Ooi Er Hern - Licensed Financial Planner

01/08/2025

Congratulations to Malaysia for achieving the second-lowest tariff level in the ASEAN region (with Singapore holding the lowest at 10%).

According to official sources cited by The Straits Times, Malaysia made several concessions during the negotiations, including matters related to halal certification and the supply of rare earth elements.

https://www.straitstimes.com/asia/se-asia/us-malaysia-tariff-deal-expected-after-trump-anwar-phone-call-on-eve-of-aug-1-deadline

This raises the question: with these concessions, could we see an increase in Lynas-type rare earth processing facilities in Malaysia?

Also, PMX like to post about his phone call with world leaders. Not sure why this round didn't post after reportedly making numerous attempts to speak with President Trump following his presidential victory.

23/07/2025

As of 22 July 2025, Malaysia’s net debt increase of RM81.28 billion has pushed the total national debt to RM1.286 trillion, officially breaching the statutory debt ceiling of 65% of GDP. This development carries significant economic and financial risks that merit close attention.

🔍 What is the Statutory Debt Ceiling?
The statutory debt ceiling is a legal limit on how much the government is allowed to borrow. It’s meant to enforce fiscal discipline and ensure that public debt remains within a sustainable range relative to the country's economic output (GDP).

In August 2020, during the Covid-19 pandemic, the ceiling was raised from 55% to 60% of GDP to allow greater borrowing for stimulus packages.

In 2021, it was raised again to 65% of GDP, acknowledging the prolonged economic recovery period.

As of July 2025, the debt has now exceeded that ceiling. It was previously projected by economists that this ceiling will be breached by 2028. But seems like the government has brought it forward.

📌 Risks and Implications of Breaching the Debt Ceiling
1. Loss of Market Confidence
Investors may interpret the breach as a sign that the government is struggling to manage its fiscal position. This could result in:
- Higher borrowing costs (due to increased risk premiums on Malaysian government bonds).
- Downgrade in credit ratings, affecting both public and private sector financing.

2. Currency Pressure
A growing debt burden can weigh on the Ringgit Malaysia (MYR). If investors pull out due to concerns about fiscal sustainability, the Ringgit may depreciate. This can make imports more expensive, push up inflation and reduce consumer purchasing power.

3. Reduced Fiscal Space
When a large portion of the national budget goes towards servicing interest (estimated debt service charge is around RM50.8 billion for 2024 and RM54.7 billion for 2025), the government has less flexibility to fund development, education, healthcare, and infrastructure. The government might even postpone or cancel development programs.

4. Risk of Fiscal Slippage
With rising debt, there's a risk that future revenue projections may fall short, especially if economic growth is slower than expected, which will result in lower tax collection. This could worsen the deficit further and create a debt spiral.

🧭 What Happens Next?
The government may seek parliamentary approval to raise the ceiling again, maybe to 70%. but that would draw scrutiny from the public, credit agencies, and international investors.

⚠ Crisis or Warning?
Breaching the 65% debt ceiling is not automatically a crisis, but it is a WARNING sign. If the borrowed funds are not used productively — for example, to stimulate sustainable growth or invest in future capacity — then the long-term cost will outweigh the short-term benefit. Prudent fiscal planning, transparency, and a credible roadmap to reduce debt will be critical in preserving Malaysia’s economic stability.

06/07/2025

I started investing since 2010 when I started working, and have been investing for the past 14 years. It is only when I joined the investment industry one years ago that I found out how little that I know about investment. And I have to admit that whatever I have known in the past 13 years is wrong. Today I would like to discuss on EPF return on investment.

Many people consider EPF their top investment choice — but did you know there are other lower-risk options available that can offer good returns?

Yes no doubt it is one of the safer investment vehicle. EPF has been giving consistent return above 5% for the past 10 years, highest was 6.9% in 2017, lowest was 5.2% in 2020 during covid.

But here's why I think EPF is not a wealth creation tool.

1. If you look at majority of the equity fund, in the year 2020, they outperform the return of EPF. Some even make double digit return, (KAF Core Income Fund 74%, Hong Leong Dana Makmur 47%, TA Global Technology 37.67%) compared the EPF that make the lowest return of 5.2% in the past 10 years.

