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Friday, October 10, 2014

Malaysia Budget for the Year 2015: “Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the Rakyat” - Highlights

Prime Minister Datuk Seri Najib Razak unveiled Malaysia’s 2015 budget today, with an eyes on how the government plans to cut the fiscal deficit, bring down its own debt, piled up close to a self-imposed limit of 55 per cent of gross domestic product.

The following are highlights of Najib’s ongoing speech to parliament:
  • Government aims to lower fiscal deficit to 3.0 per cent in 2015 from an expected 3.5 per cent this year.
  • 2015 budget allocates total RM273.9 billion, an increase of RM9.8 billion compared with the 2014 initial allocation.
  • Operating expenditure RM223.4 billion, development expenditure RM50.5 billion.
  • Payments to civil servants of RM65.6 billion is largest operating expenditure item.
  • Federal government revenue collection estimated at RM235.2 billion in 2015, an increase of RM10.2 billion from 2014.

  • Revenue from goods and services tax to be introduced in April at rate of 6 per cent expected to be RM23.2 billion, but after allowing for the abolition of the sales and services tax, and exemptions and funds channeled back to people through assistance programmes net revenue collection is expected to only be RM690 million.
  • Income tax rates to be cut by one to three percentage points. Families with monthly income of less than RM4,000 will not have to pay tax.
  • From 2016, the corporate tax rate will be reduced by one percentage point from 25 per cent to 24 per cent, and for small and medium sized enterprises to 19 per cent from 20 per cent.

  • The Economic Report said government plans to reduce the overall bill for subsidies and cash assistance by 7 per cent to RM37.7 billion in 2015 from RM40.6 billion in 2014.
  • Prime Minister Najib says he will reform the petroleum subsidy regime soon, to adopt a system that benefits less well off.

  • Budget extends 50 per cent stamp duty exemption for first-time home buyers and increases the purchase limit from RM400,000 to RM500,000. The exemption will be given until the end of 2016.
  • Malaysia to move to self-assessment for real property gains tax from 2016.

  •  Export duty exemption for crude palm oil extended until December 31, 2014.

  • Eastern Malaysian states of Sabah and Sarawak to be allocated RM4.5 billion to upgrade facilities in rural areas.

Thursday, October 9, 2014

BUDGET 2015: What to look for?

If you are not aware, tomorrow, Malaysians will be looking forward to the Budget 2015, which will be announced by Prime Minister Datuk Seri Najib Razak. The theme of the budget is something to look forward to: 

“Accelerating Growth, Ensuring Fiscal Sustainability and Prospering the Rakyat”.


What is there to look forward to?

Focusing on implementing the Goods and Services Tax (GST) in April next year.

GST may well be the talking point again

Budget 2015 will definitely highlight some of the key things in regards to GST that will take effect in April next year. 

According to Maybank Investment Bank, it is expected that there will be ammendment on the excemptions from GST. Currently, fresh food, public transport, education fees are excempted. It is expected that there will be new excemption from the GST and thus GST revenues could decline to 2.4 billion ringgit from 4 billion ringgit for the April to December period, and 7 billion ringgit for 2016 from the initial projection of 9 billion ringgit.


Will there be a targeted subsidy scheme in Malaysia?

The recent petrol hike highlight the seriousness of our government to reduce the fiscal deficit. The lower and middle income group will definitely be impacted by this and thus, it is likely that Najib could announce reform of the fuel subsidy regime in order to move away from a blanket subsidy for all consumers in favour of a system that benefits lower to middle-income earners.


It is possible that the government will reduce subsidies on essential food items, such as flour and cooking oil, as well as household gas, said RHB Research.

CASH AIDS are expected to continue

Expect it to be here to stay

We all heard Tun Dr. Mahathir's rant when he criticized Najib on BR1M but like it or not, it's likely to continue. The expansion in BR1M will likely cost the government 7.5 billion ringgit in 2015, up from 4.6 billion ringgit last year, the bank added.

PROPERTY MARKET...."I want my first home dilemma"

You've heard it so often...your friends are part of them and you might be one of them as well. Owning a home has been a real burden in Malaysia, especially in Klang Valley. According to Alliance DBS Research, it is expected that the exemptions on stamp duty for first-time house buyers may be extended. Some other research house expects the Real property gains tax (RPGT) may be raised further this year in an attempt to curb speculation. While many efforts are made to curb speculation, one must wonder if the government will do more to ensure the young adults in the working community could afford their first home. 

A GST rebate may be introduced on building materials used in the construction of medium to low cost properties, MIDF Research said in an interview with Business Times.


It is likely that this will happen. As Malaysia seek to be competitive in the region, the corporate taxes may be lowered by more than 1% cut announced for 2016. There are others that feel that the government might bring the cut in taxes forward rather than increasing the cut. In the attempt to alleviate the cost of living, new tax reliefs for household may be announced during the Budget.

What EVERYONE is saying?

You probably will hope this is true....PERODUA is hoping that whatever is going to be tabled during Budget 2015 will ease the financing difficulties of car buyers. What do you think?

PAKATAN RAKYAT has their own BUDGET too....

