Expert advice on investing

Property Vs Shares : Discover your knock out investment strategy 

Author : Peter Koulizos and Zac Zacharia Genre : Business, Finance and Law Publisher : Wrightbooks >>

ABOUT three to four years ago, a friend in his 20s bought his first property. Prior to this, he was trading in stocks. His interest in the property sector came about when he saw the double-digit price increase during the run-up in the property sector in 2009/2010.

While his interest in shares continues, it was the property sector which became the main focus of his attention. His intention was to sell the serviced apartment once it was completed at a profit, a strategy taken by many during those heady days, and today. He has the same principle when it came to stocks. If he has read this book Property Vs Shares, he may have taken a different strategy for his investments.

This book serves as a guide for those who are interested in either or both forms of investments. While it was written with beginners in mind, it provides useful reference to readers on higher rungs of the investment ladder.

In Malaysia, the two most common investments are properties and stocks. While there are unit trusts, these are, at the end of the day, also linked to stocks. The last several years, a number of books on property investments have appeared on the shelves of our local book stores. Most, if not all of them, are focused on property investments alone and therein lies the difference.

Property Vs Shares compares one asset class against another. It has two authors. Peter Koulizos is the author of The Property Professor’s Top Australian Suburbs and lectures on the subject. Zac Zacharia lectures on share investment at TAFE SA and is a founder of a wealth management group.

Both of them provide some ground rules for investment decisions in today’s volatile economic climate. They look at how property and shares have performed historically and give pointers on research.

In today’s search for yield, all sorts of schemes have entered the market. They highlight some of these scams and schemes. In short, they look at investments much more broadly, and takes into cosideration the many who keep their money in time deposits.

Using the analogy of two boxers in a boxing ring, one representing real estate and the other shares, they begin with that all pertinent question Why Invest? and explains the importance of being a shrewd steward of one’s finances if one wants to retire early and richer.

They outline from the start that saving and investing are two different things. In order to invest, one must first of all, begin a journey in savings. But while saving, as in keeping money in a time deposit may be “safe” and “risk-free”, the returns are minimal. On this premise, the authors suggest other forms of investments which, if prudently selected and managed, and depending on when one enters and exits, may provide a better yield.

My 20-something friend could have just kept his money in a fixed deposit account but with the cost of living escalating, he figured he would be earning negative interest rates in no time. And therein lies the value in property and stock investments – they provide a regular income and have the potential for capital appreciation.

However, there are caveats to this and the authors explain the perils of both clearly and succintly, without diminishing the importance of diversification.

Although this book is based on the Australian property sector and the Australian stock market, it holds within its covers very insightful information and suggestions about property and stocks that are universal.

The last several years, there has been a great interest in property investments on a global scale with Malaysians buying real estate at home and abroad, and with it comes currency risks. The Malaysian stock market has generated both interest and returns for investors. What and where one buys, or feels most comfortable with, depends on many personal and individual factors as well as global and national events.

Investment markets are inter-related, like a big jigsaw puzzle. When property prices dip, the shares of property companies may dip. When interest rate goes up, there may be less application for housing mortgages, which in turn affects bank revenue and bank stocks.

The importance of having some knowledge of economic and investment cycles are clearly spelt out with graphs and tables. But these details are used sparringly.

As mentioned earlier, my 20-something friend may have taken a different route had he read this book because in the middle of this reference guide, the authors draw the distinction between trading, investing and speculating.

The main difference is the investment timeframe. Trading on the stock market can occur within seconds whereas speculating on property can occur within weeks or months. They suggest taking a longer time frame with both.

Only you can decide why you are in the game – is it for capital growth, or for income, or both? Do you want to fund a certain lifestyle, or are you hoping to retire richer and earlier? If you are able to answer the above, you will be guided as to what suits you best. This book will set you on the road to investing with some insightful information in hand.
 
There are many nuggets of gold to be found in this book. Whether your preference is for stocks, properties, or both, there is a place in your book shelf for this slim volume.

 - Contributed by Thean Lee Cheng The Star/Asia News Network

Emotional intelligence for business success

Emotional Intelligence is the ability to relate and empathize with emotions in others.  While traditional attitudes in business have preferred to closet most emotions except a prescribed few business-related qualities like drive, ambition, and single-mindedness, 21^st century attitudes assert that emotional intelligence in business isn’t just important, it may be essential for success.

21^st Century Work Ethics
Collaboration is one of the major tenets of business in the 21^st century.  Saying it’s important, however, doesn’t help businesses achieve it in practice.  One reason collaboration is so important is because business is becoming increasingly global.  Offices spread across nations are learning to work together as a result of new partnerships and relationships with new companies.  The gel that helps support collaboration in this century isn’t single-mindedness or even an aggressive business drive.  Instead, it’s things like emotional intelligence that increasingly allow people to work together—and work together well.

Management and Emotional Intelligence
When management is not emotionally intelligent, business owners see high turnover rates.  Workers, whether new to the business or veterans, simply work better when they are with emotionally intelligent people. A lack of understanding leads to conflict and, in some cases, weekly or even daily conflict.  A manager that can’t relate to others isn’t likely to have the emotional tools required to build and manage teams.  People without emotional intelligence may be quite intelligent otherwise and almost certainly are when they land supervisory positions; however, becoming a boss does not mean they have the right skills to be a leader in this 21^st century business climate.

Why Do Managers Need to be Emotionally Intelligent?
One of the main reasons to have a team of emotionally intelligent managers is because then business is likely to be better.  According to Computer Weekly, “The world’s most effective leaders are alike in one crucial way: they all have a high degree of what has come to be known as emotional intelligence quotient or ‘EQ’ for short.” The article goes on to explain, “Psychologist David McClelland did some thorough leadership research that found that executives with higher EQ outperformed their annual revenue targets by 15-20%, and that 87% of the executives rated highly on EQ came in the top 33% of performance-related bonuses.”

Some Traits of Emotionally Intelligent Managers
When considering promoting someone to management, look for applicants who boast rewarding relationships with other people, cope well with pressure, and lead by example.  The Harvard Business Review asserts that emotional intelligence is “firm, but not rigid,” implying that some people may get better at it if it becomes a priority.  On the other hand, when you make it a point to hire and promote employees with emotional intelligence, you’re more likely to achieve both the work climate and success you want for your 21^st century business.

