Where do Shanghai’s Property Taxes Fit into China’s Economic Jigsaw Puzzle?

While the continued upward path of the Shanghai stock market has featured regularly in the world’s media, the city’s real estate market has not received so much attention. Nevertheless, property in China’s largest city is undoubtedly part of the boom and the web of economic dilemmas facing the Chinese authorities.

The latest efforts to curb real estate speculation have resulted in the introduction of a 20% tax on second-hand property sales. One explanation given for the increase is the authorities’ desire to prevent a speculative bubble in real estate fuelled by profits from the stock market. Another, more plausible reason is that the lure of the stock market is so great that people are selling property in order to finance speculative investments. This tax hike should certainly be seen in the context of Prime Minister Wen Jiabao’s general efforts to decelerate the juggernaut of the Chinese economy.

Whether the Chinese authorities will prove able to harness the economy in general is open to question. The risks of making a definite decision on exchange rate increases seem so great that they are left with an array of tools for fine-tuning different parts of the economy. What the foreign investor in Chinese property needs to remember is that these measures tend to be piece-meal (possibly affecting one part of the country only – as with Shanghai’s tax) and they seem to come and go fairly rapidly.

The situation in Shanghai is a good illustration of this; almost exactly two years ago saw a raft of measures – a 5% sales tax on properties sold within two years of purchase, a tax raise on luxury homes, regulations to curb LTVs, restrictions on second mortgages – all designed to dampen real estate speculation in the city. There was a temporary dropping off in prices but the underlying situation remained unchanged; too much foreign exchange has been flooding into China owing to its enormous trade balance and this is leading to inflation in asset prices, real estate included.

Other recent changes (8th June) to the climate for property investors have been new regulations to curb foreign investment in property through the takeover locally owned real estate concerns and efforts to clamp down on corruption in Guangdong province involving no less than 10 different government departments.The latest economic news from China is of surging industrial production in the most recent 12-month statistics and calls by Wen Jiabao for interest rate increases.

This in turn has led to a drop in the stock market and it’s worth noting that the biggest fall was experienced by China Vanke, the nation’s largest property developer. Generally speaking it looks as if Chinese real estate correlates with equities substantially and shares the risk of the bubble bursting. The specific regulatory measures being used to control the situation are different for property but the risks are similar. Possibly the one important difference is the enormous low-cost housing shortages in the biggest cities. If the central and local governments can accelerate housing developments for the masses, there is the possibility that this might have a cooling effect on the housing market as a whole (and incidentally increase construction costs in the process).

source: http://www.overseaspropertymall.com/regions/south-east-asia-property/china-property/where-do-shanghai%E2%80%99s-property-taxes-fit-into-china%E2%80%99s-economic-jigsaw-puzzle/

BioFuel Investment for Mozambique sugarcane biofuel plant

BioEnergy Africa Ltd., based in Tortola, one of the British Virgin Islands, has raised £8.6 million (approximately $15.2 million) in capital through the London Stock Exchange's Alternative Investment Market to fund development of a 438 million liters per year (116 MMgy) sugarcane ethanol plant in Massingir District, Gaza province, Mozambique.According to the company, ground has been cleared for the Massingir Fuel Ethanol Project and a water supply has been secured from the Massingir Dam. T

he company is in discussions with Netafim of Tel Aviv, Israel, to design, procure, and install a subsurface drip irrigation system for the project’s cane fields. At full capacity, the project will include 24,500 hectares (approximately 60,500 acres) of planted sugarcane. Once operational, the project is expected to employ up to 800 full-time employees, as well as 6,500 seasonal workers.BioEnergy Africa said it’s in discussions with Dedini S/A Indústrias de Base of Brazil to supply a turnkey ethanol plant for the project.

The company is considering a modular plant that initially will run at 50 percent of nameplate capacity by the end of 2011 and at full capacity sometime in 2012 or 2013. It is considering a dual-function plant that can produce sugar and ethanol, as well as a cellulosic processing module to produce ethanol from the bagasse byproduct. Bagasse will also be used to fire boilers to produce electricity. Ethanol will be transported to Maputo, Mozambique, where the country’s main port and rail links are located and where a bulk liquid terminal is under construction. The company is investigating construction and operation of a 40-kilometer (approximately 25 miles) rail spur from the main line to the ethanol plant.

