Useful information and data can be used in developing the insurance rate.
Indices & Data | Human Development Index | Human Development Reports (HDR) | United Nations Development Programme (UNDP)
Sunday, September 30, 2012
Saturday, September 8, 2012
Making all housing more affordable
The property price is soaring high and we may end up more people renting house than owning it. In Singapore, there is a suggestion to stop building shoebox houses as this does not help the issue of home ownership eventhough Singapore is facing problem of land scarcity.
Making all housing more affordable
WHEN I watched Usain Bolt cross the 100m line in an Olympic record of 9.63 seconds during the recent concluded Olympic Games, I saw a young focused sprinter with only one objective in mind; to cross the finish line in the shortest possible time. He amazed the world with his stunning performance again.
This reminds me of our journey in making all Malaysian housing more affordable. It is a race that requires the same amount of focus from all relevant stakeholders including public sector which is the Government, and private sectors, i.e. the property developers, home buyers and NGOs. Furthermore, like in a race where the sprinters have a sight on the direction and goal, all stakeholders in the housing industry should be aligned to the same goal before starting the race.
To understand what exactly drives up property prices, we need to analyse the various factors that influence the price of a housing development in Malaysia. This may help us identify the root cause and provide us with the correct remedies to make Malaysian housing more affordable and sustainable.
Let's begin by looking at what are the major cost components of a property project. Twenty or 30 years ago, land acquisition was only about 5% to 10% of a project cost, but nowadays, it can take up to a sizable 20% to 30% of the whole development budget before any value-added works are carried out on the land itself.
Land prices are ever rising due to scarcity of urban land especially in the major cities. For example, a piece of land that used to cost RM10 per sq ft in Mont' Kiara during the late 80's now can cost up to RM300 per sq ft. With rising land cost “eating” up a significant portion of the development budget, house prices automatically increase as a result.
The next major cost is the holding cost and construction financing cost of the project. The longer it takes to complete a project, the higher the financing costs of the project which will then increase the price of a home.
I mentioned this before in my earlier articles that property projects are sometimes subjected to one, two or more years of gestation period to obtain all the necessary approvals from the relevant authorities before they can be launched. The lengthy approval period will definitely affect the holding costs, and slow down the supply of housing units. If this approval time is not shortened, the rising demand will only further push the prices up. This is the basic market influence of supply and demand.
Another factor that influences the cost of housing, as highlighted by developers surveyed during the recent Real Estate and Housing Developers' Association (Rehda) media briefing, is the unsold and unreleased Bumiputra units.
According to the latest half-yearly property industry survey by Rehda, the number one reason for unsold properties comes from unreleased bumiputra units and has been so for the past two years.
With the requirement to hold on to the unsold bumiputra units, the additional holding cost is inevitably spread out to all the other house buyers in the form of higher priced units. Unreleased bumiputra units may also create a false impression of supply shortage in the market, and these can cause the prices to increase again. While we recognise the need for a bumiputra housing policy, the various states should agree on a transparent, auto-release mechanism to release bumiputra units if unsold beyond 18 months of launch, to make houses more affordable for everyone.
Apart from land cost, holding, and construction financing costs, another cost component that adds to the price of properties is utilities costs. In the past, utility companies would be expected to build substations and water storage towers as well as lay electrical cables and water pipes. Today, all these are required to be completed by developers themselves.
In a roundtable discussion on housing affordability, Housing Buyers Association secretary-general, Chang Kim Loong highlighted that the privatisation of utility companies have turned them into profit-oriented companies. Taxpayers' monies are no longer utilised to provide the basic necessities that they have paid for. This ends up making houses cost more because home owners end up bearing the cost of the infrastructure for these utility services.
In the illustration mentioned at the start of this article, a sprinter must stay focused on the targeted goal of winning the race without mental and physical disadvantages before and during the sprint. Imagine if Bolt needed to run against a headwind and carried a few pounds on his back all along the race. Would he still able to break the Olympic record and become a legend?
In the race to make the price of all housing units more affordable, the issues of high land cost, lengthy approval period, additional utilities expenditure and unreleased bumiputra lots are the burdens that are holding houses back from becoming more affordable. Solve these dilemmas and we will begin to break records.