2. EPF has a fund size in excess of RM1 trillion, and it's the 13th largest pension fund globally and 5th largest in Asia. It is extremely difficult to find a lot of investment opportunities that can give good return. Example: A RM10 million fund can invest in a small company with a RM100 million market cap. A RM10 billion fund cannot — it would own 10% just to put 1% of its money to work. That's why it is not wise to add in the 2% foreign worker contribution to EPF. This will add burden to the return.

3. EPF has not been performing well lately. To paint a rosy picture and to appease the EPF contributors, EPF made the highest dividend payout of 6.3%. This payout which represents 98.4% of its RM74.46 billion investment income that year — a significantly higher ratio compared to 2023 (the RM57.81 billion payout was below 90% of the headline investment income that year).

This means the EPF is distributing a large percentage of its realized investment income as dividends, leaving a smaller amount for reinvestment and future growth. EPF may also have less capital available to invest in potentially higher-yielding assets or to cushion against market downturns, which could negatively affect future dividend payouts and overall returns.

4. EPF Press Release Statement 2024 vs 2025 "The Employees Provident Fund (EPF) recorded a total investment income of RM18.31 billion for the first quarter ended 31 March 2025 (Q1 2025), a 13% decline from RM20.99 billion in the corresponding period in 2024. The total investment income includes RM1.02 billion mark-to-market gains on securities that have not been realised, due to foreign exchange rate fluctuations. In line with the EPF’s policy, these gains will not be distributable as dividends."

"The Employees Provident Fund (EPF) recorded total distributable income of RM19.20 billion for the first quarter ended 31 March 2024 (Q1 2024), an increase of 33.1% from the RM14.42 billion recorded in the corresponding quarter in 2023. The distributable income does not include mark-to-market (MTM) gains of securities that have not been realised."

Why do EPF need to change it's reporting from distributable income to investment income which include mark-to-market (MTM) gains?

From my observation, here's what you should and shouldn't do:

1. Diversification is key. You should not put all your eggs in one basket. EPF allow for voluntary contribution of up to RM100,000 per year. Unless you have an excess of RM1 million in your EPF account, you should not put your money into EPF as it will restrict your cash flow.

2. AVOID take out your EPF savings and invest in unit trust. I've seen many people do this, only to end up with losses. By doing so, you're giving up a guaranteed return from EPF in exchange for the uncertainty of the market. However, this strategy may be worth considering during market downturns when valuations are low — but only if you understand the risks and have a solid investment plan.

And you will also need to pay for sales charge (up to 3%) for the unit trust investment. Your portfolio return start at-3% instead of 0%. Unit trust agent will hate me for this.

3. Do not expect high return from EPF. EPF is essentially an accummulation tool primarily focuses for retirement. It is not a wealth creation tool.

4. You can use EPF as an estate planning tool because when you make a nomination in your EPF account, the nominated person(s) can claim the money directly from EPF without going through the lengthy and sometimes complicated estate distribution process.

The above is just my personal view and I may be wrong. If you think this is useful, do help to share it.

03/07/2025

Worried about rising medical insurance costs due to medical repricing? Fret not — we've got you covered.

We're now offering an affordable medical plan that’s easy on your wallet. For example, if you're in the age group of 36–40, the premium is just RM1,281/year or RM106.75/month.

Here’s a quick summary of the coverage:

✅ Annual Limit: RM1.2 million (renewable yearly)
✅ Room & Board: RM200 per day
✅ Deductible: 5% co-takaful, capped at RM500 per year

Yes, all of this for just RM106.75/month!

Interested in knowing more? Drop me a message — I’ll be happy to assist.

26/06/2025

Coming 1 July 2025, with the broaden tax based on SST, consumers will get hit the most. Why? Because SST is a single-stage tax without input tax credit, so it can compound silently across the supply chain, resulting in a tax-on-tax effect.

If you compare the Sales Tax (Goods Exempted From Tax) Order 2025 [P.U. (A) 171/2025] to the previous version, the number of exempted goods has dropped significantly - from 5,222 HS Codes (282 pages) to just 1,813 HS Codes (103 pages)

Meanwhile, under the Sales Tax (Rates of Tax) Order 2025 [P.U. (A) 170/2025], the number of taxable goods has surged - from 987 HS Codes (62 pages) to a massive 4,104 HS Codes (222 pages).