What do you think? On the flip side, what are some traits you’ve encountered of emotionally
idioticunintelligent managers?

Contributed by
Shafat Qazi, Founder and CEO of BQE Software, is an engineer-turned-entrepreneur who created the most awarded time billing software ever, BillQuick, while still in college. He set out to make time tracking, billing and project management easier for engineers as well as all service professionals, and continues to perfect BQE Software products hands-on today.

 Why Entrepreneurs Should Care About Emotional Intelligence

 

When asked what the most important qualities for entrepreneurs are, you may come up with a list that’s completely different from that of the next person.  

Successful entrepreneurs have a whole list of traits that serve them well in their endeavors. Commonly cited qualities might include determination, passion, confidence, and optimism – all distinctive traits of entrepreneurs and instrumental in achieving small business success.

But there’s one quality that you might not have thought to add to your list: emotional intelligence.
It’s the single quality that plays a defining role in the success of most entrepreneurs.

What is Emotional Intelligence (EQ)?
Emotional intelligence, otherwise known as EQ, is defined as the ability to perceive and understand the emotions of both oneself and others.

With this knowledge, individuals are able to navigate social networks, make informed decisions, and react to behavior accordingly. This quality is divided into two major categories –  personal and social competence, – each which have their own core skills.

Personal competence is comprised of self-awareness and self-management skills, which centers more on the individual’s ability to perceive his or her own emotions.

On the other hand, social competence, which is made up of social awareness and relationship management skills, determines the entrepreneur’s ability to understand and react to the moods and behaviors of others. Both are equally important for entrepreneurs and can play a major role in whether the individual succeeds or not.

Why is Emotional Intelligence Important?
Emotional intelligence provides entrepreneurs with a set of social and personal skills that can help them in any situation or environment.

The following are just a few of the skills that are enhanced by emotional intelligence:

Decision Making:
One of the major components of emotional intelligence is self-awareness, which enables individuals with the ability to accurately perceive their emotions as it happens. They are able to keep stray emotions in check, preventing them from affecting any decisions or choices. As a result, emotionally intelligent individuals are able to look at the big picture without swayed by the details.

Customer Satisfaction:
Small businesses are nothing without happy, satisfied customers. Luckily, EQ provides entrepreneurs with the ability to deliver customer satisfaction. Emotional intelligence allows the individual to be more empathetic.

They have the ability to perceive and understand the emotions of others. They are able to help customers with their buying decisions and keep them engaged, providing a more comprehensive, satisfying experience.

Leadership:
Entrepreneurs are often responsible for leading the direction of their endeavor and clearly communicating goals to their teams. Therefore, they must be able to form a good rapport with their employees, inspiring and motivating wherever possible. Emotional intelligence provides entrepreneurs with the enhanced ability to manage interactions and form meaningful relationships. In addition, individuals with high levels of emotional intelligence tend to be more self-confident and adaptable – vital traits for any entrepreneur.

Conflict Resolution:
Whether there is a dispute with a customer or a disagreement between team members, entrepreneurs are bound to run into conflicts. However, emotional intelligence provides the individual with conflict resolution skills. Entrepreneurs with this quality are able to gauge the emotions of both parties and provide a resolution that will connect with both. With this ability, they are able to quickly placate the threat to efficiency and productivity.

 Conntributed by Sara Fletcher
Today’s Guest Poston Start Your Own Small Bizwas provided by Sara Fletcher. Sara  is interested in emotional intelligence in leadership and understanding how it affects her life. She loves to explore psychology, business, and sports in relation to her test of emotional intelligence.

S P Setia's head honcho Liew resigns, looking forward to mentoring in Eco World

Ten months after S P Setia Bhd unveiled its succession plan, head honcho Tan Sri Liew Kee Sin has announced his intention to resign as president and chief executive officer.

Also quitting the company is chief financial officer Datuk Teow Leong Seng.

Liew’s departure was expected by industry observers but Teow’s resignation came as a surprise as he was named deputy chairman in the property player’s succession plan earlier, analysts told StarBiz.

Liew would leave the property giant on April 30 while Teow would stay on until July 31.

Liew and Teow would continue to be involved in the Battersea Power Station project in London until September 2015 given the prominence of the international project.

Liew would also remain managing director for Qinzhou Development (M) Consortium Sdn Bhd, a Sino-foreign joint venture company to develop the China-Malaysia Qinzhou Industrial Park in the republic until the same period.

Sources said the property magnate would eventually emerge in Eco World Development Group Bhd after his stint in S P Setia.

It is also speculated that present chief operating officer Datuk Voon Tin Yow, who was appointed the company’s acting president and chief executive officer, might also resign later.

In a statement, S P Setia said Voon’s appointment would be effective from May 1, 2014 until April 30, 2015.

Voon would be supported by executive vice-president Datuk Khor Chap Jen who would be appointed acting deputy president during the same period, it said.

Non-independent non-executive director Tan Sri Lee Lam Thye has also resigned yesterday to focus on his new role as the deputy chairman of the National Unity Consultative Council.

S P Setia chairman Tun Zaki Tun Azmi said: “Whilst the board and I are greatly saddened by the departure of Liew, Teow and Lee, we are confident that the group will continue to be in steady hands under Voon and Khor.”

Observers expected its biggest owner Permodalan Nasional Bhd (PNB) to take more proactive measures in managing its talents as well as setting the company’s direction going forward.

It was earlier reported that Datuk Jamaludin Osman of I&P Group Sdn Bhd – PNB’s property arm – was among the candidates tipped to take over Liew’s stewardship. There were also talks of a possible asset injection by PNB into S P Setia.

Liew said: “Given the solid footing which the company is on, I believe the time has arrived for me to step down after 18 years as CEO.

“With my children all growing up and starting out on their own career paths, I am looking forward to spending more time with them, mentoring and guiding them.”

Liew’s eldest son, Tian Xiong, is a major shareholder and director in Eco World, another property firm set up by former S P Setia top brass.

S P Setia fell five sen to close at RM2.88 while Eco World was up one sen to RM4.15.

Analysts said the market has priced in Liew’s retirement from S P Setia and they expected the company’s operation to remain intact for the time being.

