https://forum.lowyat.net/topic/3374996/+1020

Showtime747,

Read above thread. You are behind in news. It had happened for some banks.

Dreamer

Hansel,

So, is putting a lot of your eggs into ASx such a good deal?? How much of your asset / investment is tied to Malaysia?? Are you diversified enough??

You have ENOUGH. Protect your money / investment from any single country's failure should be your highest priority.

Dreamer

I agree about diversification and also asset allocation together with invest outside malaysia. Example:
Which one below, you find more comfortable?
1. RM 5 million in Malaysia only
2. RM 2 million in Malaysia and 1 million in foreign currencies/foreign investment

I do know people who thinks ASx is a good deal. You can get 'guaranteed' & 'stable' dividends every year. Educating the public about diversification is a real challenge, though.

I don't think it is "wide spread" enough now to cause panic. But I think it will in the near future.

Looks like what you predicted will come true soon. Your haters will be and

Showtime747,

What do you consider as "wide spread"?? Every single bank lay off 10% to 20% of its employees?? Every GLC lay off 10%??

""cause panic""

Come on...

"Don't worry, be happy!!"

and

"Not too bad" people will never panic even if they lose jobs and have no money. They believe THE GOVERNMENT will take care of them.

Dreamer

large mfg mnc's may benefit from the lower rm to incr profits, but if they are not expanding, it does little to help incr jobs or raise income for the local employees.

on the other hand, sme's trading with primarily imported intermediate goods in usd will find it difficult to continue. an sme having a simple biz model of cogs:overheads:profit of 60:20:20 finding a 33% rm depreciation will then hv 80:20:0. they will either have to cut staff or close shop. one explanation for potential jobs lost in the coming year.

overall, i can't see any real net benefit for the people despite claims "weak rm good for exports"!

if prolonged, this new cashflow problem will force lower inventories, tight supplies, prices will be forced up - more trouble for many sme's.

at 4.50, a 40% rm depr will be even more devastating on biz and employment - a recession will be imminent.

for older salaried workers and pensioners, their retirement will be dark n gloomy.

Unker, my business still face problem employing people. Still have staff resigning for "greener pasture". Some posts are vacant for 1-2 months. It ranges from office people to factory workers. If SME like mine need to cut headcount, which is a real possibility judging from the bleak outlook, then it will be widespread

I can feel the effect to RM depreciation started to set in. 6 of my suppliers have increased price in the last 2-3 weeks. Export sale has not grown since 1st half of the year and I expect it to decline . Feedback from my sales people is very gloomy especially in China.

Most of my business associates (our associations) face the same problem. We are still surviving now, but don't know for how long.

Again, hearing from the horse's mouth, the chain effect has already begun.

Tough days ahead for all.

Why NOT, you ask these companies like Sime Darby, PETRONAS, MISC, IOI Corp, YTL ..etc that earn income in USD or seek
Monetary Authority of Singapore (MAS) or Arab country friends to stabilize FOREX speculator ?

http://www.themalaymailonline.com/malaysia...gest-firms-list

Should you profit taking now ? Don't get your fingers burn.

You buy raw materials in USD, and sell and export in USD, whether the exchange rate of USD/RM fall to whatever level has no impact on the cost.
It has nothing to do with USD cash in hand or not, credit facilities, LC, hedging or whatever finance facilities are easily available.

The issue has no impact what we were discussing previously about, MNCs are not greatly affected by the exchange rate, in fact they are beneficiers.

Factories that closing down because of downsizing, business volume died down, profit margin died down or shift to a much cheaper wages countries.

Large corporate doing export, and MNCs have not cashflow problem generally,
GST claiming back is not time consuming. Our company have filed GST every months since the onset of GST, little issues.

The issues mentioned are only pronounced in SMEs, as until now I still see many still not quite understand how the GST works.

Yes, there is a hiccup in the claiming process for some. But I believe it soon will be ironed out.
GST is not a cost to business, the cashflow issue due to claiming process is not a bigger deal for large corporation, but SME may be hit harder.

SME that ceased operation because of razor sharp thin profit margin, and with GST implementation just induce them to close down, not because of GST issue alone, because GST is not a cost to business except for those non-GST registered.

Yes, business is not good out there, in fact our company suffer 30~40% drop in revenue compared to previous year, but this slowdown is worldwide currently, there is not much can be done, to be fair, although can be better.

Ya, tough environment ahead. Thinking of just surviving. Ups and downs is part and parcel of business. If a business can ride through the big waves, calmer seas is just not too far in front. We have encountered the really bad times before in 1998, so I think we are better prepared this time. Just have to manage the cashflow and forget about profit and loss. Not a time to get greedy and gungho

The silverlining is stock becomes cheaper, and may present good opportunity to investors.
We are paying the price of aftermath of QE.

Every few year or decades, surely there will be a gloomiest period, no escape from it, part of economy cycle.

Factories and businesses are very simple, if they see revenue and profit is improving, they expand.
If not, status quo or sizing down to cut cost.

