Sunday, November 26th, 2017

 

Pound rally’s progress to hinge on clearing Brexit bill hurdles

LONDON, Nov 26 — The endurance of the pound’s three-week rally against the dollar depends on whether ongoing Brexit negotiations can clear the way to discuss trade. With the week being relatively light on key UK economic data, likely…


Cryptocurrencies in the early stage of a bubble?

PETALING JAYA: With Bank Negara Malaysia (BNM) taking steps to accommodate the rise of digital currencies, the outlook for cryptocurrencies appears to be more certain, but market observers opine that the market could be in the early stage of a bubble given the rising number of participants.

FXTM chief market strategist Hussein Sayed said there are more than 1,200 cryptocurrencies with a market cap of US$205 billion (RM845 billion), with Bitcoin, Ethereum and Ripple being the three big boys, accounting for over 80% of the total market cap in the cryptocurrency market.

“Others such as Litecoin, Dash, and Monero are also experiencing increasing popularity. New players may come in, but before investing in a cryptocurrency one should understand: what problem is it solving, the long-term vision, the team behind it, and its valuation compared to similar ones.”

As at 5pm last Friday, Bitcoin’s price stood at US$8,251, and Ethereum and Ripple were at US$411 and US$0.24 respectively. Year to date, these three most popular cryptocurrencies have risen 757%, 411% and 3592% each.

Singapore-based CoinHako’s head of market research Elvis Hee said in the emerging market of cryptocurrencies, there are many new projects and the spike in prices can be attributed mainly to new releases, including new exchange listings – Bittrex, Binanace, Bitfinex – which increase the liquidity of the tokens.

Nonetheless, he said, the current spike in cryptocurrencies’ prices will not be sustainable in the long run as more participants enter the market.

While the cryptocurrency market may be in the early stages of a bubble, Hee sees room for growth within the space as main market adoption by the masses has yet to take place, which will come in the form of increased regulation and supervision by the government.

“Once these rules are in place, it will allow for mass adoption and we believe we would see an increased growth in the space then.”

CoinHako is a service for consumers to buy, sell and secure their Bitcoins. 

Last Wednesday, BNM governor Tan Sri Muhammad Ibrahim said the central bank will designate persons converting cryptocurrencies into fiat money currencies as “reporting institutions” under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 from next year. Following that, due diligence is required with proper records on customers and transactions.

Earlier, the Securities Commission Malaysia said it is in consultation with global regulators, looking at recent developments and different approaches taken by its counterparts, to establish a framework for the registration of cryptocurrency exchanges by year-end.

At the Counter-Terrorism Financing Summit 2017 last week, BNM Financial Intelligence and Enforcement Department director Abd Rahman said Bitcoin is not the main source of funding for terrorism, but is more for investment.

On risks in investing in digital currencies, Hee said the risk is security at the fundamental level.

“This is in terms of securing of assets and tokens and ensuring sending to the right address. There is also volatility risk as prices can swing 10% to 50% either way at any given time. The general advice is to invest in fundamentally strong coins over the long-term horizon and not panic sell during volatility,” he said.

Hussein sees more upside bias to cryptocurrency prices as there is a clear correlation between them and the number of users, a trend that is likely to continue.

“Whether the longer term remains positive depends on adoption and application. Will more companies accept payments in cryptocurrencies? How will governments and regulators respond? And how will banks act on what seems to be a threat to their traditional businesses? Until now it’s not very clear.”

However, he said soaring demand is the key driver for any asset class and speculation for short-term profit is another source, pushing prices and leading to extreme volatility.

“Acceptance of cryptocurrencies by some countries, particularly Japan, also helped and just recently CME Group announced that it will include a Bitcoin derivative to its platform. This indicates that new investors are likely to become a part of the new asset class, but a projection for prices is very difficult given that there’s no economic metrics to valuate Bitcoin or other cryptocurrencies.”


What to watch out for when investing in digital currencies

PETALING JAYA: CoinHako’s head of market research Elvis Hee said one should not just look at the price but the total market capitalisation of the cryptocurrency when determining the potential of the cryptocurrency.

He said there is definitely potential in other cryptocurrencies apart from Bitcoin, as there is a need-and-use case for Blockchain in each industry, such as Ethereum and Ox Project/Kyber Network, which mainly operate at the fundamental/protocol level that allows other companies to build on top of its platform and services, thus benefiting the underlying protocol.