Imagine this: You will get taxed not only once, twice, but THRICE if you eat out in a restaurant. Here's the breakdown where the taxes can stack up:

1️⃣ Import Stage (Raw Materials)
When a manufacturer imports raw materials, sales tax may apply (usually 5% or 10%, depending on the product)).

2️⃣ Manufacturing Stage (Finished Goods)
Once goods are manufactured locally, a sales tax (usually 10%) is applied on the manufacturer’s selling price of finished goods.

3️⃣ Restaurant Stage (Service Tax)
When you eat at a restaurant, you may pay 6% service tax if the restaurant is taxable.

This is a separate tax under Service Tax, not Sales Tax — but it applies on top of the final price, which may already include costs that embedded earlier SST.

And this broaden tax base is just gonna increase around RM10 billion of income to the government. Aduh!

In 2024, SST collected RM44.7 billion — only slightly more than the RM44 billion collected under GST back in 2017. Just imagine how much our government revenue will be if we are still under the GST tax regime.

Image: AI Generated.

24/06/2025

🚨Scam Alert🚨

There has been recent news about a vending machine investment scam circulating. Here’s what you need to watch out for:

🛑 1. Returns That Are Too Good to Be True
Some schemes promise returns as high as 20% per year. For context, even the legendary Warren Buffett's portfolio delivered only about 9.86% compounded annually over the past 30 years (as of May 2025). If it sounds too good to be true, it probably is.

🛑 2. Fake Legitimacy with Certificates or Licenses
Scammers often present impressive-looking certifications and licenses to gain your trust. Always verify their authenticity through official regulatory bodies, such as the Securities Commission Malaysia and Bank Negara Malaysia.

🛑 3. Payments to Personal or Unrelated Bank Accounts
Be cautious if you're asked to transfer money to a personal account or a company account unrelated to the business.

🛑 4. “Limited Time Only” Pressure Tactics
Scammers often use urgency to rush your decision. Take your time to research and don’t let anyone force you into quick action.

🛑 5. Clone Entities Mimicking Legitimate Companies
Some scams use similar names to licensed companies to mislead investors.
Example: A potential clone called Pelaburan Phillip falsely claimed to be associated with Phillip Capital Management Sdn Bhd (CMSL/A0044/2007). It promised RM15,000 in just 3 hours from a RM500 investment – clearly unrealistic.

🛑 6. Celebrity Endorsements — Real or Fake, Still Not a Guarantee
Some scams use fake endorsements with photoshopped images or AI-generated videos. But even when a real celebrity is involved, it doesn't automatically make the investment legitimate. A celebrity might be paid to promote a product or investment without knowing it’s a scam.

🧠 Always Remember:
You're hoping to make 10–20% return. The scammer’s goal is a 100% return on YOUR money.

If you suspect a scam, call the National Scam Response Centre (NSRC) at 997 immediately.

Stay informed. Stay safe. 💡

20/06/2025

Part 5: Latest Update - Insurance company agree to compensate 90% of the hospitalisation bill.

https://www.chinapress.com.my/20250620/%e4%ba%a7%e5%89%8d%e4%bf%9d%e5%8d%95%e4%ba%89%e8%ae%ae-%e5%a4%ab%e5%a6%bb%e8%8e%b7%e6%89%b990%e5%8c%bb%e8%8d%af%e8%b4%b9/

So the client is right after all. The viral fever is due to liver abscess that is unrelated to congenital disease/illness. Insurance companies cannot just use this clause to deny the claim.

Yes, subscribing to prenatal insurance policies can provide several important benefits for both mother and baby, including but not limited to:

1. Pregnancy Complications – such as gestational diabetes, preeclampsia, and premature birth.
2. Emergency C-Section – coverage for medically necessary early delivery.
3. Congenital Conditions – coverage for diagnosed conditions up to a certain age.
4. Neonatal Jaundice – common in newborns and potentially costly to treat.
5. Incubation Costs – for babies requiring special care immediately after birth.

🟡 Please note: The above benefits are typically provided in the form of lump sum payouts.

