Sunday, August 6th, 2017
PETALING JAYA: Bitcoin investments have undeniably become a trend among savvy investors in search of the golden goose, but one financial planner is against the use of it as part of the financial planning portfolio for retirement.
Max Growth Wealth Education Sdn Bhd managing director Nicholas Chu said one should not use bitcoin as part of the retirement portfolio and the public must be well aware of the risk in bitcoin trading before getting in.
“It is not asset-backed, it is very unsecure. It is, basically, you want to participate in the future changes. It’s not a proper financial planning way. It is just an experimental thing that you want to go through in this era, but it is not a proper investment product,” he told SunBiz.
“I definitely don’t agree if they use this for their financial planning. But for those who are able to try new ventures, they can go ahead provided they have extra money. If this doesn’t affect their existing financial planning, then I’ll leave it to them. We need to tell them the pros and cons of this investment. It’s up to the clients to do the final decision,” he said.
Chu cautioned on the uncertainties of bitcoin trading, which is driven by market forces.
“It is beyond anybody’s control, all the participants contribute to the bitcoin value. From that, I can say that there are a lot of uncertainties in the future,” he said.
Nonetheless, with the setting up of a few bitcoin exchanges, Chu noted that there will be demand and supply with tradeable markets available.
Bitcoin was the best-performing currency in 2015 and 2016, with a rise of 35.8% and 126.2% respectively.
Year to date, bitcoin prices have leaped more than three times. It stood at US$2,840 (RM12,140) as at 5pm last Friday.
Bitcoins are by the far the most popular cryptocurrency, which exists almost wholly in the digital realm and has no asset backing it. Bitcoin generation, known as mining, while open to anyone with a “mining application” on their computer, needs a great deal of computing power to solve complex algorithms which are later verified with the entire bitcoin network.
Colbert Low, founder of bitcoinmalaysia.com, said the recent spike in bitcoin prices could be partly due to the legalisation of bitcoin by the Japanese government.
He is unsure if the sharp rise in bitcoin prices will create a price bubble, but stressed that one cannot judge its price movement based on the “old economic theory”.
“This is a new economy based on a different model. It’s very hard to say,” Low opined, noting that there has been a growing number of retail outlets that accept bitcoin.
He foresees the usage of bitcoin propagating, especially in different types of payment methods.
However, Low opined that there will not be any “big movement” in the local market if the regulators do not regulate tbitcoin.
“Our new Bank Negara governor is forward thinking and he is very much into fintech, technology and innovation. So there would definitely be improvement,” Low said.
The positive development of blockchain will be a catalyst for the growth of bitcoin, he added.
“Blockchain is a real thing that will change the way the IP system is architectured. We need to go down to a deeper level to see how blockchain can change the current problem and solve it.
“There are a lot of projects right now, over 500 companies are looking at this (blockchain) right now. Even IBM, HP and Microsoft are looking at it.”
Blockchain refers to distributed database that maintains a continuously growing list of records, called blocks, secure from tampering and revision. Bitcoin is just an application or software that runs on blockchain technology.
“If you look at blockchain technology, government agencies like the United Nations, the World Bank and the International Monetary Fund are looking at it. This is the best way to secure your data,” Low said, noting that the usage of bitcoin will help reduce operating cost.
Currently, there are about 16 million bitcoins in the market and the number is capped at 21 million.
Bank Negara has said that it does not regulate the cryptocurrency and advised the public to be cautious of the risks associated with the usage of such digital currency.
PETALING JAYA: Relaxing banks’ lending criteria is not the solution to address the issue of access to affordable housing loans, said the National House Buyers Association (HBA) secretary-general Chang Kim Loong.
“The current problem is that house prices are too expensive in relation to the buyers’ income. This has resulted in some prospective house buyers having their loan applications rejected. However, the solution is not to relax lending guidelines but to find ways to lower property prices. The relaxation of lending guidelines will surely worsen the situation and speed up the road to a ‘homeless generation’ that HBA has been warning about for years,” he told SunBiz, addressing the Real Estate and Housing Developers Association’s (Rehda) call for banks to be less strict in their lending criteria to allow more to buy their dream homes.
According to Bank Negara Malaysia’s 2016 Annual Report, the increase in house prices since 2012 has outstripped the rise in income levels and prevailing median house prices are beyond the reach of most Malaysians.
Chang acknowledged that the average Malaysian today cannot afford to buy a property based on his or her current income and, if left unchecked, the housing crisis could lead to social problems.
“At first glance, it may appear that Rehda’s proposal has some merits as it helps people who cannot afford to buy their dream homes to get the necessary financing required. However the proposal is very detrimental in the medium to long term and will only compound the problem that property prices are too expensive in comparison to income levels,” he said.
Chang said such a move would only encourage developers to price new launches even higher and increase prices of existing completed properties, which would lead to higher costs such as legal fees and stamp duty.
“When it is known that banks are relaxing their credit criteria, owners of existing completed properties, especially the property speculators and investors club will follow the developers in increasing their selling prices. This will worsen the current situation as prices of both new and completed properties will increase at an accelerated rate,” he added.
Chang said banks owe a duty of care to depositors and Malaysia should learn from the US, whose subprime crisis “recipe” included overpriced properties, less than credit worthy borrowers and slowdown in the economy.
“Although Malaysian banks are in a much stronger and more resilient position since the Asian Financial Crisis, a subprime crisis in Malaysia could potentially devastate the domestic banking sector and trigger a widespread economic recession that could potentially spill over to the entire Asean region,” he added.
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LONDON: The global smartphone market grew by 7% year-over-year to 350.9 million units from 320 million units in Q2 2016.
Leaders of the pack Samsung, Apple, Huawei, Oppo and Vivo all grew, while Xiaomi reversed its recent performance and just missed out on a top-five spot.
The market continues to be driven by Chinese OEMs, which have optimised their operations in China. OEMs operating on the global stage, such as Apple or Samsung, saw modest growth as established markets for these companies continue to mature.
Samsung shipped 79.4 million smartphones in the quarter, up 3% from the year-ago result of 77.4 million units. The launch of the Galaxy S8/S8 Plus helped deliver 11% year-over-year revenue growth to 28.92 trillion KRW.
However, market share of Samsung declined to 23% in the quarter, down from 24% in the year earlier. Samsung has been struggling in China market as the strong top-three OEMs (Huawei, Oppo and Vivo) are dominating the market.
Apple reported a 2% growth in unit shipments for the quarter, shipping 41 million units in the quarter compared with 40.4 million units last year.
Apple has been able to grow its shipments year-over-year in light of consumer anticipation for the launch of the next, anniversary edition, of the iPhone later this summer or early fall.
Reinforcing the overall market trend towards larger screens, Apple continues to see strong demand for the premium iPhone 7 Plus model.
Huawei continues to hold the number three position globally, shipping 38.5 million smartphone units in the quarter – an increase of 20% from a year ago.
Huawei’s market share increased to 11%, narrowing the gap with Apple by 1% point in the second quarter. Huawei benefitted from the availability of its flagship P10 devices for all of Q2, even if the device is not performing as well as the P9 in the year prior.
Huawei’s Honor brand continues to do well. Huawei keeps growing its international business, something its Chinese competition has not been able to replicate.
Oppo and Vivo continued their growth stories in Q2 2017. Oppo grew 39%, from 21.9 million units in Q2 2016 to 30.5 million units in the most recent quarter. Vivo had an even higher growth rate, 45%, from 16.4 million units in Q2 2016 to 23.9 million units in Q2 2017.
This report is based on preliminary data from IHS Markit, a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide.