Saturday, January 06, 2007

Potential Pension Investment Plan

Call me a moron but why deposit 10% before a feasibility study and subsequent due diligence is done? 10% of a large base is not spare change.

Furthermore, if a known or unknown individual/company has something truly great to offer, wouldn't they do it through formal means i.e. by Investment Division of Company speaks to Investment Division o Company B?

A no brainer.

Goodness, some us save as much as 14% in EPF monthly.

God help us all...

What say you?

------------------------------------------------------------------------------Initial study on company found it viable, says EPF

KUALA LUMPUR: An initial study of the proposed investment by the Employees Provident Fund (EPF) in a company that had been wound up was found to be viable with good business prospects.
In a statement issued here yesterday, the EPF said the study was made by its private equity department and approved by its Investment Panel, subject to a full financial and legal due diligence audit being done.
“The EPF did not proceed with the deal because the company concerned was wound up and action is being taken to recover the refundable deposit of 10%, or RM1.5mil,” it said in a statement yesterday.
The statement added that as custodian of 11 million members’ retirement funds, stringent procedures and guidelines are in place to ensure that all investment transactions are carried out in the most effective and transparent manner. The EPF was referring to a report published in The Star on Wednesday, which said the fund almost paid RM15mil for a wound-up company, which was actually worth less than RM700,000. A man had approached the EPF's investment division and offered to sell an 80% stake in the firm.
The deal was halted after several former company directors alerted the EPF, but not before the fund had paid the RM1.5mil deposit.

Reported from

Saturday, December 30, 2006

Justice On a Silver Platter

All criminals should be tried in the court of law. What about criminals that defy international laws? Should they be tried in their local legal system , or should they be subject to the International Court of Justice?

Slobodan Milosovic who was allegedly the mastermind of the Balkan-Kosovo war in the early 90s was tried at the ICJ. Saddam Hussein, war monger among the Arab world, was tried in Iraq, while the US still occupied the war-torn country.

Is there a difference if 2 supposed criminals were tried in 2 different courts?

Both former leaders were accused of inflicting war (genocide i.e. ethnic cleansing to be exact) within their own countrymen, while the inprisoned Iraqi despot even transgressed international borders. The first trial for Slobodan was a very long and tedious process, where the judges that presided were not from any of the countries involved in the Balkan war, to ensure impartiality.
Saddam's trial began, concluded and the sentencing executed in the span of a few years (if you actually's less than that). What is more appalling and strange, is the sentence: Hang

Wow. As far as I know, most dictators get life inprisonment or something less barbaric.

Hmm...I wonder.

Saturday, December 16, 2006

Tall Tale Corrected, Finally

Tell me there is something wrong with me.

A leader openly blames an individual for his country's financial woes in 1997. A decade later, after a brief meeting, only then does he realize that he is wrong.

Before I go on, this leader does get brownie points for admitting his mistake. Did he apologize? Did he justify why he rashly jumped to conclusions 10 years ago?

No, he did not.

I am seriously appalled and a little afraid since discovering that a leader can actually blame one man for something so big as a financial crisis. Any normal, rational mortal would know that that is not possible. If that rational person studied economics or finance, then he would definitely know that the leader is not telling the public the truth. The fact that his advisors didn't tell him (or perhaps he refused to listen to them) that the speculation was done by many traders around the world especially bigger corporations, then his statement that " I didn't know they were done by other traders" makes Malaysia look really foolish.

You wonder how many more statements were made based on inaccurate information.

Somehow I don't want to answer that question.

My take: If you didn't know, do your research.

Point one finger to another, 4 fingers point back at you.

I know I may be the only one who feels thiw way. Then there may be truly something amiss with me.

JAIS Hushed Up

Finally I see an authoritative religious leader being sensible. A Mufti from Perlis boldly criticized a misguided organization named JAIS, who are popular for their various raids, that they should stop doing what they are known for- RAIDS.

