Government refusal to recognize the UEC due to 'national sovereignty', Kamalanthan said

 

School activity: Liow (right) with Eco World Foundation chairman Tan Sri Lee Lam Thye (with cap) and its CEO Capt (R) Datuk Liew Siong Sing (on Lee’s right) with students from SJK(C) Bukit Tinggi after Eco World handed over its donation of new canteen tables and benches to the school.

Liow: Retract UEC statement

BENTONG: MCA president Datuk Seri Liow Tiong Lai wants Deputy Education Minister Datuk P. Kamalanathan to retract his remarks about the Unified Examination Certificate (UEC).

He said Kamalanathan’s statement in Parliament that the Government’s refusal to recognise the UEC was due to issues of “national sovereignty” was never discussed in Cabinet meetings.

Kamalanathan and Muhyiddin“I urge Kamalanathan to retract his statement. This has nothing to do with the sovereignty of the country.

“This is his (Kamalanathan) personal view and not the Government’s. He may not have had the necessary information when he commented on the matter and this might mislead the public,” he said at SJK(C) Bukit Tinggi here after witnessing the handover of new canteen tables and benches yesterday.

Liow said if Kamalanathan did not understand the issue, he should have let Deputy Education Minister Chong Sin Woon explain it, adding that the statement might hurt the Chinese education system and the nation.

“The Education Ministry and the Higher Education Ministry have been in discussion over the recognition of the UEC,” he added.

Liow said the matter was discussed by the Malaysian Chinese Education Consultative Council Committee, comprising the United Chinese School Committees Association (Dong Zong), United Chinese School Teachers’ Association (Jia Zong) and Federation of Chinese Associations (Hua Zong), among others.

Responding yesterday, Kamalanathan maintained that his answer in Parliament was based on a Cabinet decision and not his personal view. His parliamentary reply was “verbatim” as per the Cabinet meeting on the matter on Nov 6 last year, he added.

However, he said it did not mean that it was impossible for UEC to be recognised.

“We (Education Ministry) have never closed the door on discussing (such) matters with any organisation because it is the ministry’s and everyone’s hope to see an improvement in the quality of our national education,” he said.

In KOTA KINABALU, Liberal Democratic Party president Datuk Teo Chee Kang said he was puzzled by Kamalanathan’s remarks in Parliament linking recognition of the UEC to national sovereignty.

“I regret that in answering a question in Parliament, the Deputy Minister said that the Government will not recognise the UEC for reasons of national interest and sovereignty.

“I wonder whether he knew what he was talking about. I cannot understand how it is related to national sovereignty,” he added.

- The Star/Asia News Network



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China start-up 'Little Red Book', Xiaohongshu valued at US$1bil

 

Colour of success: A Chinese actress dressed as a Red Guard and holding a ‘Little Red Book’ performs in front of a portrait of the late Chairman Mao Zedong at a restaurant in Beijing Xiaohongshu says its name has nothing to do with Mao’s famous tome. — Reuters

HONG KONG: The “Little Red Book” has become a symbol of capitalist success in Communist China.

E-commerce start-up Xiaohongshu, which means “Little Red Book” in Chinese, has raised US$100mil from Tencent Holdings Ltd and other investors at a valuation of about US$1bil, two people familiar with the matter said.

The online shopping site co-founded in 2013 by Charlwin Mao, which connects overseas merchants with local buyers, becomes China’s newest billion-dollar startup. It also attracted investment from Genesis Capital and Tiantu Capital in its latest round, the people said, asking not to be identified because the matter is private.

The funds will help bankroll the Shanghai-based startup’s expansion. Xiaohongshu -- which calls itself RED and stresses its name bears no relation to Mao Zedong’s book of quotations - works by letting its mostly younger female users post pictures of favorite products. It then connects them with sellers abroad of everything from Body Shop anti-dandruff shampoo to Lotte peach liquor.

Its fundraising comes as venture capital firms grow more cautious about valuations in China, an economy forecast to grow this year at its slowest pace in a quarter-century.

Genesis Capital is a late-stage investment firm founded by Richard Peng Zhijian, who oversaw Tencent’s investment unit. Genesis and Tencent didn’t respond to e-mailed queries. Calls to Shenzhen-based Tiantu’s general line went unanswered. Xiaohongshu co-founder Mao said he couldn’t immediately comment.

