What is a Real Estate Investment Trust (REIT)?

 For most people, investing in real estate is a dream, especially with ‘affordable’ homes priced at over RM400,000 today. Many Malaysians cannot afford to buy their own house, let alone to invest.

What is the right alternative for a handful of people who don’t have the cash to invest in real estate? The answer is Real Estate Investment Trusts (REITs).

In this article, the author will explain what a REIT is and what are the advantages of investing in a REIT.

A REIT is a fund or trust that owns and manages income -generating commercial properties. Among the types of properties involved are shopping complexes, hospitals, plantations, hotel industrial properties and office blocks.

A management company for a REIT is allowed to deduct distributions paid to its shareholders from taxable corporate income.

However, to enjoy such tax-free status, a REIT must have most of its assets and income tied to real estate as well as distribute at least 90% of total income to investors or unitholders on an annual basis.

Just like trading in stocks, you need to have a Central Depository System (CDS) account and a trading account managed with a broker. You also have to pay brokerage commissions, stamp duty, clearing fees and goods and services tax (GST).

If you are looking for an Islamic or Shariah compliant REIT in the country, there is no need to worry. According to Bursa Malaysia, of the 18 REITs in the country, four are Shariah-compliant REITs (i-REITs).

The four i-REITs are Al-’Aqar Healthcare Reit (ALAQAR); Al-Salam REIT (ALSREIT); AXIS REIT (AXREIT) and KLCC Property Holding (KLCC).

The difference between an i-REIT and a conventional REIT is the source of income. i-REIT earns income from Shariah-compliant business activities. For i-REITs conducting Shariah-compliant and non-Shariah-compliant business activities, the return from Shariah-non-compliant business activities must not exceed 20% of its total income.

There are several benefits if you choose to invest in a REIT, namely:

i) You don’t have to fret to issue large capital to invest in a REIT. The cost of investing in a REIT is only a fraction of the cost of direct investment in real estate. You can start with a capital as low as RM100. The minimum share purchase set by Bursa Malaysia is one lot which is equivalent to 100 units.

ii) REITs are more liquid than physical real estate. Publicly traded REIT shares are readily converted to cash when traded on the stock exchange.

iii) REITs also tend to pay a fixed dividend, which is derived from existing rents paid by tenants living in REIT properties.

iv) REIT properties are managed by professionals who will add value for higher yields, thus benefiting investors in the long run.

However, each investment must have its own risks. The total return from the REIT is subject to the performance of the real estate market. Therefore, the unit price for a REIT can go down if the underlying property goes down in terms of its value.

In addition, investors have no direct control over the investment decisions of the management company such as when to buy or sell certain properties and how the properties will be managed.

REITs are also subject to market demand and supply. Therefore, market fluctuations, confidence in the economy and changes in interest rates may affect the price of a REIT.

If you want to choose a good REIT, several factors need to be considered such as the type of property; location; growth potential; sponsor; financial structure; management and governance team.

The return to the unitholders of the REIT is in the form of income distributions based on the distribution policy set out in the REIT agreement and the capital gains that may arise from the increase in the price of the REIT.

Satan Shoes Sparks Controversy, Sold US $ 10,000 On Ebay!

 Rap singer, Montero Lamar Hill or known by his stage name, Lil Nas X sparked controversy recently when he released Nike shoes dubbed Satan Shoes.

The shoes were produced in collaboration with a streetwear company in Brooklyn, USA (USA), MSCHF.

The shoe has a picture of the inverted Cross sign and a pentagram logo. In addition, the shoe has the inscription ‘Luke 10:18’ which is a passage from the Bible that tells of the devil falling from heaven.

Most sparked controversy, when the shoes contained drops of blood of MSCHF employees. The blood droplets were injected into the sole of the shoe.

The shoes were also released in 666 units only, symbolic with devil numbers. Even so, the shoes, which sold for US $ 1,018, sold out in less than a minute.

After the shoes were sold out, some people resold Satan Shoes on Ebay for US $ 2,500 to US $ 10,000.

The shoes were released in conjunction with Lil Nas X's latest song entitled 'Montero, Call Me By Your Name'.

In the music video clip, Lil Nas X performs a dance action with the ‘devil’ and is punished in ‘hell’.