● FIABCI Asia-Pacific Regional Secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
Making all housing more affordable
WHEN I watched Usain Bolt cross the 100m line in an Olympic record of 9.63 seconds during the recent concluded Olympic Games, I saw a young focused sprinter with only one objective in mind; to cross the finish line in the shortest possible time. He amazed the world with his stunning performance again.
This reminds me of our journey in making all Malaysian housing more affordable. It is a race that requires the same amount of focus from all relevant stakeholders including public sector which is the Government, and private sectors, i.e. the property developers, home buyers and NGOs. Furthermore, like in a race where the sprinters have a sight on the direction and goal, all stakeholders in the housing industry should be aligned to the same goal before starting the race.
To understand what exactly drives up property prices, we need to analyse the various factors that influence the price of a housing development in Malaysia. This may help us identify the root cause and provide us with the correct remedies to make Malaysian housing more affordable and sustainable.
Land prices are ever rising due to scarcity of urban land especially in the major cities. For example, a piece of land that used to cost RM10 per sq ft in Mont' Kiara during the late 80's now can cost up to RM300 per sq ft. With rising land cost “eating” up a significant portion of the development budget, house prices automatically increase as a result.
The next major cost is the holding cost and construction financing cost of the project. The longer it takes to complete a project, the higher the financing costs of the project which will then increase the price of a home.
I mentioned this before in my earlier articles that property projects are sometimes subjected to one, two or more years of gestation period to obtain all the necessary approvals from the relevant authorities before they can be launched. The lengthy approval period will definitely affect the holding costs, and slow down the supply of housing units. If this approval time is not shortened, the rising demand will only further push the prices up. This is the basic market influence of supply and demand.
Another factor that influences the cost of housing, as highlighted by developers surveyed during the recent Real Estate and Housing Developers' Association (Rehda) media briefing, is the unsold and unreleased Bumiputra units.
According to the latest half-yearly property industry survey by Rehda, the number one reason for unsold properties comes from unreleased bumiputra units and has been so for the past two years.
With the requirement to hold on to the unsold bumiputra units, the additional holding cost is inevitably spread out to all the other house buyers in the form of higher priced units. Unreleased bumiputra units may also create a false impression of supply shortage in the market, and these can cause the prices to increase again. While we recognise the need for a bumiputra housing policy, the various states should agree on a transparent, auto-release mechanism to release bumiputra units if unsold beyond 18 months of launch, to make houses more affordable for everyone.
Apart from land cost, holding, and construction financing costs, another cost component that adds to the price of properties is utilities costs. In the past, utility companies would be expected to build substations and water storage towers as well as lay electrical cables and water pipes. Today, all these are required to be completed by developers themselves.
In a roundtable discussion on housing affordability, Housing Buyers Association secretary-general, Chang Kim Loong highlighted that the privatisation of utility companies have turned them into profit-oriented companies. Taxpayers' monies are no longer utilised to provide the basic necessities that they have paid for. This ends up making houses cost more because home owners end up bearing the cost of the infrastructure for these utility services.
In the illustration mentioned at the start of this article, a sprinter must stay focused on the targeted goal of winning the race without mental and physical disadvantages before and during the sprint. Imagine if Bolt needed to run against a headwind and carried a few pounds on his back all along the race. Would he still able to break the Olympic record and become a legend?
In the race to make the price of all housing units more affordable, the issues of high land cost, lengthy approval period, additional utilities expenditure and unreleased bumiputra lots are the burdens that are holding houses back from becoming more affordable. Solve these dilemmas and we will begin to break records.
● FIABCI Asia-Pacific Regional Secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.
ECB’s bond-buying welcomed but it’s temporary assuage to help stabilise the crisis-hit economy
Lets see how this may impact Malaysia economy within few weeks as this may increase the market confidence, so to speak, but again is this really the cure?
ECB’s bond-buying welcomed but it’s temporary assuage to help stabilise the crisis-hit economy
PETALING JAYA: The fresh measures taken by the European Central Bank (ECB) would calm the nerves of global markets but positive sentiments will wear out as the underlying eurozone crisis bubbles beneath the temporary relief.
Local economists favoured ECB's move to buy bonds on eurozone countries that need assistance but called it a temporary assuagement to help stabilise the crisis-hit economy.
RAM Rating Services Sdn Bhd chief economist Dr Yeah Kim Leng said the ECB's unlimited bond purchase would immediately “bring some calm to the market, especially over the sovereign debt of the periperal countries in the eurozone”.
