Saturday, October 26, 2013

Is GST implementation confusing you?

The Malaysia 2014 Budget is tabled on the 25th October 2013, and one thing consider new concern from the rakyat will the implementation on 6% of  Goods and Services Tax (GST) starting from 1st April 2015.

There are few website can be refer to check more info for the GST, like the official website  and if it is too complicated to flip the pages on the official website, is rather useful for your reading reference.

And I think what most of the consumer is concerning is how is the final goods price end up to the end user? Is it will be higher or lower with compare to the previous tax method?

Taking and extraction from a forum discussion may have a clearer view on this,

The question start with,

People who doing business in trading of goods should have some confusing on GST.

For example, how a car spare parts end up at end user.

If using normal circumstances, it will be,

Importer in Malaysia (Dealer or Distributor) -> Retailer (Spare Parts shop) --> Foreman (Workshop) --> End User (Car Owner)

So when distributor sell to retailer, their bill need to impose 6% GST, and retailer sell to foreman another 6% and foreman to owner another 6% ?

In the scenario, end user is concerning if the GST is charging as such above example ended up with compounding 6% for 4 times (In some industry may be more than 4 level of transaction), but please find how the actual transaction go through in the below example,

After registration, all businesses say with revenue > RM1 million must charge GST at the prevailing rate. This GST that they charge and collect is known as output tax, which has to be paid to LHDN. GST incurred on business purchases and expenses (including import of goods) are known as input tax. Businesses can claim input tax if conditions for claiming are satisfied. This credit mechanism ensures that only the value added is taxed at each stage of a supply chain, hence GST also known as Value Added Tax (VAT). 

As an Illustration

The GST-registered manufacturer imports leather from overseas
The GST-registered manufacturer uses them to manufacture a bag. 
The GST-registered manufacturer sells the leather bag to a GST-registered retailer. 
The GST-registered retailer sells the bag to end user like you and me

1. Manufacturer

Pays GST to Malaysia Customs for imports
Import value = $100
Import GST paid = 6% X $100=$6 (input tax to claim from LHDN)

Charges and collects GST for sale of toys to retailer
Selling price to retailer = $200
GST charged to retailer = 6% X $200 = $12 (output tax to pay LHDN)

Net GST payable to LHDN = $12 - $6 = $6 (6% of original import amount)

2. Retailer

Pays GST to Manufacturer
Purchase value = $200
GST paid = 6% X $200=$12 (input tax to claim from LHDN)

Charges and collects GST for sale of toys to end consumer
Selling price to end consumer = $300
GST charged to end consumer = 6% X $300 = $18 (output tax to pay LHDN)

Net GST payable to LHDN = $18 - $12 = $6  (still 6% of original import amount)

3. End Consumer

Pays GST to Retailer
Purchase value = $300
GST paid = 6% X $300=$18

Net GST payable to LHDN = $18 - $0 = $18 (End consumer is not GST-registered. Therefore, he cannot claim GST paid on his purchase from LHDN

4. How to check how many people should pay GST in the above mentioned supply chain?

No. of parties
= End Consumer GST / Intermediate GST
= RM18 / RM6
= 3

5. How to minimise your GST as end consumer?

Always buy from the top source, meaning directly from manufacturer. 
Those people who have been overseas will know warehouse sales very popular overseas, reason is able to bypass all the intermediaries.
So I forsee a lot of retailers will die off slowly and a lot of manufacturers will come out with warehouse direct selling !

6. How a RM1 million revenue kopitiam can avoid collecting GST?

Simple, split into 2 companies with RM500k each.

The above example is extract from a forum discussion which I personally feel it is rather simple for consumer to understand the mechanism without need to reading such a long article in the official website.

Monday, October 14, 2013

Yeah, the 100 Doraemon is coming to Malaysia

When the Harbour City of Hong Kong hosting the "100 Years Before the Birth of Doraemon" exhibition on 14th August 2012, Doraemon fans in Malaysia is wondering if there are any chances this exhibition will come to Malaysia, especially most of us is exciting to watch the 100 unique figure of Doraemon along with his difference gadget.

