Silver. Rock climbers call this “extreme verticality.” Click for jumbo chart.

This has been an historically awful day for precious metals.

Here’s just how grim the selloff in silver was today:

The $6.49, 18% decline to $30.05 an ounce (that’s the September contract) was the worst dollar loss since January 22, 1980 and the worst percentage loss since April 27, 1987.

It was the second-biggest dollar loss in history and the fifth-largest percentage loss in history.

Silver has tumbled 26% this week.

Gold had its own very bad, no-good day, too, and its week was actually much worse than silver’s.

Gold lost nearly 10% this week, or $175 an ounce, to $1637.50 (again, that’s the September contract). That was the biggest weekly dollar decline since January 25, 1980, and its biggest weekly percentage loss since February 25, 1983. This was only silver’s worst week since May 2011 — silver’s been pretty volatile this year.

Today’s loss in gold, $101.70, or 6%, was its worst percentage loss since June 2006. It was the third-worst dollar loss for gold in history.

Somebody out there is clearly dumping silver to cover losses, but there are more fundamental reasons for the pounding, too, writes Tatyana Shumsky:

silver is also facing pressure from the darkening economic outlook because it is widely used in manufacturing and industrial applications. Alarms were raised this week when China, long considered the world’s economic engine, showed its manufacturing sector has contracted for the third consecutive month.

“With China’s economy slowing, with our economy going into a recession, with Europe going out the window, the industrial metals are being sold off viciously and silver is caught up in that,” said Frank McGhee, head precious metals dealer at Integrated Brokerage Services in Chicago.

Silver is used as a catalyst in making polyester, a common fiber used in clothes; the precious metal also coats CDs and DVDs and is used in glass for flat-panel TV screens. A sharp decline in economic activity would reduce demand for these products and undercut physical demand for the metal.

Meanwhile, gold has utterly failed as a safe haven this week, as investors have had to sell it to cover losses. The world has also rushed to the dollar for safety, and a stronger dollar is bad news for gold. And a weaker economy is bad for inflation, also bad for gold.


Posted by Mr Thx Sunday, September 25, 2011 0 comments

Total Government Gross Debt (National Currency) for Malaysia in year 2010 is MYR 415.174 Billion. Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of SDRs, currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable. Thus, all liabilities in the GFSM 2001 system are debt, except for equity and investment fund shares and financial derivatives and employee stock options. Debt can be valued at current market, nominal, or face values (GFSM 2001, paragraph 7.110).

Current Account Balance (US Dollars) for Malaysia in year 2010 is US$ 28.119 Billion. Current account is all transactions other than those in financial and capital items. The major classifications are goods and services, income and current transfers. The focus of the BOP is on transactions (between an economy and the rest of the world) in goods, services, and income.

General government total expenditure (National Currency) for Malaysia in year 2010 is MYR 238.079 Billions. Total expenditure consists of total expense and the net acquisition of nonfinancial assets. Note: Apart from being on an accrual basis, total expenditure differs from the GFSM 1986 definition of total expenditure in the sense that it also takes the disposals of nonfinancial assets into account.

Population for Malaysia in year 2010 is 28.251 Million .

Unemployment Rate (% of Labour Force) for Malaysia in year 2010 is 3.3 %.

Inflation (End of Year Change %) for Malaysia in year 2010 is 2.354 %. Data for inflation are end of the period, not annual average data.

Gross National Savings (% of GDP) for Malaysia in year 2010 is 33.113 %. Data are based on individual countries' national accounts statistics. For many countries, the estimates of national saving are built up from national accounts data on gross domestic investment and from balance of payments-based data on net foreign investment.

Investment (% of GDP) for Malaysia in year 2010 is 21.297 %. Data are based on individual countries' national accounts statistics. For many countries, the estimates of national saving are built up from national accounts data on gross domestic investment and from balance of payments-based data on net foreign investment.

GDP (Current Prices, National Currency) for Malaysia in year 2010 is MYR 765.966 Billion. GDP is expressed in billions of national currency units.

GDP Growth (Constant Prices, National Currency) for Malaysia in year 2010 is 7.156 %. Annual percentages of constant price GDP are year-on-year changes; the base year is country-specific.


Posted by Mr Thx Thursday, September 22, 2011 0 comments

WHY should Asian stock markets react negatively if America does not create any new jobs? This is the question on everybody's lips, especially those who have argued that Asia can stand alone and Asian growth has decoupled from American growth.

But the news on Sept 5 that most Asian stock market indices dropped appreciably because America did not create jobs in August, must in fact mean that Asia cannot stand alone and is not decoupled from the West. The West can still influence what happens in most Asian economies including Singapore, Malaysia, the Philippines and Thailand because these Asian economies are linked to America and Europe through the real and financial economy.

The real economy in many Asian economies are dependent on and in fact compete for greenfield investments in the form of foreign direct investments (FDI) from America and Europe. They are also dependent on America to absorb the manufactured exports from the multinational corporations (MNCs) operating from Asia. Asian stock markets and bond markets are also open to foreign portfolio investments that are managed by foreign hedge funds.

In fact, it has been said the peaks and troughs of Bursa Malaysia are determined by foreign portfolio investments and the floor of the Bursa Malaysia is maintained by government investments in government-linked companies (GLCs) listed on Bursa Malaysia.

A man looking at a stock quotation board outside a brokerage in Tokyo. The Nikkei 225 index added 0.23% to 8 ,741.16 points yesterday. — Reuters

The foreign ownership of stocks in Bursa Malaysia, for example, is quite high and amounts to about 22%. Recently the bond market in Malaysia got a boost because of the large inflow of foreign portfolio investments into the bond market, including the sukuk bond market.

