Vol 12, No 1 - Financial Planning Association of Malaysia

EDITORIALEditorial BoardDear Members,CFP MarkGaining MoreIndustry RecognitionRecently, on June 30, we held the graduation ceremony for the 2011 cohort of successful CertifiedFinancial Planner (CFP) candidates who, in addition to passing the stringent requirements of theexaminations, have also met the working experience requirement laid down by the FinancialPlanning Standards Board (FPSB). We want to take this opportunity to congratulate and warmlywelcome this batch of 192 CFP professionals into our folds.Personally and as a Board member, it was most heartening for me, as I mingled and chatted withmembers of the graduating class and hear them speak of the various reasons why they enrollfor the CFP programme, and the value that the CFP qualification brings to their personal andprofessional life.As I have mentioned during the ceremony, we look to them to carry on the proud traditionthat we have fostered – that they will always be guided by our code of ethics and professionalresponsibility, carry the CFP mark with pride and be willing to share their knowledge and giveback to society.Our heartiest congratulations also go to the prize winners for each of the six modules. You havedone well and we hope you will continue to excel in your career and profession.Later on the same morning, we held our 12th Annual General Meeting. We were happy to reportthat in terms of financial performance, we achieved a much higher surplus that the previous year.More importantly, we took time to share the various activities we had undertaken for the period,the recognition by regulators and industry bodies that we have gained and to recognise thepeople and organisations that have supported us in our work.We thanked all the retiring chapter chairpersons – Wee Hun Been (Sarawak), Poedjo Soesilotomo(Sabah), Yap Soon Hin (Penang) and Tan Kim Book (Malacca) – and their committees for their effortand contribution. We look forward to working with the incoming chapter chairpersons and theirmembers who will, no doubt, take their respective chapters to greater heights. We would also liketo thank one of our Board members, Raju Periasamy, a very strong advocate of the importance offinancial planning, who retired during the course of the term.Going forward, FPAM is looking into working closely with like-minded organisations in theindustry to promote the interests of the professionals in the retail segment of the financial servicesindustry as well as the consumers in this sector. In early September, for example, we plan to have aseminar that will focus on the Private Retirement Scheme that has been recently introduced in thiscountry. Unit trust and insurance consultants, financial planners and advisers and indeed thosein the banking industry with clients planning for retirement should find this seminar beneficial.PublisherFinancial Planning Association of MalaysiaChief Executive OfficerChan Chow HunEditorEdmond CheahManaging EditorSteven K C PohEditorial PanelTan Beng WahMaznita MokhtarK P Bose DasanAdvertisingCliff TanConsulting Produceri2Media Sdn Bhd (493346-K)Suite 10-01, 10th Floor, Block A,Damansara Intan,No.1, Jalan SS20/27,47400 Petaling Jaya,Selangor Darul Ehsan.PrinterPercetakan Skyline Sdn Bhd (135134-V)35 & 37 Jalan 12/32B,TSI Business Industrial Park,Batu 6 1/2, Off Jalan Kepong,52100 Kuala Lumpur.The 4E Journal is published quarterly by theFinancial Planning Association of Malaysia.Opinions and views expressed in the 4E Journalare solely the writers’ and do not necessarily reflectthose of the Financial Planning Association ofMalaysia. The publisher accepts no responsibilityfor unsolicited manuscripts, illustrations orphotographs. All manuscripts and enquiriesshould be addressed to:The Editor, 4E Journal,c/o Financial Planning Association of Malaysia,Unit 1109, Block A,Pusat Dagangan Phileo Damansara II,No.15, Jln 16/11, Off Jalan Damansara,46350 Petaling Jaya, Selangor.Phone: +60-3-7954 9500Fax: +60-3-7954 9400Before I end, I would like to share with members that from this year onwards, the 4E Journal will bepublished every half year instead of every quarter. Besides saving on the costs, we hoped that moretraffic will be driven to our website at www.fpam.org.my on which we will post all developmentsand news pertaining to the Association, its members and the industry. Rest assured, however, thatthe quality of the magazine and its contents will remain as enjoyable and as informative as before.Happy reading folks!Wong Boon Choy,Presidentpresident@fpam.org.mywww.fpam.org.my

INDUSTRYJanuary - June 2012Evaluating the Financial Planner:A Study of Gender and Task Complexity for MillennialsBy Scott D. Johnson, Ph.D., and Stephen J. Larson, Ph.D., CFP®Executive Summary• This paper is intended to helpfinancial planners build moreeffective relationships with clients• It examines instrumental andaffective cues, which aid clients inchoosing a financial planner• Instrumental cues focus primarily onobjectively verifiable measures suchas certification or advanced degrees• Affective cues focus on personalattributes of the planner such asfriendliness• This research suggests that theimportance of these cues dependson how complex the planning task isas well as the client’s gender• Specifically, the results suggestmillennials will place a higher valueon instrumental cues when theirneeds seem complex, but they willplace a higher value on affective cueswhen their needs seem less complex• Finally, female millennials generallyplace a higher value on affective cuesthan do malesFinancial planners increasingly recognisethe importance of building enduringrelationships with clients. Building asuccessful financial planning practicerequires that the planner move beyonda transactional orientation toward arelationship built on trust that cangrow over many years. In addition, it isimperative that the financial plannerrecognises that financial planning clientsmay value different characteristics of theplanner, which is a natural reflection ofboth situational and individual differencesbetween the potential clients.Why study millennials? Millennials,also referred to as Generation Y, thegeneration after Generation X, are thoseindividuals born during the 1980s and1990s. This generation, which has differentcharacteristics than any before it, will beconfronted with many financial decisions.Although much is written about youngpeople as a generalised group, there islittle information about their attitudesand impressions about financial planning.However, millennials are importantbecause they are the future clients offinancial planners. This generation is alsoentering a changing financial landscape.These young adults will face a world ofdefined-contribution plans, not definedbenefitplans, as they plan for retirement.In addition, millennials recognise thatSocial Security in its present form will likelynot be a major part of their retirementplans.Millennials are also different in other ways.The Pew Research Center found that: (1)83 percent sleep with their cell phone(2) females will have higher educationalattainment (3) they are less likely to bemarried at the same age level as any4 The 4E Journal

decades. Such a trend is indicative of theemerging information economy. In thiscontext, financial services and the growthof financial planning are an integralpart of the services economy. Full-timeemployment in professional and businessservices has increased 12.5 percentbetween 2002 and 2007 compared with anoverall increase in full-time employmentfor all industries of 5.2 percent (Bureau ofEconomic Analysis 2008).In the case of professional services, asubstantial level of expertise is neededto achieve proper certification andstanding in the field. Physicians, lawyers,accountants, dentists, and financialplanners are all part of this emerging setof professional knowledge workers.The gender of the potential client is another factor that may affect which characteristics are valued more highly thanothers in evaluating the financial planner.previous generation (4) they define theiruniqueness primarily through technologyuse compared to previous generations,(5) they text with their phones more thanthey talk on their phones, and (6) theyare very optimistic about their financialfutures (Taylor and Keeter 2010).As financial planners look to the future,an important question to consider ishow this new generation will makedecisions about selecting and evaluatingfinancial planners. Being optimistic abouttheir financial futures, millennials willbe seeking financial solutions. A betterunderstanding of how this emerginggeneration views financial planningdecisions will increase the ability offinancial planners to meet the needs ofthis new base of financial planning clients.One situational difference millennialclients may bring to the planner is that ofthe perceived complexity of the financialsituation. Some financial problems orsituations involving multiple decisionsmay appear quite complex to the client.Similarly, some problems or situationsmay seem relatively straightforward andsimple. In this research, we investigatedthe issue of whether the perceivedcomplexity by the client of the financialplanning mission may affect the perceivedimportance of various financial plannercharacteristics.The gender of the potential client isanother factor that may affect whichcharacteristics are valued more highlythan others in evaluating the financialplanner. Numerous studies havesuggested that gender can be a factor indecision-making. The growing numberof career-oriented women points to anincreasing need for financial planning forthem as they seek to build wealth andplan for retirement. This study evaluatesthe particular characteristics both malesand females value in the selection of afinancial planner.The characteristics on which potentialclients may evaluate financial plannersare divided into two types of cues:instrumental cues and affective cues.Instrumental cues focus primarily onobjectively verifiable measures thatrecognise the professional skills of theservice provider, such as certificationor advanced degrees. Affective cuestend to be related to impressions offriendliness and caring. Such cues aredecision aids consumers may find useful.In the case of professional services suchas financial planning, the dichotomy ofinstrumental cues and affective cuesis a common approach for consumersmaking judgments. In this study, thesetwo types of cues are used with regard tohow potential financial planning clientsjudge planners. Task complexity wasmanipulated to determine if the perceivedcomplexity of the situation can affectwhich evaluative cues are consideredmore important. We then conducted ananalysis to determine whether genderhas an impact on the type of cues judgedmore or less important in the selection ofa financial planner.The Growth in ServicesThe service sector in the economy hasgrown continuously over the past severalEvaluating Professional ServiceProvidersIn evaluating professional serviceproviders, cues are a common wayfor customers to make judgments. Inearly psychology literature, a cue isconsidered a perceptual stimulus thatdefines an attribute (Harper and Boring1948). In physical, or tangible, productssuch as automobiles or clothing, thecolor, size, shape, and durability areexamples of potentially useful cuesthat help individuals make evaluativejudgments. In the case of professionalservices, consumers are typically not wellinformed about how best to evaluateservice providers. Which cues, for example,would be the best indicators of a goodprofessional service provider?“As financial plannerslook to the future, animportant question toconsider is how thisnew generation willmake decisions aboutselecting and evaluatingfinancial planners.”The intangible nature of professionalservices makes evaluation of the serviceprovider inherently difficult for thepotential client. For example, a financialplanner who is caring and friendly may,because of these characteristics, beperceived in a positive light by potentialclients. However, it is quite conceivablethat this same service provider maynot necessarily have the best technicalbackground or training. Similarly, a verytechnically competent service providerThe 4E Journal 5

with extensive training and certificationsmay provide excellent financial advice.However, if this same highly competentindividual is perceived as lacking ininterpersonal skills, then potential clientsmay be unsure about an overall evaluationof the service provider.The real challenge for the potential clientof professional services is to make a gooddecision with limited information. Is sucha decision based on overt characteristicssuch as friendliness? Or is such a decisionbased primarily on technical training oracademic degrees? Research has shownthat people may use multiple cues tohelp guide decision-making. Varioustaxonomies have been identified toassess professional service providersincluding: competency versus kindness(Glassman and Glassman 1981), abilityversus personality (Swartz and Stephens1983), and instrumental versus affective(Ben-Sira 1976, 1980; Lovdal and Pearson1989; Duhan, Johnson, Wilcox, and Harrell1997). These cue options tend to be intwo distinct categories. Researchers havevariously called the technical skills cues“competency,” “ability,” and “instrumental.”Alternatively, the second set of cuesoften used to evaluate professionalservice providers tends to fall into thefriendliness area, which is called “kindness,”“personality,” or “affective.”The “instrumental” and “affective” cuesappear to have the most applicabilityto financial planning. In evaluatingprofessional service providers, it iscommon for clients to talk in terms ofthese two dimensions when discussingthe providers. A key question is how we“Financial plannersincreasingly recognisethe importance ofbuilding enduringrelationships with clients.”can better understand the circumstancesin which the potential clients ofprofessional service providers will useone cue set over another, instrumentalcues or affective cues? What situationwould cause one person to valuepersonality over specialised training orvice versa? Becuase professional servicesare inherently complex, this complexityis a useful starting point to more fullyunderstand clients’ perceptions.In the current study, the complexityof the financial planning decision wasmanipulated to offer some respondents amore complex financial planning decisionas the starting point to select a financialplanner. The other group of respondentsreceived a less complex situation in whichthey would need to select a financialplanner to help them with a financial plan.We hypothesised that individuals mayuse different cues in their selection of afinancial planner based in large part onthe complexity of their financial situation.Task ComplexityProfessional services such as financialplanning are inherently highly complexand highly divergent (Shostak 1987).Many different factors can enter intofinancial plans related to age, perceptionof risk, value of assets, scope of financialassets, tax implications, and so on.However, financial plans might best beconceptualised along a continuum oflow complexity to high complexity. Inorder to better understand the role oftask complexity in affecting how potentialclients would evaluate a financial planner,two different financial scenarios werecreated. A pre-test found that these twoscenarios produced significant differencesin perceived task complexity.Perceived task complexity generallyincreases when decision makers arefaced with numerous alternatives. Stateddifferently, the load of information isgreater in more complex scenarios (Payne1976). One study found that decisionmakers seek to reduce cognitive strainwhen confronted with complicated tasks(Bruner 1957). The use of cues in decisionmaking helps simplify the complexity ofthe task, which then reduces cognitivestrain.In this study, two different scenarioswere used to create a high-complexitysituation and a low-complexity situationwithin the context of a financial decision.These scenarios set the stage for helpingto identify which cues might be the mostvalued in a high-complexity setting andwhich cues might be the most valuedin a low-complexity setting. Sixty-threesurvey respondents were presented ahigh-complexity scenario and 63 differentsurvey respondents were presented alow-complexity scenario. The scenarioswere pre-tested and showed a significantperceived difference in complexity. Thescenarios presented to the respondentsare as follows:High-Complexity Decision Scenario, n = 63“Your grandfather just died and left youUS$1,000,000 in the form of life insuranceand pension benefits. This money hasbeen placed into two accounts yieldinglow rates of interest pegged to T-billrates. You would like to invest thesefunds at a higher rate for your retirement.In addition, your grandfather’s estateis valued at well over US$5,000,000, soestate taxes will be due, and the pensionplan funds will be subject to income tax.The executor of your grandfather’s estateadvises that severe penalties will arise ifthe appropriate taxes are not paid on time.You are aware that financial planners canbe helpful in such a situation, so you planto immediately seek one out.”Low-Complexity Decision Scenario, n = 63“Your grandfather just died and left you aUS$25,000 life insurance settlement. TheThe 4E Journal 7

insurance company placed this moneyinto an account yielding 2.5 percentinterest, and you can access these fundsat any time. You would like to invest thesefunds at a higher rate for your retirement.You are aware that financial planners canbe helpful in such a situation, so you planto seek one out.”Differences in the scenarios are as follows:• Size of the death benefit(US$1,000,000 versus US$25,000)• The number of accounts (two versusone)• The yield on these accounts (variableversus 2.5 percent fixed)• Tax issues (estate tax and income taxissues versus no tax issues)• Possibility of severe tax penalties(high-complexity scenario only)Sample of MillennialsA sample of young adults, often referred toas millennials, was selected for this study.Survey respondents were upper-levelbusiness students at a large Midwesternuniversity. Business graduates haverelatively high salaries upon graduationand are generally planning a career inbusiness. They are financially aware andrecognise the role of financial planningfor their futures. Majors among therespondents included: accounting,finance, marketing, management, andinternational business.FindingsTask complexity. In the survey, respondentswere asked to rate the importance ofvarious instrumental cues and affectivecues in the context of selecting a financialplanner. Table 1 lists the mean score foreach cue for the high-complexity scenarioand the low-complexity scenario. Thelower the mean score, the higher theperceived importance.The instrumental cue of “uses the latestfinancial techniques and models” wasperceived as more important in the highcomplexityscenario compared with thelow-complexity scenario. This findingis statistically significant (p = .041). Inaddition, the affective cue of “is friendlytoward you” was perceived as moreimportant by respondents given the lowcomplexityscenario than by respondentsgiven the high complexity scenario. Thisdifference is statistically significant (p =.014). Overall, it should be noted that theCFP® designation as an instrumental cuewas the most important cue for both thehigh-complexity scenario and for the lowcomplexityscenario. This finding supportsthe notion that a designation (e.g., CFP®)carries significant “clout” (Young 2007).In addition, instrumental cues may bemore highly valued in general whenthe potential client is faced with a morecomplex financial situation.Gender. The gender of the client mayalso be a critical factor when assessingthe importance of financial plannercharacteristics. The role of gender isTable 1: Perceptions of Financial Planner Characteristics:High and Low Complexity of Financial Planning ScenariosFinancial Planner CharacteristicsHigh-ComplexityFinancial Planning ScenarioLow-ComplexityFinancial Planning ScenarioCue TypeSignificanceLevelSample Size Mean Score* Sample Size Mean Score* (p-value)Holds theCertified Financial Planner (CFP®)designation631.428631.619Instrumental.170Has advanced training in aspecialised field631.539631.682Instrumental.306Uses the latest financial techniquesand models631.741632.079Instrumental.041**Puts you at ease632.015632.079Affective***.705Is caring632.047631.968Affective***.626Was trained at a recognised university632.158632.301Instrumental.431Is friendly towards you632.222631.825Affective***.014*** (response options: 1 = Extremely important; 2 = Important; 3 = Neither important nor important; 4 = Unimportant; 5 = Extremel unimportant)** indicates significance at < .05*** further analysis indicates a significant difference between males and females and females at the < .05 level.More specifically, female respondents considered affective cues significantly more important than males in the low-complexity scenario.There were no gender differences in the high-complexity scenario.8 The 4E JournalFemaleMaleSignificanceLevel

In considering these gender-relatedresults, financial planners should realisethat certain cues, instrumental andaffective, may be more important towomen than men. In the case of lowcomplexitytasks, affective cues aresignificantly more important to femalescompared with males. It may be helpfulfor financial planners to realise thatfemales may value advanced training,friendliness, and being put at ease morehighly than males. As financial plannersstrive to build more effective relationshipswith clients, they may appreciate thevalue of understanding how clients rankthe importance of these financial plannercharacteristics.Recommended Strategies forFinancial PlannersThe importance of successful clientrelationships is paramount for financialplanners who wish to be more than justorder-takers for customers. Buildingthese successful client relationshipsincludes paying close attention to howclients judge the importance of variousfinancial planner characteristics. Beloware recommended strategies financialplanners may strive for in order to helpthem attract and maintain a large andsatisfied millennial client base.1. Overall it seems imperative to realisethat different cues (or financialplanning characteristics) areimportant to existing and potentialclients. Task complexity and genderplay a role in what is perceived asimportant by the potential client.2. Financial planners should make sureclients are aware that they haveadvanced training in the field offinancial planning. Financial plannerswho do not possess this characteristicshould strongly consider attaining it.This instrumental characteristic is themost important to clients regardlessof gender or complexity of thefinancial planning task.3. Financial planners shouldcommunicate to clients that theyuse the latest financial techniquesand models, especially when clientsperceive that the complexity of theservices provided are high. Oneway to communicate this is for thefinancial planner to disclose thecontinuing education requirementsneeded to maintain licenses anddesignations.4. Affective cues, such as being friendlytoward the client, are important.Affective cues are apparently lessimportant when the perceivedcomplexity is high. However, in thecase of low-complexity tasks, femalesvalue affective cues more than malesdo. In scenarios of high-complexitytasks, clients are generally lessinterested in affective personal skills.5. Females tend to value a singleinstrumental cue (e.g., CFP®designation) and multiple affectivecues (e.g., “friendliness towardyou” and “puts you at ease”) morethan males do. Financial plannersshould be attentive to this whencommunicating with clients.Scott D. Johnson, Ph.D., is professor ofmarketing and dean of the College ofBusiness at Illinois State University. Hisresearch interests focus on complex decisionmaking in the context of professionalservices. He has published articles in theJournal of Financial Planning, Journal ofthe Academy of Marketing Science, andInternational Executive. He can be reachedat scott.johnson@illinoisstate.edu.Stephen J. Larson, Ph.D., CFP®, is associateprofessor of finance at Ramapo College ofNew Jersey. His research interests includemarket overreaction and issues relatingto financial planning. He has publishedarticles in the Journal of Financial Planning,Financial Review, and Global FinanceJournal. He can be reached at slarson1@ramapo.edu.ReferencesBen-Sira, Zeev. 1976. “The Function of theProfessional’s Affective Behavior in ClientSatisfaction: A Revised Approach to SocialInteraction Theory.” Journal of Health and SocialBehavior 17 (March): 3-11.Ben-Sira, Zeev. 1980. “Affective and InstrumentalComponents in the Physician-Patient Relationship:An Additional Dimension of Interaction Theory.”Journal of Health and Social Behavior 21 (June):170-180.Bruner, Jerome. 1957. “On Perceptual Readiness.”Psychological Review 64: 123-152.Bureau of Economic Analysis, U.S. Departmentof Commerce, Industry Economic Accounts.December 15, 2008. “Full-Time EquivalentEmployee by Industry,” http://www.bea.gov/industry.Carlson, Martha. 2009. “Women Leaders.”Leadership Excellence (January): 4.Duhan, Dale F., Scott D. Johnson, James B.Wilcox, and Gilbert D. Harrell. 1997. “Influenceson Consumer Use of Word-of-MouthRecommendation Sources.” Journal of the Academyof Marketing Science 24: 283-295.Endres, Megan L., S. Chowdhury, and IntakhabAlam. 2008. “Gender Effects on Bias in ComplexFinancial Decisions.” Journal of Managerial Issues20: 238-254.Glassman, Myron, and Nanci Glassman. 1981. “AMarketing Analysis of Physician Selection andPatient Satisfaction.” Journal of Health CareMarketing 1, 4 (Fall): 25-31.Goldsmith, Ronald E., and Elizabeth B. Goldsmith.2006. “The Effects of Education on GenderDifferences in Financial Knowledge.” Journal ofPersonal Finance 5, 2: 55-69.Harper, Robert S., and Edwin G. Boring. 1948. “Cues.”American Journal of Psychology 61: 119-123.Hira, T., and O. Mugenda. 2000. “GenderDifferences in Financial Perceptions, Behaviors,and Satisfaction.” Journal of Financial Planning 13:86-92.Lovdal, Lynn T., and Ron Pearson. 1989. “Wanted-Doctors Who Care.” Journal of Healthcare Marketing9: 37-42.Payne, John W. 1976. “Task Complexity andContingent Processing in Decision Making:An Information Search and Protocol Analysis.”Organizational Behavior and Human Performance16: 366-387.Shostack, Lynn G. 1987. “Service PositioningThrough Structural Change.” Journal of Marketing51 (January): 34-43.Swartz, Teresa A., and Nancy Stephens. 1983.“Marketing Professional Services: The Case of thePhysician.” Proceedings of the American Academyof Advertising, edited by Donald Jugenheimer.Lawrence, KS: American Academy of Advertising,78-82.Taylor, Paul, and Scott Keeter, eds. February 2010.“Millennials: A Portrait of Generation Next.” PewResearch Center, http://pewsocialtrends.org/files/2010/10/millennials-confident-connectedopen-to-change.pdf.Young, Lauren. 2007. “Financial Pedigrees-orBlarney? A Guide to Decoding the Dizzying Arrayof Acronyms on Your Adviser’s Business Card.”Business Week, February 26, 114.10 The 4E Journal

ISLAMIC FINANCEJanuary - June 2012By Dr Zurina ShafiiSAMI Halal Food Index:The New Syariah-CompliantAsset ClassIntroductionIslamic banking and finance has beengrowing steadily in many parts of theworld, especially in Asian countries suchas the Middle East, Malaysia, Indonesiaand Singapore where economic growthis also substantial. But markets such asBritain and Hong Kong are also aspiringto become leading Islamic finance players.In Malaysia, the market share of Islamicbanking assets of total banking industryhas grown from 6.9 percent in 2000 to22 percent in 2011. The contribution ofIslamic finance to the Malaysian economyhas also been growing significantly,accounting for 2.1 percent share in thecountry’s gross domestic product (GDP)in 2009, when compared to 0.3 percent in2000 [1].Alongside this development, the industryhas also witnessed significant growthof the halal industry. Despite beingconsidered a new growth area in theMalaysian manufacturing sector, the halalindustry is one of the fastest growingbusiness segments in the world today[2]. It is also an emerging market forcethat is attracting non-Muslims to thesector with its wholesome, hygienic andcontamination-free food productionpractices. Research by the World HalalForum Secretariat reveals that the globalvalue for the trade of halal food and nonfoodproducts is estimated at US$2.3trillion (excluding banking). The total valuecomprises of 67 percent (US$1.4 trillion) offood and beverages, US$506 billion frompharmaceuticals and US$230 billion fromcosmetics and pharmaceuticals [3].The launching ceremony of the SAMI Halal Food Index at the Sixth World Halal Forum with the Former Prime MinisterTun Abdullah Ahmad Badawi (third from left) and Global Head Islamic Finance and OIC Countries Rushdi Siddiqui(third from right).While both industries have shownencouraging growth over a short span oftime, is there potential for them workingtogether?Islamic finance meetshalal industryThe growth of the Islamic financial servicesindustry and halal product manufacturinghas traditionally been seen as mutuallyexclusive. They both have different set ofregulators dealing with their respectivemarkets. Probably, the closest thing thetwo industries share is the availabilityof syariah-compliant investmentopportunities in Bursa Malaysia throughits syariah-compliant securities, whichinclude the halal manufacturing sector inthe consumer goods section. The numberof this type of securities has reachednearly 90 percent of total securities tradedin Bursa Malaysia today.However, the market has not made fulluse of the growth of both sectors untilrecently (in April 2011), when a halalfood index was launched. The world’s firsthalal food index known as the SociallyAcceptable Market Investments (SAMI)Halal Food Index is expected to evenoutgrow the Dow Jones Islamic Index(DJII) in terms of size, branding and spinoffproducts.The SAMI Halal Food Index (seeaccompanying chart) has over 270 stocksin six sectors from 15 Organisation ofIslamic Cooperation (OIC) countries witha market capitalisation of US$114 billion.Ninety-five of these stocks are fromMalaysia. The biggest Malaysian stockson the SAMI Halal Food Index are SimeThe 4E Journal 11

Darby Bhd, Nestle (M) Bhd and GentingPlantations Bhd. Spearheading the SAMIHalal Food Index is Rushdi Siddiqi, whoalso championed the introduction of theDow Jones Islamic Index in 1999 [4].What SAMI Halal Food Index hasto offer to syariah-compliantportfoliosThe SAMI Halal Food Index is a non-cyclicalconsumer sector ‘barometer.’ Investors mayinclude in their portfolios the companiesin the index as a hedge against inflationand also to boost the performance of theirportfolios. And according to IdealRatings,a syariah-screening company, which alsocollaborated in the introduction of theindex, the SAMI Halal Food Index hasoutperformed several leading global foodindexes from March 2010 to March 2011by 20 percent in terms of performance.Source: SAMI Halal Food Index (Chart by DinarStandard)Credit: Shikoh, R. (2011), A Look at the first ever Halal Food Investable Index. Available online at: http://dinarstandard.com/finance/a-look-at-the-first-ever-Halal-food-investable-index/Quality syariah-compliant asset classes arehard to come by due to the new issuancesof syariah-compliant papers that are likelyto be held by Islamic funds, which in turn,create a liquidity problem for the syariahcompliantsecurities. This leaves investorswanting to invest in syariah-compliantassets that are left with limited choices ofhigh quality syariah-compliant papers. Butthe introduction of the SAMI Halal FoodIndex has provided investors with morehelp in terms of information acquisitionto research and perform fundamentalanalysis on these stocks. The availabilityof the SAMI Halal Food Index also comeswith many other perks such as databaseof companies that made up the index andmany other support systems for investorsand fund managers.Having halal food companies aggregatedas a syariah-compliant asset class movesthe value proposition of halal foodproduction. Previously, consumersprovide revenue to the firms producinghalal food, but they are now able todirectly invest in these companies orthrough the various funds associatedwith these companies. Also investing in asector familiar to them will make it easierfor them to understand the risk and returnprofiles of these securities.With the introduction of the SAMI HalalFood Index, investors are now able totrack and monitor their investment inthe companies that are listed on theindex more closely. If the investmentreturns from their portfolios in halal foodcompanies, beat the index, it means theirinvestment is doing well. Also, having theindex helps investors, fund managers andfinancial planners to benchmark theirportfolio returns to that of the index. Inaddition, having the SAMI Halal FoodIndex as a benchmark also helps thefund managers to tangibly compare theperformance of halal portfolios to it. Witha tangible benchmark, investors and fundmanagers as well as financial plannersare likely to agree on the baseline (thebenchmark) of reference. Lacking such anindex would create many opportunitiesfor debate on which investment risk andreturns characteristics they should referto, thus creating problems for portfoliomonitoring and rebalancing.The SAMI Halal Food Index will bethe ‘bridge builder’ for Islamic funds,exchange traded funds (ETFs) andsukuk issues as well as for global non-Islamic investors who are interested inthe emerging food sector markets, anon-cyclical and therefore lower risksector. Some spin-off effects from theintroduction of the SAMI Halal FoodIndex will include a series of newlyintroducedETFs for halal food groupsof shares which will suit investorswith various risk profiles. Initial public“With the introduction of the SAMI Halal Food Index,investors are now able to track and monitor theirinvestment in the companies that are listed on theindex more closely.“offering (IPO) opportunities are alsopossible. When this sector becomesmore acceptable to the investors, halalfood production companies may obtainfinancial injection from Islamic banks inthe form of mudharabah participations.That’s not all. The SAMI Halal Food Indexmight also kick off some sukuk issuancein the future. Shikoh, R. (2011) writesabout the two areas where sukuk can beutilised by halal food companies [5]. Forexample, a true asset backed financing;an Ijarah Sukuk could be issued to buildfactories producing halal food. Anotherinteresting opportunity is for the halalfood production companies whichinitially failed the debt screen test to issuesukuk to refinance their conventionaland balanced budget amendment (BBA)debt to become a shariah-compliantsecurities.Halal Traceability Processes inHalal Food ProductionRushdi Siddiqui, who introduced the SAMIHalal Food Index to the market, was rightwhen he lamented that halal is not justabout certification and that it involves thewhole production chain from farm to fork.Even when there is a big sell-off in themarkets, investors still need to consume.He foresees the SAMI Halal Food Indexwill become a globally recognised index,possibly even overshadowing the DJII,since investors are more likely to connectwith halal manufacturing as investorsare also consumers. Investors also havethe ‘duty’ to invest in these companies asit is important to sustain the halal foodproduction, for the maslahah of ummah.The 4E Journal 13

Hence, the producers’ ability to trace thebeginning-to-end processes will gain theconfidence of the consumers that thecomplete processes from the production,processing and distribution of theproducts are syariah-compliant. Basic halaltraceability provides further informationabout which halal standards have beenapplied, allowing the consumers toverify the halal claims and ensure thatthe products delivered to the customersare thoyyib (wholesome, healthy, safe,nutritious and of good quality).To date, there is no established frameworkavailable for the reference of halalfood producers as different companieshave different methods of measuringthe quality of their products. Whilestandards and guidelines such as theGood Manufacturing Practice (GMP),Hazard Analysis and Critical Control Points(HACCP) and Standards and IndustrialResearch Institute of Malaysia (SIRIM) areused to evaluate hygiene, safety, efficiencyand effectiveness of their operations, theoverall practice traceability carried out byproducers are still uncertain.There are seven elements required fortraceability in a company – labour/costreduction, competitive advantage, legislation,food safety, documentation of sustainability,chain communication, and certification [6].These elements reflect the management’sthorough adoption of the traceability systemin their production processes.The following is a case study which looksat the adoption of the forces of traceabilityin a listed halal food production companyin order to derive a higher level frameworkof halal traceability, which may becomea guide to other aspiring halal foodproduction companies.Adoption of the Seven Elementsof Traceability in a Halal FoodProduction CompanyIn this case study, a company listed on theMain Board of syariah-approved securitieson Bursa Malaysia was selected as thesubject. Data collected from the companywas selected for its practice of the sevenelements of traceability in order to identifythe company’s halal traceability systemin the production and managementprocesses. Investors and fund managerswill be able to learn the requirements forhalal traceability expected from a halal foodproduction company. This informationis also useful to perform non-financialfundamental analysis for companies thatare of interest to investors.CertificationAll of the company’s products werecertified halal, so consumers do not haveto worry about the cleanliness of thematerials or ingredients used. According tothe representative of the halal committee,the company would typically apply forhalal certification of their products threeto four times a year. These applicationsare for new products to be launched inaddition to the certification renewal ofexisting products. Before manufacturinga new product, the quality assurance(QA) department will send a list of newproducts with information such as theiringredients and their respective sourcesto the halal committee for approval. Thehalal committee will verify the halal statusof the ingredients with the MalaysiaDepartment of Islamic Development(JAKIM). The QA department will thenproceed with the production processesand at the same time the committeewill apply for the halal certification from“The producers’ abilityto trace the beginningto-endprocesses willgain the confidenceof the consumersthat the completeprocesses from theproduction, processingand distribution of theproducts are syariahcompliant.“JAKIM. Halal certification applicationusually takes about six months to approve.Food safetyFor safety and hygiene, the companyhas introduced the food safety policyto ensure that all the products achievecustomers’ satisfaction and confidence.The manufacturing and processing ofbakery and confectionary productswere also involved in the control of rawmaterials and production to ensure safetyfor consumption. The food safety policiesof this company include:1. A commitment to maintainingthe effectiveness of the FoodSafety Management System (ISO22000:2005) through the monitoringand reviewing of the actualperformance of established foodsafety objectives.2. Conformity to the legislation,regulation and relevant standardcodes related to food safety.14 The 4E Journal

Competitive advantageThe company also markets other importedproducts such as those from the UnitedArab Emirates (UAE) and other countries.Every year, two or three new products willbe introduced. This company also useshigh technology to manufacture theirproducts which saves on cost and time. Itsproducts are one of the popular brands ofbakery and confectionary in Singapore.Chain communicationAs producers and manufacturers,companies need to understand thatcustomers’ demands are always changing.As such, they should always seek feedbackfrom consumers to enhance and improvetheir product quality. They should alsofoster closer ties with authorities such asJAKIM, the Ministry of Health, UniversitiPutra Malaysia and other relevantinstitutions for guidance in halal issues.For example, if any halal-related issueshould arise, JAKIM would be able toadvise on the appropriate course of actionwhich would comply with the ethics andprocedures of the halal certification.Labour/cost reduction3. Continually improving the operationthrough the adoption of effectiveFood Safety Management System(ISO 22000:2005) requirement, whileat the same time incorporatingresearch and development.4. Being at the forefront of productinnovation and creativity to ensurefurther commitment to food safetywhile being result-oriented at alltimes.5. Keeping the policy at strategiclocations and having itcommunicated to all levels of thecompany.Additionally, employees are supervised byofficers during preparation and processingto ensure the safety and hygiene of theproducts. Since there is only one entranceto the factory, safety and hygiene of theemployees can be closely monitored wherethey are required to wash their hands beforeentering the factory. They also required towear special clothing with gloves.LegislationThe company conforms to theISO22000:2005 certification of the FoodSafety Management System assessed byBritain’s Lloyd’s Register Quality Assurancewhich enhances their processing qualityand hygiene standards. The company hasalso studied and is moving forward withthe practices of halal standards. It also usesHACCP and Malaysian Standard MS 1500:2004 Halal Food – production, preparation,handling and storage – general guidelinesfor its products and processes.Documentation sustainabilitySustainability in documentation is veryimportant in order to maintain thesystem at a high level of application. Thecompany uses a documentation systemduring processing and production whichis very systematic, which allows it toidentify the problems and its causes. Thissystem is also centralised, making it easierfor officers to control the system and keepimportant documents and information inthe system.While the company relies more onmachinery for production as opposed tohuman labour, which incurs a higher cost,the latter is still much needed at the end ofproduction. The use of machinery allowsoperations that require high temperatureor sterile environment, which may bedifficult with human labour. The companyuses a combination of sophisticatedEuropean and Japanese technology toensure the highest level of productionstandards is employed to deliver qualityproducts that meet or exceed thedemands of the market.Traceability helps a company save time andcost when identifying and solving an issue.While the cost of implementing traceabilityis significant, the cost of not having thesystem would be greater. Not having atraceable system could become an exportbarrier and a limit to market access. Today,traceability has already become a minimumcost of entry in international business.“While the cost of implementing traceabilityis significant, the cost of not having thesystem would be greater. Not having atraceable system could become an exportbarrier and a limit to market access.“The 4E Journal 15

