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Young Malaysians entering the job market may not think ahead enough to consider retirement plans.

Their rationale is that retirement age lies in the distant future and there is plenty of time to save for the later years.

In addition, they may think deductions for the Employees Provident Fund (EPF), taking a minimum 11 per cent slice of their monthly pay slips, will be stored away for safe keeping and compounded to a handsome sum come retirement day.

Given EPF’s growth trackrecord (from 4.5 to 6.15 per cent over the past 10 years) and the fact that contribution is mandatory, they could take comfort in the fact that their lives after retirement would be well taken care of.
Bank Negara Malaysia statistics show that the average EPF contribution per individual at retirement age is RM155,000 but contributors from the lower income bracket may only have RM50,000.

According to the Central Bank, only about one in three people are consciously saving for retirement while 60 per cent do not know exactly how much they need when they call it a day.

According to EPF, 14 per cent of its members use up their contributions within three years of retirement. The figure goes up to 50 per cent within five years and 70 per cent within 10 years.

The fact of the matter is that EPF contributions may not be enough, given the increasingly high living costs and rising cumulative medical expenses with Malaysians now having a longer life expectancy of 71 years for males and 76 years for females, according to 2012 data from the Securities Commission (SC).

“Malaysia has an ageing population with the segment over 55 years of age expected to grow to 16 per cent by the year 2020 in tandem with a rising life expectancy of 75 years for males and 79 years for females by then.

“As a rule of thumb, we advocate that one would need to have RM1.4 million to RM2.8 million to live a fairly comfortable life after retirement, given the current conditions,” said Patrick Donald Archibald, group agency manager of Synergy Planners, a wealth management solutions and services company.

On average, Malaysians’ gross income replacement rate (gross income after retirement divided by gross income before retirement) is about 30 per cent – a far cry from the 66 per cent required for adequate and sufficient funds till death, as recommended by World Bank.

Taking into account the growing needs of Malaysians to fortify their retirement funds beyond their EPF savings, the Private Retirement Scheme (PRS), a long-term voluntary investment scheme, was launched on July 18, 2012 by Prime Minister Datuk Seri Najib Tun Razak.

The launch also saw the establishment of the Private Pension Administrator (PPA) which is an administrative and monitoring body of PRS providers and their contributors while the regulator is the SC.

As part of the Economic Transformation Programme, the main objective of PRS is to address the need to provide for adequate funds upon retirement in order to ensure comfortable
lives for retired Malaysians.

Moving forward, BizHive Weekly explores the various options, advantages, challenges and future outlook of PRS as explained by the PPA and two authorised providers.

Source: http://www.theborneopost.com/2013/05/26/prs-a-need-for-supplementary-retirement-funds-beyond-epf/

 
NEW YORK: Stocks rose 1 percent on Monday as investors speculated the Federal Reserve will reaffirm its commitment to supporting the economic recovery when it meets this week.
 
Technology and energy shares led gains on the S&P 500, pointing to bets on a stronger economy.
 
Equities were supported by data that showed homebuilder sentiment jumped in June, rising to highest in seven years since the start of the housing crisis. The PHLX housing sector index rose 2.2 percent.
 
While consensus is building among policymakers that the time is approaching for the central bank to scale down its program of buying $85 billion of bonds each month, also known as quantitative easing, investors are divided over when the Fed will start to wind down the stimulus.
 
The central bank's Federal Open Market Committee will meet on Tuesday and Wednesday, issuing a statement at the conclusion on Wednesday, followed shortly after by a news conference by Fed Chairman Ben Bernanke.
 
Bernanke had said on May 22 that the Fed could reduce the pace of QE in the "next few meetings," sparking a global bond and stock selloff.
 
"I think that the market's positioning itself ahead of the comments that will be coming from Chairman Bernanke. I think the chairman will probably say something to the effect the Fed will use every means at its disposal to make sure the economic growth we've seen continues," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.
 
The Dow Jones industrial average was up 160.20 points, or 1.06 percent, at 15,230.38. The Standard & Poor's 500 Index was up 16.64 points, or 1.02 percent, at 1,643.37. The Nasdaq Composite Index was up 41.15 points, or 1.20 percent, at 3,464.71.
 
Major indexes closed lower on Friday for the third week of losses in the past four.
 
Volatility in stocks has spiked, with the Dow industrials averaging daily swings near 191 points since Bernanke's remarks. The average for 2013 before then was about 110 points.
 
Among rising stocks, video streaming company Netflix Inc's shares jumped 7 percent to $228.99 after it signed a multiyear deal for programming from DreamWorks Animation . DreamWorks added 4.2 percent to $23.78.
 
Advanced Micro Devices Inc rose 3.5 percent to $4.08 after Barron's said prospects look better for the maker of microprocessors for personal computers.
 
Terex Corp tumbled 9.5 percent to $28.73 after the machinery maker cut its earnings forecast.
 