Bloomberg data showed that its forward price-to-earnings (P/E) was 13.4 times compared to 16.06 times currently. Its average P/E ranged from 17 times to 20 times from financial year ended Oct 31, 2011 (FY11) to FY13.

Liew is instrumental in growing S P Setia from a RM200mil entity in 1998 into a multi-billion ringgit international property company.

With him at the helm, S P Setia achieved sales of RM8.24bil in FY13, almost double from what it registered in FY12.

The group has 4,782 acres of undeveloped land bank worth RM102bil while its unbilled sales stood at RM9.6bil as at FY13.

- Contributed by Ng Bei Shan The StarBiz/ANN

Who’s who in Eco World

Fresh from graduating as a Bachelor of Commerce from Melbourne University late last year, Liew Tian Xiong, 22, is not short of persuasive skills that a sales person possesses as he introduces EcoSky to StarBizWeek when we visited Eco World Development Sdn Bhd’s sales gallery.

In fact, one of the key performance indicators he has to meet, is to sell off 30 units of its KL project, EcoSky, which will then determine whether he gets his bonus.

Besides sales and marketing, he is also involved in project planning, land acquisition and liaising with land consultants.

Asked on people who influenced him, the affable young man says: “I have probably learnt from my father throughout my whole life. He taught me to keep my head down and listen to people, and to keep asking questions.”

He says he has learnt from both CEO Datuk Chang Khim Wah and COO Datuk S. Rajoo and what he is going through, is essentially a fast track management training programme.

Chang says: “There is a lot of things (for him) to learn. He’s doing groundwork like sales and marketing, planning and reading legal documents although he is holding the director’s card.”

“Tan Sri Liew (Kee Sin) told me that I can scold him (Xiong). I was scolded by Tan Sri Liew back then, so it’s pay back time now,” Chang jokes.

However the relationship among the management team when StarBizWeek met up with them is warm and fervent.

Chang quips: “We even play futsal with him (Xiong)… ”

The experienced management personnel like Chang and Rajoo had known each other for about two decades, but Xiong, at his tender age, seems to be gelling well with them.

Xiong’s younger brother, Tian Rong, 20, is also with the company as a contract staff. He is pursuing an economics degree from University London College and is having a stint in the company.

The man who helms Eco World, Datuk Chang Khim Wah, 50, joined S P Setia in 1994 and had been there for about 20 years. Prior to that, he was a consultant engineer in Australia. He was one of the members instrumental in setting up S P Setia’s Johor Baru division and went on to set up an office in Singapore and Jakarta.

He concedes that the team has S P Setia’s DNA in terms of team effort and competitiveness. His relationship with Liew was depicted as an understanding that required little words.

“We don’t speak long sentences (but) we understand each other,” he shares.

Chang’s counterpart, Rajoo, 50, assumes the position of COO in Eco World. He spent his first seven years in S P Setia in the Klang Valley helping the development of Bukit Indah Ampang and Pusat Bandar Puchong

and subsequently in some of the township developments in Johor where he then worked closely with Chang.

After that, he was overseeing S P Setia’s projects in the northern region for seven years and had carried out 13 projects with a gross development of more than RM2bil in the Pearl of the Orient.

Heah Kok Boon, 46, the chief financial officer of Eco World, is a chartered accountant who has over two decades of experience in the field of corporate finance, corporate fund raising, investments, merger and acquisition as well as other finance-related areas.

He was with S P Setia’s corporate affairs department for six years prior to his current role.

When introducing the major shareholders behind Eco World, Chang says Leong and Rashid are the two major shareholders.

“These two names are more than enough (for Eco World’s credibility),” Chang says, joking that Xiong has no shares in the property outfit.

One of its major shareholders and directors, businessman Tan Sri Abdul Rashid Abdul Manaf, 65, was trained as a legal practitioner from Middle Temple London.

He was chairman for the board of S P Setia Bhd from March 12, 1997 until Oct 25, 2012.

Another director, who is a corporate figure, is Datuk Eddy Leong Kok Wah, 58. He holds a master of business administration from University of Hull, United Kingdom, and is also a member of Institute of Bankers (UK). He has an extensive career in the banking industry and is currently an executive director of Salcon Bhd and also sits on the board of a few other companies. He was in S P Setia’s remuneration committee from Sept 21, 2005-Feb 28, 2013.


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Bosses prefer Multi-skilled workers with the digital technologies, Global Randstad Workmonitor Report

PETALING JAYA: Malaysian employees expect their jobs to be more demanding with the increasing influence of digital technologies in the workplace and more bosses preferring to hire multi-skilled workers.

The latest survey by a global recruitment and human resource services firm showed that nine out of 10 Malaysian workers expected their jobs to be more challenging over the next five years.

According to the latest Randstad Workmonitor Report, greater workplace expectations were higher in Malaysia compared with respondents in Singapore (80%), Hong Kong (73%), Australia (73%) and New Zealand (82%).

The survey, based on 405 respondents, also found that 95% of the Malaysian workers were willing to develop their skills to meet the changes.

Randstad Malaysia director Jasmin Kaur said employers have increased the emphasis on education, experience, social and digital skills.

“With organisations becoming leaner, employees are now expected to be not only high performing, but to be able to put on several hats,” she said.

Jasmin said the figures were reflective of Malaysia’s aim to become a high-income nation by 2020.

Malaysian Employers Federation’s (MEF) executive director Shamsuddin Bardan concurred with the report’s findings

“Like it or not, this is the definite trend due to the demands of business,” he said, adding that even older employees had to adapt to the digital trend of being wired and contactable.

Jasmin said the survey also found that most of the respondents believed that their employers placed greater importance on digital skills than they did five years ago.

“With social media being a part of today’s business environment, being comfortable with using tools such as Twitter and LinkedIn could help an employee keep connected and abreast of what is happening in the industry.

“Different companies have different expectations of their workers. Employees who are client-facing may be expected to be on call outside of standard office hours to respond to clients as required,” she said.

Shamsuddin echoed similar views, saying that it was now a necessity for employees to be reachable anytime of the day, whether it was outside work hours on while they were on holiday.

However, he said employers recognised that there had to be a work-life balance for their staff, adding: “Being contactable is not the same thing as working 24/7.”

Burnt out: Employees face stressful days at home and at the workplace if a work-life balance is not struck.

He said employers also knew that happy employees were more productive.

