Light shines brightest when it is dark

THE one time I felt really scared in an unfamiliar physical environment was many years ago when my friend and I got lost in Taman Negara.

Because of a wrong turn, what was to be a simple two-hour track to a riverside lodge took us nearly eight hours. The jungle was getting really dark. The leeches were having a feast. And the sounds of wild animals in the distance made us shiver in our pants.

We eventually found our way to the lodge and quickly lit a kerosene lamp we had brought with us.

In the heart of the deep jungle, the light was truly reassuring. After a dinner of delicious instant mee and a tin of sardines, we turned down the lamp and lit some candles to illuminate the lodge.

Those of us who live in towns may not fully appreciate the beauty of a lit candle in the midst of total darkness. But it is really true that light shines brightest in the dark.

Life is not all sunshine. There are times when we feel like we are walking through very dark valleys.

It could be due to the loss of a job, the death of someone very dear to us, or a recurrent illness where treatment seems to bring more problems than the disease itself.

At times like this, it is only natural that we yearn to see the light.

A person lost at sea is encouraged when he sees the beacon of light coming from a lighthouse. It signifies hope. But the light that we seek at times like this is not necessarily from a physical source. It can come in the form of someone who is prepared to drop everything to help us navigate through our tough times.

It could be someone willing to listen to you, with a box of tissue nearby, without saying a word.

I have, in the past few weeks, felt like I was walking through a very dark valley with no end in sight.

But it is always when I am at the lowest ebb that something invariably happens – a light shows up to brighten up my life.

Last week, I went to see my dentist and told her I would be a real challenge to her this time.

My mouth can hardly open. And from what the doctors tell me, and my own research on the Internet, this is one of the most troublesome side effects of radiotherapy and chemotherapy.

I have been having trouble eating, and even brushing my teeth is difficult. I wondered how my dentist would be able to use her tools to fix whatever problems she could find. But she patiently went to work, and spoke to me gently with reassuring words.

The session lasted close to two hours and she managed to do five fillings. It was amazing!

She told me not to lose heart over my mouth issue. Take things one day at a time, she said. “You will be fine.”

And when I went to pay, the clinic assistant smiled and said: “Doctor says no charge.”

Though my dentist knew I could afford the bill, she must have wanted to do something to cheer me up.

It was not about the money, but a reminder that I do not walk alone.

I won’t deny her the opportunity to be the giver, and for me to be the blessed recipient. There is joy in both giving and receiving, if done in the right spirit.

I got into my car and tears just streamed down. I had a good cry before I made my way back to work. Suddenly, the dark valley I had been walking through in recent weeks didn’t seem so dark after all.

By SOO Ewe Jin

Executive editor Soo Ewe Jin appreciates being on the receiving end of kind words, sincere fellowship and heart-to-heart conversations, underscoring the fact that the best things in life are not only free, but priceless.

The views expressed are entirely the writer's own.

Abe Statement: Apology, Abapology or Abomb? Crafty rhetoric, insincere politics

Japanese Prime Minister Shinzo Abe delivers a statement in Tokyo on Friday marking the 70th anniversary of the end of World War II. He acknowledged Japan had inflicted "immeasurable damage and suffering" on innocent people but said generations not involved in the conflict should not be burdened with continued apologies. TORU HANAI/REUTERS

BEIJING, Aug. 14 -- As Japanese Prime Minister Shinzo Abe releases an official statement later Friday to mark the 70th anniversary of his country's surrender at the end of World War II (WWII), he is standing at a critical crossroad.

Upon such a highly symbolic and closely watched occasion, Abe has a choice to make, and there is only one way that will lead him and his nation closer to the "normal country" dream he has so frequently shouted from the rooftops.

Choosing a wrong course -- or keeping going astray, given his record on the sensitive history issue -- will undoubtedly carry the second-term prime minister further away from a legacy in nation-building he so desperately needs, as his signature "Abenomics" is losing sizzle.

Any statement that flagrantly flouts the true history and fails to repent Japan's WWII atrocities would be tantamount to Abe dropping a bomb upon his country's international reputation and trustworthiness.

Such an "Abomb" would be particularly sad, as its sole victim would be Japan itself, Abe's motherland, which is the only country in the world that has been A-bombed and still in the healing.