Moving Forward: DevelopingHalal Traceability FrameworkThe syariah-compliant measures adoptedin the company showed the generationof a halal traceability framework from thecase study discussed. These measurescould be implemented by other halal foodproducers to maintain the halal integrity.The halal traceability system can bea device for communication alongthe supply chain. For a more efficientimplementation, the government shouldfacilitate the process of implementingtraceability in industries through JAKIM,the Ministry of International Trade andIndustry (MITI), Small and MediumIndustries Development Corporation(SMIDEC) and Malaysian IndustrialDevelopment Finance Bhd (MIDF). Thesegovernment agencies can provide a planor system of traceability for companiesto follow which will make application forhalal certification simpler, which in turnwould also encourage more companies toapply for the certification.With the adoption of the halal traceabilityframework, the relevant authorities couldguide the companies involved in the foodindustries to ensure that they meet syariahcomplianceand other requirementspertaining to safety and health. Theframework could be a guideline forauthorities to monitor halal productionissues such as ingredients, hygiene andtransportation. The authorities could alsoprovide a plan or system of traceability forcompanies to implement, which complieswith halal requirements.Still, the halal compliance mechanismsthat are currently used to ensure thelevel of syariah-compliance adherenceof the companies in the SAMI Halal FoodIndex are still inadequate. The SecuritiesCommission’s screening mechanisms arenot comprehensive enough to cater forthe halal industry’s needs which requirestrict adherence to halal certificationand halal standards for production,transportation, storage and more.A new administration is needed to includehalal traceability procedures and financialscreening to ensure full compliance tosyariah. The appropriate parties suchas World Halal Forum and InternationalHalal Integrity Alliance have taken theinitiative to work hand-in-hand withcompanies in the SAMI Halal Food Indexto develop appropriate halal complianceprocedures for the next phase of industrydevelopment. The halal complianceprocedures should consist of financialscreening mechanisms as well as thehalal traceability checklist as discussedabove. In addition, the procedures couldalso include an audit on disclosures suchas information on the halal committeeand the usual variables in corporatesocial responsibility reporting such asboard characteristics, audit committeecharacteristics and external auditorcharacteristics.“A new administration isneeded to include halaltraceability proceduresand financial screeningto ensure full complianceto syariah.”ConclusionThe marriage between the halal foodindustry and Islamic finance could bea happy one if both sectors view theopportunities seriously. Having halal foodcompanies’ shares as an asset class in one’sportfolio will help diversify the associatedinvestment risks, while at the same timeprovide, especially for Muslim investorswho need to invest in syariah-compliantventures, the opportunities to participate insocially responsible enterprises. There aremany challenges ahead for both industries.Of immediate concern are challenges thatare related to the preparation of regulatoryrequirements and compliance guidelinesthat are conducive for both investors andthe companies to have the confidencein doing business within the syariahcompliantenvironment.The author is the director of Islamic Financeand Wealth Management Institute (IFWMI),an institute established by Universiti SainsIslam Malaysia (USIM). IFWMI is a researchbasedcentre of excellence specialisingin Islamic financial planning, wealthmanagement and syariah auditing. Zurinateaches at the Faculty of Economics andMuamalat (FEM) in investment, syariah audit,accounting, takaful and other businessaccounting-Muamalatrelated subjects.References1. Zeti Akhtar Aziz. 2011. Governor’s Keynote Address at the Launching of IBFIM’s Islamic Finance Qualification Framework & Progression Route(IFQFPR): Talent Development in Islamic Finance over the Next Decade on December 14, 2011. Available online: http://www.bnm.gov.my/index.php?ch=9&pg=15&ac=4222. www.investpenang.gov.my/portal. Retrieved on July 15, 2011.3. The Halal Journal, July & August, 2010.4. http://www.meattradenewsdaily.co.uk/news/050411/malaysia_worlds_first_Halal_indexes_launched_at_world_Halal_forum_.aspx.Retrieved on July 15, 2011.5. Shikoh, R., 2011. A Look at the first ever Halal Food Investable Index. Available online: http://dinarstandard.com/finance/a-look-at-the-firstever-Halal-food-investable-index/6. Donnelly K., Olsen P., 2009. Harmonising methods for food traceability process mapping and cost/benefit calculations related toimplementation of electronic traceability systems. Workshop hosted by Nofima in Association with the TRACE project, February 25-26.16 The 4E Journal

INDUSTRYJanuary - June 2012The Rising Role of Financial PlannersThe second Islamic Financial Planning& Wealth Management Conference2012, which was jointly organisedby the Financial Planning Association ofMalaysia (FPAM) and Islamic Banking andFinance Institute Malaysia (IBFIM), washeld at Kuala Lumpur’s Hotel Istana onMay 22, 2012.The keynote address, ‘Building Block of aVibrant Wealth Management Industry,’ wasdelivered by Jamaluddin Nor Mohamed,Bursa Malaysia’s head of Islamic andalternative markets.According to Jamaluddin, the Islamicwealth management industry is growingrapidly, underpinned by strong demandfrom both Muslim and non-Musliminvestors. The growing Muslim populationin the country also serves as a ready marketfor Syariah-compliant financial products.Such circumstances, he said, augurs wellfor the growth of the Malaysian financialplanning industry.The first panel discussion in session.IBFIM Chief Executive Officer Datuk Dr Adnan Alias, Bursa Malaysia’s head of Islamic and alternative marketsJamaluddin Nor Muhammad and FPAM President Wong Boon Choy President FPAM, shortly after the address.“The government considers the financialplanning industry to be of substantialimportance in developing a full valuechain of capital market intermediationservices to meet the future financial needsof Malaysian investors,” he pointed out. “Awell-developed and thriving financialplanning industry is critical to ensure thatMalaysians have access to high valueaddedservices provided by well-trainedfinancial planners.“Financial planners will help mobilise thecountry’s financial resources to generategrowth and further develop our financialsystem. It involves actively engagingindividuals within our community toparticipate more fully in the economy aswell as reaching out to the marginalisedcommunity and bringing them into themainstream financial system.“Being independent from any productprovider or manufacturer, financialplanners are indeed in a uniqueposition to consult the best deal fortheir customers,” Jamaluddin added.“But what’s more crucial is their role ininforming the public about the truecapabilities of Islamic financial solutionsas a viable alternative in reaching theirfinancial goals.”The 4E Journal 17

INDUSTRYJanuary - June 2012Certified Membership Sees HikeThe Financial Planning Associationof Malaysia (FPAM)’s 12th annualgeneral meeting (AGM) was heldon June 30, 2012 at Dewan Berjaya, BukitKiara Equestrian & Country Resort. As itwas not an election year (for FPAM), theatmosphere was somewhat easy-goingwith only agenda matters to deal with.In his speech, FPAM president WongBoon Choy highlighted that the certifiedmembership has increased from 2,300in the previous year to 2,580 individuals,a hike of 12 percent. Meanwhile, thenumber of individual members whohave or are currently undertaking FPAM’sprogrammes have also increased by 659or 7 percent, from 8,857 to 9,516.Wong also said the Financial PlanningStandards Board (FPSB) has recentlyrecommended that a degree is nowa requirement for Certified FinancialPlanner (CFP) certification. It however,recognises that this is not always possibleimmediately and has allowed for a periodfor gradual conformity.FPAM has decided that by 2014, theCFP qualification will have a degreerequirement. “This will allow the currentbatch to proceed with their studiesto completion,” Wong pointed out. Inthe meantime, we have also beengradually revising our syllabus inline with industry requirements anddevelopments as well as based onthe findings of the international jobanalysis survey we undertook jointlywith FPSB in the previous year.”Also, in the year under review, Wongsaid FPAM signed a memorandumof understanding (MOU) with theFinancial Planning Association ofSingapore (FPAS) for a cross borderrecognition of the Malaysian CFP mark.Under this MOU, members interestedin registering with FPAS or FPAM asthe case may be, need to only attenda special one-day session to familiarisethemselves with the respectivecountry’s regulations and requirements.Wong also welcomed three newmembers – Datuk Sulaiman MohdTahir, charter member representativefrom CIMB Bank as well as Mikhail Rajis from Bernama and Say Sok Kwan, thehead of the School of Business at TunkuAbdul Rahman College – to the FPAMBoard of Governors.Summary of Excellence andMerit Award Winner for 2011Excellence Awards for June 2011StudentModule 1Module 2Module 3Module 4Module 5Module 6Module 6Module 1Module 2Module 3Module 4Module 5Lai Soon ChongOoi Chye HuatTeo Say YahLiew Yeong LenColm Stephen MulhollandChin Lee KimMai Farah Zaiti Meor Chek HussienExcellence Awards for December 2011StudentModule 5Lee Bee SuatTan Bee KeowColm Stephen MulhollandKoay Kai ChongTay Geok EngMerit Awards for December 2011StudentCheah Ai Ling18 The 4E Journal

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COVER STORYJanuary - June 2012Establishingthe RightFundamentalsDatuk Sulaiman Mohd Tahir is a very busy man. For that matter, all bankers are. So when the 4E Journalrequested for an interview with him recently, the big challenge was to pin down a suitable date. But hispunishing schedule was just too relentless.Teluk Intan-born Sulaiman is the head of CIMB Bank Bhd’s consumer sales and distribution (CSD) division, aposition he held since July 2005. And as head of CSD, he is responsible for the everyday running of the bank’ssales and distribution channels encompassing 324 branches, 37 mobile sales centres, a contact centre and over8,100 staff which service the bank’s 6.4 million customers.That’s not all.20 The 4E Journal

He is also confronted by thedaily pressures from the financialmarkets, and the health of theeconomies in which CIMB operate.But Sulaiman, an RMIT Universitytrainedaccountant, knows wellthat the change that is highlylikely to redefine retail bankingwill ultimately come from thebank’s customers. And customers’expectations are rapidly changing.Keeping track of these changes andresponding to them accordingly arecritical to ensure the sustainabilityof the bank in the long-term.Already, it is increasingly becomingharder and harder for banks todifferentiate themselves fromtheir competitors based onattributes such as value-for-moneyproducts, real-time assistance,trustworthiness, omnipresence(with automated teller machinesand nationwide branches) andmulti-channel customer experience.They now need to create morecompelling reasons for theircustomers to choose them overtheir competitors.In the 21st Century bankingenvironment, it is also becomingincreasingly evident that banks areless bothered by the number ofcustomers banking with them, andmore concerned about the share oftheir customers’ wallet they alreadyhave – in other words, sellingdeeper to their existing customersand keeping them for the long-term.Also, to differentiate themselves,banks are now seen delivering easeof interaction, ease of access andsecurity. A lot of attention is given tocustomer relationship management,priority banking and fulfillment ofinteractions with customers.How is CIMB Bank differentiatingitself under these conditions? To getthe answers straight from the horse’smouth, the managing editor of the4E Journal, Steven K C Poh emailedSulaiman a list of questions whichhe graciously and thoughtfullyanswered and emailed back. Theseasoned banker with over 25 yearsof experience in consumer andcommercial banking, provided a noholds-barredresponse. Read on andfind out what he has to say abouthow financial planning fit into themodern banking environment.“I believe the industry must first come together andagree on the basic fundamentals, and from there,create a cohesive approach to develop the industryand profession.”As a retail bank, how are youpositioning the bank (CIMB Bank) toparticipate in the financial planningindustry in Malaysia per se?CIMB has always been a strong advocateof financial planning. In fact, I believeCIMB is among the pioneering localbank that recognised the importance offinancial planning and its impact on ourcustomers.In the past 10 to 15 years, the country hasexperienced phenomenal growth andwith this growth, we see the creation ofa society which is more conscious abouttheir wealth and people entrusted tomanage their wealth.We are currently seeing a trend wheremany Malaysians do not just wantfinancial products, loans or bankingservices from the banks. They expect morefrom their personal bankers – customersexpect their personal bankers to providestrong and credible advice on how theycan grow and safeguard their wealth. Inother words, they are looking for advisoryservices from their bankers and eventuallythis will lead to discretionary mandates,where we are expected to provide a setreturn for their investments.Therefore, we have ensured that ourbranches have the necessary resources toprovide financial planning and advisoryservices especially at our CIMB BankPreferred centres for our mass affluentclients. We are changing the mindsetof the bank as a whole – to go beyondjust selling a financial product. We aregearing our people towards becomingknowledgeable and trustworthy financialplanning advisers that our customers candepend on.As of now, we are on track to achieve ourgoals.Do you see financial planning as anintegral part of the bank’s overallbusiness strategy moving forward?Why? Or why not?Financial planning is definitely on ourpriority list. In fact, we are fast moving ourpeople from being just product-centricsales advisers to providing advisoryservices which is what customers demand,across all segments.We arm our staff with the necessaryknowledge required, put them intocomprehensive training programmes, getSulaiman: Only when you see customers from a bird’s-eye view will you be able to providethe best advisory services possible to them.The 4E Journal 21

them to be certified and added our ownexperts to support them. We also builtsystems and information technology (IT)infrastructure which will assist them tolook at a particular customer in a moreholistic manner. Only when you seecustomers from a bird’s-eye view willyou be able to provide the best advisoryservices possible to them.In your opinion, what are some of thehurdles faced by financial planning(as an industry) in Malaysia and whatcan be done to effectively move theprofession and industry forward?Who do you think would be the primemovers?As I see it, the industry seems disjointedwith different umbrella bodies trying tostake their claims on the industry. I believethe industry must first come together andagree on the basic fundamentals, andfrom there, create a cohesive approachto develop the industry and profession.They could look into creating industrywideaccepted practices, businessoutlook which dictates the professionand standardised certifications for thoseinvolved in the profession. That wouldbring great benefits to the industry andconsumer.As a market leader in financial planningindustry, the Financial PlanningAssociation of Malaysia (FPAM) is in theposition to drive the change necessary inthe industry.From your vantage point and expertopinion, what do you think wouldbe the ingredients needed for theMalaysian financial planning industryto move forward from where it is now?What role do you see CIMB playing inthis endeavour?As mentioned, we need to relook anddevelop the correct fundamentals for theindustry. Only when such cohesivenessexists can we then see significant changesin the industry in the future. CIMB supportsany move which can uplift the industry andprovide fringe benefits to Malaysians.At the bank, we are already conductingspecific seminars across the country toadvise our customers on the investmentopportunities available and we get expertsto talk on local and global influences.We believe we can assist customers byproviding them perspectives on thesituation around the world for them tomake sound investment decisions.“With the nation’s progress, consumers willdemand for professional financial planningbodies and personnel.“Sulaiman: We need everybody in the industry to agree on common goals.Are you happy with the state of theMalaysian financial planning industryto date? If yes, why? If no, why?I am satisfied, but there is certainly roomfor further improvement. The industry, Ibelieve, has achieved many milestonesand it is still developing. We have yetto reach the levels seen in the moredeveloped countries like Singapore andHong Kong, where financial planning isnot a luxury but a requirement. I believewe will reach that mature stage as thecountry continues to develop. With thenation’s progress, consumers will demandfor professional financial planning bodies22 The 4E Journal

Sulaiman: We have our relationship managers dedicated to servicing our customers in a manner which differs from our competitors.and personnel. The industry needs toprepare itself from now or risk being leftbehind.After more than a decade on Malaysianshores, financial planning as anindustry, seems to have stagnatedsomewhat. What in your opinion arethe contributing factors to this sadstate of affairs and what do you thinkshould be done to change this?I would not say it has stagnated. It haspockets of achievements. I see the successand excitement in CIMB Bank and the waywe approach our customers as financialplanning partners. The customersappreciate the advices given.However, what is important is how wedevelop the industry further. It seems“We look atour goals andcreate theenvironmentswhich willcreate thedesiredbehaviour.“like we have not truly developed therequired blueprints to move forward. Weneed everybody in the industry to agreeon common goals. We can’t have onepart of the industry running a marathonand another doing a 100-metre sprint.Somebody must provide that visionarytranslation for the industry and it must bea common vision and I believe FPAM canplay a strategic and lead role in this regard.How are the products and services ofCIMB Bank unique when comparedwith its competitors? How do youdifferentiate them in the marketplace?We always build our products and servicesaround our customers. We want them tosee the uniqueness of CIMB, not just fromthe products that we can offer, but as atotal proposition – product, services, andadvisory expertise. That is why we haveour relationship managers dedicatedto servicing our customers in a mannerwhich differs from our competitors.If you look at the market today, most banks’products are almost identical. If you createa good product today, somebody else maycopy it tomorrow and offer better featuressuch as pricing. They are no copyright lawsprotecting financial products. But whatwill put us in the hearts of our customers,I believe, is our holistic approach. Weleave no stones unturned and to this end,we have invested significant resourceson financial tools such as our 1View, awindow to view customer in totality andother IT infrastructure.In addition, we are cognisant of theneed to hire the best talents to drive ourbusiness forward. A recentindependent market surveyhas already put CIMB wellabove other local banks interms of service quality andwe will continue to build onthis foundation.How does CIMB Bankcompete in an increasinglyglobalised and liberalisedmarket environment? Whatare some of the initiativesthat you have put in placeto ensure that the banksucceeds in its mission?The 4E Journal 23