And after Hong Kong, the exhibition is pass by Taiwan, Shanghai China and Japan, which the Tokyo exhibition just finished on 6th October, we finally hear the news that the exhibition will be coming to Malaysia tentatively in the mid December 2013.

The event which bring in by Animation Internation (M) Sdn. Bhd. still facing some technical problem of the venue for the exhibition as the exhibition need a place of 50,000 square feet, with the venue owner willing to rent out 100 days for the exhibition, this is quite a big challenge for the organizer.

The full article on the news in Chinese version from Sinchew website as below,


  • 鄒億明認為,國人此次將會被許多博覽中的意外驚喜所震撼。(圖:星洲日報)
國際影業有限公司(Animation International(M)Sdn Bhd)大馬區董事鄒億明在接受本報專訪時表示,這是他將哆啦A夢博覽帶進我國的原因,希望將哆啦A夢故事中的正面思想和價值觀傳達給國人,以製造一個充滿正能量的地方。

For those interested in the previous exhibition news and photo, can log in to their official Facebook page in the below link.

Friday, October 11, 2013

Between collector and investor

Had been involving in share market trading, and seeing most trader are more interesting trading in penny stock rather than the value investor who buy the fundamentally strong blue-chip, which let me have some kind of rather similar feeling on the current local coin collection scenario.

In my earlier post on the commemorative coin issue from Bank Negara Malaysia(BNM), we can find out some interesting fact in the after market price trend of this coin.

BNM is issuing 5 types of specification of coin, normally mintage quantity is lesser for the higher price range for Single Gold or the Set of 3 with Gold Coin inside, and the cheapest with most mintage quantity is the Nordic Gold.

For this latest issued coin, the Set of 3 only have 500 set and the Single Gold only have 750 pieces circular in the market, while the Nordic Gold type have a whopping 25,000 pieces in circular.

But for the Nordic Gold coin which sold by BNM at RM10, the after market price is able to sell at RM15 to RM20 even on the same day of the coin issue date, that represent a 50% to 100% gain for the first owner. But for the Single Gold which cost RM1,800/piece I think it is not so easy to find a fast buyer for a 10% gain of value.

But just like share market, those Single Gold with only 750 pieces circular in the market, the growth of value may more sustainable than those with 25,000 pieces in circular, once all the genuine collector holding with it, may be price will be shouting high without any seller in the market.

Tuesday, September 17, 2013

50th Anniversary of the Formation of Malaysia Commemorative Coins

Since when Malaysian is so keen on collecting commemorative coins, for my personal experience, today is the longest waiting queue with most longest hour that I need to reach the counter. Before that let see what is the commemorative coin that drive such a interest.

Bank Negara Malaysia is issuing commemorative coins in conjunction with the 50th Anniversary of the Formation of Malaysia. Malaysia Day is celebrated on 16 September every year to commemorate the establishment of the Malaysian federation which comprises 11 states in Malaya and two states in Borneo, namely Sabah and Sarawak.
Specifications of the commemorative coins are as follows:
1. Gold Commemorative Coin (proof)
This proof coin is made of gold with 999.9 purity and weighs 7.96 grams. It has a face value of RM100 and will be sold at RM 1,800 a piece. The mintage quantity is 750 pieces.
2. Coloured Silver Commemorative Coin (proof)
This is the first coloured coin issued by Bank Negara Malaysia. The coloured Jalur Gemilang is placed on the obverse side of this coin. This proof coloured coin is made of Fine Silver with 999 purity and weighs 31.10 grams. It has a face value of RM10 and will be sold at RM200 a piece. The mintage quantity is 10,000 pieces.
3. Nordic Gold Brilliant Uncirculated (B.U) Commemorative Coin
The Nordic Gold (B.U) coin has a face value of RM1 and will be sold at RM10 each. The mintage quantity is 25,000 pieces.
These commemorative coins are also available in a set of three (3) and a set of two (2). The set of three (3) consists of the gold, coloured silver and Nordic gold proof coins. It will be sold at RM2,100 per set with 500 sets available. The set of two (2) consists the coloured silver and nordic gold proof coins. This set will be sold at RM250 per set with 1,000 sets available.