MTUC secretary-general Abdul Halim Mansor said the umbrella organisation for unions was against the culture of employees being at the beck and call of bosses beyond working hours.

He said the Malaysian Employment Act specified rest days which workers were entitled to.

“Notwithstanding the demands of the job, the rights of employees to get adequate rest should be respected,” he said.

Abdul Halim said such a working culture could have negative impacts on families and communities.

Company managers, who spoke to The Star, said the nature of a job and position would determine if an employee had to be on call.

“For those in management, there is no escape,” said the human resources manager of a multinational company in Kuala Lumpur

Another manager, who also declined to be named, said being on call 24 hours a day was already a norm.

“The company provides employees with smartphones so they can be reached anytime,” she said.

The survey, conducted between July 17 and Aug 5, also found that 77% of Malaysians were satisfied with their current employer compared with 56% in Singapore, 47% in Hong Kong and 44% in Japan.

Jasmin said a pleasant working environment, effective leadership and career development training were the reasons why Malaysian employees remained satisfied.

The quantitative study was conducted via an online questionnaire. The respondents were between 18 and 65-years old, working a minimum of 24 hours a week in a paid job.

Randstad issues its survey report four times a year.

- Contributed by  by p. Aruna, Neville Spykerman, and D. Kanyakumari, The Star/Asia News Netowrk

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Innovation Value and key Drivers to Success

The ability to increase business value through innovation is a critical success driver for most organizations. The markets that we operate in provide both opportunity and risk from an innovation perspective as they are rapidly changing.

Markets provide opportunities if we get it right and threats if we do not, particularly given the intense competitive nature of most industries. Our quest to realize innovation results is further complicated by the complexities involved for most firms – the sheer number of players to potentially coordinate with in the value chain; rising costs; margin erosion; increasing regulatory, customer and consumer demands; evolving business models; shorter cycle times; and new sources of competition, just to name a few.

The good news is that if you can get it right, you stand to gain a competitive advantage and will reap the benefits of increased revenue and profits. Hence, the lure of identifying new growth opportunities, increasing volumes and market share, securing a competitive advantage, improving margins and strengthening brand loyalty, provides a powerful incentive to be successful at product innovation. However, the challenges that organizations face do not make this easy. Developing new products and technologies is consequently one of the more complicated initiatives an organization can undertake.

Take for example the telecom market wars occurring over the past year. Samsung and Apple have emerged as two clear winners that have been able to leverage powerful innovation machines. The competition (Nokia and Research in Motion) have stumbled badly in their respective innovation capabilities and ultimately paid the price in the marketplace.

Figure 1: The Innovation Performance Framework

The Innovation Performance Framework™ (Figure 1) is a useful framework that examines the complexity and addresses some of the challenges in product innovation by separating them into four key themes: product innovation strategy; portfolio management; new product development process; and climate and culture (see Figure 1 for illustration). Interestingly, past studies suggest that organizations that excel or master these four key themes do, in fact, achieve better results from their product innovation efforts.

Let’s examine some of the challenges innovators have in each part of The Innovation Performance Framework:

Product Innovation Strategy: It all starts at the top. If there is not a clear and crisp product innovation strategy that supports the business strategy, problems begin. Some key challenges are: Do we have one? Is it clear? Is it the right strategy? Is everyone aligned? Are people walking the talk? Are there realistic expectations on new product revenues?

Lack of a product innovation strategy tailored to support the strategy of the business is often cited as a most common problem.

Portfolio Management: This is the strategic allocation of resources that ensures innovation efforts advance the product innovation strategy. This is also the prioritization of projects in the pipeline to ensure that resources are being tactically deployed on the right projects for the right reasons. Some key challenges are: too many projects and not enough resources to get everything done, difficulty in deciding which projects to select (when evaluating multiple projects that are competing for the same resources), difficulty in optimizing the portfolio of projects (i.e. short-term versus long-term, high-risk versus low-risk), poor alignment on priorities, and resources that are simply stretched too thinly.

Idea-to-Launch Process: This is the roadmap or playbook that takes each project from idea to launch including all of the activities and decisions that must occur in order to be successful. Some key challenges are: not enough high quality ideas; not having a standard playbook that can be used repeatedly for projects; leadership that cannot articulate the importance of their idea-to-launch process; employees who have not received training or have not developed a knowledge foundational base on and around innovation best practices; not tailoring the development process to support the business strategy and project needs; being unable to say no to projects and/or the need to be realistic with actual time and resource expectations that otherwise lead to unrealistic speed-to-market pressures; expectations for resource commitments to work on projects that are not in the official process; too many minor projects that negatively impact the resources available for innovation projects; and the inability to yield effective decisions in a timely manner (i.e. everything is a high priority thus creating ‘gridlock’ which in turn results in significant delays). It is no wonder given the above why achieving and then sustaining success is so difficult for many companies.

Climate and Culture: This is ‘the way the organization works’: the typical behavior, norms, values and leadership style that enables or hinders product innovation performance. Some key challenges are: difficulty in striking a healthy balance between ‘discipline and focus’ and ‘flexibility and judgment’, driving projects to successful completion while managing cross-functional teams (i.e. shortage of trained project leaders, staff turnover, gaps in necessary skills, lack of training and/or experience), management of failure, and poor support from other parts of the organization. In other words, creating and supporting a climate and culture that supports innovation company-wide.

How is your organization performing at product innovation and how does it compare to other companies? Without clear metrics and a way to compare them it can be difficult to know whether you are doing good or bad at product innovation; whether your investment in R&D is producing the desired results, and what areas of your performance in and around the Innovation Performance Framework might need to be improved or strengthened. The good news is you can change, the question is do you want to?

Contributed by 

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How to grow a small business?

 

IT’S what everyone who’s ever wanted to start a business or already running one aspires to achieve - to grow big. But growing a small business is riddled with challenges.

The following, though not exhaustive, are some examples that will set you on the path to growing your still minuscule venture.

Technology

SMI Association of Malaysia president Teh Kee Sin acknowledges that technology adoption is often an issue for small companies.

“It’s always a challenge. They see technology adoption more as an expense rather than an investment. It’s something that they would rather avoid.

“But adopting technology into your business should not be seen as an immediate expense and rather, a long-term investment.”

Teh admits that one of the biggest nitpicks of small companies is the inability to secure financing to “move to the next level.”