Competition is good for the industry asit keeps all the players on their toes andin the end, the customers benefit. AtCIMB, we always try to create a niche,be first in the market and continue todeliver services of the highest standard orcomparable to global standards.“Competition is good for the industry as it keepsall the players on their toes and in the end, thecustomers benefit.“We continue to invest in our humanresources, the people’s knowledge andputting the right supporting infrastructurefor them to excel in their work. We look atour goals and create the environmentswhich will create the desired behaviour.And we are constantly evolving with thedemands and market outlook. Being agileis one of our strengths and I believe wewill continue to be agile going forward aswell as evolve with time and the rapidlychanging market conditions.The CIMB Group purchased the Asianinvestment banking business of theRoyal Bank of Scotland (RBS), includingthe RBS franchise in Australia earlierthis year. What is the strategic intentof this initiative and how would thisexercise dovetail into the bank’s overallbusiness approach?The intent is very clear. The acquisitionof RBS’ investment banking and cashequities businesses in Asia Pacific willtransform CIMB Investment Bank into aformidable force in Asia Pacific (ex-Japan)capital markets.Additionally, a top-tier internationalinvestment banking is an importantextension to CIMB Group’s ASEANuniversal banking platform. With CIMB’sexpanded investment banking franchise,it will enable CIMB to assist investors andbusinesses who want to move in and outof ASEAN or across Asia Pacific as a whole.The deal brings significant potentialsynergies in ASEAN. RBS had built highcalibreteams in corporate finance, sectorspecialists and equities that can be drawnon to strengthen CIMB’s value propositionfor its ASEAN clients. Similarly, CIMB isnow extremely well-positioned to advisecorporations on flows of investmentsbetween ASEAN and the rest of Asia.Our vision statement and strategy havealways acknowledged the importance ofcomplementing our ASEAN platform withcapabilities in markets with significanttrade and investment flows with ASEAN. Forexample, we had already been building upour investment banking presence in China,India and Sri Lanka as well as our equitiessales teams in London and New York, andbegun accessing the Taiwan, South Koreaand Australian stock markets throughpartnerships with local brokerages.CIMB Bank’s regional foray (intoSingapore, Indonesia, Cambodia,Thailand, China and the U.S.) is clearlya statement of intent for greater thingsto come on the global scene. Howwill financial planning feature (viaCIMB Bank) in each of these marketsconsidering that a few of them (like theU.S., Singapore, Indonesia, Thailandand China) are also members of theFinancial Planning Standards Board(FPSB)?Sulaiman: We are not overly caught up on just achieving growth, but more importantly, being a responsible lender.We must remember that each country isat different stages of maturity. Singapore,for example, is at an advanced marketstage, if one were to compare it withCambodia. As financial planning in mostcases correlates directly with the wealthcreation of a nation and its people, CIMB’sadvantage is regional sharing of expertise.Being a regional entity, we can take24 The 4E Journal

the best practices from our presence inSingapore and adjust it here in Malaysia ordrive the same practices to a country likeCambodia where we have seven branches.Regional sharing and drawing on regionalsynergies have been one of the key areasof CIMB’s regional franchise. For example,we were already implementing theinvestors protection guidelines practisedin Singapore for our structured productsbusiness in Malaysia as we believe thatsuch standards will eventually becomerequirements here. So when changeshappen, we are able to adapt faster thanour competitors.The national household debt currentlystands at approximately 76 percentof the national gross domesticproduct (GDP). If not for anythingelse, this alarming figure shows a lackof financial planning on the part ofMalaysian households. Would CIMBBank be able to address this glaringnational problem through a financialliteracy programme (via the CIMBFoundation) much like the recenteffort to increase the community’sEnglish proficiency?We support Bank Negara Malaysia’sinitiatives to rein in household lending.This includes adhering closely tothe Responsible Lending Guidelines.Based on recent data, it seems that theinitiatives have already delivered positiveresults.On CIMB’s part, we are and have alwaysbeen stringent in our lending policies. Weare not overly caught up on just achievinggrowth, but more importantly, being aresponsible lender.Banks have a huge responsibility towardstheir customers and stakeholders. Interms of educating the customers, wedo have programmes to inform thepublic on how best to manage theirfinances. Our personal financial advisersalways strive to provide sound advice topotential borrowers on risks such as theconsequences in changes of rates, andother factors. We have also introducedinnovative and well-targeted productsSulaiman: Banks have a huge responsibility towards their customers and stakeholders.like Junior savings to help inculcate thesavings habit from a very young age. Thisshould bode well for the developmentof a more informed and well balancedsociety as far as banking is concerned.Problem with credit cards have oftenbeen cited for personal bankruptciesand a host of other personal financialills. Considering consumer banking isa huge part of CIMB Bank’s businessand credit cards are an integral part ofthat business, what is the bank doingin terms of consumer education, toeducate its customers on this (how towisely use the credit card)?It is indeed a serious issue and BankNegara is addressing the situation withnew guidelines on issuance of credit cardsespecially to the low-income earners.Again, this is about an individual’sdiscipline. The public must understandthat when they borrow, they have topay back the loan. They need to alsounderstand their own financial capacityand perform self-checks on their ability torepay their obligations.At CIMB, we have very stringent approvingcriteria in place for our applicants. Webelieve that in this way, we are also doinga favour to those who we are capablefinancially to service their credit card debt.Considering one of the main focus ofCIMB Group’s Community Link projectsis education, has CIMB Bank considerpersonal financial planning educationfor its customers? If yes, how is CIMBBank doing this? If no, why not?Community Link has always beensynonym with CIMB Bank. We havereceived recognition at the national levelfor our work with the community. In fact,we have done over 700 projects since2007 with funding over RM29 million.We will certainly consider expandingfinancial planning education as one ofthe agenda.“We are not overly caught up on just achievinggrowth, but more importantly, being aresponsible lender. “As mentioned earlier, we do have a seriesof workshops and expert talks across theregion and we will continue to do that.We may also integrate financial planningas a component in all our communityprogrammes. At the same time, wewill work with any interested parties toensure the message on the importanceof financial planning gets across on abroader base manner.The 4E Journal 25

INDUSTRYJanuary - June 2012By Linnet Lee, CFP, IFPEverybody Will RetireSometime … So Get Ready!Just the other day, I was having a cupof tea with a friend. He was tellingme about his work when I said to him,“Hey, I thought you retired. Why are youstill talking about work?”He facetiously responded with a chuckleand said, “No, I was never tired to beginwith, and I don’t intend to be tired againjust so that I can be re-tired.”Sometimes viewed as a new beginningin life, retirement is multi-faceted. Thereare those who spend their retirementbackpacking and traveling around theworld by taking advantage of the variouspromotions offered by airlines for offpeakseasons every now and then. Somechoose to go on gustatory adventureswith their friends to different states for thedelectable delights that each locality hasto offer. And there are some who do nottruly retire at all. They continuously toilaway at work to make ends meet due totheir commitments, which extend beyondtheir retirement age.Whatever our lifestyle we have today,retirement is imminent. And with today’ssoaring inflation and financial distractions,planning for retirement has become morecritical than ever.and what more in the face of rising costof goods and services?Remember that most of the government’sexpenses are paid using its taxpayers’money.While it is common for the man-on-thestreetto believe that having a socialsecurity plan suffice for his retirement, isthis really enough? It depends really …on several factors which are listed below,which are not exhaustive:1. What type of retirement lifestyle doyou want?2. How much are you saving for yourretirement plan?3. How many dependents do you haveliving off your retirement income?4. What is your inflation rate duringyour retirement?5. Any debts that you need to carry intoyour retirement?6. Wear and tear of your assets and theirreplacement.7. Medical and health care for yourselfand your dependents.Banks and financial product companieshave provided various types ofretirement calculators, most of whichare available online at their respectivewebsites that could help you determineif what you have is sufficient to sustainyou through your retirement. While theymay give you a rough idea of what toexpect, the results may not be accurateas they generally are based on the basicinformation keyed in by the user in thecalculation template. It should only beused as an indicative guide.For a more comprehensive estimate, youmay want to engage the services of afinancial planner to help you crunch somenumbers and provide you with a moreholistic analysis of your financial situation,which will determine whether you haveenough to live on in retirement and if youneed a plan to ensure that you are able tofill up the gaps that you may have in theplan.Knowing your financial standing earlier,especially while you are still workingwould give you the advantage of makingIn most countries, their government aimsto ensure that retiring citizens have anest egg prepared for their golden years.They have established national socialsecurity plans for retirement, some ofwhich are even multi-layered. It is crucialto each country’s economy becausesupporting dependent retired citizensmeans dipping into government coffers,which is also spent in other areas of needsuch as infrastructure and education.This is a very real issue especially if theretirees’ children are unable to supporttheir aging parents as they are strivingto meet their own financial obligationsAn example of a retirement calculator found at CNN’s website.The 4E Journal 27

can carryforward nextyear.• Amountexceedinglimit incur tax• Can be utilisedfor post-secondaryeducationSingaporeCentralProvident Fund(CPF)StatutoryBody• Defined contributionplan (mandatory) foremployer and employee• Tax-exempt oncompulsory contributiononly• Minimum guaranteeddividend 2.5%• 3 accounts:Ordinary – for housing,insurance, investment, &education• Special – for old age &investment in retirementrelated financialproducts• Medisave – forhospitalisation &approved medicalinsurance< 50 = 16%50-55 = 12%55-60 = 9%60-65 = 6.5%> 65 = 6.5%< 50 = 20%50-55 = 18%55-60 = 12.5%60-65 = 7.5%> 65 = 5%At age 55, the CPFsavings may bewithdrawn aftersetting aside theCPF minimum sum(MS).The MS formembers turning55 from 1 July2011 to 30 June2012 is S$131,000.MalaysiaEmployeeProvident Fund(EPF)StatutoryBody• Defined contributionplan (mandatory) foremployer and employee• Tax-exempt up to a limit• Minimum guaranteeddividend 2.5%• Contributor canwithdraw forinvestment, education,house purchase ormedical12% of grosssalary11% of grosssalary• 20% withdrawalat age 50• Balance at age 55• Other variationsavailable uponapplicationInformation in the above table is only a summary. More details are available on their respective websites. Readers are encouraged to refer to them for moredetails. There are other smaller private pension plans within each country, but this article only highlights the more widely used ones.Reference websites: www.ato.gov.au/cca, www.servicecanada.gc.ca, www.cra-arc.gc.ca, www.cpf.gov.sgthe necessary preparations at a morerelaxed pace as opposed to being forcedto frantically save huge chunks of yourincome to meet your set targets ordrastically cut back on your lifestyle toaccommodate what you need to savenearer to retirement.If you visit the websites of any governmentsocial security schemes worldwide, it willinevitably point you to a financial plannerto help determine whether your plan isgood enough and how you can improve“In Australia, you caneither manage your ownsuper or appoint yourown planner. AMP helpsclients to plan all aspectsof their retirementwhich includesoptimal tax treatments,sufficient income andlife insurance in theirretirement. This ispurely fee-based, nofront, back end or trailercommissions.”- Steven Helmich, Director, FinancialPlanning Advice & Services, AMPthe various layers of plans available interms of tax breaks and optimal returns.Whilst we are all familiar with themechanics of the Employees ProvidentFund (EPF), it is interesting to exploreand understand how it is being managedin other countries. Table 1 is a quickoverview of three countries in addition toMalaysia to give you a better perspectiveon how our EPF holds up in comparison.Australian SuperannuationThe Australian Superannuation (AS) or “super”as their locals call it, is government-supportedand encouraged. Unlike the EPF where astatutory body collects and manages thefunds, AS is regulated by the Australian TaxOffice. An employer is required to contributeto AS for their employees whether full-time,part-time or casual. Even those workingunder contract may be eligible for AS. Thisis known as the compulsory superannuationguarantee contribution. A cap on themaximum amount of contribution allowablewill be determined annually and the latestrates can be obtained from the Australian TaxOffice.The 4E Journal 29

The Most Popular Magazine AmongFrequent TradersAccording to Investment Trends’ Singapore Broking Report 2011, Shares Investment(Singapore) is the most popular magazine among frequent stock market traders inSingapore. Conducted in Sep tember 2011 by market research organisation, InvestmentTrends 1 , the survey asked more than 6,000 traders the question “which of the followingmagazines, if any, do you read at least monthly”. The survey results showed that SharesInvestment (Singapore) came out tops among frequent traders (respondents who do fouror more trades monthly).Shares InvestmentBloomberg BusinessweekThe EconomistSmart Investor0% 10% 20% 30% 40% 50% 60%Malaysia Edition(In Focus)Since July 1995, Shares Investment hasbeen well-acclaimed by both the investingpublic and local stock-brokers - boastingof more than 30,000 readers every issue.Thank you forreading Shares Investment!1Investment Trends is the leading specialist market research organization in the Australian financial services industry. Investment Trends wasstarted in Australia and is now a multi-national research organization servicing clients in Australia, Asia, UK and the US.

Super contributions can be furtherbroken down to concessional (beforetax) contributions and usually referred tocompulsory AS in which the contributor(self or employee) will be able to claimincome tax deduction as the contributionto the fund itself is already taxed at 15percent. Non-concessional (after tax)contributions are contributions that aremade beyond maximum cap allowableand usually attracts an income tax rate of31.5 percent.Low- to medium-income earners areeligible for co-contributions wherethe government will match the AScontribution. The qualifying incomethreshold is reviewed by the governmentannually. Matching contribution is 100percent, which is why the maximum taxrate for individuals is set at 40 percent.Like the U.S., contributions are taxedbut the tax rate fluctuates dependingon whether it is concessional or nonconcessionaland whether the fundyou contribute to is taxed at source orotherwise.Benefits received from taxed source or atage 60 years and above will be tax free.The death benefit paid to a dependent istax free as well, but to a non-dependent,there is a maximum tax of 15 percent.Canada’s Multi-Layered SocialSecurity PlansThe Canada Pension Plan (CPP) is amandatory contribution by employeesand those who are self-employed. Itis administered by Human Resourcesand Social Development Canada, agovernment outfit, for the employeesin all Canadian provinces and territoriesexcluding Quebec, which has its ownsimilar plan known as the Quebec PensionPlan.There is also the Registered RetirementSavings Plan which is operated by theCanadian Revenue Agency (statutorybody). It is very similar to the AustralianSuperannuation in that the contributorshave the option to decide where to save,such as in approved mutual funds, bondfunds, etc. Contributors are also allowedto withdraw their savings any time for aqualified home, continuing educationor retraining. As contribution is notcompulsory, the challenge is gettingemployees to start as early as possible forbetter retirement benefits.Employer-related pension plans are alsoavailable via Defined Benefit PensionPlans (DB Plan) and Defined ContributionPension Plan (DC Plan) which are similarto Malaysia’s government pension planand the EPF scheme. The pension plan iscurrently practiced in only one provinceand being considered by other regulatorybodies.Realising that the unemployed and lowertomiddle-income groups may face achallenge in retirement, the governmenthas put in place the Old Age Security (OAS)Plan and Guaranteed Income Savings(GIS), which do not require contributionand pay a fixed amount to recipients whoreach the age of 65.Just imagine for a moment, the Canadiangovernment is able to provide for theirlower income group with their prevailingtax rate in 2012 of between 15 percentand 29 percent. It should also be notedthat retirees who withdraw their pensionfunds with the exception of OAS and GIS,are required to pay a reduced tax rate for it.Retiring in MalaysiaIn the Malaysian context, we have ourEPF to help the Rakyat set aside savingsfor their retirement through compulsorycontributions by both the employee andemployer. Its tagline, Savings for Old Agesays it all. Contributors are also allowed towithdraw from their accounts to purchasea house, study, as well as for medical andretirement expenses.Recognising that EPF alone would notbe sufficient for most of its contributors’retirement, the Malaysian governmentintroduced the Private Pension Fund(PPF) under Budget 2011 two yearsago. Employees and the self-employedare allowed to claim a tax relief of up to“From what I have seen,the more complex andthe greater the numberof options for a client themore of a role there isfor financial planning. InCanada, we do not haveestate taxes whereasthey do in the U.S. andBritain and that level ofcomplexity raises evenmore issues on how youboth spend your moneyand gift it.”- Shawn Brayman, President, Planplus Inc.RM6,000 for the contributions to PPF inthe government’s bid to liberalise thepension fund industry,Furthermore, in the latest development,private sector employees will be allowedto work until the age of 64. A new lawis being drafted by the governmentto extend the current mandatoryretirement age of 55 to 60. The PrivateSector Retirement Age Act will mandateretirement at 60, with an option for a fouryearextension.How does the public take advantage ofthese changes and what are employersdoing about it? Obviously this requiresthe concerted effort of the governmentto propagate, encourage and creategreater awareness and uptake fromall parties in the workforce. Employersmust play their roles to develop PPF fortheir employees who then must activelyparticipate in order to have a betterretirement lifestyle.But who is going to advise the employeeson how to orchestrate their EPF and PPF?Which to use first in retirement? Whichto emphasize more in relations to taxadvantages and optimal returns?Ah … and isn’t this the job for a financialplanner? Are you all ready, because thiswhere the fun begins!The author runs Linvest Services (www.linvestservices.com) and is passionateabout financial planning. She currentlydevelops and runs practical workshopsleveraging on her 12 years of experience inthe financial services industry.The 4E Journal 31

MARKET OUTLOOKJanuary - June 2012Market Running on LiquidityBy Bernard ChingDespite a lacklustre economic outlook,risk taking is back on in the global equitymarkets driven by liquidity. AlthoughFTSE Bursa Malaysia KLCI Index (FBMKLCI)has broken new high, year-to-date (YTD)performance still lagged behind regionalmarkets partly due to general electionfear. However, a swift resolution of theimpending general election could bea re-rating potential while Malaysiafundamentals are turning positive. Weraise our end-2012 target from 1,600 to1,700.Risking taking back on … driven byliquidity• Despite continued subdue globaleconomic outlook, investors’ riskappetite has returned in 1Q2012driven by liquidity injections and easymoney in the advanced economies.• Coupled with the view that the riskof another global credit crunchis fast dissipating, we believe themomentum may yet carry on. Afterall, the MSCI (Morgan StanleyCapital International) World Indexhas only rallied 12 percent since theDecember 8, 2011 European CentralBank (ECB)’s announcement ofliquidity injection into the Europeanbanking system. When compared topast rallies driven by QE (quantitativeeasing) 1 and QE2, the current rallyhas just started over 16 weeks whencompared to 54 weeks for QE1 and44 weeks for QE2.Malaysian equities’ fundamentals arealso looking positive• While liquidity has been the keydriver of global equity rally sincethe beginning of the year, thefundamentals of the Malaysianeconomy and equity market remainfirmly intact.• Despite weakness in externaldemand, the Malaysian economy willbe sheltered by resilient domesticconsumption and governmentinfrastructure spending.• 4Q2011 corporate results havealso turned out to be better thanexpected, indicating that theearnings downgrade cycle, whichstarted in early 2011, has bottomedout.• Positive corporate news flow isexpected to accelerate in 2Q2012,mainly driven by more constructionas well as oil and gas related newsflow. We also expect plenty ofcorporate actions such as new listings,capital management initiatives andprivatisation exercises.General election (GE) remains the keyconcern, but swift resolution offersre-rating potential• Impending general election remainsthe key concern and partly explainsMalaysia’s underperformance YTD.• But the general election is a doubleedgesword. With expectation solow now amid the improving PrimeMinister’s public approval rating (69percent in Feb 12 versus 46 percent inMar 08), the market may be re-ratedonce the general election is concluded.Upgrade end-FBMKLCI target to 1,700(from 1,600)• Given still firm market momentum,we expect the FBMKLCI to chug alongin the near term to test 1,650. Thebullish momentum is also supportedby our expectation that there will bemore positive corporate news flow in2Q2012.• With concerns over the impendinggeneral election, we expect market topull back towards end 2Q2012 / early3Q2012. That said, any pullback is notexpected to be severe as (1) equityvaluation is currently not excessive atmean price earning (P/E) of 15x, and (2)liquidity is still expected to be strongfor the remaining part of the year.• We view any market pullback as agood opportunity to accumulatestocks with strong fundamentals.We expect the market to end ona high note in 2012 as Malaysianequities should be re-rated postgeneralelection given dissipatingpolitical risks as well as playing catchupto global equity rally this year.Accordingly, we revise our end 2012FBMKLCI from 1,600 to 1,700 as wenow value the market at a slightlyabove mean P/E valuation of 15.5x(average of mean and +1 standarddeviation). This implies that theFBMKLCI could still gain 6.0 percentfor the remainder of the year and 11.1percent for 2012 overall.• Key investment themes for 2Q2012are (1) accelerating construction newsflow, (2) continued capital expenditurespending in the oil and gas sector,(3) breweries as the next capital32 The 4E Journal