Three-year-old Xiaohongshu claims 17 million registered users on its LinkedIn page and had attracted investment previously from GGV Capital and Zhen Fund.

It specialises in cross-border e-commerce, marketing foreign brands to increasingly wealthy local shoppers.

That’s a market forecast to reach 6.5 trillion yuan (US$1 trillion) by 2016, the state-run Xinhua News Agency cited the Ministry of Commerce as saying in March.

It didn’t elaborate on that figure.

The company says its name has nothing to do with Mao’s famous tome, considered one of the most-printed works in history and known to English-speakers as the “Little Red Book.” The late Communist leader’s book is called “Hong Bao Shu” or “red treasure book” in Chinese. “Why isn’t your website called ‘Little Black Book,’ ‘Little Blue Book,’ ‘Little Purple Book’ or ‘Big Red Book’?” reads a question posted by Xiaohongshu in a section of its website sketching out its origins. “We don’t know. But anyway, our name isn’t because of Hong Bao Shu.” — Bloomberg

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Hedge funds invasion of US treasuries puts bond at risk, more turbulence in US debt market

Hedge funds are crowding into U.S. Treasuries, and that has bond traders bracing for more turbulence.

While the Federal Reserve doesn’t break out hedge-fund ownership, a group seen as a proxy increased its holdings to a record $1.27 trillion in the past year, according to a quarterly report released by the central bank this month. That came as foreign central banks and finance ministries, the biggest buy-and-hold owners in recent years, culled their investments for the first time on an annual basis since 2000.

The surge of hedge funds into U.S. government debt is a worrying sign to Societe Generale SA and Commerzbank AG.

They say the firms, which often use borrowed money and jump in and out of trades at a moment’s notice, will boost the chances of sudden shocks in the world’s de facto haven market. That may compound swings in Treasuries, which by some measures have reached record levels as concerns about China, the global economy and diverging central-bank policies whipsaw bond traders. The Treasury Department is already looking into whether the market isn’t running as smoothly as it should.

Volatility Risk

Foreign central banks’ “market share is being replaced by private investors who take a much more active approach,” Rob VandenAssem, the head of investment-grade fixed-income for developed markets at PineBridge Investments, which oversees $85 billion, said in an e-mail. “Hedge funds in particular pose a risk to volatility.”

The potential that hedge funds will amplify Treasury swings adds to questions about the resilience of the $13.3 trillion market, especially as the Fed considers whether to raise interest rates this year. And because yields are so low, sudden shifts in momentum could lead to big losses, especially for less nimble investors.

Ten-year Treasuries yielded 1.89 percent today, more than a half-percentage point below their June peak of 2.5 percent.

In the Fed’s quarterly reports, domestic hedge funds are categorized under “households and non-profit organizations.” Most analysts consider it an accurate gauge of Treasuries held by those high-powered firms, and to a lesser degree, ownership by households and other groups like private-equity shops and personal trusts. The latest data released March 10 showed they were the largest buyers of Treasuries last year, adding $398 billion. That’s the biggest increase on an annual basis since 2009.

Hedge funds are also signaling their presence in the U.S. bond market in other ways. Since the end of 2013, investors domiciled in the Caribbean, a popular legal home for hundreds of hedge funds seeking lower taxes, have increased their holdings of Treasuries by 43 percent to $352 billion, Treasury Department data show. As a group, they’re now the third biggest overseas creditors, behind only China and Japan.

At the same time, foreign investors, who still hold 40 percent of America’s bonds, were the only net sellers in 2015 as central banks in China and other emerging markets raised cash to support their currencies. And Treasury Department figures showed they kept selling at the start of the year.

The rise of hedge-fund ownership may already be making fluctuations in Treasuries worse. This year, daily swings in 10-year yields exceeded one standard deviation -- equal to 0.043 percentage point -- about 39 percent of time, according to TD Securities. That eclipses last year’s figure of 34 percent, which was the highest for any year going back to 1975, the data show.

“This will likely add volatility” said Bruno Braizinha, a fixed-income strategist at SocGen in New York.