I have always wondered why JAIS enjoys looking, searching, snooping for couples being intimate just so they can catch them in the act. I have always wondered why they enjoy bringing the press along on their "trips". What purpose would that serve? Is this to promote their activities? To give clear warnings to others to stay away from vice or else be publicly humiliated?

Beats me.

The Mufti also gave strong justifications to support his principle.

  • Islam does not preach its followers to look or search for vice. Instead, Islam encourages one to abstain from vice, and to always think good of others (husnu dhan).
  • If the vice is committed in the open (public areas) , then JAIS has the right to intervene. If it is done in the privacy of their own home, then the matter is entirely between the individuals and the Creator.
  • Islamic rules regarding certain types of vice are not applicable to Non-Muslims i.e. drinking, smoking, marital affairs, clubbing etc. Others are not governed by these rules, thus they are not considered vice for them, but they are vice for Muslims.

JAIS needs to prioritize and do what is truly relevant for the Muslim community. The key here is education. Divorce rates are high. Establish pre-marriage counselling if the course isn't sufficient. If the rate is marital affairs are high, then solve the problem at the roots. Plan a workshop, understand why people split, and tackle the issues. If apostacy is the issue, discuss, find the issues and resolve them. Don't threaten to kill them.

Raiding doesn't solve anything. It's just a waste of public funds, tax payers' money, and time. It is already bad enough that some corners of the world have to outline what is considered "decent" dressing to enable one to travel or enter into that country.

Sunday, October 29, 2006

When the Curtains Fall

Somehow I do not understand. When your time is up, it is up. You cannot expect any favors or leniency. When a Managing Director moves on and his replacement comes in, chances are the MD’s previous policies might be clarified, improved or changed completely. Yes, some people might be unhappy, and some will embrace the changes. However, it is very rare the previous MD will return with heated criticisms armed with a tape recorder to boot . Voicing concerns for the betterment of the institution is much welcomed, but to the extent that grievances aired over changed policy by using dirty personal attacks are unprofessional and downright unacceptable.

It doesn’t have to be an MD. Let’s say we’re salesmen. After reaching our monthly, quarterly and yearly targets, we have just been promoted. Now, somebody new joins the firm and replaces you. He has fresh ideas contrary to our practice. Old salesman gives advice to the new salesman. Granted, the advice has been given. The questions we must ponder are:

§ Must the new salesman follow the advice on the virtue that his predecessor has “been there, done that”? At the end of the day, an advice is still an advice. You can’t force anyone to implement an advice.

§ Is it wrong for old non-functional policies to be changed if given justified reasons? We see it happening in major companies, administrations of powerful countries, etc.

§ Does unheeding an advice or changing a policy a sinful act for a supposedly Third World Nation? I was told by a friend that Third World nations should pay heed to their predecessors on the virtue that we are not as competent as the First World nations. We should use just follow what has been set. Is it acceptable if Bush Jr changes Clinton’s policies, or Clinton changing Reagan and Bush Senior’s policies, but Third World countries should stick to what they know? It seems if we remain to chain our beliefs that we are Third World nation, and are afraid to make steps towards change, then we will forever be a First World Infrastructure country only, with 3rd World Mentality. We have seen different eras have different challenges. It is quite impossible to maintain the same policies for several generations.

§ Does Respect for a person mean following his every whim and fancy?

§ China and India are emerging markets which may (or has) threaten/ed Malaysia’s FDI as labor are relatively cheaper, and the human resource is generally more skillful in certain key areas like IT, Medicine, Bio-Tech, etc. Alternatively, their huge market attracts businesses to set-up base. Thus, does migration of focus to China mean that the economy is in a slump? Moving to China and India does not indicate economic sluggishness, but just mere common sense. What Malaysia can do to attract business (or FDI) is to offer lower corporate tax, interest rates, etc. Then, there is the issue of assisting local businesses with the inevitable fact of liberalization. Malaysia needs to strike a balance between national interests (corporate) and public interests.

