Inflation is a Tax on the Poor!

Malaysia can experience a stronger inflation rate in the August-September period, 5% before any drop later in the year. The country’s headline inflation rose to 4.4% year-on-year (yoy) in July 2022 (June 2022: 3.4%) – the highest since April 2009 – largely due to higher food prices and low base effect.

Price increases involving Gardenia products which rose by 7%-20% effective Sept 1 may be deemed small in impact, considering bread & bakery products account for only 1.2% of the consumer price index (CPI) basket.

Apart from food inflation, Department of Statistics Malaysia (DOSM) said the increase in Malaysia's inflation was also due to the lower base effect last year, when an electricity bill discount of 5% to 40% was given to domestic consumers according to their total usage under the National People's Well-being and Economic Recovery Package (Pemulih) from July to September 2021.

For July 2022, apart from the food and non-alcoholic beverage group, all other groups within the CPI also continued to record y-o-y increases, except the communication segment, which remained unchanged, said DOSM

For 2022F CPI projection is at 3.1% (2023F: 3.2%). Globally, food inflation will average at 4.5% for 2022, compared to 1.5% in 2021. 

Malaysia’ net imports of food is over RM60 billion annually. Exchange rate depreciation only accentuates this cost.

BNM has raised OPR further by 25 bps to 2.5% on September 8 and a further 25 bps to 2.75% is expected by early November (2nd/3rd). Unfortunately, BNM is not moving aggressively to stem inflation which then impacts on exchange rate. Growth matters. But to hold back rate increases does not help either growth or inflation. First stem inflation, then focus on growth. Otherwise the poor are being taxed – because inflation impacts the poor more than the rich.

 

References:

Inflation in Malaysia poised to continue rising in 3Q 2022 before subsiding, Cheah Chor Sooi, Focus Malaysia, 30 August 2022

Malaysia’s July inflation hits 4.4% bolstering bets on another OPR hike, Justin Lim, TheEdge CEO Morning Bried, 30 August 2022

Will 13% of All Singaporeans Be Millionaires in 2030?

In eight years’ time, more than 13 per cent of adults in Singapore will be worth more than US$1 million (RM4.47 million). This is a proportion higher than the United States, China and 12 other Asia-Pacific economies, said an HSBC report. In Singapore, Australia, Hong Kong and Taiwan, there are likely to be more millionaires on a relative basis than in the US, with South Korea and New Zealand coming close, the report also said.

Comparatively, the US is expected to have 8.8 per cent of its adult population as millionaires by 2030 while the figure for China is expected to be 4.4 per cent.

Source: https://sg.news.yahoo.com/

Singapore is expected to see its share of millionaires among its residents, which comprise permanent residents and citizens, grow from 7.5 per cent in 2021 to 9.8 per cent in 2025 and up to 13.4 per cent by the end of the decade. In absolute terms, this means that the number of millionaires in Singapore will rise to 700,000 in 2030, up from 400,000 currently.

The report by HSBC, titled “The Rise of Asian Wealth”, looks at the rise of wealth in Asia. Among other things, the report examines the projected number of residents that will reach certain wealth brackets in the coming years.

It does so based on the residents’ bank deposits, investments in bonds and equities, assets held by pension funds or insurance companies, as well as their real estate holdings after deducting any outstanding mortgage amounts. It compares 15 economies in the region, including Singapore, China, Japan, Malaysia and Taiwan.

The report said that currently, Singapore has the second-highest (7.5 per cent) number of millionaire adults based on the percentage share of its population, just after Australia (8 per cent) and ahead of Taiwan (5.9 per cent).

By 2030, Singapore will take the top spot at 13.4 per cent, followed by Australia (12.5 per cent) and Hong Kong (11.1 per cent). By the end of 2030, only around 4 per cent of adults in mainland China and less than 1 per cent of adults in India are likely to be millionaires, noted the report.

However, in absolute numbers, China will continue to have the highest number of millionaires, rising from about 17 million currently to 50 million by the end of the decade. This figure is projected to rise to nearly 80 million by 2035.

The number of millionaires in India is also set to hit 6.6 million by 2030, exceeding the whole of the Association of Southeast Asian Nations (Asean) region, said the report.

However, it noted that the large number of millionaires in some of these economies can be explained due to the large sizes of their population, on top of their wealth distribution and level of economic development.

At the slightly lower end of the income bracket, Singapore is also expected to see the proportion of its residents having at least US$250,000 of wealth standing at 67 per cent by 2030, up by about 10 percentage points from 2021. In terms of the percentage share of the population, this will make Singapore the second-highest city in the region with individuals of this net worth, just after Australia at 70.8 per cent. Both economies also occupy the same top two spots in this category in 2021.

