Tag: debt

  • Debt-Free After Performing Hajj

    Debt-Free After Performing Hajj

    Something amazing happened to me at Hajj… I have been going through some financial difficulties as a result of a big corporation making a small avoidable mistake that has cost me a couple of thousand pounds. This had an indirect consequence which resulted in other debts too. I had threatening calls, emails which even led to a court case that I eventually lost, though the judge was sympathetic. I was told to give up and cut my losses and just get over it, but I persisted.

    With all these debts looming over my head, I still decided to make Hajj this year. I made du’a that Allah relieve me of my debts and he make successful in this life and the hereafter. Having completed Hajj, I was waiting at Jeddah airport to board the plane back to London. I checked my emails and to my shock, one of the big corporations I was dealing with, decided to reimburse me in full!

    But the story doesn’t end there. Someone who knew of some of my issues and without me even asking, offered to pay off all my debts. “How much is your debt? Is it £20,000, £10,000? Don’t worry, I’ll pay it all off for you!” I politely declined. How true are the words of the Prophet ﷺ: “Keep on doing Hajj and ‘Umrah, for they eliminate poverty and sin just as the bellows eliminate impurities from iron, gold and silver.” (Tirmidhi)

  • Ex-Husband Never Pay Maintenance, Jobless Single Mother Faces Daunting Prospect Of Losing House

    Ex-Husband Never Pay Maintenance, Jobless Single Mother Faces Daunting Prospect Of Losing House

    A single mum with two grown-up children – one in university and the other in polytechnic wrote in to us about the compulsory acquisition of her 3-room flat by HDB.

    She owes HDB about $33,000 in mortgage rent or about 3 years equivalent. Each month her rent is $600.

    Her ex-husband also did not fulfill his maintenance obligation and has since declared himself bankrupt.

    The single mum used to earn $3600 working in a 4-star hotel in her hay days but her last drawn pay has dwindled to below $2000 creating all kinds of livelihood problem.

    She is currently jobless for the past few months and was dismissed from her job due to depression over the matter.

    Single mum seems to be in the public picture of late as they struggle to take care of their kids and try to make ends met.

    Its a tough preposition for them if the ex-spouse fails to play their part by delaying the maintenance payment or worse declare themselves bankrupt to get a downward variation.

    We only pray that once the house is acquired by HDB they could get a cheaper rental unit from HDB and not owe HDB any more back debts which will only deepen their family crisis.

    My heart goes out to the two growing-up children who are still studying in tertiary institutions. It will be a very stressful period for them too…

     

    Source: Gilbert Goh

  • Leong Sze Hian: $324.2b Owed To CPF Members?

    Leong Sze Hian: $324.2b Owed To CPF Members?

    I refer to the article “Why does Singapore have an external debt of US$1.766 trillion?” (Straits Times, Dec 28).

    Govt “invests all the proceeds which it has borrowed”

    It states that “A Government article on the subject explains that Singapore does not borrow to spend. Instead, it invests all the proceeds which it has borrowed.

    Total outstanding Government borrowings is S$436b

    The income which it earns from its investments is also more than sufficient to cover the debt servicing costs. As of March this year, the total outstanding Government borrowings stood at S$436 billion.

    The Government issues three types of domestic debts:

    * Singapore Government Securities to develop the domestic debt market;

    CPF is part of domestic debts

    * Special Singapore Government Securities to meet the investment needs of the Central Provident Fund, and

    * Singapore Saving Bonds to provide individual investors with a long-term saving option that offers safe returns.

    What is also important to note is that unlike some other countries which have to raise funds in currencies such as the US dollar or euro to balance their books, the Government does not have any foreign currency debts.”

    Amount due to CPF members is $324.2b

    According to the Department of Statistics’ Monthly Digest of Statistics – the Amount Due to (CPF) Members is $324.2 billion in October, 2016.

    This has been increasing steadily annually from $150.9 million in January 1961.

    % credited to CPF members – “na” from 1961 to 2001?

