The secret of being wealthy

By Star Online: Business
29 September 2012

I'VE been an independent financial adviser for more than a decade and one of the questions that I am periodically asked is, “What is the secret of being wealthy?” The answer, and you may be taken aback by what I am about to reveal, is not about getting richer.

Growing up in a typical middle-income family, I often wondered how wealthy people managed and grew their wealth. In particular, I wanted to know what separated the truly wealthy people from the rich. Both shared an undeniable ability to make money and could afford to lead comfortable and lavish lifestyles. Yet, those in one of these groups were clearly the front-runners because their wealth had the ability to last generations.

Analysis: Rare earth prices to erode; what are rare earths

By Star Online: Business
20 September 2012

LONDON: Prices of rare earth elements, which tumbled after a speculative bubble burst last year, are likely to erode further as new supplies hit the market and exports edge higher from dominant producer China due to weak demand at home.

Prices of the 17 elements used in technologies such as smartphones and hybrid cars soared last year by hundreds of percent after China clamped down on exports. Hot money flowed into an illiquid sector but later departed, causing a crash.

Lanthanum, used in rechargeable batteries for hybrid autos and in night-vision goggles, rocketed 26-fold from $5.15 a kg in January 2010 to a peak of $140 in June 2011. Although it has slid to $20.50, the price is still well above earlier lows.

The market has steadied in recent months, but new output from U.S. Molycorp and Australia's Lynas Corp is likely to pressure prices, especially those of "light" rare earths which are not as scarce as their "heavy" cousins.

Ways to help bring out the desired results in children, teams and staff

By Star Online: Business
18 September 2012

IN our last article, we spoke about the importance of crafting and sharing a well-thought out Mission Statement for companies. How it helps employees get aligned to the business direction and contribute wherever they can towards achieving goals set. And also how important it is to develop one for ourselves to help guide us in our life.

I'd like to bring those two items together and discuss about motivating staff because in today's challenging business environment, our people or talent is a critical part of the bloodline in an organisation. Motivating your staff is a cycle where once you find your people, you need to hold and manage them. Motivation forms part of retention strategies and programmes in organisations. In understanding the need to motivate staff to ensure that they remain engaged and loyal with your company, let's look at what are some of the factors which motivate people to work.

Top Glove wants to source for its own latex

By Star Online: Business
15 September 2012

TOP Glove Corp Bhd became the first rubber glove maker to move upstream by acquiring its own rubber plantation land to ensure a consistent supply of latex.

In June, it paid RM22mil for a 95% stake in PT Agro Pratama Sejahtera for some 30,000ha of green field rubber plantation land in Indonesia.

Assuming that the land is fully planted, it will provide up to 50% of Top Glove's current latex consumption.

Malindo Airways expected to give AirAsia a run for its money

By Star Online: Business
15 September 2012

It was a marathon meeting lasting 24 hours in a hotel in Singapore over two weeks ago that resulted in the creation of Malindo Airways.

The meeting was between Rusdi Kirana, president director of Indonesia's largest privately owned airline Lion Air and Malaysia's National Aerospace & Defense Industries (Nadi) low key businessmanTan Sri Ahmad Johan.

Both had desires to expand their empires. One to set up an airline in Malaysia the same way AirAsia has set up airlines in several countries, and the other wanted to get the regional MRO business because they had “scalability and expertise.''

All this started three months ago, according to those in the know.

Tobacco - Going Plain, Growing Pain

By Maybank IB Research
13 September 2012

Underweight Tobacco. Regulatory risk on tobacco sector rose  when the  plain cigarette-packaging rule took  a  quantum leap in Australia towards actual implementation. The industry also faces a greater threat
from  the emerging mutatef illicit cigarettes despite  a  recovery in industry volumes in 1H12. Aside from the rising risk, the sector is losing its appeal on lofty valuations and  dwindling dividend yields. Thus, we recommend an Underweight on the tobacco sector. BAT is downgraded to a SELL at  an  unchanged DCF-based TP of MYR55.00 while JTI remains a HOLD with an unchanged DCF-based TP of MYR6.70.

British American Tobacco (M) - Time to Quit!

By Maybank IB Research13 September 2012

Downgrade to SELL. BAT’s valuations are at their peak and  its dividend yield has dropped to  a 10-year low following a run-up in its share price – a rising risk to investors. We expect 2H12 earnings to be largely flat as BAT’s market share growth has lost momentum in the last two quarters. Upside is also limited due to the competitive environment and rising threat from the illicits. Hence, we downgrade BAT to a SELL at an unchanged DCF-based TP of MYR55.00.

