Get your motor or car rebates by March 31, 2009

The cash rebate system for vehicles under 2,000cc, which was implemented in June last year, will end on March 31, Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad confirmed.

He said this was because the cash rebate system had completed its one-year cycle, which was the initial plan.

“March 31 is the last date. We will end it in March,” he told reporters after launching the Malaysian Products are Our Choice, and Buy Malaysian Products Campaign here yesterday.

The campaign will last until March 1. “Whoever has yet to collect their cash rebates, please do so,” he added.

On the Government’s plans for future subsidies, and if the cash rebate system would be implemented again, Shahrir replied: “I don’t think we’ll be using this method of subsidising again, because I see that Malaysians prefer subsidised pump prices.

“They seem to prefer lower pump prices rather than having money given out to them,” he said, adding that about RM5bil would have been disbursed by March.

He also said the Government planned to set the value of RON95 petrol at RM1.70 when it is introduced in the middle of this year. “We want to give consumers good value for their money. Now you’re paying RM1.70 for RON92, we’re planning to give RM1.70 for RON 95 as well.

“So you get better quality petrol at the same price as RON 92. RON 97 will still be there too, but we haven’t decided on the pricing,” he said.

- THE STAR

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How To Control Your Spending Habit

“To Spend or Not to Spend…... that’s The Question!”

How many times have this question crossed our minds? Almost every time when we take money out of pockets, right? Have a day passed by without us having spent a single cent? Unlikely! The question is not whether to spend or not but rather, How Do We Control Our Spending Habits. Below are some smart spending habits to adopt in order to be financially healthy.

Spend According to Budget

There is a Malay proverb that says “ukur baju di badan sendiri” that we should measure our clothes on our own shoulders. This is the equivalent of saying that we should spend according to our budget. We have already covered the topic on Budgeting in our previous article and to reiterate it: Budgeting is really a plan for us to spend without feeling guilty about it later. What is important here is that we need to have a “Spending Plan” in the first place. Without it, we would most likely be spending on impulse or what is commonly known as Impulse Buying. We can’t avoid impulse buying totally and it’s not wrong. There would be times when we just can’t resist that aroma flowing from that cup of Cappuccino or that pair of shoes or handbag which is on sale! However, when it becomes the norm rather than the exception, we have to be wary of our spending habit.

In preparing your Spending Plan, you should also learn to anticipate your needs. For example, if we are going to get ourselves new clothes for the coming festive season, get it earlier during the Mega Sale or whenever a good bargain comes our way (for example, during a warehouse sale or closing down sale). If we were to buy an umbrella each time it starts raining, we not only end up with too many umbrellas but may have to pay a premium for it. It is also advisable to budget for unexpected expenses like wedding angpows, car repairs, home repairs etc. These items, if not provided for, may throw us off-budget!

Compare Prices

Do we make it a habit to shop around before buying something or do we just buy it? Some of us might argue that the time and cost of shopping around before buying a bottle of cooking oil or a tube of toothpaste may not be worth it. True and that is why we have to be a Smart Consumer – we should plan our purchases and have a record of prices of these essential items. Here, we could devise our very own “Price Book” to record down the prices of the items that we buy regularly and know exactly where and when we could get the best deal!

For example, if Store A has the lowest prices for most of the items in our shopping list during weekdays, then we should plan our grocery shopping during the weekday there. However, if Store B has the best bargains during the weekends and we are only free during the weekends, we should go there instead. The point is – have a Shopping List, a Price Book and Stick to them. In fact, we can make this entire process a fun family activity by getting our children help in doing a “price survey” each time they go shopping. Each family member can then compare notes to see who can find the best bargain in town! This would not only help us in comparing prices but also teach our children the value of money.

Branded Stuff

What’s in a Name? Everything and it may be worth more than the product itself and as consumers, we tend to buy the brands that we trust the most. This is well and fine but when we end up buying things that we don’t need or can’t afford, it becomes a problem. Some of us buy branded stuff because we are influenced by the images conjured and emotional appeal created by the advertisement itself and not because we need it. As a Smart Consumer, we have to sometimes look beyond the brand and ask ourselves: “Do I really need it?”, “is it really worth that much?” and “Can I really afford it?” Don’t make purchases based on images or even what your friends have but rather on your needs and the merits of the product itself.

Buying Second-Hand Items

The thought of buying second-hand items might put some people off but this is a great way to stretch your Ringgit. The greatest benefit of doing so is to allow the first buyer to take the initial depreciation of the goods, which is normally the largest. Take for example of buying a brand new car. Most of the time, the new car owner would suffer between 10-20% depreciation of the value of his new car the moment he drives it out of the showroom! If he sells it after 3 years, he may sell it for two-thirds of the initial purchase price, if he is lucky! Imagine if you’d bought it from him… it’s like getting a “discount”. Yes, you may not get that “new smell” of a car but does it really matter? It may be worth the sacrifice as long as the car is well-maintained, accident-free and heavily discounted, don’t you think so?

Another good example of products that we may not want to buy it new is baby products, especially clothing and toys. Some of us might cringe at that idea but it is not uncommon. Baby clothing is not cheap and your baby will most likely wear for short period of time as the baby will outgrow the clothing very fast. Ideally, we could get hand-me-downs for free by dropping a hint here and there. Otherwise, we could either borrow or buy them second-hand from parents who will no longer need them anymore.

Buying Second-Hand items can also include new items sold at a fraction of their original price because of product defects, factory overruns and clearance of old stocks. Unless you are a celebrity or some very important public figure, you do not need to be spotted with the latest fashion or newest model of mobile phones, watches etc. If we do not mind the slight defects or it being a slightly older model, there are bounds of opportunities to grab a good bargain. There are numerous places to consider when buying these items, including warehouse sales, factory outlets, garage sales, junk stores and the flea markets. The process of bargaining can be quite fun and you will certainly sharpen your bargaining skills over time!

The Sleep Test

Shopping can be an addiction and is never easy to resist. We all know the symptoms when the buying bug bites… we feel the adrenalin rush that makes our hearts desire for it; then it goes right up our head and we start rationalizing about it. We tell ourselves that since we worked so hard, we truly deserve it and want to reward ourselves JUST THIS ONCE! Finally, it triggers our hands to dig into our pockets and out comes the “Plastic Card” – CHARGE IT!

