SCORE one for Sarawak!

Sarawak Corridor of Renewable Energy (SCORE) is one of the many regional development corridors in Malaysia, and is being pioneered currently by the Sarawakian government, specifically by the newly created RECODA (Regional Corridor Development Authority). As a Sarawakian myself, I cannot help but feel proud that this plan aims to bring my beloved state into an industrialized and first-world style state by 2030.

The core industries that are prioritized for development are as follows:

1. Oil-based industry
2. Aluminium industry
3. Timber-based industry
   
4. Steel industry
5. Palm-oil industry
6. Tourism industry
7. Livestock industry
8. Aquaculture industry
9. Marine Engineering industry
10. Glass-manufacturing industry

The 3 main advantages cited for SCORE's success are the availability of large swathes of land for development ( Sarawak being the largest state in Malaysia, covering about 40% of Malaysia's total land area), cheap and abundant hydro, coal-based and natural gas-based energy sources, and Sarawak's strategic location between the economic behemoths of North Asia ( including China) and India, as well as Australia to the south.

SCORE's area of development is focused upon Sarawak's central region, itself divided into three main areas, north, central and south. These areas have been designated as 'growth nodes' and are as follows:

• Similajau - Heavy Industry Centre (Northern Node)
• Mukah - Smart City and Central Nerve Centre (Central Node)
• Tanjung Manis - Industrial Port City (Southern Node)
  

I sincerely hope that this plan will eventually work out and bring much needed development and prosperity to Sarawak. Some people may be pessimistic of the prospects, even the plausibility, of such a grand scale project, but as with all great undertakings, the first step is to believe in the lie, the so called 'vision', and only then, after much determination and hardwork, will the 'vision' eventually materialize itself into reality. I call upon all Sarawakians, as their patriotic duty, to wholly and fully support this plan that it may come to fruition and pave the way for a glorious future for Sarawak and it's people.

Books for Aspiring Malaysian Capitalists

Often times when we go to the local bookshops, we find that one of the largest sections there is the investment and wealth-related section. Too often though, these bookshops stock capitalistic-themed books which are not at all relevant to the Malaysian market, usually catering to the US market or the UK. I have, however, come across some books which I have found very useful and extremely relevant to the Malaysian market for those aspiring Malaysian capitalists out there.

Books to consider for Real Estate Investment

This book I predict, will become a classic in Malaysia, as it is one of the most comprehensive and systematic guides to beginning real estate investment I have ever come across in Malaysia. In 'How to become a Property Millionaire', Azizi Ali shares his own experience in real estate investing in this book and I like it because it makes a lot of sense and he doesn't try to be too fancy; although, his language can be a bit off sometimes and some of his humour can be a little awkward since this is one of the first books he wrote, but nothing too serious. The best part of this book is that he has devised a systematic and objective way of evaluating a property for investment and has developed a system for tenant management. Be aware though, that this book is actually an updated version of his older book called 'How to become a millionaire landlord' which is essentially the same except for the colour and some added chapters.

After you're done with Azizi Ali's book, it is a good idea to read these two books by local author Renesial Leong, 'Your Tenant, Your Jewels' and 'Property Jewels', which both deals with content relating to their respective titles. I would categorize her books as more for the intermediate property investor as she talks about investing in the many different types of properties available in Malaysian, such as land, factories, shophouses etc, in comparison to only landed residential property in Azizi Ali's book. She has also come up with many ideas and suggestions which can help you during your property investment ventures. However, her books, I feel, does not give you as solid a foundation as Azizi Ali's book, but it does help to complement and supplement the latter's book.

In Stock Market Investing, I like to divide it into two main categories; fundamental investing and technical investing. Fundamental investing, which is favored by investor Warren Buffet, is investing in a company's stock based on the company's actual performance, irrespective of it's stock price. Usually this will involve analyzing a company's annual report for the past few years to see if the company is consistent and profitable and then buying the company's stock when it is selling at a discount. On the other hand, technical investing, which is favored by hedge fund investor George Soros, is investing in a company's stock without regard for the company's underlying performance but by looking at the trend and history of a company's stock price movement. This technique is usually much more difficult to do than fundamental investing but can be a way to let you earn from stocks relatively quickly. Usually, this technique involves considering the odds of something happening which could either make the stock price move up or down.

Here I will recommend some books written by local authors dealing with the two different categories of stock market investment.

