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Wednesday, 18 September 2019

Malaysian talent lost due to racial bigotry

Leng Siew Yeap
Leng Siew Yeap, a Malaysian, a graduate of UMS applied for a scholarship to do a doctorate degree but was refused outright by the local govt.

She was however offered scholarships by University of Edinburgh, London University and Cambridge University. She chose Cambridge University's Dorothy Hodgkin postgraduate award to study stem cell.

On graduation she accepted the offer from Harvard to study human immunology. She is now working in research for a Shanghai university hospital.

She has successfully helped to create an method/procedure 4 the body to secrete an antibody to fight HIV. She is now married to a Shanghai citizen, living and working in Shanghai. She and her achievements are never mentioned in any Malaysia newspaper.

View Full Profile - Shanghai Institute of Immunology


Shanghai Institute of Immunology, Shanghai Jiao Tong University School of Medicine, China.




Research Interests
Our body is constantly attacked by pathogens. To fight against various pathogens, B cells produce a large antibody repertoire through different processes that involve genomic DNA alterations. During B cell development, a DNA cut and paste mechanism called V(D)J recombination generates a primary antibody repertoire by producing V(D)J exons that are made up of combinations of different V, D and J segments. Upon activation by pathogens, mature B cells undergo secondary antibody diversification, whereby Somatic Hypermutation (SHM) generates antibodies with higher affinity, while Class Switch Recombination (CSR) generates antibodies with different effector functions. In theory, our body has the capability to generate all necessary antibodies to fight against different pathogens through antibody diversification mechanisms. However, this is not the case. For example, in certain infectious diseases such as Human Immunodeficiency Virus Infection/ acquired immune deficiency syndrome (HIV/AIDS), only a small percentage of the infected patients were able to produce effective antibodies. Our research aims to elucidate molecular mechanisms that facilitate approaches in generating highly effective antibodies to fight pathogens and infectious diseases. We employ various approaches including mouse models, cell line systems, CRISPR-mediated genome editing and next-generation sequencing technologies (Yeap et al., Cell, 2015, Figure below) to address our aims.



Top Malaysian researcher working to wipe out infectious diseases
Dr Yeap heads the antibody diversification team at Shanghai Institute of Immunology, Shanghai Jiao Tong University School of Medicine, China.

LIKE many of her peers, Dr Yeap Leng Siew, 39, was raised believing that noble careers only include doctors and lawyers.

So when the Selangorian failed to enter medical school because she didn’t get straight As in the Sijil Tinggi Persekolahan Malaysia (STPM), her childhood ambition of becoming a doctor came crashing down.

She was upset for awhile but remembered that as a secondary school girl, she had done well in Biology.

It encouraged her to take up Biotechnology at Universiti Malaysia Sabah (UMS).

“I passed with flying colors and was the best student at university. If I hadn’t been rejected to do medicine, I wouldn’t have the career that I now enjoy. It was a blessing in disguise.”

Now married to a Chinese national and living in Shanghai, the mother-of-two graduated with first class honours from UMS in 2003, and received the Royal Educational Award and Tunku Abdul Rahman Medal. These awards recognise the country’s best student from each public university. After graduation, she was still unsure about her career path until a research stint at the Genome Institute of Singapore (GIS) sparked her interest in cell biology.

She went on to do her doctorate in stem cell biology at the University of Cambridge, before continuing as a Harvard Medical School postdoctoral fellow at the Boston Children’s Hospital.

“Initially I wanted to do a Ph.D in Singapore but my GRE score (a US-based graduate entrance exam) was not great.”

Though she did not receive any offers during the first round of application, she was determined to pursue a Ph.D degree.

“People are bitter about rejections because they do not have backup plans. Prof Bing Lim, my supervisor at GIS, once told me to be open-minded because a narrow mind narrows potential. His words were etched in my heart ever since.”

She was later granted the Biotechnology & Biological Sciences Research Council (BBSRC) Dorothy Hodgkin Postgraduate Award – a full scholarship for outstanding students from developing countries to pursue a Ph.D degree at the University of Cambridge.

