Dubai, UAE Information

GENERAL INFORMATION

FACT FILE

Dubai is one of the seven emirates that make up the United Arab Emirates and the name of the emirate’s main city. The modern emirate of Dubai was created with the formation of the United Arab Emirates in 1971.

Official Name: Dubai
Area: Total 4,114 km² (1,588.4 square miles)

Capital: Dubai (city of Dubai)
Currency: Arab Emirate Dirham (AED); 1 EUR = 5.4 AED
Official language: Arabic, but also widely spoken are Persian, Malayalam, English, Hindi, Urdu, Bengali, and Tagalog
Time zone: Dubai Standard Time (UTC+4)
Dialing Code: +971
Internet top-level domain (TLD): .ae
Emergency services: 999

Days of sunshine per year: 365
Average temperatures: December-March 24ºC; March-November 35 ºC

Main International Airports: Dubai International Airport (DXB), Maktoum International Airport (JXB) – under construction, to be ready in 2008

Religions: 96% Muslim, Hindu, Christian, 4% other
Government: Emirate
Emir: Sheikh Mohammed bin Rashid Al Maktoum

Population: metro 1, 492,000 (2006)
Population density: 345.65/km² (895.2/sq miles)
Gross Domestic Product (GDP): USD 46 billion (2006)

Business hours:

Government offices: Saturday - Wednesday (7:30am - 2:30pm)
General businesses work: 8am to 1pm and 4pm to 8pm from Saturday to Thursday
Banks: 8am to 1pm from Saturday to Wednesday and 8am to 12pm on Thursday

Most major credit cards are widely used and accepted.


Dubai is one of the wonders of the modern world. A decade ago the sand was the ruler of this emirate located on the edge of the Arabian desert with no discernible natural advantages. Nowadays the sand has been dethroned by the luxurious futuristic skyscrapers and the exclusive cozy villas scattered around the coastline. And all this is thanks to the vision of Dubai’s ruler – Sheikh Mohammed and the belief in his subjects in his idea to turn his country into the center of international trading and tourism. His logic is simple: if you build it, they will come.

The audacity of the city's ruler is breathtaking. Running out of coastline to build hotels? Build vast artificial islands with 120km of new beachfront. Need better connections with the world? Build up an award-winning international airline in 15 years.

From within these high standards of luxury and convenience, visitors can experience exotic Arabia in the bustling souks or a night in a Bedouin tent with belly-dancing under the starlit desert skies, as well as a way of life that is still embedded in the Islamic traditions of an ancient land. Dubai's attraction lies in the contrast between the ultra modern and the enchantingly traditional, which gives the city a personality like no other and visitors a variety of experiences to choose from. From desert oases and unspoiled beaches, camel races and old wind towers, to top-class shopping opportunities, avant-garde architecture and the finest international cuisine, Dubai has more than enough depth to satisfy even the most seasoned of travelers.

Places to see:

• Bastakiya District - historic home to many reconstructed buildings in the traditional style;
• Burj al-Arab hotel
• Dubai Museum
• Dubai Zoo
• Gold Souq
• Ibn Battuta Mall
• Jumeirah Mosque
• Mall of the Emirates
• Shindagha District
• Palm Islands

Warren Buffet's Investment Advice

Warren Buffet's Investment Advice

When it comes to the world of investments - especially in the stock market - Warren Buffet, the Chief Executive Officer of Berkshire Hathaway, is an enigma.

Celebrated as the "Oracle of Omaha" because of his unparalleled success in the stock market, Warren Buffet lives the life of your regular next-door neighbour, hardly eats in classy restaurants and drives a regular, used 4-wheel drive.

How is he able to maintain success for so many years? Here are some of his best advice. Hear him:

Stay liquid
"We will never become dependent on the kindness of strangers. We will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses."

Buy when everyone else is selling
"We've put a lot of money to work during the chaos of the last two years. It's been an ideal period for investors: A climate of fear is their best friend.... Big opportunities come infrequently. When it's raining gold, reach for a bucket, not a thimble."

Don't buy when everyone else is buying
"Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. The obvious corollary is to be patient. You can only buy when everyone else is selling if you have held your fire when everyone was buying."

Value, value, value
"In the end, what counts in investing is what you pay for a business -- through the purchase of a small piece of it in the stock market -- and what that business earns in the succeeding decade or two."

Don't get suckered by big growth stories
Buffett further reminded investors that he and Berkshire's Vice Chairman, Charlie Munger, "avoid businesses whose futures we can't evaluate, no matter how exciting their products may be."

