken over as the constitution would allow for the wife of the chief minister to become the Yang Di Pertua of the association. They are now in the midst of registering a new association although keeping the same name but limiting membership to wives of BN leaders.
The minutes go on to say that Bakti had been approached by Bunga Tanjung and Balkis to assist them to receive and manage their funds for their welfare activities in the interim period.
According to the minutes, Bakti, will hold these monies which can be utilised for welfare activities in Penang and Selangor accordingly. After the formation of the new associations, Bakti will transfer these funds to the respective bodies.
However, another portion of the minutes says: Pending the formation of the new associations, the monies transferred to Bakti will be disbursed to the respective associations but in accordance with Bakti’s constitution for welfare programmes in Penang and Selangor.
The minutes also state that “these matters have been discussed and cleared with Dato’ Helilah Yusof, Bakti’s legal adviser”. A three-page enclosure dated April 7 ended with the initials “HY”.
The enclosure, among others, states: Pending the formation of a new society that will be a successor to the now dissolved Balkis, the following is agreed to:
» A letter of undertaking will be executed to provide a framework of assistance between Bakti on one part and the remaining three office-bearers of Balkis (being the Trustees).
» While the establishment of a new society is still pending there arises an urgent project which relates to the upkeep and maintenance of a hostel for youths who are at the age of 17 and below. These are youths who face various forms of social problems. The hostel is still being actively operated and hence there arises an exigency of a situation where some expenditure requires to be disbursed and in particular certain amounts are already due to be paid or overdue.
» It is considered that the aforementioned hostel falls into the category of scheme that is suitable for adoption by Bakti and its project pendidikan as a project khas. Upon adoption of such a project, all related expenses towards the project could be financed from the fund itself by Bakti.
The enclosure concludes: “It is also the understanding that is to be incorporated in the above-mentioned letter of understanding that the fund will be duly returned to the new society that is to succeed Balkis once it is formally constituted."
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Penang to probe financial records of wives club, too
Source: The Star
PENANG: The state government has ordered its state financial officer to look into the status of Persatuan Bunga Tanjung, the association for former Barisan National state assemblymen wives, and its financial records.
Chief Minister Lim Guan Eng said he had asked Datuk Supiah Md Yusof to report back to him his findings.
Former chief minister Tan Sri Koh Tsu Koon’s wife, Puan Sri Chui Kah Peng, headed Bunga Tanjung.
It is understood the former officer bearers of the association have yet to vacate their seats even though the new state government took over the administration of the state last month. The wives of the DAP state assemblymen have yet to take over the membership of the organisation.
A source said Bunga Tanjung has about RM250,000 in its bank account.
Attempts to get the several wives of the former Barisan state assemblymen failed while DAP assemblymen refused to comment on the status of the association or the membership of their wives.
In Alor Star, the Wives of Kedah Assemblymen and Parliamentarians Welfare Body (Bidara) just has a token sum in its coffers, according to Bidara president Datin Seri Noraini Abdullah. She said funds were usually disbursed immediately after a fund-raising campaign.
“We do not accumulate funds. We hold fundraisers as and when the need arises. Usually in a year, we choose 10 charitable organisations and orphanages.
“We also give aid to needy handicapped people and hardcore poor folks. But we do not give aid to the same people year after year. We give aid to different groups of people each year,” she said yesterday.
She said that Bidara would continue to operate as usual, although Kedah was now under the Pakatan Rakyat Government.
Bidara is a non-governmental organisation that would continue to be under the control of the wives of present and past Barisan National elected representatives, she said.
Noraini also said Bidara was not giving up its RM300,000 premises at Jalan Sultanah.
“That premises is Bidara property. We do not see why we cannot continue operating from there.”
State executive councillor Amiruddin Hamzah said that wives of Pakatan Rakyat elected representatives might set up a similar body if it was legally not possible to take over Bidara.
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Neither law nor ethics in mind
by R. Nadeswaran
If in March 2007 I had "temporarily transferred" the LawCare Fund out, to ensure that the money would be spent for the welfare purposes intended, and because I was unsure whether (Datuk) Ambiga (Sreenivasan) might remove some of the names from the list of recipients, I would be (and should be) struck off by now. My face will also not suffer from dry skin, because people will spit at me wherever I go. Carry on insulting the intelligence of the people, if you must.
- Yeo Yang Poh (former President of the Bar Council)
THE above response to theSun’s front page report on the transfer of funds from Balkis to Bakti appeared in the Bar Council’s website last week. It puts the whole issue into context. In a nutshell, the movement of money from one account to another is illegal and the council has been quoted in The Star as saying that this could tantamount to criminal breach of trust.
But the spin doctors and certain sections of the media who are beholden to individuals and not the truth have joined the bandwagon in an attempt to exonerate Datin Seri Zaharah Kechik, the beleaguered wife of former Mentri Besar, Datuk Seri Dr Mohamad Khir Toyo from any wrongdoing.
