EDUCATION MUST START FROM THE YOUNG AGE

I even hear it from radio, the advertisement from AKPK to ask those in debts & facing financial problem to see them for solution.

This is good to lend a hand on those in debts problem, find a workable solution for them.

But this is not the best approach, because there are already trapped by the 'DEBTS', they are in sickness already.

The best approach is to educate the financial planning skill from the young age. Just start the financial education from school level ( primary or secondary school).

A lot of social problems can be avoided if they have some 'FQ'!


THE STAR NEWS
1,600 turn to Bank Negara’s AKPK unit every month

By RASHVINJEET S. BEDI

KUALA LUMPUR: Every month, more than 1,600 individuals turn to the Credit Counselling and Debt Management Agency (AKPK) to help them overcome their financial difficulties.

The number seeking help monthly has tripled since the agency was set up 18 months.

Of the number that receives counselling, more than 25%, or 430 individuals, sign up for the Debt Management Programme, through which AKPK helps them renegotiate their loan repayment schemes with financial institutions.

AKPK chief executive Mohamed Akwal Sultan believes that more people are finding themselves in financial trouble because of poor financial knowledge.

“The sample size is small and may not be a true reflection of the nation’s problem. It is likely to be a much bigger problem,” said Akwal, adding that more people were seeking AKPK’s expertise.

AKPK is a wholly-owned subsidiary of Bank Negara that provides financial counselling and debt-management services to individuals at no cost.

Last year, 6,837 individuals sought help from the agency. This number almost tripled to 20,853 individuals up to October this year.

“Many people come to us when they are no longer able to manage their debts,” said Akwal.

Most of those who approach AKPK come from the Klang Valley and are in their 30s and 40s.

“At this age, the cost of living goes up generally because people have commitments such as family and housing payments,” said Akwal.

Other reasons contribute to their financial problems, the main causes being loss of control over the use of credit cards and poor financial planning (see chart).

As of September this year, the total household debts stood at RM351bil, with the ratio of non-performing-loans at 7%.

A non-performing loan (NPL) one that is in default or close to being in default. Many loans become non-performing after being in default for three months, although this can depend on the contract terms.

“At a single digit, the debt in Malaysia is still manageable,” said Akwal.

“The statistics show that our household indebtedness to the banking sector in Malaysia remains within prudent levels at 52.1% of the GDP,” he added.

Credit card debts alone stood at RM21.6bil, with non-payment of credit card loans amounting to RM591mil, or at an NPL ratio of 2.7%.

“If you look at (the NPL for) credit cards alone, the percentage is small. It’s not a big problem,” said Akwal.

It is for this reason that Akwal would like to promote the use of credit cards if given the opportunity.

“The credit card is like a kitchen knife. It has many uses but if you are not careful, you can cut yourself,” he said.

DR AZAM, 28, had it all: two flashy cars, a beautiful home and a flourishing career. He wore expensive clothes and lived extravagantly on credit.

He renovated his mother’s home and decorated it with expensive Italian furniture. He took a loan for the renovation and bought another house.

Without realising it, Dr Azam owed creditors RM400,000 in housing loans, hire-purchase loans and credit card debts.

Stuck, he approached the AKPK for help. Being single and with his mother being the only dependant, Dr Azam was advised to sell his house. He moved in with his mother and sold one of his cars.

In the end, Dr Azam was able to save 45% of his monthly loan payment.

BEFORE the economic crisis of 1997, Allen was a sales manager earning a five-figure monthly salary, living a comfortable life. However, the economic downturn forced his employers to shut down operations in Malaysia.

At 43, it was hard for him to find a new job. To complicate matters, his wife has a medical condition.

Allen turned to loans and credit cards to fund his lifestyle. Soon enough, creditors began hunting him and threatening bankruptcy.

Suicidal, Allen turned to odd jobs, making less than RM1,000 a month. He skipped meals to ensure his wife had something to eat.

His wife changed his mind about suicide and suggested that he seek the help of AKPK.

Allen had RM200,000 in his EPF, although he could only withdraw the money at 55.

With a debt of RM130,000, AKPK advised him to consider bankruptcy as an option, so that he would be able to settle all his debts when he turns 55.

CHINA LIFE - HK

大行推介 [昔日新聞]
野村：中壽過貴宜沽
業績無驚喜 增長放緩 2007年11月1日

【明報專訊】中國人壽(2628)最近按內地會計準則公布今年第3季度業績，純利達78億元(人民幣‧下同)，相當於06年全年純利的81%，每股盈利0.27元。但野村證券指出，有關業績與該行預期相若，並沒有帶來任何驚喜，相反保單失效率及保費增長有放緩舻象，令該行感到憂慮，加上中壽估值偏貴，因此野村仍維持中壽的減持評級，合理價為 44港元(建議時中壽做52港元)。

保單失效率增 保費僅升2%

中壽並沒有公布06年第3季度業績作比較，但 07年第3季度純利，已相當於06年全年純利81%。野村指出，中壽業績繼續受惠於強勁的A股市場表現，單是第3季A股指數已茘升45%，因此中壽季度投資收入多達240億元，相當於期內整體收入的40%，值得注意的是中壽的投資回報率，由今年上半年的5.7%，急增至第3季度的8.6%。