Treasury Review

Concerns over abrupt swings, whether it’s because of a lack of liquidity or an increase in high-volume traders, have already caught the attention of the U.S. government. Spurred by a 12-minute plunge and rebound in yields on Oct. 15, 2014, the Treasury Department is conducting its first comprehensive review of the market’s structure since 1998.

Some say hedge funds aren’t the problem, but a potential solution.

By stepping in to take the place of traditional Wall Street banks, whose bond-trading businesses have come under pressure from regulations and shifts in technology, hedge funds may actually increase liquidity. And their use of leverage, or borrowed money, means they have the wherewithal to trade vast quantities of securities.

Leverage, Liquidity

At least that’s the view of Ronin Capital LLC, a Chicago-based proprietary trading firm. When U.S. officials asked for comments on liquidity and market structure earlier this year, the firm wrote in a March 19 letter that “leverage and liquidity in the U.S. Treasury market go hand in hand.”

“If the only entities willing to hold positions in U.S. Treasuries are ‘buy and hold,’ meaningful liquidity in the U.S. Treasury market will be nonexistent,” the firm said.

Some sophisticated investors have also started to trade on Treasury platforms previously reserved for bond dealers, according to an October report from financial-services consulting firm Greenwich Associates. Christian Hauff, the co-founder of Quantitative Brokers LLC, says many of those funds now look a lot like Wall Street’s proprietary bond-trading desks from years ago.

“You’re seeing those that used to trade on Wall Street transition to working at hedge funds,” he said.

Even if hedge funds provide more liquidity, it doesn’t necessarily ensure the ride won’t be bumpy. That’s because while traditional dealers often served as buffers for their clients during times of stress, hedge funds have no such incentive.

When volatility picks up, hedge funds can “jump on another ship,” said David Schnautz, a London-based rates strategist at Commerzbank. - Bloomberg

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Entrepreneurship is not a job but providing a solution

Coming up with a winning idea

Entrepreneurship is not a job. It’s about providing a solution, and pulling people and resources together to make that change. Workable business ideas are all about solving problems.

Q: I’m an engineering student in Portugal, but I feel I really was born to be an entrepreneur. I started creating logos for companies when I was about 15. I’m passionate about entrepreneurship and I’m always trying to think of new ways to start businesses. I want to follow my passion — but it’s tough when you have a great business idea, and no support. How do I find the right path? — João Bandeira, PortugalJoão, it’s always heartening to hear a young would-be entrepreneur talk about passion being a key driver in his life. The most successful entrepreneurs share that indescribable desire to change the world and make a positive difference in people’s lives.

And while it can be a struggle in the early days to find one project to pour all your enthusiasm into, just remember that successful entrepreneurs always manage to come up with an idea that’s right for them, and they make it work.

Your question reminds me of the origins of Ring — a wildly successful business that I have invested in.

For years, founder Jamie Siminoff had attempted to come up with a winning business idea — he even turned his garage in California into a lab for prototypes. As he worked there, though, Jamie was annoyed that he couldn’t hear the front doorbell.

One day he decided to fix this problem — he created a program to link the doorbell to his smartphone so that he could answer the door remotely with a video call. It was a great solution.

Jamie’s wife loved the idea as well: When Jamie was away, she could always see who was at the front door, and she felt safer.

Later, Jamie invited friends around to check out his other inventions, but the only thing anybody cared about was the doorbell!

He soon realised that this was the best business idea he ever had, and Ring was born. Just like that, the hours of searching for a winning idea were over.

João, the fact that you are constantly thinking of new businesses to start is a hugely valuable asset. Being proactive is a good thing, but I would strike a note of caution about the idea search.

I recently joined a host of fellow entrepreneurs in Los Angeles for Virgin Atlantic’s inaugural “Business Is an Adventure” event, and the topic of generating business ideas came up in a panel. Sean Rad, the CEO and founder of the dating app Tinder, made a great point.

“Entrepreneurship is not a job — it is a reaction to you wanting to solve a problem,” he said. “You have to wake up and say: ‘I am passionate about making a change, and I am passionate about pulling together people and resources... Not wake up and say: ‘I want to be an entrepreneur’ because I think you’ll kind of be lost... you’ll be looking for a problem instead of finding a problem looking for a solution.”