However one looks at it, the whole exercise appears to have been carried out hastily without cognisance of law and procedure; ethics and morals and above all, common sense.
Donations to Balkis are exempt from tax, a privilege that is enjoyed by a select few and the all-important criteria is: the exemption is given ONLY for non-political bodies. Therefore, Balkis, in the eyes of the law, is apolitical although its membership is made of elected women wakil rakyat and in the case of men, their wives. There is a category for associate members, restricted to women who had been politicians or whose husbands had been elected wakil rakyat. They have no voting rights. Therefore, the issue of it being an exclusive "Barisan Nasional" club does not arise and ad-hoc decisions cannot be made by Zaharah, whose position as president is by virtue of being the Mentri Besar’s wife.
The issue that comes into question is the dissolution of Balkis. Zaharah, in her capacity as the former president (emphasis is the writer’s), has no power of dissolution. According the Balkis’ constitution, it can only be dissolved by two-thirds of the members at a special meeting convened at the request of at least one-fifth of "ordinary members".
The constitution is clear on such special meetings and it states it must be held within 30 days of receiving notice of such a requisition. It goes on to say that the notice and agenda of the meeting must be sent out by the secretary to members giving them 14 days’ notice.
Let’s work backwards. If the meeting was held on March 11, the notice must have been given on Feb 25 – at the latest. But her husband, then the Mentri Besar, was going around campaigning on the lines of "Zero Opposition in Selangor"! Did Zaharah get a written requisition from one-fifth of the members on Feb 11 – when Parliament was not even dissolved? Unless of course, some wives knew that their husbands won’t be occupying the seats of power!
Therefore, in short, this whole exercise of dissolution is void because procedures were not followed. This has been confirmed by the Registrar of Societies, who in his letter dated April 14 to the (new) Selangor Mentri Besar, says: "After going through the application to dissolve Balkis, we discovered that the information provided is incomplete. I have sent a letter asking Balkis to provide additional information within 30 days."
So, legally, Balkis is not dissolved. Therefore, no individual or factions can take it upon herself or themselves to transfer any monies to any other person or organisation.
Even if they had the power, they have defied their own constitution which states that upon dissolution, all monies should be donated to the government or a similar fund approved by the Inland Revenue Board (IRB). So, the inevitable question is: When was an application made to the IRB and if given the go ahead, when did it come?
Again, on March 11, Zaharah was no longer the president. There’s no such thing as "caretaker president" in its constitution. The only consolation she can take is that she can apply for associate member which does not come with voting rights, which she has not done to date.
But Bakti, the national body, cannot be absolved of blame for this shameful episode. How could it have accepted the money and held it in a separate account without checking if Balkis’s dissolution had been carried out in accordance with the law?
According to documents sighted by theSun, a sitting judge credited as "Bakti’s legal advisor" opined that it is all right. But Datuk Param Cumaraswamy, the former United Nations Special Rapporteur on the Independence of Judges and Lawyer said that the judge’s conduct was "likely to cause a reasonable suspicion that the judge allowed his private interests to come into conflict with his judicial duties, which could amount to a breach of the Judge’s Code of Ethics 1994".
Do remember, two wrongs don’t make a right.
And by the way, Mr Yeo, a lot of people are not yet walking around with wet skin!
KLANG: The external auditors for the Wives of Selangor Assemblymen and MPs Welfare and Charity Organisation (Balkis) said yesterday they were not consulted before the body transferred its RM9.9mil funds.
Yee Choon Kong & Co principal Yee Choon Kong said the firm was never consulted by Balkis president Datin Seri Zahrah Kechik, its executive committee members or former Mentri Besar Datuk Seri Dr Mohd Khir Toyo prior to the transfer.
He said the organisation’s financial statements remained unaudited till now and the firm had not issued a signed Audit Report on Balkis’ conduct and financial affairs for the financial year ending Dec 31, 2007.
“My firm had on a number of occasions called the organisation’s treasurer Datin Suraimi Sapuan to send the financial records including bank statements, official receipt books, payment vouchers, supporting documents, fixed deposit receipts, minutes of meetings and the details of membership and subscription for 2007,” he said in a statement yesterday.
He said Balkis ignored the requests, adding that contrary to press reports, the accounts had not been finalised before the funds were transferred out.
Yee was commenting on a recent statement by Dr Khir that Balkis had consulted its auditors and legal advisors before transferring the funds to the Association of Wives of Ministers and Deputy Ministers (Bakti) and there was no “hanky panky” involved.
Balkis has come under fire from the Selangor Government over its controversial dissolution and the transfer of RM9.9mil from its coffers several days after Pakatan Rakyat came into power.
Yee said the firm was appointed as Balkis’ external auditor at the body’s last AGM held on June 30, 2007, in accordance with its constitution which required an external auditor licensed by the Finance Ministry to be appointed as its statutory auditor.
He added that he had no knowledge if a new auditor was hired by the body but pointed out that the law stipulated that any new firm hired was obliged to seek the reasons for the change from the previously hired firm.