Our will may be strong but our flesh is weak! After all, we are only humans, right? However, one effective way to counter this is through “sleeping over it”. This will be especially useful for big-ticket items like buying a new car, changing that old furniture set, renovating our home, buying that plasma/ LCD TV or even that home-theatre system or whatever else we are considering. Before committing ourselves to these items, sleep over it and take a closer look at our budget to see if the purchase fits into your current plan. Discuss it over with your spouse or family and take all the time you need to think it through carefully because once the money is gone, it’s gone!

Remember: When making your next purchase, ask yourself these questions: “Do I really NEED it?”, “Is it within my Budget?” “Is it the Best Deal?” “Can I find a cheaper Brand with the same value?” “Can I find a Second-Hand item instead?”

Be a Smart Consumer today!

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Here I Come To Save Our Economy - Mahathirman

Tun Dr Mahathir Mohamad has called for a ban on the manipulation of “money to make money” to help resolve the global financial crisis.

The former Prime Minister said the main problem was that banks were empowered to create money out of thin air and lend money which they did not have.

He suggested that everyone should go back to producing goods and services although the profits would not be that massive.

“But the wealth from these activities will be real and the economy will be more sound,” he said in his talk at the “Leadership in Times of Crisis” seminar at the British Institute of Technology and E-Commerce here on Friday.

Dr Mahathir also expressed doubts of a recovery despite the US government talking of a trillion-dollar plan to save the economy.

He said there would come a time when the government would have to admit that the whole system had failed.

What was needed, he said, was a total write-off of the monies lost and the need to reduce the lavish lifestyles and per capita income in rich countries.

“The rich will have to sell their yachts and private planes as well as their holiday and palatial homes while the poor will become poorer,” he said.

If there is to be recovery, the world must accept that everyone – the rich and the poor – must take part in formulating a change in the system, he added.

Dr Mahathir said the most important reform was to ensure that money was created by governments and not by banks.

“Governments need to come back and supervise the banks. If the executives go beyond something, they’ll be punished,” he said.

He described as ridiculous the present system where executives were paid bonuses if they could show figures to their directors even if the banks lose money.

Describing the scenario as frightening, he said: “We have no control over money and we don’t know how much of it is in circulation.”

Dr Mahathir said when Malaysia was hit by currency speculators in 1997-1998, it was told that the trade in currencies was 20 times bigger than the total world trade.

“That’s a huge sum of money. But where does it come from?” he said, adding it was important to get rid of those who were playing tricks.

He also said government bailouts, which were effectively nationalisation, would not enable businesses to recover when the economy was in recession.

“We see governments furiously bailing out financial institutions and businesses but we have yet to see any results,” he added.

He also said the formulation of any new system must involve both the rich and poor countries as well as elements of Islamic banking principles.

- THE STAR

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Worst recession in 100 years?

Last week, a minister and close confidante of British premier Gordon Brown warned that the current recession is worse than the 1930s Great Depression, while the US Congress passed a US$787bil (RM2.83tril) stimulus package containing a strong protectionist element.

Perhaps the most sensational news in Britain last week was a speech by premier Gordon Brown’s closest economics advisor that the world is facing its worst recession in a hundred years, thus implying it will be worse than the Great Depression of the 1930s.

It was the bleakest scenario yet painted by a senior member of the Western establishment. And in this scenario, the effects of the recession will last 15 years.

The author of this is Ed Balls, one of Brown’s closest allies and confidants. He is a senior minister in charge of schools, and for many years had he been the chief economic advisor of the UK Treasury, when Brown was Chancellor.

Speaking at a Labour Party conference, Balls said: “The reality is that this is becoming the most serious global recession for, I’m sure, over 100 years, as it will turn out.”

He warned that events worldwide were moving at a “speed, pace and ferocity which none of us have seen before” and banks were losing cash on a “scale that nobody believed possible”.

He admitted that financial regulators had failed, saying: “People are quite right to say that financial regulation wasn’t tough enough in Britain and around the world, that regulators misunderstood and did not see the nature of the risks of the dangers being run in our financial institutions – absolutely right.”

He described the financial crisis as worse than the one in the 1930s and hinted that the far right could gain ground, as they did then.

“The economy is going to define our politics in this region and in Britain in the next year, the next five years, the next 10, and even the next 15 years,” said Balls. “These are seismic events that are going to change the political landscape.

“I think this is a financial crisis more extreme and more serious than that of the 1930s, and we all remember how the politics of that era were shaped by the economy.”

Balls’ comments caused quite a lot of alarm because Brown had been trying to give the impression the government had things under control, even as bad news was emerging about big losses in banks, the latest being Lloyds.

There is speculation that Balls has inside information on how very bad the situation is, which the British government has not yet made known to the public.

The UK Financial Services Autho­rity also gave a warning, but milder, that the recession “may be deeper and more prolonged than expected”, and added that the global financial system had “suffered its greatest crisis in more than 70 years”.

Last Friday and Saturday, the finance ministers and Central Bank governors of the Group of Seven leading industrial countries met in Rome to discuss the crisis.

Their statement at the end of the meeting did not contain anything new on measures to manage the crisis. News reports indicate that one major issue in the discussion was the need to prevent protectionist measures, since such measures in one country could lead to retaliation from others.

Accordingly, the statement pled­ged that “the G7 remains committed to avoiding protectionist measures, which would only exacerbate the downturn, to refraining from raising new barriers, and to working towards a quick and ambitious conclusion of the Doha round”.

But while the G7 Ministers pledged to avoid protectionism, a few of their countries were in fact taking protectionist measures.

France last week announced bailout loans to its motorcar companies, and tied these to their maintaining production and jobs in France, thereby rousing anger from the Czech Republic which now fears that the French car companies’ factories in the country may retrench workers or even close.

The bigger worry, however, is the US$787bill fiscal stimulus package passed by the US Congress last Friday night.

