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Further clarification from Tong on Crowd Funding and the Budget
savemalaysia
Publish date: Fri, 09 Nov 2018, 06:31 PM
Today, my friend Datuk Kadir Jasin posted on his blog on the possibility that there might have been a leak of the contents of the recent Budget given the launch of FundMy Home just 2 days after the presentation of Budget 2019 in Parliament.
This was also previously mentioned by YB Datuk Seri Najib Razak, to which I have responded both through the social media as well as in The Edge Financial Daily.
Rest assured I share the same concerns as every Malaysian on the sanctity and confidentiality of the Government’s national budget. It is a highly confidential document, protected by the OSA.
I believe the misunderstanding comes about due to legal complexities.
What the YB Minister of Finance announced was that the Government is considering approving regulated property exchanges under the peer-to-peer framework and the Securities Commission (SC) is entrusted with the task. YB Lim mentioned that the target for approving such regulated property exchanges is first quarter 2019.
Meanwhile, I assume the SC is reviewing the rules and regulations, investors’ protection, possible mechanisms and so forth. It will then proceed to issue a consultative paper as per their guidelines and all stakeholders will be consulted before any new guidelines governing the new P2P framework are issued.
SC will then proceed to invite applications, review compliances before licenses are issued.
The new Malaysia does not tolerate rent-seeking or monopolistic behaviours and I am sure this will be the case as well.
What YAB Prime Minister launched last Sunday, 2 days after the Budget, was a digital property platform that does not require regulatory approvals.
It is NOT the same as what YB MOF mentioned in the Budget, although it is the intention of Edge Prop to turn FundMyHome platform that was launched into a regulated property exchange upon future SC approval, sometime in early 2019.
What is the difference?
The SC regulates investments by the public, with the aim of protecting the individual investors. Currently, FundMyHome does NOT solicit public investments, but is instead funded only by institutions.
On whether FundMyHome will really help home owners and make homes more affordable, I am convinced it will and in the course of the weeks and months ahead, I suspect most will agree.
All innovations go through stages of perception; from “ridicule” to “debate” and finally to “ it was obvious”.
In any case, given that FundMyHome involves no public money, concessions or guarantees of any kind from the Government, and that this is just an additional possible solution over and above existing ones, what can be wrong?
For those who think they have better solutions, this launch and this innovation in no way impedes anyone else from doing and proposing what they have in mind.
To those who say the way to make homes more affordable is to produce them at a lower price, I hope you can be successful too. We all share the same objective, to help fellow Malaysians have a roof over their heads that they can afford.
In the end, there will probably be many solutions with each complementing the other.
The only real argument against FundMyHome is therefore the possible cost to the economy and society that may arise out of the implementation of this scheme.
I know there are none.
The various regulators will and must review and ensure this to be the case before approvals are given. I too want to ensure that it does not create more problems than it solves.
I am aware many think this creates a possible subprime crisis in future. I have no space here to elaborate but I can assure you that you are dead wrong and you should go read up the topic first on the conditions under which subprime happened i.e. overbearing debts.
FundMyHome has the opposite effect – it reduces debt (bank mortgage) by using equity (investors).
http://www.theedgemarkets.com/article/further-clarification-tong-crowd-funding-and-budget
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Discussions
Be the first to like this. Showing 29 of 29 comments
qqq, whoever can write well must be right ah? critic must be wrong ah? then kc always right and u must be damn wrong lo..
2018-11-09 19:12
write well with facts and logic la.....
this tong can do it better than me....but still same ideas la.....
2018-11-09 19:16
that value investor kc.....not same class...nowadays value investors pitiful, I pity value investors....so many shares 90% discount to NTA.......
2018-11-09 19:18
qqq, value investing not just about 90% discount NTA...don't think like cpteh...he like to list all stock below NTA and conclude value investing won't work.
2018-11-09 19:28
lizi...if stocks go from 10% discount to NTA to 90% discounts to NTA....it is proof value investing do not work....
and u know that can be real painful for all involved.....
2018-11-09 19:34
some stocks go from 1 time NTA to 5 times NTA, I also want to be in that business........
2018-11-09 19:36
already say discount to NTA is not the whole thing of value investing lo...btw, ah tong, your idol who can write well also talk about value investing every week leh, u go shoot him la..
2018-11-09 19:38
tong is smarter than me....cannot shoot him.
kc good enough target, easy target.