Yee said the company had not received any such enquiry.
Selangor senior executive councillor Teresa Kok also questioned the validity of the Balkis emergency meeting on March 11.
She said Clause 12(c) of the Balkis constitution stipulated that the secretary must issue letters to members at least 14 days before holding the meeting.
“As the meeting was held on March 11, then the letters must have been sent out towards the end of February, which seems quite impossible as it was election campaigning time,” said Kok.
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Penang goes Balkis’ way
by R. Nadeswaran and Terence Fernandez
PETALING JAYA: Penang has joined the ranks of Selangor – transferring money from the wives’ association for “safekeeping” with Bakti, the federal Association of Wives of Ministers and Deputy Ministers.
Although the amount is small compared to the RM9.9 million which was transferred by the Association of Wives of State Assemblymen and Members of Parliament in Selangor (Balkis), its Penang equivalent – Bunga Tanjung – could only spare RM350,000. But it’s the principle involved.
In an immediate response, Penang Chief Minister Lim Guan Eng said he was shocked by the turn of events and asked for the relevant documents, adding that the state government was seeking legal advice.
“This is a charitable organisation and not a Barisan Nasional organisation or a sendirian berhad. I want Bakti to return the money as soon as possible plus interests. After all, it is in an interest-earning fixed deposit account,” he told theSun.
The minutes of a Bakti council meeting, a copy of which was obtained by theSun, among others, say: With the formation of Opposition State Governments in Penang and Selangor, action has been taken to dissolve the associations to prevent them from being taken over as the constitution would allow for the wife of the chief minister to become the Yang Di Pertua of the association. They are now in the midst of registering a new association although keeping the same name but limiting membership to wives of BN leaders.
The minutes go on to say that Bakti had been approached by Bunga Tanjung and Balkis to assist them to receive and manage their funds for their welfare activities in the interim period.
According to the minutes, Bakti, will hold these monies which can be utilised for welfare activities in Penang and Selangor accordingly. After the formation of the new associations, Bakti will transfer these funds to the respective bodies.
However, another portion of the minutes says: Pending the formation of the new associations, the monies transferred to Bakti will be disbursed to the respective associations but in accordance with Bakti’s constitution for welfare programmes in Penang and Selangor.
The minutes also state that “these matters have been discussed and cleared with Dato’ Helilah Yusof, Bakti’s legal adviser”. A three-page enclosure dated April 7 ended with the initials “HY”.
The enclosure, among others, states: Pending the formation of a new society that will be a successor to the now dissolved Balkis, the following is agreed to:
» A letter of undertaking will be executed to provide a framework of assistance between Bakti on one part and the remaining three office-bearers of Balkis (being the Trustees).
» While the establishment of a new society is still pending there arises an urgent project which relates to the upkeep and maintenance of a hostel for youths who are at the age of 17 and below. These are youths who face various forms of social problems. The hostel is still being actively operated and hence there arises an exigency of a situation where some expenditure requires to be disbursed and in particular certain amounts are already due to be paid or overdue.
» It is considered that the aforementioned hostel falls into the category of scheme that is suitable for adoption by Bakti and its project pendidikan as a project khas. Upon adoption of such a project, all related expenses towards the project could be financed from the fund itself by Bakti.
The enclosure concludes: “It is also the understanding that is to be incorporated in the above-mentioned letter of understanding that the fund will be duly returned to the new society that is to succeed Balkis once it is formally constituted."
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Penang to probe financial records of wives club, too
Source: The Star
PENANG: The state government has ordered its state financial officer to look into the status of Persatuan Bunga Tanjung, the association for former Barisan National state assemblymen wives, and its financial records.
Chief Minister Lim Guan Eng said he had asked Datuk Supiah Md Yusof to report back to him his findings.
Former chief minister Tan Sri Koh Tsu Koon’s wife, Puan Sri Chui Kah Peng, headed Bunga Tanjung.
It is understood the former officer bearers of the association have yet to vacate their seats even though the new state government took over the administration of the state last month. The wives of the DAP state assemblymen have yet to take over the membership of the organisation.
A source said Bunga Tanjung has about RM250,000 in its bank account.
Attempts to get the several wives of the former Barisan state assemblymen failed while DAP assemblymen refused to comment on the status of the association or the membership of their wives.
In Alor Star, the Wives of Kedah Assemblymen and Parliamentarians Welfare Body (Bidara) just has a token sum in its coffers, according to Bidara president Datin Seri Noraini Abdullah. She said funds were usually disbursed immediately after a fund-raising campaign.
“We do not accumulate funds. We hold fundraisers as and when the need arises. Usually in a year, we choose 10 charitable organisations and orphanages.
“We also give aid to needy handicapped people and hardcore poor folks. But we do not give aid to the same people year after year. We give aid to different groups of people each year,” she said yesterday.
She said that Bidara would continue to operate as usual, although Kedah was now under the Pakatan Rakyat Government.
