Tuesday, March 22, 2011

Buffett says Japan quake presents buying opportunity


SEOUL: US billionaire investor Warren Buffett said on Monday that a massive natural disaster would not hamper the future of the Japanese economy and could prompt a new bout of stock buying.

"I'm not looking at Japan's economic future differently from 10 days ago... extraordinary events offer (a) buying opportunity," he told reporters.

Buffett, the chairman of investment firm Berkshire Hathaway, was visiting South Korea to attend a ground-breaking ceremony for a local unit of Israel's Iscar Metalworking Companies, 80 per cent owned by Berkshire Hathaway.

Japan's Nikkei index lost around 10 per cent in the week following the devastating March 11 quake and tsunami.


Buffett, however, urged against selling Japanese stock -- markets were closed in Tokyo on Monday -- and said Japan would recover relatively quickly, Yonhap news agency said.

The disaster, which has left 8,649 people dead and 13,262 missing, could cost the Japanese economy up to US$235 billion, the World Bank said Monday.

Growth, however, should pick up in subsequent quarters "as reconstruction efforts, which could last five years, accelerate", it said.

Buffett, known as the "Oracle of Omaha" for his investment savvy, said Berkshire was seeking further acquisitions worldwide including South Korea following its US$9 billion purchase of US lubricant maker Lubrizol.

"We're looking at a number of big businesses in Korea, the US, the UK. We hope to find good companies wherever they may be. Basically, it's the bigger, the better," he said.

The tycoon also played down military and nuclear threats from North Korea, saying the communist country "isn't a big threat" to the firm's investment in the capitalist South.

Buffett was scheduled to meet with South Korean President Lee Myung-Bak later Monday. -- AFP

Friday, March 18, 2011

Bank Negara raises minimum income requirement for new credit card holders

KUALA LUMPUR: Bank Negara Malaysia has tightened the rules for the credit card industry to inculcate sound financial and debt management among credit card users while issuers were barred from increasing cardholders’ credit limit without obtaining their consent.

“These measures are also aimed to promote fair and responsible business practices by credit card issuers with further enhancements in the cards security infrastructure,” it said on Friday, March 18.

With immediate effect, BNM raised the minimum income requirement of new card holders to RM24,000 per annum from RM18,000 a year.

The central bank also limited the maximum credit limit for card holders earning RM36,000 a year or less to two times their monthly income of card holder per issuer.

BNM's deputy governor Nor Shamsiah Mohd Yunus said at a press conference on Friday that “these new guidelines are to promote public confidence in the usage of credit card as a viable and safe payment.”

“In addition, it will ensure fair business practices as well as greater transparency and disclosure," she said.

Nor Shamsiah said credit card debt in Malaysia currently remained at a manageable level. As at end 2010, outstanding credit card debt totalled RM30.8 billion or 5% of total household debt.

"Although credit card usage continued to increase, non-performing loan ratio remains low. As at end 2010, credit card non-performing loans were only 1.7% of total credit card loans and 2% of the total banking system’s non-performing loans," she said.

In a statement issued by BNM, it said on the new ruling for cardholders earning RM36,000 per annum and less, the cardholders could only hold credit cards from a maximum of two issuers.

BNM said existing cardholders with credit cards from more than two issuers had until the end of 2011 to select their preferred issuers.

Cardholders would also be given at least two years to service their outstanding credit card debt for the credit cards that have been cancelled for the purpose of meeting this requirement.

For existing cardholders, whose credit card outstanding balance exceeds the maximum credit limit, a grace period of two years will be given to them to meet with the new requirement.

BNM said the card issuers would engage with the affected cardholders to assist them in restructuring their repayments to facilitate the smooth implementation of this measure. Cardholders can also seek the assistance of Agensi Kaunseling dan Pengurusan Kredit (AKPK) for advice on their debt management.

The central bank said to ensure responsible business practices in provision of credit cards, the issuers must adopt fair, transparent and responsible approach in marketing and offering of credit cards to consumers.

“Issuers are not allowed to increase cardholders’ credit limit without obtaining their consent. Issuers are also not allowed to offer a credit advance in the form of cheque payable to the cardholders unless the cardholders have requested for the credit advance,” it said.

BNM said to enable consumers to make comparison and informed decisions; card issuers must provide a product disclosure sheet that contains key information on the card’s features, fees and obligations of the cardholders.

It said issuers had to display prominently alerts to communicate to cardholders the implications of meeting only minimum and partial repayments.

At the end of each year, customised information on how long it will take to fully pay off the cardholder’s outstanding balance and the total interest costs if the cardholder only makes minimum repayment will be issued to each cardholder. This will be effective for annual statements issued from December 2011.

BNM said to further enhance credit card security and to promote public confidence in the usage of credit cards as a safe payment instrument, from Jan 1, 2012, transaction alerts via short messaging service (SMS) will be implemented by card issuers for their cardholders after transactions are performed.

“This will be followed by the implementation of the personal identification number (PIN) verification for all card transactions from Jan 1, 2015 onwards,” it said.