The bill, which is expected to be signed by President Barack Obama this week, stipulates that none of the funds appropriated may be used for public works projects “unless all of the iron, steel, and manufactured goods used in the project are produced in the United States”.

When a draft of the bill containing this clause was made known, it led to protests from political leaders in Europe and Canada.

President Obama promised that the bill would be amended to avoid protectionism. The final bill adds this line: “This section shall be applied in a manner consistent with US obligations under international agreements.”

This is taken to mean that the buy-American principle would not be implemented if it violates rules in the World Trade Organisation or in free trade agreements that the US has signed.

However, there is cold comfort in this because the WTO’s multilateral rules do not forbid a country from having measures requiring that spending by the government on its projects should be on locally produced goods and services.

There is a plurilateral agreement on government procurement in the WTO that obliges those who are members to allow the imported products or services from other members to benefit from government spending.

The United States is a member of this agreement, thus it has to allow fellow members to bid for projects under its stimulus package. But there are only a few other members, and almost all of them are from developed countries.

Developing countries will thus not be able to profit much from the expanded government expenditure in the stimulus programme, since almost no developing country has signed the WTO’s procurement agreement.

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Commentary - Time to cut the fat and waste

The economic downturn should be an opportunity to re-examine the New Economic Policy, government procurement, the pricing system and the system of subsidies.

Two by-elections for Malaysians right after the political drama in Perak. And let’s not forget the two other by-elections in Permatang Pauh and Kuala Terengganu.

I don’t think many Malaysians are looking forward to the prospect of the two by-elections. The rising political temperature is draining our energy from more pressing concerns such as the economic crisis.

The storm clouds are gathering fast and the Government, private sector and individual Malaysians should be in a state of readiness for what could be a very challenging time for the Malaysian economy.

So, how should we respond? By being bold and brave. Deputy Prime Minister Datuk Seri Najib Tun Razak has said that the Government is ready to unveil a mini-budget soon.

It’s termed a mini budget rather than a stimulus package because it is not just providing allocations that can generate growth but incentives would have to be included.

If the RM7bil stimulus package in Novem­ber was aimed at boosting domestic demands and perking up the construction sector, it is hoped that the mini-budget will focus on reducing the cost of doing business in Malay­sia and making some structural changes to the economy.

Making sacrifices

Malaysia’s Industrial Production Index is down and so are the country’s exports. This is a sure sign that the manufacturing sector is hurting and jobs are at risk.

To preempt any mass retrenchment, the Government should consider allowing employers to reduce their contribution to the EPF and suspend their payments to some funds, including the Human Resource Development Fund.

These savings will boost the reserves of companies and small and medium-sized enterprises, allowing them to keep retrenchment to a minimum.

We can already hear the unions baying for blood but the reality is very simple – jobs are going to be lost during this crunch time and everyone has got to be on the same page to ensure that unemployment numbers are kept down.

If this means suspending some of the employers’ contributions for a period of time, so be it. Workers should also be prepared to make some sacrifices. Some companies have already started asking their workers to work fewer days in the month. This is the result of a drop-off in demand for goods and services.

It’s simple. The United States and Europe no longer have the capacity to consume more goods; they just can’t afford it.

That means Malaysian factories are no longer required to produce more. Factories have no choice but to cut down production and reduce expenditure to save jobs.

It is possible that more companies in Malay­sia would have to shorten working hours and cut down on overtime. All in the name of keeping businesses going and keeping people on the payroll.

The priority of the Government has to be to save jobs. The goal of boosting domestic demands and keeping consumption at healthy levels will come to naught if Malaysians are out of work.

The mini-budget should also focus on spreading funds to projects which can be implemented speedily and easily. Building medium-cost houses and other major infrastructure has significant multiplier effect but all these take time to take off the ground. Land has to be acquired, approvals obtained and obstacles overcome.

In short, it will take some time before the funds from the Govern­ment get to the developer or contractor.

Treating the malady

As an alternative, the Government should focus on maintenance and repair of schools, maintenance of government flats and replacement of water pipes. Money can be disbursed faster and the spillover effects will also be felt faster.

The fact that school boards of management can now decide on their contractors is in the right direction.

That would result in fewer complaints of shoddy work, over-priced jobs and contract jobs that are dominated by one race.

But it is hoped that the mini-budget will not just be about pump-priming and short-term measures. Businessmen, foreign investors and analysts agree that Malaysia’s attractiveness as a place to invest and do business has been eroded by structural problems.

So the Government should view the economic downturn as an opportunity to re-examine all the assumptions and policies which have underpinned the Malaysian economy all these years. This includes the New Economic Policy, government procurement, the pricing system and the system of subsidies.

Nothing can be sacred in these unprecedented times. This is the time to cut the fat, eradicate waste and boost productivity without having to worry about offending the sacred cows, dead wood and Little Napoleons.

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Silica potential for Terengganu

The Mineral and Geoscience Department Malaysia will propose to the Terengganu Government that a “Silica Route” be set up to boost production of the mineral resource.

Depart­­ment director-general Da­­tuk Yunus Abdul Razak said the state had development potential because it was rich in non-metallic mineral silica.

“We want to create a stretch in the state where silica is processed, refined and melted down for locally-made products,” he said at a press conference yesterday during Natural Resources and Environment Deputy Minister Senator Datuk Maznah Mazlan’s visit to the department.

Yunus said the department would initially produce silica pellets and later on, train local people to take over the process.

“The department is also looking into producing crystalised silica for export,” he said, adding that the country exported silica in the form of wafers.

Currently, Sarawak produces 90% of silica sand in the country and exports it to Taiwan, Japan and China, while peninsula Malaysia produces the rest for export to Singapore.

Maznah said that domestic mineral production contributed 2% to the gross domestic product (GDP) in 2007.

“Mineral production output was valued at RM2.5bil in 2007. Coal contributed RM118mil, metallic minerals RM465mil and industrial minerals RM1.95bil,” she said.

She said the department was preparing a reserve plan for minerals to ensure the local industry was sustainable.

“The department will identify the minerals available in the states and inform them on the development potential.

“In its reports, the department will state what minerals should be mined,” she said, adding that the general mapping of minerals was revised every 10 years.

