IMF's Stuctural Adjustment Programme Essay Example | Topics and Well Written Essays - 1500 words

IMF's Stuctural Adjustment Programme - Essay Example Some of the conditions that third world debtors needed to fulfill were devaluing currency, import liberalization, privatisation, "cuts in government expenditure", continued debt servicing, economic development focused on exporting goods and moratorium on hiring and pay increases for both public and private sectors (Kreye and Schubert,1988, p.264). "The structural adjustment scheme was primarily implemented to address balance of payments issues". These issues were largely generated by internal conditions such as high inflation rates, budget deficits or inefficient allocation of resources. The IMF assumed that in order to recover from the debts, third world countries must tighten its expenditures and divert them to more productive domestic investments. However, tightening the belt meant reduced government subsidies on food and services, higher interest rates, more lay-offs, higher interest rates and taxes. The scheme inadvertently affected the poorest segments of the third world country. Ferraro and Rosser (1994) noted that instead of easing the burden debt, the policies of the IMF appeared to drive the country into further debts. The IMF's policies with exclusive emphasis on internal economic improvements failed to consider external factors such as oil price movements or global recession that might affect the fiscal positions of the third world nations. ... emphasis on internal economic improvements failed to consider external factors such as oil price movements or global recession that might affect the fiscal positions of the third world nations. Their policies had pushed the heavily indebted countries into more desperate conditions and the future of economic growth in these countries was hampered. The structural adjustment programmes were perceived as benefiting more the creditors than debtor countries. In addition, the foundation of the SAP framework was rooted in neoliberalisation and an emphasis on export capacities of debtor countries. The SAP also would require the poor country to be integrated into the international market economy. Most of the poor nations hardly had the right political and economic structures that would address the demands of the IMF SAP. Instead of easing the burden of debt, SAP appeared to have driven the poor countries into dire positions. The intent of the SAP was to remove any government controls over key economic sectors to induce a free market financial condition. Socio-Economic Impact of IMF SAP The inappropriateness of IMF structural adjustment programmes could be seen in various aspects of socio-economic structures of a debtor country. The stringent conditions imposed by the SAP on the debtor countries as a requisite to avail of the IMF financing has affected the poor nation's socio-economic fundamentals. Currency Devaluation The currency devaluation requisite of the IMF SAP meant that the population would experience increases in basic cost of goods formerly accessible. In addition, essential items like agricultural machineries, medicines and other provisions included in the development project would be expensive (Riddell, 1992, p.57). The purchasing power of the local currency

What is Hobbes account of the good Essay Example | Topics and Well Written Essays - 750 words

What is Hobbes account of the good - Essay Example Therefore, according to him, things are perceived to be good if the repercussions of undertaking it are pleasing to us. There are two forms of motion as described by Hobbes: vital motion, which runs through the entire existence span of a living creature such as the flow of blood and voluntary motion, which is processed through imagination, followed by execution of the thought. In defining what may be perceived as good, Hobbes argues that good usually produces a motion deep inside us; the motion experienced is referred to as ‘delight.’ Sovereign states do play an important role in ensuring harmonious existence of different people. This is because the sovereign states have laws, which people have to abide to, failure to which they are to face punishment. In avoiding punishment, people try to avoid doing any act that is against the stipulated laws; thus, promoting harmony. Absence of such regulating authority would lead to people undertaking different activities based on th eir perceptions. For example, a man could sleep with anyone at any location and perceive it to be good because it brings forth delight to him. How Hobbes’ account of the good is related to his account of the constitutions â€Å"of Man.† Hobbes account of the good is related to his account of constitution of man in that mechanical effects of their senses trigger human actions. According to Hobbes, a man uses his volition to direct his actions away from harmful or evil situations, and towards beneficial situations. Hobbes employs the word appetites as well as aversions to explain conflicting desires of a man. Some human appetites are natural for instance, food desires while others emanate from a man’s experiences. Certain appetites emanate in the body of a man and are experienced as disruptions and sufferings that should be overcome. Therefore, every man is stimulated to act in a way that tends to ease his discomfort, safeguard and enhance his well-being. Similarl y, a man’s actions are dictated by this innate inclination to easy the physical challenges which impinge upon his body. Desires for some ‘good’ changes with time, even though a man cease to survive if he ceases to have desires for good things. In other words, it is the nature of man to search and desire for the ‘good’ such as wealth, power and diet to achieve satisfaction of his desires. A man’s power is a strategy to achieve a better future, ‘the good’. Human power is categorized into one natural power that comes from innate capacities of his mind and body such as strength, ability, artistic capability and brevity. Secondly, instrumental power that emanates from the acquired faculties as well as friends benefits, reputation or resources. The enduring perpetual and endless appetites for power are an essential quality common to all human beings. Similarly, fear of powers and authorities of other people serves as a counterbalance fo r the power desires and prevents human beings from often competing to attain power. Addition, fear of death, war and accidents stimulates men to seek harmony (common good for all). Description of the distinctly social nature of the desires that are common to us There is impossibility for a people to live without desires just like the way they can live without imaginations. Moreover, Hobbes describes happiness to a continual progress of desires, which is derived from one object to another, and achieving a path that leads to other paths in life. Nevertheless, the reasons behind this