Technical Specifications
Face Value
Mintage Quantity (pcs/sets)
Diameter (mm)
Weight (g)
Gold Proof
Gold (Au999.9)
Round with milled edge
Coloured Silver Proof
Silver (Ag999)
Round with milled edge
Nordic Gold (B.U.)
Cu89 Zn5 Al5 Sn1
Round with milled edge
Set of 21

10 + 1

Set of 32

100 + 10 + 1

1Set of 2 consists of coloured silver and Nordic gold proof coins, and
2Set of 3 consists of gold, coloured silver and Nordic gold proof coins.

After queuing for at least 4 hours, when come near to the counter only left single silver and single gold available for sell, other type like set of 3 and set of 2, even the Nordic Gold also sold out.

From the venue, I know that someone is queue as early as 7:45 am and only get his stuff at 11:30 am, and heard that there are people who queue as early as at 2.00 am. Please note that Bank Negara only open at 9 am to start selling the coin.

I'm wonder how many who queue is genuine collector which will keep their collection as their hobby, most of them may be is just the speculative trader that would like to sell off their items to earn some good margin, is the scenario good for the trader or for collector?

Friday, September 13, 2013

China Stationery Limited

Watching an article from TheStar Business News column drive to to write something what I feel is not so true from investor perception.

Since the first China base company XingQuan listed in Malaysia stock exchange in Bursa, their performance is well known by those who follow the stock market trend closely.

It is already a norm which most of the investor may agree that China base company listed in Malaysia is trading at the lowest PE range among other listed company in Bursa, by using the normal valuation method, a newbie in stock market will always tend to found that they are extremely undervalue, yet their stock price is fail to perform from what your valuation had done, not even near to it.

Normally what analysis blame to their bad performance in share price is due to some bad perception on the history of some China base company that listed oversea at US, Canada or Singapore, the accounting fraud is the main concern. And foreign investor is not easy to do a site visit to the Company as it base in China.

Another reason to be blame may be is although with the low PE and able to generate huge profit, but the dividend policy is quite stingy which their reason is China fund raising through bank is not that easy like Malaysia and the cost is very high, so they prefer to keep the cash from the profit as their operating cash reserve.

But does it mean this Company in Malaysia is really lack of retail investor in Malaysia? I'm not think so.

May be we can see the first few China base company listed in Malaysia which mainly on shoe maker industries, is trading quite a normal low volume, I would like to use China Stationery Limited (CSL) as special case study on those blame.

Investor who follow the CSL share price trend since its first day IPO debut in Bursa, should very well noted that they actually not open below their IPO offer price, with continuous high volume trading and it actually trading at above RM1 for quite some time after the IPO debut.

And you can see their current price is merely RM0.205 (Closing price on 13th September 2013) now, but investor always can noted that their trading volume is always among the top 20 in Bursa during this period.

So do anyone think there are no retail investor participated into it with this volume? May be a lot of retailers is just speculating on it, but if one who had join share market forum (There are quite a few forum site on Malaysia share market discussion), ones may noted there are quite a lot of retailer involve in CSL, some may stuck in various price from RM1 all the way  to current RM0.205.

So personally I'm disagree that there are lack of retail interest on this CSL, what I can say is, CSL share issue amount is too big for Malaysia retail investor to do any impact on their share price movement, share price performance......the ball is still under the foot of those major shareholder, so it is very weird claim that China base company bad share price performance is due to lack of retail investor.