Bidara is a non-governmental organisation that would continue to be under the control of the wives of present and past Barisan National elected representatives, she said.
Noraini also said Bidara was not giving up its RM300,000 premises at Jalan Sultanah.
“That premises is Bidara property. We do not see why we cannot continue operating from there.”
State executive councillor Amiruddin Hamzah said that wives of Pakatan Rakyat elected representatives might set up a similar body if it was legally not possible to take over Bidara.
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Neither law nor ethics in mind
by R. Nadeswaran
If in March 2007 I had "temporarily transferred" the LawCare Fund out, to ensure that the money would be spent for the welfare purposes intended, and because I was unsure whether (Datuk) Ambiga (Sreenivasan) might remove some of the names from the list of recipients, I would be (and should be) struck off by now. My face will also not suffer from dry skin, because people will spit at me wherever I go. Carry on insulting the intelligence of the people, if you must.
- Yeo Yang Poh (former President of the Bar Council)
THE above response to theSun’s front page report on the transfer of funds from Balkis to Bakti appeared in the Bar Council’s website last week. It puts the whole issue into context. In a nutshell, the movement of money from one account to another is illegal and the council has been quoted in The Star as saying that this could tantamount to criminal breach of trust.
But the spin doctors and certain sections of the media who are beholden to individuals and not the truth have joined the bandwagon in an attempt to exonerate Datin Seri Zaharah Kechik, the beleaguered wife of former Mentri Besar, Datuk Seri Dr Mohamad Khir Toyo from any wrongdoing.
However one looks at it, the whole exercise appears to have been carried out hastily without cognisance of law and procedure; ethics and morals and above all, common sense.
Donations to Balkis are exempt from tax, a privilege that is enjoyed by a select few and the all-important criteria is: the exemption is given ONLY for non-political bodies. Therefore, Balkis, in the eyes of the law, is apolitical although its membership is made of elected women wakil rakyat and in the case of men, their wives. There is a category for associate members, restricted to women who had been politicians or whose husbands had been elected wakil rakyat. They have no voting rights. Therefore, the issue of it being an exclusive "Barisan Nasional" club does not arise and ad-hoc decisions cannot be made by Zaharah, whose position as president is by virtue of being the Mentri Besar’s wife.
The issue that comes into question is the dissolution of Balkis. Zaharah, in her capacity as the former president (emphasis is the writer’s), has no power of dissolution. According the Balkis’ constitution, it can only be dissolved by two-thirds of the members at a special meeting convened at the request of at least one-fifth of "ordinary members".
The constitution is clear on such special meetings and it states it must be held within 30 days of receiving notice of such a requisition. It goes on to say that the notice and agenda of the meeting must be sent out by the secretary to members giving them 14 days’ notice.
Let’s work backwards. If the meeting was held on March 11, the notice must have been given on Feb 25 – at the latest. But her husband, then the Mentri Besar, was going around campaigning on the lines of "Zero Opposition in Selangor"! Did Zaharah get a written requisition from one-fifth of the members on Feb 11 – when Parliament was not even dissolved? Unless of course, some wives knew that their husbands won’t be occupying the seats of power!
Therefore, in short, this whole exercise of dissolution is void because procedures were not followed. This has been confirmed by the Registrar of Societies, who in his letter dated April 14 to the (new) Selangor Mentri Besar, says: "After going through the application to dissolve Balkis, we discovered that the information provided is incomplete. I have sent a letter asking Balkis to provide additional information within 30 days."
So, legally, Balkis is not dissolved. Therefore, no individual or factions can take it upon herself or themselves to transfer any monies to any other person or organisation.
Even if they had the power, they have defied their own constitution which states that upon dissolution, all monies should be donated to the government or a similar fund approved by the Inland Revenue Board (IRB). So, the inevitable question is: When was an application made to the IRB and if given the go ahead, when did it come?
Again, on March 11, Zaharah was no longer the president. There’s no such thing as "caretaker president" in its constitution. The only consolation she can take is that she can apply for associate member which does not come with voting rights, which she has not done to date.
But Bakti, the national body, cannot be absolved of blame for this shameful episode. How could it have accepted the money and held it in a separate account without checking if Balkis’s dissolution had been carried out in accordance with the law?
According to documents sighted by theSun, a sitting judge credited as "Bakti’s legal advisor" opined that it is all right. But Datuk Param Cumaraswamy, the former United Nations Special Rapporteur on the Independence of Judges and Lawyer said that the judge’s conduct was "likely to cause a reasonable suspicion that the judge allowed his private interests to come into conflict with his judicial duties, which could amount to a breach of the Judge’s Code of Ethics 1994".
Do remember, two wrongs don’t make a right.
And by the way, Mr Yeo, a lot of people are not yet walking around with wet skin!
