Friday, April 26, 2013
Monday, April 15, 2013
Here are the reasons behind the sharp selloff in gold:
- Supply may rise: Cyprus is planning to sell gold reserves to raise around 400 million euros to help finance a bailout. This has raised concerns that other indebted euro zone countries like Italy, Spain and Portugal could follow suit. As a result, investors have cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012. (Also read: Why 2013 may not be the year of gold)
- Inflation moderating: In the U.S., the world's largest economy, wholesale prices fell in March by the most in 10 months. Since gold is regarded as an inflation hedge, any indication that prices aren't rising has prompted investors to sell gold.
- Interest rates may go up: U.S. interest rates might edge higher sooner than previously thought. This will tend to strengthen the dollar and weaken gold, since another reason investors buy gold is to hold it as an alternative to U.S. dollars. When traders expect the dollar to rise, they will sell gold.
- QE ending sooner than expected: Minutes from U.S. Fed's policy meeting suggest the quantitative easing programme could draw to a close by year end, earlier than some economists had expected. This has led to panic selling in gold.
- Risk-on trade: Investors have been flocking to equity markets for better returns. The Dow Jones Average in the U.S. is trading near its all-time high indicating increased participation in the equity markets.
Posted by Benson at 4:39 AM
Sunday, April 7, 2013
The most basic rule of all is to make sure you file your tax returns, and pay your dues on time.
IT’S the tax season again. This time round, what can Malaysian do to maximise their savings?
According to KPMG Tax Services executive director Datin Pauline Tam, there are several new personal deductions for individuals who are filing their tax returns for the year 2012.
Malaysians who have opened a Private Retirement Scheme (PRS) account last year can claim for a deduction of up to RM3,000.
“People should take note that while the deduction for life insurance and the Employees Provident Fund (EPF) does not have a time limit, the deduction for PRS is only effective from the year of assessment 2012 to 2021, unless this is changed later on by the Government,” she says.
Married couples with children would qualify for a deduction of RM6,000 if they have opened an SSPN (Skim Simpanan Pendidikan Nasional) account to save for their children’s education last year. This is up from RM3,000 (in 2011).
“This deduction is on a per-taxpayer basis, so if the family has two children, the father can open an account for one child, and the mother for the other child. This would allow the parents to maximise their savings,” she says.
Tam also points out that this is the final chance for Malaysians to claim their deductions for broadband subscription.
“This RM500 deduction began in 2010, for three years, so this is the last year this deduction will be available.”
She adds that the RM10,000 personal deduction for interest on housing loan also has a three-year expiry, but this is dependent on “the date in which the interest is first expended”.
However, there are conditions attached to this deduction.
According to the Explanatory Notes (Form BE 2012) provided by the Inland Revenue Board (IRB), only Malaysian citizens who are residing in the country are entitled to this deduction.
Further, it is limited to one residential property only, with the Sales and Purchase Agreement (SPA) executed between March 10, 2009 and Dec 31, 2010. The property must not be rented out.
If the property is under a joint name (for example, husband and wife), then each of the owners can claim up to 50% of the interest paid.
“Let’s say the interest expense is RM12,000 for last year, and the property is under a joint name, then the deduction is restricted to RM5,000 each, because the maximum deduction is RM10,000,” Tam says.
She explains that when it comes to property, it always boils down to the legal ownership.
“IRB will always look at who the legal owners of the property are. It doesn’t matter who is actually financing it (whether it’s fully financed by the husband or wife). In the end, it still goes back to the document, which is either the title deed (for landed property) or the strata title (for high-rise property).
“Legally, both names have an entitlement to income derived from the property. So if there are two names, it is usually 50:50. If there are three names, then each name has a 33% entitlement,” she says.
It was previously reported that the IRB is confident of collecting RM130bil in taxes this year, in line with the country’s economic growth.
Last year, IRB collected about RM125bil in taxes, which is 13.76% higher compared with the RM109.6bil collected in 2011.
PricewaterhouseCoopers (PwC) senior executive director Sakaya Johns Rani, too, has some advice to share.
Retirees with retirement gratuity can claim tax exemption for the gratuity, but it does have some conditions attached.
The Income Tax Act 1967 states that the retirement gratuity would be tax exempted if “the retirement is due to ill-health”, if the retirement takes place on or after reaching 55 (or the retirement age as per the employment contract), and the employment has lasted 10 years with the same employer, or companies within the same group.