It would also be extraordinarily irresponsible and destructive, not only because its shock waves would blow the chances for his "normal country" ambition to come true anytime soon, but because its fallout would further ail Japan's already morbid ties with its neighbors and stoke regional tensions. If Abe possesses any reasonable level of sobriety, he will not throw an "Abomb" at his own country. Rather, judging from the trial balloons he has released of late, a more likely scenario is that the canny nationalist would offer an adulterated apology.

An "Abapology" -- mentioning such key words as aggression and apology but placing them in a context that waters down their meaning, or releasing nuanced versions in different languages -- would be regrettable.

Such a half-hearted apology would once again reveal Abe's deep reluctance to face up to his country's wartime crimes and take on the noble responsibility on his shoulders in seriously reflecting on the past in order to usher Japan into a world-assuring future.

A muddle-through approach of that kind would be not only unworthy of the great significance of the historic juncture, but indicative of a conspicuous lack of political and historical calcium, which explains to a large extent why Japan remains an "abnormal" country 70 years after WWII.

The only right way forward is for Abe to stop his rightist slide and provide a proper and unalloyed apology -- explicit enough to demonstrate heartfelt remorse and a resolve to abandon his erstwhile troublesome attitude toward WWII history and help dispel the specter of distrust between his country and its neighbors.

Yet should history be any guide, even an apparently whole-hearted apology from Abe would not be enough. It is the least he should do. To realize his "normal country" dream and restore Japan's standing on the world stage, he has to follow up with concrete actions.

By Deng Yushan (Xinhua)

Crafty rhetoric, insincere politics 
(China Daily)

A very cleverly worded speech. An impressive play of the words. That's about everything we could say about Japanese Prime Minister Shinzo Abe's latest statement on his country's unseemly record in World War II.

Abe didn't seem to deviate much from the well-received benchmark statement in 1995 by then Japanese prime minister Tomiichi Murayama. And the key points of that historic speech, including "aggression", "colonial rule", "remorse" and "apology", did find their way into his speech, though with abundant ambiguity.

For many in his audience, his expression of "heartfelt gratitude" to those who have been tolerant of his country and helped it return to the international community might be an unexpected bonus - not unlike his pledge to "squarely face the history of the past". That could be why some believe Abe has delivered more than what had been anticipated, given the discrepancies among its versions in different languages.

That East Asia just got around a potentially explosive occasion that could have escalated tensions is itself something to celebrate. For Japan's vigilant neighbors, however, whether or not Abe included the salient points of the Murayama Statement in his speech is not just a touchstone to gauge his attitude toward history, but the bottom line as well. Once that line is crossed, Japan's deteriorating ties with neighboring China and the Republic of Korea will slide past a point of no return, at least during Abe's term in office.

Abe knows what will come next. So, even after provoking neighboring countries no end, he waved olive branches at them requesting meetings at the highest level. He is yet to get one, precisely because of his betrayal of the Murayama Statement's spirit.

By incorporating the key expressions of that milestone statement, Abe may effectively silence some of his critics, whose latest demand was that his statement include the core Murayama expressions.

But make no mistake, he didn't present an apology of his own. He merely stated the obvious truth that earlier Japanese cabinets had expressed "heartfelt" apologies for the atrocities committed by imperial Japan.

It would be naive to think the tensions paralyzing East Asia will thus be gone. That Abe didn't cross the Rubicon, at best, means he was aware of the dire consequences of doing so and avoided it. And, that tremendous public pressure from home and abroad forced him to squeeze those words into his speech doesn't mean he actually meant it.

Rhetoric counts when dealing with Japanese politicians, for whom whether or not the Abe statement includes those key words makes a difference. Japanese politicians' infamous tradition of "slip of the tongue", however, makes it even more important to see how they act.

Abe's track record belies his claims of commitment to peace and good neighborly relations. That Abe and his advisers had reportedly struggled over whether or not to include Murayama's expressions, that the ruling parties had not agreed on the exact use of the expressions in the final transcript until the very last moment, that Abe managed to avoid directly referring to Japan's war as one of aggression and some of the perished Japanese as war criminals, and that his words became evasive when it came to Japan's colonial rule and the "comfort women" issue all betrayed a sense of reluctance.