The full article published in TheStar today as below,

Published: Saturday September 14, 2013 MYT 12:00:00 AM
Updated: Saturday September 14, 2013 MYT 6:54:40 AM

Chinese companies still keen to list here

STIGMA, bad perception, lack of understanding of their businesses – so many negative things have been said about Chinese initial public offerings (IPOs) here.
True, the share price performances of such companies have been nothing short of dismal although fundamentally they are generally solid companies.
The ninth and latest Chinese company to list on Bursa Malaysia – China Automobile Parts Holdings Ltd – for example, which reported a healthy net profit of some RM64mil for its financial year ended Dec 31, 2012 (FY12) – is trading at less than half of its IPO price of 68 sen, based on its latest closing price of 31.5 sen,
Still, the general lack of ability of Chinese companies to attract local investors has not stopped their counterparts from wanting to list here, partly also due to the fact that there is a long waiting list back in China.
“I know of a couple of interested firms,” says one industry observer.
He says one of the issues with the Chinese listings here so far is that most tend to go for big amounts – aiming to raise huge amounts of funds does not mean quality.
“These companies should focus more on creating value for their companies in order to attract investors to take up their shares.
“For example, Chinese companies should consider building up their presence here by setting up manufacturing facilities locally so that people can have better understanding of their businesses,” he says.
“This way, they are also value-adding Malaysia by creating jobs and boosting the economy by investing and, of course, investors will feel ‘closer’ to them as their facilities will be located near to where investors can physically see them.”
He says Chinese companies serious about expanding their businesses and making it more relevant to this part of the world can also use Malaysia as a stepping stone to expand into other growing South-East Asian markets.
“Investors here will definitely welcome such a move.”
A fund manager echoes his sentiments.
“Much of the concern of prospective Chinese company investors here are focused on the companies’ investment or assets which are mainly located in China.
“Prospective investors are wary of the fact that fixed assets (plants, warehouses, machines) are located too far away from Malaysia, which translates into an issue when it comes to ‘site-visiting’,” he notes.
Reports of fraud cases and scandals surrounding Chinese companies that list overseas, for example in Singapore, do not help the situation either.
“It’s really about engaging the prospective investor in a holistic, personal and proper manner,” notes the industry observer.
In the meantime, sources say that there are at least two Chinese firms in the process of preparing their applications for the authorities for a potential listing.
One is an apparel manufacturer while the other is dealing mainly with chemicals.
According to the latter’s website, Everfine New Resin Co Ltd was established in 1998 in and is located in Quanzhou, Fujian Province Wuli Industrial Zone.
The company, which is at the initial stage of its IPO plan, is focused on the “development, production and sale of resin/curing agent of the modern enterprise.”
“The company’s products are widely used in aerospace communications, electronics, chemical paints, leather bags, decorating paints, building materials and other fields.”
If this IPO does materialise, it will contribute to creating a more diverse group of Chinese companies listed on Bursa Malaysia as most are now sports apparel companies.
That said, bamboo flooring manufacturer Kanger International Bhd is set to be the 10th China-based company to be listed on Bursa Malaysia.
The company’s business is in the manufacturing and trading of bamboo flooring and related products for residential and commercial markets under its brands Kanger andKAR Masterpiece.
It also acts as an original equipment manufacturer for customers who request this service.
“China’s robust growing economy has encouraged many of its entrepreneurs to list their companies for expansion purposes. Some may want to expand their businesses offshore and may find South-East Asia a suitable region for listing, this includes listing right here in Malaysia,” says the fund manager. 

Sunday, August 4, 2013

Homes Priced Beyond New Grad

This article is extract from Star Property website, which I think it is a very true fact facing by new grad in Malaysia, the purpose of you may not feel so down if you can't own a home.