She continued to make her mark when she was awarded the St Catharine’s College Graduate Prize for Distinction in Research during her stint in Cambridge. She then went on to receive the prestigious Cancer Research Institute Postdoctoral Fellowship in the United States.

Disappointment, she said, is part of life.

“It is how we overcome disappointments and take up challenges that distinguishes us from the rest.”

The former research assistant at GIS now heads the antibody diversification team at Shanghai Institute of Immunology, Shanghai Jiao Tong University School of Medicine, China.

“Prof Huck Hui Ng from GIS once told me, ‘work hard, and the sky is the limit’. I now tell my students those very same words.”

In 2017, Yeap was selected by the National Natural Science Foundation of China (NSFC) to receive the Excellent Young Scientist Fund, which is aimed at nurturing young talents with innovative potential.

She speaks to StarEdu about her work and advises young science students to expand their horizon. The world doesn’t end just because you didn’t get into medical school. There are many opportunities for those interested in Science, Technology, Engineering and Mathematics (STEM).

> What is your area of research?I am interested in understanding why some people develop effective antibodies to fight diseases while others do not. For example, only a small percentage of HIV-1 infected patients develop potent antibodies against the virus, which is why this remains a major health problem globally. Another example is how despite being vaccinated for the flu or hepatitis B (HBV), some do not develop protective antibodies and are still susceptible to these illnesses. My research group is studying how the antibodies acquire high levels of mutations and other special characteristics. Understanding how these rare antibodies develop will shed light on developing HIV or new vaccines for the flu or HBV.

> How long have you been away from home? Sixteen years. During the final semester of my undergraduate studies, I did a 10-week research attachment at the National Cancer Centre of Singapore. It was a time when biological research was just starting to bloom there. I was very fortunate not to be sent home because of the Severe Acute Respiratory Syndrome (SARS) outbreak, and even luckier, because I landed my first job as a research assistant at the Genome Institute of Singapore (GIS).

Seeing that I graduated from a university that didn’t even exist when he left his hometown, Kota Kinabalu, my supervisor at GIS, Dr Bing Lim, decided to hire me. He has been a great mentor ever since. In his laboratory, we were trying to culture human stem cells and I was fascinated by the idea that these cells may be turned into any type of cells for therapeutic purposes.

I realised then that I would have to pursue a Ph.D degree if I want to move further along in my research career. Two years later, I moved to the United Kingdom to begin my postgraduate studies in the lab of Prof Azim Surani at the University of Cambridge. When I completed my doctorate, my parents were expecting me to come home. So when I told them that I had planned on continuing my postdoctoral training in the United States, they were shocked. It took a while to convince them that a Ph.D degree is just the beginning of a career in research and that to have a chance of running my own laboratory one day, I would have to undergo a postdoctoral training as well.

In 2010, I started my postdoctoral training in the laboratory of a top immunologist, Dr Fred Alt at Harvard Medical School. During the five years of postdoctoral training, I met my husband and gave birth to my first child.

In 2015, we decided to move closer to home to start our career as independent researchers.

> What is it about home you miss the most?The food definitely – nasi lemak, durian, and my mum’s cooking.

> You helped find a way for the body to fight HIV. Tell us about that breakthrough.During my postdoctoral training, I developed mouse models to study how different antibody genes undergo mutation. We found that certain DNA sequences are more prone to mutations and that the same DNA sequences are also prone to deletions, another common characteristic of anti-HIV broadly neutralising antibodies.

These results suggest that DNA sequence direct the evolution of antibodies and these results were published in Cell in 2015, a top journal in the biological field. In 2017, we published in Proceedings of National Academy of Science on a related work where we analysed a mouse model carrying a human antibody gene and found that many mutations in anti-HIV antibodies are not easily achieved. Understanding how our bodies are able to elicit these rare antibodies will help in vaccine design strategies.

> What are you currently working on?We are continuously trying to elucidate the molecular mechanisms underlying highly effective antibody generation and developing approaches to guide our bodies to produce such antibodies during infection. We use animal models, cutting-edge gene editing techniques and next generation DNA sequencing in our research. We hope to one day wipe out infectious diseases like HIV.