    The Interest Credited to CPF members is shown as “na” from January 1961 to December 2001.

    % in 2002 was 2.6%?

    For January 2002 – the Interest Credited was $238 million over the Amount Due to Members of $92.9 billion.

    This works out to an annual interest of only about 2.6 per cent.

    % in 2006 was 3.1%?

    Similarly, for October 2016 – the Interest Credited was $1.02 billion over the Amount Due to Members of $324.2 billion.

    This works out to an annual interest of about 3.1 per cent (up to October).

    Real % was 0.5% from 2001 to 2015?

    Since inflation from 2001 to 2015 was about 2 per cent per annum (CPI 2015 99.461 divided by 2001 75.568) – does it mean that the real annualised rate of return on our CPF Ordinary Account is only about 0.5 per cent (2.5 – 2.0) per annum?

    Lowest real % of all national pension funds in the world?

    Is this the lowest real rate of return of all national pension funds in the world since 1999 – the year that I understand that the CPF Ordinary Account interest rate has remained at 2.5 per cent until now?

    Returns from investing our CPF?

    What is the annualised rate of return derived from investing our CPF funds since 1999?

    In this connection, I would like to quote again – “A Government article on the subject explains that Singapore does not borrow to spend. Instead, it invests all the proceeds which it has borrowed“.

    Cumulative returns from investing our CPF vs % to CPF members?

    What is the cumulative difference between the annualised rate of return derived from investing our CPF funds since 1961 (when CPF started) to today, and the annualised rate given to CPF members?

    In absolute numbers on a cumulative basis with interest – how much money are we talking about over the last 55 years?

    No transparency and accountability?

    Are we the only developing or developed country in the world that is arguably non-transparent, as there is no disclosure on the rate of return derived from our pension funds relative to the weighted average interest rate paid on all our CPF accounts (Ordinary, Special, Medisave and Retirement accounts)?

    $324.2b owed to CPF members?

    Also, does it mean that our domestic debt owed to CPF members is $324.2 billion?

     

    Source: http://leongszehian.com

  • Till Debt Do Us Part – Malay Weddings No Longer A Budget Event

    Till Debt Do Us Part – Malay Weddings No Longer A Budget Event

    KUALA LUMPUR, Dec 24 ― Dr Farah’s wedding celebration last year comprised three receptions costing a whopping RM95,000 that forced her to take a RM15,000 loan even after getting financial help from her family.

    The 30-year-old doctor, who asked to speak using a pseudonym, said that her father had sponsored RM15,000 for the reception at his home state in Kelantan, while her husband’s family spent RM15,000 for their wedding dinner in Putrajaya.

    “My mum’s a doctor, my dad’s a doctor and three of us siblings are doctors. If we do a very simple wedding, people will wonder why we are doing a very simple wedding when we’re doctors,” Dr Farah told The Malay Mail Online in a recent interview.

    “That was my mum’s thinking. My mum’s function was very grand. There were dancers, ‘silat’ (Malay martial arts) performers, an MC who was hired,” she said, adding that the third reception, which was for her mother’s side of the family in Selayang, cost RM30,000. There were separate receptions for her parents as they are divorced.

    Dr Farah said that she and her 29-year-old husband spent another RM35,000 on items like dowry, a jazz band at one of the receptions, silat performers, accommodation for her in-laws who are from Johor, invitation cards, decorations, clothes, wedding rings and make-up.

    Despite the exorbitant cost of the wedding, however, Dr Farah said that she and her husband managed to buy a condominium unit in Putrajaya.

    Seasoned wedding planners say that the cost of an average wedding, across all races, has soared to above RM50,000, causing some couples to take out personal loans to pay for their nuptials if they are unable to get much financial support from their parents.

    At Malay and Indian weddings, food domes, food stations and buffets are common, said Leticia Hsu, president and co-founder of the Association of Wedding Professionals (AWP)

    According to wedding planners, the dowry given by the groom’s family to the bride’s side among the Chinese ranges from a few hundred to tens of thousands of ringgit.