Globe-trotting VIP wives
OVERSEAS JAUNTS AMONG ‘ANNUAL ACTIVITIES’ OF ASSOCIATION OF SELANGOR ELECTED REPS’ SPOUSES
by R. Nadeswaran and Terence Fernandez
PETALING JAYA: While their husbands went on lawatan sambil belajar, the wives were not to be outdone. Shopping trips, overseas junkets and lavish functions have been the hallmark of activities of Balkis – Association of Wives of State Assemblymen and Members of Parliament in Selangor.
Nothing wrong with the junkets, except that their excesses were paid for by the state government and private donors, who contributed money in the belief that it was going to good causes.
Attempts to get an insight into its operations have come to naught – newly appointed state executive councillors Teresa Kok and Elizabeth Wong who had gone to the Balkis secretariat to seek information and collect files were refused entry. Staff had been “instructed” not to allow access to the office.
While Balkis has done its bit for the less fortunate – its most visible contribution being the setting up of Kompleks Wawasan Balkis (KWB) its RM5 million secretariat which doubles as a women’s shelter in Shah Alam – some of its programmes raise the question if Balkis’ philanthropy is a façade for a group of VIPs to enjoy themselves at the expense of generous donors who included state government subsidiaries.
In the eight years that Datuk Seri Dr Mohamad Khir Toyo has been mentri besar, his wife and Balkis president Datin Seri Zaharah Kechik (above) has led delegations to Europe, Hongkong and Australia.
According to sources in the state government, these trips were listed as among Balkis’ annual activities but had nothing to do with charity.
Balkis’ accounts have never been made public and no one is sure if they too had suffered the same fate as other documents – shredded and destroyed after Barisan Nasional (BN)’s rule in Selangor ended on March 8.
But the extravagance of Balkis has been laid bare by the Selangor State Development Corporation (PKNS) which said that it gave RM218,719.60 for KWB’s opening ceremony. It also revealed that 43,560 sq ft of land for the construction of KWB was given to Balkis at an undervalued RM250,000 – a contra deal to offset a loan between PKNS and the state government.
Private donors included the Sunway Group and LBS Bina Sdn Bhd. Other state government subsidiaries which contributed to Balkis included Kumpulan Darul Ehsan Berhad which gave RM268,862.
According to an official at one of the subsidiaries, there were regular requests from Balkis for financial contributions.
Balkis has been in the news since last Friday when theSun front-paged a report that its previous executive committee headed by Zaharah had transferred Balkis’ RM9.9 million to Bakti – the federal Organisation of Wives of Ministers – three days after Selangor fell to the Opposition in the general election. The previous executive committee also tried to dissolve the association and set up a new body – Balkis-BN.
The newly-elected Pakatan Rakyat state government is demanding the return
of the money, saying these actions were illegal. The Registrar of Societies has yet to approve Balkis’ dissolution and has asked for additional information from Zaharah’s administration.
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‘Balkis dissolved according to rules’
SHAH ALAM: The wife of former Selangor mentri besar, Datin Seri Zaharah Kechik, said yesterday that the dissolution of the Wives of Selangor Assemblymen and MPs Welfare and Charity Organisation (Balkis) was according to its constitution.
The dissolution took place on March 11 before Tan Sri Abdul Khalid Ibrahim was sworn in as mentri besar on March 13, she told a press conference.
“It means, I was the president at the time and had not relinquished the president’s post. Therefore, the question of me not having the power to chair the meeting called for the purpose of Balkis’ dissolution does not arise.”
According to Bernama, she said Balkis was dissolved with the consent of over two-thirds of its ordinary members during the extraordinary general meeting which was called by more than one-fifth of its ordinary members.
“The EGM and Balkis’ dissolution were in line with Article 15(1) and 12 of Balkis Constitution and minutes of the meeting can confirm that all legal provisions have been complied with.”
Following the dissolution, Balkis’ funds totalling RM9.9 million were transferred to the Wives of Ministers Welfare and Charity Organisation (Bakti) according to Article 15(2) of Balkis Constitution, Zaharah said.
She hoped that with the explanation, no one would make baseless accusations and slander. Legal action would be taken if they did, she said.
On Saturday, Khalid requested for Balkis’ dissolution to be withdrawn and the RM9.9 million transferred to Bakti to be returned.
Zaharah said that under Article 8 of Balkis constitution, the organisation could receive contributions from the government and government-linked companies.
“When Balkis received a contribution, it became Balkis’. Therefore, the question of the money being channelled out or returned to the government or any government-linked companies does not arise,” she said.
Datuk Seri Dr Mohamad Khir Toyo, who was present at the press conference, said the state government should talk to the legal firm appointed by Balkis, Sallehudin & Co, if it was not satisfied with the issue.
“They are trying to politicise the issue and do not read Balkis constitution correctly,” he said.
He said the RM9.9 million was donated specially for students adopted by Balkis and it was transferred straight to Bakti following Balkis’ dissolution and Bakti gave a written reply that it had received the money.