This is not the first time MSCHF has used ‘religion’ as a promotional measure they sell shoes. Previously, MSCHF had modified the Nike Air Max 97 shoes into ‘Jesus Shoe’.

If Satan Shoes is injected with human blood, Jesus Shoe shoes are injected with ‘holy water’.

Although the shoes sold are Nike Air Max 97 models, Nike denies that Satan Shoes has anything to do with the company.

As a result, Nike has filed a lawsuit against the MSCHF company.

Nike claims MSCHF has infringed on trademarks because the company has used the Nike logo and Air Max 97 design.

In fact, the launch of Satan Shoes also did not get Nike’s approval and sanction. People had previously wanted to boycott Nike for allowing the shoes to be launched but Nike vehemently denied that the launch of Satan Shoes had anything to do with the company.

After Nike filed a lawsuit against MSCHF, Lil Nas X just released a statement on Twitter with a 4 -second video showing a cartoon character, Squidward sitting in a box asking for donations along with writing a caption that reads ‘me after the Nike lawsuit’.

This Product Was Once A Toilet Cleaner

 Listerine is the most popular brand of mouthwash products in the world. But did you know that Listerine was originally used as a toilet cleaner?

Not only is it used to clean toilets, but Listerine is also promoted to treat gonorrhea or venereal disease.

So, how can toilet cleaning products and sexually transmitted disease medications be turned into mouthwash products?

In the 1800s, Joseph Lister or known as Dr. Lister says the practice of hand washing is a good action. He believed the disease came from dirty and foul air.

Dr. Lister also found that washing his medical devices and hands with phenol would reduce the percentage of deaths of his patients compared to before.

After he discovered the use of phenol, Dr. Lister explores in more depth the theory of evil microorganisms that plague the entire human race.

Dr. Lister believes germs are like invisible monsters but are very dangerous in everyday human life.

However, the idea was widely rejected by other doctors at the time. Prior to that, the doctor's medical equipment was not washed but Dr. Lister who started the revolution in the use of antiseptics in the field of medicine.

A chemist and businessman, Jordan Wheat Lambert decided to make an antiseptic. Probably because he was interested in Dr. Lister and want to get free marketing, Lambert named his product Listerine.

At that time, antiseptics were used to wash surgical instruments only but were not sold. Due to that, Lambert's partner Dr. Joseph Lawrence decided to market their products with a variety of tactics such as being able to treat dandruff, used after shaving, to flush toilets and treat venereal diseases.

However, Listerine sales are still not selling even though various tactics have been used so they need a new strategy.

Therefore, there is a hilotoxis. This hilotosis is a combination of two Latin words, ‘halitus’ which means breath and ‘osis’ is a disease or the simple language is bad breath.

The word is used so that people consider hilotoxis to be a dangerous disease and can only be treated with Listerine, whereas bad breath can be ‘treated’ by just eating chewing gum.

In fact, the strategy of scaring people to buy a product is still practiced to this day and is a very ‘powerful’ tactic.

Why Malaysian Artists Need to Know About NFT?

 NFT or ‘non-fungible token’ is a cryptocurrency phenomenon that is hot right now.

If you are curious about cryptocurrencies such as Bitcoin, Ethereum and so on, you must know the blockchain technology used to record and store digital transactions.

The technology is secure and protects privacy because it is independent of third parties and we have absolute authority over all our transactions. An example is the fiat currency system managed by banks.

As a result, many are starting to turn to investing in cryptocurrencies because they believe the technology can replace the paper currency we use today.

Blockchain technology is also not just limited to financial systems. Based on the same technology, blockchain allows us to buy and sell digital artwork such as paintings, songs, videos and items in video games. This is called NFT.

NFT is a non -transferable digital token, unique and exclusive to its owner only. Christoe or his artist name, Beeple, managed to sell his NFT work, a photo collage known as Everydays: The First 5000 Days, for as high as US $ 69.3 million.

The event caused NFT to become popular around the world. Even Twitter's Chief Executive Officer (CEO), Jack Dorsey also sold a 'screenshot' of his first tweet in the form of NFT with a value of US $ 2.9 million to a Malaysian tycoon.

The Nyan Cat meme, which is often shared on social media by the public, also sold for US $ 580,000.