> Are there any plans to work with other Malaysian researchers moving forward?We are constantly reaching out to researchers from all over the world, and Malaysia is definitely a priority. On Aug 9, I was in Malaysia with a delegation headed by Shanghai Jiao Tong University School of Medicine chancellor Prof Guoqiang Chen, and Shanghai Institute of Immunology director Prof Bing Su, to promote collaborations with Universiti Malaya’s Faculty of Medicine. We also visited the International Medical University (IMU).

With the Chinese government’s ‘One Belt, One Road’ initiative, there are plenty of funding opportunities for academic exchanges and scholarships for graduate studies. Hopefully, more people will come to know about research and academic opportunities in our school.

I have been exposed to different research environments in top laboratories and research institutes around the world, and the current biomedical research environment in Shanghai and other major cities in China, is definitely on par with the places that I have been to.

>What is the most challenging aspect of working in a lab?As an independent researcher, my job is to design and supervise experiments, analyse the results with my students and postdocs, and write manuscripts for publications. I also have to make sure that the lab has enough funding to do research.

Some of the challenging aspects include dealing with failed experiments, manuscripts and grants being rejected, and harsh criticisms by peers. But the satisfaction in being the first in the world to discover something new and potentially textbook-changing, makes all the hard work worthwhile.

> What qualities would a young, aspiring researcher need?Passion, persistence and determination. In the labs I’ve been to, I’ve seen college or even high school students doing research internships during school holidays. These kinds of opportunities allow students to experience the laboratory culture and life as a researcher. Being exposed to different career options at an early stage allows students to make better career choices and develop greater potential. I hope young Malaysians can be more pro-active and seek out such opportunities to enrich themselves in their spare time. I didn’t know there was such a possibility when I was in school.-Source link

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Malaysian public universities’ worst nightmare is beginning, with local private universities rapidly rising and making their presence fe...

WHO IS A “MELAYU” AS EXPLAINED BY A MELAYU: Melayu by a Melayu

WHO IS A “MELAYU” AS EXPLAINED BY A MELAYU ...

The politics of race - Melayu by a Melayu
https://kuncitberagum.wordpress.com/2009/08/26/melayu-by-a-melayu/
 

I salute my former colleague Syed Imran….

I got this from a friend and decided to resend it as it explains in great detail what a Malayu really is. It is time we stopped those who corrupt the original meaning in order to use it to divide Malaysian.

Mahathir should know this since he registered himself as an Indian in Singapore where he studied medicine. Inside him, he knows the real reason why he now considers himself a Malay and refuses to acknowledge his Indian roots. There are opportunists everywhere and UMNO has become the platform for them to satisfy their greed.. It will also be the platform on which they destroy themselves.

The Deputy PM expressed disappointment with the Chinese for not voting UMNO but when you look back at recent history, did he thank the Chinese for their role in getting independence for Malaya? The Chinese, Indians and Malays were supposed to be equal partners as a condition for obtaining Merdeka. Then, the Malays asked for 25 years of “Special Privileges” so that they could catch up with the other races. Along the way, they changed the Constitution and it is now an unquestionable “Malay Right” for perpetuity. Look at your genuine history books (not the ones they distorted) to see if I am telling the truth.. Or go to the newspaper archives in the Straits Times and in London to get to the truth.

Because of this, the UMNOputras own the banks, the plantations, petroleum. The Malays are encouraged to start and own their businesses entirely on their own (100%). The non-Malays start their own businesses but when they get big, 30% must be given to bumiputras. Who are these bumiputras? They are selected UMNOputras ( not ordinary Malays) – those who use politics to get what is not rightfully theirs. They use the law to rob others of their wealth. Yet, they will not give a single share to the ordinary Malays in the streets – it is all theirs to keep. They will not do what they ask the non-Malays to do – sharing their wealth.

Not only that, they rob the ordinary Malays daily with the Water Concessions, the Tolls, etc.

CH

Melayu By a Malay-Syed Imran

You may have already read this article I published more than a year ago, below this is another article written by a “Malay” who I salute, that reinforces what I have said.

I’d like to challenge your article on the origins of the word Melayu.