Best of all, it gives your child early access to life insurance. Prenatal insurance often allows your baby to be automatically covered shortly after birth, without the need for a separate medical check-up.

Not many companies offer this type of insurance plan. Insurance Company P offers one of the best plan in my opinion. You an start the protection as early as 13 weeks of pregnancy. If you want to know more, do drop me a DM.

Also can follow this story in my previous post here:

Part 1: https://www.facebook.com/share/p/19N6oBj2U9/
Part 2: https://www.facebook.com/share/p/1FZPs67qFG/
Part 3: https://www.facebook.com/share/p/1FbCNUK1Xh/
Part 4: https://www.facebook.com/share/p/1C8p7GMhAF/

（吉隆坡20日讯）捍卫大马投保人权益运动法律顾问吴健南捎来好消息，早前揭露的产前保单先天性疾病争议，如今已获得保险公司批准约90%的医疗费用。▶相关新闻：产前保险不保先天性疾病 华裔母亲发律师信 追索24万医药费...

12/06/2025

Jom Bincang IPO Tealive (PART 1)

After going through 511 pages of the Prospectus of Loob Berhad (The company behind Tealive and Bask Bear in Malaysia), here is my summary:

1. Maybank Investment Bank as their Principal Adviser and sole managing underwriter, with AmInvestment Bank as the joint bookrunner and underwriter - Maybank Investment Bank usually only do mega IPO.

2. Selling Shareholders:
- Uttama (Creador)
- Bryan Loo
- Loo Chuu Lin (father)
- Loo Chee Leng (sister)
- Singli Aerovest

3. Institutional Offering - 204,608,200 IPO Shares (17.5% of enlarged issued shares) - 12.5% to bumiputera institutional investors, 5% to others.

4. Retail Offering - 146,148,700 IPO Shares (12.5% of enlarged issued shares) - 1% to eligible person, 11.5% to public (50% bumiputera allocation)

5. Conversion ot public company on 17 March 2020 - initial listing plan. postponed due to Covid-19.

6. 831 Tealive stores (547 owned, 284 franchised)

7. 135 Bask Bear stores (129 owned, 6 licensed)

8. 121 Tealive Francised/Licensed Stores in the Phillipines, Myanmar, Brunei, Mauritius, Vietnam, Cambodia and Canada.

9. Newly secured market - India, Thailand, UAE, Bangladesh

10. Future plan
- increase same-store sales
- expansion locally and internationally
- introduce new FMCG range across modern trade
- innovate and automate using technology to drive sales
- expand and develop brand portfolio

11. Use of IPO proceeds raised
- repayment of existing bank borrowing - total RM75.4 million bank loan by OCBC Al-Amin.
- capital expenditure for new Tealive and Bask Bear stores in Malaysia - 12 new Tealive and 13 new Bask Bear stores
- listing fee

06/06/2025

PART 2: Trend of Medical Claim

2013 - RM1,991,509,614
2014 - RM2,736,482,357
2015 - RM3,153,823,419
2016 - RM3,408,176,898
2017 - RM3,660,715,515
2018 - RM4,088,416,357
2019 - RM4,939,645,443
2020 - RM4,508,524,205 (drop due to Covid-19)
2021 - RM4,610,672,441
2022 - RM6,163,799,351
2023 - RM7,780,606,751
2024 - RM8,897,759,384

Source: LIAM Annual Report

The rising trend in medical insurance claims over the past decade paints a clear picture of escalating healthcare costs in Malaysia.

From RM1.99 billion in 2013 to RM8.90 billion in 2024, total medical claims have more than quadrupled—an increase of over 347% in just 11 years.

This continuous upward trend highlights the growing pressure on insurers, employers, and individuals. It reflects not only rising medical costs and utilization rates, but also underlines the urgent need for cost-containment strategies—such as medical repricing.

If not properly addressed, this surge could lead to higher insurance premiums, limited coverage, or greater out-of-pocket expenses for policyholders in the future.

As a result, current medical premiums collected have become increasingly unsustainable. To cope with the sharp rise in claims and maintain the financial viability of health insurance products, many insurers have recently increased their medical premiums (some more than 100%). This adjustment is necessary to ensure that insurance coverage remains available and reliable amid a challenging healthcare environment.

