MALAYSIA FINOMICS

BOOK SMART VS STREET SMART

2008-11-22T23:14:00.000-08:00

Long-Term Capital Management L.P , an American hedge fund was run by a battalion of mathematicians , computer scientists and two Nobel Prize - winning economist. No doubt that this group of people are people whom are not only educated but also they have high IQ or SAT scores . This fund manage to command more than $100 billion in assets at its height . Between 1994 and 1998 the fund showed a return on investment of more than 40% per annum. However, its enormously leveraged gamble with various forms of arbitrage involving more than $1 trillion dollars went bad, and in one month, LTCM lost $1.9 billion.This so called geniuses made huge bets that the bond market would return to norm but the market when the other way instead . As LCTM had borrowed so much money its collapse almost capsized the global finance system.
Another incident dated back in spring of 1720 , Sir Issac Newton the father of Newton law and one of the most intelligent humans who ever lived owned shares in the South Sea Company , one of the hottest stocks in England . Sensing that the market was reacting crazily , the great physicist said that he " could calculate the motions of the heavenly bodies but not the madness of the people." Newton sold his stocks and made a 100% return from his investment totaling to £7000 . But within months he was again caught up with the wild enthusiasm of the market and jumped back in to the market at a higher price . This resulted him to eventually lose £20,000 (more than $3 million in today's money) . For the rest of his life he forebade anyone to utter South Sea in his presence.

Li Ka Shing born in Guangdong province came to Hong Kong in the 1940s with his family. Li's father died in Hong Kong. Shouldering the responsibility of looking after the livelihood of the family, Li was forced to leave school before the age of 15 and found a job in a plastics trading company where he labored 16 hours a day.Though he hardly earned any education in school but his preseverance and determination shoved him to success . By 1950, Li was able to start his own company , Cheung Kong Industries . From manufacturing plastics Li manage to develop his company into a real estate investment company in Hong Kong that was listed on the Hong Kong Stock Exchang e in 1972. Cheung Kong continued to expand by acquiring Hutchison Whampoa and Hongkong Electric Holdings Limited in 1979 and 1985 respectively.^{Today Li though with limited education this once poor immigrant proves that high education does not guarantee success and he is currently the 11th richest man in the world according to the Forbes list in 2008.} He is also the world's largest operator of container terminals, world's largest health and beauty retailer, a major supplier of electricity to Hong Kong and a real estate developer. Hutchison Essar sold its stake in an Indian mobile business for $11 billion in 2007; the group still has other telecom interests. Li also has a $12 billion stake in Canadian oil company Husky Energy.

P/S photo:

	Daniel Craig and Olga Kurylenko

Miserable losing streak 4 Gunners

2008-11-22T22:37:00.000-08:00

10 points away from the leaders Liverpool and Chelsea will Arsenal make a comeback . To sum it all the Gunners are piled up with injury woes , suspended players and conflict between players Theo Walcott , Emmanuel Adebayor , Cesc Fabregas , William Gallas , and etc ... Will they come back the next game? but as far as I'm concerned if Arsenal do not come back the next match it is time to bid bye-bye for the elusive EPL title.

Largest sovereign wealth funds: SWF

2008-11-20T09:39:00.000-08:00

Many of us just think that a country is rich because of it being rich in its resources but actually how many of us actually know that a countries financial system is governed by SWFs and SWF plays a major role in increasing the wealth of a country. In Malaysia the top SWF are Khazanah National , EPF , Amanah Saham , KWSP , and Tabung Haji.SWF plays a major role in the business comunity and the development of the county as this funds are basically funds managing peoples retirement funds .

Rounding up the top 3 largest SWFs in the world are [wikipedia]

1. United Arab Emirates (Abu Dhabi Emirate) - Abu Dhabi Investment Authority[875 Bil]
ADIA was established in 1976 by Sheikh Zayed bin Sultan Al Nahyan, the founder of the United Arab Emirates. The goal was to invest the Abu Dhabi government�??s surpluses across various asset classes, with low risk. At the time it was novel for a government to invest its reserves in anything other than gold or short-term credit. Even today, investment in short-term paper remains the strategy for the vast majority of countries.^[2]

ADIA manages a substantial amount of capital, and is one of the world's larger investment funds. Due to its size, the fund has been influential in international finance.

It manages the emirate�??s excess oil reserves, estimated to be as much as $1 trillion.^[2] Its portfolio grows at an annual rate of about 10% compounded.^[2] As such, ADIA is the world�??s second biggest institutional investor, behind only the Bank of Japan, according to the Oxford Business Group

Today ADIA invests in all international markets �?? equities, fixed income, real estate, private equity and alternatives (hedge funds and commodity trading advisers �?? CTAs). ADIA's global portfolio is broken down into sub-funds covering a specific asset class. Each asset class has its own fund managers and in-house analysts covering it. Almost every asset class is managed both internally and externally. Overall between 70% and 80% of the organization�??s assets are managed outside.^[2]

More recently, as of June 2008, ADIA has started buying large amounts of residential real estate in London, New York, Chicago and Los Angeles. It is estimated that its UK portfolio alone is worth in excess of $4bn.

2. Norway-Government Pension Fund of Norway[391 Bil]

The Government Pension Fund of Norway comprises two entirely separate sovereign wealth funds owned by the Government of Norway:

The Government Pension Fund - Global (formerly The Government Petroleum Fund)
The Government Pension Fund - Norway (formerly The National Insurance Scheme Fund)

The Government Pension Fund - Global (Norwegian: Statens pensjonsfond - Utland) is a fund into which the surplus wealth produced by Norwegian petroleum income is deposited. The fund changed name in January 2006 from its previous name The Petroleum Fund of Norway. The fund is commonly referred to as The Petroleum Fund (Norwegian: Oljefondet). As of the valuation in June 2007, it was the largest pension fund in Europe and the second largest in the world ^[1] with a value of NOK 1.939 trillion, although it is not actually a pension fund as it derives its financial backing from oil profits and not pension contributions. Its June 2008 value is NOK 1.992 trillion^[2]

The Government Pension Fund - Norway (Norwegian: Statens pensjonsfond - Norge) was established by the National Insurance Act (Folketrygdloven) in 1967 under the name National Insurance Scheme Fund (Norwegian: Folketrygdfondet). The name was changed at the same time as the former Petroleum Fund on January 1, 2006. This fund continues to be managed by a separate board and separate government entity still named Folketrygdfondet. The Government Pension Fund - Norway had a value of NOK 106.9 billion at the end of 2006. Unlike the Global division, it is instructed to invest in domestic companies on the stock market, dominantly on Oslo Stock Exchange. Due to this, the Government Pension Fund - Norway is a key stock owner in many large Norwegian companies.

3. Singapore-Government of Singapore Investment Corporation[330 Bil]

The Government of Singapore Investment Corporation Private Limited (GIC) is a sovereign wealth fund established by the Government of Singapore in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world, GIC invests internationally in equities, fixed income, money-market instruments, real estate and special investments.

GIC's investment portfolio is managed by its three subsidiaries: GIC Asset Management Pte Ltd (public markets), GIC Real Estate Pte Ltd and GIC Special Investments Pte Ltd (private-equity investments).

In 2008, The Economist reported that Morgan Stanley had estimated the fund's assets at US$330 billion^[1], making it world's third largest sovereign wealth fund.^[2]

p/s photo: Toyota Camry Sportivo 01 2007