(I hope you will not be emotional about this email and create an issue about it, but rather treat this as an intellectual argument between two matured individuals. I have presented facts here for you to review, and if you disagree please substantiate it. Since you have come out with a blog to attempt to tell us the origins of the word Melayu, and as a Malay, if you are really and truly keen in your own heritage and roots, I am writing to you with the facts of the origins of the word Melayu, in fact there are many scholars of yesteryear’s, Malays, who will tell you that the only original words in the Malay language are “Tanah” and “Melayu”)

Melayu is derived from the Javanese word Melayu, there are many other words in the Malay vocabulary that actually come from the various Asian languages mostly those of Sanskrit Origin.

The Sanskrit in Malay is derived from the Indian influence of the Majapahit, Srivijaya and other Indian influences in South East Asia. This particular word in Bahasa Malaysia is derived from the word Melayu from Javanese. Javanese was the lingua franca of the people in the region having had its own script, which was actually taken from the Arabic script, the bugis and the rest have dialects close to Javanese.

The Malay language in its romanised context only evolved in the early part of the 20th century.

In Javanese the word Melayu means running away, or a runaway, that is why if you go to Java and ask a Javanese if he is Melayu he will feel very insulted. The word Melayu found on the statue as claimed in your URL; http://www.sabrizain.org/malaya/malays4.htm thus denotes that this person was a Melayu, a “Runaway.”

These people, the runaways whether in Sumatra or in the Malay Peninsula referred to themselves as orangMelayu, it is therefore no coincidence that the word orang is placed before Melayu, people who ran away so to speak.

In the Malay Peninsular, it was gradually accepted as the word to describe the Javanese, the Bugis, the Menang, the Achinese etc. and even the Kelantanese who are actually Yunanese and have their origins in China, because they recognized the fact that at the end of the day they were all Melayu, or Run Aways from their respective homelands the word was accepted by all these communities to describe themselves.

In fact, before the formation of the United Malays National Organisation (UMNO), it is a fact that all the people in the country had referred to themselves as Menang, Achinese, Bugis, Javanese etc. etc. and we all know that the Kelantanese used to treat the other Melayu, that is the Menang, Javanese, the Bugis etc. as foreigners.

Well for that matter, even Mahathir Mohammed was registered as Indian in King Edwards College where he studied medicine.

The Malay therefore very much like the Indians, and later the Chinese are Melayu in the very true sense of the word because they all left their respective countries to come to this location in South East Asia called Malaysia today.

The real natives of the country are the Orang Laut, the Jakun, the Kadazaan, the Iban, the Senoi and the rest, and not the so called Orang Melayu, because these people are actually Javanese, Achinese, Bugis, people from the Mollucas islands, and other parts of neighbouring Indonesia, including those from Cambodia and even China (Yunanese). That explains the word Melayu in various parts of Sumatra too.

The Javanese people in particular were referred to as Java Kontra a term they despised and today in Sumatra they are referred to as Orang Transmigrasi which is more acceptable to the Javanese in Indonesia then the term Melayu.

For Malay citizenship and for permanent residence reasons, the Orang Java, be they Sundanese, Orang Java Barat, Orang Java Tengah or Orang Java Timor, or any other Indonesian for that matter recognises the fact that the day he becomes a Malaysian citizen, he is now an Orang Melayu that is a new word coined by Malaysians of these origins to legitimise their Bumiputraism.

And to become Bumiputra this way, that is by becoming a Melayu, he has to profess the Islamic faith. This privilege is not extended to Dayaks, from Kalimantan, or Christian Filipinos, or for that matter Christians from among the peoples of Sumatra, Java or any other Indonesian Islands.

The irony of all this is the fact that if you look at the real Orang Asli of Malaysia as a whole you’ll find out that the majority of them are not from the Islamic faith, and that is one of the reasons why in Sabah the registration department of the Federal Government legitimised and gave citizenship and permanent residence status to hundreds and thousands of illegal Fillipina immigrants from the Southern part of the Philippines.

I therefore disagree with your attempt to legitimize the term Orang Melayu as a race, it is not and never will be. The so-called Melayu must own up to their own heritage the way the Chinese and Indians in Malaysia proudly do.