In China, the number of adults with a net wealth of at least US$250,000 is expected to double by 2030 to around 350 million, while the figure in India could triple to 57 million.

Region-wide, the number of millionaires is projected to jump from about 30 million currently to more than 76 million by the end of the decade. The report said that economies that are growing more rapidly tend to accumulate wealth faster.

For example, Vietnam, the Philippines and India are expected to see the number of adults holding wealth of at least US$250,000 more than double by 2030, with Indonesia and Malaysia “not far behind”. 

Malaysia’s problems are corruption and the race and religion card used by politicians since 1957. Otherwise the future is really positive for a nation blessed with natural resources and inherently tolerant and friendly people!

Reference:

HSBC report: 13pc of Singapore population to become millionaires by 2030, highest proportion among Asia-Pacific economies, Malay Mail, 17 August 2022

Homo Corruptus or Homo Sapiens?

Although we are Homo sapiens or "wise man” in Latin, another primate species is fast evolving. It’s Homo corruptus. This species is thriving in the Age of Corruption and Malaysia is one of the fertile grounds for its rise.

It seems to have become an epidemic in Malaysia. Hopefully, not a pandemic.  The SRC, 1MDB financial scandals and now the fiasco of littoral combat ships (LCS).

Malaysians are tired of our leaders dipping into Malaysia’s Treasury and then saying we have no money for projects or cost of living subsidies. 

The World Bank estimates international bribery exceeds US$1.5tril (RM6.734tril) annually, or 2% of global GDP and 10 times more than total global aid funds. Other estimates are higher at 2% to 5% of global GDP. Corruption permeates all levels of society, from low-level public servants accepting petty bribes to national leaders stealing millions or billions of dollars.

Source: https://blog-pfm.imf.org

We see that clearly in South Korea. In South Korea, presidential pardons are almost always given for the rich and well-connected convicted Homo corruptus. Surprisingly, South Koreans, whose fierce protests toppled a disgraced President, accepted the government’s reason for pardon, with a public poll showing almost 70% support. In Malaysia, growing calls are made to pardon Najib (and maybe Rosmah and the rest).

It seems all the kleptocrats would like a pardon. Just like the last days of Trump. If we grant pardons to all then that sets a new standard – be corrupt and steal as much as you want, because we are so compassionate that we will, of course, grant you a pardon. It makes no moral or religious sense. Why have a judiciary, AG or the police? We can all swear by our holy books that we are innocent of the crimes committed – even if there is irrefutable evidence. Surely hearsay and an oath should be enough to persuade the majority of our innocence? What foolishness!

In the coming general election, we citizens of Malaysia cannot vote for Homo Corruptus candidates. Or, we will be a failed state!

Reference:

The rise of “Homo corruptus” in our midst, June HL Wong, The Star, 24 August 2022

Climate Change and its Impact

There is a 50:50 chance of the annual average global temperature temporarily reaching 1.5 °C above the pre-industrial level in one of the next five years. The likelihood is increasing with time, according to a new climate update issued by the World Meteorological Organization (WMO).

There is a 93% likelihood of at least one year between 2022-2026 becoming the warmest on record and dislodging 2016 from the top ranking. The chance of the five-year average for 2022-2026 being higher than the last five years (2017-2021) is also 93%, according to the Global Annual to Decadal Climate Update, produced by the United Kingdom’s Met Office

Source: https://climate.nasa.gov

The chance of temporarily exceeding 1.5°C has risen steadily since 2015, when it was close to zero.  For the years between 2017 and 2021, there was a 10% chance of exceedance. That probability has increased to nearly 50% for the 2022-2026 period.

The Paris Agreement sets long-term goals to guide all nations to substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 °C while pursuing efforts to limit the increase even further to 1.5 °C. The Intergovernmental Panel on Climate Change says that climate-related risks for natural and human systems are higher for global warming of 1.5 °C than at present, but lower than at 2 °C.

In 2021, the global average temperature was 1.1 °C above the pre-industrial baseline, according to the provisional WMO report on the State of the Global Climate. Back-to-back La Niña events at the start and end of 2021 had a cooling effect on global temperatures, but this is only temporary and does not reverse the long-term global warming trend. Any development of an El Niño event would immediately fuel temperatures, as it did in 2016, which is until now the warmest year on record.

The findings of the annual update include:

• The annual mean global near-surface temperature for each year between 2022 and 2026 is predicted to be between 1.1 °C and 1.7 °C higher than preindustrial levels (the average over the years 1850-1900).