The department has identified Perak, Pahang and Terengganu as potential areas for tin, Terengganu, Pahang, Kelantan and Perak for iron, Sabah and Pahang for copper, and Pahang, Kelantan, Terengganu, Johor and Sarawak for gold.

- The Star

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Blog readers want cash and tax cuts

The Government has been asked to set up a special task force to compensate victims of the global economic crisis as part of its second stimulus package.

There are also requests for the Government to increase consumer spending and cut personal and corporate taxes.

These are among 135 suggestions by Malaysians to Deputy Prime Minister Datuk Seri Najib Tun Razak, who had asked for ideas on his blog on what should be included in the second stimulus package.

Among other suggestions sent to his blog www.1malaysia.com.my were calls to reduce cost for passport and transport as well as to give cash rebates to the people.

Abolishing the New Economic Policy and race-based business policies were also suggested.

A respondent, Jorg Sacul, said housing developers should allocate funds for public amenities such as parks, post offices, police stations and offices for local authorities in their projects.

Another reader, Razak, said the second stimulus package should include investments in construction and renewable energy.

“Renewable energy provides the benefits of new jobs, development in poorer states and alternative fuel,” he said.

The public should be allowed to withdraw their Employees Provident Fund savings to buy cars, said Sim, a writer, adding that car loans for civil servants should be increased, while a reduction in excise duties for new cars would generate more domestic consumption.

Respondent Seangin urged the Government to cut electricity tariff for industries that were hardest hit by the economic slump.

“Follow the Singapore government’s move to give cash grants to subsidise company wage bills,” he said.

While Ryan said there were many talented entrepreneurs who needed financial backing and in turn could help provide jobs for thousands of graduates, Rick suggested the repatriation of foreign workers to reduce currency outflow.

Rodzi said money should be given directly to village folks so that they could use it for development projects such as roads.

Consumer items such as cement and steel, he said, should be sold to the people directly without having to go through middlemen to avoid the public from paying inflated prices.

- The Star

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Najib: Malaysians should be more resilient and determined

Malaysians have been urged to be more diligent and work hard to cushion themselves against the impact of the global economic crisis – and adopt the ox’s main qualities like resilience and determination.

Deputy Prime Minister Datuk Seri Najib Tun Razak said that with the Chinese ushering in the Year of the Ox, it was only fitting that everyone should practise these good qualities.

“I would like to wish a Happy New Year to the Chinese community in Malaysia and they will be celebrating the Year of the Ox, which according to their belief, symbolises diligence and hard work” he told reporters yesterday.

“I would say that this is the right time for us to emphasise such qualities as we are facing a lot of uncertainties in the global economy.

“We have to brace ourselves for the situation,” Najib said after presenting school uniforms, bags and stationery to 2,000 pupils from schools in the Pekan parliamentary constituency.

The items, worth about RM300,000, were contributed by the Amanah Raya Berhad.

Najib said the country expected to register lower economic growth this year and that Malaysians must persevere.

He added that together with the right policies formulated by the Government, Malaysia could get out of the global financial crisis and regain sound growth.

To a question, Najib said both fiscal and monetary measures had been taken including the recent announcement by Bank Negara on the setting up of a RM2bil SME Assistance Guarantee Scheme.

He said these were major announcements, including the credit guarantee scheme, where small and medium enterprises hit by the economic crisis could still get loans without having to put up collateral.

“This is a very significant development because there will be more economic activities and there will not be massive reduction in employment,” Najib said.

To another question, he said it was better for the Government to take progressive steps to stimulate growth now because one did not know the type of global problems that would occur in the future.

“Our assessment is that a second package is necessary, so once we have made the assessment, we will formulate a fiscal package,” he added.

Najib, who asked the public for their feedback, said they could contribute their ideas through his website at www.1malaysia.com.my or e-mail to najib@1malaysia.com.my

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Business - Do ratings matter?

Ratings have seldom shown themselves to be forward indicators of problems, raising legitimate questions of their usefulness.

One wonders how rating agencies make their judgements which can make or break the mightiest of them – both companies and countries - in a matter of moments.

And one wonders even more how they retain any credibility at all when their ratings have been extremely off the mark in difficult times – the times when the ratings matter most.

Before its spectacular collapse last year, the Standard & Poor’s, or S&P, rating on US insurer AIG International was higher than that of many countries, including Malaysia, at AA+, just one step below the best sovereign rating of AAA, accorded to countries such as the United States.

S&P is the largest rating agency in the world. It gives Malaysia a relatively lowly rating of just A+ (reminds me of the highest possible grade those days that a lot of us aspired to in primary school but few got) under a system which gave the highest triple-A or AAA grade to the most secure debt, descending in steps to AA+, AA, A+, etc write down to D to denote a borrower in major default.

But that AA+ did not prevent AIG’s dramatic fall from grace in a pall of shame when, like almost everybody else, it came to pass that it was also exposed to the subprime credit crisis and very substantially at that.

What it did was to guarantee subprime credit for a fee which increased fee income and which it was able to do because of its high credit rating, thanks to the wonderful people at S&P who thought so highly of AIG.

But the question is, how come the credit rating agencies did not pick this up when the books and officials of AIG were open to them? Did they not understand that AIG had exposed itself to great risks by these guarantees or were they glibly and blissfully unaware?

As they say ignorance is bliss, until the bliss was shattered by reality that is. The share price of this venerable global institution skittered down to a tenth of its value and no less than the US government had to pump in tens of billions of dollars to save the day.

Since that day in September last year, much water has flowed under the bridge along with newly discovered losses at a number of banks, financial institutions and other companies, all of which have lined up begging bowl in hand at the doors of the seemingly overflowing and bottomless coffers of the US treasury.

The General Motors official who flew in a private jet from Detroit to join the queue in Washington, was suitably chastised by the press the following day. The United States has to shell out a few trillion US dollars to keep more venerable names in business.

Through my simple mind a lot of complex questions are raging like a freight train barrelling along the tracks out of control. But apparently not at S&P.