Yeah: ‘It will prevent global demand from further decelerating.’ “Although the crisis is yet to be resolved, at least this has provided relief to the highly indebted countries as it should help cap their borrowing cost from rising further,” he told StarBizWeek.
He added that the relief would help eurozone countries refocus their attention on restructuring, particularly in terms of growth generation and job creation. “It will prevent global demand from further decelerating.”
He believed that the bond-buying programme would restrain the soft patch in the global economy to within the third quarter of this year or, at most, the fourth quarter.
“We should be able to see growth stability in the last quarter (as) the attention has now shifted towards fiscal and monetary stimulus whether in the United States or the eurozone as well as large emerging countries like China to bolster growth,” he said.
Yeah opined that the measure taken was a major commitment that should help ensure the euro monetary zone kept intact.
As for the impact on Malaysia, he said sentiments would have been lifted among businesses.
Alliance Investment Bank Bhd chief economist Manokaran Mottain also saw the measure as a potential boost to Malaysia-eurozone trade as financial markets became more stable.
“Before a year ago, trade (between the two) had been improving fast but then the crisis slowed (it) down,” he said. “Our market share (for exports) to Europe has been improving and the ECB's announcement will provide some strength for them to continue importing our goods.”
However, he believed the buoyed sentiments would only be short term. “I would say one or two months but hopefully ECB will provide more news and information on the bond purchase.”
MIDF Research economist Anthony Dass said in a report that the bond-buying programme “will give some breathing space but not solve the deep structural problems of euro and its common currency”.
While he expects the bond-buying to reduce the pressure on Spain and Italy if they choose the assistance, “our concern is that a bond speculators' run on Italy and Spain, the third and fourth-largest economies in the eurozone, would overwhelm the European bailout funds”.
Dass said this would pose a fundamental crisis for the euro union, possibly sinking the currency, long before European politicians could put in place the necessary legal basis they had agreed to in principle for maintaining fiscal discipline and banking health in eurozone countries.
In another move to tackle the eurozone financial crisis, ECB announced on Thursday that it would buy bonds issued by heavily-indebted eurozone in open markets under strict conditions. The interesting twist here is that ECB would buy unlimited amount of bonds with maturity of up to three years.
To that move, local economists harboured favourable views, citing it as a sign the authorities are serious about keeping the eurozone together.
ECB’s bond-buying welcomed but it’s temporary assuage to help stabilise the crisis-hit economy
PETALING JAYA: The fresh measures taken by the European Central Bank (ECB) would calm the nerves of global markets but positive sentiments will wear out as the underlying eurozone crisis bubbles beneath the temporary relief.
Local economists favoured ECB's move to buy bonds on eurozone countries that need assistance but called it a temporary assuagement to help stabilise the crisis-hit economy.
RAM Rating Services Sdn Bhd chief economist Dr Yeah Kim Leng said the ECB's unlimited bond purchase would immediately “bring some calm to the market, especially over the sovereign debt of the periperal countries in the eurozone”.
Yeah: ‘It will prevent global demand from further decelerating.’ He added that the relief would help eurozone countries refocus their attention on restructuring, particularly in terms of growth generation and job creation. “It will prevent global demand from further decelerating.”
He believed that the bond-buying programme would restrain the soft patch in the global economy to within the third quarter of this year or, at most, the fourth quarter.
“We should be able to see growth stability in the last quarter (as) the attention has now shifted towards fiscal and monetary stimulus whether in the United States or the eurozone as well as large emerging countries like China to bolster growth,” he said.
Yeah opined that the measure taken was a major commitment that should help ensure the euro monetary zone kept intact.
As for the impact on Malaysia, he said sentiments would have been lifted among businesses.
Alliance Investment Bank Bhd chief economist Manokaran Mottain also saw the measure as a potential boost to Malaysia-eurozone trade as financial markets became more stable.
“Before a year ago, trade (between the two) had been improving fast but then the crisis slowed (it) down,” he said. “Our market share (for exports) to Europe has been improving and the ECB's announcement will provide some strength for them to continue importing our goods.”
However, he believed the buoyed sentiments would only be short term. “I would say one or two months but hopefully ECB will provide more news and information on the bond purchase.”
MIDF Research economist Anthony Dass said in a report that the bond-buying programme “will give some breathing space but not solve the deep structural problems of euro and its common currency”.