Needless to say, reading between the lines of the Murayama Statement and Abe's speech even a casual reader can feel the difference in tones. In contrast to Murayama's sincerity, Abe seemed eager to shut out the past, though its sophisticated wording did hit the sentimental sweet spot at some points. But that will not be possible until Abe acts sincerely to achieve real reconciliation.

Therefore, even after weathering an otherwise imminent crisis, East Asia will continue to struggle in the long shadow of history.

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Property prices will hold as ringgit falls to new low against USD and S$

PETALING JAYA: The depreciation of the ringgit will not lead to real estate prices crashing.

The Malaysian Institute of Estate Agents (MIEA) president Eric Kho said property remained a sound investment despite the current economic climate.

“Holding property is always better than holding cash,” he said.

Kho acknowledged that demand for primary or new developments had slowed but not as a result of weakening currency.

He said the slowdown was due to Bank Negara guidelines for banks to be more prudent when providing loans as well as increased construction cost due to the Goods and Service Tax (GST).

Kho said construction cost had increased by up to 15% and some developers were holding back on launching new properties.

He said developers who had launched projects were offering huge discounts to attract buyers.

Kho said there was also a slowdown in the secondary market and those looking to buy could expect to pay between 5 and 10% less, depending on location.

Kho, however, expected this situation to be temporary and said property would eventually appreciate.
- The Star/Asia News Network

Ringgit falls to a new low

PETALING JAYA: China’s central bank adjusted the yuan downwards for the second consecutive day, sending markets and currencies reeling.

The ringgit continued its fall against the US dollar, hitting a new low of RM4.0275, largely due to the devaluation of the yuan.

All currencies in the region also continued with their decline against the US dollar.

On a year-to-date basis, the ringgit is the worst performer among its Asian peers, and is down 13.33%. This is followed by the Indonesian rupiah, South Korean won and Thai baht at 9.88%, 8.35% and 6.99%, respectively.

Comparatively, the yuan is now down approximately 4.61%.

The impact on the ringgit is worse compared to other countries because Malaysia is viewed as a net exporter of energy and prices are depressed now – hovering below the US$50 per barrel mark.

Stock markets across the region fell with the Jakarta Composite Index leading the pack by falling 3.1% followed by Hong Kong’s Hang Seng Index which dropped 2.38%.

There was a “bloodbath” on Bursa Malaysia where about 90% of the 1,000-odd stocks listed closed lower.

The benchmark KLCI fell for the fifth consecutive day, shedding 26.8 points yesterday to close at 1609 points. Since last Thursday, the index has been down by 116 points.

On Tuesday, the People Bank of China (PBOC) moved the guiding rate for the yuan 2% downwards and yesterday it set it at 1.6% lower. The guiding rate is the band within which the yuan is allowed to trade.

The downward movement is viewed as a devaluation of the yuan and the biggest currency movement for the world’s second largest economy since 1994. Although China abandoned its currency peg in 2005, the central bank manages the yuan in a tight range.

The devaluation of the yuan has sparked concerns that China’s economic slowdown was more severe than anticipated and the central bank had to devalue the currency to export its way out of the situation.

Independent economist Lee Heng Guie said that the devaluation that has sparked a global currency war may end up with no winners.

The impact on depreciating ringgit is likely to be felt most by companies which import their raw materials, consumers and parents with children studying overseas.

BY RAHIMY RAHIM, RAZAK AHMAD, AND L. SUGANYA The Star/Asia News Network

Ringgit hits new record low of 2.9109 to Singdollar

Malaysia's ringgit hit a new record low against the Singapore dollar on Friday (Aug 14).PHOTO: AFP

SINGAPORE - Malaysia's ringgit hit a new record low against the Singapore dollar on Friday (Aug 14), after the Malaysian unit slumped to a fresh 17-year low versus the US dollar.

With the fall in oil prices increasing concerns over the country's exports, the ringgit lost as much as 2.6 per cent to 4.1180 per dollar, its weakest since Sept. 1 1998.

It recovered some ground to trade at 4.0660 to the US dollar at 2:04pm, bringing its loss this week to about 4.5 per cent.

Malaysia pegged the ringgit at 3.8000 in September 1998 and maintained it until 2005.

Against the Singapore dollar, the ringgit tumbled 1.55 per cent to 2.9109 as at 11:45am from its close of 2.8665 on Thursday. The ringgit pared its losses to trade at 2.8944 as at 2:04pm.