Where is the US going to get the money? Will the foreign countries, which have put their funds inside the US, pull out? If the US prints money to pay its obligations, the bulk of it luckily in US dollars, won’t inflation spiral high and out of control nevertheless, plunging the value of the US dollar?

That’s bad news, right? The US’s creditworthiness must be shot to bits, right? No, wrong according to S&P and the other people who know enough about credit to rate whether others are worthy or not but whose assessment is becoming increasingly incredible and worthless.

According to S&P, the US’s rating, despite all the myriad troubles it faces, still stands at AAA, the best possible.

Perhaps the UK or Australia or New Zealand, all of which have serious problems, have lower ratings? No, they are all triple A, just like the US. And so are Germany and Japan.

And since the creditworthiness of the entire developed world has not changed one single jot – not a single teeny-weeny downgrade despite all those troubles – all’s well with the world, right? But, unfortunately, we all know that is not true.

Mystery: How is it possible for the developed world to be in major, unprecedented financial and economic mess and for the credit ratings of these countries to be not affected at all?

What about those countries with the highest reserves and perhaps the best balance sheets? China is a mere A+, same as Malaysia. South Korea is just one grade up at AA. And what do you know, Israel, in a constant state of war and surrounded by hostile neighbours who will snuff it off if given half a chance, is at AA, higher than Malaysia or China.

Oh, perhaps there’s some credit rating agency out there which may have something more real to say. Yes, there it is! Moody’s says the US is at risk of losing its triple A rating but within a decade – how insightful and forward-looking.

Just a little footnote: Moody’s has not altered its triple A rating on the US since 1917 when it first initiated ratings – now that’s dynamism for you.

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Have your say on second package via Najib’s blog

The economy is in trouble. It needs help. And you can help — by having your say on how best to stimulate growth.

Deputy Prime Minister Datuk Seri Najib Tun Razak, in his blog www.1malaysia.com.my is welcoming Malaysians to tell him what they think the Government should include in the Second Stimulus Package.

“As you may already be aware, a second stimulus package is in the pipeline.

“For one, the focus of this package will be different from the first,” he said in his latest post entitled Our Economy: Your Suggestions for the Second Fiscal Stimulus.

He said that the Second Stimulus Package had an overriding objective to address the issues which have come about due to the global financial crisis, and would be focused on the niche areas of the economy.

The first stimulus package of RM7bil was announced last November, and is being rolled out in stages in the first quarter of this year to alleviate the threat of recession.

“I am in the process of gathering views from different parties on what is to be included in the second economic stimulus package.

“The relevant Government ministries and agencies are also committed to the stimulus package so that we avoid falling into a recession and sustain our economic livability,” he said, adding he thought it would be a good idea to reach out to the Malaysian public via 1Malaysia.

“In this regard, I invite all Malaysians to participate in providing constructive and healthy, yet concise input as your personal contribution to move our nation forward,” he said.

Those who wish to contribute their ideas can comment at Najib’s blog, or e-mail to najib@1malaysia.com.my.

National Chamber of Commerce and Industry of Malaysia secretary-general Datuk Syed Hussien al Habshee lauded Najib for inviting Malaysians to give their views, comments and suggestions for the Second Stimulus Package.

“Commerce associations and members should take the opportunity to give their input on what the Government should do to help the economy,’’ he said.

He said while it was a good measure to have a Second Stimulus Package, the recipients have to ensure that the money was used wisely and quickly.

“They cannot take their time to scrutinise the plans. The money must reach the people as soon as possible and not be tied up by red tape,’’ he said.

- The Star

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The jobs that will be most at risk in tough year

How will the worst global recession now hovering over Australia – and possibly Malay­sia – affect the ordinary workers in both countries?

Researchers and labour market analysts examining this issue, which is the biggest worry for most Australians today, have identified a variety of jobs that are at most risk in tough 2009 and those in “safe haven”, as they call it, when the recession hits the nation in one way or another.

Sectors at risk

Apart from mining jobs, which are already being scaled down due to reduced exports of iron ore and energy resources, the first to be affected in the other categories is the banking sector.

This is understandable because of the financial crisis, which has caused the major Australian banks to lose billions of dollars – although their losses are not as much as those in the United States, the United Kingdom and Europe.

Banks here are restructuring their entire organisations and networks and are retrenching workers to cut costs.

Next will be the car industry. Fewer people are now buying new cars, putting car salesmen at risk of losing their jobs.

At risk also are workers in the tyre manufacturing sector, which rely heavily on the local car industry that’s now struggling to main­tain its market share against imported brands.

Since petrol prices at the browsers have not come down to the level before the escalation early last year, coupled with the downturn in the economy, motorists are reducing their outings to save money. Workers at petrol browsers and truck drivers will be affected.

Despite the removal of fuel surcharge by airlines, the number of people travelling overseas or interstate has reduced considerably, and the airline industry and its related tourism industry will face a difficult year and shed jobs.

Real estate agents are also worried as fewer people can afford to buy homes and the number of properties under repossession is increasing in all Australian capital cities.

No estimated figures of these specific job losses or of those at great risk this year are available. However, the latest Australian Bureau of Statistics figures for December showed that 44,000 workers were sacked last month as the global recession began to grip the Australian economy. Economists believe that the figures were collected in early December and do not reflect the full extent of lay-offs in the mining sector announced recently.

The figures show that while Australia has yet to experience the substantial rise in unemployment seen in other developed countries, the small rise in jobless rate to 4.5% is worrying government and union officials.

Australian Congress of Trade Unions secretary Jeff Lawrence says the sacking of 14,000 workers worldwide by Rio Tinto, Australia’s big iron producer, shows the worst could be on the way.

The latest statistics also show that job advertisements plunged by 52% last year, with online job advertisements at their lowest ever.

The sharp fall, according to ANZ Bank monthly report, was the weakest annual rate of growth since the bank began its survey of job ads in 1975, and was worse than the drop during the 1982 and 1991 recessions.

This provides further evidence that demand for workforce across the Australian economy is now at recession levels. The Australian economy is forecast to record zero growth this year from an estimated 1.9% last year.

But the economy is expected to rebound to 1% growth next year, according to the Dun & Bradstreet’s Economic and Risk Outlook report released last week.