While he expects the bond-buying to reduce the pressure on Spain and Italy if they choose the assistance, “our concern is that a bond speculators' run on Italy and Spain, the third and fourth-largest economies in the eurozone, would overwhelm the European bailout funds”.
Dass said this would pose a fundamental crisis for the euro union, possibly sinking the currency, long before European politicians could put in place the necessary legal basis they had agreed to in principle for maintaining fiscal discipline and banking health in eurozone countries.
In another move to tackle the eurozone financial crisis, ECB announced on Thursday that it would buy bonds issued by heavily-indebted eurozone in open markets under strict conditions. The interesting twist here is that ECB would buy unlimited amount of bonds with maturity of up to three years.
To that move, local economists harboured favourable views, citing it as a sign the authorities are serious about keeping the eurozone together.
Producing effective teachers and critical learners the focus of national blueprint - Nation | The Star Online
Producing effective teachers and critical learners the focus of national blueprint - Nation | The Star Online
PETALING JAYA: The focus of the National Education Blueprint 2013-2025 will be on the making of effective teachers and critical learners.
The two elements will get greater emphasis in the transformation of the education system, under the blueprint to be unveiled on Tuesday.
Measures, some old and some new, will be taken to ensure that more effective teaching takes place in the classroom to produce students who are more than mere rote learners.
In acknowledging weaknesses in the system and how below average our students rank in international assessments, the Government will review and improve primary and secondary school curricula to produce learners with better thinking skills.
There is concern over the declining performance among students in external tests although there are pockets of high achievers and international award-winning students, as well as excellent schools, including the 66 designated High Performing Schools.
To achieve teaching excellence, the teaching profession is likely to be made more attractive to draw high calibre graduates with more avenues for promotions and career growth.
These are among some of measures that Prime Minister Datuk Seri Najib Tun Razak is expected to share when he unveils the preliminary blueprint. The event will be aired live over RTM, TV3 and Astro at 10am.
The blueprint is expected to take stock of both the successes and shortcomings of the education system and from there, chart an action plan to move it towards world-class education.
With Malaysia being one of the countries with the highest percentage of the national budget (16% in 2011) set aside for education, there are high expectations for the returns on the investment.
The ministry is expected to review this under the blueprint and look for more effective ways to get value for the money spent, in terms of student outcomes.
Unlike the previous education reform that paid greater attention to physical infrastructure and systems, the blueprint for 2013 to 2025 looks at teachers as the driving force behind a superior education system. Hence, teacher training, retraining and “up-skilling” will be priorities.
For example, 70,000 English teachers have to sit for the Cambridge Placement Test and those found to be low or non-proficient would be given intensive “up-skilling” courses.
Steps such as this have already been taken to get the ball rolling even before the official implementation of the blueprint under the purview of Deputy Prime Minister and Education Minister Tan Sri Muhyiddin Yassin.
After the document is made public, the Education Ministry will continue to gather feedback from stakeholders.
The information will be fine-tuned and compiled in the final blueprint to be submitted to the Cabinet by December.
It has been a ground-breaking achievement for the ministry to put together the preliminary blueprint, after garnering views of international bodies like the World Bank and Unesco, local universities and organisations and most importantly, engaging the people through roundtable and townhall discussions over the past year.
Naturally, stakeholders from parents and the community to the private sector as well as state education departments should have a say as well as a role in raising the bar for the country’s education system.
A worrying development is the growing homogenous learning environments with the mushrooming of private and international schools in addition to existing vernacular and agama schools. Thus, programmes that foster national unity are likely to get much-needed attention.
Another concern is the gender achievement gap, as shown by the fact that 70% of the country’s undergraduates are females. Questions are being asked as to why boys are lagging so far behind in school.
This has been an issue the ministry has been grappling with and is expected to be redressed under the blueprint.
There is greater awareness that our students will be best served in a global workforce if they are bilingual, if not trilingual, hence the need to brush up on English – the language that Malaysian students are generally weaker in.
Najib has already expressed his desire to see English Literature in the school curriculum and this has already resonated well with parents and teachers.
Interestingly, in the preparation for the blueprint, the document was completed in English before work began on the Bahasa Malaysia version.
PETALING JAYA: The focus of the National Education Blueprint 2013-2025 will be on the making of effective teachers and critical learners.