Growth in New York state manufacturing picked back up in June, but the details of a report by the New York Fed Bank were less encouraging as new orders and employment weakened. - Reuters
 
Asian shares reverse losses, capped before Fed meeting
 
TOKYO: Asian shares recouped early losses on Monday but prices were capped as investors settled in to wait for the U.S. Federal Reserve meeting outcome later in the week - and some long-awaited clarity on its intentions for monetary stimulus.
 
Uncertainty over the Fed's future policy course has triggered a sharp sell-off in broad risk assets over the past few weeks, offering dip buying levels for some Asian equities.
 
Wall Street fell on Friday for its third negative week in four as investors took profits from recent gains, while data showed the U.S. economic recovery was still not strong enough to warrant an imminent change in the Fed's current position.
 
"Market players both domestic and overseas are taking a wait-and-see stance," said Kim Young-il, a market analyst at Daishin Securities, of South Korean shares which traded nearly flat but hovered near a seven-month low hit last week.
 
"The market at its current level, however, has limited room for further downward moves. Valuations are cheap," Kim added.
 
MSCI's broadest index of Asia-Pacific shares outside Japan erased earlier losses to rise 0.5 percent. It advanced 1.6 percent on Friday for its best daily gain since January 2, but ended the week down 1.3 percent after tumbling to its lowest since September on Thursday.
 
Australian shares regained positive territory to rise 0.4 percent from a 1 percent drop earlier in the session. They posted their biggest one-day rise in 18 months on Friday.
 
Still, investors remained wary ahead of the Fed policy meeting over Tuesday and Wednesday, where the central bank may conceivably taper its massive bond-buying program as long as the economy is showing some improvement.
 
Data on Friday showed May industrial output was unchanged, below a 0.2 percent forecast rise, while Thomson Reuters and University of Michigan's index of U.S. consumer sentiment unexpectedly fell from a near six-year high in early June.
 
The U.S. economy may not be picking up much steam but it was also not facing deflationary pressure, with the producer price index up 0.5 percent last month, above a 0.1 percent gain forecast.
 
"Although no change in policy settings is expected, the ability of Fed Chairman Bernanke to communicate effectively the Fed's strategy over 'tapering' will be crucial to determine whether market volatility persists or lessens," analysts at Credit Agricole CIB said in a research note.
 
The dollar was top-heavy against a basket of six major currencies, trading up 0.06 percent but staying near a four-month low of 80.50 hit on Thursday.
 
Goldman Sachs said in a research report that despite moderate growth in the United States relative to the rest of the world, the latest TIC data released last week indicated a lack of any notable capital inflows, which, along with the persistent trade deficit, remains negative for the dollar.
 
The dollar recovered against the yen, however, rising 0.5 percent to 94.57 and helping improve sentiment for Japan's benchmark Nikkei stock average <.N225>, which rose 1.2 percent after opening lower.
 
The dollar hit a 10-week low of 93.75 yen on Thursday, bringing it down nearly 10 percent from last month's 4-1/2-year peak of 103.74 yen. The dollar ended last week down 3.4 percent for its biggest weekly loss since July 2009.
 
The dollar's loss against the yen has also been linked to speculators and investors cutting back their yen short positions after the Bank of Japan took no action to quell a highly volatile domestic bond market last week, sparking a sell-off in the Nikkei and erasing gains made since the central bank's big-bang stimulus unveiled on April 4, which had helped propel the index up to a 5-1/2-year high last month.
 
"The reaction to the BOJ's no-action brought the dollar/yen and Nikkei back to levels before the bazooka stimulus in April, leaving markets wondering whether the BOJ's 2 percent inflation target is achievable without a weak yen," said an official at a Japanese institutional investor.
 
On the interest rate front, India's central bank will announce its rate decision later in the session, coming after central banks in the Philippines and South Korea held rates steady last week amid the spike in global risk aversion.
 
U.S. crude futures fell 0.3 percent at $97.53 a barrel and Brent eased 0.2 percent to $105.76.
 
London copper rose 0.9 percent to $7,151 a ton on short covering following its steepest weekly decline in two months last week, ahead of the Fed meeting. - Reuters

Original Source: http://biz.thestar.com.my/news/story.asp?file=/2013/6/18/business/20130618081125&sec=business
 
KUALA LUMPUR: Following is a list of events in Malaysia as well as news company-related and market news which could have an influence on the Malaysian market.

GLOBAL MARKETS-Shares rally as Fed meeting nears, dollar firms
 
SE Asia Stocks-Higher in subdued trade; Philippines outperforms
 
WHAT IS HAPPENING IN MALAYSIA, IN TIMES LOCAL FOLLOWED BY GMT:
 
* Islamic Finance Conference 2013 at Istana Hotel, Kuala Lumpur.
 
* Prime Minister Najib Razak attends 2014 Budget Consultation at Ministry of Finance, Putrajaya at 0900am (0100).
 
* Whitman Independent Advisors and private retirement scheme providers sign memorandum of understanding at Securities Commission Malaysia, Persiaran Bukit Kiara, Kuala Lumpur at 1000am (0200).
 
* BlueScope Steel announces joint venture partnership with Nippon Steel Sumitomo Metal Corp at The Gardens Hotel, Mid Valley City, Kuala Lumpur at 1000am (0200).
 