“Many small firms complain that financial institutions demand a lot of unnecessary documents and information that is difficult to be fulfilled. So they get stuck and are not able to move forward.”

Teh says there needs to be more Government involvement so that support from financial institutions can be improved.

Branding

Branding Association of Malaysia (BAM) president Datuk Eric Chong says branding is extremely important for business organisations, regardless of the size of the organisation.

“Big and medium-sized businesses usually understand the importance of branding. They would not be where they are had they not understood and practised the art of branding along the way.

“Small businesses, however, usually struggle tremendously in this area. It is a chicken and egg situation for these small guys - should they make money and maximise profits first, or invest in their brands from day one?”

Chong adds that what a lot of small and medium-sized enterprise (SME) operators fail to understand is that branding isn’t just about spending money on advertising.

“While advertising is an essential part of branding, it takes much more than just splashing money around if one wishes to brand something properly. It is just like gardening - you need to sow the seeds and nurture the plants with consistency. A beautiful garden reflects the absolute commitment of the gardener; similarly, a good brand reflects the absolute commitment of the CEO and his team.

“It is about finding the right brand positioning, creating the right image, building a great brand culture, ensuring superb customer experience, communicate effectively with the market, etc. So is branding essential for SMEs? Yes, it lays the foundation and paves the way for a small entity to, someday, become a respectable player in the market.”

Talents

Leaderonomics chief executive officer Roshan Thiran notes that for many SMEs, leaders want growth but do not want to invest their time or energy to grow their people.

“This ultimately results in their company not growing either. Every company, even SMEs, are limited by the growth of their people. So, as long as your people are not learning and growing, don’t expect your organisation to grow exponentially either.

“As the business world changes, even small companies have become more attractive to young talents. Many start-ups can attract great talents in spite of their size or funds.”

Roshan says that many youths view working at start-ups more attractive than multinational companies.

“SMEs need to leverage this by their own personal inspirational leadership. People are attracted to work in an SME not because you pay well or have a big reputation.

“Instead, it is because of the leader. A great way to attract talent to your organisation is for the leaders and the leadership team to develop their own leadership skills. If you become an inspirational leader, the likelihood of you attracting talent rises significantly.”

Training

Peoplelogy group founder and chief executive officer Allen Lee says many small firms first complain that they have “no time” for training.

“Whenever they say they have no time, I always tell them to ‘make time lor.”

The next complaint, says Lee, is “what if I send them for training and they leave?”

“My response to them is always what if you don’t send them for training and they stay! If this is the case, how could these employees help small business to improve productivity and efficiency, cost savings and customer retention, for example? This also means that you will not have a chance to improve on your sales, cost efficiency, profitability and even your competitive edge.”

Lee believes most companies spend 60% to 70% of their money on people’s salary.

“And yet, they spend less than 1% of their total budget to develop the people. And most companies, in fact, spend more time and money on maintaining their buildings and equipment than they do on maintaining and developing people.

“If people get results, then it certainly makes good sense to invest in people. People are an asset to organisation anyway, regardless if it’s a big or small business.

Diversification

Established in 1974, PKT Logistics Group Sdn Bhd initially offered only customs brokerage services - but is now providing total logistics services.

PKT group chief executive and managing director Datuk Michael Tio believes that diversification was they key to how the company transformed itself into the total logistics provider it is today.

“As we started to diversify our services, our revenue grew. So the first step of growth was to continue to diversify services within the logistics industry by providing more services.

W started off as a custom agent, then subsequently expanded to freight forwarding, haulage, warehousing and so forth.”

Tio says the next step was to look for foreign partners to grow the business.“We found Japanese and Korean partners.

The Japanese provided us with a cushion during the currency crisis and the Korean partnership gave us entry into the automotive logistics sector.”

He adds that PKT started to observe how other multinational logistics companies expanded their revenue.

“We ended up competing with them in the fast moving consumer goods (FMCG) segment because 60% of the industry, or RM2bil, were controlled by them.

We had to overcome several challenges in order to compete with these companies, namely know-how, acquiring new technology, modern infrastructure and most importantly, moving up the value chain.”

  - Contributor: EUGENE MAHALINGAM  eugenicz@thestar.com.my

The mind-set: how the rich get richer, the poor get poorer? You need more money ...

The rich may get richer while the poor may get poorer, but it doesn't have to be that way. It requires a change of mind-set.

I ONCE overheard someone lament that “the rich get richer and the poor get poorer”, which made me think if indeed that statement is true.

The rich do get richer only because they have sound financial concepts required to stay rich. They focus on their net worth, working on their appreciating rather than depreciating assets.

They know how much is required to keep their lifestyle. They don’t necessarily need to be debt-free because they know what good leveraging can do to enhance their wealth. They employ financial strategies which are contrarian to common ones - taking on investment opportunities when others would stay away and having the purpose driven portfolios.

They consciously inject capital into their portfolios rather than on an ad hoc or timing basis. They know the impact of inflation on their money and insurance coverage because they review their financial life regularly. Their financial data is maintained and accessible anytime they want.

The poor do get poorer only because they continue to adopt a poverty mind-set. They focus on their expenses too much either being overly frugal or overly spendthrift.

Frugality means overprotective of your money which prevents risk-taking while overspending means financial leakages and unnecessary bad debts.

Their financial life has no planning and they have never taken a conscious effort to straighten it out. Their finances are all lumped into a “pot” which is meant to be used for everything.

They do invest but usually due to either lack of knowledge or fear of losing their capital, the amount is too small to be financially significant. Their insurance coverage depletes as medical costs rise, unsure what and for how much they are insured for.

It really doesn’t have to be this way. There is a way to change your financial situation. The first step is to decide to be financially responsible yourself. Acquire the right financial knowledge and make that change. Find a financial buddy to help you get started.

- Financial Snacks by Joyce Chuah, CEO of Success Concepts Life Planners

So you need more money ... 

The problem always starts when you owe more than what you can earn, financial experts say.

When it comes to money, Adrienne Wong (not her real name) believes she is a reasonable spender.

An assistant communications manager, Wong, 31, earns about RM8,000 a month, but says her debts take up a sizeable chunk of her monthly income.

The two biggest items in her list, her housing and car loans, amount to about RM3,000.