management play, (4) privatisationdriving interest in small cap consumerstocks, and (5) ETP (EconomicTransformation Programme) spilloverto the banking sector.Risk taking back onWhile the economic growth outlookof advanced economies continue tobe dampened by fiscal consolidation,household debt deleveraging, and highunemployment, investors’ risk appetitehas returned in 1Q2012. This was broughtabout by two key events which weregame-changer, in our opinion.Firstly, the ECB has softened its stanceon liquidity injection to avert a Europeanfinancial system meltdown followingthe appointment of Mario Draghi as thepresident of ECB on November 1, 2011.Draghi was swift in lowering the interestrate by 50bps to 1 percent and injectedover €1 trillion into the European bankingsystem through two rounds of ECB’s longtermrepurchase operations (LTROs) onDecember 21 and February 29. The latterprovided much comfort to banks starvedof liquidity (and investors who are shortof confidence) while European leadersdragged their feet in resolving the nervewreckingGreek sovereign debt swap.Secondly, in early January, the U.S. FederalReserve extends its near zero interest ratepolicy from mid-2013 to late 2014 whilenot ruling out the possibility of furtherquantitative easing to stimulate theeconomy. This effectively “extends” theuse of U.S. Dollar as the funding currencyfor global carry trade.These two events have resulted inmassive equity fund flow into emergingmarkets (including Malaysia) since earlyJanuary. For the January-March 2012period, net equity fund flow into Malaysiaamounted to RM4.9 billion as comparedto a net outflow of RM3.4 billion in thecorresponding period last year.Malaysian equity market trended higherbut lagged behind regional peersWhile a deluge of liquidity has fuelledglobal equity re-rating, Malaysia haslagged behind its peers. This is notsurprising as Malaysia has outperformedduring the down cycle in 2011. For1Q2012, the benchmark FBMKLCI posteda meagre 4.3 percent return, one of thelowest in the Asian region. Despite suchunder-performance, Malaysian equityvaluation is far from compelling at CY12P/E of 15.0x which is higher than theFigure Interest rate kept at exceptionally low levelsFigure FigureFigure1 : Interest 1 : InterestInterestrate rateratekept keptkeptat atatexceptionallyexceptionallylow levels lowlowlevelslevelsFigure Figure 1 : Interest 1 : Interest rate rate kept kept at at exceptionally low levels low levelsFigure Figure 1 : Interest 1 : Interest rate rate kept kept at at exceptionally low levels low levels% US Fed US Fund Fed Rate Fund Rate ECB Refinancing ECB Refinancing Rate Rate% % US Fed US Fund Fed Rate Fund Rate ECB Refinancing ECB Refinancing Rate Rate5% % US Fed US Fund Fed Rate Fund Rate ECB Refinancing ECB Refinancing Rate Rate5% 5% US Fed US Fund Fed Rate Fund Rate ECB Refinancing ECB Refinancing Rate Rate5 5445454 4334343 3223232 2112121 1001010 00 0Jan-08Jan-08Apr-08 Jan-08Jan-08 Apr-08 Jan-08Apr-08 Jul-08Jul-08 Apr-08 Jul-08Oct-08 Jul-08Jul-08 Oct-08 Jul-08Oct-08 Jan-09Oct-08 Jan-09Apr-09 Jan-09Jan-09 Apr-09 Jan-09Apr-09 Jul-09Jul-09 Apr-09 Jul-09Oct-09 Jul-09Jul-09 Oct-09 Jul-09Oct-09 Jan-10Oct-09 Jan-10Source: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergFigure ECB massive balance sheet expansion to provide liquidityFigure FigureFigure2 : ECB 2 : massive ECBECBmassivemassivebalance balancebalancesheet sheetsheetexpansion expansionexpansionto provide totoprovideprovideliquidity liquidityliquidityFigure Figure 2 : ECB 2 : massive ECB massive balance balance sheet sheet expansion expansion to provide to provide liquidity liquidityFigure Figure 2 : ECB 2 : massive ECB massive balance balance sheet sheet expansion expansion to provide to provide liquidity liquiditybn EURbn EURbn EURbn EUR3,500 bn EUR 3,500 bn EUR3,500 3,500bn EURbn EUR3,500 3,5003,000 3,500 3,000 3,500LTRO LTRO on 29 on Feb 2912Feb 123,000 3,000LTRO LTRO 2 on 292 on Feb 2912Feb 12LTRO on 21 Dec 21113,000 3,000Dec 11LTRO LTRO 12 on 21 29 12 on Dec Feb 21 291211 Dec Feb 12 112,500 3,000 2,500 3,0002,500 2,500LTRO LTRO 12 on 21 29 12 on Dec Feb 21 291211 Dec Feb 12 112,500 2,500LTRO LTRO 1 on 21 1 on Dec 2111Dec 112,000 2,500 2,000 2,5002,000 2,0002,000 2,0001,500 2,000 1,500 2,0001,500 1,5001,500 1,5001,000 1,500 1,000 1,5001,000 1,0001,000 1,0001,000 1,000Jan Jan 07 Jan 07 Jan 07 07Apr Apr 07 Apr 07 Apr 07 07Jan Jan 07 Jan 07 Jan 07 07Jul Jul 07 Jul 07 Jul 07 07Apr Apr 07 Apr 07 Apr 07 07Oct Oct 07 Oct 07 Oct 07 07Jul Jul 07 Jul 07 Jul 07 07Jan Jan 08 Jan 08 Jan 08 08Oct Oct 07 Oct 07 Oct 07 07Apr Apr 08 Apr 08 Apr 08 08Jan Jan 08 Jan 08 Jan 08 08Jul Jul 08 Jul 08 Jul 08 08Apr Apr 08 Apr 08 Apr 08 08Oct Oct 08 Oct 08 Oct 08 08Jul Jul 08 Jul 08 Jul 08 08Jan Jan 09 Jan 09 Jan 09 09Oct Oct 08 Oct 08 Oct 08 08Apr Apr 09 Apr 09 Apr 09 09Jan Jan 09 Jan 09 Jan 09 09Jul Jul 09 Jul 09 Jul 09 09Apr Apr 09 Apr 09 Apr 09 09Oct Oct 09 Oct 09 Oct 09 09Jul Jul 09 Jul 09 Jul 09 09Jan Jan 10 Jan 10 Jan 10 10Oct Oct 09 Oct 09 Oct 09 09Apr Apr 10 Apr 10 Apr 10 10Jan Jan 10 Jan 10 Jan 10 10Jul Jul 10 Jul 10 Jul 10 10Apr Apr 10 Apr 10 Apr 10 10Oct Oct 10 Oct 10 Oct 10 10Jul Jul 10 Jul 10 Jul 10 10Jan Jan 11 Jan 11 Jan 11 11Oct Oct 10 Oct 10 Oct 10 10Apr Apr 11 Apr 11 Apr 11 11Jan Jan 11 Jan 11 Jan 11 11Jul Jul 11 Jul 11 Jul 11 11Apr Apr 11 Apr 11 Apr 11 11Oct Oct 11 Oct 11 Oct 11 11Jul Jul 11 Jul 11 Jul 11 11Jan Jan 12 Jan 12 Jan 12 12Oct Oct 11 Oct 11 Oct 11 11Source: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergFigure Figure Equity Equity fund fund flow flow to emerging to emerging markets markets picking picking upFigure Figure 3 : Equity 3 : Equity fund fund flow flow to emerging to emerging markets markets picking picking up upupFigure Figure 3 : Equity 3 : Equity fund fund flow flow to emerging to emerging markets markets picking picking up upFigure Figure 3 : Equity 3 : Equity fund fund flow flow to emerging to emerging markets markets picking picking up up400040003800 40003800 40003600 38003600 38003400 36003400 36003200 34003200 34003000 32003000 32002800 30002800 30002600 28002600 280026002600400040003800 40003800 40003600 38003600 38003400 36003400 36003200 34003200 34003000 32003000 32002800 30002800 30002600 28002600 280026002600Jan-10 Jan-10 Jan-10Apr-10 Apr-10 Apr-10Jul-10 Jul-10 Jul-10region’s average 14.1x but largely inlinewith Malaysia’s historical average of 14.8x.Trading volume on Bursa Malaysia hasedged higher with the one-month averagetrading value hitting a recent high ofRM2.2 billion on February 29 (+80 percentYTD). However, trading interest has mainlyfocused on small cap stocks as can beevidenced by the strong performanceof the FBM Small Cap Index which hit 14percent return in mid-February, beforeprofit-taking activities brought it downto 5.9 percent as of March 30. In contrast,the benchmark FBMKLCI only posted a 4.3percent return during the same period.Still got some legs to runOct-10 Oct-10 Oct-10Jan-11 Jan-11 Jan-11Back in early January 2012, we expectthe Malaysian market momentum topeak by end 1Q2012. However, with theApr-10 Jan-10Jan-10 Apr-10 Jan-10Apr-11 Apr-11 Apr-11Apr-10 Jul-10Jul-10 Apr-10 Jul-10Oct-10 Jul-10Jul-10 Oct-10 Jul-10Jul-11 Jul-11 Jul-11Oct-10 Jan-11Oct-10 Jan-11Apr-11 Jan-11Jan-11 Apr-11 Jan-11Oct-11 Oct-11 Oct-11Apr-11 Jul-11Jul-11 Apr-11 Jul-11Oct-11 Jul-11Jul-11 Oct-11 Jul-11Jan-12 Jan-12 Jan-12Oct-11 Jan-12Oct-11 Jan-12Source: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergFigure Foreign institutional investors’ net equity flowsFigure Malaysia equity indices (up to 30 Mar)Figure FigureFigure4 : Foreign 4 : ForeignForeign institutionalinstitutionalinvestors’ investors’investors’net equity netnetequityequityflows flowsflowsFigureSource:FigureFigure Source:8Bloomberg: Malaysia 8 Bloomberg: MalaysiaMalaysiaequity equityequityindices indicesindices(up to (up(up30 totoMar) 3030Mar)Mar)Figure Figure 4 : Foreign 4 : Foreign institutional investors’ investors’ net equity net equity flows flowsFigure Figure 8 : Malaysia 8 : Malaysia equity equity indices indices (up to (up 30 to Mar) 30 Mar)Figure Figure 4 : Foreign 4 : Foreign institutional investors’ investors’ net equity net equity flows flowsFigure Figure 8 : Malaysia 8 : Malaysia equity equity indices indices (up to (up 30 to Mar) 30 Mar)RM bnRM bnRM bnRM bn5.0 5.04.4RM4.45.0bnRM 5.0bn4.4 4.4Re-indexed Re-indexed FBMKLCI FBMKLCI FBM Small FBM Small Cap Cap FBM Syariah FBM SyariahRM 4.0 bnRM 4.0 bn3.03.23.43.01.8 2.3 3.03.23.44.02.6116Re-indexed Re-indexed FBMKLCI FBMKLCI FBM Small FBM Small Cap Cap FBM Syariah FBM Syariah5.0 4.0 5.04.4 4.43.01.8 2.3 2.61163.03.23.43.03.23.43.01.8 1.82.0 1.10.91.2 1.6 1141.52.01.31.10.91.2 1.6 1141.8 2.3 2.6116 Re-indexed3.01.8 2.3 2.6116 Re-indexed FBMKLCI FBMKLCI FBM Small FBM Small Cap Cap FBM Syariah FBM Syariah4.0 5.0 4.0 5.04.4 4.43.03.23.43.03.23.41.8 1.81.50.70.7 0.81.32.01121.0 1.1 0.30.70.7 0.8 1121.00.30.91.2 1.6 1142.01.51.11.30.91.2 1.6 1141.5 1.31.8 2.3 2.6116 Re-indexed3.01.8 2.3 2.6116 Re-indexed FBMKLCI FBMKLCI FBM Small FBM Small Cap Cap FBM Syariah FBM Syariah4.0 3.0 4.03.03.23.43.03.23.41.8 1.8 0.1 0.10.7 0.7 0.7 0.80.7 0.2 0.8 0.20.3110112 1121.0 2.0 1.00.31100.01.10.1 0.10.2 0.20.00.91.2 1.6 1141.51.11.30.91.2 1.6 1142.01.51.8 2.3 2.61163.01.8 2.3 2.61163.01.8 1.81.30.7 0.7 0.7 0.80.7 0.8 108110 112 110 1120.0 1.0 0.0 1.0 1.1 0.3 0.3108-1.00.9 0.1-1.0(1.0) (0.7) (0.1)1.2 1.6 1142.01.51.10.21.30.91.2 1.6 1142.01.5 0.21.3(0.3)106-2.0 (1.0) (0.7) (0.1) 0.7 0.7 0.7 0.80.7 0.8 108 110 112 108 110 112(0.3)-1.0 0.0 1.0-1.0 0.00.3 0.3106(1.0) -2.0 (0.7) (0.1)(0.3)(1.3) (1.3)104106-2.0 (1.0) (0.7) 0.1(0.1)0.2 0.2(0.3)108 110 106 108 110-1.0 0.0-2.0 -1.0 0.0104-3.0(1.3) (1.3)-3.0102104 104-3.0(1.0)-3.0(0.7) (0.1)(0.3)106-2.0 (1.0) (0.7) (0.1)(0.3)108 106 108-1.0 -2.0 -1.0(1.3) (1.3)102-4.0 -4.0(3.4) (3.4)100102 104 102 104(1.0) (0.7) (0.1)(0.3)106-4.0 -3.0 -2.0 (1.0) (0.7) (0.1)(0.3)106-4.0 -3.0 -2.0 (1.3) (1.3)(3.8)100-5.0(3.8)-5.0(3.4) (3.4)100 102 104(3.8) (3.8)98100 102 104-5.0 -4.0 -3.0-5.0 -4.0 -3.098(3.4) (3.4)100 102(3.8) (3.8)9698 100 102 98-5.0 -4.0 -5.0 -4.0(3.4) (3.4)100 96(3.8) (3.8)96 98 100 96 98-5.0 -5.096 98 96 9896 96Jan-10 Jan-10 Jan-10Jan-10 Jan-10 Jan-10Apr-10 Apr-10 Apr-10Jul-10 Jul-10 Jul-10Feb-10 Feb-10 Feb-10Mar-10 Jan-10Jan-10 Mar-10 Jan-10Feb-10 Apr-10 Feb-10 Apr-10 Feb-10 Apr-10May-10 Mar-10Mar-10 May-10 Mar-10Apr-10 Jun-10 Apr-10 Jun-10 Apr-10 Jun-10May-10 Jul-10Jul-10 May-10Jul-10Aug-10 Jun-10Jun-10 Aug-10 Jun-10Sep-10 Jul-10 Sep-10 Jul-10 Sep-10 Jul-10Aug-10 Oct-10 Aug-10 Oct-10 Aug-10 Oct-10Nov-10 Sep-10Sep-10 Nov-10 Sep-10Dec-10 Oct-10 Dec-10 Oct-10 Dec-10 Oct-10Nov-10 Jan-11 Nov-10 Jan-11 Nov-10 Jan-11Dec-10 Feb-11 Dec-10 Feb-11 Dec-10 Feb-11Mar-11 Jan-11Jan-11 Mar-11 Jan-11Feb-11 Apr-11 Feb-11 Apr-11 Feb-11 Apr-11May-11 Mar-11Mar-11 May-11 Mar-11Apr-11 Jun-11 Apr-11 Jun-11 Apr-11 Jun-11May-11 Jul-11Jul-11 May-11Jul-11Aug-11 Jun-11Jun-11 Aug-11 Jun-11Sep-11 Jul-11 Sep-11 Jul-11 Sep-11 Jul-11Aug-11 Oct-11 Aug-11 Oct-11 Aug-11 Oct-11Nov-11 Sep-11Sep-11 Nov-11 Sep-11Dec-11 Oct-11 Dec-11 Oct-11 Dec-11 Oct-11Nov-11 Jan-12 Nov-11 Jan-12 Nov-11 Jan-12Dec-11 Feb-12 Dec-11 Feb-12 Dec-11 Feb-12Mar-12 Jan-12Jan-12 Mar-12 Jan-12Feb-12 Feb-12 Feb-12Source: Source: Bursa Bursa Malaysia MalaysiaSource: Source: Bursa Bursa Malaysia MalaysiaSource: Source: Bursa Bursa Malaysia MalaysiaSource: Source: Bursa Bursa Malaysia MalaysiaOct-10 Oct-10 Oct-10Jan-11 Jan-11 Jan-11Apr-11 Apr-11 Apr-11Jul-11 Jul-11 Jul-11Oct-11 Oct-11 Oct-11Jan-12 Jan-12 Jan-12Jan-12 Jan-12 Jan-12Jan Jan 12 Jan 12 Jan 12 12Mar-12 Mar-12 Mar-12Figure Figure YTD YTD equity equity market market performance performance (up to (up 30 to Mar)Figure Figure 5 : YTD 5 : YTD equity equity market market performance (up to (up 30 to Mar) 3030Mar)Mar)Figure Figure 5 : YTD 5 : equity YTD equity market market performance (up to (up 30 to Mar) 30 Mar)Figure Figure 5 : YTD 5 : equity YTD equity market market performance (up to (up 30 to Mar) 30 Mar)19.3% 19.3%19.3% 19.3%16.8% 16.8% 16.7% 16.7%19.3% 19.3% 16.8% 16.8% 16.7% 16.7%19.3% 19.3% 16.8% 16.8% 16.7% 16.7%13.8% 13.8% 12.6%16.8% 16.8% 16.7% 16.7% 12.6% 12.6% 11.5% 12.2% 12.2% 11.5%13.8% 13.8% 11.5% 11.5% 7.8% 12.6% 12.6% 12.2% 12.2% 11.5% 11.5% 10.3% 10.3% 7.8%10.3% 10.3% 7.8%7.8%7.8% 6.9%6.9%7.8% 6.9%6.9%6.9%4.3% 6.9% 4.3%4.3%4.3% 2.9%13.8% 12.6% 12.2% 12.2%12.6% 12.6% 10.3% 10.3%2.9%6.9% 6.9% 2.9%13.8%2.9%13.8% 11.5% 11.5% 10.3% 10.3%4.3% 4.3%2.9%13.8%2.9%12.2% 12.2%7.8% 7.8%4.3% 4.3%2.9% 2.9%Japan Japan JapanJapan Japan JapanPhilippinesPhilippinesPhilippinesPhilippinesThailandThailandThailandThailandSingaporeSingaporeSingaporeSingaporeIndia India India IndiaIndia India IndiaTaiwanTaiwanTaiwan Taiwan TaiwanHong Hong Kong Hong Hong Kong Kong KongHong Hong Kong Hong Kong KongKorea Korea KoreaSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergFigure Figure CY2012 CY2012 P/E of P/E regional of regional marketsFigure Figure 6 : CY2012 6 : CY2012 P/E of P/E regional of regional markets marketsmarketsFigure Figure 6 : CY2012 6 : CY2012 P/E of P/E regional of regional markets marketsFigure Figure 6 : CY2012 6 : CY2012 P/E of P/E regional of regional markets markets24.1 24.124.1 24.124.1 24.124.1 24.1Japan Japan Japan15.815.815.815.8Japan Japan JapanPhilippinesPhilippinesrisk of another global credit crunch fastdissipating and present of ample liquidityin the system, we believe the momentummay yet carry on for another quarter. Afterall, the MSCI World Index (which is a proxyfor global equity markets) has only rallied12 percent since the December 8, 2011ECB’s announcement of liquidity injectioninto the European banking system.When compared to past rallies driven byQE1 and QE2, the current rally has juststarted over 16 weeks as compared to 54weeks for QE1 and 44 weeks for QE2. There isalso prospect that the Federal Reserve mayimplement another round of quantitativeeasing i.e. QE3 to further stimulate the U.S.economy which is still in its nascent stage ofrecovery. No doubt economic data comingout of U.S. has been surprising on the upsidelately, particularly on jobs creation, but it isfar from out of the woods yet. This viewwas most importantly echoed by FederalKorea Korea KoreaIndonesiaIndonesiaIndonesiaIndonesiaAustraliaAustraliaSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergFigure Figure 1-month 1-month average average trading trading value value has picked has picked upFigure Figure 7 : 1-month 7 : 1-month average average trading trading value value has picked has picked up upupFigure Figure 7 : 1-month 7 : 1-month average average trading trading value value has picked has picked up upFigure Figure 7 : 1-month 7 : 1-month average average trading trading value value has picked has picked up upRM bnRM bnRM bnRM bn3.5 3.53.5 RM bn3.5RM bn3.0 3.5RM bn3.0 3.5RM bn3.0 3.5 3.0 3.52.5 3.0 2.5 3.02.5 3.0 2.5 3.02.0 2.5 2.0 2.52.0 2.5 2.0 2.51.5 2.0 1.5 2.01.5 2.0 1.5 2.01.0 1.5 1.0 1.51.0 1.5 1.0 1.50.5 1.0 0.5 1.00.5 1.0 0.5 1.00.0 0.5 0.0 0.50.0 0.5 0.0 0.50.0 0.00.0 0.02005 2005 2005 20052-Jan 2-Jan 2-Jan2005 2005 20059-Jan 2-Jan 9-Jan 2-Jan 9-Jan 2-JanAustraliaAustraliaMalaysiaMalaysiaMalaysiaMalaysiaChina China China15.815.815.3 15.3 15.3 15.3 15.0 15.0Average Average 14.1x 14.1x12.6 Average Average 14.1x 14.1x15.0 14.2 14.2 14.115.3 15.3 15.3 15.3 15.014.115.814.2 14.2 14.1 14.1 12.8 12.8 12.615.3 15.3 15.3 15.3 15.0 15.015.812.6 Average Average 14.1x 14.1x14.2 14.2 14.1 14.1 12.8 12.8 12.615.3 15.3 15.3 15.0 15.012.6 Average 10.3 Average 10.3 10.2 14.1x 10.2 14.1x10.3 10.3 10.2 10.2 9.6 9.614.2 14.2 14.1 14.1 12.8 12.8 12.69.612.8 12.8 12.6 12.69.610.3 10.3 10.2 10.29.6 9.610.3 10.3 10.2 10.29.6 9.6PhilippinesPhilippinesTaiwanTaiwan2006 2006 2006 200616-Jan 9-Jan9-Jan 16-Jan 9-Jan2006 2006 2006Taiwan Taiwan TaiwanIndia India India IndiaSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg BloombergSource: Source: Bloomberg Bloomberg2007 2007 2007 200716-Jan 23-Jan 16-Jan16-Jan 23-JanIndia India IndiaMalaysiaMalaysia2007 2007 200723-Jan 30-Jan 23-Jan23-Jan 30-JanMalaysiaMalaysiaSingaporeSingapore2008 2008 2008 200830-Jan 6-Feb 30-Jan 6-Feb 30-Jan 6-FebSingaporeSingaporeIndonesiaIndonesia2008 2008 200813-Feb 6-Feb6-Feb 13-Feb 6-Feb2009 2009 2009 2009IndonesiaIndonesiaThailandThailand13-Feb 20-Feb13-Feb 20-Feb2009 2009 200927-Feb 20-Feb27-Feb 20-FebThailandThailandAustraliaAustralia2010 2010 2010 201027-Feb 5-Mar5-Mar 27-Feb 5-MarAustraliaAustraliaHong Hong Kong Hong Hong Kong Kong Kong2010 2010 201012-Mar 5-Mar5-Mar 12-Mar 5-MarHong Hong Kong Hong Kong KongKorea Korea Korea2011 2011 2011 201112-Mar 19-Mar12-Mar 19-Mar2011 2011 2011Korea Korea KoreaChina China China2012 2012 2012 201226-Mar 19-Mar26-Mar 19-MarChina China ChinaChina China China2012 2012 2012+5.9% +5.9%+5.9% +5.9%+4.6% +4.6%+4.3%+4.6% +5.9% +4.6% +5.9%+4.3%+4.3% +4.6% +5.9%+4.3% +4.6% +5.9%+4.3% +4.6% +4.3% +4.6%+4.3% +4.3%26-Mar26-MarThe 4E Journal 33