As for Malaysian talent who have returned from working overseas, they, too, can have tax savings if they meet the conditions under the Returning Expert Programme (REP).
“Malaysian talent who come back can write to TalentCorp, and if they meet all conditions, they will qualify for a 15% flat tax rate.
“This tax rate also applies to knowledge workers who are employed in Iskandar Malaysia,” she says.
(Details and conditions can be found at http://www.talentcorp.com.myand http://www.iskandarmalaysia.com.my)
In general, to maximise their tax savings, Malaysians need to look at their overall profile as a tax payer.
“Are you single or married? Do you have children? Look at your profile, and then look at all the possible deductions that you can make,” Rani says.
The tax experts also advocate for couples to file their income tax separately.
“Always go for separate filing because when you combine your income, your taxable income becomes much larger and it will reach a higher tax rate faster. Filing separately allows you to reduce the effective tax rate.
“Also, for child relief, a basic tax principle is to allow the higher income spouse to claim for the relief (as the savings will be more),” Tam says.
But the most basic rule of all is to make sure you file your tax returns – something Rani says she has observed that many Malaysians take for granted.
“Many assume that just because their monthly pay is subjected to the monthly tax deduction (MTD), their taxes are paid and taken care of. That is not true; you still need to file your tax returns,” she says.
And don’t pay your taxes late.
The deadline for those who submit their forms via e-Filing is May 15 (for the BE Form), and July 15 (the B Form).
However, those who are still submitting their forms the conventional way will still have to meet the April 30 (BE Form) and June 30 (B Form) deadlines.
“There are penalties for late filing. Even if you are one day late, the penalty can be quite heavy (at 20%), and the penalty is on your tax payable before it is set off by the MTD.
“For example, if your tax payable is RM10,000, but your MTD is RM12,000, you should have a repayment of RM2,000. But because you were late in submitting your tax assessment, IRB can impose a 20% penalty on you, which is RM2,000. Hence, you will lose out on your repayment,” Tam explains.
Further, she advises Malaysians to be mindful of what they claim.
“Make sure you fulfil the conditions of a deduction before applying for it. If you submit an incorrect tax return, the IRB can impose a penalty of up to 100% (on the additional tax) if there is an omission of income or over-claim of expenses.
“For example, if you make a deduction of RM10,000 (but you are in fact not entitled to it), and your tax rate is 26%, that would have given you tax savings of RM2,600. IRB can impose up to 100% penalty on the RM2,600, which means now you have to pay RM5,200 instead,” Tam says.
Finally, don’t be afraid to ask for help.
“Read the explanatory notes to understand the terms and conditions properly. If you still have problems, call IRB’s customer service centre and ask them for help.”
Source: Star online
Posted by Benson at 7:50 AM
Tuesday, March 26, 2013
KUALA LUMPUR: Malaysian equities have been upgraded to an “overweight” by JPMorgan in a report, which advised investors to buy quality growth stocks whose businesses relied on domestic demand andEconomic Transformation Programme (ETP)-related growth.
The bank's Kuala Lumpur- and Hong Kong-based analysts said investors should buy “quality growth stock” now as local equities have underperformed emerging markets while emerging markets have significantly underperformed developed markets.
They made their case based on the fact that Malaysian equities have underperformed Asean neighbours Indonesia, Thailand, and the Philippines whose growth were also based on domestic consumption and investment growth.
Among signs of growth and consumption, they said Malaysia's capital expenditure (capex) grew 20% in 2012 up from a five-year average of 7% while January vehicle sales grew 26%.
“Our economist forecasts 5.1% gross domestic product growth (GDP), similar to that for other Asean economies. The central bank is on hold. Inflation is modest the 2013 forecast is 2.3%,” they said, adding that private investment grew 22% last year with this year's to grow 15.6% while infrastructure is funded by a savings-investment gap at over 11% of GDP.
The ETP would be supported by a strong pipeline of RM211.3bil in committed investments derived from 152 entry point projects, with 149 projects announced. These projects were expected to generate gross national income of RM135.6bil in 2020 and create 400,000 jobs.
They said investors should “probably not wait” for the imminent dissolution of parliament, the last day of which to do so would be April 28. Following which, the general election must be held within 60 days.