Most investors who bet on the auto industry in 1910, planes in 1930 or TV makers in 1950 ended up losing their shirts, even though the products really did change the world. "Dramatic growth" doesn't always lead to high profit margins and returns on capital.

Understand what you own
"Investors, who buy and sell based upon media or analyst commentary are not for us.

"We want partners, who join us at Berkshire because they wish to make a long-term investment in a business they themselves understand and because it's one that follows policies with which they concur."

Defense beats offense
"Though we have lagged the S&P in some years that were positive for the market, we have consistently done better than the S&P in the 11 years during which it delivered negative results. In other words, our defense has been better than our offense, and that's likely to continue."

Hard work
All hard work bring a profit, but mere talk leads only to poverty.

Laziness
A sleeping lobster is carried away by the water current.

Earnings
Never depend on a single source of income. (At least make your Investments get you second earning)

Spending
If you buy things you don't need, you'll soon sell things you need.

Savings
Don't save what is left after spending; Spend what is left after saving.

Borrowings
The borrower becomes the lender's slave.

Accounting
It's no use carrying an umbrella, if your shoes are leaking.

Auditing
Beware of little expenses; A small leak can sink a large ship.

Risk-taking
Never test the depth of the river with both feet.(Have an alternate plan ready)

Investment
Don't put all your eggs in one basket.

General Investment Rules

1. Rule Number 1 - Never lose money


2. Rule Number 2 - Don't forget rule number 1


3. You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right - and that's the only thing that makes you right.


4. Risk comes from not knowing what you're doing. If you don't know jewelry, know the jeweler.


5. If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes.


6. There seems to be some perverse human characteristic that likes to make easy things difficult (Remember his advice to Bill Gates - keep it simple).


7. One's objective should be to get it right, get it quick, get it out, and get it over... your problem won't improve with age.


8. A public-opinion poll is no substitute for thought.


9. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.


10. "I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would know the answer to that. "I'm paying $32 billion today for the Coca Cola Company because..." If you can't answer that question, you shouldn't buy it. If you can answer that question, and you do it a few times, you'll make a lot of money.


11. You ought to be able to explain why you're taking the job you're taking, why you're making the investment you're making, or whatever it may be. And if it can't stand applying pencil to paper, you'd better think it through some more. And if you can't write an intelligent answer to those questions, don't do it.


12. Be fearful when others are greedy, be greedy when others are fearful.

Comparison Between Direct CDS and Nominees CDS Account

When opening a trading account with a Stock Broker (Participating Organization or Investment Banks) a CDS account will be opened at the same time. Normally, stock brokers can offer Direct CDS or Nominee CDS Account.
CDS stand for “Central Depository System” and it maintain by Bursa Malaysia Depository Sdn Bhd. Previously it was known as Malaysian Central Depository (“MCD”).
Each CDS account have its own advantage and disadvantage. The table below highlighted the different between the two.

	CDS Account
	Direct	Nominee
Account Name	Under shareholder name (eg Mr M)	Under broker name ( eg HLG Nominee Tempatan for Mr M)
IPO application	Eligible	Not eligible
Paperwork on corporate exercise	Handle by shareholder	Handle by stock broker (upon instruction). Broker may impose fees.
Dividend	Send to shareholder	Credited to trust account with stock broker
Attending AGM	Eligible	Not Eligible (Possible but have to get stock broker to appoint as proxy)
Annual Report	Mail to shareholder	Have to request from broker
Share transfer	To own or relative account	Only to own account

By looking at the table above, it is clear that Direct CDS account have more advantage when compare to Nominee CDS account. The only advantage of Nominee CDS account is shareholder do not need to worry about paperwork on corporate exercise.

How to Open Trading and CDS Account for Trading in Bursa Malaysia?

In order for you to invest or trade shares that are listed in Bursa Malaysia, you need to open Trading Account and CDS Account. Below are the steps for you to follow.

Step 1 – Open trading account

You have to open trading accounts with stock broker or participating organization that is registered with Bursa Malaysia. You can find the list of stock broker companies at Bursa Malaysia webpage. You are recommended to visit their office to open an account so that their representative can verify your documents.

Some stock brokers allow account opening via internet but you need to get your documents certified by Notary Public.

Step 2 – Choose between Nominee or Direct Trading Account

Normally, stock broker provide two different trading account namely Nominee and Direct Trading Account.

For Nominee trading account, basically you appoint your broker to hold shares on your behalf. It means that, once you buy shares, your name will not show on the registration book of existing shareholders directly, instead it will show your Broker Name.

The advantage is, you do not need to do any paperworks such as fill up forms for bonus issue, right entitlements and others. The most important is your broker have to remember the dateline for all the paperworks, not you. But you still need to instruct them on what to do.