The Asian banking system is also linked to the West as there are numerous branches of foreign banks in Asia and an increasing number of Asian banks are setting up branches in the West to participate in the financing of trade. The financial links are then kept alive by the banks and the capital markets.

If America does not create jobs then it means that the recovery from the recession is slow and this means that incomes will not grow and hence consumption will not grow in America.

Most of the exports of East Asian countries are destined to the USA and Europe although there has been some growth in exports to China. If American consumption does not grow then the demand for manufactured goods from countries like Malaysia will fall. If this happens investor confidence in the Malaysian economy might turn negative. If American jobs do not grow, then American GDP will not grow and may even fall if the recession gets worse.

It has been found that Asian economies are very sensitive to changes in the GDP of the USA. A study by, for instance, Bank of America (BoA) Merrill Lynch found that if the US GDP declines by 1%, it will have the impact of reducing GDP by 1.7% in Singapore; 0.8% in Malaysia; 0.4% in Thailand, 0.3% in the Philippines and Indonesia. It is clear then that the more an economy is dependent on trade as a percentage of its GDP, the more it is affected by an economic crisis in the USA. The sensitivity of GDP growth to changes in the GDP of the USA is then a function of the trade dependence of the Asian countries. Singapore, for example, is more trade dependent than Indonesia and hence its GDP is more sensitive to movements in the GDP of the USA.

If Asian countries are not able to keep up their export momentum, their incomes will drop and their companies may not generate more profits.

In fact profits might fall and this may lead investors to sell the stocks of the companies negatively affected by the fall in exports. If incomes go down as a result of the drop in external demand then savings will drop and the amount of funds available for margin financing of stocks might fall. Tighter loan conditions or credit conditions may persuade investors to move out of the market and this may cause stock prices and the market index to fall.

So American jobs mean an increase in aggregate demand for manufactured goods from Asia and this translates into increased incomes and increased demand for Asian stocks.

If Asian exports decline then the demand for Asian currencies will decline and this will trigger a depreciation of the local Asian currencies, which will mean that foreign portfolio managers will not be attracted by the prospects of an appreciating local currency.

If the money supply declines as a result of the drop in exports, then interest rates will rise and this will cause the price of stocks and bonds to tumble because there is an inverse relation between asset values and interest rates.

The rate of job creation in a crisis economy such as America, which is linked to the real and financial economies of Asia, has therefore a significant effect on the stock market performance of the dependent Asian economies.

In August, for example, foreign investors sold more than RM3.8bil worth of Malaysian stocks because of the fall in the S&P credit rating of America and the European debt crisis because of the expectation that the external demand for Malaysian exports will decline. As a result, the FTSE Bursa Malaysia KLCI Index fell 6.6% in August.


Posted by Mr Thx 0 comments

About 85% of Liaoning province’s 184 financing companies defaulted on debt service payments in 2010 according to a report from the province’s Audit Office. The report also noted that 120 of these borrowers, de facto government agencies, operated at a loss last year.

Since 1994, provinces and lower-tier governments have not been permitted to issue bonds or borrow from banks. Despite the strict prohibition, their debt has skyrocketed as local officials incurred obligations through LGFVs, local government finance vehicles. The central government’s National Audit Office said these companies, at the end of last year, had taken on 10.7 trillion yuan of debt. No one, however, knows the true amount of LGFV indebtedness, and some have calculated the real amount to be more than double the official figure.

Why the disagreement as to the amount of debt? Local governments have gone out of their way to hide borrowings, perhaps in part because of their doubtful legality. As famed economic journalist Hu Shuli points out, new local officials sometimes do not know the extent of obligations left by their predecessors. There have been a number of stratagems employed, from the issuance of illegal government guarantees to the transfer of funds in roundabout routes.

The case of China Zhongwang Holdings, a giant aluminum producer, illustrates how Liaoning province effectively went into debt in a roundabout manner—and concealed the borrowing. As disclosed in a footnote in its 2009 financial statements, Zhongwang had borrowed 2.3 billion yuan from two Liaoning banks and, as reported by Naomi Rovnick of the South China Morning Post, had “given the money” to a government-owned entity. Zhongwang, based in Liaoning, kept the loan on its books but disclaimed any responsibility for repayment. Apparently, the series of money transfers among Liaoning’s government-owned entities through Zhongwang was intended to facilitate development of the local economy.

The debt problems of northeastern Liaoning may be worse than those of other provinces because it is in the heart of China’s “rust belt,” but LGFVs in other parts of the country are also beginning to experience difficulties. Yunnan Investment Group, the largest financing vehicle of southwestern Yunnan province, has just put restructuring plans on hold after China’s most widely followed rating agency warned of a downgrade in July. Most LGFVs, however, are not rated and so there is virtually no public scrutiny of their activity.

LGFVs can continue to meet existing debt obligations as long as they can borrow new funds. “If the government doesn’t tighten its policy too much, there shouldn’t be any problem,” said Tianjin Vice-Mayor Cui Jindu on Friday. “But if we end up not getting a single new loan, there could be problems.” The problems Cui was referring to, according to the official China Daily, included non-completion of projects. And if projects are not completed, there will be no sources of repayment.

The problem is that Beijing, to control inflation, is in fact putting the brakes on the money supply. The growth of M2 is the slowest it has been in six years—less than half of what it was two years ago—and central government regulators are trying to restrict new loans with periodic increases in bank reserve requirements and direct administrative measures.

As a result, China’s debt-fueled growth is slowing fast, probably faster than official GDP figures indicate. Electricity usage, perhaps the best barometer of economic activity, was essentially flat this summer on a month-to-month basis. Moreover, export and shipbuilding orders are down. The closely watched HSBC purchasing managers’ index, at its record lowest point, is close to negative territory and headed south.