RHB Research upgrades AirAsia to Trading Buy, FV RM3.63

By Star Online: Business
12 September 2012

KUALA LUMPUR: RHB Research Institute has upgraded AirAsia to a Trading Buy from Market Perform and maintained its fair value for the low-cost carrier at RM3.63.

It said AirAsia's near-term earnings growth prospects are less exciting as growth from its domestic operation is tapering off, coming from an enlarged base.

RHB Research also said not helping either, are lingering losses from its new low-cost carrier start-up in Japan and the Expedia JV, given the long gestation periods for these new ventures.

Difficult oil or new efficient energy pursuit poser

By Star Online: Business
10 September 2012

PETROLIAM Nasional Bhd (Petronas), which recorded a weaker financial performance in its second quarter for the financial year 2012, is aiming to substantially beef up its capital expenditure (capex) moving forward.

Its CEO Tan Sri Shamsul Azhar Abbas and executive vice-president of finance Datuk George Ratilal had repeatedly highlighted in Friday's press conference that this will be the immediate focus for Petronas at least in the coming five years.

City within a city

By Star Online: Business8 September 2012

I-BHD founder and executive chairman Tan Sri Lim Kim Hong has been in business for a great many years. Yet, he never fails to light up at the mention of his pride and joy the ambitious, steadily forming township of i-City.

With the exuberance of a young man, Lim, 62, is likely to take you by the hand and break into a short sprint as he points out upcoming attractions at his RM5bil, 72-acre development in Shah Alam, which was exactly what happened when StarBizWeek paid a visit there this week.

Seven years hence, I-Bhd's flagship project is set to harvest the first fruits of its labour.

Having made its name on the rows upon rows of LED-lit trees lining its streets, i-City is now a familiar backdrop to weekend family jaunts. However, its owners believe this is the year I-Bhd begins the transition to a serious player in property development.

A place to have fun and live in

By Star Online: Business
8 September 2012

I-BHD's City of Digital Lights, which opened its doors in 2009, has never failed to attract visitors. On average, it receives 90,000 visitors a week or about five million visitors per annum. Group executive chairman Tan Sri Lim Kim Hong recalls that the traffic jam at the entrance to i-City that stretched some 10km when it was first opened and parking was free.

Subsequently, I-Bhd charged RM3 per entry into the car park and the jam had eased to about 5km and now it costs RM10 per entry. He says the traffic buildup is now mainly during weekends, public and school holidays.

“I-City has become a landmark in Shah Alam. We're now a crowd puller,” Lim says. The soon-to-be developed mega shopping mall known as CityMall and Water World@i-City, which is opening its door in November, are set to attract more visitors.

Making all housing more affordable

By Star Online: Business
8 September 2012

WHEN I watched Usain Bolt cross the 100m line in an Olympic record of 9.63 seconds during the recent concluded Olympic Games, I saw a young focused sprinter with only one objective in mind; to cross the finish line in the shortest possible time. He amazed the world with his stunning performance again.

This reminds me of our journey in making all Malaysian housing more affordable. It is a race that requires the same amount of focus from all relevant stakeholders including public sector which is the Government, and private sectors, i.e. the property developers, home buyers and NGOs. Furthermore, like in a race where the sprinters have a sight on the direction and goal, all stakeholders in the housing industry should be aligned to the same goal before starting the race.

To understand what exactly drives up property prices, we need to analyse the various factors that influence the price of a housing development in Malaysia. This may help us identify the root cause and provide us with the correct remedies to make Malaysian housing more affordable and sustainable.

Consumer stocks face challenges

By Star Online: Business
7 September 2012

GST and subsidiy review looms

PETALING JAYA: Consumer sector stocks will face challenges following the 13th general election despite having done well year-to-date as the implementation of Goods and Services Tax and resumption of subsidy rationalisation looms.

Alliance Research analyst Ian Wan advises investors to be more cautious as the sector would be facing more challenges regardless of the outcome of the election.

“If the existing Government remains in power post-election, we foresee the Government to implement Goods and Services Tax (GST), resume its subsidies rationalisation programme and raise the electricity tariff to close its budget deficit in 2013. Furthermore, de-rating of the sector could happen post-election as domestic investors return to higher beta plays.