A newspaper report which said the money went to the account of a third party before it was transferred to Bakti was incorrect, he said.
by R. Nadeswaran and Terence Fernandez
PETALING JAYA: While their husbands went on lawatan sambil belajar, the wives were not to be outdone. Shopping trips, overseas junkets and lavish functions have been the hallmark of activities of Balkis – Association of Wives of State Assemblymen and Members of Parliament in Selangor.
Nothing wrong with the junkets, except that their excesses were paid for by the state government and private donors, who contributed money in the belief that it was going to good causes.
Attempts to get an insight into its operations have come to naught – newly appointed state executive councillors Teresa Kok and Elizabeth Wong who had gone to the Balkis secretariat to seek information and collect files were refused entry. Staff had been “instructed” not to allow access to the office.
While Balkis has done its bit for the less fortunate – its most visible contribution being the setting up of Kompleks Wawasan Balkis (KWB) its RM5 million secretariat which doubles as a women’s shelter in Shah Alam – some of its programmes raise the question if Balkis’ philanthropy is a façade for a group of VIPs to enjoy themselves at the expense of generous donors who included state government subsidiaries.
In the eight years that Datuk Seri Dr Mohamad Khir Toyo has been mentri besar, his wife and Balkis president Datin Seri Zaharah Kechik (above) has led delegations to Europe, Hongkong and Australia.
According to sources in the state government, these trips were listed as among Balkis’ annual activities but had nothing to do with charity.
Balkis’ accounts have never been made public and no one is sure if they too had suffered the same fate as other documents – shredded and destroyed after Barisan Nasional (BN)’s rule in Selangor ended on March 8.
But the extravagance of Balkis has been laid bare by the Selangor State Development Corporation (PKNS) which said that it gave RM218,719.60 for KWB’s opening ceremony. It also revealed that 43,560 sq ft of land for the construction of KWB was given to Balkis at an undervalued RM250,000 – a contra deal to offset a loan between PKNS and the state government.
Private donors included the Sunway Group and LBS Bina Sdn Bhd. Other state government subsidiaries which contributed to Balkis included Kumpulan Darul Ehsan Berhad which gave RM268,862.
According to an official at one of the subsidiaries, there were regular requests from Balkis for financial contributions.
Balkis has been in the news since last Friday when theSun front-paged a report that its previous executive committee headed by Zaharah had transferred Balkis’ RM9.9 million to Bakti – the federal Organisation of Wives of Ministers – three days after Selangor fell to the Opposition in the general election. The previous executive committee also tried to dissolve the association and set up a new body – Balkis-BN.
The newly-elected Pakatan Rakyat state government is demanding the return
of the money, saying these actions were illegal. The Registrar of Societies has yet to approve Balkis’ dissolution and has asked for additional information from Zaharah’s administration.
-------------------------------------------------------------------------------------
‘Balkis dissolved according to rules’
SHAH ALAM: The wife of former Selangor mentri besar, Datin Seri Zaharah Kechik, said yesterday that the dissolution of the Wives of Selangor Assemblymen and MPs Welfare and Charity Organisation (Balkis) was according to its constitution.
The dissolution took place on March 11 before Tan Sri Abdul Khalid Ibrahim was sworn in as mentri besar on March 13, she told a press conference.
“It means, I was the president at the time and had not relinquished the president’s post. Therefore, the question of me not having the power to chair the meeting called for the purpose of Balkis’ dissolution does not arise.”
According to Bernama, she said Balkis was dissolved with the consent of over two-thirds of its ordinary members during the extraordinary general meeting which was called by more than one-fifth of its ordinary members.
“The EGM and Balkis’ dissolution were in line with Article 15(1) and 12 of Balkis Constitution and minutes of the meeting can confirm that all legal provisions have been complied with.”
Following the dissolution, Balkis’ funds totalling RM9.9 million were transferred to the Wives of Ministers Welfare and Charity Organisation (Bakti) according to Article 15(2) of Balkis Constitution, Zaharah said.
She hoped that with the explanation, no one would make baseless accusations and slander. Legal action would be taken if they did, she said.
On Saturday, Khalid requested for Balkis’ dissolution to be withdrawn and the RM9.9 million transferred to Bakti to be returned.
Zaharah said that under Article 8 of Balkis constitution, the organisation could receive contributions from the government and government-linked companies.
“When Balkis received a contribution, it became Balkis’. Therefore, the question of the money being channelled out or returned to the government or any government-linked companies does not arise,” she said.
Datuk Seri Dr Mohamad Khir Toyo, who was present at the press conference, said the state government should talk to the legal firm appointed by Balkis, Sallehudin & Co, if it was not satisfied with the issue.
“They are trying to politicise the issue and do not read Balkis constitution correctly,” he said.
He said the RM9.9 million was donated specially for students adopted by Balkis and it was transferred straight to Bakti following Balkis’ dissolution and Bakti gave a written reply that it had received the money.
A newspaper report which said the money went to the account of a third party before it was transferred to Bakti was incorrect, he said.