* Bursa Malaysia Bhd chief executive officer (CEO) Tajuddin Atan launches Technology Park Corporation Sdn Bhd's TPM Angle Chapter at Putrajaya Marriott Hotel, Putrajaya at 1430pm (0630).
 
* Science, Technology and Innovation Minister Ewon Ebin witnesses signing ceremony between Huawei Malaysia and Multimedia Development Corporation at Huawei Malaysia Global Training Centre, Cyberjaya at 1430pm (0630).
 
MARKET NEWS
 
> Nikkei gains 2.7 pct, climbs out of bear market; wary before Fed outcome
 
> Wall St rises in volatile session before Fed meeting
 
> Bond prices fall on jitters over Fed bond buying
 
> US dollar gains vs yen on stock bounce, Fed meeting
 
> Gold slips as U.S. equities rise, FOMC in focus
 
> Brent crude oil dips before U.S. Fed meeting
 
> Palm oil ends higher on strong exports ahead of Ramadan MALAYSIA IN THE NEWS:
 
> Singapore, Malaysia choke as illegal Indonesia forest fires rage
 
> Malaysia's Sona Petroleum to raise nearly $160 mln in IPO
 
> Asia Softs-Tokyo rubber eyes Fed; cocoa butter at 4-yr high
 
> ILFC confirms $5 bln Airbus A320neo order
 
> POLL-Malaysia's May inflation seen steady at 1.7 pct - Reuters
 
VEGOILS-Market factors to watch June 18(Tuesday)
 
KUALA LUMPUR: The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets.
 
FUNDAMENTALS
 
* Malaysian palm oil futures ended higher on Monday, after data showed exports rose in the first 15 days of the month as buyers stocked up ahead of the Muslim holy month of Ramadan, although gains were capped by uncertainty in the global markets.
 
* Brent crude oil futures touched a 10-week high close to $107 a barrel on Monday as tensions in the Middle East rose, but prices finished slightly lower on the day after a late sell-off in U.S. gasoline futures. MARKET NEWS
 
* Global equity markets rose and the dollar strengthened against the yen on Monday on expectations the Federal Reserve will reinforce its commitment this week to supporting the U.S. economic recovery.
 
* Chicago Board of Trade (CBOT) corn futures leaped over 2 percent on Monday, posting the biggest one-day advance in nearly a month on soaring cash corn markets and tight stocks of corn.
 
* Copper closed a touch lower on Monday on concerns the United States may scale back its monetary stimulus program, and oil prices fell after initially rising on fears of a superpower standoff over Syria and possible disruptions to Middle East crude supplies. RELATED NEWS
 
> Malaysia's June 1-15 palm oil exports jump 18.5 pct -ITS
 
> Malaysia's June 1-15 palm oil exports up 15.7 pct -SGS
 
> Malaysia keeps crude palm oil export unchanged for fifth month > Corn jumps 2 percent on soaring cash markets > Oil traders diversify into food and metals in quest for profits
 
> Louis Dreyfus CEO quits, operations chief to take over
 
> Cocoa sinks for third day, ICE sugar inches up after rally
 
> Argentine grain sales strike may slow much-needed corn exports
 
> Thai govt says rice scheme losses $4.4 bln in 2011/12
 
> Monsoon covers India by mid-June, earliest ever -Met official
 
DATA/EVENTS
 
> Cargo surveyors to release June 1-20 exports data on Thursday. - Reuters

Original source: http://biz.thestar.com.my/news/story.asp?file=/2013/6/18/business/20130618081638&sec=business
 
KUALA LUMPUR: Malaysia's blue chips opened lower on Tuesday as investors mulled the fresh corporate developments while they also awaited the outcome of the US Federal Open Market Committee (FOMC).

The FBM KLCI opened down 2.14 points to 1,770.03, dragged down by losses in plantations and banks. Turnover was 29.87 million shares vaklued at RM12.73mil. The broader market was firmer, with 87 gainers to 28 losers.

Hwang DBS Vickers Research (HDBSVR) said as the FOMC begins its two-day meeting on Tuesday, the outcome of which could provide an insight whether the monetary stimulus will be scaled back anytime soon.

"Investors turned net buyers when they pushed up key equity indices on Wall Street by between 0.7% and 0.8% last night. "This will likely pave the way for Asian equities to extend their recoveries ahead. In Malaysia, the benchmark may build on its two-day gains of 29.3-point or 1.7% to climb towards the immediate resistance threshold of 1,785," said HDBSVR. At Bursa Malaysia, Petronas Dagangan fell the most, down 56 sen to RM24.84 while Genting Malaysia shed seven sen to RM3.85 and Genting Bhd four sen lower at RM190.46.

Plantations were among the major losers, KL Kepong fell 24 sen to RM21.26, Genting Plantations 10 sen to RM9.17 and FGV three sen to RM4.52.

AmBank fell 10 sen to RM7.09, Maybank four sen to RM10.34. Pos Malaysia slipped four sen to RM4.84.

Original source: http://biz.thestar.com.my/news/story.asp?file=/2013/6/18/business/20130618091846&sec=business

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