“My credit card bills usually come up to another RM1,000 plus, so that’s more than half of my salary gone. With utility bills, that’s another RM600. The rest goes into savings, pocket money for my parents and a bit of shopping.

“With property and car prices as high as they are now, it’s no wonder our loan amounts are so big. But what choice do we have?” Wong asks.

Indeed, the rising rate of household debts is a pressing concern – as of March, this year, the Malaysian household debt ratio against the GDP reached an all-time high of 83%.

Last week, Bank Negara Malaysia (BNM) announced a three-prong approach to curb the rising trend of household debts:

> Maximum tenure of property financing is now fixed at 35 years;

> Maximum tenure of personal loans is fixed at 10 years;

> Prohibition on the offering of pre-approved personal financing products.

BNM Governor Tan Sri Dr Zeti Akhtar Aziz had said that Malaysia currently has the highest household debt to GDP for a developing country in the region. In comparison, Thailand’s household debt ratio stands at 30%, Indonesia at 15.8%, Hong Kong at 58%, Taiwan at 82%, Japan at 75% and Singapore at 67%.

Countries that have higher household debt to GDP are the United States at 91.7%, United Kingdom at 114%, Australia at 113%, New Zealand at 91%, and South Korea at 91%.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng says BNM’s move is a “prudent one”.

“A financial crisis can always be traced back to excessive borrowing or leveraging, and the problem is that we never know we are in a credit bubble until that bubble bursts.

“The higher this figure is, the more vulnerable the household sector will be to economic shocks, which can come in the form of an economic downturn,” he says.

The concern, he says, is when people owe more than what they can earn, which is not sustainable.

According to BNM figures, the three biggest contributors to Malaysian household debt are the housing, car and personal loans (refer to chart).

Personal loans can be used for a variety of reasons.

Teacher Siti Norsharmi Fateh Mohamad, 28, says she took a RM35,000 personal loan three years ago to fund her wedding.

“We wanted our wedding to be special, with everything done up nicely. It didn’t feel like much then, but now that we have more commitments (a daughter and a housing loan), it’s definitely an additional burden for us.

“On hindsight, we shouldn’t have taken the personal loan ... it wasn’t a necessity,” she says.

But personal loans are popular lately and there’s a reason for it.

“Banks aggressively push personal loans because it’s one of the most profitable products for them. Interest rates for personal loans can be anywhere from 3% to 12%,” says a former local bank manager who declined to be named.

Spending trends have also changed, says Dr Yeah.

“Previously, people only spend what they can afford, but practices have changed. Today, many people don’t mind spending money they don’t have.

“Taking a personal loan is not necessarily a bad thing, but it depends on why you’re doing it. Taking a personal loan for education, for example, is fine, because you’re improving your skills ... or for medical purposes to enhance one’s health. But to take a loan for conspicuous consumption, or to make speculative ‘investments’... I think that should be discouraged,” he says.

Credit Counselling and Debt Management Agency (AKPK) chief executive officer Koid Swee Lian agrees.

“It is quite common now for people to take personal loans prior to a festivity because they want to buy new furniture, change their curtains, do a bit of renovation.

“Consumers must be discerning and responsible in their borrowings, just as credit providers must be responsible in their lending. Earn before you spend, not spend then earn! Use the debit card and not the credit card if you cannot pay in full each month,” she says.

Before taking a loan, Koid says consumers should ask themselves:

> Do you really need the personal loan?

> Is it for a productive purpose or can you forgo it?

> Can you afford to pay the loan instalments? If the interest rate increases, can you still pay the increased loan instalments?

> If the loan is for a productive purpose, would you generate enough income to repay the loan and leave some income for yourself?

If taking up a personal loan is absolutely necessary, Koid advises potential borrowers to do their homework and compare the different bank rates.

“Go to bankinginfo.com.my where you can make a comparison of all the rates. Don’t take a loan just because it’s offered. Also, understand what you’re signing up for. Find out whether the bank is charging you a flat rate, a reducing rate or a floating rate,” she says.

Koid gives an example of a loan with these terms – a RM10,000 loan to be paid over five years at 4% interest rate per annum.

“A flat rate of 4% for a five years may not sound like a lot, but what it actually means is that you’re essentially paying 20% interest for the five-year loan. The amount of interest you pay doesn’t change regardless of how much you’ve repaid,” she says.

“Compare this to a reducing rate. If you’ve paid RM1,000, that means the interest should only be on the remaining RM9,000.”

Those who have trouble managing their cashflow can also seek help at AKPK or call its toll-free line at 1800-88-2575.

“People who have a debt problem often feel very embarrassed, but I think they need to be realistic. You’re in that situation, you have to solve it. Come to us, we will do our best to help you,” Koid says.

BY LISA GOH  lisagoh@thestar.com.my

No time to be patient

Can we, Malaysians, not see the changes we so long for in our lifetime?

NELSON Mandela is dying. The world waits sombrely and respectfully for what seems to be inevitable. He has lived to a good age – he turns 95 on July 18 – and it is time to let him go. What’s more, this great man’s place in history is assured.

He is in the same league as Mahatma Gandhi and Abraham Lincoln, for what he did for his country.

Yet, I wonder: Mandela was in his Robben Island prison cell for 27 years. During that time, did he ever think he would not live to see the end of apartheid in his beloved South Africa. Perhaps he thought, “Not in my lifetime.”

“Not in my lifetime”, that’s what we say to denote the unlikelihood of something momentous or significant happening or coming to fruition within our life span.

I guess NIML (as those four words have been abbreviated in this Internet age) would have crossed the minds of cynics concerning the fight to end slavery or suffrage for women in centuries past.

“Freedom for slaves? Never, not in my lifetime?” “Vote for women? Balderdash! Surely not in my lifetime.”

In our more recent past, so many amazing things have changed or taken place that were thought quite impossible, at least NIML: The creation of the Pill that sparked the sexual revolution, men walking on the moon and the birth of the first test-tube baby.

I remember when “Made in Japan” was a byword for shoddily made products that didn’t last and China was an uptight communist state where its repressed people dressed in monochrome colours and were deprived of life’s little luxuries.

Today, Japanese-made products are synonymous with quality; Russia and China are practically unrecognisable from the USSR and China of, say, 1985.