Xu Lin, a senior official at the National Development and Reform Commission, says there is no need to “panic,” but there are plenty of reasons to think that China’s economy is already landing hard. And a hard landing will soon cause LGFV defaults around the country, which will roil banks. Fitch early this month put China’s local-currency debt on downgrade watch due to concerns about bank asset quality and general concerns about financial stability.

Many analysts, thinking Beijing has plenty of cash, don’t worry. Yes, it is sitting on $3.2 trillion in foreign exchange reserves, but for various reasons dollars, euros, and yen are of little use in a local-currency crisis. Of course, the central government can print more renminbi to pay off LGFV creditors, but that, by increasing the money supply, would only aggravate what is China’s most serious economic problem, inflation.

Everyone now wants to know whether Beijing will buy Greek and Italian debt to save Europe. Yet the better question to ask at the moment is this: “Can China save itself?”


Posted by Mr Thx Monday, September 19, 2011 0 comments

PETALING JAYA: Tenaga Nasional Bhd (TNB) will raise RM5bil from a 20-year ringgit-denominated sukuk issuance at the end of next month to finance the extension of its Janamanjung power plant.

This comes at a time when the national utility company is facing a severe gas supply shortage that may result in it incurring additional fuel cost.

In a Bernama report on Thursday, TNB president and chief executive officer Datuk Seri Che Khalib Mohd Noh said the group would do its book-building exercise in the third week of October. “The timing is good as the domestic market is now flush with liquidity,” he said.

In April, TNB awarded French group Alstom a 650-million-euro (RM2.8bil) contract to build the Janamanjung 1,000-MW supercritical coal-fired power plant.

Alstom will engineer, procure, construct and commission a 1,000-MW steam turbine, a generator, a supercritical boiler and auxiliaries. The plant is expected to come online in 2015.

The plant will be the single largest in South-East Asia and will produce enough electricity to power nearly two million households in the country.

The project follows TNB's 1999 contract with Alstom to build the currently operating 2,100-MW Manjung coal-fired power plant.

The supercritical power plant operates at a higher temperature than regular coal-fired power plants. Its high temperature increases the pressure at which it operates, which in turn improves its efficiency, increasing the amount of power output and decreasing emission per unit of fuel burned.

Meanwhile, TNB is still bogged down by cost concerns whereby it may incur additional fuel costs of up to RM3bil.

On Tuesday, Che Khalib said the company's fourth-quarter performance would be weak and his earnings estimate for 2011 had gone haywire and had been cut by more than 50%, marred by a continued gas supply shortage.

Analysts have said the gas shortage might only be permanently resolved by the second half of 2012, when Petronas Gas' regasification terminal in Malacca was operational and Malaysia started importing liquefied natural gas at market prices.


Posted by Mr Thx Sunday, September 18, 2011 0 comments

This article is a direct translation from the source using google translator. It's probably not 100% accurate. Please click the source link for your reference.

Direct Sales Business Guidelines In Multi Level Marketing (Multi-Level Marketing) According to the Shariah is provided for the purpose of providing guidance to the company's direct sales business plan based on multi-level marketing (MLM), the participants, including distributors, sales representatives or agents, buyers, the who are involved directly or indirectly in the business and the public to ensure that the direct sales business in line with sharia principles.

2. Direct sales business conducted in general and in particular MLM is one form of business has contributed to the income of individuals and the economy. Businesses in this category to be a platform that provides space and opportunity for the public to increase household income generating livelihood on a regular or incidental to improve living standards.

3. However, multi-level direct sales business (MLM) has made many polemics in relation to the status from the perspective of Islamic law. In this regard, the Dialogue Fatwa Committee, National Council for Islamic Affairs Malaysia Ke-72 time is sitting at 25 to 26 February 2006 has decided that:
"The concept, structure and business legal multi-level marketing (MLM) which was approved by the Government is a must, and do not conflict with the business concept of Islam".

4. Advanced decision, a committee was formed to develop guidelines on business practices. The committee consists of experts in the field of paka-sharia and related agency representatives as follows:
(I) Dr. Zaharuddin bin Abd. Rahman
International Islamic University Malaysia
(Ii) En. Mohd. Talal bin Abu Bakar

Ministry of Domestic Trade, Cooperatives and Consumer Affairs
(Iii) DJ Keramat Keramat Ali bin Ahmad Fadzil
International Islamic University Malaysia
(Iv) Ustaz Wan Wan Husin bin Rumaizi
International Islamic University Malaysia
(V) DJ Zaharudin bin Muhammad

Alliance Islamic Bank's Shariah Advisor and Prudential BSN Takaful

5. Draft Guidelines have been formulated by the committee was approved and reviewed by the Review Panel Meeting Shariah-74 Jakim time to 24 to May 26, 2011. Furthermore, the Dialogue Fatwa Committee, National Council for Islamic Affairs Malaysia Ke-95 time is sitting at 16 to June 18, 2011 has agreed to recommend the Direct Sales Business Guidelines In Multi Level Marketing (Multi-Level Marketing) According to the Shariah.

6. Guidelines were established to achieve the following objectives:
(A) to refine the results of the Dialogue Fatwa Committee, National Council for Islamic Affairs Malaysia to outline the criteria required and prohibited in the MLM direct selling business, and
(B) serve as reference and guidance in relation to the MLM direct selling business in accordance with Islamic law to ensure fairness and transparency to all parties involved in this business.