At current rates, fresh grad workers cannot afford to buy a house
Buyers Beware by Chang Kim Loong
IT was one of those long eye-opening conversation between father and his soon-to-graduate son.
“What are you going to do when you graduate?”
“Get a job, buy a car.”
“Don’t you want to buy a house?”
“It’s too expensive. I can always live with you and mum,” says Sonny.
There was a long silence.
“Dad, I went into environmental studies because I believe I can do my little part for the world we live in today. I am not looking for a fat salary,” says Sonny.
“But you need to have a decent salary in order to buy your own house one day. You can’t live with mum and dad forever, although I know your mum would like that,” says Dad.
“I read somewhere that it is possible for young people to buy their own house without taking a two-generational loan. And I am trying hard to be independent. I just need to get around some puzzling issues.
“Like what?”
And so begins the little lesson in house ownership.
What sort of loan tenure will be suitable for a young person?
A 35-year loan is more than adequate. If he needs a loan tenure longer than 35 years, it just means that he is buying something that is far beyond his current income levels.
What sort of loan tenure do most banks provide?
Most banks only give housing loans up to 30 years. Selected banks previously gave loans up to 45 years. These are two generational loans. Most people are against two generational loans as the second generation is born into debt – “Slave into debt”.
How much of my salary should go towards housing loan repayment?
The rule of thumb is always the following:
(a) Any single loan repayment should not exceed a third of the borrower’s income
(b) All combined loan repayments should not exceed half of the borrower’s income
(c) The price of the house ideally should be three times that of the borrower’s annual household income to be deemed as affordable based on a study by Harvard University and World Bank. A young couple with RM10,000 between them is equivalent to RM120,000 a year. The value of the house that this young couple should be looking at is RM360,000 at the most.
Does a young person need help from parents to buy a house today?
It has become almost impossible for a fresh graduate to buy a property without parental support. Many condominiums are now launched in excess of RM500,000 even in suburban areas and landed properties in areas such as Kota Damansara are almost RM800,000 and above. How is a fresh graduate with a starting salary of RM3,000 ever going to afford such properties?
Here are some numbers to chew on. The monthly repayment for a housing loan of RM450,000 (average condo price of RM500,000 less 10% downpayment) for 30 years is RM2,175. This is 72% of the fresh graduate’s monthly income of about RM3,000.
Fresh graduates will have to continue staying with their parents until both the parents and the borrower have saved enough money for a larger downpayment, or for the parents to withdraw their own EPF funds to help their children.
What about young people applying for government-linked projects like Perumahan Rakyat 1Malaysia (PR1MA)?
Some quarters have commented that young professionals still have the option to do that. PR1MA has just raised the ceiling price of their properties to RM450,000 and the maximum household income eligibility to RM7,500. Based on a study by Harvard University and World Bank, the ratings of the Value of Property over Annual Household Income are as follows:
Based on the above study, the Value of PR1MA properties are actually not affordable by international standards. In fact, it is between “Seriously” to “Severely unaffordable”.
Under PR1MA, the borrower need not pay the 10% downpayment and can take a 100% loan for the RM450,000 property.
We have illustrated a typical household income vs expense of a prospective PR1MA buyer (see table above).
Hence, it would not be unusual for banks to reject PR1MA applicants for housing loans as many of them are buying far beyond their income eligibility. In other words, PR1MA properties are just too expensive. House Buyers Association (HBA) has suggested a price of between RM150,000 and RM300,000.
By this time, both dad and son are glad the conversation is coming to an end. There does not seem to be a happy ending though.
“What does this mean, Dad?”
“It means the Government must introduce further measures to reduce speculation in the property market. The Government must bring back the old formulae of real property gains tax, higher stamp duty for buyers of multiple properties, further reduction of loan to value ratio,” says Dad.
Chang Kim Loong is the honorary secretary-general of the HBA (, a non-profit, non-governmental organisation (NGO) manned by volunteers. He is also an NGO councillor at the Subang Jaya Municipal Council.

Friday, July 5, 2013

Between Environmental Friendly and Traditional

Fasting month is around the corner, and it means celebration of Hari Raya Aidilfitri is also not far away. In this festive seasons, giving out "Duit Raya" is a kind of tradition which is similar like giving out "Ang Pau" (Red Packet) during Chinese New Year festival, and the demand of new bank note become huge during this kind of period.

But there are some environmental issue on this scenario, the recent press statement from Bank Negara Malaysia (BNM) show some fact of why it is a waste on just issuing new Bank Note for this purpose. One of the paragraph of their statement stated as below which we should have a thought on it.

