Dividend stocks a viable option. Lessons from Corporate Malaysia. KLCI down on profit-taking. CEOs pan fiscal cliff deal, vow to continue debt fight. EPF earns RM7.02bil in investment income in third quarter ending Sept 30. BNM sees GDP stable in 2013, inflation to pick up. Top economists: U.S. heading for another crash, debt crisis looms. SANTA MONICA, Calif: Two leading U.S. economists expressed deep pessimism on Friday that politicians in Washington will be able to strike a deal to rein in America's soaring national debt. Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation, and Stephen Roach, a veteran economist at Yale University's School of Management, also said the Federal Reserve was creating another catastrophic financial bubble with attempts to stimulate the economy through its policy known as quantitative easing.
The two were speaking at a conference on global risks sponsored by the Rand Corporation and Thomson Reuters, at Rand headquarters in Santa Monica, California. Bair, who stepped down as head of the FDIC in July 2011, said the Federal Reserve's policy of pumping money into the economy, combined with an unprecedented period of historically low interest rates, was creating "the mother of all bond bubbles. " Expert dismisses long held notion gold is a refuge in times of economic trouble. Das(inset) also dismisses the long-held notion that gold was a refuge in times of trouble. “I don’t understand gold, it is an irrational asset.
My mother, who is Indian, would buy gold whether it is valued at US$20, US$200 or US$2,000. It doesn’t make any difference to her because people have an innate desire to own gold. In my mind there is no difference between gold and paper currency," Das says. KUALA LUMPUR: The party's over and what comes next is not going to be pretty, an international financial expert believes. Satyajit Das, who has over 30 years experience in capital markets and risk management and is now a consultant to banks, corporations and regulators, contends that the debt-fueled boom and “botox economics” of the past have come to a halt to make way for what will be, at least until global debt levels come down, a bleak future. From the current malaise, he sees three possible outcomes: a 75% chance of stagnation, 20% of a collapse, and 5% of belle epoque. EPF’s new move a big boon. PETALING JAYA: EPF members who have reached the age of 50 but do not want to withdraw all their entitled sum under Account 2 can just take out what they need, anytime they want to, in a one-off withdrawal.
It is a simple process where the member just need to present his identity card and a valid bank passbook at any of the EPF offices. Normally, members take out the full amount under Account 2, which represents 30% of the their total savings, when they hit 50. In recent years, however, there have been requests by members to make partial withdrawals to settle bills and also to go on holidays. F.L. Lim said when she reached 50, she had about RM100,000 under Account 2. “I wanted to keep most of the money there so that the dividend can be based on a higher amount,” she said. “I am glad that what I could not do two years ago, I can do so now.” He stressed, however, that members should be mindful that this was a one-off option. Former factory worker A. Marketing manager C.S. KLCI closes at record high of 1,665. KUALA LUMPUR: The FBM KLCI closed at a fresh record high of 1,665.42 on Thursday, the second time in October on foreign buying of telcos for their dividend yields while there was some rotation among the banking stocks.
At 5pm, the FBM KLCI was up 4.75 points or 0.29% to 1,665.42. Turnover was 1.30 billion shares valued at RM1.53bil. There were 416 gainers, 265 losers and 370 counters unchanged. Reuters reported European shares were steady near a one-month high and Asian stocks surged on Thursday, as a slew of Chinese data boosted optimism over the health of the world economy. The news report said signs of a steadier footing in China's economy coupled with recent good news from the US on jobs have reassured investors that actions taken by the world's major central banks to boost activity are taking effect.
US light crude oil was unchanged at US$92.12 and Brent 23 cents higher at US$113.45. The ringgit was slightly weaker against the US dollar at 3.0373. World economy to improve only slightly next year - Reuters poll - World Updates. Thursday, October 11, 2012MYT 12:00:02 AM LONDON (Reuters) - Next year offers only a slight improvement for a global economy hit by recession in Europe and slowing or moribund growth in Asia and the United States, according to Reuters polls of hundreds economists worldwide. After reaching 3.1 percent this year, world economic growth is expected to hit 3.4 percent in 2013, polls released on Thursday said - a slight cut from July's poll and slower than the International Monetary Fund's latest forecasts of 3.3 percent and 3.6 percent.
While few expected 2012 would be anything other than a difficult year for the world economy, there had earlier been some hope a resilient United States and faster-growing emerging markets would keep up the momentum. This view has changed with economists polled over the last week saying at least some of the weakness will inevitably spill into next year. "We think they'll find some sort of compromise on that. Malaysia's main market index seen hitting 1,620 points by year-end. The research unit said it continued to peg its year-end target for the local bourse to 13.3 times 12-month forward price-to-earnings ratio, which reflected its caution concerning weakening economic fundamentals in the eurozone and the upcoming 13th general election in Malaysia.