Exporters hit

D&B chief executive Christine Christian said the slowdown in emerging markets would be felt most among Australia’s exporters, which send about 40% of their goods to the Asia-Pacific region.

“Demand from Asia is critical to Australia’s economic prosperity,” she added. “However, with this demand expected to decrease markedly and default risks likely to rise, Australia’s exporters will be hit hard in 2009.”

The report pointed out that, among other factors, loss of trade partners, slowing productivity gains and a worsening business climate could lower the long-term growth potential of emerging markets.

While the report also predicts that world economic growth would fall to 1% in 2009 – the lowest level in more than 20 years – amid deteriorating trade conditions and decreasing demand, the IBIS World study released last week says traffic from key markets such as China, Japan, the US and most of Europe will fall dramatically.

“While the vulnerabilities vary across the globe, no region will escape the fallout completely,” the study adds.

Most surprisingly, however, the consensus in most reports is that the top 10 “safe haven” jobs include those in the biotechnology and online information services sectors.

Other categories are jobs in childcare, community health care and nursing homes, where the number of over-70s will grow and will keep radiographers and other workers in diagnostic imaging busy as more tests are needed for their health.

Online shopping has shown strong growth among the 25- to 44-year-olds and will create employment opportunities in the sector for technology developers, technical support and supply chain staff and marketing personnel.

With consumers tightening their belts, women especially will buy alternatives to their more expensive fashion items as long as they deliver “the feel good factor”.

This means that women will reduce their spending on clothes, shoes and handbags in favour of lipsticks, skin creams, perfumes and other beauty products.

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Proton Savvy among top 10 cars in Thailand

Malaysian-made Proton Savvy has been voted among Thailand's top 10 cars in 2008 by The Nationdaily's car writers.

The Savvy, priced at 469,000 baht (RM44,000), was selected along with some of the most impressive and expensive cars in the Thai market, among them the Jaguar XF, BMW 320D, Volvo S80 3.2, Mini Copper S Clubman, Honda City, Honda Jazz, Ford Focus 2.0 TDCI, Mitsubishi Pajero Sport and Subaru Impreza STI.

The daily said many would not consider Proton a mainstream brand in Thailand, but with the Savvy, the writers were more than impressed.

"Cheap price, good acceleration and almost go-kart-like handling (thanks to Lotus) made us fall in love with this little Malaysian thing," the daily said of the car, which is distributed by Phranakorn Auto Sales.

The list, which is prepared annually, covers a whole range of criteria, from value for money through to drivability, performance, fuel economy and sheer good looks.

Phranakorn general manager (operations), Apichart Wangsatorntanakhun, said the quality of the car was the main factor for the selection, adding that the listing augured well for Proton brand in the market and its future model launchings in Thailand.

"It's best value for money in the market, with good performance, like handling, plus economical to purchase and operate.

"You can buy a cheap car but if its performance is not good, you cannot sustain in the market," he said, when commenting on Savvy's listing in the top 10.

When Proton made its debut at end-2007 in the Thai market, dominated by the world's top manufacturers like Toyota and Honda for decades, Savvy was the cheapest car priced between 399,000 baht and 460,000 baht.

GEN 2 and Satria were launched at the same time while Persona CNG came to the market last December.

Apichart said in its first year of operation, Proton sold more than 3,000 cars, with Savvy accounting for 54 percent of the total sales.

"During the recent 25th Thailand International Motor Expo, Proton received 863 bookings, with the Persona model, fitted with preinstalled compressed natural gas (CNG), being the top model," he said.

He said Phranakorn planned to have between 35 and 40 dealer centres throughout the country by the second quarter of the year, complete with after sales services.

- Bernama

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TM’s new growth engine - CEO

Telekom Malaysia Bhd group CEO Datuk Zamzamzairani says high speed broadband will boost sophistication and provide TM growth opportunities

What are the challenges and outlook of the telecoms sector this year?

The telecoms outlook will be challenging as the full economic impact of the financial crisis will be felt more in 2009. This will change the purchasing behaviour of all customer segments.

TM will see continued challenges in both the data and voice segments with customers demanding a higher level of service while facing competition driving for the very same customers.

To maintain our leadership position in the industry, TM will continue to improve customer experience and customer service, cost management, operational efficiencies and other initiatives as spelt out in our performance improvement programme (PIP).

With the intense competition from multiple players in the market, customers will be focusing on better services with greater value.

The market will see players that are able to provide innovative services to the market to separate themselves from the crowd.

What are you going to do to address the slide in fixed line revenues and other areas of opportunities to grow revenues?

TM will increase its focus on providing relevant value to the targeted customer segments, for example promoting lower ‘Let’s Talk’ and ‘Family’ packages.

TM will also reach out to the younger segments through new approaches via the Internet such as “blogvertising.”

Recognising the need for simplicity, TM will provide a simplified approach to make the use of voice services as seamless as possible.

For example, we recently introduced a simpler calling service via iTalk Mobile Starter Pack which works in almost the same way as the iTalk prepaid calling card but with enhanced features. The new features allow users to use iTalk automatically, without having to dial the iTalk Toll Free number to activate the iTalk account or keying in the intended destination numbers.

TM will also continue its drive to get more users on the Internet and help make fixed line remain relevant, thereby providing a means for TM to explore opportunities for services such as teleworking, applications on demand, web-conferencing, and self-management services to be offered via the Internet.

As for the enterprise customers segment, TM will be better able to serve them with value-added services over the Internet such as managed security, managed hosting and managed connectivity.

TM is also positioned to tap the wholesale and global market for voice traffic. The better offering for the licensees by the wholesale arm as well as the better termination rates offered via our global arm will help mitigate the voice traffic lost at the retail front.

High speed broadband (HSBB) is our engine of growth moving forward. It will bring broadband usage to another level of sophistication and provides us with growth opportunities.


What can be done to improve Internet services in 2009?

