ARTICLE: Proton-VW deal off...

Proton-VW deal off, new directors to come in

May 28, 2010

KUALA LUMPUR, May 28 — Proton and German auto giant Volkswagen AG (VW) will not get into a partnership, contrary to speculation, but the national car maker is going ahead to appoint new directors to further its business abroad.

Sources told The Malaysian Insider today that Proton chairman Datuk Mohd Nadzmi Salleh will soon announce an end to talks for a tie-up with the German company. Speculation that Proton will strike a deal with VW has been growing after several years on the backburner when two previous attempts failed.

“The deal is off,” a source told The Malaysian Insider today.

Shares of Proton rose 27 sen to hit an intra-day high of RM4.71 but later settled to close RM4.67, a 5.18 per cent increase, yesterday after news of a possible tie-up with Germany’s Volksawagen AG. The market is closed today due to the Wesak celebrations.

Nadzmi said on Tuesday that there would be an announcement in the next two weeks but did not specify what that would be and noted that Proton did not need to form a tie-up.
“Hence, we do not rule out that for the time being, the anticipated tie-up may only be limited to contract assembly or a re-badging of the Passat as the Perdana replacement,” investment bank OSK said yesterday.

It is understood that VW would like to focus on its recent acquisitions — a stake in Japanese car maker Suzuki and its take over of sports and luxury car maker Porsche.

Proton also told Bursa Malaysia yesterday that independent non-executive directors Abdul Kadir Md Kassim and Oh Kim Sun had resigned from the board. It is understood that there could be a couple more resignations to pave way for new directors linked to the car maker’s business ambitions.

Oh is the Proton audit committee chairman while Abdul Kadir sits on the same committee.
The audit committee will now comprise current directors Datuk Michael Lim Heen Peok, Datuk Zalekha Hassan and Behara Venkata Rama Subbu, Proton said in a filing to the bourse.
Sources said the new directors will be able to further the company’s ambitions of going global, an idea that has been dampened by the lack of tie-ups with an international strategic partner.
Malaysian media had reported earlier this year that Proton was in ‘‘intense discussions’’ with global original equipment manufacturers on different types of collaboration.

Managing director Datuk Syed Zainal Abidin Salleh Mohamed Tahir said Proton was talking not only with VW but also with Mitsubishi and Renault for collaboration in engine and products.
In March, it was reported that PSA Peugeot Citroen and Mitsubishi Motors Corp ended talks about an equity tie-up and would instead concentrate on broadening their five-year partnership.
“Peugeot decided against buying a stake in Mitsubishi partly because of concerns that the plan would damage the French company’s debt ratings.

“What they could do is acquire a smaller company, such as Proton,” an analyst was quoted as saying by The Star today.

The national car maker, founded in 1983, has seen its shares trade between RM2.53 and RM5.03 in the last 52 weeks, rising RM1.63 to RM4.67 yesterday, a 53.62 per cent increase in the same period.

END OF SOURCE:

SOURCE: http://www.themalaysianinsider.com/business/article/proton-vw-deal-off-new-directors-to-come-in/

That's all folks, thanks for having the time and patience to read this blog entry...

ARTICLE: Young men should pay more for car insurance

Young men should pay more for car insurance, says industry group

By Boo Su-Lyn

May 13, 2010, THE MALAYSIAN INSIDER, BUSINESS

KUALA LUMPUR, May 13 — The average male in his 20s accounts for one in four car accident insurance claims in Malaysia and should be charged a higher premium, an industry report released today concluded.

Although individuals aged between 21 and 30 years represented only one-fifth of motor insurance holders, their average claims frequency was 47 per cent higher than the 41-to-45 age group.

“A risk rating system would ensure those in high-risk groups would pay more,” said ISM Insurance Services Malaysia Berhad (ISM) CEO Carl Rajendram today.
ISM is a shared services company that provides statistics and information on insurance coverage and claims to insurance companies and takaful operators.

Rajendram urged the government to reform the outdated tariff insurance system that has been in place since the 1970s as it charges similar premiums to both high-risk and low-risk groups.
Comparatively, other markets like the United States and Australia use risk-based rating systems that vary motor insurance premiums depending on risk characteristics such as age, gender, driving record and vehicle model.

Insurance companies in those markets also offer pay-as-you-drive policies where drivers only need to pay for the total distance driven on a rate determined by their driving habits, as monitored by Global Positioning System (GPS) devices installed in their vehicles.

“A risk-based system will provide incentives for road safety, better vehicle safety and security standards, and better driver behaviour,” said Rajendram in his presentation of ISM’s 2009 Motor Insurance and Takaful Statistics Report.

He added that the net claims incurred ratio for third-party bodily injury increased by more than 80 per cent from 2002 till 2009.

A risk-based insurance system would also incentivise express bus companies to improve their safety standards, and vehicle owners to install good safety and anti-theft systems in order to avoid paying high premiums, said Rajendram.

“A total of 21 per cent of buses are more than 20 years old,” he said. “Programmes to phase out these buses should be put in place by the government.”

END OF MalaysianInsider Article. Source:
http://www.themalaysianinsider.com/business/article/young-men-should-pay-more-for-car-insurance-says-industry-group/
MY (OTOREVIEW'S) OPINION:

In my opinion, Malaysia should LOOK NO FURTHER than United Kingdom's FAIR Tiered Insurance schemes.  It rewards Frugal, city cars (Lower group)  and penalise Performance Car (Higher group).  It also rewards Family men and penalise Young and RECKLESS Drivers (Points based).  Here are its "BASIS of Premium Charges".