• The chance of global near-surface temperature exceeding 1.5 °C above preindustrial levels at least one year between 2022 and 2026 is about as likely as not (48%). There is only a small chance (10%) of the five-year mean exceeding this threshold.

• The chance of at least one year between 2022 and 2026 exceeding the warmest year on record, 2016, is 93%. The chance of the five-year mean for 2022-2026 being higher than the last five years (2017-2021) is also 93%.

• Predicted precipitation patterns for 2022 compared to the 1991-2020 average suggest an increased chance of drier conditions over southwestern Europe and southwestern North America, and wetter conditions in northern Europe, the Sahel, north-east Brazil, and Australia.

• Predicted precipitation patterns for the May to September 2022-2026 average, compared to the 1991-2020 average, suggest an increased chance of wetter conditions in the Sahel, northern Europe, Alaska and northern Siberia, and drier conditions over the Amazon.

• Predicted precipitation patterns for the November to March 2022/23-2026/27 average, compared to the 1991-2020 average, suggest increased precipitation in the tropics and reduced precipitation in the subtropics, consistent with the patterns expected from climate warming.

For Malaysia, climate change is expected to have considerable impact. Increasing temperatures mean more heat waves. Variations in precipitation will increase in frequency. Sea levels will rise and inundate some coastal areas. The main contributors to emissions are fossil fuels and deforestation. We hope to reach net zero emissions by 2050 – is this for real? Why? Deforestation and fossil fuels remain firmly entrenched. Sahabat Alam Malaysia has stated that a survey by the Rimba Disclosure Project (“RDP”), forests totalling an area nearly the size of Singapore is earmarked for clearing in Peninsular Malaysia. We need a Minister for Climate Change – the present Minister of Environment and Water is not tuned to climate but more well versed in religious affairs! Greater public awareness is another must.

Reference:

50:50 chance of global temperature temporarily reaching 1.5oC threshold in next 5 years, World Meteorological Organisation, 90 May 2022

12 Proven Tips to Sleep Better

A good night’s sleep is just as important as regular exercise and a healthy diet. Research shows that poor sleep has immediate negative effects on your hormones, exercise performance, and brain function. It can also cause weight gain and increase disease risk in both adults and children. In contrast, good sleep can help you eat less, exercise better, and be healthier. If you want to optimize your health or lose weight, getting a good night’s sleep is one of the most important things you can do.

Source: https://www.medicalnewstoday.com

1. Increase bright light exposure (during the day)

Your body has a natural time-keeping clock known as your circadian rhythm. It affects your brain, body and helping you stay awake and telling your body when it’s time to sleep. 

Natural sunlight or bright light during the day helps keep your circadian rhythm healthy. This improves daytime, as well as night time sleep quality and duration. In people with insomnia, daytime bright light exposure improved sleep quality and duration. It also reduced the time it took to fall asleep by 83%.

A similar study in older adults found that 2 hours of bright light exposure during the day increased the amount of sleep by 2 hours and sleep efficiency by 80%.

While most research involves people with severe sleep issues, daily light exposure will most likely help you even if you experience average sleep.

2. Reduce blue light exposure (in the evening)

Exposure to light during the day is beneficial, but nighttime light exposure has the opposite effect. Again, this is due to its effect on your circadian rhythm, tricking your brain into thinking it’s still daytime. This reduces hormones like, which help you relax and get deep sleep.

Blue light — which electronic devices like smartphones and computers emit in large amounts is the worst in this regard.

There are several popular methods you can use to reduce nighttime blue light exposure. These include:

• Wear glasses that block blue light. 

• Install an app that blocks blue light on your smartphone. These are available for both iPhones and Android models.

• Stop watching TV and turn off any bright lights 2 hours before heading to bed.

3. Don’t consume caffeine late in the day

Caffeine has numerous benefits and is consumed by 90% of the U.S.

A single dose can enhance focus, energy, and sports performance. However, when consumed late in the day, caffeine stimulates your nervous system and may stop your body from naturally relaxing at night.

In one study, consuming caffeine up to 6 hours before bed significantly worsened sleep quality. 

Caffeine can stay elevated in your blood for 6–8 hours. Therefore, drinking large amounts of coffee after 3–4 p.m. is not recommended, especially if you’re sensitive to caffeine or have trouble sleeping.

4. Try to sleep and wake at consistent times

Your body’s circadian rhythm functions on a set loop, aligning itself with sunrise and sunset. Being consistent with your sleep and waking times can aid long-term sleep quality.

One study noted that participants who had irregular sleeping patterns and went to bed late on the weekends reported poor sleep. Other studies have highlighted that irregular sleep patterns can alter your circadian rhythm and levels of melatonin, which signal your brain to sleep.