Better-than-expected economic data on Thursday failed to dispel the gloom with the benchmark stock index falling 1.5 per cent on Friday morning, heading for its lowest close since 2012. Fve-year government bond yield rose to 3.982 per cent, its highest since November 2008.

Oil prices fell with crude futures hitting six-and-a-half lows, exacerbating worries about Malaysia's exports. The country supplies liquefied natural gas and palm oil.

Malaysia has also had to draw heavily on its foreign exchange reserves to defend its currency amid a political scandal, a yuan devaluation and slumping oil prices. Bank Negara governor Zeti Akhtar Aziz said on Thursday the central bank will need to rebuild the reserves that have fallen below US$100 billion for the first time since 2010.

"Foreigners are still selling," said Ang Kok Heng, chief investment officer at Phillip Capital Management Bhd. in Kuala Lumpur, told Bloomberg News. "Unless the ringgit stops weakening, I don't know how long the selling will continue." - New Straits Time

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  Chinese yuan extends fall, long-term depreciation unlikely, weakening is not devaluation

  BEIJING, Aug. 12 (Xinhua) -- Chinese currency continued to fall on Wednesday after the central bank reformed the exchange rate formation...

Chinese yuan extends fall, long-term depreciation unlikely, weakening is not devaluation

BEIJING, Aug. 12 (Xinhua) -- Chinese currency continued to fall on Wednesday after the central bank reformed the exchange rate formation system to better reflect the market.

The central parity rate of renminbi, or yuan, weakened by 1,008 basis points, or 1.6 percent, to 6.3306 against the U.S. dollar, narrowing from Tuesday's 2 percent, according to the China Foreign Exchange Trading System.

The People's Bank of China (PBOC), the central bank, changed the exchange rate formation system so that it takes into consideration the closing rate of the inter-bank foreign exchange market on the previous day, supply and demand in the market and price movement of major currencies.

The International Monetary Fund (IMF) described the central bank's move as "a welcome step" that allows market forces to have a greater role in determining the exchange rate.

"Greater exchange rate flexibility is important for China as it strives to give market-forces a decisive role in the economy and is rapidly integrating into global financial markets," an IMF spokesperson said in an email on Wednesday.

The IMF said it believes the country can achieve an effective floating exchange rate system within two or three years.

However, the move still surprised the market and prompted the lowest valuation of the yuan since October 2012.

Ma Jun, chief economist at the PBOC's research bureau, attributed the lower rate to a long-standing gap between the central parity rate and the previous day's closing rate on the inter-bank market.

In a latest statement released on Wednesday, the PBOC said the rate changes are normal, as it shows a more market-based system and the decisive role that the supply-demand relationship plays in determining the exchange rate.

"This may lead to potentially significant fluctuations in the short run but after a short period of adaptation the intra-day exchange rate movements and resulting central parity fluctuations will converge to a reasonably stable zone," the PBOC said.

Ma also said the shift is a one-off technical correction and should not be interpreted as an indicator of future depreciation.

A relatively robust economy, current account surplus and the internationalization of the yuan will help the currency remain stable, the PBOC said.

Official data showed the Chinese economy maintained 7 percent growth in the first half of 2015 against challenges at home and abroad, creating sound conditions for the yuan to hold steady.

Surplus in goods trade reached 305.2 billion U.S. dollars in the first 7 months, a fundamental prop for the exchange rate.

An internationalized yuan and open financial sector have boosted the demand for the currency in recent years, which serves as momentum for the rate's stabilization, the PBOC said.

In addition, the PBOC also cited China's abundant foreign exchange reserves, stable fiscal condition and healthy financial system. The central parity rate is based on a weighted average of prices offered by market makers before the opening of the interbank market each trading day. The currency is allowed to trade on the spot market within 2 percent of the rate.

The PBOC said it will strive to further improve market-based exchange rate formation, maintain normal fluctuations and keep the rate basically stable at an adaptive and equilibrium level.
- Xinhuanet

Yuan weakening is not devaluation: central bank economist

Photo taken on March 16, 2014, shows yuan (central) and other currencies in the picture. [Photo/IC]

BEIJING, Aug. 11 (Xinhua) -- Allowing the Chinese yuan to weaken sharply against the U.S. dollar does not signify the beginning of a downward trend, a central bank economist said on Tuesday .