    For the Malay community, the dowry, or “wang hantaran” gifted by the groom to the bride’s family is between RM10,000 and RM18,000 for low to medium-range weddings, and RM50,000 for high-end weddings. Indian Malaysians, on the other hand, generally do not practise the dowry custom.

    Another wedding planner, Nasrul Nasaruddin, said that the average Malay wedding costs between RM50,000 and RM80,000 if it is held at a convention centre or a tent. But the cost shoots up to RM300,000, or even a million ringgit if it is held at a five-star hotel.

    “For five-star hotels, the standard rate is RM200 per pax, depending on the package,” Nasrul told The Malay Mail Online at a recent interview.

    The founder of Nas Great Idea added that guests usually give RM200 “angpows” (envelopes containing cash gifts) at Malay weddings held at five-star hotels, breaking away from the tradition of giving gifts. If the wedding reception is held at a tent, both gifts and angpows are generally given.

    nazrul-wedding-planner

    Nasrul, who started his business 12 years ago, said that the Malay wedding reception is typically sponsored by the bride’s family. But if both partners live in different states, the groom’s family may also organise their own dinner. Inviting 1,000 guests to a Malay wedding reception is not unusual.

    “For high-end weddings, they will have a ceremony at the bride’s, groom’s, for the media, VIPs. So, in total, three to five receptions. For politicians, they have receptions at their home state where they invite lots of people, up to 15,000,” he said.

    Nasrul said that decoration is key for Malay weddings and described previous weddings he has organised, such as creating a glass floor with flowers underneath at the stage area where the “pelamin”, or the traditional wedding dais that represents the bridal couple as the king and queen sitting in state, is located.

    “For high-end weddings, the decoration costs between RM100,000 and RM500,000,” he said.

    “The trend now is for massive pelamin decoration that catches your eye. Five years ago, it was stiff pelamin decor ― flowers and pillars. Now, they transform the whole ballroom, like turning it into a garden of flowers, a Japanese garden with bonsai trees, Oriental with cherry blossoms, European with Roman pillars, or Minangkabau style, Javanese style, Acheh style, or Moroccan style with a dome and stained glass,” he added.

    Nasrul, who mostly plans Malay weddings and some high-end Chinese or Indian ones, said recently that he is organising a “Chengdu style” wedding for a Chinese tycoon next year, with the ballroom lined with a structure resembling the Great Wall of China and transformed into a garden with pagodas.

    The lavish wedding of celebrity couple Rozita Che Wan and Zain Saidin on December 11, dubbed the wedding of the year, was reported by Malay-language daily Harian Metro last month to have received a sponsorship of RM13 million.

    The newspaper also reported that the actress would receive RM23,200 in “wang hantaran” and a wedding ring estimated to cost RM93,000.

    “Wang hantaran” for the average Malay couple can be equally expensive, Dr Farah noted, saying that some of her friends had splurged on luxury watches and handbags that cost tens of thousands, despite not being able to afford them, as the “wang hantaran” is displayed prominently at the reception or ceremony.

    “My friend bought a Maurice Lacroix watch, which cost RM20,000, even though he has only been working for two years,” said Dr Farah. “We live in a materialistic world.”

    Excessive spending on weddings has also strained newlyweds’ relationships, with Dr Farah observing that some of her friends have even gotten divorced after splurging on their big day because of financial concerns over starting a family, or even buying a car.

    Nasrul said that local weddings typically have a huge number of guests, unlike more intimate Western nuptials, because Malaysians fear offending others.

    “Malaysians are very sensitive. If you hear that your friend is getting married, you will feel that there is something wrong if you’re not invited. That’s why they invite all,” he said.

    He added that he charges clients between RM20,000 and RM30,000 on average to organise the decorations for their weddings, though his fees start at RM5,000.

    According to Nasrul, honeymoons for Malaysian newlyweds, which are not included in the wedding expenditure, cost at least RM5,000 for local or South-east Asian spots, and above RM50,000 for trips to Europe, where the popular destinations are Paris and Rome.

