Thursday, July 23, 2009

Liberalising The Monkey

Hellow Folks......I'm BACK!!!!!!! Had a wonderful 5 weeks holiday in my Tanah Air Tercinta......lets see where do i many things to talk about and share with you all.....

huh lets begin with the customary gua tibai lu thinggy......

1. LANCAU Lu TMNET gua putus internet dua minggu kat KL, lu janji 2 business day...technician tak sampai sampai....dah sampai bole ke cakap kata cable underground area gua kurang cantik as if thats my fucking problem.....dah la gua takde talipon 3G....GPRS connection macam sial mahal gile pulak tu

2. LANCAU Lu Malaysia Airlines...I book my tickets online for 2 Kids(< 4 years old), 2 adults and 1 Infant…….how come when I go and check in 2.5 hours before you can say to me that ALL of us have to be separated because the flight is full and say that I should have reserved the seats online (Fuck u n ur mama…you blardy system does not have seat booking function bingai!!!)

Now to more matters of national importance- Let me begin with the Liberalisation measures announced by our PM……did anyone see it coming?

You should have if the respective regulators had done a proper public education message …….as most of the items announced are interlinked with the major discussion that have been going at the ASEAN Level for the past 10 years….allow me to share with you some of the on-going discussions- for some background info please read in details here (make sure u at least browse through it before reading on....its fucking important siut)

Someone thought that if we were to work together as a Single Market that we will be stronger…….will we?

Achieving sustainable Economic Growth is of a paramount importance affecting our thinking process today, achieving one in a single economy in an equitable and inclusive manner is a challenge to all of us individually and trying to map the individual targets of economies into unison will provide a far greater challenge to achieve in the medium or the long run. As we position ourselves in the global competitive environment; where resource mobility is experiencing a double dot phenomena (Accelaration in physics) aided by the development of telecommunication and information technology over the last decade, we must be able to ask ourselves how competitive are we either individually or as a unit given the fact that at the same time each one of us are competing with one another in almost every economic aspect. One of the defining characteristics of the world in which we now live is that, by most economically relevant measures, distances are shrinking rapidly. The shrinking globe has been a major source of the powerful wave of worldwide economic integration and increased economic interdependence that we are currently experiencing.

As economies in ASEAN specialize; competition become more fierce both from domestic, regional and Global perspective, consideration on how the domestic industry can cope and be abreast with these new competition factors are fundamental to policy makers whilst promoting healthy foreign competition. The software aspects such as human and knowledge factors becomes delicate parameter to enable growth planners to find a careful balance to be able to manage the risk of unemployment or potential dislocation of domestic industry participants who are unable to adjust with the new environment.

Stable, Deep and Liquid Capital Market is one of the key determinants to propel us further into the new era, markets function best when they attract sufficient liquidity and to some extent liquidity can be thought of as roughly comparable to investor confidence. Liquidity exists when investors are confident and willing to assume risks. And liquidity persists when risks are quantifiable and investors are creditworthy. I will not dwell further as I think all of us here are fully aware of the recent developments in US credit markets, as we speak today, the global markets are still adjusting to the aftermath of the Sub-prime. Internally we must build our strength and resiliency in time of stress for our markets to be able to handle the forces of external shocks to our domestic markets.

As our markets become more globalised in nature, with it comes the ‘theoretical thinking” of Financial globalization--opening a country's financial markets to foreign capital and financial institutions and the expectations that it will confer several important benefits on developing countries. First, by bringing in new capital, financial globalization will lower the cost of capital, thereby encouraging investment, which in turn promotes growth. Second, when foreign capital and financial institutions are allowed to enter a country, they improve the allocation of capital. Third--the most important benefit and one not usually emphasized--globalization of a country's financial system, if it is designed to promote competition in domestic financial markets, helps promote the development of better property rights and institutions. Better property rights and institutions make the domestic financial sector work better. They facilitate the movement of capital to productive uses and prepare the domestic financial sector to better handle the increased capital flows that would come with the opening of the country's financial sector……betui ka pakcik?