The yuan central parity rate announced by the China Foreign Exchange Trading System (CFETS) stood at 6.2298 against the greenback on Tuesday compared to 6.1162 on Monday, down nearly 2 percent, the lowest level since April, 2013.

The shift is a one-off technical correction and should not be interpreted as an indicator of future depreciation, said Ma Jun, chief economist at the research bureau of the People's Bank of China (PBOC).

The central parity rate is based on a weighted average of prices offered by market makers before the opening of the interbank market each trading day. The currency is allowed to trade on the spot market within 2 percent of the rate.

The PBOC said Tuesday's lower rate resolved accumulated differences between the central parity rate and the market rate, and was part of improvements to the central parity rate formation system to make it more market-based.

Ma said a long-standing gap between the central parity rate and the previous day's closing rate on the inter-bank market led to the lower rate on Tuesday.

He said China's economic fundamentals support a "basically stable" yuan exchange rate. A central parity rate closer to the market rate will provide a more stable environment for macro-economic development.

The economy has shown signs steadying and recovery, with infrastructure investment accelerating and property sales improving. Compared with some economies under strong pressure to depreciate their currencies, China is better-off, with a current account surplus, huge foreign exchange reserves, low inflation and sound fiscal conditions, he explained.

From Tuesday, daily central parity quotes reported to CFETS before the market opens will be based on the previous day's closing rate on the inter-bank market, supply and demand and price movements of other major currencies, according to the PBOC.

In July 2005, the central bank unpegged the yuan against the U.S. dollar, allowing it to fluctuate against a basket of currencies.

Making formation of the central parity rate more market-based touches on the core of reform, compared with previous steps that mainly concerned how much the yuan can fluctuate, said Guan Tao, former head of the international payments department at the State Administration of Foreign Exchange.

The yuan was at first allowed to vary by 0.3 percent from the central parity rate each trading day and the trading band gradually expanded to 2 percent in March last year. The market expects it to expand to 3 percent in the near future.

The latest reform actually increases China's flexibility and independence in foreign exchange control, as a rigid exchange rate system is open to speculative attacks, Guan told China Business News.

Two-way fluctuations will become normal for the yuan in future, he said.

- Xinhuanet

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Sorry is the hardest word for Abe

The news that the "draft of Abe's statement contains an 'apology'" made the headlines all day on Japanese broadcaster NHK on Monday. According to the report, the statement to mark the 70th anniversary of the end of World War II by Japanese Prime Minister Shinzo Abe on Friday will also include key expressions used in the 1995 statement by then-prime minister Tomiichi Murayama, including "apology," "deep remorse," "aggression" and "colonial rule." This is so far the first report released saying that Abe's speech will cover this positive content.

Yet over the past few days, a number of Japanese media have been quoting a variety of inside information saying that Abe's remarks will not include terms like "apology." As the day that marks Japan's defeat in WWII approaches, how Abe will talk about it has been placed under global public scrutiny.

Abe's statement will reflect the future path of the country. If he only reflects on the wartime past but tries to blur the nature of the war by refusing to apologize, or avoiding mention of "aggression," the nation will face serious doubts over whether it is planning to ditch peaceful development, and means to reshape the political and historical pattern that formed after the war.

Abe has always been beating about the bush, trying to lower the world's anticipation of him echoing the spirit of the Murayama Statement. Not long ago, his cabinet voted through revisions of the country's security rules, which has triggered quite a few domestic protests. His domestic support rate has tumbled sharply, causing him unprecedented pressure since he assumed office as prime minister for the second time.

Abe might compromise, and add those key words from the 1995 Statement. Yet this is not as certain as a compromise to political pressure, rather than his own moral and political responsibility. His historical revisionism is known by all, and opportunism is universally considered as his main principle to adjust strategies over historical issues. Hence, there is a good chance that he may rewrite his statement draft at the last minute.

Accordingly, instead of the real historical recognition by Abe's administration, the speech will more likely mirror Abe's scheming and calculating among all the pros and cons in the power structure of the Asia-Pacific region.

Even so, a statement that can be accepted by the international community is still worth welcoming.

