EPF declares 5.8% dividend

Wednesday January 23, 2008

KUALA LUMPUR: The Government has announced a 5.8% Employees Provident Fund (EPF) dividend for last year, up from 5.15% in 2006.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the dividend would be credited into members’ accounts on March 1.

“The EPF has been efficient in managing the fund and is able to declare an attractive dividend rate,” he said.

He made the announcement after a closed-door briefing at the EPF headquarters here yesterday.

The EPF’s dividend rate has been steadily growing since it hit a low of 4.25% in 2002.

“Investment in foreign assets has achieved good returns and I hope the EPF will continue to take new initiatives for the country’s development,” said Nor Mohamed.

The EPF, the sixth biggest old age fund manager in Asia, has RM312bil in assets and plays an important role in the country’s development, he said.

It has in its portfolio US$1.8bil (RM5.76bil) worth of assets in foreign countries, a result of recent diversification efforts, he said.

“Although the current market situation will affect us in the short term, Malaysia has big savings funds and this is a good opportunity, given our strong fundamentals, for the funds to pick up some stocks because prices are attractive,” he said.

On the housing loan monthly instalment withdrawal scheme introduced on Jan 1, Nor Mohamed said the response was good and the EPF had approved 4,378 applications amounting to RM75mil as of Monday.

EPF chief executive officer Datuk Azlan Zainol said the Fund hoped to invest more in the local and foreign markets if opportunities arose.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said the EPF's dividend rate had nothing to do with the coming general election.

He said the higher dividend was given out because the EPF was able to generate higher returns as its share investment portfolio had made more profits.

“When we have more money, we give more. Why say it is the election?” he said after a briefing for 3,000 Umno members at the Putra World Trade Centre in Kuala Lumpur yesterday.

On the share market, Abdullah said the country's well-managed economy was among the factors which have maintained investors' confidence in the market.

Meanwhile, Malaysian Trades Union Congress president Syed Shahir Syed Mohamud said the MTUC had hoped for a slightly higher figure than 5.8%.

“We hope they will give better dividends in future,” he said.

Technical Update

Jan 2008

The Malaysian Capital Markets and Services Act 2007 (CMSA), which came into force on 28 September 2007, aims to strengthen the capital market regulatory framework, improve business efficiency and enhance investor protection. The CMSA, passed by Parliament in May 2007, consolidates the Securities Industry Act 1983, the Futures Industry Act 1993 and Part IV of the Securities Commission Act 1993, which deals with fund-raising activities. The CMSA is supported by the Capital Markets and Services Regulations 2007, the Licensing Handbook and the Guidelines on Regulation of Markets. All of these documents come into effect concurrently with the CMSA.

A key CMSA measure benefiting capital market intermediaries is the introduction of the single licensing regime. Under this measure, intermediaries hold a Capital Markets and Services Licence as opposed to multiple separate licences, which effectively reduces administrative and compliance costs, and ultimately saves time. The Licensing Handbook explains the implementation of the single licensing regime.

In November 2007, the Malaysian Institute of Accountants (MIA) issued the following revised auditing standards:
- ISA 230 (Revised), Audit Documentation
- ISA 700 (Revised), The Independent Auditor's Report on a Complete Set of General Purpose Financial Statements, and the Related Conforming Amendments to Other ISAs.

ISA 230 (Revised) will be effective for the audit of financial statements for periods beginning on or after 1 January 2008, and ISA 700 (Revised) and ISA 701 will be effective for audit reports issued on or after 1 July 2008. These revised standards will supersede the existing ISA 230 and ISA 700 respectively once they become effective.

In addition to the above, MIA also issued 15 exposure drafts for public consultation. These exposure drafts (revision or redrafting of existing standards) are drawn primarily from IFAC's International Standards on Auditing issues. At the same time, the following existing practice statements were withdrawn with immediate effect.
- IAPS 1001, IT Environments - Stand Alone Computers
- IAPS 1002, IT Environments - Online Computer Systems
- IAPS 1003, IT Environments - Database Systems
- IAPS 1009, Computer Assisted Audit Techniques.