It was also noted that the potential inclusion of Felda Global Ventures Holdings Bhd and Astro Malaysia Holdings Bhd in the index by year-end may provide some upside. Maybank IB Research said the second-quarter results of companies under its coverage were largely in line with expectations. Maybank IB Research expects the equities market to consolidate towards year-end and hit 1,620 points.
However, it noted that plantations disappointed for the second consecutive quarter due to tree stress which impacted fresh fruit bunches (FFB) output while steel players also disappointed on pricey raw material inventories and one-off charges or unrealised foreign exchange loss. Temporary profit-taking seen as elections approach. PETALING JAYA: The impending general election will inspire profit-taking among investors as they intuitively brace for any political uncertainty but history has shown that the impact of elections on the market is only temporary and usually not as bad.
Alliance Research said although the market could intuitively succumb to selling pressure when there was political uncertainty, past experience proved that it was not as bad as one might perceive. “Furthermore, our analysis of the last general election shows that market selldown due to political shock' is temporary and will normalise in three months,” it said in its report.
In Alliance Research's survey on investors' expectations on the coming elections, the research house said “market performance over the long term is dictated by fundamentals and macro outlook.” However, cyclical sectors such as construction, property and technology have significantly underperformed the FBM KLCI over the same period. Time to impose stronger policies to weed out property speculation. WE have heard all the reasons for the increase in property prices. Land is getting expensive, building materials are costlier and interest rates are low and so on. Now, Syarikat Perumahan Negara Bhd managing director Datuk Dr Kamarul Rashdan Salleh has said the buying of homes by non-Malaysians was pushing up the price of homes. There is truth to that but we should not be putting the blame solely on foreigners for the hike in property prices. Rich foreigners, like their Malaysian peers, will buy luxurious condominiums, sprawling bungalows and expansive semi-detach homes.
Those with money will know that property prices in the hot urban areas have surged in recent years and over the long-term, they will stand to make a pretty decent capital return from their investment. There had been stories of people buying multiple units of homes when they were launched. Those at the back of the queue would just have to find a house somewhere else after being told the units on sale had all been sold. Euro zone flounders, China brakes, U.S. may slow. LONDON/BEIJING: The euro zone is on track for its second recession in three years, China's once booming manufacturing sector is contracting at a faster pace than previously reported, and the United States is widely seen as struggling to keep up its pace of growth. Business surveys released on Thursday painted a global picture of economic malaise from Beijing to Berlin. The euro zone economy will shrink around 0.5 percent in the current quarter as the economic rot is even spreading through Germany, the region's largest and strongest economy, Markit's Purchasing Mangers' Index (PMI) suggested.
It came on the heels of the HSBC Flash China manufacturing PMI falling to 47.8 for August, its lowest level since November and well down from July's final figure of 49.3. Growth in the United States manufacturing sector is also expected to have slowed in August. "The indicators taken as a whole indicate a material slowdown in the pace of the world economy," said economist Philip Shaw at Investec. Upper-income group don’t feel wealthy because of high cost of living. PETALING JAYA: There may be more millionaires in Malaysia now than before but they may not necessarily be feeling rich. Besides the rising number of successful business owners, many high-salaried people are already millionaires based on the value of their assets and properties. RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said the term could also apply to those in the middle-class who could have earned the amount but had spent it on necessities such as on costly children's education and high property prices.
He said although a millionaire was measured by his or her disposable income, those who have made their million would not have the same purchasing power compared to a decade ago, citing inflation as the main reason. Dr Yeah said many in business had made their millions as a result of savvy investments and the growth of the industries that they were involved in, adding that overall, the rising affluence was due to sustained economic growth.
Billionaires, however, remain rare. Millionaires’ secret to success. PETALING JAYA: Ganesh Kumar Bangah made his first million at the age of 23. The secret, he said, was as simple as knowing what people needed and delivering it to them. “I knew what I was good at, which was IT. I used that to come up with something of value to the world. “I also worked hard and persevered until I reached the goals I had set for myself,” said Ganesh, now 33 and the CEO of MOL Global Bhd, a company worth over RM1bil. Young and rich: Ganesh (left) and Yap made their first million at the age of 23 and 26 respectively. He said that even when he was only 15, he had been using his skills to make money, like repairing his teachers' computers for a fee.