It is classified according to the following:

1) Gender: Men average more miles driven per year than women do, and consequently have a proportionally higher accident involvement at all ages. Insurance companies cite women's lower accident involvement in keeping the youth surcharge lower for young women drivers than for their male counterparts, but adult rates are generally unisex.

2) Age: Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognized courses (eg. Defensive Driving Courses).  Senior drivers are often eligible for retirement discounts reflecting lower average miles driven by this age group. 

3) Driving History: In many Countries, moving violations, including running red lights and speeding, assess points on a driver's driving record. Since more points indicate an increased risk of future violations, insurance companies periodically review drivers' records, and may raise premiums accordingly.


4) Marital Status: Policy owners that are married often receive lower premiums than single persons. One reason is that marriage may be considered an indicator of stronger financial stability within the household

5) Vehicle Classification.  In UK, it's graded according to Groups.  Group 1 (for Perodua Kelisa) to Group 20 (for Mitsubishi Evo).  The higher the groupings, the more $$$ it is.

6) Distance/Mileage based: Insurance are higher in London or Large Cities compared to Countryside OR Suburbs as more cars perceived as Higher risks. 

7) GPS Based System. 

8) Classic Car status.  Classic Car (above 25 years old) tends to have LOW Mileage (RARELY USED), as a result, Insurance Risk lower, hence Lower Premiums.

END OF MY OPINION.

That's all folks, thanks for having the time and patience to read this article of mine (Partly)...

ARTICLE: Forget subsidies, just give me cash

Forget subsidies, just give me cash

By Hafiz Noor, The Malaysian Insider

JAN 19 — In spite of opposition that saw the streets of Kuala Lumpur filled with pro-fuel subsidy groups during the Abdullah administration, efforts to liberalise the fuel subsidy regime has gone a long way.

Out of a number of its arguments, one that criticises the untargeted and blanket nature of the policy has gained tremendous traction. The fact that it benefits those who do not need or deserve the subsidy is clearly one of the main motivators — the bigger drivers are probably cost and waste — behind the reformation of the policy.

The Najib administration is addressing this particular criticism. That has resulted in multiple novel moves and proposals from the federal government. Among the proposals reported in the mainstream media are different prices for different groups, a cap on subsidised fuel consumption and access to subsidy based on engine size. While the moves and proposals may reduce the size of fuel subsidy either in value or in quantity, the proposals may appear too convoluted.

I appreciate the government’s effort at making the policy more targeted hence, less wasteful in terms of opportunity cost. Yet, these novel ways are really unnecessary given its simpler alternatives. In fact, the more convoluted the methods are, the more complex the implementation will be. That is a recipe for a disaster, policy wise.

Just observe the recent attempt to limit the sale of subsidised fuel to foreigners at the border. So complicated was it that everybody was confused and in the end, it did not work. Consumers found ways around the restriction.

There is a better and much simpler way to do to this.

Before we proceed to that better and simpler policy, it is crucial for us to recall the purpose of the fuel subsidy. Its goal is ultimately to reduce the cost of living of the less well-to-do Malaysians. On top of that, fuel subsidy is not the only way to achieve that goal.

With that in mind, the better alternative to the fuel subsidy is a simple cash transfer from the government to those who deserve it.

Why cash transfer?

The first reason is that it paves the way for total elimination of fuel subsidy to free up the market. Since free prices signal scarcity, individuals and entities will make decisions that are more reflective of the reality of the energy market. On top of that, it creates real competition among pump owners. The same system of free prices already exists in the United States and Australia. Its effectiveness is proven.

Not only that, elimination of subsidy at the pump reduces consumption, all else being constant. That means lower carbon emissions. In times when carbon emissions are a worldwide concern and in light of the Najib administration’s promise to announce a carbon cut roadmap in the near future, this is an opportunity to integrate transportation and energy policies together environmental policy. Such integration is important given that, according to the International Energy Agency in 2007, the transportation sector was the source of 30 per cent of Malaysia’s carbon dioxide emissions in 2005.

Thirdly, cash can be used for a variety of things and not just fuel. Maybe a beneficiary of such a cash transfer appreciates books or food more than fuel. This has the potential of increasing the beneficiary’s welfare higher than what a fuel subsidy policy can bring. If the beneficiary does appreciate fuel more than anything else, then he or she can simply buy the same amount of fuel he or she would have otherwise bought under the fuel subsidy policy. In other words, there are more choices. The economics behind cash transfer is clearly more welfare enhancing than a simple fuel subsidy.

The next question is, naturally, how to do it.

If the sale of subsidised fuel is to be limited, then the government will have a good idea about the maximum amount of money it needs to spend on fuel subsidy. Furthermore, the lower the cap, the higher the likelihood a beneficiary of the subsidy will exhaust his or her quota. From there on, certain statistical manipulations can give us the size of money transfer per capita required to make the cash transfer method the equivalent of the fuel subsidy policy in terms of value.

The cash transfer itself can be delivered to the deserving via the existing tax system. Here is another beauty of cash transfer. It pays only to those who have filed their taxes. Thus, this is yet another incentive for those who have yet to file their tax to finally do so.

For those who just want to fill up their vehicles, here is another reason to support a simple cash transfer instead of an explicit targeted fuel subsidy policy: no weird rule at the pump.

So, what about it that is not to like?

*The views written here are the personal opinion of the columnist.

END OF ARTICLE.  That's all folks, thanks for reading this WONDERFULLY WRITTEN ARTICLE. 

SOURCE: 

 1) http://www.themalaysianinsider.com/index.php/opinion/alice-nah/index.php/opinion/
hafiznoorshams/50045-forget-subsidies-just-give-me-cash