So too South Korea, now east Asia’s poster nation. But it wasn’t too long ago it was under a repressive military dictatorship and it was only in May 1980 that the Gwangju Uprising began that nation’s transformation to liberal democracy.

Who would have thought back in the 1980s, that many Chinese nationals and Russians would become obscenely rich citizens living freely in various parts of the world; or that South Korea would rule with “soft” power through its pop culture.

Ironically, I found Korean music grating and unpleasant during the opening ceremony of the 1988 Seoul Olympic Games. Twenty-five years on, I can hum Arirang, Korea’s popular folk song, and have k-pop songs on my handphone, a Samsung Galaxy, of course.

All that in my lifetime. And I am not that old. Really.

Change is a constant throughout the ages but the current speed of it is what takes our breath away. We accept and even demand it when it involves technology, our devices and machines.

Japanese scientists are ready to send a talking robot called Kirobo into space that can communicate directly with astronauts on board the International Space Station.

Better still, researchers just announced that people with severe spinal cord injuries can walk again with ground-breaking stem cell therapy that regrows nerve fibres.

Dr Wise Young, chief executive officer of the China Spinal Cord Injury Network, was quoted as saying: “It’s the first time in human history that we can see the regeneration of the spinal cord.”

He further declared: “This will convince the doctors of the world that they do not need to tell patients ‘you will never walk again’.”

It is a pity quadriplegic Christopher Reeve, who will always be Superman to his fans, did not live to see it happen in his lifetime.

Yet, strangely enough, when it comes to change to create a better and safer society, change to weeding out corruption, change to needs-based policies, change to save our education system, change to end institutionalised racism, we seem willing to apply brakes and decelerate.

We tell ourselves, “slowly lah”, or “some things take time” and yes, even “not in our lifetime” because we believe the things we want changed are too entrenched or too rotten.

I refuse to accept that because, as I have repeatedly lamented, we don’t have the time to slow such things down. We need to change urgently and effectively or we will fall further behind other nations. What I think we need for effective change to happen is great statesmanship and selflessness from our leaders.

While Mandela is rightly honoured and revered, he could not have succeeded in ending apartheid without the support and courage of F.W. de Klerk, the now largely forgotten last white president of South Africa who freed Mandela.

Similarly, it was Mikhail Gorbachev, the last general secretary of the Soviet Union who brought political, social and economic reforms that ended both the USSR and the Cold War.

It is men in power like them who had the political will, the vision and steely courage to dismantle their untenable systems of government and set their nations on the path of a new future.

Do we have a de Klerk or Gorbachev among our leaders who will demolish race-based politics and policies, free our education system from politics and truly fight corruption and crime? A leader who will move our nation onto a new path of greatness by quickly harnessing all the talents that a multiracial Malaysia has to offer without fear or bias?

Can it happen in my lifetime? Since I have seen what was deemed impossible, NIML, the first black man elected US President, I want to believe the answer is yes, we can.

So Aunty, So What? By JUNE H.L. WONG

> The aunty likes this quote: Patience is good only when it is the shortest way to a good end; otherwise, impatience is better. Feedback: junewong@thestar.com.my or tweet @JuneHL­Wong

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Gen Y – they are different, deal with it

Understand them, get the best out of them rather than trying to remould them

SINCE I started the column about a year ago, I often get requests to write about the “younger” generation (Gen-Y).

They are also referred to as Millennias, those born from 1981-1991 (22-year-olds who are new graduates joining the workforce to those who are in the early 30s). Some famous people in this generation include Mark Zuckerberg and Lady Gaga.

There are many surveys to find out who they are, their characteristics and how to better manage them. There are many studies on them because they make up 25% of the world's population.

Retailers, computer and mobile phone companies, games and gadget producers would certainly like to know their tastes, habits, likes and dislikes. Financial institutions would like to know their spending patterns, propensity to save, online purchasing habits, among others.

At work, managers, senior managers and many of the older generation would like to know how to better relate and work with them.

The complaints my friends have about Gen-Y would be something like this:

They have hired a young graduate from a good school, the resume looked impressive, he is pleasant looking, dresses professionally and speaks quite well.

Six to eight months into work, and the guy seems to be always late for work, late for important meetings, appears distracted at work, cannot be reached (on handphone), leaves work at 6:30pm and complains he has no work-life balance, makes mistakes in documents and presentations to clients, goes to meeting unprepared the list goes on.

“When you give them feedback, they don't take it too well and may want to resign.

“They don't know what they don't know. They make mistakes and think they are right. They have unrealistic expectations and think they were unfairly treated.

“They are choosy about what they do. They want interesting and exciting work but cannot deliver. They don't take on much responsibilities but think they should be paid more”.

Someone asked me what they could do to change them. I thought it ought to be the other way around we need to change our ways, expectations and how we work with them.

The generation is a reflection of the society they have grown up in. They didn't cycle nor walked to school. They didn't grow up poor and deprived.

They grew up in a world of celebrities, designer goods, smart phones, computers and the Internet, 24/7 connectivity, iPod, Facebook, Youtube and addictive e-games (instead of games played in the field, rivers or jungle).

They are different in many ways. Accept it and deal with it.

We believe in doing one thing at a time and being focused. Are they distracted and cannot focus or are they good at multitasking?

At work, they listen to music, chat and surf all at the same time. When they are chatting, it is not with one person at a time but with half a dozen different chat groups (as opposed to a few individuals).

They move more they spin the pen when they are at their desk, they click the mouse and turn the pages faster. They have so many windows opened, they flip back and forth.

While they are eating, they surf, text, send pictures on Instagram, make Facebook posts, listen to music, tweet and have conversation with the person in front of them or maybe squeeze in a game at the same time. That is the way they are.

That means they can handle eight tasks while having a meal which equals to higher productivity.

Be sure to engage them with multi tasks and challenging tasks. Don't assume they ought to slowly learn the ropes like how it was 20 to 30 years ago when we were a new graduate. Take advantage of their savviness by having them set up tools, work on complex spread sheets and make searches, gather data or come up with ideas.

(There may be qualifications why you will not assign certain work to them. But if you don't and let them make the mistakes, they would miss the learning opportunity and become bored)

They are used to direct communications having grown up with emails, tweets, handphones, smses, messengers, facebook; they don't like the rigid hierarchy in the organisation or being limited by their position.