Economic globalization has come a long way, in one particular dimension--finance--it is very far from complete. Financial globalization has made its greatest strides in rich countries. Gross international capital flows, which have risen enormously in recent years, move primarily among rich countries. The exchange of assets in these flows is undertaken to a large extent to enable individuals and businesses to diversify their portfolios, putting some of their eggs in the baskets of other rich countries. Only a small fraction of total international capital flows into emerging economies such as ASEAN. The situation is even more remarkable when you add into the picture the capital flows out of developing countries, especially the governmental acquisition of international reserves; then we see that emerging-market economies have, on net, actually been sending capital to rich countries….how sweet eh

A number of issues linger in my mind; from Investor Protection Capabilities and Investors Rights of each domestic markets and the adherence to international standards, domestic market access from transactional execution perspective as well as the potential migration of domestic markets from issuer fund raising activities, the level of economic of scale of Domestic Market Intermediaries and Market infrastructure operators (execution, settlement and depository agents, exchanges, central clearing and depository) and of how the domestic industry will adjust to the competition factors of the regionally integrated markets.

Collectively we must define and analyze the structure of ASEAN economies and markets and come up with a common strategy on how best to brand it as a product. We must look deep from domestic as well as consolidated regional view. What will be our main selling point to the world, does geographical boundaries define the identity of our markets?.

So if all of us are really serious about this what would be the key issues to achieve the so called “integration”?

To me the differences in the level of development of Individual markets is a major stumbling block be it from capital control perspective, market access to foreign investors, depth and liquidity of markets and more importantly the sophistication and maturity of markets, industry and its key actors(investors, intermediaries, regulators) and the lack of convergence of regulations and rules governing markets all of which affect the overall resiliency factors and attractiveness from foreign investors perspectives.

Each country is on its own path of reform with great focus in strengthening market intermediaries, overall reforms in regulatory structure towards international standards and improving market liquidity and depths. Current focus may be domestic oriented with some aspects of regional and global view into consideration. Major challenges lies in the explicitly laying out the terms of regional integration given the current structure of competition among markets as well as the build up of domestic markets capacity in term of intermediary capacity, regulatory capacity and infrastructure capacity.

Market Regulators must also strive to be able to undertake its regulatory and supervisory functions in the new era of globalization. Individual regulators are challenged in their typical way of operation in to ensure market stability, integrity and institutions and investor’s protection in a market whereby the increased level of access to foreign markets and foreign access to domestic markets are facilitated with the advancement of telecommunication and information technology (Websites/Internet Trading/Foreign Brokers selling products to local investors without proper licensing)

On the other hand how relevant is ASEAN as a group to the eyes of the world? How big is our voice in the global flow of liquidity?. On one hand we aspire to be classified as a unique Asset class, whereas in reality we are viewed differently from credit as well as economic diversity perspective. Europe took more than 50 years to achieve the level of integration which we are witnessing now, how will ASEAN fare in achieving it regional integration activities and why in the world are we rushing towards it?

So Mr Prime Minister/part time Finance Minister wannabe what are you doing? Do you even know the implication of your decision which I presume is based on advices by the respective bureaucrats, “Con”Sultans and of course Technocraps……not that I’m trying to underestimate your intelligence or those who whisper in your ears…..but by my yardstick tak jauh sangat dari bingai…….

One of the fundamental building block of this initiative is the "Mutual Recognition"  (MR)Concept whereby foreign intermediaries/player does not need to go through the necessary licensing procedure of domestic regulators BUT will need to comply to their respective home regulators rule as long as their Home Regulators Rule is of the minimum standards as Ours. The overall concept is similar to the "Substituted Compliance Framework" proposed by Tafara and Peterson read here for details
  • Harmonizing Disclosure Standards, Align Distribution Timelines and Develop Mutual Recognition for Primary Offering
  • MR of Market Proffesional involved in Primary Offerings
  • MR for the provision of products& services by Intermediaries to Non Retail Investors (NRI)
  • Promote Cross Border Investment through Local Intermediaries
  • Harmonize defination of Non Retail Investors
  • Ammend Laws to allow NRI to invest freely
  • Allow Local Intermediaries to distribute ASEAN listed products, with marketing and support services
  • MR of Market Proffesionals
  • MR of Collective Investment Schemes