The two elements will get greater emphasis in the transformation of the education system, under the blueprint to be unveiled on Tuesday.
Measures, some old and some new, will be taken to ensure that more effective teaching takes place in the classroom to produce students who are more than mere rote learners.
In acknowledging weaknesses in the system and how below average our students rank in international assessments, the Government will review and improve primary and secondary school curricula to produce learners with better thinking skills.
There is concern over the declining performance among students in external tests although there are pockets of high achievers and international award-winning students, as well as excellent schools, including the 66 designated High Performing Schools.
To achieve teaching excellence, the teaching profession is likely to be made more attractive to draw high calibre graduates with more avenues for promotions and career growth.
These are among some of measures that Prime Minister Datuk Seri Najib Tun Razak is expected to share when he unveils the preliminary blueprint. The event will be aired live over RTM, TV3 and Astro at 10am.
The blueprint is expected to take stock of both the successes and shortcomings of the education system and from there, chart an action plan to move it towards world-class education.
With Malaysia being one of the countries with the highest percentage of the national budget (16% in 2011) set aside for education, there are high expectations for the returns on the investment.
The ministry is expected to review this under the blueprint and look for more effective ways to get value for the money spent, in terms of student outcomes.
Unlike the previous education reform that paid greater attention to physical infrastructure and systems, the blueprint for 2013 to 2025 looks at teachers as the driving force behind a superior education system. Hence, teacher training, retraining and “up-skilling” will be priorities.
For example, 70,000 English teachers have to sit for the Cambridge Placement Test and those found to be low or non-proficient would be given intensive “up-skilling” courses.
Steps such as this have already been taken to get the ball rolling even before the official implementation of the blueprint under the purview of Deputy Prime Minister and Education Minister Tan Sri Muhyiddin Yassin.
After the document is made public, the Education Ministry will continue to gather feedback from stakeholders.
The information will be fine-tuned and compiled in the final blueprint to be submitted to the Cabinet by December.
It has been a ground-breaking achievement for the ministry to put together the preliminary blueprint, after garnering views of international bodies like the World Bank and Unesco, local universities and organisations and most importantly, engaging the people through roundtable and townhall discussions over the past year.
Naturally, stakeholders from parents and the community to the private sector as well as state education departments should have a say as well as a role in raising the bar for the country’s education system.
A worrying development is the growing homogenous learning environments with the mushrooming of private and international schools in addition to existing vernacular and agama schools. Thus, programmes that foster national unity are likely to get much-needed attention.
Another concern is the gender achievement gap, as shown by the fact that 70% of the country’s undergraduates are females. Questions are being asked as to why boys are lagging so far behind in school.
This has been an issue the ministry has been grappling with and is expected to be redressed under the blueprint.
There is greater awareness that our students will be best served in a global workforce if they are bilingual, if not trilingual, hence the need to brush up on English – the language that Malaysian students are generally weaker in.
Najib has already expressed his desire to see English Literature in the school curriculum and this has already resonated well with parents and teachers.
Interestingly, in the preparation for the blueprint, the document was completed in English before work began on the Bahasa Malaysia version.
Saturday, January 22, 2011
The Warriors
I have a few friends who has served his notice recently. Luckily, they have a good offer from other organization with a good perks.
New office with new environment, new challenges, new cultures and values where one must adapt or change it to a positive attitude and motivation. New role with new responsibility requires the concrete heart to strive to change the surroundings.
Like a warrior in the battle field, he must be able to assess the situational factors by having a quick SWOT analysis, for instance. He must also be able to calculate his soldier's strenghts, weaknesses. He should be able to smell any opportunity and threat that can give him advantage to win the war.
In a corporate environment, a warrior also needs to assess the current situational and from there develop a plan on how best to tackle the issue. After developing a structured plan, then come into execution which requires high level of teamwork. Often in executing a task, there will be a conflict that might jeopardize the plan. This is where a control and monitoring is very important in order to counter minimize the setback. Not only that, a warrior sometimes need to show the human touch where he must be able to explain the benefits of the plan execution.
New office with new environment, new challenges, new cultures and values where one must adapt or change it to a positive attitude and motivation. New role with new responsibility requires the concrete heart to strive to change the surroundings.