No more banks

Jan 2008

With 22 commercial banking groups already in the country, there is no need for any more new financial institutions in Malaysia. The Government therefore has no intention of issuing further licences for the setting up of new commercial banks. The door is not completely closed, however. The Parliamentary Secretary of the Finance Ministry, Dr Mohd Hilmi Yahya, said that the Government was still willing to consider new licence applications provided the new applicant could prove it would be able to fill any gap not already covered by existing institutions. This was being undertaken as part of the Financial Sector Master Plan that seeks to ensure the further strengthening of local financial institutions over the next 10 years.

Sky opens between Singapore and KL

Jan 2008

The virtual duopoly between Singapore Airlines and Malaysia Airlines on the Singapore-Kuala Lumpur route will end in February when the route becomes partly opened to low-cost carriers from both countries. Jetstar Asia and AirAsia have already indicated their interest in operating the route. The Singapore-KL route is one of the most lucrative short-haul routes in the world, with return tickets for the half-hour hop costing about US$280. Full liberalisation took place on 1 December 2008.

Petronas' new deals

Jan 2008

Malaysia's national oil company, Petroliam Nasional Berhad (Petronas), may be on a roll. Having recently bought Australian energy firm Woodside Petroleum Ltd for US$418m, and a US$1.1bn stake in Rosneft, a player in Russian oil and gas, Petronas has now secured funds to buy Italian lubricant maker, FL Selenia SpA from Kohlberg, Kravis Roberts & Co (KKR).

Petronas will be paying KKR €950m (RM4.65bn) for Selenia, €115m more than KKR paid when it bought the company in 2005 from the New York-based buyout firm Vestar Capital Partners. The move to acquire appears to be gaining momentum.

Via its wholly-owned company, Petronas International Corp, Petronas plans to put out about €207m to increase its stake in Star Energy, the UK's second largest onshore oil producer. Currently, it owns about 39% of Star Energy, and will offer 365p for each share bought back, having paid that price per share for the shares it purchased in Star in mid-November 2007.
Petronas has so far spent about US$1.5bn (RM4.98bn) on purchasing international assets this year. While the Australian deal brought in Woodside's Mauritanian assets and the Rosneft deal will place Petronas' foot in the oil and gas producing regions of Eastern Europe, it was not immediately evident where the purchase of Selenia will lead. Petronas officials have so far declined to comment on the deal.

The reason for the Star Energy purchase, however, is clear: Star is considering a North Sea project in which Petronas sees great potential - an offshore project that is 50% bigger than the UK's current biggest gas-storage site.

Accountants act amended

Jan 2008

Recommendations by the Malaysian Institute of Accountants (MIA) for the proposed Accountants Act were expected to be finalised by the end of 2007. These will then be submitted to the Government through the Accountant-General's office.

Having earlier issued a consultative document on the matter, the MIA has already received feedback from stakeholders, regulators and academics. It is currently collaborating with the Malaysian Ministry of Finance and the office of the Accountant-General on amendments to the Accountants Act 1967.

Among the recommendations are the introduction of a competency assessment for accountants against international standards and the widening of the MIA's regulatory functions, vis-à-vis designing surveillance mechanisms and taking disciplinary action against errant members.

Coin's last call

Jan 2008

They cost more to produce than they are actually worth, so come 1 April 2008, the Malaysian one sen coin will no longer be in use. All payments will therefore be either rounded up or down to the nearest five sen. However, the coin will not be demonetised and will continue to be legal tender up to a limit of RM2.

Malaysia's central bank, Bank Negara, will reduce production of the coin with the view to eventually withdrawing it completely. It currently produces 30 million pieces of the copper-based one sen coins per month. The price of copper has steadily increased over the years, from US$1,500 (RM5,028) per ton in 2002 to US$7,500 (RM10,057) in 2007.