“With increased partnerships and adoption of the protocol it supports the ecosystem of decentralised applications at the secondary layer as they leverage of one another within the platform. This contributes to the overall success / sustainability of the protocol and make difficult for the protocol to fail in the long run as other companies rely on it.”

With thousands of cryptocurrencies currently in the space, there are many opportunities to invest but what would be the best investment or return?

Hee said there are a few indicators that investors can look out for when it comes to investment decision making.

He explained that projects that build at the protocol level are fundamentally more valuable as compared to the application level.

“Protocols are like the foundation to building blocks. Every building needs a strong foundation to build on top of it, if not it will not stand and protocols provide this underlying support for applications to build on top of. ”


26/11/2017 21:52:06

PETALING JAYA: CoinHako’s head of market research Elvis Hee said one should not just look at the price but the total market capitalisation of the cryptocurrency when determining the potential of the cryptocurrency.

He said there is definitely potential in other cryptocurrencies apart from Bitcoin, as there is a need-and-use case for Blockchain in each industry, such as Ethereum and Ox Project/Kyber Network, which mainly operate at the fundamental/protocol level that allows other companies to build on top of its platform and services, thus benefiting the underlying protocol.

“With increased partnerships and adoption of the protocol it supports the ecosystem of decentralised applications at the secondary layer as they leverage of one another within the platform. This contributes to the overall success / sustainability of the protocol and make difficult for the protocol to fail in the long run as other companies rely on it.”

With thousands of cryptocurrencies currently in the space, there are many opportunities to invest but what would be the best investment or return?

Hee said there are a few indicators that investors can look out for when it comes to investment decision making.

He explained that projects that build at the protocol level are fundamentally more valuable as compared to the application level.

“Protocols are like the foundation to building blocks. Every building needs a strong foundation to build on top of it, if not it will not stand and protocols provide this underlying support for applications to build on top of. ”


Berjaya Food disposes of interest in Kenny Rogers Indonesia

PETALING JAYA: Berjaya Food Bhd (BFood) subsidiary Berjaya Food International Sdn Bhd (BFI) is selling its entire stake in Kenny Rogers Roasters Indonesia operations, PT Boga Lestari Sentosa, for 9.60 billion rupiah (RM3.1 million).

The disposal is an opportunity for the BFood Group to divest its non-profitable foreign investment and recover a portion of the inter-company debt.

In a filing with Bursa Malaysia last Friday, the company said it entered into an agreement with two individuals Rudy Wiguna and Komelia Ersan for the disposal of its interest at 1,000 rupiah (32 sen) and the repayment of a 9.60 billion rupiah PT Boga debt to BFI.

The nominal consideration for the disposal was arrived at on a willing-seller willing-buyer basis after taking into consideration the past yearly losses and the shareholders’ deficit of PT Boga of 114.65 billion rupiah as at Aug 31, 2017. The original cost of investment in PT Boga was RM33.98 million, which has been fully impaired to date.

PT Boga was incorporated in Indonesia on June 9, 2005 and currently has an issued share capital of 127.61 billion rupiah comprising about 13.83 million PT Boga shares.

PT Boga is involved in the developing and operating of Kenny Rogers Roasters restaurants in Indonesia since 2011 and currently has 10 restaurants in Jakarta, Indonesia. The disposal results in a loss of about RM13.27 million or 3.53 sen per share for BFood.


BFood disposes of interest in Kenny Rogers Indonesia

PETALING JAYA: Berjaya Food Bhd (BFood) subsidiary Berjaya Food International Sdn Bhd (BFI) is selling its entire stake in Kenny Rogers Roasters Indonesia operations, PT Boga Lestari Sentosa, for 9.60 billion rupiah (RM3.1 million).

The disposal is an opportunity for the BFood Group to divest its non-profitable foreign investment and recover a portion of the inter-company debt.

In a filing with Bursa Malaysia last Friday, the company said it entered into an agreement with two individuals Rudy Wiguna and Komelia Ersan for the disposal of its interest at 1,000 rupiah (32 sen) and the repayment of a 9.60 billion rupiah PT Boga debt to BFI.

The nominal consideration for the disposal was arrived at on a willing-seller willing-buyer basis after taking into consideration the past yearly losses and the shareholders’ deficit of PT Boga of 114.65 billion rupiah as at Aug 31, 2017. The original cost of investment in PT Boga was RM33.98 million, which has been fully impaired to date.

PT Boga was incorporated in Indonesia on June 9, 2005 and currently has an issued share capital of 127.61 billion rupiah comprising about 13.83 million PT Boga shares.