Like a warrior in the battle field, he must be able to assess the situational factors by having a quick SWOT analysis, for instance. He must also be able to calculate his soldier's strenghts, weaknesses. He should be able to smell any opportunity and threat that can give him advantage to win the war.
In a corporate environment, a warrior also needs to assess the current situational and from there develop a plan on how best to tackle the issue. After developing a structured plan, then come into execution which requires high level of teamwork. Often in executing a task, there will be a conflict that might jeopardize the plan. This is where a control and monitoring is very important in order to counter minimize the setback. Not only that, a warrior sometimes need to show the human touch where he must be able to explain the benefits of the plan execution.
Saturday, January 15, 2011
Pros hired to detect Fraud
PETALING JAYA: Concerned with the increase in fraudulent claims, insurance firms are now recruiting engineers, surveyors and accountants to work as loss adjusters.
Association of Malaysian Loss Adjusters (AMLA) chairman Lee Thim Fook said these professionals were vital in checking the wrongdoings in the industry.
“We need the expertise of each of these professionals as insurance claims encompass a wide area of interest and we have to get the right people for the job,” he said.
Lee said he was unable to provide specific details and data on the extent of the problem in Malaysia, but judging by the cases globally, fraudulent cases had been on the rise over the past few years.
He said other than hiring engineers, surveyors and accountants, other specialists in other areas were also recruited as adjusters.
“Each of them have specific skills which are vital in detecting fraud claims.
“We also collaborate with related bodies like the Malaysian Insurance Institute to conduct training for adjusters,” he said.
On top of that, Lee said conferences pertaining to fraud were organised regularly to keep adjusters abreast with current trends.
He noted that many claimants would stop pursuing their claims once insurers repudiated their claims.
“Insurance fraud which can be broadly classified as ‘planned insurance fraud’ and ‘opportunistic insurance fraud’ is a serious matter and is punishable under the Penal Code,” he said.
For more information, visit : http://thestar.com.my/news/story.asp?file=/2011/1/15/starprobe/7806562&sec=starprobe
Association of Malaysian Loss Adjusters (AMLA) chairman Lee Thim Fook said these professionals were vital in checking the wrongdoings in the industry.
“We need the expertise of each of these professionals as insurance claims encompass a wide area of interest and we have to get the right people for the job,” he said.
Lee said he was unable to provide specific details and data on the extent of the problem in Malaysia, but judging by the cases globally, fraudulent cases had been on the rise over the past few years.
He said other than hiring engineers, surveyors and accountants, other specialists in other areas were also recruited as adjusters.
“Each of them have specific skills which are vital in detecting fraud claims.
“We also collaborate with related bodies like the Malaysian Insurance Institute to conduct training for adjusters,” he said.
On top of that, Lee said conferences pertaining to fraud were organised regularly to keep adjusters abreast with current trends.
He noted that many claimants would stop pursuing their claims once insurers repudiated their claims.
“Insurance fraud which can be broadly classified as ‘planned insurance fraud’ and ‘opportunistic insurance fraud’ is a serious matter and is punishable under the Penal Code,” he said.
For more information, visit : http://thestar.com.my/news/story.asp?file=/2011/1/15/starprobe/7806562&sec=starprobe
Sunday, January 9, 2011
Likely hike in food prices
PETALING JAYA: Consumers may have to fork out more for their foodstuff now that several food and beverage industry players have been hit with a RM600 increase per tonne in the price of sugar.
Sugar refineries issued a notification on Dec 31, informing 17 manufacturers of the price increase effective Jan 1.
The price for coarse grain sugar is now RM2,540 per tonne, up from RM1,940, while that of fine grain sugar has risen to RM2,620 per tonne from RM2,020.
However, manufacturers have expressed surprise at the lack of an official government announcement.
Fraser and Neaves Holdings Bhd (F&N) chief executive officer Datuk Ng Jui Sia said he was confused, adding that the Government normally announced any increase before such a notification from suppliers.
“I understand the rationale for the price adjustment. The problem is that we received such short notice and had no time to plan or prepare for it,” he said, adding that he was also surprised that the change came a month before Chinese New Year.
Permanis chief executive officer Erwin Selvarajah said he was unaware of the price increase.
“I was merely informed of a meeting with the Domestic Trade, Cooperatives and Consumerism Ministry on Monday to discuss certain issues,” he said.