Analysis of Awareness of Real Estate Investment Trusts

Analysis of Awareness of Real Estate Investment Trusts Investment in general, and property investment in particular, have been traditionally regarded more as an art than a science, where investors, decision-makers and analyst rely more on their experience, subjective judgement and quantified evidence. Real Estate Investment Trust or REITs is a new medium of investment specifically in property investment in Malaysia. Malaysia is the first country in Asia to introduce property trust and only in 1989 was listed in Kuala Lumpur Stock Exchange. The property trust was then facing some issues such as potential conflict of interest, a lack of focus on asset management and thin trading volume and then led the Real Property Investment Trust to be announced. REITs in Malaysia growth perfectly with stimulate the growth of property sector in this country. Malaysia then introduces the first of its new REITs, with the Axis REIT. YTL Corporation, Malaysias biggest builder, established the second REITs later, with properties in the REIT including the JW Marriott Hotel and Starhill Shopping Center in Kuala Lumpur. Besides that, other REITs that now established in Malaysia are Hektar REITs, Tower REITs, and also UOA REITs. Other companies in Malaysia that are expecting to join for REITs include Sunway City and the Landmarks Group. Most of the REITs companies in Malaysia own the real property asset such as shopping malls, hotels and also apartment buildings and they generate income from owning the building and also rental income from the buildings. The investors physically own a part of the building depending on the size of the share that they invest. Through REITs, investors can invest any amount that they want to own REITs. They can sell it anytime with the easiest way through stocks market. Compared to normal properties, the transaction cost of buy and sell REITs are much lower. But REITs does not like other unit trust, which is sold through agents or other peoples, but it is traded in stock exchange. So it gives return to investors in form of dividend and also capital appreciation from price change. This way, shows that REITs is a secured investment that protect investors interest and it works under the guidelines or frameworks that have been set up by government. Background: The investment characteristics of property are significantly different from the characteristics of assets in other investments. REITs in Malaysia is so attractive as Malaysia now is developing country. There is still a gap between Malaysia and others develop country in Asia. In order to put Malaysia in same level with Asia develop country, most of REITs managers are with option and plan to growth their property portfolio to trade or manage rental in order to achieve it. It also will give a better yield for investor if our country is same level with others. In order to improve market performance of REITs, the REITs Company should consider developing new opportunities, acquiring more properties into their portfolio and also to some countries, or joint developing property project. The relation of both legal frameworks and the market performance will give a picture to investor and other people who interested in this investment. The REITs sector need to provide more chance to other people to invest and it will help Malaysian generate more income others than monthly salary and to boost up economy in this country. Research Question: Finance in real estate is just a popular way of investment nowadays. The market performance of REITs shows the good results this few years. With the regulation that set up by government, surely REITs is the secured investment. But is there many people in Klang Valley that come from middle-income group realise about this investment in this develop country? Objectives: The main objective of this study is to determine the level of awareness towards REITs among middle-income group in Klang Valley. In line with above, this study also seeks to study types of REITs available in Malaysia Besides, these study also to discuss about the way to introduce REITs in Malaysia in order to make REITs the favourable investment medium. Scope of Study: In overall, this research is confined to REITs in Malaysia which in an attractive investment nowadays. This study covers the types of REITs available in Malaysia and also people awareness about it. Other than that, this study is carried out to know what is the way of promoting REITs that people