Books to consider for Stock Market Investing

Books on Fundamental Investing

Written by local author Ho Kok Mun, the books 'How to make money from your stock investment even in a falling market' and 'Essential Stock Investment strategies to make money even in a falling stock market' ( yeah, I thought his book titles were long winded too ) are a good way to start learning about the techniques involved in fundamental investing. I would advise to start with his first book, the 'How to...' one, because in it he goes through the techniques and formulas you will need to analyze a company's annual report. Once you're done with that book, you can graduate towards his second book, the 'Essential Stock..' one . In this book, he goes into the more subjective part of fundamental investing, where he advises you on how to look beyond just a company's annual report and to see the bigger picture, such as how popular are the company's products in society and is the management of the company good etc.

Book on Technical Investing

Although you might see Azizi Ali's name written on this guy's book, he did not really contribute to the content of the book except for praising the author and sharing a little bit of his experience. I also have to admit that the author, Bill Wermine isn't really a local author, he is from the US ( if I'm not mistaken ), however he does claims to have been investing in the Malaysian market for over a decade and his advice is sound. In this book, 'How you can get rich Swing Trading' he teaches you some basic techniques you could use to start on your journey of technical investing. His book provides you with the knowledge you will need to analyze candle stick charts ( a popular kind of chart for analyzing stock price movement ) and provides a few good examples. Although he advises you to create a system for your investing, he doesn't really go into much detail and prefers that you develop your own system, which would involve a lot of trial and error. The candle stick charting software that he recommends in his book, I feel, is quite redundant and expensive; and if I'm not mistaken, as long as you have a registered account with any local brokerage companies ( now known as 'Investment Banks' for some reason ), you can download charting software from their website or use a web-based version of it from them. Thus far I am using OSK's brokerage service, and I find their system to be adequate. Some advice from my own personal experience with technical investing; first, start with a capital of at least RM10k to avoid your profits to be erroded and your losses to be amplified; by having to pay brokerage fees, and second, make sure you don't misread your charts!!!

There you go. These are the books that any aspiring Malaysian capitalist should read and I can attest that I have read each of these books myself. Of course, these books won't turn you into a Donald Trump or Warren Buffet overnight, I admit, I myself am still learning too, but it will provide you with some solid grounding you will need when you start investing in the future.

Become a "Goldmember"

The title occurred to me when I recently re-watched the 3rd installment in the comedic movie series of Austin Powers. Public Bank has just recently announced their Gold Investment Account which allows you to own gold outright in an affordable manner with convenience and minimal hassle.

Although I would normally advocate anyone to invest at least some part of their wealth in gold as a good hedge against inflation, with gold prices hovering some where at about US$1000 per troy ounce these days, I think we should probably wait for prices to come down to more reasonable levels first.

Global Food Crisis of 2008

In 2008, after years of good crop yields, massive food surpluses and world economic growth, we have entered into the first global food crisis of the 21st Century. Years of agricultural prosperity dating back to the sixties and seventies have resulted in many countries around the world to neglect agricultural growth for the more sexy and prestigious, industrial, technological and services economic growth.

The major factors cited in various media as to what have caused this crisis are as follows:

1. The rapid rise of oil and energy prices which has more or less screwed up the logistics of commercial agricultural production, since agricultural machines cost more to buy, run and repair, food more costly to transport and oil based fertilizers and pesticides cost more to buy.

2. Increased demand for food from India and China as they grow ever more wealthy these days due to their rapid economic growth. Also, with rising economic growth, comes a change in their diet to include more meat, which means that even more food will be diverted from humans to feed livestock.

3. Bad harvest due to weather related events such as the droughts in Australia, a major global food supplier, recently.

4. The shift from growing food crops to biofuel crops, which divert more food away from humans and encourage more wild speculation on the world's commodities market.

5. Reduced investment over the years in agriculture worldwide, causing less supply to be available.

The Economist (April 19th-25th 2008 Edition) has a good cover story about this food crisis and the BBC has compiled some interesting facts and figures in colourful diagrams and graphs here.

May Day 2008

The biggest holiday celebrated in the former Soviet Union, Labour day is now a globally celebrated holiday. Meant to celebrate the humble and lowly worker, the main driver of any business and nation's economy, it does, however, strike me as some what of a celebration of communism, which could be bad news for capitalism. I'm not saying that the workers of the world should not be recognized or celebrated, by all means, they should be! There are some marxist groups which could come to exploit this holiday as what happened in Malaysia recently.