TM will continue its efforts to improve Internet services in several aspects:

● Technical: The migration of the old equipment to new equipment, i.e. from a digital legacy system to a full Internet protocol that will help provide better surfing experience for users

● On the customer front: More focus on improving our customer support services to help customer resolve their problems via the first call through our first call resolution programme

● Improving channel management: TM will ensure that customers are better educated at point-of-sales so that they are able to use the services without problems and understand simple resolution techniques and protection from security threats that may impact user experience

● Better offerings: To offer more customised packages to suit the segment needs and make the service offering simpler to understand and use, in addition to offering better products and services over the Internet

● Quality of service: TM is committed to spend 3% of our annual revenue on improving quality of service and increasing our quality of service audits.

TM has a huge HSBB project in hand, how much of this will be developed in 2009?

The project scope calls for HSBB infrastructure to be provided for 1.3 million premises passed, which will be achieved by the end of 2012.

This year will be the launch year for the project and thus it will be a groundbreaking and critical first phase of it.

This year, we expect to accomplish the following:

Strive to meet our premises passed commitments as agreed with the Government.

Since the HSBB rollout will be confined to inner Klang Valley, Iskandar Malaysia and key industrial zones throughout the country, the premises passed in 2009 will cover identified exchange areas in the Klang Valley and key industrial zones in the northern and southern regions of the country.

In line with our open access commitment, we will launch bandwidth services by the second quarter. This product will be available to all licensed and qualified value-adding access seekers.

The rollout of our commercial retail HSBB packages by the fourth quarter: The pricing and package details will be announced at an appropriate time before the rollout as we are still in the process of fine-tuning the various offerings.

Your capex requirements and source of funding?

We are reviewing our capex plans in view of the challenging market as capex spending is based on expected demand.

While we are able to fund our capex from internally generated cash, borrowings will be considered if it makes sense from a capital efficiency standpoint.

- The Star

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Personal Investing - Good fundamental stocks always give steady returns

By Ooi Kok Hwa
(Investment adviser and managing partner of MRR Consulting)


IN a stock market, there is a small group of investors who seem to have the wrong mindset on long-term investment.

To them, long-term investment via the “buy and hold” strategy cannot give higher returns than short-term trading.

They feel that even though the former may provide higher returns, they need to wait for a long time before they can enjoy the good returns.

According to Peter L. Bernstein in his article The 60/40 Solution: “In investing, tortoises tend to win far more often than hares over the turns of the market cycle ... placing large bets on an unknown future is worse than gambling, because at least in gambling you know the odds.”

Good fundamental stocks always give good and steady returns over the long term.

However, investors need to hold them for long term.

Besides giving higher returns, investors will also face lower risks when they invest in these good fundamental stocks compared with speculative stocks.

In this article, we will look at the performance of Warren Buffett’s investment company, Berkshire Hathaway Inc versus the performance of S&P 500.

The table summarises the historical performance for Berkshire versus the S&P 500 from 1965 to 2007 (a total 43 years) based on the latest available 2007 annual report.

Based on the annual report, the yearly compounded gain for Berkshire was 21.1%, which outperformed the 10.3% returns generated from S&P 500 over the same period.

In general, in most periods, the returns from Berkshire were higher than those from the S&P 500. However, we need to understand that Buffett did not generate 21.1% every year.

There were 23 years in which his returns were lower than 20% (we used the nearest 20% as the benchmark).

Nevertheless, during the bull markets, Berkshire was able to generate annual returns of 40% to 60% for five years whereas there was not a single year in which S&P 500 charted above 40% returns per annum.

In terms of losses, Berkshire only reported one year of negative return versus S&P 500, which has 10 years of negative returns.

To quote one of Buffett’s most important investment principles: “If you want to win, you don’t lose.”

To Buffett, as long as you can reduce the losses incurred in the bear market and increase the percentage of high returns during the bull market, your performance should be higher than the overall market performance.

In short, we cannot expect to generate high returns every year. We have to accept that there will be certain years we need to protect our capital from incurring losses rather than thinking of how to generate high returns.

Almost all investment gurus or analysts say that 2009 will be a tough year. As long as we can avoid incurring losses and have the patience to wait for the next bull market, we should be able to outperform the overall market over the long term.

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Hollywood coming to Malaysia

Hollywood is coming to Malaysia.

Los Angeles-based award winning visual effects studio, Rhythm and Hues Studio, will be setting up a high-tech studio on par with its LA studio in Malaysia.

With more than 100 feature films to its credit such as Babe, The Hulk, The Golden Compass, The Chronicles of Narnia and Night In The Museum, Rhythm is internationally recognised as one of Hollywood’s top visual effects and animation facilities.

“Rhythm is not outsourcing or doing back office work in Malaysia. The work done here will be the same sort of thing being done in LA. The Malaysian studio will be a wholly-owned subsidiary of Rhythm in the US,” said Rhythm senior advisor Shahril Ibrahim.

“For instance, while shooting a film, the lighting is done in Mumbai, the animation in Kuala Lumpur and the visual effects in LA. So it’s a very collaborated effort which is broken up into task groups.”

The studio in Malaysia will be Rhythm’s third outside of the US. It also has studios in Mumbai and Hyderabad. Presently, there are 300 people in the India outfit.

Shahril said Rhythm was in need of a third studio and had looked at a few countries.

Malaysia was chosen because of Multimedia Development Corp’s (MDec) support for its sort of work, he said. Cost was another huge factor, apart from the big pool of students studying multimedia in Malaysia.

“We did get some incentives from MDec, but it’s minor support things,” he said.

Rhythm’s present primary need is talent, and it is looking to hire 200 to 225 skilled workers. The studio is expected to be running by year-end, with 40 recruits for a start.

In the process of film and animation, Shahril said the Malaysian studio would initially be more involved with background works. After the necessary training (three to six months of in-house training) , it will start moving into animation works. Most of Rhythm’s technology is its own proprietary software.

“Rhythm is creating high end jobs. The next best equivalent of Rhythm is probably Lucas Films Ltd Studio in Singapore. So it’s definitely a coup for Malaysia. The Malaysian studio will be doing Hollywood work. So Malaysians get a chance to be involved in the making of an international movie. For instance, the Indian studio did parts of The Hulk, Narnia and The Golden Compass,” said Shahril.

He added that Rhythm had no plan to enter the Malaysian movie industry.