However, the disadvantage of nominee account are you are not eligible to apply for IPO and you may not receive the annual report or some gift vouchers easily.

Direct Trading account is exactly the opposite of Nominee Trading account.

You may choose to open nominee account with one broker and direct account with another broker.

Step 3 – Choose between Cash Upfront or Collateralised Account

Some brokers have an option for you to choose between Cash Upfront or Collateralised Account. For Cash Upfront account, total trading limit of the day is equal to the amount of cash you have in your trust account. The advantage of Cash Upfront account is lower brokerage fee.

For Collateralised Account, you are allowed to trade beyond the amount of cash that you have in trust account. Normally, broker allows at least 2 times the amount cash that you have. On top of that, if you have shares in the attached CDS account, they also can be used as collateral to increase your trading limit.

Trust account is an account where your broker keep cash that you deposited. They may pay interest on the money keep in this account.

Step 4 – Decide to invest Online or Offline

To invest or trade in Bursa Malaysia you can have either do it via Offline or Online but now, most of the brokers in Malaysia provide online trading platform.

For Offline Trading account, you will have a real people called remiser who will handle all your orders. You will have to contact your remiser through what ever means for buy or sell shares.

For Online Trading Account, all of your orders are made through internet application which nomally load through internet browser of your computer. Some stock broker also allow to do transaction via PDA phone or mobile phone.

The main advantage of Online trading Account over Offline Trading account is lower brokerage fee. For online trading account, you may call helpdesk for trading but they may impose high brokerage fee.

You can look at the list of stock broker companies that offering online trading here.

Step 5 – Open Central Depository System (CDS) account

Next, you have to open CDS account. Your chosen Stock Broker will assist you to open CDS account.

CDS account is an electronic account which maintain by Bursa Depository or formerly known as Malaysian Central Depository.

CDS account is used to keep track or your shares or stocks movement. Shares will be credited to your account when you buy and debited from your account when you sell on due date.

You need to fill and sign in CDS Opening Account Form (FMN01). At the same time you have to sign two copies of specimen cards and provide copies of your identity card (NRIC).  The fee for CDS account openning is RM10.

If you have multiple trading account, you have to open separate CDS account for each trading account. Sharing CDS account is not allowed.

 

Braised Spicy Pumpkin

Ingredients

·         1 medium Japanese pumpkin, 2lb

·         4 oz minced pork or beef

·         2 tbsp dried shrimp, soaked until soft

·         1/2 tbsp spicy Sichuan bean paste

·         2 slice ginger

·         2 tbsp soy sauce

·         2 tbsp cooking wine

·         1 cup stock/water

·         Chopped scallions

Instructions

1.       Cut the pumpkin into 1.5x1.5 cubes with the skin attached.

2.       In a wok, heat up 2 tbsp of oil. Fry the ginger until brown. Add the minced the pork, dried shrimp, and the cooking wine. Cook until the pork turns color. Add cubes of pumpkin.

3.       Stir the pumpkin to mix with the meat and shrimp. Add stock/water, Sichuan bean paste, and soy sauce. Mix well.

4.       Bring to boil and simmer in low heat to your tenderness. Stir to mix periodically to make sure the pumpkin cubes are cooked evenly.

5.       I like my pumpkin soft but not completely mush so I normally simmer for about 6 minutes. If you like it really soft, cook it for about 10 – 12 minutes. Garnish with some freshly chopped scallions

Chinese White Radish Soup

It’s time for another comfort soup and this time, I am featuring the Chinese White Radish Soup. The chinese white radish is also known as white radish (surprise!) or amongst the Japanese as the Daikon Radish. It basically looks like a white carrot which is oversized. It is quite a versatile vegetable as you can use it to make lo bak kou (turnip cake), stirfried, pickled or cooked in soups like the above. I am given to understand that amongst the chinese who practice or partake in traditional herbal medicine, the white radish is a no-no in the diet of the patient during treatment as it supposedly absorbs all the medicinal values. Anyone knows about this?

Anyway, the Chinese White Radish Soup is a simple recipe which is suitable even for beginners. Just prepare the ingredients, drop them into a crockpot / slow cooker / double-boiler or pot and simmer it. A good tasting healthy soup awaits you when it is done. I usually add dried cuttlefish and dried oysters for added taste and flavour but that is optional. Give this soup a try. It’s delicious.

This is my recipe for Chinese White Radish Soup

Ingredients

• 300 grammes pork ribs / bony pork or chicken parts
• 1 white radish (about 200 grammes or more – cut into large chunks or sliced)
• 8 red dates
• 1 piece dried cuttlefish
• 6 pieces dried oysters
• 700 ml water for soup (or approximately 2 1/2 soup bowls of water)
• 500 ml water

Method

Bring to boil 500 ml water in a pot. Add pork ribs / chicken part and allow the meat to cook slightly. Remove scum from surface of water. Remove meat and discard water.