And if we are to use this word called Melayu, it should be a term used to refer to all Malaysians except the ethnic Malaysians who are orang Asli.

The term Bumiputera was coined and the Malay placed in that category to legitimize the fact that he is ethnic when he is not.

It is a shame, and in fact a disgrace that they are the only group of people who by this very act, show the world that they are ashamed of their own heritage.

And who else can be so? Only those who run away or are banished from their own lands, for it is only such people who are ashamed of their own heritage.

Even the customs, the traditions, the dressings, the architecture etc. point to the fact that the so calledOrang Melayu of Peninsular Malaysia are actually not one and the same people.

Scroll below and read the next article by Syed Imran a Melayu and an ex Bernama Journalist from Penang

Some time ago I wrote about the Melayu and the origins of the name Melayu, which means runaway.

Today another “Melayu has written” totally unconnected this man, yes he is a man he stands up for the truth has written a similar article.

I am sending both these articles to you for your reading and circulation

All immigrants

Syed Imran, an Arab-Malaysian born in Penang, Malaysia, an ex-Bernama journalist (1971-1998) and former press secretary to the Minister in PM’s Department, posted a great blog days ago, which was translated into English.

Please circulate it and let all Malaysians understand the facts.

*Antara pendatang dan penumpang (English Translation) *

To begin with, I was quite reluctant to comment on the mess created by the statement made by Ahmad bin Ismail, the head of the Bukit Bendera, Pulau Pinang UMNO Division.. Whether he made the statement in reference to Chinese Malaysians is no longer the question, as the issue has spread and has been hotly debated.

If it is not handled carefully and smartly, this issue could make clear water murky, giving opportunity to parties who are keen on seeing this country crash, not to mention falling into the hands of foreigners. In today’s borderless world, international electronic media coverage makes it difficult for any country to hide or deny any given event.

The main issue brought up by Ahmad Ismail revolves around the question of “squatters”, that is, that Chinese Malaysians are squatters in this country. He explained that he was referring to pre-independence days. However, it had hurt the sensitivity of the Chinese Malaysian community.

I don’t know Ahmad Ismail personally, but I was quite close to his late elder brother, Abdul Rahim Ismail, the owner of Rahim Construction Company that was once famous as an “Earth-Prince” (Bumiputra) construction firm in Pulau Pinang. I don’t know what has happened to the company after Abdul Rahim passed away.

Personally, I don’t agree with what Ahmad Ismail said for the following reasons.

To me, nearly 90 percent of Malaysians, especially those in the Peninsula, are immigrants, and all of us are actually squatters in the land of Allah anyways. We are anything but permanent owners, we are merely squatters.

For example, I come from a family that squatted in this blessed land. My paternal grandfather and grandmother migrated from Mecca and Brunei, while my maternal grandmother came from Hadramut, Yaman. We are immigrants and squatters, as are almost everyone else in this country.

As for Ahmad Ismail, he is also an immigrant having descended from an immigrant’s family who squatted in this country. Ahmad Ismail cannot deny the fact that his grandfather and grandmother moved from India to this country in search of a better life in this blessed land.

It is also the case with Prime Minister Abdullah Ahmad Badawi whose maternal grandfather hailed from Guangdong in southern China. In short, Pak Lah’s grandfather, Allahyarhamah Kailan, whose name was Hasson Salleh or Hah Su Chiang, was an immigrant. He moved to Tanah Melayu from Guangdong in the mid-19th century. He stayed in Bayan Lepas as a rubber estate worker, a padi farmer and later became a diamond trader.

Najib Tun Razak, Deputy Prime Minister, is also a descendant of an immigrant Bugis family that came from Sulawesi, Indonesia. Hishammudin Hussein cannot escape the fact that there is Turkish blood running through his veins.

The Malacca Malay Sultanate was founded by an immigrant coming from Sumatra — Parameswara, a prince who practised Hinduism.

A reading of the history of Malay Sultanates would reveal that some of them were founded by Bugis immigrants, while others were of Hadramut and Minangkabau parentage.