“Investors are asking when to buy. Inbound investors' visits year to date are equivalent to the whole of 2012. Our advice is to buy quality growth stock now,” they said.
Furthermore, they said the Iskandar growth region continues to boom with cummulative investments hitting the RM100bil target in the third quarter of last year.
They pointed out that property demand remains strong in the growth region with several companies announcing multi-billion ringgit property projects.
The basket of stocks which they believe provides a strong franchise, domestic-led earnings growth and double-digit earnings per share growth were AMMB Holdings Bhd, Axiata Group Bhd, Berjaya Sports Toto Bhd, CIMB Group, Dialog Group Bhd, Gamuda Bhd, IJM Land Bhd,KLCC Property Holdings Bhd and Media Prima Bhd.
These stocks have potential for earnings and dividend upgrades. They said Axiata offers a healthy yield (4%) with higher dividend per share forecast, and double-digit earnings per share growth; CIMB is a high growth, low price-to-earnings ratio stock; Gamuda Bhd continues to leverage on the RM60bil MRT project and has a high backlog of RM10bil and KLCC Property is the largest, most liquid REIT with prime portfolio and offers 4.5% dividend yield, with potential upside.
Meanwhile, MIDF Research said the Malaysia and Indian stock markets escaped the global funds outflow deluge which hit Asian markets last week
As a weekly aggregate, the research house said net outflow of foreign equity investment for the seven markets it tracked increased to about US$2.7 trillion, the highest weekly outflow since mid-May 2012.
The seven markets in MIDF's research coverage are South Korea, Taiwan, Thailand, Malaysia, Indonesia, the Philippines and India. The report noted that Malaysia continued to register net inflow of foreign equity capital albeit in smaller quantum last week whereas Indonesia, Thailand and the Philippines recorded negative foreign flows albeit well within the usual weekly cyclical band.
Source: Star Online
Posted by Benson at 1:43 AM
Friday, March 22, 2013
KUALA LUMPUR: A recent survey by HSBC Bank Malaysia Bhd found that, on average, Malaysians expect to live 17 years in retirement but that their savings would only last 12 years.
The future of retirement: a new reality report is based on a survey of over 15,000 people in 15 countries. It highlighted that 43% of Malaysians felt that they were not adequately prepared for retirement, with 10% taking an even bigger risk of not being prepared at all.
HSBC head of retail banking and wealth management Lim Eng Seong said people are still running the risk of living long beyond their retirement savings. In a statement yesterday, he said: “Many Malaysians have begun to place importance on retirement planning and savings.”
“This is an improvement from the last survey in 2011 where 68% of respondents were worried that they would not be able to cope financially in retirement.” The study also found that Malaysians understood the importance of preparing for retirement from a relatively young age with the average age for when they started planning financially at 34.
When asked how much money they felt was needed to live comfortably, both now and when they retired, about 81% of the respondents said a sensible proportion of “working age” income would be required for a comfortable retirement.
Meanwhile, 68% of the respondents cited financial hardship around retirement as their most common concern whereas 59% of them were concerned about poor health around retirement.
The survey also reported that 59% opted for the longer-term goal of retirement with only 37% choosing to save for the short-term goal of a holiday.
Posted by Benson at 7:27 AM
What is a Budget?
A budget is simply a plan for spending your money (now, does that get you excited?). Yes, most of us love to spend but very few are able to control their spending. A budget is a way to balance the money you have with the money you spend. You create a plan by making choices. You decide what you will spend money on, how much money you will spend and how much money you will save.
Your plan is based on your income and expenses. Income is money coming into your pockets. Expenses are things that take money out of your pockets. Since every person’s income and expenses are different, your plan needs to fit your situation (or your pockets!). Your budget is based on your Goals, Needs and Wants.
Let's take a look at some examples:
|Own a Car|
Own a Home
Set up own business
Provide good education to children
Contribute to charity
Quality time with family
Expensive branded clothes
Latest full-featured phone
Most advanced computer
Etc., etc., etc……
As you can see from the above, sometimes it’s hard to differentiate between Needs and Wants. As time evolves, our basic needs may extend to more than just food, shelter and clothing. A salesperson may work more effectively with a car (unless our public transportation system is super-efficient!) In today’s IT age, mobile phones are practically indispensable (even school children thinks so!), so are computers. However, there are cars that costs RM30,000+ while some, RM300,000+; mobile phones of RM100+ and some RM1,000+ and computers that costs RM1,000+ while some can go as high as RM10,000+!