In the simplest terms, NFT transforms a work of art into an asset that can be verified for its authenticity and easily traded on the blockchain.

The idea has soared in popularity in recent times based on the rise of cryptocurrency technology as well as the desire of digital artists to have their own ownership and at the same time be profitable.

For example, memes. Everyone can ‘screenshot’ the same meme but NFT allows people to find out who the real owner of the meme is.

NFT also solves the problem of ‘plagiarism’. The NFT has a ‘coding’ system that is embedded in the blockchain ecosystem and makes it easy for others to check the ownership record for an NFT.

The artists will also get their art rights without going through a third party. Royalties can also be channeled to the artists involved. As we all know, there are many cases of novelists or celebrities who do not get their royalties so they have to demand help from the parties involved. NFT can solve that problem easily and artists can also work with pleasure.

Why can the price of an art reach up to millions of dollars? Like all assets in the world, something can be very valuable due to demand and supply factors. When many people want to buy something, then the more expensive the goods involved.

Maybe many people think, why want to have a picture, meme or work of NFT? The answer is the same as why people are willing to buy fighting fish or Supreme shirts up to thousands of Malaysian Ringgit. People are willing to buy at that price to show their status and sell it back as a form of investment.

NFT is not new. In 2017, a company called Dapper Labs sold a unique digital cat cartoon called CryptoKitties.

The game is traded on the Ethereum blockchain and became very popular in 2017. The game is like buying a Digimon in a Digivice some time ago. Various types of cats are also offered and you can resell the cats.

NFT is also being developed in the real world. Nike also uses patented technology that allows a blockchain system to validate genuine and genuine products. Nike uses an NFT system called CyptoKicks.

Beijing ‘Hole’ of the World’s Rich

 The city of Beijing in China now has more wealthy people than any city in the world, according to Forbes.

According to the business magazine, Beijing now has 100 rich people compared to 33 last year.

That number surpasses New York City, which has 99 millionaires and holds the top spot for seven years.

China’s rapid Covid-19 preventive measures, the rise of its technology firm and the country’s stock market helped it grab the top spot.

Although Beijing has more rich people, the total net wealth of New York City's rich remains US $ 80 billion more than their 'partners' in Beijing.

The richest resident of Beijing is Zhang Yiming, the founder of the video -sharing app TikTok and the chief executive of the firm ByteDance. His fortune is worth US $ 35.6 billion.

By comparison, the richest resident of New York City is Michael Bloomberg who has a fortune worth US $ 59 billion.

China along with the United States (US) saw its tech giant become more influential during the Covid-19 pandemic as many people chose to shop online and find entertainment sources.

China also added 210 new tycoons, more than any other country in the world.

Half of them earn income through the manufacturing or technology industries, including a wealthy woman who earns income through the sale of electronic cigarettes, namely Kate Wang.

China now has 698 rich people while the US still leads with 724 rich people.

Amazon founder and chief executive Jeff Bezos remained the richest man in the world for the fourth year in a row with a fortune value of US $ 177 billion last year.

Why Is Gold More Expensive Than Other Metals?

 In this article, the author will explore why gold is more expensive than other metals.

Humans have been in love with gold since 40,000 BC. From the time of Ancient Egyptian civilization, people have been obsessed with gold.

They not only use gold as currency but gold is also used as jewelry to be buried with corpses.

The ruler of Ancient Egypt, King Tutankhamun when he died was buried along with 3 golden coffins. The interior of King Tutankhamun’s coffin is also made of pure gold which is now worth more than 1 million dollars.

Therefore, we already know that people have always loved gold. In fact, the story of gold is also told in the Quran and the Bible.

To this day, gold is a symbol of wealth. Some are willing to put gold on cars, phones, teeth and even ice cream.

Gold is also a symbol of romance. If they want to get married, people will buy a gold ring instead of a silver ring.

For investors, gold is one of the good long -term investment portfolios. For manufacturers of smartphones or electronic devices, gold is very suitable if used because the metal is the best conductor of heat and electricity.

Gold is also difficult to corrode and rust, unlike other metals.

Another factor why gold is expensive is due to geological aspects. Gold can be found in most places but it is difficult for us to get because to get gold, it has to be mined and the cost of mining is very expensive.