As reported by Giam Say Khoon, from theSun newspaper, dated 2 May 2008, 200 people attended a Labour day march which was organized by the May One Committee, a coalition of union workers (which i thought was illegal in Malaysia) NGOs and some politicians. They made the following "demands" to the Party Rakyat ( I believe this is the name of Malaysia's coalition of opposition parties ):

* The enactment of a minimum wage policy and the abolishment of the minimum wage policy;
* For maids to be recognized under the Employment Act 1955 and International Labour Organisation Convention;
* the automatic establishment of a workers union;
* work places free of sexual and gender discrimination and the establishment of the anti-sexual harrasment act;
* protection be expanded to migrant workers in the Employment Act 1955;
* an end to talk on free trade agreements; ( Gasp! )
* that settlers not be evicted and the establishment of an affordable housing scheme;
* stop the privatisation of utilities and hospitals;
* abolish the Internal Security Act (ISA), Emergency Ordinance and Universities and University Colleges Act 1971;
* a government that is clean, transparent and free from corruption and cronyism; (what government isn't ?!?)
* the enactment of a freedom of information act.

I worry especially about the parts where they wanted to set a minimum wage, establish workers unions and abolish free trade! These seem like very communistic things to do and could only potentially hurt the economy of this country more. Being a free market idealist, and pro-globalist, the best way to help any economy is to open it up, rather than to shut itself out, and of course you need a government that can regulate it well enough too.

Back to blogging after extremely long hiatus

I cannot explain it, but somehow I suddenly felt this urge to blog again this fine Sunday afternoon after a long 'hiatus'. I do not know why, although I suspect that it is probably to procrastinate from my studies for my finals, HAHAHAHAH! But, I digress. In these recent months I feel that are a great deal many things happening to the world and to myself, what with my foundation studies in University coming to and end,campus politics,assignments completed, uncertainty in Malaysia's government, the financial crisis in the US, uncertainty of the global economy, the commodities boom, the global food crisis of 2008, oil being worth more than US$100 per barrel.

I feel that in these potentially trying times and period of great personal growth, I need to document my thoughts in this online journal, so called "Blog". In any case, look forward to posts from me in the weeks and months to come.

Welcome to the University of Nottingham Malaysia Campus

One of my seniors once said " I'm never ever coming back to this stupid, stupid university again! " at the end of his undergraduate course, yet he is still here today pursuing his Masters qualification. LOL.

Another senior told me that in this uni, be prepared for assignments, assignments and more assingments ( did I mention more assignments? )

Anyway, this got me and and friends thinking the other day of a joke that is applicable to students who hail from this studious university.

A bald youth enters a hospital to see his/her doctor.
Nurse: I'm sorry for asking but are you a cancer patient?
Student: No,I'm a University of Nottingham student.

Gap Between Rich and Poor

Just a quick tip people; did you know that the richest 20% of Malaysian society owns 54.3% of it's wealth?

This information was sourced from the Human Developement Report 2006 done by the UN.

I dunno bout you, but I was shocked when I saw this. Apparently Malaysia has one of the highest income disparities in South East Asia. Something should be done about this widening gap between the rich and the poor.

Whichever way this problem should be handled, I'm more in favor of a market based approach instead of the usual bumbling government approach and it's bureaucracy. Restrictions on business should be lifted to encourage more people into this area which in turn will raise employment levels as well as raise the competition for competent workers, which in turn will drive wages higher.

Any other suggestions as to how we can tackle this growing problem?

Boleh Tumpang-kah?

An interesting idea I came across from the internet. Imagine you and some other shoppers gang up together to get a group rate discount from the shopkeeper for the stuff you want to buy, like that 40 inch plasma TV or them Nike sneakers. Brought to you by the folks @ tumpang.com

Interesting concept, check out the following link to find out more. Viva La Capitalism!

The Extinction of RPGT

Recently the government of Malaysia has abolished their RPGT (Real Property Gains Tax) on properties sold in Malaysia. On the upside, those who stand to benefit the most are of course people who are thinking of selling their property, fixer-uppers, those who would buy a dilapidated house, fix it up and renovate it and sell it for a quick profit, and those companies who are in the property development business. On the downside, expect property prices to sky rocket, perhaps as much as 25% in the short term.

The capital gains tax omission not only applies to real estate investments here, it also applies to stocks. As far as I know, Malaysia is one of the few countries in the world that does not have a capital gains tax on any profits gained from an increase in share price.

There is some speculation however that the government may be preparing to launch their GST (Goods & Services Tax) very soon and that is one of the reasons for the recent and sudden abolishment of the RPGT. This would mean that we consumers here would be paying more taxes when we spend our money for food, entertainment, and so on. Of course there will be some essential items that would not have GST but when it does come out, we all have to be more careful of our spending in Malaysia. Potentially though , during the national budget this year,the government could announce a reduction of income tax payments as well as corporate tax to compensate for the launch of the GST.

So before people start complaining about the GST and it’s implications, here is a quote from the Joyce Gon, a writer from The Edge Malaysia;

“So, before anybody starts complaining about another yet another tax, they must ask this question - would you rather pay tax as you earn or as you spend?”