If they have something on their mind, they should be able to talk to or email someone higher in the organisation (regardless of level) rather than their immediate superior who don't seem to be able to help or understand.

This can be a positive. They are helping highlight stifling work environment that we have got used to and give meaning to better collaboration between different levels in the organisation. Their opinion counts. We need to get used to their feedback and having our views questioned.

Retention is an issue. They may move on for something more interesting or aspire to be entrepreneurs. How could they not when there are so many Internet multi-millionaires or those who became multi millionaires because they started a business or sold an application to Yahoo or Facebook.

They have been told by billionaires, actors and many successful personalities “not to settle”, they can do anything they set their mind to and should dare to fail.

Inspire them with the right ambitions at work. They are a group prepared to work hard if you can show how the hard work fuels that ambition. Spend time to understand their personal buyer values what they value most in their job and aspire for.

Every generation complains about the next generation. The new generation is somehow less respectful, less hardworking but somehow in time they will become responsible adults with major responsibilities at work and as parents.

The hippies from the 70s became responsible adults and CEOs.

Gen Y is our future. If you are at work or at home with them, spend more time with them. They will shape trends, politics, culture, our work place and many other aspects in the world.

If you experience pain and frustration trying to convince your young boss how things are done in the past, don't try too hard. Listen to his ideas and get used to his ways. You may find that you can still learn and develop.

They are different, they are here to stay. Get used to it... until Gen Z comes.

TAKE ON CHANGE By JOAN HOI  
 Joan Hoi is the author of Take on Change. We need to throw out some of our old selves to better appreciate this young, fun and bright group!

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Penang Sungai Nibong Express Bus Terminal management takeover postponed

Operator stopped paying rent as the council failed an implementing e-ticketing system

Disquiet in the air: A confrontation between Sungai Nibong Express Bus Terminal management staff and MPPP enforcement personnel at the main gate of the terminal in Sungai Nibong, Penang.

 

EFFORTS by the Penang Muni-cipal Council (MPPP) to take over the management of the Sungai Nibong Express Bus Ter-minal were halted following a three-hour confrontation with the current operator.

The council postponed its action to take vacant possession of the terminal following the resistance, and called off some 50 council enforcement personnel at the scene.

Several enforcement personnel had arrived there as early as 7.30am Tuesday.

Their arrival was anticipated by the operator Aspirasi Utara Engi-neering (AUE) and a few of its staff members and representatives confronted the MPPP personnel.

Their exchange heated up from around 8.30am, and the group steadily grew to about 50 MPPP enforcement personnel and 20 people from AUE about three hours later.

MPPP Valuation Department deputy director Mohamed Idrus Saleh then briefed the enforcement team that their operation was being postponed.

In a written statement issued to reporters at the scene, the council said it had terminated the appointment of AUE as the operator of the terminal effective June 30, 2012.

It also said that AUE had on July 24, 2012, obtained an ex-parte order from the High Court to pro- hibit MPPP from taking any enforcement action concerning the bus terminal.

“The High Court then on Dec 28, 2012, set aside the ex-parte order after dismissing AUE’s inter-parte application for an injunction.

“The court also dismissed AUE’s application (pending its appeal) for an Erinford injunction on the same day, and dismissed its application for stay of execution on Feb 22 this year,” read the statement.

It also stated that MPPP, as the local authority and owner of the bus terminal, wanted to take over the management of the terminal in the interests of the public and users.

AUE legal advisor Mohd Noor Sirajajudeen Mohd Abdul Kader said they resisted the operation by MPPP because the personnel had come without a court order.

“They just came and pasted the notice to take over the management on the window of our office here on Monday morning,” he said.

He added that MPPP’s action was not in accordance with the law.

Company director Mohd Faisal Sirashahabudeen Mohd Abdul Kader said MPPP’s attempt to take over the management and the termination notice were still subject matters in court.

“The issue is still in court and MPPP’s action is deemed a disrup-tion to the administration of justice and contempt of court,” Mohd Faisal said.

He then ordered the council personnel to leave the terminal within 45 minutes.

He said the company had been appointed by MPPP to be the operator since 2010 but stopped paying the monthly rental of RM22,500 in January 2012 as the council had failed to implement an e-ticketing system.

The terminal was built by the MPPP in 2004 and has 41 ticket counters, five stalls, a restaurant, a bakery, 10 parking spaces for buses and 12 route platforms

By WINNIE YEOH winnie@thestar.com.my Photos by ZHAFARAN NASIB

Footnote:

Penang Sungai Nibong Bus Terminal

Sungai Nibong Bus Terminal is the centralised long distance express bus terminal on Penang Island. It was opened in May 2005, before that long distance express bus runs from Komtar, Georgetown. Though most express bus companies have relocated their operation to Sungai Nibong bus terminal, even until today, there are still some express bus companies departing from Komtar, Georgetown. For these groups of buses, they depart from Komtar then go to Sungai Nibong to pick up another group of passengers before leaving the island for the destinations. This is especially convenient for tourist who usually spends time and stays hotel in Georgetown area.

Sungai Nibong bus terminal is located about mid-way between northern and southern end of Penang Island. It is near the famous Penang bridge about 20 minutes to the city centre. Many city bus coaches arrive and depart from this terminal. Please check MyRapid for Penang city bus network details.

How do get to Sungai Nibong Bus Terminal?

The best way to get to Sungai Nibong Bus Terminal are by taxis and city buses.

Taxi fare from Georgetown area to Sungai Nibong Bus Terminal is around RM 25-35, whereas the travelling time is about 15 minutes.

Bus fare is RM 2 from from Georgetown area to Sungai Nibong Bus Terminal, whereas the travelling time is about 20 minutes. Do prepare yourself earlier if you are rushing for bus, in case of heavy traffic and longer waiting time for the bus.

How do get to city, Georgetown, from Sungai Nibong Bus Terminal?

The best way to get to city from Sungai Nibong Bus Terminal are by taxis and city buses.

Taxi stand is just in front of the Sungai Nibong Bus Terminal.

As for city bus, you can easily find the it from the two bus stops at the Sungai Nibong Bus Terminal. One is located at the front entrance of the terminal (along Jalan Sultan Azlan Shah) and the other one is located at the side entrance of the terminal (along Jalan Sungai Dua, at the opposite site of the terminal for town direction).