According to Phil Edmonds, chairman for BioEnergy Africa, the company is investigating additional sugarcane ethanol opportunities in southern Africa. According to the company, Africa’s premier sugar growing region is eastern and northeast South Africa, southeast Zimbabwe, Swaziland, and southern and central Mozambique.

Five of the top eight cheapest sugar producers in the world are in southern Africa.On Aug. 12, BioEnergy Africa acquired a 94 percent share of ProCana Limitada of Mozambique, which has an investment agreement with the government of Mozambique to develop the sugarcane ethanol project in Massingir District.

source: http://africanagriculture.blogspot.com/2008/09/investment-fund-to-raise-15-million-for.html

Blue Chip Stocks on Bursa Malaysia

Blue Chip Stocks on Bursa Malaysia

The Biggest Companies in Malaysia

As at 31-Aug-07, the Top 5 companies in Malaysia by Market Capitalization are:-

Malayan Banking Berhad (RM45.1 billion)
Tenaga Nasional Berhad (RM43.1 billion)
Commerce Asset Holdings Berhad (RM36.7 billion)
MISC (RM35.3 billion)
Telekom Malaysia Berhad (RM33.3 billion)

I maintain an updated list of the Top Malaysian Companies here:

http://www.light.com.my/list.php

As you can see, our companies are peanuts in size compared with the top US companies such as GE, Exxon, Microsoft etc.But it is noteworthy that we have come a long way since the 1997 - 98 crash when our financial system all but disappeared. From memory, the market cap of Malayan Banking (or Maybank as it is affectionately known here) was less than RM5.0 billion at its bottom.

source: http://www.squidoo.com/larrylam

International mutual funds investment

International mutual funds invest in markets outside of the United States and across the globe.

These funds can be good for diversifying and adding balance to a portfolio. Generally, international funds are more volatile than their domestic counterparts. However, the rewards of investing in foreign markets can be many, allowing investors to fatten their wallets with more than just local opportunities.

1. Understand the difference between international funds and global funds. International funds typically focus on investing outside the United States; global funds invest both inside and outside of the United States.

2. Recognize that investing in international mutual funds provides a way of breaking into foreign markets without the risks brought on by investing with little applicable knowledge. Professional mutual fund managers bring experience and in-depth research to the table, boosting your chances of profiting from your investment.

3. Carefully evaluate the level of risk you can take and your investment time horizon.

4. Determine the portion of your assets you can afford to invest in international mutual funds.

5. Understand that international mutual funds may invest in stocks and/or bonds from markets around the world. An international fund may focus on a particular market or a combination of markets.

6. Recognize that you may need to sit out some rough times in order to realize an international fund’s full potential.

7. Consider the fact that international funds may help you to lower your overall investment risk. As the world’s markets do not move exactly in tune with each other, you could capitalize on a thriving market in one region, even while trouble brews in another country.

8. Research and compare international mutual funds online, using MorningStar.com.

9. Visit the websites of the funds that interest you and request or download prospectuses.

10. Contact a financial adviser to discuss the portion of your portfolio best allocated to international mutual funds. With the adviser’s help, invest in the mutual funds best suited to your goals, risk tolerance and time horizon.'

By Ada Denis
sourced:http://www.articalworld.com/2008/12/how-to-invest-in-international-mutual-funds/

Tokyo Property Market Best for Investment in 2009

Tokyo has replaced Shanghai as the best property market, according to the latest survey by the Urban Land Institute and PriceWaterhouseCoopers.

Tokyo is the best Asian city to buy real estate as it is regarded as less risky than other locations around the world, according to a new report.

The Japanese capital city has overtaken Shanghai in the survey by the Urban Land Institute and PricewaterhouseCoopers.

It is regarded as having the best prospects for 2009 and the lowest risk of the 20 locations covered in the survey of global investors, property developers and brokers.

Singapore is in second place and Hong Kong is third, according to the ULI, a Washington-based research firm, and New York-based accounting firm PricewaterhouseCoopers.

Property values are tumbling around the globe but in Asia the markets with the strongest economies and highest levels of liquidity will be most attractive to investors in the coming 12 months.