7. For the purposes of these guidelines:
(A) "Marriage" means the agreement between the company and participants who have understood and agreed by both parties in accordance with Islamic law.
(B) "goods" means property of every kind whether tangible assets (tangible) or intangible assets (intangible) and assets in the form of real or virtual. The property must also be other than choses in action, negotiable instruments, shares, debentures and money.
(C) "Bonus" means the amount of commission payments as promised and paid to the participants as a reward to players being able, either alone or in groups, resulting in the outcome-the outcome as stated in the contract and detailed in a marketing plan or defined benefit plans.
(D) "Electronic" means technology that uses electrical, optical, magnetic, electromagnetic, biometric, photonics, or other similar technology.
(E) "intangible property" means any goods or services that do not have a clear value or benefits to participants and users.
(F) "Incentive" means something given or offered as an inducement or encouragement.
(G) "direct selling" means selling directly from the distributor to be appointed to the customer without going through layers of wholesalers and retailers in layers include door to door sales, mail order or sales through electronic transactions. 4
(H) "Door to door sale" means sale of goods or services conducted in the following way: A person or any person authorized by him to:
(I) go from one place to another than a fixed place of business, or
(Ii) to make phone calls to find people willing to enter into contracts as a purchaser for the sale of goods or services.
The first-mentioned person or any other person then or subsequently enter into negotiations with the prospective purchaser with a contract.
(I) "mail-order sales" means the sale of goods or services by any person, whether himself or through any person authorized by him, by accepting an offer for the sale by mail.
(J) "Sales through electronic transactions" means the sale of goods or services electronically by using the marketing network for the purpose of obtaining a commission, bonus or any other economic benefits.
(K) "Commission" means the wages paid to attorneys or agents for selling goods or services.
(L) "Services" means any rights or benefits except for goods and performance of work under a contract of service.
(M) "Participant" means a person who takes part in the direct sales business in MLM as a party that entered the contract with 5
direct selling companies, including distributors, dealers or agents and buyers.
(N) "Products" means goods or services.
(O) "pyramid scheme" means any scheme, arrangement, plan, operation or process chain bonus or benefit is derived solely or primarily from the recruitment or recruitment of participants in the scheme, plan, operation or process chain with sales pyramid goods, services or intangible property by participants.

8. There are three types of direct sales business marketing plan as follows:

(A) Multi Level Marketing Plan (Multi-Level Marketing Plan / MLM)
(I) the Company shall appoint a person as a participant to sell goods or services.
(Ii) Participants will also appoint other individuals to form networks in which (refer) to sell goods or services. The process of recruitment of new participants may continue to a reasonable level.
(Iii) Each participant will receive a commission, bonus or other economic benefits from a private sale and the sale of or dealers in the network or in a group (overriding bonus).

(B) Marketing Plan A Level (Single Level Marketing Plan)
(I) the Company will appoint a representative or agent or sponsor the sale and pay the salary or commission or a combination of salary and commissions on their sales.
(Ii) representatives or agents are not allowed to appoint or to sponsor other representatives or agents.

(C) Sales through Mail Order (Mail Order)
Sale of goods or services by any person, whether in person or through any person authorized by post.

9. Direct sales business multi-level marketing or multi-level marketing (MLM) which is required by Islamic law, taking into account maslahah and justice parties transactions as well as legal provisions, contains the following features:

(1) Registered and licensed
Company must be registered under the Companies Act 1965 and have a valid license to do business direct sales Direct Selling Act and the Anti-Pyramid Scheme 1993.

(2) Direct Sales Contracts In Writing
(A) The Company shall prepare a written contract that contains terms and conditions of a clear description of the agreement between the company and participants.
(B) The terms and conditions of the agreement shall be understood and agreed by the company and participants.
(C) The contract shall contain the clause "THIS CONTRACT IS SUBJECT TO THE COOLING-OFF PERIOD FOR TEN WORKING DAYS" printed in block letters in print not less than 18 point Times.
(D) The contract should be signed or shall be in accordance with law to be signed by representatives of companies and new players join a direct sales company.
(E) A participant may cancel the contract at any time before the expiration of the grace period, stating its intention to terminate or withdraw from the contract.

(3 ) Cooling-off Period
(A) the cooling-off period is a period of not less than ten working days from the date of entry that allow a participant to cancel or withdraw participation in the direct sales business.
(B) In the event of cancellation of membership, the company must return the entire membership fee paid by participants.
(C) If the buyer makes the purchase and intends to return the goods have been found not suitable, the buyer is entitled to do so before the expiration of ten days, and the company must return the entire money or the price the item.
(D) The purchaser also reserves the right to return goods purchased if found to not meet the required specifications. 8
This is based on al-syart khiyar the option to cancel a contract after a few days as agreed by both parties.

(4) Membership Fees On the Minimum Rate
(A) the prescribed fee, if any, shall at a minimum covers the cost of management and printed materials are included in the sale of equipment containing a marketing plan and code of ethics.
(B) Using either the registration fee if dtetapkan by the company without payment of fees charged by the company if not, players automatically have become members or distributors, sales representatives or agents for direct selling companies.
(C) Membership fees shall not at a pace that is reasonable and so high that it no longer remains in accordance with the capacity to cover the cost starter kit or the business tools provided by the company during the registration but more towards the source of payment to the recruitment of new members as the basis pyramid schemes.
(D) Payment of entry fees without any consideration or exchange goods or services, except for a reasonable sum to cover the cost starter kit or business tools and the like are contain elements of riba al-fadhl and riba al-nasi'ah, which is putting some money (entry fees ) in cash in order to obtain a sum of money that occurs more grace.

( 5) Purpose To be participants
The purpose of participating in direct selling company should be clear and consistent with legislation such as the following resolution:
i) buying and using goods or services produced or offered by the company to enjoy the privileges and incentives that have been prescribed and / or
(Ii) a distributor, representative or agent selling the goods or services produced or offered by the company to enjoy the privileges and incentives that have been set.

(6) Wedding In Direct Sales Business
(A) Marriage between the company and participants must be clearly defined between the company and participants.
(B) Subject to (a), and by not denying the possibility of the use of other obligations, essentially the main contract in the direct sales business multi-level marketing (MLM) is a contract al-ju `alah (الجعالة).