Ironically, the cost of production is about 4.2 sen per piece, more than four times the actual value of the coin. With the cut in production, the Government expects to save about RM14m in annual minting costs.

Another major reason for taking the coin out of circulation is the cost connected with its issuance and administration. Charges paid to security companies to handle and transport the coin can be as high as RM3 per bag, and RM60 per trip. There have also been instances where a shortage of the coin has occurred, leading to an increase in customer dissatisfaction.

Consumers' main concern is that the removal of the one sen coin from circulation, and the resulting move to 'round up' or 'round down', will cause an increase in prices. However, the Ministry of Domestic Trade and Consumer Affairs says that the move has more pros than cons for both consumers and retailers.

The Minister, Shafie Apdal, added that the coins usually ended up unused as consumers were not particularly concerned about such small change; this contributed to economic wastage. On concerns that the move to round off prices could cause inflation, he said that according to analysis done by Bank Negara, countries that had made similar moves only experienced an effect of about -0.0004% on their inflation rate.

eBay way to earn a living

Tuesday January 15, 2008

KUALA LUMPUR: Chris Chan is a 30-year-old graduate who, like many in her generation, says no to a 9-to-5 office regime and refuses to be a slave to money.

Instead, she is trying to combine work with a balanced life. She has found a suitable income-generating way by selling through eBay.

“I earn about US$1,000 (about RM3,300) a month selling collectibles on eBay. I own my time and I can combine my love for travel with work, since I do need to go overseas to source for supplies,” she said.

“Selling through eBay is something a person can do to earn an income. Just like any other business, one will need to invest time, money and energy if one wants to make it big,” said Chan, an architecture graduate from Australia.

Chan started selling on eBay during her student days in Australia to earn pocket money. She first started by putting her used handbags and other things on sale online.

“My first sale was exhilarating. It was a pleasant surprise that others actually wanted to buy things I had used. From then, I was interested in eBay business and went through their online course to be a certified power seller,” said Chan.

The certification also allows her to train others on the art of selling professionally and ethically on eBay.

Chan will be sharing her experience at a talk How to Earn Extra Income via eBay and Google at the MCA 9-point party exhibition to be held at Putra World Trade Centre from Jan 18 to Jan 20. Her talk is on Jan 19.

Chan commended MCA for organising the exhibition and for recognising eBay as an income-generating source and taking advantage of the Internet boom.

Another speaker on Jan 19 is Sean Lee, CEO and director of Oscar Wealth Advisory Sdn Bhd, who will talk on “Money Works @ Wealth Management”. The talk that will be in English is scheduled to begin at 11am.

Among the topics he will cover are “Do you have a chance to be a millionaire?”, “How money works instead of just chasing it”, “Total wealth management” and “How to optimise your investment”.

The talk will include steps on how to plan your wealth, and the do’s and don’ts in financial planning.

Lee is a licensed financial planner with 15 years of experience under his belt.

RM19mil windfall for Johor family

Wednesday January 9, 2008

PETALING JAYA: It's a happy new year and a family of eight here are feeling like a million dollars. Make that RM19mil ringgit!

The family of eight won the Sports Toto Malaysia jackpot on Saturday with a single ticket bearing the winning set of numbers 2, 20, 25, 34, 47, and 52.

The biggest shareholder of the group, a self-employed man his 50s, said he had pooled money with his family members to wager on a few sets of lucky numbers.

And lucky was just the word for the group.

Sports Toto Malaysia confirmed the man and his family members collected the mega winning from its head office at Berjaya Times Square, KL, recently.

“I could not believe my eyes when I checked the draw results the next day. I had my wife and children verify it before announcing it to my other family members.” the man said.

He said he would enjoy half of the winnings, while the others shared the remaining half (RM9.6 million) equally.

Some of the winnings, he said, would be contributed to charity.

The jackpot of RM19, 274, 477.99 was the highest ever in the history of the betting company as well as Malaysia.