The second building block is the Exchange Alliance Framework consisting of
  • The building of the "Bulletin Board" of top 30 ASEAN listed Securities from each ASEAN exchange- Phase I no transaction on Home Exchange, Transactiona Phase after ACE linkage is build
  • Build the Common Access Gateway called the ASEAN Common Exchange Gateway (ACE) which is an Order Routing Mechanism that will allow a Foreign Broker say in Singapore to be able to hit the prices in Bursa Malaysia (Displayed in Singapore Exchange) without being a member of Bursa Malaysia (Order is still routed to the Domestic Member for Final Execution)
  • Link Depository and Settlement Systems among ASEAN Central Security Deposity and Clearing Houses
For details read here

And before I forget beware of Singapore's intention in escalating the “integration” activities ( I shall reserve this for my follow up post on the matter)

Someone asked me what I think of the 30% Bumi Rule for IPO….I gave a straightforward answer…in the current global markets, our domestic issuers can raise funds ANYWHERE in the WORLD WITHOUT the need to comply to such rule….and if you can imagine how the market would look like in 2015 as per the ASEAN Market Integration Plan.....Local Malaysian Companies can list anywhere in ASEAN and can still TARGET local Malaysian Investors Via the Mutual Recognition and the Exchange Linkages how now, even if the PM did not liberalise the 30% rule the loophole environment HAS BEEN AGREED BY SECURITIES COMMISSION AND BURSA MALAYSIA BEFORE his announcement.....kantoi tu!(It was during Tun Dol's time as PM not Najib's, but he was the Finance Minister after the portfolio swap)

As a matter of principle, when you design a policy action, you must be able to have the necessary tools for enforcement and monitoring so that the cost of implementation is not too high that it eats up the intended economic benefit of the policy action…….

Throughout the whole implementation of the 30% rule did our regulators bother to publish the Bumiputra Ownership Index for each security and for the market as a whole?

What in the world did all the CEO’s of Bursa and Chairmans of SC was doing all this while…such a simple thing also cannot ka pakcik n makciks…….kalu ini macam baik gua balik Malaysia and take over your job...... I hear Yusli's Contract gonna end soon

To all the 30% proxies who have benefited from this rule, I envy you for doing fuck all and earning tons of money.

Better stop here on this issue….kalu tak berjela jela…I shall let you all digest this post first…

PS: To all who have commented on my previous articles, sorry been having some problems with Intense Debate system, will try to respond once i sort it out....thank you for your tots

PPS: Think Domestic Market First (the Bumi Market is a subset of the Domestic Market) and FUCK Globalisation and Market Integration Initiatives, markets are ALREADY integrated through the presence of Foreign Intermediaries in OUR domestic market.

PPPS: If you read the original ASEAN Economic Community Blueprint you would notice that there will be Resource Mobility in be prepared to compete with our Regional counterparts for Jobs folks by 2015.....ask yourself what would your competative advantage be?


Friday, July 17, 2009

There Goes My Man U Tickets!

This will be a quick one......

My phone been getting so many SMS's from morning....yes we are OK thank you for your concern...

Today Indonesia was struck again with concurrent bombing at Mega Kuningan.....(less than 1 KM from where I live)- JW Marriot n Ritz Carlton....

As of current 49 folks are hurt n 7 confirmed dead......

To all those directly affected prayers for all of you....

To those involved in plotting and executing this act....I hope you, your family and your mother would go to hell......

To all the Man U fans who are now holding a worthless ticket for tomorrow....lets go beat up some Liverpool fanatics......(blardy hell!!....Man U was supposed to stay at one of the hotel....imagine if the bombing is tomorrow amidst all the fans........)

Minds are like parachutes; they work best when open. -Lord Thomas Dewer