2018-11-09 19:42
1. the scheme is exactly like what the Budget 2019 mentioned (because the idea came from Tong). the only difference is Tong haven't solicit public investment that's why it does not need to be regulated yet
2. Regulators can only come out with a proper framework when given independence. But now SC is pressured into coming out with such framework in Budget 2019 and deputy housing minister even gave a deadline of two weeks, the independence is doubtful
3. innovative stuffs doesn't equal to productive or beneficial stuffs. subprime crisis was caused by mortgage-backed securities (MBS), collateralised debt obligations (CDO), no-income-no-job(NINJA)loans and bunch of other innovative products
4. the condition on which subprime happen is not overbearing debt, it's simply the underlying speculative behavior which turns a productive asset like house into a speculative financial product. to the extent speculative buyers buy multiple houses with cash that they don't have (rely on refinancing)
Let's be honest, Tong was a developer himself and now he runs the property platform. Whose interest is he gonna look out for?
2018-11-09 20:18
Let's be honest, Tong was a developer himself and now he runs the property platform. Whose interest is he gonna look out for?
what kind of question is that?
the buyers look out for themselves and buy what is suitable to themselves...that has never changed.....it is as always....buy if they like project, the location and the price....and here is an alternative financing scheme.
2018-11-09 20:28
as for the unwarranted fear....I am aware many think this creates a possible subprime crisis in future. I have no space here to elaborate but I can assure you that you are dead wrong and you should go read up the topic first on the conditions under which subprime happened i.e. overbearing debts.
FundMyHome has the opposite effect – it reduces debt (bank mortgage) by using equity (investors).
2018-11-09 20:29
there is nothing wrong in buying 20% stake as first home.....need to change the idea that must buy 100 % stake when still young....and immediately become a mortgage slave.
2018-11-09 20:32
just like in business...a 20% stake can some times be better than a 100% stake if the 100% stake causes a lot of cash flow problems.......
2018-11-09 20:35
buy 100% also make sure of the house, buy 20% also make full use of house....why not? can save interest costs also....
some body using the houses better than leaving them empty, unoccupied....good for the economy.
2018-11-09 20:49
I am still not impressed. As investor I see no reason to join. I prefer leveraged up 10x method. As an observer, I still think it is not good to create "fake affordability"...sooner or later someone got to bailout the house...it is better to admit the problem now than further delaying it.
2018-11-09 21:02
Back to basic.
Who are the beneficiaries of the scheme?
Who are the losers ?
Is this type of financial instrument fair to buyers ?
Or it just design to be Ah Long in a legitimate and guaranteed way to milk from buyers at least 5% profit a year ?
With all the risk pass to the buyers ?
So is it a fair and just manner to make money from those B40 ?
君子爱财
取之有道
2018-11-10 10:13
ks...wrong questions....u want profits/ losses go gear up like lizi says.....this p2p is for buyers who do not want to pay interests and no gambling......
2018-11-10 10:21
If really want to help house buyers, why not the bank come out with a more innovative way ?
DIBS helps flippers more than actual demand, but now all killed in action.
Banks surely can do a better way to enhance eligibility for housing loan.
Let say for first 5 years, buyers just pay the interest on loan.
From 6th year onward, pay interest plus principal at progressive rate, say 1% of principal for 6th and 7th year, 2% for 8th and 9th year and so on.
Up to the buyers to negotiate for higher installment when they are promoted and want to pay more to reduce tenure of the loan.
It definitely help more house buyers to be eligible for loan while they are earning less as freshmen in job market.
2018-11-10 10:30
What Tong wrote in his article above only safeguard the interest of the fund provider (so-called Investors), but bluntly disregard the interest of the buyers whom he claimed wanted to help.
Tong is not a Robin Hood lah.
Rather he is a vulture eyeing easy target as his prey..........
2018-11-10 10:38
I like this sentence by tong...
"All innovations go through stages of perception; from “ridicule” to “debate” and finally to “ it was obvious”.
2018-11-10 10:53
ks....the developer may say to u.....I give u 10% discount if traditional financing and no discounts if p2p.....then it becomes tough choice between the two.......
2018-11-10 11:05
ahjib kor got wisdom? u dare to say such a ridiculous thing? from the guy responsible for 1 MDB?
2018-11-10 11:47
ciku...very disappointed in u.......scary even to think Malaysia still got people got good opinion of Ah Jib......
2018-11-10 12:06
ciku......i can tolerate idiots...cannot tolerate people who still got good opinion of ahjib......
2018-11-10 12:25
ciku...I cannot tolerate anyone who still have good opinion of ahjib....says more about u than about ahjib.....
2018-11-10 12:29
Some people in this forum have the same strategy with some criminals in news. Be aware!
First they will try to impress you with a story like I bought this stock at a very low price two years ago.... Then, they will try to make you believe they are top traders with a lot of good stories, which are not real.
Their intention is simple. They want you to buy the stocks they bought and sell the stocks they sold.
2018-11-10 12:46
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too bad I cannot write as well as this Tong.....but still the same ideas la......
and to all the critics in i3......fingers to u....
"All innovations go through stages of perception; from “ridicule” to “debate” and finally to “ it was obvious”.
2018-11-09 18:39