If you struggle with sleep, try to get in the habit of waking up and going to bed at similar times. After several weeks, you may not even need an alarm.

5. Don’t drink alcohol

Having a couple of drinks at night can negatively affect your sleep and hormones.

Alcohol is known to cause or increase the symptoms of sleep apnea, snoring, and disrupted sleep patterns It also alters night time melatonin production, which plays a key role in your body’s circadian rhythm.

Another study found that alcohol consumption at night decreased the natural night time elevations in.

6. Optimize your bedroom environment

Many people believe that the bedroom environment and its setup are key factors in getting a good night’s sleep. These factors include temperature, noise, external lights, and furniture arrangement.

Numerous studies point out that external noise, often from traffic, can cause poor sleep and long-term health issues. In one study on the bedroom environment of women, around 50% of participants noticed improved sleep quality when noise and light diminished.

To optimize your bedroom environment, try to minimize external noise, light, and artificial lights from devices like alarm clocks. Make sure your bedroom is a quiet, relaxing, clean, and enjoyable place.

7. Set your bedroom temperature

Body and bedroom temperature can also profoundly affect sleep quality. As you may have experienced during the summer or in hot locations, it can be very hard to get a good night’s sleep when it’s too warm. One study found that bedroom temperature affected sleep quality more than external noise. Other studies reveal that increased body and bedroom temperature can decrease sleep quality and increase wakefulness. Around 70°F (20°C) seems to be a comfortable temperature for most people, although it depends on your preferences and habits.

8. Don’t eat late in the evening

Eating late at night may negatively affect both sleep quality and the natural release of HGH and melatonin. That said, the quality and type of your may play a role as well.

In one study, a high carb meal eaten 4 hours before bed helped people fall asleep faster.

Interestingly, one study discovered that a low carb diet also improved sleep, indicating that carbs aren’t always necessary, especially if you’re used to a low carb diet.

9. Relax 

Many people have a pre-sleep routine that helps them relax. Relaxation techniques before bed have been shown to improve sleep quality and are another common technique used to treat insomnia.

In one study, a relaxing massage improved sleep quality in people who were ill.

Strategies include listening to relaxing music, reading a book, taking a hot bath, meditating, deep breathing, and visualization. Try out different methods and find what works best for you.

10. Take a relaxing bath or shower

A relaxing bath or shower is another popular way to sleep better. Studies indicate that they can help improve overall sleep quality and help people — especially older adults — fall asleep faster.

In one study, taking a hot bath 90 minutes before bed improved sleep quality and helped people get more deep sleep. Alternatively, if you don’t want to take a full bath at night, simply bathing your feet in hot water can help you relax and improve sleep.

11. Exercise regularly 

Exercise is one of the best science-backed ways to improve your sleep and health. It can enhance all aspects of sleep and has been used to reduce symptoms of insomnia.

One study in older adults determined that nearly halved the amount of time it took to fall asleep and provided 41 more minutes of sleep at night. In people with severe insomnia, exercise offered more benefits than most drugs. Exercise reduced time to fall asleep by 55%, total night wakefulness by 30%, and anxiety by 15% while increasing total sleep time by 18%.

Although daily exercise is key for a good night’s sleep, performing it too late in the day may cause sleep problems. This is due to the stimulatory effect of exercise, which increases alertness and hormones like epinephrine and adrenaline.

12. Don’t drink any liquids before bed

Nocturia is the medical term for excessive urination during the night. It affects sleep quality and daytime energy. Drinking large amounts of liquids before bed can lead to similar symptoms, though some people are more sensitive than others.

Although hydration is vital for your health, it’s wise to reduce your fluid intake in the late evening. Try to not drink any fluids 1–2 hours before going to bed. You should also use the bathroom right before going to bed, as this may decrease your chances of waking in the night.

The bottom line

One large review linked insufficient sleep to an increased risk of obesity by 89% in children and 55% in adults.

Other studies conclude that getting less than 7–8 hours per night increases your risk of developing heart disease and type 2 diabetes.

In some people, lack of quality sleep makes them irritable and difficult the next day. Office colleagues suffer because their output is impacted by what you say or do. So, try to get some sleep today!

Reference:

17 Proven tips to sleep better, Rudy Mawer, www.healthline.com

Is Malaysia’s Property Sector Bleaker in 2H 2022?

The year 2022 started off on a positive note with the property sector poised for a long overdue rebound. This was in tandem with post-pandemic economic recovery. But sentiment has now weakened.

According to Hong Leong Investment Bank (HLIB) Research, Bank Negara Malaysia’s (BNM) interest rate upcycle as well as the rising inflationary pressure will negatively impact buyers’ purchasing power.