PT Boga is involved in the developing and operating of Kenny Rogers Roasters restaurants in Indonesia since 2011 and currently has 10 restaurants in Jakarta, Indonesia. The disposal results in a loss of about RM13.27 million or 3.53 sen per share for BFood.


Social media merchants must declare income: Inland Revenue Board

PETALING JAYA: Individuals or businesses selling their wares on social media, which are not registered with the Companies Commission of Malaysia (SSM), must declare their income and file their income tax returns, according to the Inland Revenue Board (IRB).

“They (social media-based online businesses) still have to submit their income declaration to IRB even though they did not register with SSM,” a spokesman for the IRB told SunBiz via e-mail.

Online entrepreneurs are leveraging on social media platforms, such as Instagram and Facebook, to set up their virtual stores without having to operate through a website or a brick and mortar store.

While there are copious amounts of online stores particularly online fashion boutiques on these platforms, not all of them are registered with SSM.

An SSM spokesman told SunBiz that while taxation is not within its jurisdiction, the commission requires all business activities, irrespective of whether or not they are carried out through social media or physical premises, to be registered under the Registration of Business Act 1956.

“SSM will take action against entrepreneurs who failed to comply with the relevant laws,” the spokesman added.

It is learnt that businesses which are registered under the enterprise category will not have to file their annual returns while renewing their licences, whereas companies incorporated under the private limited, otherwise known as “Sendirian Berhad”, will have to file their annual returns while renewing their licence.

Although there is no particular provision in the Income Tax Act 1967 regulating online businesses, Section 4 of the Act stipulates that business income will be subject to tax after deducting allowable expenditures and tax reliefs claimable by the trader.

According to the tax authorities’ Guidelines on Taxation of Electronic Commerce, e-commerce businesses will be subjected to the same tax treatment as conventional businesses, given that the income is accrued from or derived in Malaysia.

Individuals operating online businesses will be subjected to the individual income tax rate of between zero and 28%. E-commerce businesses operated by companies will be taxed between 19% and 24%.


Social media merchants must declare income: IRB

PETALING JAYA: Individuals or businesses selling their wares on social media, which are not registered with the Companies Commission of Malaysia (SSM), must declare their income and file their income tax returns, according to the Inland Revenue Board (IRB).

“They (social media-based online businesses) still have to submit their income declaration to IRB even though they did not register with SSM,” a spokesman for the IRB told SunBiz via e-mail.

Online entrepreneurs are leveraging on social media platforms, such as Instagram and Facebook, to set up their virtual stores without having to operate through a website or a brick and mortar store.

While there are copious amounts of online stores particularly online fashion boutiques on these platforms, not all of them are registered with SSM.

An SSM spokesman told SunBiz that while taxation is not within its jurisdiction, the commission requires all business activities, irrespective of whether or not they are carried out through social media or physical premises, to be registered under the Registration of Business Act 1956.

“SSM will take action against entrepreneurs who failed to comply with the relevant laws,” the spokesman added.

It is learnt that businesses which are registered under the enterprise category will not have to file their annual returns while renewing their licences, whereas companies incorporated under the private limited, otherwise known as “Sendirian Berhad”, will have to file their annual returns while renewing their licence.

Although there is no particular provision in the Income Tax Act 1967 regulating online businesses, Section 4 of the Act stipulates that business income will be subject to tax after deducting allowable expenditures and tax reliefs claimable by the trader.

According to the tax authorities’ Guidelines on Taxation of Electronic Commerce, e-commerce businesses will be subjected to the same tax treatment as conventional businesses, given that the income is accrued from or derived in Malaysia.

Individuals operating online businesses will be subjected to the individual income tax rate of between zero and 28%. E-commerce businesses operated by companies will be taxed between 19% and 24%.


Malaysia bond market weekly update 26 November 2017

Over the week, the Thomson Reuters BPAM All Bond Index registered a gain of 0.441 per cent to close at 155.212 points from 154.53 points recorded last week, underpinned by strong rally in the MGS segment. MGS yields eased by two to 26bps across the board. Foreign demand for Malaysian bonds picked up as the […]


Crude Palm Oil Weekly Updates – November 25, 2017

Malaysian palm oil futures dipped, on track for a fourth consecutive week of decline, as sentiment turned bearish on India’s decision to raise import tax on edible oils to the highest in over a decade, and the strengthening of local palm oil currency. The benchmark crude palm oil futures (FCPO) contract plunged 3.17 per cent […]