Rhythm has already identified Cyberjaya for the studio.

“Putting the technical elements into the studio is not dificult. The main priority is to recruit and train people. Rhythm is cautious because it wants to hire people which are culturally Rhythm.

“In Rhythm, we’re very open and transparent. Its not truly hierarchical, it’s more matrically in culture,” said Shahril.

Rhythm is a privately owned company which makes about US$100mil a year in revenue.

- The Star

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One-stop centre for ECER investors

A one-stop centre will be set up to fast-track applications and approvals for the East Coast Economic Region (ECER) projects.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said the one-stop centre would be a single point of contact to process applications before approval by the Finance Ministry.

“Potential investors do not have to run around to get their applications done.

“They will obtain the necessary information and understanding on essential matters involving their interests in one place,” he told a press conference after attending an ECER development council board meeting here yesterday.

The one-stop centre will have its headquarters in Kuala Lumpur. An office will be set up in every state.

Abdullah also said that an allocation of RM2.6bil had been identified for 107 projects under the ECER with 48 already commenced last year.

“Twenty-nine more will begin by the middle of this year, with 22 projects to start before end of 2009. A further eight will be implemented by early of 2010,” he added.

On an agropolitan programme in Besut and Setiu, Abdullah said it would involve 3,000 poor households and would commence by the middle of this year.

He added that the infrastructure to support the various economic clusters, such as the Kuala Terengganu International Airport had been completed, while other projects such as Phase Two of the East Coast Expressway was expected to be completed by 2011.

To a question, he said projects under the ECER would continue and there would be no delay in spite of the current economic situation.

On whether there would be a second stimulus economic package, Abdullah said it would be announced if the need arose.

- The Star

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MAS drops fuel surcharge

Malaysia Airlines (MAS) will remove fuel surcharge for domestic travel in Malaysia starting today.

Its managing director and chief executive officer Datuk Seri Idris Jala said the decision was made based on the drop in fuel prices, competitive pressures and the need to boost air travel during the current economic slowdown.

“We have always offered competitive fares that are benchmarked against our competitors’ on a route-by-route basis. Our stand is the total amount that the customer pays must be competitive, whether it is the fares alone or fares in combination with the fuel surcharge,” he said in a statement here yesterday.

Idris said the removal of the fuel surcharge would see more competitive prices for the MH Value Fares that offered four fare options for economy class travel, with discounts of between 20% and 70% being offered.

For international travel, MAS had earlier reduced fuel surcharge for travel from Malaysia to South Korea, Japan, France, Hong Kong and Singapore, and from other points of sales to various destinations, he said.

“In markets where other carriers are the major players, we will follow if they drop the surcharge. In markets where we lead, we will evaluate the customer demand against the supply,” Idris said, adding that despite the recent drop in oil price, MAS’ fuel costs were still higher compared with when the surcharge was first introduced in 2004.

- The Star

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Boycott Israel - List of Product & Brand That Supporting Israel

List of Product & Brand That Supporting Israel


Source : Malaysian Muslim Consumer (PPIM)

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‘Buy Malaysian goods’ drive to be launched

The Government is launching a “Buy Malaysian Goods” campaign to boost domestic economic growth in the face of the global economic meltdown.

Domestic Trade and Consumer Affairs Minister Datuk Shahrir Samad said the campaign, to be launched on Jan 16, was to ensure local producers would not have to rely on export markets.

“The main concern for the ministry is no longer inflation but to ensure the economic growth of local businesses,” he said at the New Year gathering at his ministry here yesterday.

He said Malaysia could not escape the economic crisis that the Western countries were suffering.

“We never expected that a country like Iceland would resort to the IMF for financial help and if Lehman Brothers Holdings Inc could go bust, we would definitely feel the heat too.”

He said the nationwide campaign was to encourage the buying of Malaysian-made goods so they could survive in the business world.

“We might have overlooked some of the local products in the past but we do produce goods with high quality,” he said.

Asked whether the quantity of imported products would be reduced following the launch of the campaign, Shahrir said there was no plan to do so because Malaysian products could definitely compete with those from overseas.

On whether there would be another fuel price cut this month, he said: “There isn’t any big difference with the world crude price, which stood at US$41 per barrel at the end of December but we will continue to monitor the price every two weeks.”

- The Star

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Bank Negara: SMS scams tied to unauthorised withdrawals

Unauthorised bank withdrawals are mostly caused by SMS scams which inform victims they have won cash prizes, says Bank Negara Malaysia.

The central bank said it received 165 complaints last year on illegal withdrawals, all of which were due to customers knowingly or unknowingly divulging personal information such as their personal identification number (PIN) and password to third parties or fraudsters.

“Banks will never request for such personal information through e-mail, SMS or phone calls,” Bank Negara said in a statement yesterday.

It urged the public not to respond to any SMS or e-mail requesting personal information for banking accounts.

“In most cases, victims of unauthorised withdrawals receive an unidentified SMS to inform them they have won a cash prize and that they have to open an Internet banking account to claim it.

“The victim then contacts the fraudster, who provides a step-by-step guide on how to register and activate their Internet banking account using the ATM terminal,” the statement said.

Upon registering at the ATM terminal, the victim would be given an Internet banking PIN number which the fraudster would ask for to create the online banking account.

Bank Negara said the victim would then be asked to register the fraudster’s handphone number to obtain an authorisation code to enable transfer of funds via Internet banking.

“This will result in the authorisation code being sent via SMS directly to the fraudster’s handphone. The victim has unknowingly provided the fraudster with full access to their banking account,” Bank Negara said.

Meanwhile, Deputy Finance Minister Datuk Kong Cho Ha said the claim by Deputy Minister in the Prime Minister’s Department Senator T. Murugiah’s that funds from bank accounts had been siphoned off monthly to Indonesia should be backed by evidence.

“You can’t just make a claim without proof. You need to show evidence that such a thing is in fact happening,” he told reporters yesterday.

On Friday, Murugiah claimed that funds from some 60 to 70 bank accounts were being siphoned off and raised the fear that bank insiders were working together with fraudsters.

Kong said no police report had been lodged by the victims so far.

- The Star

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