After being mined, the gold needs to be cleaned to look beautiful. Because of that, gold is sold at a high price.

Hard to get gold is not the main factor why gold is expensive. There are metals that are harder to find than gold but still cheaper. An example is a metal known as Ruthenium.

1 kilogram of Ruthenium costs around RM9,000 while gold costs RM55,000 per kilogram. So we know the difficulty of getting the gold is not a factor why the metal is expensive.

It is difficult to know how much more gold is in the belly of the Earth but the World Gold Council in 2019 once told the total gold that has been mined is 190,040 metric tonnes equivalent to 190 million kilograms of gold.

This gold is hard to get but enough to build a tower with gold. Gold becomes expensive because it requires a lot of work when mining but that is not the only reason. As mentioned, gold does not rust and is easy to mold.

Easy to make rings, necklaces and people are easily attracted to see whatever jewelry is made of gold.

Silver is also one of the hardest metals to obtain and has a low melting point but silver fades easily and is not durable.

So this gold is perfect in many ways. Gold stays the same, so if you want to do anything with gold, you don't have to worry because it will stay sparkling for many years.

If you have gold, you have a good asset because its value is stable and the whole world acknowledges the value of gold.

Paper money used to be printed on gold but since 1971, paper money is no longer based on gold but only trust from the government alone.

No Need to Use CBDC - BNM

 Bank Negara Malaysia (BNM) has no plans to issue the Central Bank Digital Currency (CBDC) in the near future.

Through the 2020 Annual Report, BNM informed that the financial system in the country continues to support economic functions as well as meet the needs of individuals and consumers.

“To achieve this goal, the existing monetary and monetary policy tools remain effective in maintaining monetary and financial stability.

"In addition, domestic payment systems including the Real -Time Retail Payment Platform (RPP) continue to operate safely and efficiently to support economic needs and enable real -time digital payments," he said as reported by Bernama.

The report also noted that technological advances and the rapid rate of digitization have led to an increase in the use of digital payments as well as the emergence of private digital assets such as Bitcoin, Ethereum and Stablecoin.

Most digital assets in their current form, are not used as payment instruments because these assets do not exhibit the universal characteristics of a piece of money.

In essence, the characteristics of digital assets prevent them from being a good store of value and a medium of exchange due to the fact that digital assets are vulnerable to volatile price fluctuations, cyber threats and lack of scalability.

“For example, the price of Bitcoin recorded a sharp decline of 39% in a single day in March last year. Therefore, the public needs to have a clear understanding of digital assets such as their features, the underlying technology and the associated risks, ”said BNM.

According to BNM, new forms of digital assets such as Stablecoin have also been introduced to reduce fluctuations in value by linking or supporting them with fiat currency assets.

BNM will also actively assess the potential value proposition of CBDC based on developments in the digital asset and payments landscape as the situation evolves rapidly.

Key policy decisions on CBDCs will be made based on clear benefits to Malaysia as a whole, while ensuring that the associated risks arising from the production of CBDCs, in particular financial stability risks, are effectively managed.

The issuance of CBDCs needs to be complementary to existing payment instruments including physical cash to ensure that all citizens of the country, especially the underserved communities, have continued access to secure and efficient payment solutions.

“BNM will also actively monitor trends in key indicators that have a direct impact on its mandate, which can serve as a useful data reference for assessing the appropriateness of CBDC production.

"Among others, these key indicators include the level of use of physical cash in Malaysia, the extent to which privately issued digital assets are used for payment purposes in Malaysia and the extent to which CBDCs are being used to facilitate cross -border trade," according to BNM.

As part of efforts to improve understanding of the associated risks and implications for policy, the central bank is actively building internal capacity to support adequate information -based decisions recognizing CBDC production including implementing proof of concept (POC).

Suez Canal Incident, These Two Sectors Receive Minimal Impact

 The income of glove manufacturers and the consumer sector will receive minimal impact for the financial year ending 2021 (FY21) following the Suez Canal incident which was blocked by a ship.

According to PublicInvest Research, preliminary estimates suggest that the two -week disruption has minimal impact, even though the European market accounts for 30 to 40% of glove manufacturers ’sales quantities.