Federation of Malaysian Manufacturers president Tan Sri Mustafa Mansur confirmed that it would be having the dialogue.
“We want to get ministry clarification on the price increase. The 17 manufacturers want to discuss how it will be implemented,” he said.
A spokesman for one of the country’s four sugar refineries said the increase affected only a certain segment of the market.
“Only the biggest players are involved. A government announcement would only be made if the entire market was affected,” he said, adding that it was normal for a last-minute notification.
When contacted, ministry secretary-general Datuk Mohd Zain Mohd Dom said manufacturers had been warned that they might not be able to buy subsidised sugar any more in view of the rise in world sugar price.
He said the Government only had RM400mil left from the initial RM1.6bil fund to subsidise sugar at the current price of RM2.10 per kilo.
On the notification before Chinese New Year, he said the Government could not afford to spend so much money on sugar subsidies for another month if they waited until after the festival.
Sugar refineries issued a notification on Dec 31, informing 17 manufacturers of the price increase effective Jan 1.
The price for coarse grain sugar is now RM2,540 per tonne, up from RM1,940, while that of fine grain sugar has risen to RM2,620 per tonne from RM2,020.
However, manufacturers have expressed surprise at the lack of an official government announcement.
Fraser and Neaves Holdings Bhd (F&N) chief executive officer Datuk Ng Jui Sia said he was confused, adding that the Government normally announced any increase before such a notification from suppliers.
“I understand the rationale for the price adjustment. The problem is that we received such short notice and had no time to plan or prepare for it,” he said, adding that he was also surprised that the change came a month before Chinese New Year.
Permanis chief executive officer Erwin Selvarajah said he was unaware of the price increase.
“I was merely informed of a meeting with the Domestic Trade, Cooperatives and Consumerism Ministry on Monday to discuss certain issues,” he said.
Federation of Malaysian Manufacturers president Tan Sri Mustafa Mansur confirmed that it would be having the dialogue.
“We want to get ministry clarification on the price increase. The 17 manufacturers want to discuss how it will be implemented,” he said.
A spokesman for one of the country’s four sugar refineries said the increase affected only a certain segment of the market.
“Only the biggest players are involved. A government announcement would only be made if the entire market was affected,” he said, adding that it was normal for a last-minute notification.
When contacted, ministry secretary-general Datuk Mohd Zain Mohd Dom said manufacturers had been warned that they might not be able to buy subsidised sugar any more in view of the rise in world sugar price.
He said the Government only had RM400mil left from the initial RM1.6bil fund to subsidise sugar at the current price of RM2.10 per kilo.
On the notification before Chinese New Year, he said the Government could not afford to spend so much money on sugar subsidies for another month if they waited until after the festival.
Saturday, December 4, 2010
INFLATION IN THE MAKING
We have been shared with the latest news of revision of service tax from current 5% to 6% effectively 1st January 2011. The revised service tax is to ensure that the government will earn an extra income and further reduce the deficit. The implementation of revision is to temporarily 'calm the emotion' of the public of the implementation of GST of which pending for approval in Parliament.
The government also has announced the revision of retail price for RON95, RON97, flour, and LPG. All revision has take into effect on 4/12/2010 from 12 midnight, except RON97 was increased couple of days ago.
In any business nowadays, we will need transportation to deliver goods, services as well as products to consumers/customers. A mamak will get his supply of flour from retailer/wholesaler/supermarket. Definitely he will need to drive or at least get someone to buy the stock on his behalf.
The cost of transportation also will be borne by retailer/supermarket/wholesaler from the supplier/factory. What is the transportation cost here? We are talking about the price hike of petrol/diesel, a commodity used by the transporter to power up their prime mover/trucks to deliver the goods to the consumer (mamak, supermarket, retailer, wholesaler).
In this case, the transportation cost are being passed from one end to another end and the last effect is, the rakyat will pay the cost, i.e. an increase price of roti canai.
An increase of consumer goods will defitely impacted our inflation rate escalating, eventhough this is not the primary cause to the increase. The consumer price index for Oct 2010 114.7 an increase of 2% from 2009. An increase of CPI resulted to less buying power of the consumer as they need to fock-up extra 2% of their disposible income to spend their income on goods and services as compared to goods and services pricing in 2005.