(I) Al-ju `alah (الجعالة)
Al-ju `yield is the contract that promises the salaries of those who managed to produce a desired outcome and required by the contracting iatu al-ja'il. This contract is result-oriented nature of Success-oriented rather than outcome-oriented which is oriented effort is required to cause the wages given by al-ja'il and deserve by the person doing the work of al-'amil, when the outcome required by the al-ja' il successfully realized and not merely to make the effort and apply oneself.
For example, to facilitate understanding of the difference between the contract and contract-oriented results-oriented effort, said Mr A said to Ms B: "If teachers would teach my child C that he can read, I paid RM500 teacher". Ms B did everything hard to teach C, but he still can not read. As a result, Ms B is not entitled to the RM500 as promised even have to spend time and energy teaching children to Mr A because here the conditions set by Mr A and Ms B agreed by contract to be results-oriented causes.
Unlike the case if Mr A said to Ms B: "Ms B C help teach my child to read four hours a week for a month, I paid to Ms B RM500". Here, whether C is subsequently able to read or not, as long as Ms B had carried out the work required of teaching children to Mr A, C, reading in the period, then Ms B is entitled to RM500 as promised because the contract here and time-oriented efforts .
Akad al-ju'alah contract generally is not binding on both parties (gyair common) and found to be suitable in practice with MLM practices in which participants are not employees of the company and the company is not the employer to the employee.
In the context of MLM, direct sales company to be al-ja'il or the person making the promise by al-ju'alah contract offered by the prescribed marketing plan and the participant will be al-'amil or executor to fulfill the conditions stipulated wages in the marketing plan and agreed set of participants. Among the participants were between the uplines and downlines a particular contract does not exist other relationships as al-musytarikun fi al-'amal or parties who perform a task together to share their wages through the formula set forth in the marketing plan.

(Ii) Al-Wakala representative ((الوكالة) or agent)
Al-Wakalah is the contract that authorizes the person (al-attorney) to act on behalf of that power (al-muwakkil). Typically companies doing business in MLM direct sales explicitly deny the existence of al-attorney relationship, and al-muwakkil between participants and companies. Therefore, the potential use of this contract occurs in the direct sales business in SLM compared with MLM. In this contract, participants, including distributors, sales representatives or agents perform the task of creating a description of the company, promotion of goods or services, sell goods and services and sign up new members to the company. The Company will pay the salaries, commissions, bonuses or other economic benefits for the task or work when the players achieve sales targets based on the concept of al-ujr or al-ju `yield or a combination. Under the contract al-wakalah, participants or representatives may stop or withdraw at any time when the participants no longer perform the work within the time prescribed by the company such as a year. If participants do not withdraw after this period, the contract will end in itself although it is not known to the company in relation to termination.

(Iii) Al-Wakala bi ujr (باجر) representative ((الوكالة) or agent of wages)
Al-Wakala ujr bi is the contract that authorizes the person (al-attorney) to act on behalf of that power (al-muwakkil). Normally, this contract is applied in the direct sales business a stage. Through this contract, the company will appoint the participants, including distributors, sales representatives or agents perform the task of creating a description of the company, promotion of goods or services, sell goods and services and sign up new members to the company. The Company will pay commissions, bonuses or other economic benefits on the job or work when the players achieve sales targets based on the concept of `alah al-ju. Under the contract al-wakalah bi ujr, both parties do not have to cancel the contract without the consent of other parties.
Note: In terms of fiqh, al-wakalah bi ujr divided into two:
First: Al-wakalah with the concept of al-ju `alah (wages for the work)
Example: "A is representative of B to promote the goods, if unsold goods, 5% will be owned by B."
Al-wakalah with the concept of `alah al-ju, all the jurists' view is not binding, but binding Maliki said if the person receiving the offer has started work or tasks.
Second: Al-wakalah with the concept of Ijarah (wages over time eg a week, year)
Example: "A is representative of B to sell goods to pay RM10 a day." A regular for wages even if not to sell the item.
Hanafi and Maliki view that the concept of Ijarah wakalah binding on both parties. According to the Shafi sect "i and Hanbali schools, they are not binding.

(Iv) Grants (الهبة) 

Grant is a voluntary giving by the company is required by Islamic law to the participants.

(V) al-bay '(البيع) (sale) 

Buying and selling that occurs between companies and participants or between companies and end-users or between participants and end users.

(7). Principle-based contract-seller interaction Reda (التراضي).
(A) Marriage between the contracting parties shall mutually down-seller (التراضي (when signing the contract. Jurists' consensus that the principle of inter-pleased with the contract seller is the legal conditions.
(B) Islamic law stipulates that the principle of mutual-meredhai pleased occurs when there is intent to give effect to the contract that is free from pressure or coercion. Thus, 
 a direct sales transaction between the parties shall be based on the principle of mutual-meredhai pleased and free from elements of coercion, manipulation and exploitation.

(8) Features Participants 

Each participant is entitled to a direct sales company to enjoy one or a combination of the following privileges:
(I) Obtain a rebate on every purchase and / or receive vouchers or coupons for products offered by the company. The deduction is based on the contract of al-wa'd bi al-grant (promise to give the grant).
(Ii) To commission, bonus or other economic benefits for each purchase or a private sale or the purchase or sale of the network under contract or in a group based on al-ju'alah.
(Iii) Being a distributor for the company's product range to become a separate business entity under direct selling company (independent business owner).