     

    Source: www.themalaymailonline.com

  • Singapore Inc Faces $12 Billion Debt Scramble

    Singapore Inc Faces $12 Billion Debt Scramble

    Singapore companies, highly exposed to slowing global trade and a lackluster commodity market, face a financing scramble in 2017, as more than US$12 billion of their bonds falls due and banks grow wary of lending to the resources sector.

    That could trigger more blood-letting in a market that has already seen some high-profile corporate defaults, such as oil services firm Swiber Holdings (SWBR.SI), which hit the skids in July and went into judicial management this month.

    It has also seen an increase in the number of bond issuers trying to renegotiate the terms of their credit to stay afloat, a disturbing signal in a market skewed to retail buyers and smaller issues subject to light scrutiny.

    Corporate leverage has risen to increasingly risky levels, according to credit analysts and investors, while banks are becoming more circumspect about extending financing as the quality of their loan books causes concern.

    Between now and the end of 2017, according to Reuters data, US$12.4 billion of bonds falls due, but corporate balance sheets in the city state are looking strained.

    A Reuters study of 228 non-financial companies’ half-year earnings shows that 74 had net debt more than five times their core profit, a level that usually prompts concern among credit analysts, and more than a third of that group were at least twice that level.

    “We had not seen Singapore dollar corporate defaults since 2009, but suddenly we see a pick-up in defaults in 2015-2016. This is a warning sign about a refinancing confidence crisis across many sectors, not just commodity-related ones,” said Raymond Chia, Head of Credit Research for Asia ex-Japan at Schroders Investment Management.

    LIGHT SCRUTINY

    The structure of Singapore’s capital markets has left them particularly vulnerable as global trade cools and Chinese growth slows. Commodities have been a mainstay after a frothy 2013 and 2014, and private banking has loomed large, fuelling smaller bond deals. In 2014, private banks accounted for almost half of investments into Singapore dollar corporate debt, a central bank report said last year.

    Their participation has helped encourage smaller issues that are not assessed by credit rating agencies and yet are targeted at private wealth investors, analysts say.

    “Their bond issues are also mostly unrated, so the layer of scrutiny provided by rating agencies is missing. Many of these deals were mispriced: they priced like investment grade even though they had high-yield profiles,” said Harsh Agarwal, Head of Asia Credit Research at Deutsche Bank.

    That is now changing – at considerable cost for firms. Property firm Oxley Holdings, whose short-term debt dwarfs its cash balance, according to its latest accounts, saw yields on its bonds due 2019 SGOXHL1119= jump 220 basis points to 7.5 percent in the past quarter.

    And banks, under pressure to increase provisions for bad loans, are pulling back from indebted sectors like real estate, commodities and oil and gas, which dominate Singapore’s outstanding S$53 billion ($38 billion) of local currency corporate bonds.

    Non-performing loans have risen at all Singapore’s three banks in the latest quarterly results, reflecting a decline in loan quality across sectors.

    “In the absence of further bank support, refinancing this debt may prove difficult, potentially leading to more defaults over the next year,” said Devinda Paranathanthri at UBS Wealth Management, which estimates S$18 billion of local currency denominated bonds are coming due over the next 18 months. Over a quarter are from sectors facing structural headwinds.

    The latest sign of strain has been an increase in borrowers asking bondholders to cut them some slack. Ezra Holdings (EZRA.SI), Rickmers Maritime (RIMT.SI), Otto Marine OTTO.SI and Marco Polo Marine (MAPM.SI) are just some of the companies that sought bondholder consent this year to loosen the conditions, or covenants, attached to their loans.

    “It will continue to be busy, but the question is whether loosening covenants will be adequate to give these companies the lifeline that they need,” said Kevin Wong, Singapore-based partner with law firm Linklaters.

    “There is a risk these consent solicitations may lead to full-blown debt restructurings.”

    ($1 = 1.3943 Singapore dollars)

     

    Source: Reuters