Property investors will still be interested in price but they are also expected to put quality as an equally important pointer for decision making, according to Stephen Blank, a principal researcher at the ULI.

"Tokyo is a weaker market than last year, but clearly stronger than other global financial centres," the report says.

"Financing will be the single biggest issue facing the industry in 2009," Blank said.

Ho Chi Minh City was ranked the best market for office properties, followed by Tokyo, Mumbai, Shanghai and Bangalore. Vietnam's former capital city was also rated on top for retail and apartment residential property, the study showed.

This article has been reposted from PropertyWire. View the article on PropertyWire's international real estate news website here. (www.propertywire.com)

A lesson from Warren Buffet

The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Source: http://www.pakdi.net/biz/buy-american-i-am/

Gold Price Increase Due to Inflation?

It's a good thing people do not know what causes rising prices (which they think is inflation) and crashing economies, or they would be really ticked off, or having a revolution in the streets the next day. The cause is too much creation of what they call "money". Artificial demand for real goods and services is caused be artificially creating to much credit, which when accepted, is debt.
Instead of the demand for real economic goods and services coming from the creation, and then spending, of real wealth, it comes from the creation of credit and debt that was not earned because it will not be paid back because there is not enough creation of real wealth to support the future payment of the debt. Debt default causes economic contractions.

Keep an eye out for the amount of debt relative to the amount of wealth. Ratios count, a lot! Also whether the ratio is changing, and if so, which side(s) of the ratio is changing and by how much. There are constants in life, but not many; so are there trends. There are plenty of trends that make huge differences that need watching.

If debt keeps increasing while real wealth creation does not keep pace, or stops, or declines, some kind of economic and financial adjustment has to take place. After all, how long will a debtor be allowed to keep taking on debt when it becomes obvious that the debtor is not doing enough, nor will the debtor be able to in the future, to make the future payments on the debt.
It works the same for individuals, towns, companies, cities and national governments.
The "money" monster is stalking the world.

From the Fed's third quarter "Flow of Funds" report:

Total US credit growth expanded at an annualized $4.99 trillion.

To give that number some perspective, the US has an annualized GDP of about $14 trillion. That means that about 36% of GDP was borrowed. It was not necessarily due to the creation of real wealth, real goods and services.

Imagine what all those dollars are ultimately going to do to the prices of real goods and services; real goods and services becoming scarcer relative to the number of dollars chasing real goods and services.

If someone borrows "money" from a bank, the bank takes that person's I.O.U. and puts it on its books as an asset because, to the bank, it is. If that person takes that "money" and buys debt in the debt market, no real wealth was created. Yet all other things being equal, GDP increases because of those exchanges of "money". A GDP number means a lot less than most people think.
An increasing GDP number can mean that a nation is increasing it total real wealth. It can also mean that it is actully consuming/spending its real wealth, becoming less wealthy. One has to look under the hood, dig into the details, other fundamentals, to know.

By the way, when the bank puts that I.O.U. on its books as an asset, that action increases its reserves. Therefore, since its reserves increased, it is allowed to create more dollars, out of thin air, necessary to make that loan.

If central banks and the banking system as a whole are allowed to create fiat tokens out of thin air, how come "counterfeiters" are not allowed to?

Where was the use of human hands and mind, manipulating nature, being used to create real economic goods and services in these exchanges? Virtually none. Yet GDP increases. GDP can be increasing while the rate of the production of real wealth is actually decreasing. At some point in future time, real wealth is needed to pay off these loans. Let's see now, real debt increasing with real wealth decreasing. ... trouble ahead.

The rate of debt and "money" creation has got way out of line with the rate of real wealth creation. At this point, there is going to be quite the reaction/adjustment/correction. And, it will not be felt just in the US.

Now a days, since 1971 (Brenton Woods Agreement), these huge increases of "money" supply (mostly digital bits on a hard drive) and the huge reaction/adjustment/correction that is inevitable are due to those that control the hard drives that contain the supply of digital bits. Huge increases in supply and the next Great Depression, sure are not due to the invisible hand of a free market. They are due to visable hands that have no business messing about in markets because that makes the markets non-free, which makes the markets not work well, and sometimes to crash.

Source: http://www.goldprice.org/bob/2008/01/inflation-cause-and-effect.html