(9) Product Criteria
(A) issued by the company's products consist of halal goods and services and benefits according to Islamic perspective.
(B) products generally have a quality product and safe to use and must be expected in an equitable, reasonable and fair that the products offered are favored targets for purchase by consumers regardless of MLM marketing plan prepared.
(C) This product is not a "mask" or contrivance in a transaction to obscure the features of a pyramid scheme or get rich quick scheme. The strength of the direct selling company is located to the product quality and not on short-term objectives for the purpose of immediate profit alone.
(D) Food products, beverages and consumption of goods sold by the company to get halal certification from JAKIM or halal certification bodies recognized by JAKIM. To ensure the company's management system is mengik ut Islamic principles, it is recommended that direct selling companies to apply standards of MS2400: 2010 Standards on Halal Logistics, MS1500: 2009 Halal Food: Production, Preparation Handling and Storage, MS2200 Applied Products Division-Muslim 1:2008 Part 1: Cosmetics and toiletries-General Guidelines and the MS1900: 2005 Standards on Quality Management System from Islamic Perspective to provide value added to the lawful recognition of the company products.
(E) Product is not made up of ribawi goods such as gold and silver can be traded in grace as it involves elements of interest.

(10) Product Price
(A) Prices of products offered by the company to be reasonable, reasonable, not excessive, and in proportion to the type and quality of goods and services.
(B) Their products are still sought for purchase by consumers at a price that is offered without regard to MLM marketing plan prepared.

(11) Provision of Incentives
(A) The provision of incentives by the company to participants may include commissions, bonuses or other economic benefits.
(B) Payment of commission, bonus or other economic interest in the direct sales business is based on the principle of al-all `is or grant.
(C) Grant of commissions, bonuses or other economic benefits should be based on quantity of sales of goods or services and non-recruitment or recruitment of new participants only.
(D) the direct selling company's marketing plan and plan of incentives aimed at recruitment or recruitment of new participants solely or primarily as a qualification for a commission, bonus or other economic benefits is contained elements of gambling money game or not required by Islamic law.
(E) Upline entitled to receive commissions, bonuses or other economic benefits from the purchase or sale of referrals based on the contract ju'alah parties were united in carrying out any work (al-mushtarikun fi al-a `mal) and the company as a party that promises wages (al-ja'il) as detailed division of the company's marketing plan.
(F) The commission, bonus or other economic benefits to be derived from the sales of products and / or company contributions.
(G) The Company shall specify clearly the work to be done and the outcome and results to be achieved by the participants to be eligible to receive commissions, bonuses or other economic benefits and declare the terms and conditions.
(H) The Company shall give a fair chance to all participants to earn commissions, bonuses or incentives.
(I) States are encouraged to diversify their products to the participants the opportunity to increase sales in order to get commissions, bonuses or other economic benefits. This approach seeks to prevent exploitation of the money system or network games.
(J) the company's marketing plan and providing incentives to plan participants should be stated clearly by the company in a written document that participants should be given the opportunity to understand before entering the contract.

(12) Appointment of Shariah Advisor
(A) The Company shall appoint a Shariah Advisor, comprising at least two Muslims who at least has a degree in the field of Shariah, including studies in Fiqh and Usul Fiqh Transactions.
(B) States are encouraged to appoint a Shariah Advisor who has appropriate experience in the field of recitation.
(C) of the Shariah Advisory should not have any relationships that may affect the position of making independent decisions with immediate family relationship as spouse, child or sibling with the Chief Executive Officer of the Company or the Board of Directors and have no interest in selling company shares directly or its subsidiaries.

(13) Training Program
(A) The Company shall organize training programs for the following purposes:
(I) to introduce the product to the participants, especially for products with specific features of a technical nature and specific features that comply with Islamic law and
(Ii) to give exposure to participants on the marketing methods to increase the company's sales performance in an ethical and legal compliance.
(B) The Company shall organize training programs either free or paid with reasonable entry fees.
(C) Conduct training programs shall be in conformity with Islamic principles, including preserving manners and socializing between men and women.
(D) The company has appointed Shariah Advisor, Shariah Adviser shall be given appropriate space to play a role in providing training, guidance and understanding 
 about the theoretical and practical adherence to sharia in the direct sales business in MLM for participants to be practiced and appreciated by them.

(14) Repurchase Policy or Payback Policy
(A) The Company shall prepare a written contract that contains terms of the buy-back policy or pay back.
(B) The Company shall buy back any marketable goods sold to participants in the six months to make payments of not less than ninety percent (90%) of the amount paid.

(15) Participant Withdrawal
Any participant may withdraw from participating companies at any time based on the terms and conditions agreed by both parties.

10. The elements are forbidden in the direct sales business multi-storey or multi-level marketing (MLM) is as follows:

(1) Containing Element Pyramid Scheme
(A) A pyramid scheme or get rich quick scheme is not to comply with Shariah principles-based gambling or betting (qimar) in game money (money game) that is sponsored by the new downline upline will lose money if it does not seek the participation of other referrals .
(B) a written contract between the company and the participants are not available.
(C) The plan focuses on the search or recruitment of new members (downline) solely or mainly and not the purpose of conducting business through the movement of products to end users as appropriate.
(D) Income of participants in a pyramid scheme or get rich quick scheme generated from the new member fee solely or mainly and not the proceeds from the sale of goods or services.
(E) a compulsory purchase of goods or services or intangible property or the minimum payment or sales requirements imposed as a condition to qualify a person for a bonus or other economic benefits in the scheme to purchase or private sale or the purchase or sale of under it.
(F) Participants are not given the option and required to do the "front-loading inventory" of buying goods or services within a reasonable amount not to exceed the expectations may be sold or consumed within a reasonable period of time.
(G) Purchase of rank or purchase more than one member is an approach that contains elements of a pyramid scheme and as such is contrary to Islamic law.
(H) which set the structure of the bonus payments in accordance with a strict hierarchical order, without allowing participants to skip off payment regardless of actual ability and efforts of participants is contained elements of a pyramid scheme that is contrary to Islamic law. 21
(I) refund policy (refund) or policy buy-back (buy back) not available
(J) Not to allow participants to withdraw from participating in the plan.