§ In a normal world, when a project is undertaken, an analysis is done to determine the cost and benefits. Benefits have to be in monetary, socially, and environmental terms. Naturally, if the benefits exceed the cost, the project would receive an approval to begin work. Somewhere in the middle, with new information, a reassessment is done and finds out that the project has far greater costs than benefits, the project would be halted, and may be even be replaced/improved by something else. In my opinion, halting a project that ceases to benefit the people should be allowed. If not the public, then who else will benefit from them? More importantly, why continue with something that is proven to be unworkable?

Like most footballers, athletes, entertainers and professionals, when it comes to retirement or promotion, people tend to exit gracefully. So far it is only seen in the supposed First World countries. If we claim to have First World mentality yet still dependant on past administrations, in what way are we leading our organization?

I guess we still have a lot to learn.

Tuesday, May 30, 2006

Booking Freaks

I was really interested to read what unconventional economic theories did Steven D. Levitt actually have to expound him on international fame. More importantly, I wanted to understand why he was labeled as a ‘rogue economist’.

My curiosity resulted in me purchasing his FREAKANOMICS book. From there did I learn more about the author as well as his theories:

What Do School Teachers and Sumo Wrestlers have in Common?
How is the Klu Klux Klan like Real Estate Agents?
Why Do Drug Dealers Still Live with their Moms?
Where Have All the Criminals Gone?
What Makes a Perfect Parent?
Perfect Parenting: Names Outlining/Defining One’s Destiny

The answers:
1) They both have incentives to cheat.
2) They both know how to manipulate information
3) Drug Dealing Income is not as high as it is perceived. The drug business is too saturated, i.e. the pyramid is too big and their gains are marginally low
4) Debunking myths that crime rate falls due to economic boom and lower employment rates- actual reasons given by the author are the increase in policing, but by and large, the legalization of abortion
5) Too long to describe
6) Same as number 5

Though I do not agree with some of his theories nor with some of the outcome, I do applaud Levitt for tackling the core issues that haunt us i.e. Education, Victories and Losses (both might have been fabricated), Criminals and the Justice System, & the many definitions of good parenting.

It makes a good read. But you must be warned:

Read with an alert mind. Not all outcomes from Levitt’s studies are applicable to other countries.

Saturday, April 08, 2006

Who Are We?

I have always wondered about the term 'freedom' and how it applies in a society. In Malaysia, the word is abuzz as the story of a couple kissing & hugging appear all over the front pages of the local dailies. Frankly, I think the issue is being blown completely out of proportions.

Malaysia is multi-racial, & multi-religious country. Naturally being Asians, we publicly announce our adoption of the Look East policy. In reality, many prefer the Western methodology and philosophy.

Let me make it clear that I am not against either camps. I am a firm believer of learning from the good examples of both civilizations, and leaving the not-so-good.

What perplexes me is Malaysians in general apply the Look East Policy in their business expansions (benefits) only, yet in lifestyle we embrace the western way of life without question nor hesitation. Of course, we are relatively free to adopt whichever in our related fields. But it seems the western lifestyle is becoming more dominant, and no matter how many baju kebayas, cheong sams or punjabi suits we wear, we no longer think and act 'Asian'. Yet, we often exclaim how true we are to our Asian values. Btw, what are our Asian values? Do we even know?

So the defenders of 'freedom to live' (the core argument of the defense team) does not hold much water as the legal system pretty much reflects Asian values even though the thinking/perception is changing. Freedom to kiss in public is still taboo in Asian communities. If we want to remain Asian and protect our identity, perhaps we should give a stern warning, or just a warning. There is no need for the issue to be brought to court. If we want to return to our roots, we should promote Asian values once more. Put up sign boards like how they do in India. E.g. (road safety campaign) " Don't Drive Like Hell or You'll Get There, For Sure"

If we decide to jump into the bandwagon and go Western full time, then, the public must be educated, and legislations amended. Then again, does the majority of the public want this change? Are we ready for it?