It’s a shrewd observation, and one that underlies the success of many companies, including Tinder.

In our daily lives, we all come across problems, annoyances or frustrations that we would love to see solved. Luckily, entrepreneurs are perfectly placed to solve those problems.

Interestingly enough, that’s how Virgin Atlantic began. After one particularly terrible experience as a passenger with an unscrupulous airline, I decided there must be a better way to fly. The next day, our team was on the phone with Boeing asking if they had any second-hand 747s that they were willing to sell.

Thankfully, they didn’t laugh and hang up — and the first Virgin airline was born.

So keep in mind that generating ideas is a great strength, but make sure that you’re spending your time and energy searching for solutions, not problems. That’s the best way to approach workable business ideas. Become a passionate problem-solver, and you’re half-way to being a successful entrepreneur.

Also keep in mind that once a great idea has been sparked, getting it off the ground can feel like a daunting task for anyone — especially if you have nobody there to support you, as you point out. I would advise you to take advantage of the connectivity offered by the Internet. Plenty of resources, networks and fellow entrepreneurs are just a click away.

Additionally, getting a mentor who can point you in the right direction and share his experiences is one of the best things you could ever do. You’d be surprised how many people are willing to help if you just ask. — Distributed by The New York Times Syndicate

By Richard Branson

Questions from readers will be answered in future columns. Please send them to Richard.Branson@nytimes.com. Please include your name, country, email address and the name of the website or publication where you read the column.

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House buyers' traps: purchasers lose their homes because of defaulting developers

WHY does this keep happening to house buyers in Malaysia?

This incident happened two years ago in Taiping where a laid-back community of mainly retirees found the roof over their heads nearly, and in some cases, actually, blown away. The purchasers had paid the developer and had moved into their houses and lived there for 10 years. Problem was that the purchasers paid the developers in cash remittance without taking out end-financing loans.

Unknown to the purchasers, the developer did not pay the developer’s bank to settle the developer’s loan vide bridging loans. The developer’s charge remained and grew into bigger indebtedness to the bank.

Apparently, the developer’s bank had not been collecting payment of the loan from the developer, even as the developer was collecting the instalments of the purchase price from the purchasers, as provided in the sale & purchase agreement (S&P) schedule.

Having waited for 10 years for the developer to settle his loan, the bank realised that the developer was not going to pay; that foreclosure was unavoidable.

The bank had a problem. Apart from the developer’s loan having ballooned over the years because of the bank’s laxity in not insisting on the developer paying promptly, there was also political repercussion. There are a few issues here, namely, the destruction of a settled community in a pleasant location, the injustice of the S&P; the solicitousness for developers in preference to purchasers on the part of the powers that be; and the embarrassment resulting from the bank’s philanthropic ramifications.

Has the bank breached the fiduciary duty of care to the purchasers as the bridging loan financier to the defaulting developer?

The crux of the problem is that the Housing Ministry-prescribed S&P allows the developer to build the purchaser’s house with the instalments of the purchase price paid by the purchaser from the day the S&P is signed. On top of this, and even more seriously, the developer is allowed to borrow from the developer’s banks on the security of the purchaser’s property.

Where a purchaser has paid the purchase price in full to the developer, and the developer does not pay the developer’s loan secured by the purchaser’s property, the developer’s bank may foreclose, auction off the purchaser’s property to recover the developer’s loan.

The developer suffers nothing. It has received the purchase price and pocketed it. The developer borrowed from its bank and gave the purchaser’s property as security, and with foreclosure the developer’s bank recovers its loan, and so the developer owes no money to the bank. It takes no risk, suffers no loss.

Purchasers the victims

It is the purchaser who loses. He loses his house and he has to settle the loan he took to buy the house with increasing interest on it. He is blacklisted, which means he can never borrow again. He may never buy a house again! Is this fair to the buyer who never did anything wrong to the developer or to the developer’s bank? In the Taiping housing fiasco, some of the purchasers had to buy their houses again at prices bloated by 10 years’ arrears of interest (i.e. pay the developer’s debt) to stave off foreclosure.