Reserve chairman Ben Bernanke whenhe mentioned at the National Associationof Business Economists conference inArlington, Virginia, “… an assessment of abroad range of indicators suggests thata substantial portion of the decline inthe unemployment rate does not reflectgenuine improvement in labour marketconditions.”It is not just about liquidityWhile liquidity has been the key driver ofglobal equity rally since the beginningof the year, the fundamentals of theMalaysian economy and equity marketremain firmly intact, especially whencompared to the lacklustre economicoutlook in the advanced economies.For a start, the Malaysian economy isexpected to grow by a decent 4-5 percentin 2012 based on Bank Negara Malaysia(BNM)’s estimate when compared tothe International Monetary Fund (IMF)’sestimate of world gross domestic product(GDP) of just 3.3 percent.While weak external demand will be a dragon export-dependent economies such asMalaysia, resilient domestic consumptionand government spending under the ETPare expected to pick up the slack. Theformer which accounts for more than 50percent of the Malaysian economy hasgrown in excess of 6 percent per annumover the last decade, with the exceptionof a nominal 0.7 percent growth in 2009due to the global financial crisis. Therefore,based solely on BNM’s projection of a 6.2percent domestic consumption growthin 2012, the overall GDP will grow by 3.4percent assuming other GDP componentsregister flat growth. This forms the worstcase scenario for the Malaysian GDPoutlook for 2012.In addition to a resilient domestic economy,Malaysian corporate results have alsoturned out to be better than expected in thejust ended 4Q2011 reporting season as theearnings downgrade cycle which startedin early 2011 has bottomed out. While weare still ramping up our stock coverage, wemonitored the financial performance of90 corporates versus consensus estimates.Based on our analysis, we noted thepercentage of results coming in belowexpectation has fallen to just 24 percent (41percent in 3Q2011), the lowest level sincethe 2Q2010 reporting season. While weare not seeing a lot of companies beatingstreet estimates yet, this will at least assuageinvestors of better things to come.Furthermore, positive corporate newsflow is likely to accelerate in 2Q2012 in therun up to the next general election, widelyFigure 9 : Impact of quantitative easing on global equities (MSCI World Index)14001300120011001000900800700600Jan-09Mar-09Source: Bloomberg18 Mar 09: QE1expanded to USD1.25trnof agency MBSMay-09Jul-09expected now in June. We can expect moretraction in the implementation of projectsunder the ETP, particularly constructionas well as oil and gas related projects. Todate, we have already witnessed heavynews flow on the award of constructionjobs, for example, the award of TanjungBin and MRT related jobs. In addition, wealso expect plenty of corporate actionssuch as new listings (Gas Malaysia andFelda Global Ventures Holdings, to name aSep-09Market gained 52%over 54 weeksNov-09Figure 10 : Domestic private consumption growthy-o-y %121086420Source: BNMJan-1031 Mar 10:End of QE1Mar-10May-102003 2004 2005 2006 2007 2008 2009 2010 2011Figure 12 : Negative earnings surprises has bottomed out in 4Q1160%50%40%30%20%10%0%56%56%54%53%51%50% 47%49% 43%42%39%40%41%33%34% 35% 32% 33% 30%27% 27%28% 28% 28%24% 25% 26%24%24%18%19%20%16%17% 16%14%1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11Source: Alliance ResearchAbove Inline BelowFigure 14 : VIX index near trough level (post global financial crisis)6055504540353025201510Jan-08Mar-08May-08Jul-08Sep-08Source: Bloomberg, Alliance ResearchNov-08Jan-09Mar-09May-09VIX (LHS)Market peaked asVIX bottomed at 15Jul-09Sep-09Nov-09Jan-10Jul-10Mar-104 Nov 10:Announced QE2to buy USD600bnTreasury27 Aug 10: BenBernankedropped hintof QE2Sep-10Nov-10Market gained 22%over 44 weeksJan-11Mar-11May-11Figure 11 : BNM’s GDP outlook30 Jun 10:End of QE2Jul-11few), capital management initiatives andprivatisation exercises.But risks are higher nowAlthough we expect the current bullishmomentum to continue into 2Q2012, weacknowledge that risks are higher nowas the market is susceptible to a longoverdue correction. Risk appetite is nowSep-118 Dec 11: ECBannounced 2 LTROsto be undertaken on21 Dec and 29 Feb toinject EUR1trn 3-year liquidity intoEuropean bankingsystemNov-11Marketgained 12%over 16weeks2011p 2012f 2011p 2012fContribution to net GDPAnnual change (%)growth (%)Domestic demand 8.2 6.6 7.2 6.0Private expenditure 8.2 6. 5.2 4.4Consumption 6.9 6.2 3.7 3.4Investment 14.4 8.3 1.6 1.0Public expenditure 8.2 6.7 2.0 1.7Consumption 16.8 0.2 2.2 0.0Investment -2.4 16.2 -0.3 1.6Jan-12Mar-12Change in stocks -0.7 -1.5Net exports -14.4 -1.4 -1.4 -0.1Real GDP 5.1 4.0 – 5.0 5.1 4.0 – 5.0Source: BNMFigure 13 : Free float weighted consensus CY12 earnings of FBMKLCIRM bn3837363534333231Jan-11Feb-11Mar-11Apr-11Source: Alliance ResearchMSCI World Index (RHS)Figure 15 : Observation of market monthly performance before and after general electionsMay-10Jul-10Sep-10Nov-10Jan-11May-11Jun-11Mar-11Jul-11May-11Aug-11Jul-11Sep-11Sep-11Oct-11Nov-11Nov-11Jan-12Dec-11Mar-12Earningsdowngradecycle hasbottomedJan-12Feb-121600150014001300120011001000900800700600Mar-1234 The 4E JournalGeneralMonth-on-month return prior and post general election

at its highest level since market correctedin 3Q2011 due to concern over sovereigndebt crisis in Europe. This can be evidencedby the fall of the VIX (volatility index),which has an inverse relationship withthe equity market and risk appetite to the15 percent level. However, complacencymay have set it and correction may be justaround the corner. Looking at past trendsince 2008, market has peaked or almostpeaked when VIX fell to the 15 percentlevel.Figure 14 : VIX index near trough level (post global financial crisis)Figure 14 : VIX index near trough level (post global financial crisis)Impending general election is a doubleedge60VIX (LHS)Market peaked assword60 5555 5050 45Another source of risk is the impending45 4013th GE. We have given up hope predicting40 35when 35 30 the next GE will be held, but based ongrapevine 30 25 and coffee shop talks, it is nowwidely25 20expected to be held in September.20 15Looking at how the equity market has15 10performed10before and after GEs in the past,we observed that the FBMKLCI has morethan an even chance of posting positiveJan-08 Jan-08Mar-08 Mar-08May-08 May-08Jul-08Jul-08Sep-08 Sep-08Source: Bloomberg, Alliance ResearchSource: Bloomberg, Alliance ResearchNov-08 Nov-08Jan-09 Jan-09Mar-09 Mar-09May-09 May-09VIX (LHS)Figure 15 : Observation of market monthly performance before and after general electionsFigure 15 : Observation of market monthly performance before and after general electionsJul-09Sep-09 Sep-09Nov-09 Nov-09Jan-10 Jan-10Mar-10 Mar-10return on a month-on-month (m-o-m)basis three months before and two monthsafter the GE.However, we caution that the statisticalsignificance of our observations has notbeen proven. Furthermore, each GE isdifferent and coincides with differentstage of an economic cycle. For example,the market selldown during and afterthe the12th GE in 2008, in which theruling government failed to re-capturethe two-thirds majority in parliamentaryseats, actually coincided with the globalMSCI World Index (RHS)financial crisis.16001600 1500We believe market performance 1500 before1400GEs will be dictated by whether there1400 1300are1300 1200concerns over the unknown in the run1200 1100up to the GE. We believe this hypothesis1100 1000is supported by what happened 1000 in 900 therun up to the 8th GE (spilt in UMNO) 900 800and800 70012th GE (Hindraf and Bersih rallies) when700 600there was widespread concern that the600ruling government will fare poorly in theupcoming election.GeneralMonth-on-month return prior and post general electionElection DateBN's MajorityNumber of Months Before ElectionNumber of Months After ElectionGeneralMonth-on-month return prior and post general election% of votes % of seat 6 5 4 3 2 1 1 2 3 4 5 6Election DateBN's MajorityNumber of Months Before ElectionNumber of Months After Election5th 8-Jul-78 57.2% 85.1% 3.1% 3.2% 7.8% 5.4% 3.0% 17.6% 4.9% 5.3% -8.6% 3.7% -10.9% 4.4%% of votes % of seat 6 5 4 3 2 1 1 2 3 4 5 66th 22-Apr-82 60.5% 85.7% 13.2% 8.1% -3.3% -10.1% -5.6% 2.7% 1.0% -10.4% -8.2% -8.1% 5.0% 8.2%5th 8-Jul-78 57.2% 85.1% 3.1% 3.2% 7.8% 5.4% 3.0% 17.6% 4.9% 5.3% -8.6% 3.7% -10.9% 4.4%7th 3-Aug-86 57.3% 83.6% -5.6% -2.0% -10.3% 16.7% 8.3% -2.7% 17.6% -8.7% 19.7% -7.8% 1.5% 10.3%6th 22-Apr-82 60.5% 85.7% 13.2% 8.1% -3.3% -10.1% -5.6% 2.7% 1.0% -10.4% -8.2% -8.1% 5.0% 8.2%8th 21-Oct-90 53.4% 70.6% 11.9% -1.2% 8.0% -17.0% -2.3% -6.0% 0.2% 4.2% -2.1% 12.0% 6.1% 2.8%7th 3-Aug-86 57.3% 83.6% -5.6% -2.0% -10.3% 16.7% 8.3% -2.7% 17.6% -8.7% 19.7% -7.8% 1.5% 10.3%9th 25-Apr-95 65.2% 84.4% -8.2% -2.2% -11.9% 11.4% -1.3% 1.8% 6.6% 2.1% -1.6% -1.6% -1.1% -5.7%8th 21-Oct-90 53.4% 70.6% 11.9% -1.2% 8.0% -17.0% -2.3% -6.0% 0.2% 4.2% -2.1% 12.0% 6.1% 2.8%10th 29-Nov-99 56.5% 76.6% 12.8% -9.1% -0.2% -11.9% 10.0% 0.4% 7.9% 16.3% 7.2% -2.1% -7.9% -2.2%9th 25-Apr-95 65.2% 84.4% -8.2% -2.2% -11.9% 11.4% -1.3% 1.8% 6.6% 2.1% -1.6% -1.6% -1.1% -5.7%11th 21-Mar-04 63.9% 90.4% 9.1% -2.5% -1.2% 6.4% 4.5% 5.0% -4.8% -8.4% 4.2% 2.6% -4.0% 6.2%10th 29-Nov-99 56.5% 76.6% 12.8% -9.1% -0.2% -11.9% 10.0% 0.4% 7.9% 16.3% 7.2% -2.1% -7.9% -2.2%12th 8-Mar-08 50.3% 63.1% 6.7% 1.8% 2.3% 3.9% -5.0% -8.4% -5.8% 5.4% -3.0% -9.2% -0.5% -3.9%11th 21-Mar-04 63.9% 90.4% 9.1% -2.5% -1.2% 6.4% 4.5% 5.0% -4.8% -8.4% 4.2% 2.6% -4.0% 6.2%12th 8-Mar-08 50.3% 63.1% 6.7% 1.8% 2.3% 3.9% -5.0% -8.4% -5.8% 5.4% -3.0% -9.2% -0.5% -3.9%Simple average return 5.4% -0.5% -1.1% 0.6% 1.5% 1.3% 3.5% 0.7% 1.0% -1.3% -1.5% 2.5%% incidence of positive return 75% 38% 38% 63% 50% 63% 75% 63% 38% 38% 38% 63%Simple average return 5.4% -0.5% -1.1% 0.6% 1.5% 1.3% 3.5% 0.7% 1.0% -1.3% -1.5% 2.5%% incidence of positive return 75% 38% 38% 63% 50% 63% 75% 63% 38% 38% 38% 63%Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-1213th 1st week June? 4.0% -0.6% 3.2% 1.7%Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-1213th 1st week June? 4.0% -0.6% 3.2% 1.7%Source: Alliance ResearchSource: Alliance ResearchFigure 16 : Malaysia-Thailand PE valuation spreadFigure 17 : Malaysia-Philippines PE valuation spreadFigure 16 : Malaysia-Thailand PE valuation spreadFigure 17 : Malaysia-Philippines PE valuation spreadxx95xx84957384 Mean @ 1x6273 Mean @ 1x516Mean @ 4x24-513Mean @ 4x(1)4-2(2)3(1)1(3)2(2)-(4)1(3)-(4)Jan-07 Jan-07Apr-07 Apr-07Jul-07 Jul-07Oct-07 Oct-07Jan-08 Jan-08Apr-08 Apr-08Jul-08 Jul-08Oct-08 Oct-08Jan-09 Jan-09Apr-09 Apr-09Jul-09 Jul-09Oct-09 Oct-09Jan-10 Jan-10Apr-10 Apr-10Jul-10 Jul-10Oct-10 Oct-10Jan-11 Jan-11Apr-11 Apr-11Jul-11 Jul-11Oct-11 Oct-11Jan-12 Jan-12Source: Bloomberg, Alliance ResearchSource: Bloomberg, Alliance ResearchVIX bottomed at 15Market peaked asVIX bottomed at 15Jul-09Figure 18 : Approval rating of Prime Minister75%70%65%60%55%50%45%40%35%30%47%56%Source: Merdeka Center45% 46% 45%40%34%65% 66% 56%MSCI World Index (RHS)May-10 May-10Jul-10Jul-10Sep-10 Sep-10Nov-10 Nov-10Jan-11 Jan-11Mar-11 Mar-11May-11 May-11Source: Bloomberg, Alliance ResearchSource: Bloomberg, Alliance ResearchJul-11Jul-11Sep-11 Sep-11Nov-11 Nov-11Jan-12 Jan-12Mar-12 Mar-12Jan-07 Jan-07Apr-07 Apr-07Jul-07 Jul-07Oct-07 Oct-07Jan-08 Jan-08Apr-08 Apr-08Jul-08 Jul-08Oct-08 Oct-08Jan-09 Jan-09Apr-09 Apr-09Jul-09 Jul-09Oct-09 Oct-09Jan-10 Jan-10Apr-10 Apr-10Jul-10 Jul-10Oct-10 Oct-10Jan-11 Jan-11Apr-11 Apr-11Jul-11 Jul-11Oct-11 Oct-11Jan-12 Jan-1266% 69%72% 71%69% 69%67%65%59%66%Oct-06Apr-07Feb-08Mar-08Jul-08Sep-08May-09Jun-09Jul-09Sep-09Dec-09Mar-10May-10Nov-10Feb-11May-11Aug-11Oct-11Dec-11Feb-12Figure 19 : Technical outlook of FBMKLCI still bullishOn the other hand, market performanceafter the GE will be affected by positive ornegative surprises. For example, the 12thGE resulted in the biggest loss to the rulinggovernment and that led market lower onconcern of regulatory uncertainty, not justat federal level, but also at state level.So, how is that applied to the 13th GE? Fora start, we believe the under-performanceof Malaysian equities vis-à-vis regionalequities is already proving that there iswidespread concern among investors ofthe upcoming GE. Valuation premiumof Malaysian equities (which is a norm)over some of its ASEAN neighbours hascompressed below historical mean.Next, what are the likely positive andnegative surprises that will affect marketperformance post general election? Thisis where we are a little more optimistic.Based on our observation, there is littleexpectation of the ruling government torecapture the two-thirds majority. Thatbeing the case, the market is unlikely tobe negatively surprised if it ever comesto pass. Based on a February 2012 surveyundertaken by Merdeka Centre, public’sapproval rating of the Prime Minister hasclimbed to 69 percent (almost all-timehigh) from just 46 percent in March 2008.Therefore, it appears that there will lessnegative surprise factors going into the13th GE when compared to the 12th GE.FBMKLCI set to test 1,650 in 2Q2012 ….Based on technical analysis, the FBMKLCIstill has bullish momentum going forwardas it is still above its 30-day, 90-day and200-day moving averages. Using theElliott Wave analysis, the current rallyis at the fifth wave. As the third wave isshorter than the first wave, the fifth waveshould not be longer than the third wave.Assuming that the Elliott wave is correct,the FBMKLCI should not go beyond1,650 points. The fifth wave may last untilMay or June 2012 based on the upwardchannel from wave two and wave four,extended from wave three. A correctionis expected once wave five is completed.The bullish momentum is also supportedby our expectation that there will be morepositive corporate news flow in 2Q2012.…with mild correction in 3Q2012 beforeending FBMKLCI at 1,700With momentum indicators showingsigns of peaking coupled with concernsover the impending GE, we expect themarket to pull back towards end-2Q2012/ early-3Q2012. That said, any pullback isnot expected to be severe as: (1) equityThe 4E Journal 35