06/06/2025

PART 1: What is Medical Repricing?

Medical repricing is an increasingly important concept in healthcare and insurance, especially as medical costs continue to rise. In 2024, global medical inflation averages around 10%, with Asia Pacific at similar levels—and Malaysia experiencing a sharper increase of about 15%. As these trends continue, understanding medical repricing becomes essential for healthcare providers, insurers, and policyholders alike.

In the Malaysian context, several factors drive rising healthcare costs (will be discussed further). One of the key tools used to manage these evolving demands is medical repricing.

Medical repricing involves reviewing and adjusting the costs associated with insurance coverage and medical services. This process is often based on negotiated agreements between healthcare providers and insurance companies. It ensures that the prices paid for treatments and procedures more accurately reflect the real cost of care, including human resources and medical infrastructure.

This mechanism plays a critical role in managing medical inflation. When insurers and providers renegotiate rates, the outcome can directly influence the overall cost of healthcare—either by helping to contain costs or, in some cases, contributing to further inflation.

04/06/2025

Protect Your Assets — Don’t Let Disaster Destroy Your Wealth

The recent Putra Heights explosion was a stark reminder of how quickly tragedy can strike:

The Damage:
- 87 houses were completely destroyed
- 148 homes required repairs
- 365 vehicles damaged
- 1,254 individuals from 308 families were affected

Yet, many Malaysian homeowners remain unprotected.

According to the Department of Statistics Malaysia, there were 9.1 million households in 2024, but only 3.88 million had fire and home insurance policies — that’s a take-up rate of just 42.6%. The take-up rate will be even lower if it's not a prerequisite for mortgaged homes.

And even among those insured, many are likely underinsured.
Why? Because rebuilding costs have surged in recent years. If you bought your home 10 years ago and haven’t updated your policy since, it’s likely based on outdated construction costs — not today’s much higher rebuilding value.

To illustrate the financial scale of such disasters, Petronas Gas Berhad’s latest quarterly filing estimates the cost of repairs and asset restoration at RM170 million, based on current site conditions and damage — and that’s just from a single incident.

⚖️ Can You Sue Petronas Gas Berhad for Compensation?
In theory, yes — affected individuals may pursue legal action if negligence can be proven. For example, if the explosion was caused by poor pipeline maintenance or failure to follow safety protocols, Petronas (or other responsible parties like contractors) could be held liable for damages.

However, legal action in such cases can be complex and lengthy, often requiring:
- Independent investigations
- Expert testimony
- Class-action representation
- Legal resources to challenge a GLC (government-linked company)

While compensation might be possible through legal or governmental channels, it’s not guaranteed — and it won’t undo the emotional or financial damage if you're not adequately protected in the first place.

✅ Take this as your sign to review your insurance coverage.
Don’t wait for disaster to find out you're not properly protected.

Source: Petronas Gas Berhad Q1 2025 Report. Google Images.

03/06/2025

Financial Struggles Among Malaysians: A Wake-Up Call

Source: OECD/INFE, FCI Survey 2024

Common problem faced by Malaysians:
1. 6 out of 10 unable to raise emergency fund worth RM1,000
2. Only 37% can sustain for 3-6 months in the event of loss income
3. 28% of Malaysians have life insurance/takaful coverage.
4. 26% Malaysians feel that they have too much debt.
5. Every 7 in 10 Malaysians reported to have no retirement strategies.

🤦‍♂️ The Wrong Place to Seek Help
Even more troubling is that 4 out of 5 Malaysians turn to family members or close friends for financial advice on debt management. While the intention is understandable — we naturally turn to people we trust — this may not always lead to the best outcomes.

✅ Debt Is a Serious Matter — Seek Professional Guidance
Debt management is complex. It's not just about understanding interest rates and payment schedules. It also involves credit scoring, which directly affects your ability to secure future loans, housing, or even job opportunities in some industries. Poor debt decisions today can have long-term consequences on your financial health.

Friends and family may offer emotional support, but they usually lack the expertise and objectivity needed for effective financial guidance.

If you're struggling with debt, it’s crucial to speak to:
- Licensed financial planners
- Debt management agency - AKPK

These professionals can offer customized strategies, negotiate with creditors, and help you regain control over your financial life.