"However, the continued disruption may exacerbate the container shortage situation which has led to delays in receipt of revenue for glove manufacturers," the firm said in a research note today.

In addition, Bernama reported, the potential for higher freight charges will not reduce the glove company's margins as shipping costs are usually borne by buyers.

Although glove manufacturers usually receive revenue when goods are delivered to the port but they are expected to obtain ship orders before transporting goods to the port, the situation of shortage of ships may cause delays in receipt of revenue.

Meanwhile, the recovery in global economic activity is expected to be supported by the launch of vaccination programs and stimulus packages that will boost consumer confidence.

Given that the Suez Canal in Egypt is an important route to world trade, the incident will further affect the already severely affected global supply chain.

"However, we are of the view that the incident will not have a big impact on the income of the companies under our coverage.

“Based on the calculations, we estimate the revenue impact for Kawan Food and QL Resources is minimal at 1.0% in the event of a two-week delivery delay as both companies have geographically diverse markets. Europe contributed 9.0% of Kawan Food's Financial Year 2020 sales, ”he said.

What Is A Stock Index?

 An index is a standard method for tracking the performance of a number of assets. Stock indices typically measure the performance of a number of stocks in the market. There are several indices that are often used to display the overall situation of the stock market.

An example is the FBMKLCI Index which measures the performance of the top 30 stock counters on the main board of the Malaysian Stock Exchange. The S&P 500 index measures the performance of the top 500 company counters in the United States. The Dow Jones index measures the top 30 company counters on the US stock exchange.

There are also other more specific indices such as indices that record the movement of a particular industry or segment.

Indices are also used to measure other financial or economic data such as interest rates, inflation or manufacturing output. Indices often serve as a benchmark for assessing portfolio return performance.

An index is an indication or measure of something. In finance, an index usually refers to a statistical measure of changes in the securities market. In the case of financial markets, stock and bond market indices consist of a portfolio of securities that represent a particular market or segment.

Each index related to the stock and bond markets has its own calculation methodology. In most cases, the relative change of the index is more important than the actual numerical value that represents the index. For example, if the FTSE 100 Index is at 6,670.40, the figure tells investors that the index is almost seven times higher than its base level of 1,000.

However, to assess how the index has changed from the previous day, investors must look at the amount of the index that has fallen, often expressed as a percentage.

Indices are also often used as a reference to measure the performance of mutual index funds (index funds) and exchange traded funds (ETFs). For example, many mutual funds compare their returns to returns in the S&P 500 to give investors an idea of ​​how much more fund managers earn than they generate in index funds.

Indexing is a form of passive fund management. Rather than fund portfolio managers actively selecting and determining market timing, that is, choosing securities to invest in as well as strategizing when buying and selling them, fund managers build portfolios in which the holdings reflect specific index securities.

The idea is to mimic the profile of an index, the stock market as a whole or a heavyweight segment and the fund will match its performance as well.

Since you cannot invest directly in an index, an index fund is created to allow you to invest in the performance of index movements. The fund combines mimic securities with what is in the index. For example, the Premier Index Fund which uses the FTSE Bursa Malaysia KLCI Index as a benchmark.

Among the popular index funds is the Vanguard S&P ETF (VOO) which is very similar to the S&P 500 Index.

When raising mutual funds and ETFs, fund sponsors seek to build portfolios that contain several different components within a particular index. This allows investors to buy securities that are likely to go up or down in line with the stock market as a whole or with market segments.

The S&P 500 index is one of the most well -known indices in the world and one of the most frequently used benchmarks for the stock market. The index accounts for 80% of the total number of stocks traded in the United States (US). The Dow Jones is also popular but only represents the share value of 30 publicly traded companies in the country.

Other leading indices include the Nasdaq 100 Index, the Wilshire 5000 Overall Market Index, the MSCI EAFE Index and the US Bloomberg Barclays Aggregate Bond Index.

Like mutual funds, indexed annuities are tied to a trading index. These securities offer rates of return that follow a particular index but usually have a limit on the returns they provide. For example, if an investor buys a Dow Jones indexed annuity and has a return limit of up to 10%, then his rate of return is between 0 and 10%, depending on the annual change of the index.

Indexed annuities allow investors to buy securities that grow in tandem with a heavyweight segment or the entire market.