30%Oct-06Apr-07Feb-08Mar-08Jul-08Sep-08May-09Jun-09Jul-09Sep-09Dec-09Mar-10May-10Nov-10Feb-11May-11Aug-11Oct-11Dec-11Feb-12Source: Merdeka CenterFigure 19 : Technical outlook of FBMKLCI still bullishFigure 20 : FBMKLCI has strong support at 13x P/ESource: Alliance Researchvaluation is currently not excessive atmean P/E of 15x, and (2) liquidity is stillexpected to be strong for the remainderof the year.30Figure 20 : FBMKLCI has strong support at 13x P/E25302013.1x P/E signifies marketvaluations during past nonrecessionslowdowns36 The 4E JournalOn a worst case scenario, the maximumdownside risk is 12 percent from currentlevel as we expect strong support level at1,410 based on past trough P/E valuation(excluding recessions) of 13x.We view any market pullback as a goodopportunity to accumulate stocks withstrong fundamental. We expect marketto end on a high in 2012 as Malaysianequities should be re-rated post generalelection given dissipating political risks aswell as playing catch-up to global equityrally this year.Accordingly, we revise our end 2012FBMKLCI from 1,600 to 1,700 as we nowvalue the market at slightly above meanP/E valuation of 15.5x (average of meanand +1 standard deviation) on CY2012earnings which are expected to growby 13.9 percent. This implies that theFBMKLCI could still gain 6 percent for theremainder of the year and 11.1 percent for2012 overall.Sector weightingGiven the external uncertainties, theMalaysian economy is likely to be drivenby government infrastructure spendingand resilient domestic consumptionin 2012. We, therefore, continue tooverweight construction as well as oil andgas sectors to ride on capital expenditureupcycle as well as consumer, retail real25 15Figure 20 : FBMKLCI has strong support at 13x P/E20 10301552520108.4x P/E1998-1999Source: 15 Alliance Research, BloombergAsian financial crisis10 58.4x P/E1998-1999Figure 21 : FBMKLCI P/E trend5Asian financial crisis1990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201219901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012xSource: 18Alliance Research, BloombergSource: Alliance Research, Bloomberg17+1 SD @ 16.5xFigure 1621 : 21 FBMKLCI : FBMKLCI P/E trend P/E trendAverage @ 14.8x15x148.4x P/E1998-1999Asian financial crisis13.1x P/E signifies marketvaluations during past nonrecessionslowdowns9.7x P/E2008-2009Global financial crisis13.1x P/E signifies marketvaluations during past nonrecessionP/E slowdowns9.7x2008-2009Global financial crisis199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120129.7x P/E2008-2009Global financial crisisFigure 22 : FBMKLCI P/B trend18 x2.6-1 SD @ 13.0x1.8x1713+1 SD @ 16.5x2.4+1 SD @ 2.3x182.6162.21.61217Average @ 14.8x15+1 SD @ 16.5xAverage @ 2.4 2.0x2.014111.416-1 SD @ 13.0x1.82.2 -1 SD @ 1.7x1310Average @ 14.8x1.2151.6122.011 91.4141.010-1 SD @ 13.0x1.21.89131.01.612111.4Source: Source: 10 Bloomberg BloombergSource: BloombergSource: 1.2 Bloomberg91.0Figure 23 : Sector weightingFigure 23 : Sector weightingOverweight Neutral UnderweightBanksOverweightAutomotiveNeutralGloveUnderweightSource: BloombergConstruction Aviation PropertySource: BloombergConsumerBuilding materialsBanks Automotive GloveGamingMediaOil Figure Construction & gas 23 : Sector weighting Plantation Aviation PropertyREITConsumer(retail)PowerBuilding materialsTechnology ↑OverweightGamingTelecommunication MediaNeutral ↓UnderweightOil & gasPlantationSource: Alliance ResearchBanksREIT (retail)PowerAutomotive GloveConstructionTechnologyAviation↑PropertyConsumerTelecommunicationBuilding materials↓GamingMediaSource: Alliance ResearchOil & gasPlantationREIT (retail)PowerTechnology ↑Telecommunication ↓Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Oct-09Jan-10Apr-10Jul-10Oct-10Jan-11Apr-11Jul-11Oct-11Jan-12xFigure 22 : FBMKLCI P/B trend2.4+1 SD @ 2.3xFigure 22 : FBMKLCI P/B trend2.2Average @ 2.0+1 SD @ 2.3xAverage @ 2Jan-07Apr-07 Jan-07Jul-07Apr-07Oct-07Jan-08 Jul-07Apr-08Oct-07Jul-08Oct-08 Jan-08Jan-09 Apr-08Apr-09Jul-08Jul-09Oct-09 Oct-08Jan-10Jan-09Apr-10Jul-10 Apr-09Oct-10Jul-09Jan-11Apr-11 Oct-09Jul-11Jan-10Oct-11Apr-10Jan-12Jul-10Oct-10Jan-11Jan-06 Apr-11Apr-06Jul-11Jul-06Oct-06 Oct-11Jan-07Apr-07 Jan-12Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09Jul-09Jan-06Oct-09Jan-10 Apr-06Apr-10 Jul-06Jul-10Oct-10 Oct-06Jan-11 Jan-07Apr-11Apr-07Jul-11Oct-11 Jul-07Jan-12Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09x2.62.0Jan-06Apr-06Jul-06Oct-06Jan-07Apr-07Jul-07Oct-07Jan-08Apr-08Jul-08Oct-08Jan-09Apr-09

estate investment trust (REIT) and gamingsectors to ride on resilient domesticconsumption. We also overweight thebanking sector, which we believe, willbenefit from both capital expenditure(mainly ETP driven) and domesticconsumption.We downgrade the telecommunicationsector from overweight to neutral givenstrong performance YTD and limitedupside going forward especially aftertaking into account yield spread (dividend– Malaysian government securities orMGS) compression. On the other hand, arebound in semi-conductor book-to-billratio and improving economic outlook inthe U.S. is expected to raise the prospectfor the technology sector although itis still not out of the woods yet. As such,we upgrade technology sector fromunderweight to neutral.INVESTMENT THEMES IN 2Q2012Theme #1:Accelerating construction news flow(Jeremy Goh jeremygoh@alliancefg.comDID: +603 2717 6664)It has traditionally been witnessed thatnews flow on construction, particularlyon contract awards and implementation,tends to accelerate months before the GE.Academicians have termed this “politicsof developmentalism” which states thatfunding, especially for infrastructure,increases months before and during theelection campaign. This is done in hopesto garner more political support for theincumbent government and to portray itscommitment towards development.The current construction news flowreminds us of a time back in mid-2007(yes, the boom times) where talk of megaprojects were in abundance. In fact, threemonths prior to the 12th GE in 2008, theNorthern Double Track (largest projectthen) was awarded.Looking at it now, we feel that projectawards will continue to gain momentumover the coming months. Domesticcontract awards have already startedstrong in 1Q2012 with RM5.74 billionawarded. In fact, this was the strongestquarter for contract awards witnessed inthe last three years. The best part is, 1Qhas historically been one of the weakestquarters of the year, implying that jobflows could accelerate further in thecoming months. Some of the notablecontracts that could be out in 2Q includeMRT packages V4 (Section 16-Semantan)and V7 (Tun Hussien Onn-Tmn Mesra)which should be worth RM1 billion each,the LRT depot (RM500million) and WestCoast Expressway(RM6 billion). Figure25 lists down thevarious projects thatare in the pipeline.Despite its slowimplementationsince initially mootedin 2005, the longawaitedpublicfinance initiative (PFI)[or public privatepartnerships (PPP)]type projects finallytook off in mid-2010 and have beenaccelerating since.We estimate thatat least RM3 billionworth of PFI projectshave been awardedsince mid-2010. The7,000kick start of PFI jobs6,000is very positive for theconstruction5,000 sectorsince 4,000 the governmentcan now implementFigure 25 : Projects in the pipelineProjects in the pipeline RM/m CommentsMRT SBK line elevated works 12,000 RM2bn already awardedMRT SBK line tunneling works 8,200 Awaiting official LOA to Gamuda-MMCLRT depot at Putra Heights 500 Tenders closed in FebKLIA2 additional works 1,900 Tenders ongoingIRWT - Langat 2 2,000 Must be awarded to complete the IRWTPNB owned hotel in KL 700-800 Awaiting tenders to be calledKLIFD earthworks na Largest earthworks project, preQ calledPrai 1000-1400MW gas fired plant 3000-4200 Plans for 4000MW in new gas plants overallWest Coast Expressway 7,000 CA to be signed in March, works to start in 3QPenang traffic alleviation project 5000-8000 PreQ called but kick start only in 2015Jabor (Pahang) to KT (Terengganu) road 5,000 Implemented in 6 packagesSegamat-Tangkak-Muar Highway 750-770 Implemented in 5 packages over 63kmVarious rural road networks in Sarawak 2,000 Tenders closed but award delayedKota Marudu-Ranau road (Sabah) 700 Part of rural development plansNew Pantai Expressway extension 900 Allingment issues, likely delayedFigure 24 : Domestic contracts awarded to listed contractors (RM m)KL Outer Ring Road 1,000 Govt approved, finalising CAKinrara-Damansara Highway 1,000 Tenders called, 7 invited to bidAmpang-Cheras Highway na Details TBADamansara-Sg5,606Buloh Highway 5,740 na Details TBASg Dua-Juru (Penang) 5,231na Details TBA4,696Source: Alliance Research, various media sources3,0003,1632,719 2,5443,430Figure 26 : Contracts awarded over the past 2 quarters2,7362,246Date Recipient Customer Value Project Completion TypeOct-11 Dayang 1,644Murphy Sarawak 100 Various 4Q12 TopsideOct-11 MMHE Petronas Carigali 236 Telok 4Q12 FabricaNov-11 MMHE ExxonMobil 1,400 Tapis 4Q13 FabricaNov-11 SapuraCrest Petrobras 4,200 Brazil 2020 InstallaDec-11 Coastal Contracts Various 223 Various n/a Vessel sDec-11 Alam Maritim Sarawak Shell 30 E8, F13K 2Q2012 InstallaDec-11 Kencana Bechtel, Saipem 1,000 Wheatstone 3Q15 FabricaNote: 1Q12 figures exclude the MRT SBK line tunnelling Jan-12 works (RM8.2bn) SapuraCrest since LOA is not out yet Petrovietnam 300 n/a n/a InstallaJan-12 Alam Maritim Samsung 115 SOGT 3Q2012 InstallaJan-12 Bumi Armada Petrobras 155 Brazil 2016 Vessel cFeb-12 Kencana Murphy Sarawak 101 Patricia & Serendah 2Q12 FabricaFeb-12 Dayang Brunei Shell 85 n/a 4Q16 Vessel cFeb-12 Dayang Talisman 125 Various 2015 TopsideFeb-12 Uzma Petronas Carigali 350 West Region Msia 1Q17 Well TeFeb-12 Kencana ExxonMobil 74 Tapis 2Q13 FabricaMRT SBK line elevated works 12,000 Mar-12 RM2bn Ramunia already awardedAquaterra 24 West Desaru 3Q12 FabricaMRT SBK line tunneling works 8,200 Mar-12 Awaiting Bumi official Armada LOA to Gamuda-MMC Petrobras 110 Brazil 2016 Vessel cLRT depot at Putra Heights TOTAL 500 Tenders closed in Feb8,627more projects than what 1,904 its budget would2,000 1,607allow. Under the PFI scheme, the project1,000is private sector funded which is then-accorded a stream of returns from the asset.1Q092Q093Q09We feel that investors have largelySource: Alliance Research compilation from Bursa announcementsdiscounted the strong magnitude ofcontract flows. This is evident by theFigure 25 : Projects in the pipelineKLCON Index only trading at meanProjects in the pipeline RM/m CommentsP/B of 1.4x in spite of a strong contractawards in 1Q. Maintain OVERWEIGHTon KLIA2 construction additional works with Gamuda 1,900 Tenders (Buy, ongoing TP:RM4.77) and Mudajaya (Strong Buy, TP:RM4.53) as our top picks.Theme #2:Continued capex spending in the oil &gas sector(Team Ampang-Cheras coverage Highway arhnue@alliancefg.comna Details TBADamansara-Sg Buloh Highway na Details TBADID: +603 2722 1565)Source: Alliance Research, various media sourcesFigure 24 : Domestic contracts awarded to listed contractors (RM m)7,0006,0005,0004,0003,0002,0001,000-1,6071Q092,719 2,5443,1632Q093Q094Q091,9041Q103,4305,606Note: 1Q12 figures exclude the MRT SBK line tunnelling works (RM8.2bn) since LOA is not out yet2Q103Q10Source: Alliance Research compilation from Bursa announcementsIRWT - Langat 2 Source: 2,000 Bloomberg, Must awarded Alliance Research to complete the IRWTPNB owned hotel in KL 700-800 Awaiting tenders to be calledKLIFD earthworks na Largest earthworks project, preQ calledPrai 1000-1400MW gas fired plant 3000-4200 Plans for 4000MW in new gas plants overallWest Coast Expressway 7,000 CA to be signed in March, works to start in 3QPenang traffic alleviation project 5000-8000 PreQ called but kick start only in 2015Jabor (Pahang) to KT (Terengganu) road 5,000 Implemented in 6 packagesSegamat-Tangkak-Muar Highway 750-770 Implemented in 5 packages over 63kmVarious rural road networks in Sarawak 2,000 Tenders closed but award delayedKota Marudu-Ranau road (Sabah) 700 Part of rural development plansNew Pantai Expressway extension 900 Allingment issues, likely delayedKL Outer Ring Road 1,000 Govt approved, finalising CAKinrara-Damansara Highway 1,000 Tenders called, 7 invited to bidSg Dua-Juru (Penang) na Details TBAFigure 26 : Contracts awarded over the past 2 quarters4,6964Q102,7361Q111,6445,2312,2465,740We believe that the oil and gas sectorwill continue to be vibrant with newsflow and contract awards over 2012. YTD,we have tabulated contract amounts tototal at a modest RM1.4 billion, comparedto RM7.2 billion worth of jobs awardedto Malaysian companies over 4Q2012.Contracts that have been awarded so farthis year were a combination of vesselcharters and renewals as well as smallfabrication works. Notably, we have notseen contract awards for big ticket itemslike major fabrication, floating productionand/or major installation and pipelineprojects yet.This is about to change though. Whilecontract awards have been slow incoming, bidding activity as well as newson upcoming developments has beenheating up of late. Some key contractsin Malaysia that are due to arrive in theDate Recipient Customer Value Project Completion TypeOct-11 Dayang Murphy Sarawak 100 Various 4Q12 Topside MaintenanceOct-11 MMHE Petronas Carigali 236 Telok 4Q12 FabricationNov-11 MMHE ExxonMobil 1,400 Tapis 4Q13 FabricationNov-11 SapuraCrest Petrobras 4,200 Brazil 2020 InstallationDec-11 Coastal Contracts Various 223 Various n/a Vessel salesDec-11 Alam Maritim Sarawak Shell 30 E8, F13K 2Q2012 InstallationDec-11 Kencana Bechtel, Saipem 1,000 Wheatstone 3Q15 FabricationJan-12 SapuraCrest Petrovietnam 300 n/a n/a InstallationJan-12 Alam Maritim Samsung 115 SOGT 3Q2012 InstallationJan-12 Bumi Armada Petrobras 155 Brazil 2016 Vessel charterFeb-12 Kencana Murphy Sarawak 101 Patricia & Serendah 2Q12 FabricationFeb-12 Dayang Brunei Shell 85 n/a 4Q16 Vessel charterFeb-12 Dayang Talisman 125 Various 2015 Topside MaintenanceFeb-12 Uzma Petronas Carigali 350 West Region Msia 1Q17 Well TestingFeb-12 Kencana ExxonMobil 74 Tapis 2Q13 FabricationMar-12 Ramunia Aquaterra 24 West Desaru 3Q12 FabricationMar-12 Bumi Armada Petrobras 110 Brazil 2016 Vessel charterTOTAL 8,627Source: Bloomberg, Alliance Research4Q091Q102Q103Q104Q101Q112Q113Q114Q111Q122Q113Q114Q111Q12The 4E Journal 37