Bring to boil 700 ml water in a clean pot. Add the partially cooked meat and the rest of the ingredients and bring back to boil. Then reduce heat to simmer for 2 to 3 hours or till soup reduced to 1 1/2 bowls water. Add salt to taste before serving.

If you are using a crockpot or double-boiler, reduce amount of water to just over a soup bowl. Add ingredients into pot. Boil the water separately and pour the boiling water into the pot before simmering. Enjoy your chinese white radish soup.

Managing Equity Market Risk by Using Derivatives

Managing Equity Market Risk by Using Derivatives

 

       
Experts have always advised investors to reduce risk in their investment portfolio by diversifying. However, even the most diversified portfolio fluctuates according to market movement. In this article, we take a closer look at managing equity market risks with the use of derivatives. By the end of this article, you as an investor will be able to identify:

• the two basic risks inherent in an investment portfolio; and
• how futures, as a form of derivatives, is used to manage market risks and turn one’s investment profile from equity to risk-free bond.

What is Equity Market Risk?
In the equity market, risk basically means the unpredictability of the expected return and how it affects the investment portfolio. There are two basic risks inherent in an investment portfolio: unsystematic risk or firm-specific risk (diversifiable) and systematic risk or market risk (non-diversifiable). When a portfolio is diversified, it basically means the firm-specific or asset-specific risk arising due to specific characteristics of the firm is removed. But of course, market risk, which is inherent in the portfolio, can never be fully eliminated because it is caused by the overall stock market and economic situation.
                 
Risk: Good or Bad?
Many investors wrongly perceive risk as bad for their portfolios. Yet at the same time, it is widely understood by investors that risk and return go hand in hand. In order to earn higher returns, we must assume higher risks. So, if we eliminate all risk, we will only earn risk-free returns, which is equivalent to risk-free rates. What all investors ultimately want is to preserve or enhance upside risk while minimising or eliminating downside risk.

Many investors also think that derivatives are financial instruments that are highly risky. They do not relish the idea of using derivatives to manage portfolio market risk. In actual fact, the development of financial derivatives instruments provides new ways of managing risk for investors!

Taking Advantage of Futures to Hedge Market Risk  
Futures are standard contracts being traded on the exchange. They are one of the most common derivatives used to manage equity market risk. Since most futures are based on broad indices, they can be used to manage the risk related to the indices that the futures are based on.
For example, if an investor is optimistic that the overall economy is heading towards recovery, but his current stock holdings are not big or diverse enough to resemble market exposure[1], he can consider buying futures contracts that are based on the broad market index. By doing this, when the market goes up, he will gain higher profits than his original portfolio. However, in the event that the market heads downwards, his losses will also be more than what he would lose in his original portfolio.

Now, assume an investor is currently holding a well-diversified portfolio, and based on his own observation, thinks the market may be heading downward. Instead of selling his current stock holdings, he can choose to hedge his portfolio by selling futures contracts. The amount of contracts to sell will depend on how much market risk the investor would like to hedge[2]. When the market actually drops, the investor will close his positions in the futures contracts and the profits earned can then be used to offset the drop in the value of his investment portfolio. However, if the market goes up, the losses in the futures contracts will also offset the increase in the value of this portfolio. By using futures to hedge his portfolio risk, he gets downside protection but at the same time foregoes upside potential.

In extreme cases, if the investor is very pessimistic about market conditions, he may choose to fully hedge his portfolio by selling the amount of futures contracts that is equivalent to the value of his investment portfolio. Effectively, the investor would be turning his investment profile from equity into a risk-free bond[3]:

 
Conclusion

Futures enable investors to change their risk and return profiles without changing their investment holdings. This is very important as oftentimes, ups and downs in the market are only temporary. If investors were to change their investment holdings to get broader market exposure, they would need more capital and incur a lot more transaction costs compared to using futures. Additionally, to change the stock holdings would mean investors need to do in-depth research before deciding what to sell or buy.

Ultimately, using futures to manage equity market risk gives the flexibility of altering your equity market risk profile without changing your stock holdings, making it a very viable market risk management solution for any investor.


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[1] The exposure of a portfolio to particular securities/markets/sectors must be considered when determining asset allocation since it can greatly increase returns or, if properly done, minimise losses. For example, a portfolio with both stocks and bonds holdings will typically have less risk than a portfolio with exposure only to stocks.

 

[2] To make an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.