At the age of 20, he started his own company, which made him a millionaire in three years. “Be focused and set new goals for yourself to keep climbing higher. Feng shui master and multi-millionaire Joey Yap said learning to make good use of time was a key ingredient to achieving financial success. Full EPF withdrawal at 60. Fake fish oil capsules removed from shelves.
New blow to banking system. Timing of election crucial for performance of the local market, say analysts. PETALING JAYA: The timing of the general election will be crucial in determining the performance of the local bourse in the second half of the year, according to research analysts. TA Securities Holdings research head Kaladher Govindan believes there are two scenarios for the local bourse, based on when Malaysians will wield the vote. “We think the current bullish sentiment on the local bourse is a pre-election rally. So, if the general election is held this year, our year-end target for the FBM KLCI is 1,520 points. However, if the election is held next year, our year-end target for the FBM KLCI is 1,680 points as the index-linked stocks should perform well due to factors such as more roll-outs of projects under the Economic Transformation Prog-ramme,” he told StarBiz. ECM Libra Capital head of research Leong Hon Sze concurred, saying the research unit's year-end target for the FBM KLCI was 1,604 points (plus or minus 1.6%).
EPF urges the self-employed to join scheme. 'China fund' turns to Japan amid Europe fears. For years, the two Asian powerhouses have eyed each other suspiciously with frequent diplomatic spats flaring over territorial claims and longstanding disputes, largely stemming from Japan’s wartime record. But with economic ties improving and Europe in a debt crisis, an ever more practical Beijing is buying up shares of Japanese firms as it looks for safer places to park its mountainous foreign-exchange reserves, the world’s largest. A fund known as OD05 Omnibus, widely viewed as linked to Beijing, was a major shareholder in 174 Japanese firms by the end of March, including names such as Toyota and Nikon, said a survey by the Nikkei business daily.
The paper put the value of its Japan investments at a record 3.58 trillion yen ($45 billion). The survey showed the fund’s shareholdings have more than tripled since 2008, when the collapse of Wall Street titan Lehman Brothers triggered an unprecedented shock to the global financial system. Private sector workers may be able to withdraw EPF before 60.
KUALA LUMPUR: The Finance Ministry has hinted that private sector employees may be allowed to withdraw their Employees Provident Fund (EPF) savings early should the retirement age be increased to 60. The mechanics behind this have yet to be discussed or decided by the EPF board but Deputy Finance Minister Datuk Donald Lim has assured that the Government is aware of the concerns of many soon-to-retire employees in the private sector. This comes following the proposed Minimum Retirement Age Bill 2012, which was tabled for first reading in the Dewan Rakyat on Wednesday, which, if passed, will see the retirement age raised from 55 to 60. “If we decide to extend (the retirement age) to 60, I believe there will be measures taken by EPF for those who have made plans. For example, those who are 53 or 54 may be allowed (to withdraw early).
But the actual measure will be announced later,” said Lim, after the launching ceremony of the Golden Bull Award 2012 at a hotel here yesterday. 5 Keys To Financial Success | Daily Ticker. By Bernice Napach If Alexa von Tobel had her way, there would be a primetime reality show that focuses on educating people about their personal finances, just as "The Biggest Loser" educates people on eating healthy. "I love that show," says von Tobel, a Harvard graduate.
"The six million people who tune in every Tuesday learn about healthy choices and the basics of living a healthy lifestyle. I wish there was a show like that about personal finance. " Von Tobel didn't create a TV show but did probably the next best thing. Her first words of advice: have a financial plan. Her other top recommendations: -Live by a budget -Prioritize debt repayment -Have 6 months worth of emergency savings on hand -Start saving for retirement now -Negotiate your salary Von Tobel says many people haven't grasped these "financial basics" because they're not part of the public school education system.
EPF continues to sell equities. Gold investment, paper style. Malaysia Inflation Rate. Malaysia's growth beats consensus. Gold price set to go up to US$2,000 by mid-year. No forex trading for Muslims. Mass S&P downgrade as Greek debt impasse hit euro zone. Fitch Ratings - Dedicated to providing value beyond the rating. Fitch: Stable Outlook for Malaysia's Insurance in 2012. Malaysian banks on solid foundation. Slower IPI, export growth expected. Nomura: Speed up economic reform momentum. Europe's debt: Pressure's on - Nov. 24. George Soros’ advice for the eurozone. Financial literacy vital when investing in funds. More cross-border investments. Banks are relying more on unit trust fee income. High fees dampener for unit trust. Wealth and Investment Tips | Adam Khoo Wealth & Investment Tips.