Thursday, April 24, 2008
Rear Seat Belt Implementation
Wednesday April 9, 2008
Rear Seat Belts A Must Soon
By ROYCE CHEAH
PUTRAJAYA: The Road Safety Department will propose to the Government to allow a short grace period for motorists to get rear seatbelts installed and be “prepared mentally” before its implementation.
Department director-general Datuk Suret Singh said the rear seatbelt ruling would be enforced around the third quarter of this year.
“I feel we have given the public enough time to get ready,” he said, adding that the move for compulsory wearing of rear seatbelts did not need to be tabled in Parliament.
He said promotional activities encouraging the use of rear seatbelts had already taken place in the past year and it was time to move forward.
Previously, the Malaysian Institute for Road Safety Research said that more than 80% of cars had rear seatbelts installed.
Suret Singh also spoke about the department’s plans for the rest of the year and said emphasis would be on community-based programmes, such as the helmet-wearing initiatives, that were successfully implemented in 20 districts.
“This particular programme has been well documented and there is already a standard operating procedure so that we can implement it in any district in the country.”
Suret Singh said road safety education was taking off well in schools and now even included security personnel being trained as traffic wardens.
“It is an understanding we have with the company that the Education Ministry hires. They provide the security personnel and we train them as traffic wardens so that there is no need to hire extra people.”
Suret Singh said that by 2011, road safety education would have worked its way up to Form 4 students and that a whole new breed of motorists who took safety seriously would emerge as a result.
Friday April 11, 2008
Old Cars Should Be Given More Time To Fit Rear Seat Belt
By PAUL CHOO
KUALA LUMPUR: The Road Safety Department has proposed for private vehicles manufactured before 1995 be given more time to comply with the rear seat belt ruling, expected to be implemented over the next few months.
Its director-general Datuk Suret Singh said the suggestion would help ease the burden of those owning old vehicles from going through the hassle of fitting rear seat belts to comply with the ruling.
Various vehicles, depending on its model, do not come fitted with rear seat belts between the two years stated above. All vehicles after 1995 however, come with the amenity. Currently some 90% of vehicles on the road come fitted with rear safety belts.
"We encourage those with old vehicles to fit rear safety belts, and we are proposing for a three-year grace period for them to get it done.
"This is so that when the ruling is implemented they are not caught off guard as it would be unfair," he said during a press conference at the Sungai Besi toll plaza here on Friday after distributing stickers to motorists encouraging passengers to buckle up.
He added that his department is in talks with car manufacturers to help fit rear safety belts into old vehicles produced by them.
Suret Singh also said the department is proposing for a three-month grace period for enforcement officers to not issue summonses but let off offenders with just a warning.
"Once people start complying with the ruling, we estimate that the risk of heavy injuries or death can be reduced by 50%.
"This translates into saving around 350 lives per year based on last year's road accident studies carried out by the Malaysian Institute of Road Safety Research (Miros)," said Suret Singh.
Saturday April 26, 2008
Kancil, Kenari get exemption
By SIM LEOI LEOI
PUTRAJAYA: Perodua Kancil and Kenari cars manufactured between 1998 until mid-2004 will be exempted from the compulsory backseat belt rule when it comes into effect in June.
Road Safety Department director-general Datuk Suret Singh said this was because the models produced during this period did not have anchorage points for these seat belts.
“Some models that came out in the period between 2004 and 2005 have anchorage points but no rear seat belts.
“The department has proposed that Perodua offer special packages to owners of these Kancil and Kenari models to install rear seat belts.
“They have three years to do that,” he told reporters here yesterday.
Transport Minister Datuk Ong Tee Keat had announced that the Government would enforce the ruling requiring backseat passengers to wear safety belts beginning June.
However, no summonses will be given out until the end of August.
The ruling, which is only effective for cars registered after January 1995, is said to be able to prevent 350 road deaths a year.
Suret Singh also advised car owners whose vehicles were not fitted with rear seat belts not to have them installed at unauthorised workshops.
“They should instead go back to the car manufacturers. This is because retrofitting your cars with anchorage points for seat belts at these workshops may jeopardise the safety aspect of the cars and the passengers.
“This will not be money well spent. Some cars cannot be retrofitted with seat belts. That’s why the owners will have to refer to the manufacturers whether this can be done on their cars,” he said.
Suret Singh said that in cases where there were more than three backseat passengers, the person not wearing the seat belt would not be fined.
“This is because usually, there are only three seatbelts in the back seat. However, about 91% of the time, there are three or fewer passengers in the back,” he said, adding that police cars and Road Transport Department vehicles would also be required to have rear seat belts except in high-risk incidences.
The department, he added, would also carry out a campaign to promote the usage of baby and child car seats for children aged below 11 years.
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I'm just wondering why implementing on rear seat belts? Previously, there's implementation of 3rd brake lights, hands-free kits, etc. These accessories don’t come together as compulsory equipments. Does it effectively reduce the accident rates? Who really benefits from the implementation? Vehicle owners or manufacturers?
Would like to hear opinion from others regarding this issue.