(2) Contain Elements fraud, oppression, manipulation and exploitation of the Marketing Plan and Grant of Incentive Plan
(A) The Company shall ensure that the marketing plan and plan incentives are transparent and fair and free from any form of fraud, oppression, manipulation and exploitation that can deceive members or users.
(B) Any element of fraud, oppression, manipulation and exploitation by members or distributors in the search for new members only or mainly to improve the achievement of the target group is forbidden by Islamic law. "Manipulation" means all actions and know-how to deceive people or influence other people stand without knowing the person. "Exploitation" means the act (action) took the opportunity to exploit a person or situation and is not just in the interest or the profits themselves.

(3) Contains Element Coercion
(A) Efforts aimed to find new members must be made through a transparent approach and method, and wise without the element of coercion that can disrupt or cause distress and annoyance to the person who approached.
(B) After each session of the company profile, products, marketing plans and incentives plan, individuals who are approached should be given space and time to think, to make judgments as to whether to become participants or reject the invitation.
(C) Participants shall be given full freedom in the purchase and are not compelled to buy packages of certain products to meet sales requirements to qualify for the bonus scheme or when they might not need a few items in the package or require the goods offered in the package but not on the amount so much as determined.

(4) Contain Waste Element
(A) Purchases in large quantities without reasonable justification simply to get the bonus on offer without having a proper marketing strategy.
(B) purchase products offered by the company to be based on real consumer needs and / or ability to sell the product.

(5) Promising Fixed Gain Without Efforts
Any direct sales company that promised a fixed profit to the participants by giving commissions / bonuses without any apparent effort includes promotional activities and sales of goods or services are contrary to Islamic law because it contained elements of riba.

(6) Includes Elements syubhah
In the context of a direct sales business that is based on multi-level marketing, companies must ensure that marketing plans are free of things that are not clear or syubhah شبهة)) in every aspect of the business including marketing plans, providing incentives, goods and services and other matters related to it to ensure that business conducted is in compliance with Shariah principles outlined by Islam.

Direct Sales Business Guidelines In Multi Level Marketing (Multi-Level Marketing) According to the Shariah is in accordance with the provisions of the Direct Sales Act and the Anti-Pyramid Scheme .1993 Therefore, any matters not specified in these guidelines, with the should be referred to the Direct Sales Act and the Anti-Pyramid Scheme .1993 relevant parties should refer to these guidelines to determine the parameters required by the shari'a in relation to direct sales business multi-level marketing.


Posted by Mr Thx Wednesday, September 14, 2011 0 comments

Property price increases continue in Malaysia, albeit at a lower rate, amidst slower exports and economic growth in the first quarter of 2011.

The national house price index rose 6.5% y-o-y to Q1 2011, after annual increases of 7.9% y-o-y in 2010, according to the Valuation and Property Services Department (JPPH). When adjusted for inflation, house prices rose by 3.4% over the same period.

In Kuala Lumpur, the house price index surged by 11.4% y-o-y to Q1 2011, with a rise of 7.1% during the latest quarter. House prices also increased in Selangor (9.6%), Perak (8%), and Negeri Sembilan (5%) over the same period. On the other hand, in the year to end-Q1 2011, Pulau Pinang and Johor experienced price falls of 1.2% and 1%, respectively.

By property type, nationally:

  • Terraced houses rose 7.7% y-o-y to Q1 2011
  • Detached houses rose 5.8%
  • Semi-detached houses rose 5.3%
  • High rises rose by just 0.9% over the same period.

The national average price of houses was MYR201,851 (US$67,791) in Q1 2011, based on the latest figures released by the JPPH.

In 2010, property transactions rose by 11% y-o-y to 376,583 while transaction values increased by 33% y-o-y to MYR107.44 billion (US$36.08 billion), according to C.H. Williams Talhar & Wong, a local real estate services company.

There were about 7,982 units sold in 2010, up 21.6% from 6,563 units sold in the previous year. However in Q1 2011, total property sales dropped by 36% to 1,033 units from 1,607 units in the same period last year, according to the JPPH.

In Q1 2011, there were just 6,109 new housing units launched in the market, down 52.3% from the previous quarter and a 59.3% drop from the same period last year, according to JPPH. In 2010, there were a total of 55,768 units launched, up 14.3% from 48,791 units launched in 2009.

In 2011, moderate property price increases are expected in Malaysia, based on the 2011 Property Market Report (PMR) published by C.H. Williams Talhar & Wong.

Malaysia’s economy grew strongly in 2010, with a real GDP growth rate of about 7.2%, after experiencing a 1.7% contraction in 2009 due to the global crisis.

Confidence since then has been boosted by Najib Razak succeeding Abdullah Badawi as Prime Minister on April 3, 2009. Badawi’s last months were marked by public criticism of cronyism, ineptness and corruption. Disaffected members of the ruling party threatened to provide support to the opposition’s Anwar, if Badawi did not resign.

In 2011, the economy is expected to grow by 5.2%, according to the Malaysian Institute of Economic Research (MIER).

In June 2011, inflation may have peaked at 3.8%, driven by high electricity and gas prices. In 2011, the inflation rate is to stay in a range of 2.5%-3.5%, up from just 1.7% in 2010.
Despite inflationary pressures, Bank Negara Malaysia maintained the benchmark Overnight Policy Rate (OPR) at its current level of 3%. However, some economists predict that the central bank will eventually hike the OPR by 25 basis points later this year, and by another 25 basis points next year.

