is it a sign that election is coming soon in Malaysia? who knows? but today...
Bank Negara (Central Bank of Malaysia) has announced further liberalisation of our foreign exchange administration. Previously, as an individual, we only can invest up to RM 100k abroad per annum...now, RM 1 million! bravo! but seems like it has nothing to do with me...
Limits for Corporation for overseas investment has increased to RM50million p.a. from RM10million p.a. before... good stuff, shall we expect to see more growth in earnings in coming years or more volatility in their earnings? well, in the end of day, it's fundamental that counts. Company with good management team will always outperform the rest...
Onshore funds like Unit Trust, Fund Management and Insurance companies can now invest up to 50% of their Net Asset Value (NAV) in foreign currency assets from 30% previously. This is good news for investors as you will expect fund houses and insurance company will continue to roll out more innovative product for us to invest in overseas, thus better diversification i would say.
there are more details to it, but bottom line is, we're on our way back to the open market that we used to be in before the Asian Crisis 1997. Most importantly, foreign investors will regain their confidence in our market again!
but then, there was an argument saying that it might not be such a good idea as investment flow might flow out faster that usual as previous "liquidity trap" in the market has loosened up abit... oh well... what ever it is, if you believe in economic theory, an economy with no government intervention or any form of capital control is the best form of market, as dead weight loss will be minimize, more efficient allocation of assets.... etc etc
This relaxation will officially be effective on....1st April 2007.
if you think this piece of news is not good enough. wait, we have more!
The government has announced several incentives to boost the property market, but most exciting of all, is this.
The Abolishment of nationwide REAL PROPERTY GAINS tax with effect from...1st April 2007!
what does this mean?
it means that if you have recently bought a house, you can straight away sell it off, with no property gain tax! (of course, provided you make a gain...) or, if you think this property can make money, but you have not enough capital, plus you don't want to stay there...you can borrow from bank, buy the property, and "flip" it within months, sell it at a gain, and hey ! no property gain tax!
by no mean, for foreigners and those who leaving the countries for good, this sounds like a good way to make more profit on the way out...
but would this induce to a mini-version of US Housing crisis? when there's too much flipping in the property market wouldn't it leads us to the same collapse that happened in Hong Kong's property market as well?
well, oh well, it's a good news, so at the mean time, we should embrace it happily. Who knows what lies in the future?
hopefully, this is a good April fool gift.
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3 comments:
So there is no capital gain tax on property from 1 Apr onwards?! Woo-Hoo, seems like a tax heaven for properties! But yet it has nothing to do with me at the moment, how sad!
Yup. Good measures taken by government to stimulate local property market, and indirectly, local economy!
Good post.
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