Almost all Malays living in this country are from outside Tanah Melayu, but are defined as “Malay Race” by the Federal Constitution. We are “Malay” in definition by the Constitution, that is, we are Muslims; we practise Malay customs and speak the Malay language. Unfortunately, the Malay language itself seems> to have been killed by the Malays in UMNO when they named it the Malaysian language (Bahasa Malaysia).

Therefore, Arabs like Syed Hamid Albar and myself, Achehs like Sanusi Junid, Indians like Kader Sheikh Fadzir and Nor Mohamed Yakcop, Bugises like Najib, Minangs like Rais Yatim, Jawas like Mohamad Rahmat, and others from Madura, Pulau Buyan, Siam, Myanmar, Yunnan (China) and the Philippines are conveniently categorized as Malays.

They are accepted as Malays regardless of whether they speak Malay or otherwise at home like those of us who speak Arabic, the Jawas that speak Jawa, the Minangs that speak Minang, or the Mamak that speak Tamil..

These languages are anything but Malay if we look at it from the perspective of the Federal Constitution, so they should never have been declared Malays. But for the sake of political correctness, all of them are accepted as Malays and “Earth Princes” (bumiputra).

It is grossly unfair to point to the Chinese as immigrants when the Arabs, Indians, Achehs, Minangs, Bataks, Mandailings, Jawas, Maduras, and Bugises are immigrants no less in this country. We cannot deny the fact that most of the Chinese’s grandfathers and

grandmothers migrated to this country in the days of the Malacca Malay Sultanante, some of whom did so during the period of Kedah Sultanate, Terengganu Sultanate and Kelantan Sultanate respectively. After Francis Light wrested Penang from the hands of the sultan of Kedah in 1786, more Chinese had arrived here.

We are all immigrants squatting in this country. Only the Negrito, Jekun, Semang, Jahut, Orang Laut, Orang Darat, Senoi, and other indigenous people groups (like the Kadazandusuns, ibans and bidayuhs) can be correctly considered the original inhabitants of this country.

We must never forget the contributions and sacrifices made by all the races in building our nation in all its aspects, including the economy, social structure, national defense and, most importantly, national unity. We are all taxpayers whether or not we are descended from immigrants or squatters.

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Related Posts:

Malaysian talent lost due to racial bigotry

Leng Siew Yeap
Leng Siew Yeap, a Malaysian, a graduate of UMS applied for a scholarship to do a doctorate degree but was refused outright by the local govt.

She was however offered scholarships by University of Edinburgh, London University and Cambridge University. She chose Cambridge University's Dorothy Hodgkin postgraduate award to study stem cell.

On graduation she accepted the offer from Harvard to study human immunology. She is now working in research for a Shanghai university hospital.

She has successfully helped to create an method/procedure 4 the body to secrete an antibody to fight HIV. She is now married to a Shanghai citizen, living and working in Shanghai. She and her achievements are never mentioned in any Malaysia newspaper.

View Full Profile - Shanghai Institute of Immunology






 

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Tuesday, 17 September 2019

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Malaysian public universities’ worst nightmare is beginning, with local private universities rapidly rising and making their presence fe.


Saturday, 14 September 2019

Recession fears can by itself be a self-fulfilling prophecy



AS talk of a recession picks up, a veteran fund manager, Ang Kok Heng of Phillip Capital Management Sdn Bhd, correctly points out that the Malaysian stock market has been in “recession” in five of the six years since 2014.

Hence, he does not envisage how it can get worse for the Malaysian stock market if the global economy does go into a recession next year. Fears of a global recession have picked up pace based on the behaviour of the US yield curve.

The yield curve, which charts the spreads of US debt papers of various tenures, has inverted several times in the past few weeks. Most people would not understand what an inverted yield curve means.

Simply put, it means long-dated debt papers of 10 years giving lower returns compared to shorter-term debt papers such as two-year US Treasuries. It causes what is called an inverted yield curve.

It goes against the normal behaviour of US Treasury yields because long-term debt papers should give a higher return than short-term papers.

The consequence of an inverted yield curve is that it will lead to banks reducing their lending activities because their margins are narrow. Eventually, it results in companies reducing their activities and the country going into a slowdown or recession.

An inverted yield curve has been the precursor to all past recessions (see diagram).