Who is to blame for this sad state of affairs? We will consider each one in turn. The most obvious candidate is, of course, the developer. Not so. It is the Housing Ministry for providing a standard form S&P that allows this to happen. Firstly, the S&P allows the developer to borrow money from a bank with a charge on the whole housing development land before it is sub-divided and sold. This pre-sale loan is referred to in the recitals to the S&P. This is understandable as the developer needs money before sale. The result of this is that the purchaser buys an encumbered property but the purchaser is not told how much of the developer’s loan, if apportioned equally, is borne by each purchaser’s sub-divided land (the redemption sum). After sale, the developer collects money from the purchaser from the day the S&P is signed, and should be able to make use of it to meet all the expenses of the development. However, after the sub-divided land is sold, the developer keeps borrowing, and no effort is made to keep the purchaser informed about the increasing amount of the developer’s loan/ the redemption sum.

The purchaser’s consent to the additional, post-sale loans is taken for granted. In fact, the purchaser cannot withhold his consent as long as the purchaser receives some fig-leaf protection from the developer’s bank in the form of an undertaking not to foreclose.

What is the use to the purchaser of the developer’s bank’s undertaking not to foreclose? What the purchaser needs is the absolute undertaking by the developer and the developer’s bank that a purchaser who has paid the purchase price will not face foreclosure vis-à-vis the disclaimer(s). This would have helped the Taiping purchasers. It is, therefore, a matter between the developer’s bank and the developer, with the Housing Ministry playing the proper protective role required of it by law, to ensure that such an undertaking/ disclaimer is given by the developer’s bank to the purchaser. This and other issues arising from the S&P have been raised by HBA with the Housing Ministry which continues to procrastinate.

To the developer’s bank, the loans to the developer on the security of the purchaser’s land is regarded as if it is the developer’s property entirely; it is of no concern to the developer’s bank that some of the purchasers have paid the developer and the developer may or may not have forwarded some of these payments to the developer’s bank.

The developer’s bank’s concern is whether the whole loan has been settled by the developer-borrower. If not, the developer’s bank feels secure in the knowledge that the entire housing development land is available to the developer’s bank to recover its loan/s. In so far as the developer’s bank is concerned, payments made by each purchaser to the developer is of no consequence. The transaction between the bank and the developer is the one that matters.

Under the then S&P, there is also no control over how much the developer should be allowed to borrow, for what purpose and by when it should be settled. Each loan to the developer increases the risks to the purchaser.

In the recent past, developer’s borrowed only for the purpose of meeting the expenses of the housing development. The developer was allowed to borrow twice only – once before sale and once after sale. Although the developer was not required to disclose the redemption sum, there was a very important safeguard. And that is, the developer had to settle the redemption sum to the developer’s bank before completion of construction so that at the end of the 24- or 36-month construction period, as the case may be, the property was free from the developer’s encumbrances and safe from foreclosure, even if the property was not transferred to the purchaser just as promptly. It was at least safe from foreclosure.

Bank initiatives

Banks/financial institutions should take the initiative to recover progressively the loan it had given the developer. Banks should stipulate as a condition for giving loans to their customers (developers) that the latter open its Housing Development Account (HDA), a statutory requirement, with the same bank and require the instalments of the purchase price be paid into it, and authorise the bank to deduct the developer’s loan by instalments from the HDA so that when the purchaser completes payment, the developer’s loan is also settled.

There is no such statutory requirement in the S&P so that if it happens at all, it’s serendipity!

HBA had meetings with the Housing Ministry to propose changes to the law and S&P with the view of giving greater protection to purchasers within the framework of the sell-and-build (which Rehda defend so fervently) but some pertinent ones had been objected by Rehda.

As if that is not enough, the ministry too have rejected those proposals vis-a-vis pre-determination of redemption sums in the S&P transaction. And that notwithstanding the Housing Development Act 1966 stating that it is inter alia for “the protection of the interests of purchaser.”

The next continuing article will dwell on the new “protection” or whatever in lieu thereof approved by the Attorney-General’s Chambers vis-à-vis “redemptions and disclaimers”.

Buyers beware by Chang Kim Loong

Chang Kim Loong is secretary-general of the National House Buyers Association: www.hba.org.my, a non-profit, non-governmental organisation.

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