Felda Global Ventures At RM2.41 And Falling, Postpone the GST lah !!

There is plenty going on at Felda Global Ventures. 

There is a tiff going on between Felda Chairman Isa Samad (who is not a businessman) and the latest Felda CEO (earlier CEO was replaced).  Someone has also been suspended from their job. 

FGV's share price is now at RM2.41. The IPO price was RM4.55. That is almost 50% down. Almost half their market capitalisation has been wiped out.

 FGV Share Price Plummeting Today (@ 3:00PM)

 Here is a chart from the Bursa showing FGV's share price. Looks like a kamikaze dive bomber.

Palm oil prices are down but not all oil palm companies are suffering such a beating in their share prices like FGV.

It was clueless Najib's idea to list Felda Global Ventures.  

Meantime Felda is still shopping for buildings overseas.

The Malaysian Ringgit is now at RM2.67 to the Singapore Dollar. And it is at RM3.50 to the US Dollar.  

Crude oil has touched US$56 per barrel yesterday. It has levelled off at about US$58 per barrel. Kepada blogger bangang, err blogger UMNO, that means oil has gone below US60 per barrel !!

The Dow Jones fell 300 points yesterday. Warren Buffet says that the Dow may crash to half its value. Despite falling oil and commodity prices, Warren Buffet still feels that the US economy is in an overbought situation.  Listen to that guy closely.  (Blogger bangang..err blogger UMNO faham ke siapa Warren Buffet?)

Folks this is the real news. I did not create this news. 

The question is can our gomen take all this in?  Can they understand what is going on? 

Do you think Hassan Malek, Ismail Sabri, Jamil Khir Baharom, Zahid Hamidi or Najib Razak understand the seriousness of all this? I dont think so.  Or will they just scratch their butts? I think so.

What will be the impact on our GDP growth if oil sits  below US$60 per barrel?  Is there anyone in Bank Negara or Treasury sitting down and doing all the number crunching? Better do it now.  Do "what if scenarios" all the way down to US$40 per barrel.

Bloomberg says inflation will hit 4% in Malaysia next year. I beg to differ. The GST will add 6% already to inflation.

The Japanese economy has entered a recession after they increased their GST.  The same will happen here.

Tengku Adnan says the average Malay family in Kuala Lumpur earns RM1500 - RM2000 (or something close). 

Lets play conservative and fix it at RM2000 (after EPF). At RM2000 in Kuala Lumpur any family can barely keep its head above water.  You can forget about savings. They have to spend all their RM2000 (bayar sewa, bayar motor, bayar api, beli ayam..)

Now here is some simple arithmetic.  Suddenly they have to pay 6% GST. 

This means they have to pay (approx) RM2000 x 6% = RM120 in GST every month.

That means the actual amount of money left over to beli barang and bayar api, bayar minyak, bayar sewa etc is RM2000 - RM120  = RM1880.

If you have to cut EPF, the amount left over is even less, about RM1700.

Not only does the family's life become more difficult  but they will buy less things from the Malaysian economy. The economy will suffer because consumption woud have gone down by at least 6%.  That is a very big wallop.

And here is the other point - the bulk of Malays are wage earners. Not traders or businessmen like Ibrahim Ali's "bad people".  Melayu jadi miskin dulu. 

Bear this in mind, Japan has gone into a recession when they increased their GST from 5% to 8% (increase by 3% only).  Here is the news :

Japanese Recession Illustrates Link Between Indirect Tax And Corporate Strategy

This past Tuesday, immediately following reports that Japan had officially fallen into recession, Prime Minister Shinzō Abe announced that he would delay the implementation of a planned sales tax increase for 18 months.

The move made it clear just how tightly correlated sales tax is to consumer sentiment and spending.  Japan increased its consumption tax from 5% to 8% in April, and that was largely to blame for a 1.7% quarterly decrease in GDP in Q2. 

The Japanese PM has decided to defer the increase in GST by 18 months. 

My advise to our Clueless PM is to defer the GST.  Please, please listen to me on this one.