HONG KONG (MarketWatch) -- Asian currencies could be about to break their long-standing link to the global industrial cycle and transform into good safe havens if the world economy heads for a new major slowdown, according to some analysts.
Though they have historically tracked movements in the U.S. ISM Manufacturing Index, analysts at Standard Chartered said Thursday that the region's currencies may decouple from this pattern in coming quarters, thanks to China's new currency policy.
Detail of a 1,000 New Taiwan Dollar note
The [People's Bank of China] wants to show the market that the new yuan exchange rate is genuinely flexible and more market-driven than the previous framework," Standard Chartered analysts said Thursday in a note co-authored by Shanghai-based head of research for Greater China, Stephen Green.
The strengthening yuan, they added, is "medium-term bullish" for Asian currencies by supporting widening interest-rate spreads with the U.S. dollar that attract capital inflows to the region.
As long as China manages to sidestep a serious economic slump, the region should ride out the coming storm with relative ease. China's economy will grow about 8% in 2011, easing from around 10% this year, according to the Standard Chartered forecasts.
"Global purchasing manager's indexes have peaked and will head lower in the second half," said Standard Chartered.
South Korea's won and Taiwan's dollar will be among those to lead Asian currencies higher against the U.S. dollar, starting from the fourth quarter, they said. The Malaysian ringgit, Indonesian rupiah and Singapore dollar were also seen as currencies that would benefit the most from a rising yuan.
The bank forecast that all major currencies in the region, apart from the Vietnamese dong, will be higher against the U.S. dollar by the fourth quarter of 2011, although the survey also excluded the Japanese yen, the New Zealand and Australian dollars and a few other units.
Chris Oliver is MarketWatch's Hong Kong bureau chief.
Improving education quality and making it relevant is needed, not cutting exams.
THAT assessment is largely examinations-based is a significant part of the problems of the education system, but right now that is not the major one because there are so many demands upon the education system, the Govern-ment needs to prioritise them.
But first, let’s deal with the proposal to abolish the Ujian Penilaian Sekolah Rendah (UPSR) and Penilaian Menengah Rendah (PMR) examinations, reportedly to make the system less exam-oriented and provide a more holistic education.
Will it? Most likely not, simply because the problem is not just these two examinations but the overall emphasis on academic results. There will still be examinations at the end of each term etc.
The bad effect of abolishing these exams is we will have no clue as to the standard of our students until they reach Form Five. By then it will be too late to take remedial steps to help the poorer students.
We need UPSR and PMR at least as a gauge to measure the standard of our students. But at the same time, we should look at other means to reduce the emphasis on exams by introducing year-long programmes which are project-based and will take into account extra-curricular activities.
The priority now has to be to improve the quality of education and here are 10 ways to do that. Yes, many of these steps require time but a start has to be made now.
1. Better quality of teachers. This is simply the most important factor. It calls for the raising of both standards and incentives for teacher education and the continuous training of existing ones. Without this, nothing else will succeed.
2. Ensure a minimal standard of physical facilities for schools. While quality of teachers is most important, all schools must be provided with good basic physical facilities such as a playing field, hall, laboratories, classrooms and everything else that facilitates learning.
3. A syllabus that reflects holistic education. The syllabus itself must reflect the aims of holistic education by including subjects that cover living skills. We should look at greater emphasis on daily commerce – for example opening bank accounts, budgeting and investing.
4. Real emphasis on extra-curricular activities. Emphasis means teachers who are trained in these. Over the years there has been less emphasis on teachers specialising in sports, for instance. It is necessary to produce teachers who specialise in sports and, within that, in some particular areas of sports.
5. Single-session schools. For proper emphasis on extra-curricular activities and stuff such as additional classes and time for homework, a longer, single-session school would be ideal.
This has been talked about for decades but nothing has happened to date.
6. Provisions for English Langua-ge education. With even science and maths not being taught in English anymore, there is a need to come up with more imaginative ways to ensure that the quality of English among our students improves.
We all know that English is important but we still do very little about it and allow the issue to be repeatedly politicised.
7. Provisions for mother tongue education. The national school system may see an increase in enrolment if adequate provisions are made and time allocated for pupils’ own language or POL classes.
This must not be merely for show and there should be enough hours and resources for a proper education in the mother tongue. A single-session school system will facilitate that.