Tuesday, March 15, 2011

Timber stocks buck market trend


BURSA Malaysia closed flat yesterday as investors digested the full impact of Friday's earthquake and tsunami in Japan.

Timber stocks, however, bucked the trend, while rubber and palm oil futures took a hit.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed 0.27 point lower to 1,495.35 points yesterday.

Timber-related counters rose after RHB Research Institute Sdn Bhd said timber companies are likely to benefit from a surge in demand from Japan as the country rebuilds after last week's earthquake and tsunami.


Ta Ann Holdings Bhd added 8 sen to RM4.84, Jaya Tiasa Holdings Bhd climbed 16 sen to RM5.01 and WTK Holdings Bhd rose 7 sen to RM1.33.

A fund manager from TA Investment Management Sdn Bhd said the rise in timber stocks was quite benign.

On the converse, futures prices of commodities such as rubber and palm oil were pressed down.

August delivery for rubber, the most active contract on Tokyo Commodity Exchange, plunged 5 per cent to 383.5 yen a kg before settling at 384.1 yen (RM14.19), triggering a circuit breaker that suspended trading on all contract months.

Japan, one of the world's top five rubber consumers, mainly imports its rubber supply from Southeast Asia.

Taking the cue from Japan, the Malaysian Rubber Board's SMR 20 plunged 74 sen to RM12.85 per kg, while latex-in-bulk dropped 33.5 sen to RM9.49 sen per kg.

Palm oil prices also declined on concerns that Japan, one of Malaysia's top five clients, is facing difficulties receiving cargo as some of its ports had been destroyed by the earthquake and tsunami.

One trader said the bulk of shipment had to be re-routed.

Another trader said the aftershock of the earthquake and tsunami may worsen. This will likely lead to "force majeure" and subsequently, trigger contract defaults.

Yesterday, the third month benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange dropped RM29 to RM3,335 per tonne.

Mercury Securities head of research Edmund Tham said there is no certainty on the extent of damage at Japan's seaports.

"There are no real figures out yet although Japan's logistic sector is hit hard," Tham added.

Investors may have sold off some of their shares here to take profit but Tham said there were no major selldowns.

"I don't see any major concern. If anything, the FBM KLCI is likely to trade rangebound over the next few days," he added.

Saturday, March 5, 2011

MRT briefing draws massive crowd

IT WAS meant to be a closed-door session. But nearly three times more contractors came to a briefing on the Mass Rapid Transit (MRT) project that the hotel's ballroom doors could not be closed.

Having advertised the briefing in mainstream newspapers for three days, Syarikat Prasarana Negara Bhd (SPNB) anticipated 250 contractors to turn up on Thursday night.

But much to their surprise, close to 700 came to the Petaling Jaya hotel, some from as far as Sarawak.

Snacks and coffee served by the hotelier finished in 20 minutes.


SPNB's brochure revealed that the planned construction period for MRT Sungai Buloh-Kajang line is from 2011 to 2016. When completed, it is expected to move 1.2 million people along the route.

The line will be integrated with existing KTM Komuter and LRT lines and feeder bus networks with a common ticketing system.

Reporters could not enter the hall but questions emanating from the ballroom touched on whether there would be opportunities for vending machine operators at MRT stations.

There were also offers for SPNB to buy the latest ticketing systems and bathroom facilities that can handle ultra-high traffic flow.

A government official, who declined to be named, attested that SPNB had in the past months received enquiries from custom-fitted furniture manufacturers and energy-efficient lighting suppliers.

Indeed, the construction sector is not just brick and cement.

Pemandu director of Greater Kuala Lumpur/Klang Valley NKEA Ahmad Suhaili Idrus told Business Times, "the MRT is the biggest infrastructure project the country is undertaking. Today's overwhelming crowd is reflective of the economic multiplier effects of the MRT project."

He estimates the MRT project to support more than 100 types of businesses, ranging from contractors, construction professionals, building material suppliers to logistics and even telecommunication services.

Malay Contractors Association president Datuk Mokhtar Samad commended SPNB for giving the opportunity for Bumiputera contractors to gain an insight into the intricacies of the project.

Yesterday, Zulkifli Mohd Yusoff, group director of the project management division at SPNB, in a statement, said: "The contractors briefing is to ensure all are given the correct information regarding the type of work involved in the project including underground tunneling, elevated structures, track, system and rolling stock works."

The pre-qualifying stage is to identify contractors who are financially strong, possess the technical expertise and track record to take on the relevant job packages. Only contractors who are pre-qualified will be allowed to bid for the job packages.

He then said tenders will be called once public feedback has been gathered and project details confirmed after the public display period ends on May 14 2011.

As SPNB wrapped up the briefing at 9.30pm, throngs of contractors lined up to pay their parking tickets.

After a while, the machine let out a groan and stopped working. A clearly exasperated contractor turned around to the bemused queue behind him and joked, "well, the supplier of this hotel's parking system definitely cannot pre-qualify for the MRT ticketing package!"

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