Thursday, October 23, 2014

Thoughts On The Alternative Budget

This is even later than my thoughts on the official budget (this was supposed to have been published two days ago), even though Pakatan’s budget proposals came out a day earlier.

I’m not going to do a head-to-head with the “official” budget – the two are very different animals, and any comparison will not be fair. Pakatan does not have full access to the minutae of government operations, and as such will not have the kind of detailed expenditure breakdown that the official budget does. I take it for what it really is – a policy platform, akin to a political manifesto.

Monday, October 20, 2014

Thoughts On Budget 2015

It’s been a really hectic week, which is the reason I haven’t put down my thoughts on the budget sooner. In one sense, that’s an advantage – it means I get some time to think about it more. In another sense, it’s not – people are probably suffering from budget “fatigue”.

Be that as it may, here’s what I really think: there was a little something in here for everyone…emphasis on “little”. Ok, I’m kidding, just a bit.

Thursday, October 16, 2014

Talking About Tax Reform: Capital Gains Taxes (Reprint)

[I wrote this article for a mainstream newspaper in August last year. It should be read in conjunction with this post]

It’s almost that time of the year again, when the Federal Government sets about planning its budget for the year ahead. With Malaysia’s sovereign credit rating at risk, it’s also time to take a look at reforming tax policy. One avenue that should be explored but has gotten little public airing is adding a capital gains tax (CGT).

Friday, October 10, 2014

Budget 2015–No Live Blogging

Unlike in past years, I won’t be live-blogging the budget this afternoon. I’ll be busy doing…other things.

However, I’ll do my best to tweet about it if time permits (catch the link to my Twitter feed on the right-hand column). Nor have I forgotten about the PR Alternative Budget which was released yesterday (link here)– again, a lack of time to comment. I’m hoping I can do something about both tomorrow.

Friday, October 3, 2014

Subsidy Cut

So, effective yesterday, petrol prices at the pump have been raised to RM2.30 and diesel to RM2.20.

Ballsy move, and to me, completely unexpected. With the 20sen cut in the petrol and diesel subsidy, Malaysia is within striking distance of abolishing fossil fuel subsidies entirely – at least, at the retail level. We still have the gas subsidy to deal with, but that’s less important for a couple of reasons: gas is a cleaner fuel (no negative externalities) and there’s also less implications for the government budget.

Resistance, compared to the similar 20sen cut last year, seems to me to be a lot more muted this time around. Nevertheless, resistance there is.

Thursday, September 25, 2014

Oh Rats!

I was tickled pink when this link turned up on my twitter feed (excerpt):

Investment rats

...One project is Michael Marcovici’s Rat Trader. The book describes the training of laboratory rats to trade in foreign exchange and commodity futures markets. Marcovici says the rats “outperformed some of the world’s leading human fund managers.” The rats were trained to press a red or green button to give buy or sell signals, after listening to ticker tape movements represented as sounds. If they called the market right they were fed, if they called it wrong they got a small electric shock. Male and female rats performed equally well. The second generation of rattraders, cross-bred from the best performers in the first generation, appeared to have even better performance, although this is a preliminary result, according to the text. Marcovici’s plan, he writes, is to breed enough of them to set up a hedge fund...

No, this isn’t an April Fool’s joke. Because believe it or not, here’s what I came across a day later:

The website is here, and the training methods are detailed here. Check out the record of Mr Kleinworth Morgan Jr 5. Brings a whole new meaning to the term “alternative investment”.

I might just recommend this to our investment committee. They could even take me seriously, if they don’t die of laughter first.

The Colour Of Inequality: Available Now

I reviewed the book a week ago. It’s now in stock in MPH, and can be ordered online.

You can check out the blog here and the Facebook page here.

Dr Muhammed is also on Twitter @inequality_MYS

Wednesday, September 24, 2014

GLICs And Capital Outflows

I’ve heard this from more than a few people (excerpt):

Mahathir expresses concerns on fund outflow

KUALA LUMPUR: Former Prime Minister Tun Mahathir Mohamad has expressed his concern over local funds, including the Employees Provident Fund (EPF) on their property investment overseas as it promoted fund outflow from the country. "At a certain extend it is desirable to invest abroad, but we should always have to balance between inflow against outflow of funds," he said…

…He pointed out that too much of fund outflow from the country would not be good for the economy, especially overseas property assets that were acquired.

"Instead of supporting local industry, they (funds) have gone abroad," he said….

Friday, September 19, 2014

BNM Watch: OPR On Hold

It was a coin toss and tails it is (excerpt):

Monetary Policy Statement

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.25 percent….

…For Malaysia, economic activity has been supported by the continued growth in domestic demand and exports…While private investment activity is projected to remain robust, private consumption is expected to moderate…The prospects are for the Malaysian economy to remain on a steady growth path.

Inflation is expected to remain relatively stable for the remainder of the year. Going into next year, inflation is projected to edge higher and is expected to be above its long-term average due to domestic cost factors….

The current stance of monetary policy remains supportive of growth…Further adjustment to the degree of monetary accommodation may be taken depending on how new information will affect the assessment on the balance of risks….

Thursday, September 18, 2014

BNM Watch: MPC Preview

First off, I have NO idea what BNM is going to do today. I have decided opinions on what they SHOULD do, but there’s a striking divergence of opinion in the market about this.

So here’s the situation – the MPC decided in July that with growth looking robust, it’s time to normalise interest rates and head off the risk of “financial imbalances”, which could mean anything from excessive borrowing by firms and households, or an imbalance in net foreign asset holdings, or pretty much anything really. I didn’t agree with the decision then, and I still don’t.

August 2014 Consumer Prices

Prices in August took another blip upwards (log annual and monthly changes; 2000=100):

01_inflation

Wednesday, September 17, 2014

The Colour Of Inequality

[Full disclosure: Dr Muhammed is a good friend of mine, so the following commentary should be taken as unbalanced and totally biased. You have been warned]

There’s a new book coming out this weekend on income and wealth inequality in Malaysia, at MPH:

photo