As mentioned before, RM depreciation poses the tough situation towards SME primary, not MNCs or large corporation.

Weak currency is like 2 edged sword, you get more business but on the other hand something need to give.
It is like cutting price to boost sales, you have better top line but at the expense of bottom line.
It is not a free lunch, a weak currency, purchasing power is sacrificed for potential more business in export (your price is cheaper than rival so you undercut them).

The suffering of SME in term of import will eventually mean trade import will be trending down, and with export status quo, we may see better trade surplus, if the currency is prolonged weak. This is the dynamic of how weak currency that result in better trade surplus.
We have experienced it before the aftermath of 1998, how a trade deficit quickly turn to surplus, after a big depreciation of RM during 1998 crisis.

No escape from it, this is a difficult period that we need to go through. Everyone knew business is tough out there currently.
Just recession and booming is cyclical, once is many years or decade, there is almost certainty got economy issue one.

The near future is gloomy, no doubt, but it is not the end of the world.

Too gloomy view, sometimes is not good for decision making, be it for business or investment, as in this kind of period, they may be opportunity as well.
Just like how 2008 financial crisis, everyone said, USD will become worthless, stock will plunge, but see what happening now, those invest and get into right business during that time are making decent gain after many years later.

i m more concern rmb too.

rmb v rm is more easier to predict current eco situation...

what will happen if rmb v rm reach the level of

0.7
0.8
0.9
1.0

?? life is still goes on but the eco structure will totally change... at 1.0 we are eco conquer by others player in the world...

2 cents.

Sometimes really don't know where people went already.
Keep on reading news graduate cannot get a job, but in actual situation for those running businesses, we tend to see employer always complain hiring is difficult. Almost everywhere see banner of hiring.

For sure, high wages, and goyang kaki job is not available.

Gen Y has a very different thinking. Somehow they can afford to be choosy. They want MNC, they want O&G salary, they want accommodative bosses who don't scold. Learning at their stage of career is not their priority, but salary is. And they can resign first, then only look for new job.

Very different from my time. We value our job and try to learn as much as possible instead of looking for better pay. We work until mid-night without OT just to get the job done because that is our responsibility to our boss. We can take loads of shit from our boss. And complain and whine among our colleague behind our boss's back. Resign without a job in hand is unheard of. If you resign without a job, and go for an interview, the interviewer will treat you as a problematic staff

If recession comes, it may be good for Gen-Y to experience a really bad job market to teach them a lesson. Life has been too good to them.

---end of whining from a Gen X---

Gen Y buy 600k to 800k property upon graduate, some flip property, jobs to them is a pass time until next property flip, so pay must sustain their lifestyle.

I thought we are at 4.26 closed as at 4 Sept 2015. Bloomberg and bnm figures.

Seems that your inability to buy a property because of missing the boat has preoccupied your life so much that you have to bring up the issue even in a non property related thread

If you buy raw materials with USD in-hand, and then sell and collect USD and in-turn park it somewhere in the USD, you don't have a problem. If you do not convert and perform your acct'g treatments in RM, you don't have a problem. It is all about the acct'g treatment.

I have SME clients doing this, and they are not as badly affected as the others who delve into the RM.

Hence MNCs will not be affected so much in terms of raw material costing.

GST issue IS AN ISSUE, though not directly, but the indirect effects should not be ignored too. If the execution of the GST taxation process is not good, it will bring hardships to good operations which, as claimed (though I wouldn't concur is limited to this) have 'razor-thin profit margins'. Why should a strong cashflow company prosper and a company with lower cashflow capability suffer because of the GST ? If an SME operation is able to sell at a lower profit margin so that entities down the 'food-chain' can enjoy better cost savings, and finally benefitting the end-consumer, it will be good for the end-consumers. Furthermore, the percentage of GST charged against the end-consumer will be lower because of the lower pricing.

If the problem here is an entity which is not paying taxes or evading taxes, hence not respecting the law and the courts, that would be a problem. But if the problem resides with the tax-collection authorities, then it is not fair to eliminate the smaller guy which is trying to follow the rule-of-law.

There is a hiccup in the claiming process..., but it will soon be ironed out ? How long will it take to iron out, when we have a few tsunamis hitting us now in the face along with this GST thing ? Do we, then blame it on the timing of these issues coming together at the same time ? No,... blaming won't help the smaller guy who will be wiped out before the problems external to him are erased.

If we are going to go with the concept put up here, then many SMEs should close down, and MNCs alone will survive and prosper. Perhaps a few 'stronger' SMEs might survive too, and they will have the luxury of raising prices. We, as the end-consumers, will bear the brunt of this effect in the end. Perhaps we are already feeling that now, with the rising prices of 'everything' around us.

If your MNC (with good cashflow and dealing in the USD alone in and out) can suffer a revenue drop of approx. 30%-40% in these times, how do you think an SME (with razor-thin margins and not able to deal entirely in the USD) will be affected ? Is it fair to let the little guy go ? Is it fair for the end-consumers to pay more for products and services later on ?

Is it fair to let only MNCs survive ?

All should be given a chance to survive.