Economic boost, tax cuts

In the wake of the crisis, Malaysia’s budget deficit rose to levels unseen for two decades. The over-all deficit in 2009 was around 7.4%, according to the Malaysian Institute of Economic Research (MIER), an independent think-tank. This followed 2008’s 4.8% of GDP deficit (the deficit averaged 3.4% from 2005 to 2007).

A stimulus package worth MYR60 billion (almost US$17.5 billion) or 3.5% of GDP, was announced in March 2009. Implementation will be spread over two years and includes spending (MYR15 billion), guarantee funds (MYR25 billion), equity investments (MYR10 billion), private finance and off-budget initiatives (MYR7 billion) and tax incentives (MYR3 billion).

There are also tax cuts:

  • a tax relief for homebuyers on housing loans interest relief up to MYR10,000 (US$2,900) a year, for 3 years
  • deferred housing loan repayments for 1 year for those retrenched.

The first stimulus package, announced in November 2008, had amounted to only MYR7 billion (US$2 billion) or 1% of GDP, and was allocated to spending on projects with high-multiplier effects like infrastructure. Fuel subsidy savings financed the packages - in April 2004, petrol pump prices were raised by 40%.

Home ownership made easy

Malaysians face low barriers to homeownership, according to Datuk Michael Yam, REHDA’s deputy president:

  • Mortgage interest rates can be as low as BLR minus 2.3%
  • Financing is available up to 100%
  • There is zero lock in period
  • There are stamp duty exemptions
  • Repayment periods extend to 30 years, or up to age 75.

Outstanding housing loans reached MYR177.5 billion (US$51.6 billion) in 2009, around 24.7% of GDP, up 11% from a year earlier.

A low and steady base lending rate (BLR) has encouraged loan growth. From May 2006 to October 2008, Bank Negara Malaysia (BNM) pegged its key rate at 6.72% before gradually adjusting it downward to its present 5.51% in August 2009. Average lending rates fell from 6.63% in September 2006 to 4.83% in December 2009.

Capital gains taxes are back?

In mid-2009 the cash-strapped government announced it would restore the 5% real property gains tax on all transactions, abolished in April 2007. But the real estate community reacted strongly, and the government backed down and restricted the 5% real property gains tax to properties sold within five years of acquisition.

The government also added some exemptions:

  • The level of exemption is increased from MYR5,000 (US$1,454) to MYR10,000 (US$2,908) or 10% of the chargeable gains, whichever is higher
  • Gifts between parent and child, husband and wife, grandparent and grandchild are exempt
  • One residential property in a lifetime is exempt

Foreign buyers more discriminated against!

The Malaysian government has partly retreated from its December 2006 liberalization of foreign property purchases. Effective January 2010, the price floor below which foreign buyers can buy is hiked to MYR500,000 (US$145,383), twice the previous level.

Foreign purchases above MYR500,000 (US$145,383) are placed under the “purview of the State Authorities” under the new regulations. Approval is expected to take one to two months.

The REHDA opposed the new restrictions, arguing that “the restriction might impact residential property acquisition by foreigners in the country, as the number of properties priced above MYR500,000, especially outside the Klang Valley areas, are limited.

“The ruling may be applicable to properties in Kuala Lumpur areas, but we should also consider other states with lesser price ranges,” said Datuk Ng, president of REHDA in a statement.

“This is definitely not the right time to restrict the property value to be purchased by foreigners.”

Serious over-supply

The over-supply of high-end condominiums is a concern. There were 66,328 units unsold at end-2010, though this was lower than 2004’s peak level of 83,888 units unsold.

The take-up rate has however improved says James Wong, president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS). He added that many developers scaled back or postponed projects in the first half of 2009. The resale market for luxury condominium will remain soft until 2H of 2010, Wong adds.

The secondary market for landed residential properties is strong.

There is a constant flow of new supply of mass housing, as a result of the government’s attempt to make housing more affordable. From 2004 to 2008, more than 100,000 low cost housing units were built by government agencies nationwide.

In October 2009, the government announced the construction of 44,000 low cost housing units priced between MYR21,500 and MYR 35,000 (US$6,250 – US$10,176). It also ordered the construction of 74,000 low-cost rental housing units by the end of 2010.

Weak house price growth

The house price index rose 4.7% in 2008, but actually fell slightly (-0.66%) when adjusted for inflation.

In 2007, the house price index rose 4.8% (2.6 % in real terms)
In 2006, house prices rose 2.1% (a fall of 1.4% in real terms)
In 2005, house price rose 2.3% (a fall of 0.7% in real terms).

In Kuala Lumpur:
2008: house prices rose 4.5% (-0.9% in real terms)
2007: house prices rose 7.9% (5.7% in real terms)
2006: house prices rose5.3% (1.7% in real terms)
2005: house prices rose 6.5% (3.35% in real terms)
2004: house price rose 6.5% (5% in real terms).

House prices in Malaysia are still below their pre-Asian Crisis levels. House prices rose rapidly in the early 1990s with two particularly dramatic upward surges – in 1991, when 25.5% (20.3% in real terms) price rises were achieved, and in 1995 which saw 18.4% price growth (14.7% in real terms).
After the Asian Crisis, prices of luxury detached Kuala Lumpur houses fell by no less than 39%, between 1997 and 1999

Small rental market

Malaysia’s rental market is small. Only 6% of the housing stock is in the private rental sector. About 85% of the total stock is owner-occupied, while government-provided housing accounts for 7% of the housing stock.

The active luxury rental market caters mainly to expatriates, centered on Kuala Lumpur. Rental yields in Kuala Lumpur are relatively good, ranging from 5.5% to 8.7% in October 2009. Smaller units generally earn higher yields. On the other hand, yields on KL bungalows are relatively poor at around 3% – 4%.


Posted by Mr Thx 0 comments
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