Moreover, property developers are also facing their own set of challenges that range from elevated building material pricing to labour shortage and rising financing costs. 

Source: https://sea.mashable.com

There is a lack of visibility on when the challenges faced by the developers will start to ease. Demand outlook has also weakened with the current interest rate upcycle and inflationary pressure.

The National Property Information Centre’s (NAPIC) data, suggests that the number of residential property transaction was down -10% quarter-on-quarter (qoq) due to a higher base from the previous quarter as buyers took advantage of the Home Ownership Campaign (HOC) prior to its expiry in end-2021. Nevertheless, this was still a +10.5% year-on-year (yoy) improvement from better sales following economic re-opening.

Unsold units eased slightly at -3.4% qoq but increased +21.5% yoy and remained at an elevated level. As such, the property overhang issue will likely continue to exert pressure on housing price as witnessed by the Malaysia House Price Index (HPI) which came down -2% qoq.

HLIB Research expects property developers to be more cautious in their project launches under a rising and volatile cost environment as any cost increase is likely to compress their margin.

Labour shortage would delay (i) project execution timeline; (ii) revenue recognition; and (iii) cash flows to developers. In addition, the interest rate hike would also increase the financing cost for developers.

As observed by HLIB research, the KL Property (KLPRP) Index’s 1H 2022 performance was in line with its narrative as the index started off the year with gains of +2% in 4M 2022, indicating a sense of optimism.

But this has now been dampened with interest rate hikes and poorer economic prospects globally. Planners, developers, regulators and economists have to work on an action plan to revive the housing sector for the benefit of the B40 and M40 groups. Otherwise, we will continue to build units that will remain unsold for long periods. We can’t afford to have another “Forest City” in other parts of this nation.

Reference:

Malaysia’s property sector outlook turns bleaker in 2H 2022, Cheah Chor Sooi, Focus Malaysia, July 14, 2022

One Country, Two Programmes!

Malaysia’s Home minister perceives the Premium Visa Programme will attract affluent individuals from all countries. This new premium visa programme will draw rich investors to settle in the country, similar to Golden Visa initiatives in Singapore, Thailand and Portugal.

The number of applicants will be capped at 1% of the Malaysian population. This limit includes the number of participants under the Malaysia My Second Home (MM2H) programme. The PVIP does not replace the MM2H programme aimed at retired foreigners seeking to settle in Malaysia. Participants are not eligible for citizenship.

Applicants must have at least RM1 million in their bank account and are only allowed to withdraw 50% of that amount after a year for the purchase of property or to pay for medical and educational expenses.

Successful applicants are allowed to bring their spouses, children, parents, in-laws and domestic workers as dependents subject to existing immigration laws.

Applications for the PVIP open on Oct 1. Those eligible are individuals of all ages with an offshore income of at least RM40,000 a month or RM480,000 a year.

Applicants will have to pay a one-off RM200,000 participation fee. A one-off RM100,000 fee will be levied for each dependent. Children of participants over the age of 21 are not considered dependents and must apply to be a PVIP participant to remain in the country.

Applicants and dependents will also need to submit a Letter of Good Conduct from the authorities of the country they are currently residing in.

The PVIP is applicable for 20 years, with renewals granted once every five years. This process includes having a valid passport, updating personal information, screening by the police and medical checks in Malaysia. Applicants and dependents must also have health insurance.

As part of the benefits of the PVIP, participants will be allowed to buy properties (subject to state laws), study, invest and conduct business.

The Government is targeting 1,000 participants in the first year that will contribute RM200 million to the economy and fixed deposits of RM1 billion.

Meanwhile, Sarawak invites qualified citizens of foreign countries to retire and reside there. It is open to citizens of countries recognized by Malaysia, regardless of race, religion and gender.

All main applicants are to fulfill certain personal and financial criteria set by the Sarawak Government. Successful applicants are granted multiple-entry social visit pass for a period of 10 years and this is renewable. They are allowed to bring with them their spouses and unmarried children below the age of 21 as dependents.

Of the above, guess which is more attractive? It’s a no-brainer,  Sarawak wins hands down. Why would anyone want this Premium Visa Programme (“PVP”)? If I were to consider PVP, I would rather go to Singapore, Thailand or Portugal – because Malaysia is great with “flip-flop” policies. Otherwise, I will see you in Sarawak!

References:

Govt rolls out premium visa programme to draw rich investors, FMT, 1 Sept 2022

S-MM2H visa permit, benefits & incentives (https://mm2h.co/s-mm2h-benefits-incentives/)