We only Need a few things but our Wants are endless! Is it hard to differentiate now???
Why Should I Have One?
Anyone who has income and expenses needs a budget. Having a plan helps you use your money to reach your goals. You can learn and practice the skills that are needed to make a budget. This money plan will help you to be in control of your money. You can avoid financial trouble and reach your goals easier.
How Do I Start a Budget?
To make a money plan, list your Income and your Fixed Expenses, which are expenses that do not change from month to month, like rent, home and car installments or insurance premiums. Other expenses are Variable, i.e. they change from month to month, like utility bills, clothing or entertainment.
Next, you’ll need to keep track of how you are now spending your money. You can do this by writing down what you buy and how much you spend. This will take some time and effort but it is worthwhile because it will help you see where your money goes. Don’t be too surprised by what you’d learn about yourselves and your money!
For the next 30 days, every time you spend, write down in your planner (use the Excel spreadsheet, if you are tech-savvy) how much you spent and where you spent it. When you pay a bill, pump petrol, go to a movie, give money at church/ contribute zakat or even buying your favourite nasi lemak from the makcik around the corner, record everything down.
At the end of the month, use a calculator to total each column at the bottom of the chart to see how much money you spent in each area. Then, total all the columns to see how much money you spend in an average month. Get your children involved as this will not only sharpen their math skills but also expose them to the concept of budgeting (but a word of caution: they’ll then know when’s the best time to ask for their new toy!)
How Do I Decide Where to Spend My Money?
By reviewing your completed chart/ spreadsheet, you can see where your money goes. It is often helpful to discuss your chart with a counselor or someone you know who manages their money well.
A big part of your money is used for basic necessities like food, housing and clothing. These are needs and you will always be spending money on them in order to live but you can choose how much to spend. Other spending might include buying new clothes, new dishes or new toys for your children. These are wants. While you might enjoy spending money in these ways, you can live without them.
The following questions may help you decide what to do:
- Which spending can’t be cut?
- What is the minimum I need to live?
- Which spending is Needs and which is Wants?
- What would happen if I delayed some of my spending?
- Can I buy cheaper substitutes?
Now that you have studied your chart and discussed the questions above, you are ready to make your personal budget. Write down how much money you need for each kind of expense for one month. For example: RM300 for food, RM100 for transportation, RM50 for savings and so on.
Try to set some short-term goals and long-term goals. Some short-term goals might be: limit money for food to RM10 per day, take the bus/ LRT instead or driving to work and check (your neighbour’s) newspaper for free family entertainment. Some long-term goals might be: save RM1,000 for a new refrigerator (energy-saving & environmentally-friendly models would be ideal!), get out of debt or perhaps move to a different neighbourhood (or as some might say, balik kampung!)
How Do I Stick to My Budget?
This is the hardest part, mind you! It will take practice and self-discipline to follow your budget. You are the only one who can maintain your plan. Here are some suggestions that can help you stick to your budget:
- Pay necessary bills first. If possible, try to stretch your bills out evenly over the month so they are not all due on the same day.
- Save some money every month, no matter how small. You just want to form that habit.
- Make a list before you go shopping. When you shop, remember the difference between needs and wants.
- Plan ahead and buy items on sale. Check out discount stores and garage sales. Share reusable items with family and friends.
- Stay away from stores or places where you waste money!
- Learn ways from family and friends to save money and follow a plan.
- Keep a record of where you spend money and how much money is spent. Make it simple and easy to do. (Tip: the “555 pocket-book” may come in handy!)
- Compare this record to your written money plan so you can see if you are following your spending decisions.
When Should I Change My Budget?
Don’t panic or feel disappointed if you are unable to follow your budget completely. It takes time and practice to change any behaviour, especially spending habits! You may need to change your budget as your needs or the needs of your family change. If your income increases or decreases, you will also have to make adjustments. The important thing is that you have a plan and that you are in control of your money.
Last but not least, remember to always “Make Prudent Financial Management a Way of Life!”
For more information, can kindly visit http://www.akpk.org.my
Posted by Benson at 6:54 AM