Freedom here permits actions that do not infringe on society's sensitivities. Once it crosses the sensitivity line, it is no longer freedom. Perhaps you can do so in other countries, as it is permitted. But you won't be able to get away in most Asian countries.

I guess Huntington did good by examining "Who Are We?". Many really don't know. Whether his answers are valid is another issue.

I guess we have to ask ourselves the question.

Sunday, April 02, 2006

Islamic Banking: The Future?

What is the way forward for Islamic Banking? I remember when I was still in the banking industry, the debate wld continue amongst the highly-paid Syariah consultants on what is deemed valid/null regarding syariah-based financing tools.

With the threat of financial liberalization, manifestations of fear is evident with the newly consolidation agreement between Bumiputra Commerce (BCB) and Southern Bank. By 2007, Bank Negara has outlined that there should only be 5 local banks. I wonder who will whose running partner in this much awaited rat race. Citibank, HSBC, Standard Chartered, etc will soon be allowed to open branches in major cities in Malaysia.

Moving on to the fate of Islamic banks, so far we have 3 local Islamic banks (BIMB, Muamalat and Commerce Tijarah). Already, they aren't doing so well. Of course, there will be the grand entrance by a foreign Islamic bank soon. How can local Islamic banks survive?

My input is we branch out of Malaysia. We go regional, middle east and perhaps global. Wait, I believe Islamic Banks in malaysia are thinking along those lines as well. Their major obstacle is harmonizing the differences in Muamalat within the 4 Sunni groups. Believe it or not, these differences cost money to Islamic banks as it does not allow the institution to move forward with new financing tools. A local bank in malaysia has Syariah consultants from all 4 Sunni groups, and they can enver agree.

I'm thinking why can't banks implement Hanafi Muamalat principles in Hanafi-dominant countries, Shafie's in Shafie-dominant countries, and etc. This is based on the concept that Muslims agree that all 4 Sunni scholars are correct in their interpretation. To be consistent, Bank Islam in Malaysia can have Shafie agreed financing tools, at the same time it can open branches in Saudi Arabia with Hanafi agreed banking principles. I mean, rationally, if we visit saudi Arabia, we pray according to Hanafi rules. We can also apply the same for banking.

Ask me why, I'll tell you, give me reasons for Why Not?

The next obstacle Islamic banks must address is their marketing strategy. Most marketing agents will say and have said,"Islamic tools are the same as Conventional" and "If you use it, you will get 'pahala' (reward)".

Really? Both are flawed statements especially the latter. Who are we to confirm whether an individual will receive 'reward' from God? That is a private matter btw God and the individual.

Secondly, marketers should promote using economics and how a tool can (materially) BENEFIT the user.

Characteristics of Islamic banking tools:
1) It uses a fixed profit rate for the financing
2) It buys the property that you want, and sells to you at a selling price
3) The final price of the product is known to the buyer, the frequencyof payments.

Characteristics of Conventional financing:
1) Interest is based on the current market rate (volatile)
2) You borrow an amount from the bank, and pay the bank monthly for a specified period.
3) Final price is not disclosed

This is how users can benefit from Islamic banking:
1) If you are risk averse, then you should go for Islamic banking. Why?
Interest rates go up and down in a business cycle. The future environment is expecting to see interest rates rise (remember 1997?). The higher the interest rate, the higher you have to pay for your loan. In the early 2000s, interest rates were relatively low. Now the cycle is going up again. So if you want to hedge, you take a 'fixed amount'. In 1997, many homeowners could not afford to pay their housing loans as the rates were drastically high and hence, many defaulted on their loan payments. Banks had to colect the houses. Banks lost a lot of money.

But if you like taking risks, go ahead. As a consumer you have a choice. Make sure you know the produts before you choose, though.

I believe in Islamic banks and its tools. Surely Islamic banks can survive and even better, compete. I just think we should grow up, put our differences aside and work with our differences.

Let us stop being petty.

Flibbertigibit, signing off