8. Less politicisation and greater ‘professionalisation’ of education. The emotive issues such as language and culture should be taken out of education and a more accommodative and liberal spirit that takes into account the beliefs of all races and cultures should be part and parcel of the national school system. Professionals should essentially run education with policy agreed upon and set by the politicians.
9. Continuity of planning – 20-year plans will be good. The education system cannot be left to the whims and fancies of successive education ministers but should be guided by firm policy and a long-term rolling plan of 20 years.
Otherwise, key milestones targeted in earlier years will not be achieved as priorities are shifted elsewhere as new education ministers come in.
10. Keep up to date with education everywhere. Education methods and means are not static anywhere and they constantly change and evolve.
We have to make sure that we keep with the trends by getting people with both breadth and depth and put them in charge of the educational agencies.
Without a doubt, education is a pet peeve among all Malaysians.
The deterioration in quality over the years is terribly worrying and the time for doing something drastic and at the same time constructive is long past.
The rakyat will be eternally grateful to anyone who can put education right so that we start producing a new generation of really educated Malay-sians. But the question remains as to who or what that will be.
> Managing editor P Gunasegaram started working life 33 years ago as a maths and science teacher in a Government school.
Malaysia recognised as approved investment destination by China
PETALING JAYA: China’s banking regulator has recognised Malaysia as an approved investment destination, paving the way for an inflow of Chinese funds into this country, the Securities Commission (SC) said.
The SC said Malaysia had now become an approved investment destination under China’s Qualified Domestic Institutional Investor (QDII) scheme and thereby joined the ranks of 10 other such recognised jurisdictions.
They are Australia, Canada, Hong Kong, Germany, Japan, Luxembourg, Singapore, South Korea, the United Kingdom and the United States.
SC chairman Tan Sri Zarinah Anwar and China Banking Regulatory Commission (CBRC) chairman Liu Mingkang signed letters of exchange in Beijing yesterday to formalise the recognition. CBRC is China’s banking regulator.
Zarinah said in a media statement: “The QDII programme presents a major opportunity for Malaysian capital market intermediaries to gain access to the Chinese market. They should therefore make full use of the opportunity to broaden their reach to this new pool of investors.”
The programme enables Chinese nationals to invest in overseas markets through approved institutions. The China Securities Regulatory Commission (CSRC) had also confirmed that based on an existing memorandum of understanding with the SC, Malaysia is an approved investment destination under the QDII programme for Chinese fund management and securities companies.
CSRC is China’s capital market regulator.
“With the recognition, approved institutions regulated by CBRC and CSRC may now invest funds pooled from their clients into Malaysian securities, including equities, fixed-income products and collective investment schemes approved by SC.
“Such Chinese institutions may also engage the services of licensed Malaysian fund managers to assist with QDII investment matters,” the SC said.
Bursa Malaysia Bhd said the QDII recognition augured well for the exchange.
“It is aligned with our other initiatives such as improving our country classification for the capital market. We also see this benefiting us in terms of enhancing our attraction as a capital-raising platform for foreign companies, particularly Chinese companies.”
Bursa noted that Malaysia was the second Asean country to be recognised as an authorised market for Chinese investors.
Inter-Pacific Asset Management Sdn Bhd chief executive officer Robbin Khoo said this development paved the way for joint ventures and collaborations between Malaysian fund asset managers and their Chinese counterparts.
“Our relationships can now be reciprocal. Market players can now build relationships where each can be directly involved in the other’s market,” he said.
Khoo added that with Malaysia having promoted itself well as an international Islamic finance hub, there should be keen interest from the part of Chinese investors looking for exposure into syariah-compliant investment products.
It is understood that the Chinese government had mandated the QDII programme to get their institutional and other investors to diversify their funds into different asset classes and different parts of the globe.
“Commodity-based securities or derivatives could be a target investment by China, given its increasing bilateral trades with Malaysia,” pointed out a fund manager familiar with the programme.
It is still unclear how much funds will actually flow into the Malaysian market as a result of this development. It is understood that Chinese authorities have approved its banks and securities-related firms under the QDII scheme to invest up to US$47.7bil so far. However, it is unclear how much of this has been invested in approved markets.
Canada was the last recipient to gain the QDII status in April. Canadian Finance Minister Jim Flaherty had then said in a statement that the recognition would give Canadian financial markets access to up to US$8bil in investment capital.