Abe's political logic is weird. He should realize that the US is Japan's biggest obstacle on the path toward becoming a "normal state." But he won't let go of the rivalry with China. Some suspect that Tokyo is eager to stay in the good graces of Washington, letting its guard down and seeking a chance to get rid of its control. However, Japan is unable to make that work.

Abe will find that his ability falls short of his wishes over his strategy in the Western Pacific. We hope he will make the right choice for his statement, whatever the reasons. And history will judge him fairly.

- Global Times

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The 70th annv. of the victory of war of resistance against Japanese aggression

Expert hails China's efforts in war against fascism  China's fight against Japanese Aggression began in 1931, and lasted for 14 years. This part of history has been widely recognised as a crucial part of the global fight against fascism. 

By-laws governing strata property management in Malaysia, part 2

General duties of a proprietors according to the Third Schedule of Strata Management Regulation 2015

WHILE last week's article covered the general by-laws under the Third Schedule of the Strata Management Regulation 2015, this week, we look at what is required and prohibited by the proprietor who is the house owner.

General duties of a proprietor

• Promptly pay to the management corporation the charges and contribution to the sinking fund relating to his parcel, and all other monies imposed by or payable to the management corporation under the Act;

• Promptly pay all quit rent, local authority assessment and other charges and outgoings which are payable in respect of his parcel;

• Permit the management corporation and its servants or agents, at all reasonable times and on reasonable notice being given (except in the case of an emergency when no notice is required), to enter his parcel for the purposes of:

a) checking for leakages or other building defects;

b) maintaining, repairing, renewing or upgrading pipes, wires, cables and ducts used or capable of being used in connection with the enjoyment of any other parcel or the common property;

c) maintaining, repairing, renewing or upgrading the common property; and executing any work or doing any act reasonably necessary for or in connection with the performance of its duties under the Act or the regulations made thereunder or for or in connection with the enforcement of these by- laws or additional by-laws affecting the development and forthwith carry out all the work ordered by any competent public or statutory authority in respect of his parcel other than such work for the benefit of the building or common property;

d) repair and maintain his parcel, including doors and windows and keep it in a state of good repair, reasonable wear and tear, damage by fire, storm, tempest or act of God excepted, and shall keep clean all exterior surfaces of glass in windows and doors on the boundary of his parcel which are not common property, unless the management corporation has resolved that it will keep clean the glass or specified part of the glass or the glass or part of the glass that cannot be accessed safely or at all by the proprietor;

e) maintain his parcel including all sanitary fittings, water, gas, electrical and air- conditioning pipes and apparatus thereof in a good condition so as not to cause any fire or explosion, or any leakages to any other parcel or the common property or so as not to cause any annoyance to the proprietors of other parcels in the development area;

f) forthwith repair and make good at his own cost and expense any damage to his parcel if such damage is excluded under any insurance policy effected by the management corporation and to carry out and complete such repair within any time period specified by the management corporation, failing which the management corporation may carry out such repair and the cost of so doing shall be charged to the proprietor and shall be payable on demand;

g) not use or permit to be used his parcel in such a manner or for such a purpose as to cause nuisance or danger to any other proprietor or the families of such proprietor; not use or permit to be used his parcel contrary to the terms of use of the parcel shown in the plan approved by the relevant authority; and

h) notify the management corporation forthwith of any change in the proprietorship of his parcel or any dealings, charges, leases or creation of any interest, for entry in the strata roll; and use and enjoy the common property in such a manner so as not to interfere unreasonably with the use and enjoyment thereof by other proprietors. Follow our column next week to learn of the general prohibitions of proprietors, power of the management corporation and changes to by-laws that are possible.

BY Datuk Pretam Singh Darshan Singh, a lawyer by profession, has previously worked as Senior Federal Counsel, Deputy Public Prosecutor with the Attorney General's Chambers and legal advisor to several government departments and agencies. He is currently the partner in a legal firm while simultaneously serving as President of the Tribunal for Home Buyers' Claims. Leveraging his vast knowledge and decades of experience and knowledge, he contributes articles to local and international journals, besides delivering lectures and talks in relevant forums.

Email your feedback and queries to: propertyqs@thesundaily.com

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Not wise to sell property or house to shore up ringgit Malaysia

ON Thursday, at a seminar organised by Malaysia Property Inc, the Employees Provident Fund (EPF) said it would continue to seek “opportunistic” investments abroad.