Rear Seat Belts A Must Soon
By ROYCE CHEAH
PUTRAJAYA: The Road Safety Department will propose to the Government to allow a short grace period for motorists to get rear seatbelts installed and be “prepared mentally” before its implementation.
Department director-general Datuk Suret Singh said the rear seatbelt ruling would be enforced around the third quarter of this year.
“I feel we have given the public enough time to get ready,” he said, adding that the move for compulsory wearing of rear seatbelts did not need to be tabled in Parliament.
He said promotional activities encouraging the use of rear seatbelts had already taken place in the past year and it was time to move forward.
Previously, the Malaysian Institute for Road Safety Research said that more than 80% of cars had rear seatbelts installed.
Suret Singh also spoke about the department’s plans for the rest of the year and said emphasis would be on community-based programmes, such as the helmet-wearing initiatives, that were successfully implemented in 20 districts.
“This particular programme has been well documented and there is already a standard operating procedure so that we can implement it in any district in the country.”
Suret Singh said road safety education was taking off well in schools and now even included security personnel being trained as traffic wardens.
“It is an understanding we have with the company that the Education Ministry hires. They provide the security personnel and we train them as traffic wardens so that there is no need to hire extra people.”
Suret Singh said that by 2011, road safety education would have worked its way up to Form 4 students and that a whole new breed of motorists who took safety seriously would emerge as a result.
Friday April 11, 2008
Old Cars Should Be Given More Time To Fit Rear Seat Belt
By PAUL CHOO
KUALA LUMPUR: The Road Safety Department has proposed for private vehicles manufactured before 1995 be given more time to comply with the rear seat belt ruling, expected to be implemented over the next few months.
Its director-general Datuk Suret Singh said the suggestion would help ease the burden of those owning old vehicles from going through the hassle of fitting rear seat belts to comply with the ruling.
Various vehicles, depending on its model, do not come fitted with rear seat belts between the two years stated above. All vehicles after 1995 however, come with the amenity. Currently some 90% of vehicles on the road come fitted with rear safety belts.
"We encourage those with old vehicles to fit rear safety belts, and we are proposing for a three-year grace period for them to get it done.
"This is so that when the ruling is implemented they are not caught off guard as it would be unfair," he said during a press conference at the Sungai Besi toll plaza here on Friday after distributing stickers to motorists encouraging passengers to buckle up.
He added that his department is in talks with car manufacturers to help fit rear safety belts into old vehicles produced by them.
Suret Singh also said the department is proposing for a three-month grace period for enforcement officers to not issue summonses but let off offenders with just a warning.
"Once people start complying with the ruling, we estimate that the risk of heavy injuries or death can be reduced by 50%.
"This translates into saving around 350 lives per year based on last year's road accident studies carried out by the Malaysian Institute of Road Safety Research (Miros)," said Suret Singh.
Saturday April 26, 2008
Kancil, Kenari get exemption
By SIM LEOI LEOI
PUTRAJAYA: Perodua Kancil and Kenari cars manufactured between 1998 until mid-2004 will be exempted from the compulsory backseat belt rule when it comes into effect in June.
Road Safety Department director-general Datuk Suret Singh said this was because the models produced during this period did not have anchorage points for these seat belts.
“Some models that came out in the period between 2004 and 2005 have anchorage points but no rear seat belts.
“The department has proposed that Perodua offer special packages to owners of these Kancil and Kenari models to install rear seat belts.
“They have three years to do that,” he told reporters here yesterday.
Transport Minister Datuk Ong Tee Keat had announced that the Government would enforce the ruling requiring backseat passengers to wear safety belts beginning June.
However, no summonses will be given out until the end of August.
The ruling, which is only effective for cars registered after January 1995, is said to be able to prevent 350 road deaths a year.
Suret Singh also advised car owners whose vehicles were not fitted with rear seat belts not to have them installed at unauthorised workshops.
“They should instead go back to the car manufacturers. This is because retrofitting your cars with anchorage points for seat belts at these workshops may jeopardise the safety aspect of the cars and the passengers.
“This will not be money well spent. Some cars cannot be retrofitted with seat belts. That’s why the owners will have to refer to the manufacturers whether this can be done on their cars,” he said.
Suret Singh said that in cases where there were more than three backseat passengers, the person not wearing the seat belt would not be fined.
“This is because usually, there are only three seatbelts in the back seat. However, about 91% of the time, there are three or fewer passengers in the back,” he said, adding that police cars and Road Transport Department vehicles would also be required to have rear seat belts except in high-risk incidences.
The department, he added, would also carry out a campaign to promote the usage of baby and child car seats for children aged below 11 years.
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I'm just wondering why implementing on rear seat belts? Previously, there's implementation of 3rd brake lights, hands-free kits, etc. These accessories don’t come together as compulsory equipments. Does it effectively reduce the accident rates? Who really benefits from the implementation? Vehicle owners or manufacturers?
Would like to hear opinion from others regarding this issue.
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