How is Initial Public Offering (IPO) shares being ballotted?

All applications received are sorted into Bumiputera or non-Bumiputera categories (except for some ACE Market IPOs which are not segregated) and also in terms of denomination of shares applied.

Electronic Share Applications (ESA) and Internet Share Applications (ISA) applications furnished by all participating ESA banks and internet participating financial institutions will also be electronically sorted into the required categories.

Counting of applications is thereafter done.

The subscription results are presented to the Directors of the IPO Issuer for information purposes as well as to determine the basis of allotment of available shares via balloting in the event of oversubscription.

In determining the number of successful applications to be balloted in each category, the Directors will give due consideration to fair distribution to a reasonable number of applicants to ensure a broadened shareholding base which will establish an adequate market in the trading of the shares to be listed. The minimum share spread required under the Listing Requirements of the Bursa Malaysia Securities Berhad will also be observed.

Having decided on the basis of allotment, balloting of successful applicants in each category of shares will be carried out. Using 2 sets of passwords, balloting is electronically done with the 7 digit random numbers assigned to each share application randomly picked by computer. Reserve applications representing about 10% of successful applications will also be balloted. The balloting is conducted in the presence of the Directors of the IPO Issuer and external balloting auditors, the only party with access to the balloting program.

The Securities Commission, Bursa Malaysia and the media are informed of the subscription and balloting results.

Disadvantages of Leasehold Property

Property can be divided into two sections. A freehold or leasehold property. A freehold property is a property where you will have the rights on the property with any time frame or duration. For leasehold property, one will have a lease duration usually 30, 60 or 99 years.

Below are the disadvantages of purchasing a leasehold property :-

1. Less chance in appreciation in value.

2. Harder to sell. Even harder to sell if the lease is nearing the end.

3. Need to pay premium. To extend the period of the lease one needs to pay premium. The longer the extension of the lease, the more premium one needs to pay.

4. Harder to get loan. To purchase leasehold property, banks are more strict in giving out loans. Property which has shorter lease period might not even get a bank loan.

5. Limitations. The leasehold agreement places limitations on what can be done with the property. Eg. to knock down an old development and build a new one would require a new leasehold agreement. There are associated costs with each of those arrangements.

What Do You Know About Bankruptcy?

A bankrupt is someone who has officially declared that he cannot pay what he owes. In Malaysia, the minimum amount outstanding debt amount to initiate bankruptcy is RM30,000.

How Does a Person Become a Bankrupt?

1. Taking Up a Loan - There are various loans available to cater for different needs and wants. These loans can be personal loans, study or education loans, housing loans and even buying a car under a hire-purchase scheme.

2. Acting As a Guarantor - A guarantor can be a social guarantor or a corporate guarantor. A person who stood as a guarantor for loans like education, house, car hire purchase, scholarship and also third-party loans is known as a social guarantor. A corporate guarantor is a person who stood for loans relating to business loans, for example in a business partnership. A guarantor is also liable to face bankruptcy when summoned by the creditors. The creditors will go after the borrower first and if that fails to recover the amount owed, they will go after the guarantor to settle the debts.

3. Defaulting On Credit Card Payment - The inability to pay up the amount owed in the credit card account is also one reason to go bankrupt.

What Does It Mean To Be a Bankrupt?

1. He had to give up all his belongings and assets.

2. He is not allowed to open a bank account without the approval of the Director General of Insolvency (DGI).

3. He is not allowed to travel outside from the country without first getting approval from the DGI or the court. The DGI will hold his passport.

4. He is not allowed to do any business nor become a company director nor even be part of the company's management.

5. He has to sacrifice a certain percentage of his monthly income to the DGI to repay his debts.

What Happen If There Is No Will?

If there is NO WILL in Malaysia, the estate will be distributed in accordance with the Distribution Act 1958 (Amended 1997) as follow:-

1. Spouse - 1/4
2. Parent - 1/4 (siblings if parent also die without will during the distribution process)
3. Children - 1/2

In the case when and intestate dies without leaving a surviving spouse, child or parent, the following person(s) are entitled to the estate in accordance to priority :-

1. brothers and sisters
2. grandparents
3. uncles and aunts
4. great grandparents
5. great uncles and aunts
6. government

Under the law, there is no provision for other groups of people (eg. partner, step children, illegitimate children, aged relative, etc). They might fall into financial difficulties without your support.

The legal process could take years.  Assets could have frozen and shrunk in value when Letter of Administration is obtained.

Please consider writing a Will today for your loves one. Be sure they get what you want them to get when you are not around.

(Note: This Act does not apply to Muslims)

Real Property Gain Tax (RPGT) & Exemption

Under Budget 2012, a new structure of RPGT was introduced:-

- Properties held and disposed within 2 years, RPGT = 10%
- Properties held and disposed after 2 years & up to 5 years , RPGT = 5%

(Note: The RPGT of 5% flat for disposal of real properties or shares un real property companies within 5 years is no longer applicable.)

However, RPGT is exempted or no RPGT is levied even though they are disposed within the first 5 years from the date of purchase:-

- Disposal of a residential property once in a lifetime by an individual who is a Malaysian citizen or a permanent resident if he/she elects in writing for the exemption to apply to that private residence.

- Transfer as gifts between parent and child, husband and wife, grandparent and grandchild which are deemed to be "No Gain No Loss" (transfer between sibling/brothers or sisters is not applicable); and

- Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater, for each disposal of a property by an individual. Chargeable gain is generally meaning sale proceeds less purchase cost.

- Transfers between companies that bring greater efficiency or for purpose of reorganization/restructuring.

- Transactions in which the disposal price is deemed equal to acquisition price (i.e. “No Gain No Loss" transactions)