There are various reasons why EPF and the other funds absolutely need to do so if they are to provide a steady dividend stream to contributors over the longer term and to diversify risk.

As we have seen the last year or so, the ringgit has come under tremendous pressure and year to date, it has weakened against most currencies, especially the US dollar, the British pound and the Singapore dollar.

Had EPF not made forays abroad in 2009, its 14 million odd contributors would not have received dividends ranging between 6% and 6.75% between 2011 and 2014 and in the interim years of 2012, 6.12% and 2013, 6.35%.

Prior to this, EPF declared dividends of 5.8% in 2007, 4.5% in 2008, 5.65% in 2009 and 5.8% in 2010.

The Asian financial crisis in 1997/98 and the 2008 global financial crisis were costly lessons for EPF and the other funds.

Before its move to buy property abroad in 2008, less than 1% of its total funds were invested in real estate. Today, it has the mandate to invest up to 4% of its total funds of about RM700bil in local and foreign properties. It can also invest up to 26% of its available funds in non-ringgit denominated investment instruments including bonds, securities, properties and other others.

So far, EPF has invested more than £1bil in UK and more than 1bil euros in France and Germany. It also has properties in Japan and Australia.

Its core investments in Europe, excluding UK, are in the office and logistics sector. In UK, it has offices, logistics and 12 hospitals under the Spire brand. It also has a 20% stake in Battersea Power Station mixed used project. According to its head of global real estate in the private markets department Kamarulzaman Hassan, EPF would like to add retail hypermarket chain to its stable.

It is prudent and logical for EPF to seek opportunities in mature markets because although it knows the home market well, it is already in every sub-segment of the local real estate market - logistics, retail, office, residential.

As Kamarulzaman aptly said, EPF is “a big fish in a small crowded pond.” Other big fish in this small pond include Permodalan Nasional Bhd, Retirement Fund Inc (or KWAP) and Lembaga Tabung Haji, Perbadanan Hartanah Bumiputra among others.

There are several reasons why EPF has made forays abroad. It was badly hit in 1997 and 2008. Prior to this, it invested only in Malaysia. It had all its eggs in one basket.

Earlier this year, as the ringgit was weakening, certain parties in the government called on the various funds to bring their money home to shore up the ringgit. They were to curb investments abroad.

EPF subsequently sold 1 Sheldon Square, UK for £210mil (RM1.14bil), which it bought in 2010 for £156.7mi, giving EPF a net gain of £54 mil. Whether it made that decision to sell based on that call to bring the money home is a moot point. That property was tenanted out to Visa Services Europe until December 2022, with a 5.75% annual yield.

So far, KWAP and Felda have said they will not be selling their investments which gave them a good yield.

The thing is, if there is better yield to be had, and forex to earn, why dispose of them?

And why curb funds from investing abroad if they have done proper due diligence and are able to manage these investments well.

As it is, according to Kamarulzaman, London properties are so hot today that investors are willing to get 3.5% to 4% in annual yield.

Selling overseas real estate which were purchased when the pound was low, when it is offering a good yield, just to shore up the ringgit does not seem to be a wise call.

It is like killing the goose that lays the golden egg just to provide food for a day. Yes, London’s property prices are frothy now, but these property investment have long leases.

Besides, the markets it has invested in are mature markets with high liquidity. There is interest in these markets from around the world.

Because property sector is cyclical, the timing is important. EPF entered UK when the it was about RM5 to a pound. These investments came with long leases, which fit into EPF’s need for a steady income flow as it needs to pay dividends to contributors.

In short, going abroad gave it a much needed new investment platform which was not available at home.

These mature markets offer transparent legal and tax structures and clearly, governance was well established.

There is a clear exit option and this was demonstrated when it sold 1 Sheldon Square earlier this year.

UK properties have gone up in value considerably since. Whether EPF will continue to liquidate depends on various factors but to liquidate just to bring home the money to shore up the ringgit should not be one of them, especially when its investments are yielding good returns.

Property is today the biggest alternative asset class for institutional investors and forms the largest allocation for pension funds, insurance companies and sovereign wealth funds.

It is also not homogenous but in today’s volatile environment, it is more tangible than most other asset classes.

Comment by Thean Lee Cheng The Star/Asia News Network

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