Every year Bank Negara Malaysia issues about 750 million pieces of new RM1 and RM5 banknotes to meet the seasonal demand for Hari Raya Aidilfitri and Chinese New Year. However, about 70% of the issued banknotes are not required for normal payment transactions. These banknotes are returned as deposits soon after the festive season resulting in the accumulation of excess RM1 and RM5 banknotes at Bank Negara Malaysia. The printing of an additional 500 million pieces to meet the festive demand results in high costs and demands on our resources. Its production consumes more than 80 tons of ink and 2 million kWh of electricity which is enough to power 7,500 Malaysian homes for a month.

So this year BNM will promote on the use of recycling Bank Note in this festive season which mainly focus on RM1 and RM5 Bank Note.

The full article can be view in the BNM official website at below link,

Friday, June 21, 2013

Should we question on limit down during Pre-Closing session?

Although Bursa Malaysia had clarify that the trade is valid and genuine, but still, investor have so many question to ask about and they wish to have a valid answer of it.

Below are the news article from the Star online website,

Saturday June 22, 2013

Bursa: Trades ‘valid and genuine’


PETALING JAYA: The seemingly unusual market activity that saw sharp price gyrations in several stocks in the final 10 minutes of trading yesterday was valid and genuine, according to Bursa Malaysia.
Six counters from mid-caps to big ones, namely, Hap Seng Plantations Holdings BhdBatu Kawan BhdTDM BhdCB Industrial Product Holding Bhd (CBIP)Coastal Contracts Bhd and Berjaya Sports Toto Bhd, hit limit-down, or a 30% plunge, with a combined trade of RM43.1mil in that short time window during pre-close.
While the trading pattern may seem like an “error in trading” could have taken place, a Bursa Malaysia representative when contacted byStarBizWeek clarified: “With regards to the eight stocks which hit their limits-up (two) and down (six), Bursa Malaysia has investigated the matter and has confirmed with the broker that the basket order, which was from their institutional client, was valid and genuine.”
In yesterday's trade, Hap Seng shed 81 sen to RM1.89, Batu Kawan lost RM5.76 to RM13.46, TDM declined RM1.24 to RM2.90, CBIP decreased 82 sen to RM1.93, Coastal Contracts was down 62 sen to RM1.48, andBerjaya Sports Toto fell RM1.01 to RM3.20.
At the other end of the spectrum, JCY International Bhd gained 24 sen, or 36%, to 90 sen and Star Publications (M) Bhd shot up 85 sen, or 29%, to RM3.71.
In the broader market, the FBM KLCI shed 6.49 points, or 0.37%, to 1,755.85 points, with 306 gainers, 512 losers, and 267 counters unchanged.
Over 2.05 billion shares valued at RM3.78bil were traded.

Monday, June 10, 2013

AirAsia X IPO Roadshow

    AirAsia X Bhd's initial public offer (IPO) of up to 790.12 million shares, which includes the issuance of new shares, will see its market capitalisation increase to RM3.43bil, based on the enlarged share capital of 2.37 billion shares.
    In its summary prospectus issued on Monday, AirAsia X said the enlarged paid-up would be 790.12 million shares comprising an offer for sale of up to 197.53 million existing shares and a public issue of 592.59 million new shares.
    AirAsia X said the floatation exercise includes the sale of 197.53 million existing shares and 592.59 million new shares. The institutional offering would involve 538.01 million shares while the retail offering would be 252.11 million shares.
    The listing exercise would enable AirAsia X to raise RM859.26mil from sale of 592.59 million new shares at an indicative retail price of RM1.45 a share.
    Of the gross proceeds of RM859.26mil, it said RM280mil would be used a capital expenditure, another RM285.81mil for repayment of bank borrowings, RM255.45mil as general working capital and the remaining RM38mil for listing expenses.
    The low-cost carrier posted revenue of RM535.27mil for the first quarter ended March 31, 2013, compared to RM1.28bil in the year to Dec 31, 2012.
    Its net profit during the first quarter of 2013 and financial year ended Dec 31, 2012 stood at RM50.19mil and RM33.85mil, respectively.