However, there are some who are disputing the fears of an impending global recession based on the behaviour of the bond yield curve. Their reason is that the bond yields are not behaving as what they should due to the governments all around the world printing money to keep interest rates artificially low since 2009.

Interest rates have become so low to the extent that European banks are offering no returns on deposits. This means depositors do not get any money for keeping their money in the banks. Borrowers instead get discounts on their installments.

It’s happening in Europe because government bond yields there have turned negative.

For instance, the yield on 10-year Switzerland bonds is negative 0.74%, while German bonds of a similar tenure yield negative 0.52%. From France to Denmark, government debt papers have negative yields.

Only some countries such as Portugal and Spain still have positive yields on their debt papers.

Analysts believe that this has resulted in investors resorting to buying US debt papers that still offer positive yields. Hence, the price of bonds across all tenures in the US has gone up, causing their yields to come down.

The search for yields has also resulted in the narrowing of the difference between what the two-year and 10-year debt papers offer. And there have been several occasions in the last one month when the yield on the 10-year paper was lower than the two-year debt papers.

Apart from the behaviour of the yield curve, the other indicator that is seen as a precursor to a recession is the declining manufacturing sector all around the world caused by the trade war between the US and China. The Purchasing Managers’ Index (PMI), which is a leading indicator to assess the state of the economy, has been declining for all major economies.

For Malaysia, the PMI has been less than the 50-point benchmark for almost a year now. The same trend is seen in China, while the indicator has started to decline in the US in the last few months, which some see as a result of the trade war.

The trade war has caused supply disruptions, impacting the manufacturing sector.

However, there are other indicators that do not indicate a recession is imminent.

Banks are fairly well-capitalised and have pulled the brakes on lending. We do not hear of banks being impacted by major corporate defaults except for some financial institutions in China. Malaysian banks, for instance, have weathered the storm quite well so far, thanks to Bank Negara keeping a tight rein on their lending activities.

There has not been any run-up in asset prices. Property prices in countries such as Malaysia have remained subdued since 2015 after Bank Negara pulled the brakes on lending. Since 2014, Bursa Malaysia has closed lower every year, except for 2017.

The only exception of rising asset prices is Wall Street that has soared to record highs. Stock prices are hitting all-time highs due to improved earnings growth.

Technology companies such as Apple and Amazon are US$1 trillion companies. The other technology companies such as Facebook and Alphabet are enjoying growing valuations because of earnings growth.

No other stock exchange in the world has such a large concentration of technology companies than the exchanges on Wall Street. All technology companies, even from China, want to list on Wall Street.

Even Alibaba is listed on the New York Stock Exchange and not in Hong Kong.

It has been 11 years since the last recession, but the world’s central banks have resumed their printing of cheap money to keep interest rates low. The European Central Bank has resumed quantitative easing, while the US Federal Reserve is reducing interest rates. In essence, central banks are taking these measures to prevent a slowing economy going into recession.

In the meantime, it has caused fear among people and companies. Companies are holding back on spending, and in fact, cutting down on their debt.

A clear indicator is in the US where companies raised the most amount of corporate debt. Apple and Disney raised US$7bil worth of debt papers to reduce their borrowings.

In Malaysia, corporations have been deleveraging for the past few years in anticipation of a slowdown. Companies are not expanding, as indicated by the declining private-sector gross capital formation.

It is only reasonable for companies and people to save for the upcoming rainy days. Even governments are cautious in spending. For instance, in the upcoming Budget 2020, many are expecting the government to start spending. But there is also a view that the government will adopt a cautious stance as it continues to strengthen its balance sheet and reduce debts.

If nobody spends for fear of a recession, it would be a self-fulfilling prophecy.

Most people are expecting a recession, meaning negative growth. Fear of a recession has translated into a slowdown that the world and Malaysia are experiencing. If this fear continues to perpetuate, a recession would be a self-fulling prophecy.

It is good to be fearful, but being too fearful and conservative will also result in lost opportunity.

As Ang of Phillip Capital puts it, in times when fears of a recession seap in, cash must be held to seize opportunities. Holding cash as an investment is not a wise option.



 By M. SHANMUGAM , The views expressed here are solely that of the writer. Source link


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