  1. Instead of GST, PR proposes Capital Gain Tax for equities (CGT) and Inheritance Tax
  2. Reduce the deficit by stopping corruption, an estimation of a savings of RM11.8 billion and RM12.4 billion in 2014 with an effective and robust programme.
  3. PETRONAS would be made accountable to the Parliament
  4. Look at the non-transparent 1MDB. (well, at least PR is agreeing to Tun Dr. Mahathir now)
  5. Oppose the recent petrol hike. 
Entrepreneurs are expecting more in this budget. Some are expecting a fund of about RM50,000 to RM100,000 to help in R&D for SME. 

Well, we all have our own expectations, wishes and objectives...but the final say will be coming out tomorrow from Prime Minister Datuk Seri Najib Razak. Hopefully, the Budget will be something that benefit Malaysian in progressing to achieve an advanced and high-income nation status by the year 2020. 

Wednesday, October 8, 2014

Buffett on stocks: Look at them as "business"

Recently the stock market has not been doing very well, whether it is in the local market or in the region or in US or Europe.

For today, the FBMI KLCI ended lower for the second day in a row as weak foreign sentiment weighed down the market. It lost 9.22 points or 0.5% to end at 1824.32 as stocks such as IHH Healthcare Bhd and SapuraKencana Petroleum Berhad declined. 

I guess it's natural for people to panic when they see such a drop, especially if you are buying on news and projects that you heard of.

When you look at the world market, you are probably even more afraid.

Below are the indexes of the world market from Bloomberg.



Red signs are not what investors would wanna see.

But there is one thing that is bigger than the trend, bigger than the volatility of the market...and according to Warren Buffett, it's the business.

Warren Buffett in an interview with CNN
The man known as America's greatest investor isn't bothered by stock market volatility. 

"I have no idea what the stock market's going to do tomorrow or next week or next month or next year," said Berkshire Hathaway Chairman and CEO Warren Buffett.

"If you own your stocks as an investment—just like you'd own an apartment, house or a farm—look at them as a business," Buffett advised. "If you're going to try to buy and sell them based on news or something your neighbor tells you, you're not going to do well. Find a good bunch of businesses and hold them."

"You will not make money trying to sell stocks daily or weekly," Buffett said.

So, if you are holding a stock that you know the business is good and that the prospect moving forward is great, why fear the volatility? 

Another famous quote by Buffett:

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

Monday, October 6, 2014

Maybankard 2 Platinum Card

On my previous blog post, I posted on the comparison of some of the best cash rebate credit cards in Malaysia namely the Maybank 2 Card Platinum (Maybankard 2 Platinum), Citibank Cash Back Platinum, UOB One Platinum and the Hong Leong Wise Platinum card. Note that I'm using the "platinum" tag to compare although there is the gold card for Maybankard 2 Card, Hong Leong Wise and UOB One is because I cannot find something similar for Citibank Cash Back Platinum, so I think it will be fair to compare the four cards based on the same annual income requirement of RM 60, 000.

Today I'm blogging more on the details of the Maybankard 2 Platinum Card. Maybankard 2 Platinum Card comes with two cards, as the name has suggested. It comes with the bundle of one Maybankard 2 American Express card and the choice of either the Visa or Master Card. Having said so, the users prior to mid of 2014 only have to pay one GST or RM50 while the new applicants after that will be required to pay GST for both cards or RM100.

The following is the pros and cons of the Maybankard 2 Platinum Card.

  • Lifetime annual fee waiver
  • 5% cash back on everything during the weekends using the Maybankard 2 American Express card, capped at RM50 per month
  • 5x TreatsPoints for all spend on your Maybankard 2 American Express Card in Malaysia or anywhere else in the world except Government Bodies, Education Institutions and Insurance Provider
  • 2x TreatsPoints for every RM1 spend on your Maybankard 2 American Express Card at Government Bodies, Education Institutions and Insurance Providers.
  • 1x TreatPoints for every RM1 spend on the Visa or Master Card

  • Shared credit limit
  • 2x RM50 GST per year (although the benefit only comes from the Maybank 2 American Express Card)
  • Not all merchant accept American Express
  • Cash back only effective on weekends

Basically, I don't find any cash back benefit or cap difference between the gold and the platinum card. The platinum basically requires higher annual income of RM 60, 000 compares to RM 30, 000 of the gold card which is why I think the gold card is exceptionally useful for fresh grad especially those with the pay between RM 2, 5000 and RM 3, 500 and fresh grads can make full use of the cash back during the spending over the weekends with almost no hidden terms and conditions even though they are applying for the gold card; as the cash back cap for the gold and platinum is the same.

Thursday, October 2, 2014

Comparison Of Cash Rebate Credit Cards in Malaysia

As we all might have know by now that the Ron95 petrol price up by 20c beginning 2nd October 2014, 12.00 a.m as part of the subsidy rationalization move by the government. In fact, after the announcement of the petrol hike, the petrol stations are jammed with the citizen rushing out to fill up the tank in order to save some money.

While the effort might save a few ringgit and it is a one time effort, still a lot of Malaysians are doing so, knowing that every penny saved count. This is why for the past few years, cash rebate credit cards are gaining popularity in Malaysia - especially those credit cards that offer the cash rebate for petrol like the Maybank 2 card, Citibank Cash Back card, UOB One card and Hong Leong Bank Wise card. Before this OCBC Titanium is popular due to its 5% on petrol and dining and capped at RM50 cash back per month, however the offer ended and it is now offering 1% unlimited cash back.

The attached is the comparison of the 4 most attractive cash rebate cards for the Malaysian to choose from in which I will blog more details on each of the credit card feature in the following posts.