The concerns on property bubble in Klang Valley has raised the concerns of BNM to increase OPR to 2.75% to curb the issue of property speculation. Most of the speculators are buying the middle and high end property for the purpose of rental or disposal at a later date. Speculation activity impacted the low and middle income group as they buying power has diminished as cost of living increased.
As a consumer/rakyat, it is time for us to reprioritise our expenditure and to make adjustments to suit with challenging economy landscape nowadays.
The government also has announced the revision of retail price for RON95, RON97, flour, and LPG. All revision has take into effect on 4/12/2010 from 12 midnight, except RON97 was increased couple of days ago.
In any business nowadays, we will need transportation to deliver goods, services as well as products to consumers/customers. A mamak will get his supply of flour from retailer/wholesaler/supermarket. Definitely he will need to drive or at least get someone to buy the stock on his behalf.
The cost of transportation also will be borne by retailer/supermarket/wholesaler from the supplier/factory. What is the transportation cost here? We are talking about the price hike of petrol/diesel, a commodity used by the transporter to power up their prime mover/trucks to deliver the goods to the consumer (mamak, supermarket, retailer, wholesaler).
In this case, the transportation cost are being passed from one end to another end and the last effect is, the rakyat will pay the cost, i.e. an increase price of roti canai.
An increase of consumer goods will defitely impacted our inflation rate escalating, eventhough this is not the primary cause to the increase. The consumer price index for Oct 2010 114.7 an increase of 2% from 2009. An increase of CPI resulted to less buying power of the consumer as they need to fock-up extra 2% of their disposible income to spend their income on goods and services as compared to goods and services pricing in 2005.
The concerns on property bubble in Klang Valley has raised the concerns of BNM to increase OPR to 2.75% to curb the issue of property speculation. Most of the speculators are buying the middle and high end property for the purpose of rental or disposal at a later date. Speculation activity impacted the low and middle income group as they buying power has diminished as cost of living increased.
As a consumer/rakyat, it is time for us to reprioritise our expenditure and to make adjustments to suit with challenging economy landscape nowadays.
Wednesday, October 20, 2010
Financial Ratios
Just to share to those who is interested to know the common Financial Ratios formulae used in assessing financial health of an organization.
Financial Ratios
a. Liquidity Ratios
a. Current Ratio = Current Assets/Current Liabilities
b. Net Working Capital = Current Asset – Current Liabilities
c. Quick Ratio = (Current Assets – Inventories)/Current Liabilities
b. Activity Ratios
a. Receivable Ratios
i. Account Receivable Ratios Turnover = Sales/Account Receivables
ii. Average Collection Period = Account Receivables/(Credit Sales/Period)
b. Inventory Turnover Ratios
i. Inventory Turnover = Sales/Inventory
ii. Days Sales Inventory = Inventory/(COGS/Period)
iii. Total Assets Turnover = Sales/Total Assets
iv. Fixed Assets Turnover = Sales/Fixed Assets
c. Solvency Ratios
a. Debt Ratio = Total Debt (CL + LTD)/Total Assets
b. Debt to Equity Ratio = Total Debt (CL + LTD)/Equity
c. Time Interest Earned = EBIT/Interest
d. Long Term Debt to Equity = LTD/Equity
d. Profitability Ratios
a. Gross Profit Margin = Gross Profit/Sales
b. Net Profit Margin = Net Profit/Sales
c. Operating Profit Margin = EBIT/Sales
d. Return on Assets = Net Income/Total Assets
e. Return on Investments =Net Income/Equity
f. Return on Equity = Net Income/Equity
e. Ownership Ratios
a. Earnings Per Share = Net Income / No. of Shares
b. Dividend Per Share = Dividend Payout/No. of Shares
c. Dividend Payout Ratios = Dividend Per Share/Earning Per Share
d. Price Earning = Market Price/Earnings Per Share
e. Book Value Per Share = Equity/No. of Shares
f. Market Capitalization = Market Price X No. of Shares
g. Dividend Yield = Dividend Per Share/Market Price Per Share
See for more update/news later..
It's 20.10.2010
Last week, people are vowing to celebrate special occassions such as registering marriage, delivering baby, etc. on 10.10.2010. Not to forget the most tragic accident for the year at PLUS highway not to far to Simpang Ampat, Melaka exit.
It is time for me recheck my current development in terms of Ibadah, health and wealth.
To all wishers, thanks for your greetings and may our friendship last forever.
Thank you.
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