保單失效率方面，由06年全年的4.8%增至今年第3季的4.9%，野村認為可能由於愈來愈多保單持有人斷保，將資金轉投股市所致，這亦是內地保險業一個明顯趨勢。中壽並沒有公布保費的詳細資料，但按照中壽壽險總負債推算其保費變化情，野村則認為情令人憂慮，因為按此計算，保費增幅只有2%，是今年以來最低，今年首兩季增幅均維持3.5%，但野村也承認，這可能與季節性因素有關。

手持現金600億 苦無出路

野村亦留意到中壽資本水平極高，手持現金高逾600億元，公司有水浸之嫌，問題是該股如何有效運用該筆現金。

經調整中港兩地會計準則的差異後，野村估計，以本地會計準則計算的第3季度業績，應與該行預期相若，該行的預期亦是處於市場預期範圍的上限位置。按野村最新估計，中壽07年至09年純利分別為440億、383億及326億元。雖然中壽季度業績強勁，但野村基於估值偏高原因，維持中壽的減持評級及合理價44港元不變。

Bank of East Asia-HK

東亞回吐7.3％ 披露商討敏感交易
2007年12月8日

【明報專訊】近日消息多多的東亞銀行(0023)，過去7天隨覑大市升近三成後，昨日顯著回落，收市價較前日下滑7.3%，報53.9元。東亞昨日傍晚發表公告表示，不知悉導致價格下跌的任何原因，但透露該行「正與第三方商討構成或可能構成價格敏感資料的有關可能交易」。

東亞昨日以61元高開，但隨後回落並跌幅擴大，最後以53.9元接近全日低位收市。該行在公告中指：「董事會已知悉最近公司的股份的價格下跌，茲聲明本行並不知悉導致價格下跌的任何原因。本行謹確認，除本行正與第三方商討構成或可能構成價格敏感資料的有關可能交易外，目前並無任何有關收購或變賣的商談或協議……而須予公開者。」

中銀增持至今 升勢凌厲

東亞是近日升幅最凌厲的銀行股，上月28日至周四短短7個交易日，累積升幅達到27％，即使昨日顯著回落，股價仍然比上月底升近18％。該行上月中獲中銀香港(2388)以近40億元，每股51元代價，購入約7750萬股份，佔東亞已發行股份的4.94%。東亞主席李國寶其後表示，不排除中銀香港日後增持。

FOR LONG TERM INVESTOR, HONG KONG IS THE BEST MARKET !

China Shifts Policy To Choke Inflation

2007年12月07日11:36
The announcement by China's leadership of a tougher economic policy for 2008 shows a new consensus that more has to be done to address risks of inflation and overheating in the nation's fast-growing economy.

The new position, which formalizes a policy shift already under way over the past couple of months, was announced yesterday at the close of the annual Central Economic Work Conference chaired by President Hu Jintao.

The rise in inflation, which this year was running at 4.4% through October, has become a major concern of the leadership and has apparently trumped any worries about a slowdown in the world economy.

Although policy makers have been expressing concerns about rapid growth in bank lending and corporate investment for some time, inflation brought new worries of eroding living standards and increased social tensions.

China's inflation has so far been confined mostly to food prices, but it is a definite concern. In October, for example, cooking oil cost 34% more than a year earlier. Policy makers say their goal is to prevent such price increases from spreading throughout the economy.

In order to achieve that, a 'tight' monetary policy will be followed for 2008, a rare and significant change in the official stance. Since the middle of this year, officials had characterized China's monetary policy as 'stable-to-tight,' which itself was somewhat tougher language than the previous standard of a 'stable' monetary policy.

The new policy was announced by the central bank and the main economic-planning agency, the National Development and Reform Commission, two bodies sometimes seen to be at odds.

What form next year's tighter policy could take is uncertain, but more direct controls of bank lending seem certain to be part of the mix. In recent weeks, the central bank has been rolling out a tougher supervision system to try to ensure that commercial banks next year will adhere to often-ignored lending quotas.

If inflation doesn't retreat, some further interest-rate increases are also possible. The benchmark deposit rate, at 3.87%, is below the rate of inflation -- meaning households are effectively losing money on bank savings.

Analysts say measures taken this year have been moderate and have done relatively little to restrain economic activity. Five increases in interest rates have barely kept up with accelerating inflation, thus the cost of borrowing didn't rise, or even declined, in real terms.

The central bank has also periodically ordered commercial banks to keep more money on reserve. But such increases in the so-called reserve-requirement ratio just kept up with the flow of cash into the economy from the country's large trade surplus, and so haven't seriously restricted the funds available for lending.

Indeed, economic growth accelerated to 11.5% for the first three quarters of this year, from 11.1% in 2006, and its momentum is powerful. Most analysts expect only a very moderate slowdown next year, even taking into account the weakening U.S. economy and tighter domestic policy. The State Information Center, a Chinese government think tank, this week forecast economic growth of 10.8% for 2008.

Many economists also expect China to allow its currency to strengthen at a faster pace next year, in part because a stronger currency helps combat inflation by making imports cheaper. The yuan has risen about 5.5% against the U.S. dollar this year, but the effect of that gain has so far been limited because the dollar itself has been sharply declining against other currencies.

Andrew Batson