they look well positioned to capitalise onthe rise in demand for FPSO globally.Besides these three large cap companies,we also highlight four small capcompanies under our radar which appearto have exciting prospects. Havingalready performed well, these companies(Perisai Petroleum, Deleum and Uzma)could still surprise the market further, webelieve, given their growing order books,and in Hibiscus’s case, striking oil in theMiddle East.Theme #3:Breweries are the next capitalmanagement play(Ian Wan ianwwk@alliancefg.com DID:+603 2717 6694)Recently, we have seen a pick-up in capitalmanagement initiatives by publicly listedcompanies such as Telekom and Maxis,thanks to the accommodative fundingenvironment. Within the consumer space,we believe breweries could be the nextplay on capital management. In fact, webelieve 2Q2012 could be an excitingquarter for the brewery sector as weexpect to see a lot more positive newsflows throughout the quarter.Firstly, we expect Guinness Anchor Bhd(GAB) to reward its shareholders withanother lumpy special cash dividend inApril 2012 as the company is currentlysitting on a large cash piles of close toRM400 million (equivalent to about 10percent of its market cap) after it issuedanother RM200 million commercialpapers (CP) in late January 2012. Torecap, GAB initiated a RM500 millioncommercial paper (CP)/medium-termnotes (MTN) programme in November2011, of which RM350 million has beenutilised. We believe the purpose of the CP/MTN programme is to improve the capitalstructure of the company as it does notneed much capital expenditure goingforward.compared to GAB who achieved recordsales volume in December 2011 due toChinese New Year.Lastly, we anticipate that market interestson the brewery sub-sector to increasefurther in June 2012 as investors startfeeling the “Euro 2012’s heat wave” onthe street as the eagerly awaited footballcompetition second only to World Cupkick-off from June 8 to July 1, whichwould directly boost beer consumptionsthroughout the period.In a nutshell, we reaffirm our bullish viewon the brewery sector and reiterate ourStrong Buy recommendations on bothGAB and Carlsberg with a target price ofRM18.26 and RM11.12 respectively, basedon free cash flow to firm (FCFF) valuationmodel. Both of the stocks offer a yieldof more than 5 percent, based on ourestimates without taken into account theGAB’s special cash dividend that we hadmentioned above. Hence, GAB remainsour top pick for the sector.Theme #4:Privatisations driving interest in smallcap consumer stocks(Ian Wan ianwwk@alliancefg.com DID:+603 2717 6694)Over the years, Malaysian consumer sectorhas always been perceived as just a yieldplay. However, we believe this view couldchange in 2012 as we anticipate marketinterest on small consumer stocks toincrease due to: (1) diminishing investableuniverse within the consumer sector, and(2) potentially more privatisation of thesmall cap consumer stocks.Malaysian consumer sector is mainlyrepresented by 16 companies withmarket cap of more than RM1 billion(big cap), making up more than 85percent of the sector weightage. Thebig cap consumer stocks are trading ata high PER of 17x, as compared to lessthan 10x for the small cap (less than RM1billion) consumer stocks. Given that KFCand QSR are likely to be taken privatein 2Q2012, the big cap consumer poolwould drop to only 14 companies, ormaybe even less as some of the otherbig cap consumer stocks could also bedropped by investors as concerns mounton excise duty hike for sin-sector andsubsidies roll-back, post 13th GE.Furthermore, we have also seen quite afew privatisation deals in the consumersector in 2011, especially those withmarket cap of less than RM1 billion. Webelieve this trend could continue in 2012,thanks to the accommodative fundingenvironment. This could again potentiallyserve as a re-rating catalyst for small capconsumer stocks in 2012.Given the two reasons mentioned above,we anticipate the valuation gap betweenthe big and small cap stocks to narrowin 2012. Hence, we prefer small caps thatoffer strong growth prospect and couldpotentially enter the big cap pool overthe next three years such as Padini (nonrated),Guan Chong (non-rated), Bonia(non-rated) and Old Town (non-rated).On top of that, we have also identifiedfour potential privatisation targets basedon three criteria, which are: (1) strongoperating cash flow, (2) high net cashor low gearing, and (3) high controllingstake by its major shareholder. Amongthe four, we see Hup Seng Industries(non-rated) as the most likely privatisationtarget in 2012, given its strong cash flowfrom operations (CFO) yield of 15 percentand high net cash which making up 32percent of its market capitalisation.Figure 29 : Consumer sector’s privatisation deals and take-over offers in 2011/2010Figure 29 : Consumer sector’s privatisation deals and take-over offers in 2011/2010Date Company Market Cap Offer price Fwd PER Fwd PBV(RM m) RMDate(x) (x)Company Market Cap Offer price Fwd PER Fwd PBVDec-11 KFC 3,173.1 4.00 17.7 3.02(RM m) RM (x) (x)Dec-11 QSR 2,063.3 6.80Dec-1114.8KFC1.953,173.1 4.00 17.7 3.02Secondly, we expect Sep-11 better-than DXN Holdingsexpected131.4 1.75Dec-119.0QSR1.702,063.3 6.80 14.8 1.95Sep-11 DXN Holdings 131.4 1.75 9.0 1.701QCY2012 quarterly Jul-11results CI Holdings' from Permanis the S/B 819.3 5.77 25.5 8.60May-11 Mamee Double Decker 655.3 4.33Jul-1113.8CI Holdings'2.22Permanis S/B 819.3 5.77 25.5 8.60breweries in May 2012 as Chinese NewMay-11 Teo Seng Capital 130.0 0.65May-118.3Mamee Double1.31Decker 655.3 4.33 13.8 2.22Year’s impact remains Apr-11 strong Berjaya Retail in January 973.1 0.65May-1118.0Teo Seng2.71Capital 130.0 0.65 8.3 1.31Apr-11 Berjaya Retail 973.1 0.65 18.0 2.712012. For example, Nov-10 Carlsberg Leong Hup Industries Malaysia 318.7 1.80 10.6 0.51Nov-10 Eminvest 108.0 0.90Nov-102.7Leong Hup0.57Industries 318.7 1.80 10.6 0.51(Carlsberg) expects the Chinese New YearAverageNov-1013.4Eminvest3.07108.0 0.90 2.7 0.57sales impact to be stronger in JanuaryAverage 13.4 3.07Source: Alliance Research2012, instead of December 2012 as Source: Alliance ResearchFigure 30 : Potential privatisation or take-over targetsFigure 30 : Potential privatisation or take-over targetsCompany Sector Market cap Share Trailing 12- Forward (1) Trailing CFO yield (2) Net % of (3) Major shareholder's Latest net Cash required for Pro-forma Shareholder number ofprice mth PERCompany12-mth 12-mth CFO/Sectorcash perMarket cap Share Trailing 12-shareForward (1) Trailing CFO yield (2) Netgearing/ (net privatisation* net gearing% of (3) Major shareholder's Latest net Cash required(RM m) (RM) (x) PER (x) share (RM)share (RM) priceprice mth PERstake12-mth 12-mth CFO/cash) (%) (RM m)cash per share(%) equity/ share sharesgearing/ (net privatisationHUP SENG INDUSTRIES BHD Food Products 232.8 1.94 8.4 N/A 0.29 15.0% 0.62 31.7% (RM m) HSB Group (RM) S/B (x) 51% PER (x) (50.2) share (RM) 148 share 50.6 (RM) price 1.23 stake 120.0cash) (%) (RM m)AJINOMOTO MALAYSIA BHD Food Products 247.5 4.07 9.9 HUP SENG N/AINDUSTRIES 0.59 BHD 14.5% Food Products 1.04 25.6% 232.8 Ajinomoto 1.94 Co Inc 8.4 50% N/A(27.6) 0.29 15.0% 161 42.4 0.62 31.7% 3.77 HSB Group S/B60.851% (50.2)APOLLO FOOD HOLDINGS BHD Food Products 238.4 2.98 15.9 AJINOMOTO N/A MALAYSIA 0.37 BHD 12.4% Food Products 0.77 25.9% 247.5 Keynote Capital 4.07 9.9 51% N/A(28.6) 0.59 14.5% 151 41.3 1.04 25.6% 2.70 Ajinomoto Co 80.0 Inc 50% (27.6)KAWAN FOOD BHD Food Products 105.6 0.88 7.4 APOLLO 8.0 FOOD HOLDINGS 0.09 BHD 9.9% Food Products 0.14 16.2% 238.4 Gan Family 2.98 15.9 50% N/A(15.8) 0.37 12.4% 68 47.3 0.77 25.9% 0.90 Keynote Capital 120.0 51% (28.6)KAWAN FOOD BHD Food Products 105.6 0.88 7.4 8.0 0.09 9.9% 0.14 16.2% Gan Family 50% (15.8)Source: Alliance ResearchSource: Alliance ResearchFigure 31 : Management’s guidance on loan growth and NIMFigure 31 : Management’s guidance on loan growth and NIMThe 4E Journal 39

with so much industry reform andbusiness change taking place. In thepast few months, we’ve fully utilisedall of the traditional and new mediachannels available to us to keepmembers up-to-date.” said Rantall.Lindy Jones, FPA’s Chief MarketingOfficer, believes the FPA’s Twitterand LinkedIn channels have provedextremely successful in breaking newground to communicate with FPAmembers.“The LinkedIn Forum is only open to FPAmembers, and provides a means forthem to discuss views and exchangeopinions with each other on the issuesthat affect them as professionals. Thesubject matter, collegiate tone andcalibre of insight distinguish thisForum from any other online media forfinancial planners,” said Jones.“We’ve also found the LinkedIn Forumhas been very effective in testingthe temperature of our membershipon a range of issues, as well asgathering member views to developour Government Policy submissions.For instance, the Federal Budgetsubmission in January prompted adebate in the Forum about the hottopic of tax deductibility of advicefees. The Forum’s views were takeninto account when we developed theSubmission.”“While Investment Trends’ research tellsus that only around one in ten financialplanners use Twitter, we also know thatFPA members who follow us on Twitterappreciated the minute-by-minuteupdates from January PJC inquiry andthe February SEC hearings into FoFA.You simply can’t achieve the same levelof immediacy with other media.”In the coming weeks, the FPA will lookto build on its social media strategy byincluding online forums on its websiteat www.fpabestpractice.com.au. Theonline forums will facilitate discussionabout the Shadow Shopper reportand members’ views before and afterthe exclusive FPA workshop eventsheld throughout Australia in May withAustralian Securities and InvestmentsCommission (ASIC) and FinancialOmbudsman Service (FOS).FPA Launches Fee-for-ServiceToolkit and online knowledgehub for membersSydney: The Financial PlanningAssociation (FPA) of Australia haslaunched a Fee-for-Service toolkit and anonline knowledge hub as valuable anduseful resources to support members intheir practices.The Toolkit includes a practical and diverserange of tools and educational resourcesto help transition financial planningbusinesses to a Fee-for-Service model.The resource is in line with the FPA’s ownremuneration policy, approved by theFPA Board in 2009, requiring membersto remove conflicted remuneration forinvestment and superannuation advicein line with the Future of Financial Advice(FoFA) reforms. Following a three-yeartransition, this policy is effective from July1, 2012 for all FPA members.Lindy Jones, ChiefMarketing Officer ofthe Australian FPAsaid, “Commissionswill soon be historyfor most aspectsof investment andsuperannuationadvice. Our researchshows that more than 75 percent ofFPA members have already removedcommissions from their business modelsand we are committed to supporting allof our members with the transition tothe FPA remuneration model. Removingconflicted remuneration and ensuringfinancial planners adopt an approachcharacterised by clarity, comparabilityand transparency, signals a key milestonein assisting financial planning become arespected profession.”“This Toolkit brings together the bestideas and strategies from FPA experts,FPA practitioner members and leadingtechnical specialists in the industry. FPAmembers will find a practical and diverserange of tools and educational resourcesto help transition their business to apost-FoFA model and comply with theFPA remuneration policy.” The Toolkit,offered free of charge as an exclusivebenefit to FPA members, outlines a ‘Sixsteps to Fee-for-Service transition’ guidewww.financialplanningmagazine.com.auFee-for-Service Toolkit for FPA Members.as well as online Continuing ProfessionalDevelopment (CPD) sessions and a liveblog to ask questions and share ideas.Another resource designed specificallyfor FPA members is the new online“knowledge hub” which is live atfinancialplanningmagazine.com.au.The hub provides access to valuablecontent from the FPA’s Financial Planningmagazine, which FPA members receiveeach month. The website features socialmedia functions, content from back issuesof the magazine as well as the latest newsfrom the FPA and the profession.Jones said, “Our research tells us thatFPA members highly value the qualitycontent that characterises our FinancialPlanning magazine. In response tomember feedback, we are delighted to beextending this content to digital channelson a state-of-the-art interactive platformfor our members. With everythinghappening in the industry right now,we believe it’s vital to keep the focus onadding real and practical value to ourmembers through initiatives such as thisonline knowledge hub and our Fee-for-Service Toolkit.”The 4E Journal 43

INDUSTRYJanuary - June 2012Penang ChapterRaised funds for several charitiesRelevancy of Euro Debt CrisisThe FPAM Penang Chapter raised RM1836.00 for various charities through its FPAM/ Rockwills CSR joint project over two seminars held in February and March. Thehanding over event of the donations was published by newspapers such as The Star,New Strait Times and Sin Chew Daily on April 26, 2012.PlanPlus Inc. President Shawn Braymansharing on “European Debt Crisis - How it willaffect You & I” at Wisma Rockwills in Penangon May 19, 2012.Ipoh ChapterFamily Wealth PlanningParticipants comprised of different professions.Koh (right) receiving a token of appreciation.The FPAM Ipoh Chapter held a seminar in May where FlorenceKoh was invited to present on Family Wealth Planning - Leaving aLegacy. Participants who attended came represented a variety ofprofessions such as accountants, lawyers, financial planners andbusinessmen.Koh addressed the in-depth issue of family legacy planning ina simple yet profound and practical manner based on her ownpersonal experiences.The participants were divided into three groups to brainstormsolutions for case studies. Most of those who attended providedencouraging feedback and were impressed with the session.Brainstorming session.Participant presenting his group’s findings.The 4E Journal 45

Programmes are subject to changes. Course will be cancelled if dateof course coincides with the 13th General Election date.CE COURSESUnderstanding & Interpreting Financial Statements(A Securities Commission CPE-accredited course)Understanding Upstream Oil and Gas Economics Valuation(A Securities Commission CPE-accredited course)Speaker:Thye Foot LeongDate: July 7, 2012 / Saturday [ full day ]Venue:Tower Regency Hotel, Ipoh, PerakRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:05PMFee:Normal – RM150 ( FPAM Member), RM200 (Public)10CE10CPECode ofEthics10CPDPrivate Trust: Wealth Preservation, Distribution,Creditors Protection & Succession Planning(A Securities Commission CPE-accredited course)Speaker:Sabrina Soon AbdullahDate: July 14, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 ( FPAM Member) , RM350 (Public)by July 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPE10CPDFamily Wealth Planning: Leaving Legacy(A Securities Commission CPE-accredited course)Speaker:Florence Koh Lee KhengDate: July 25, 2012 / Wednesday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 ( FPAM Member) , RM380 (Public)by July 1, 2012Normal – RM320 ( FPAM Member), RM430 (Public)10 10CE CPE10CPDAnti-Money Laundering (AML) For Financial Professional(A Securities Commission CPE-accredited course)Speaker:David MathewDate: August 25, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by August 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPE10CPDUnderstanding & Interpreting Financial Statements(A Securities Commission CPE-accredited course)Speaker:Thye Foot LeongDate: September 12, 2012 / Wednesday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by September 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10CE10CPECode ofEthics10CPDSpeaker:Elias AbllahDate: September 22, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by September 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPEShariah Perspectives of Financial Planning & Wealth Management(A Securities Commission CPE-accredited course)Speaker:Mahadzir AhmadDate: October 13, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by October 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPE10CPDIslamic Financial Planning: Comprehensive Case Study(A Securities Commission CPE-accredited course)Speaker:Mahadzir AhmadDate: November 24, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by November 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPEBehavioural Finance & Its Impact on Corporate Decision Making(A Securities Commission CPE-accredited course)Speaker:Dr. Ch’ng Huck KhoonDate: November 27, 2012 / Tuesday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM380 (Public)by November 1, 2012Normal – RM320 ( FPAM Member), RM430 (Public)10 10CE CPE10CPDFormulating Effective Portfolio Management Strategies(A Securities Commission CPE-accredited course)Speaker:Dr. Ch’ng Huck KhoonDate: December 15, 2012 / Saturday [ full day ]Venue:Dewan Berjaya, Bukit Kiara Equestrian & Country ResortJalan Bukit Kiara, 60000 Kuala LumpurRegistration: 8:30AM – 9:00AMTime:9:00AM – 5:00PMFee:Early Bird Special – RM280 (FPAM Member), RM350 (Public)by December 1, 2012Normal – RM320 ( FPAM Member), RM380 (Public)10 10CE CPE10CPD10CPD10CPDThe 4E Journal 47

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