prefer. Methodology: This research would be done in an analytic study manner. The information that is needed to examine the issue will be obtained from primary and secondary data. The primary data refers to the first-hand data, which required data collection that is the distribution of questionnaire. The questionnaire will be distributed to certain amount of Malaysian with a different background. Secondary data or desk research refers to the data that already exist, mostly in quantitative form. In this study, most of the secondary data were obtained from; Academic research on REITs and journals. Website of REITs Company. Other dissertations. Data analysis will be done through frequency analysis. Frequency analysis is used to determine the frequency of certain choice for the questions. Most frequent answer will be given the priority. The results will be shows in diagram or graph to show the popularity answers. Significance: It is hoped that the anticipated outcome of this study can benefit the: The REITs Company where they will more alert toward the middle-income people awareness of REITs and the way people wanted REITs to be promoted. The interested investor and also the student, as a reference on the information that relates to REITs. Organisation of Research: This study consists of five chapters where the first chapter provides a brief concept and view on the topic that will be studied in this research. It consists of introduction, objective of study, scope of study, significance on research and also organisation of research. Chapter two discuss on literature review about REITs in Malaysia. The discussion will be on definition of REITs, the types of REITs in Malaysia and also the list of REITs companies. Other than that, the discussion also will describe on how REITs work and also the benefit of REITs. The definition on middle-income people and background of Klang Valley also will briefly explain. The next chapter, chapter three is on methodology. In this chapter, methods used to construct the questionnaires will be outlined. This chapter will highlight how the administration of the questionnaire which will conduct to respondents. Chapter four is the finding and analysis of data obtained through questionnaires survey. The analysis of data obtained will determine the level of awareness towards REITs among middle-income people in Klang Valley. Through the survey, the preference way of promoting REITs also can be discover. The last chapter, which is chapter five, is the conclusion and limitation of this study. The best suggestion of promoting REITs also will be stated in this chapter. The weaknesses and strengths of the study may be included. Some suggestions for further study will also be included in this study. In the next chapter, a review of related information about REITs will be explained. The explanation will cover definition, types, how REITs work, REITs companies in Malaysia, the legislation of REITs Islamic REITs and also the future prospect of REITs. Chapter 2: Literature Review: LITERATURE REVIEW: REITs which stand for Real Estate Investment Trust is an investment that relates to properties. Trust fund has been introducing in this country since 1986, but REITS; a part of trust fund is a new medium investment only famous around few years back. REITs is an investment vehicle for investors to invest in large-scale income producing real estate. With the concept like unit trust, this investment gathers pool of money from all sizes of investors. REIT based companies will invest, manage and distribute rental as dividend back to the investors by yearly basis or depends on the agreement that have been signed before.REITs is a liquidity investment which It is being trade in Bursa Kuala Lumpur with ease of buy and sells back like a normal equity. As the years flow, REITs is not new to the world especially in many other developed countries. REITs usually targets for a long term investor with moderate risk such as insurance companies, unit trust funds and even individual investors. REITs invest in a variety of real estate properties such as office buildings, shopping malls, warehouses, apartments and hotels. The investor also has the added advantages of holding a liquid asset in the form of shares that can be sold on the market unlike the real estate itself which is illiquid. Investing in REITs provides the investor with dividend income and also allows them to own a real estate portfolio rather than just a single building. This chapter then will briefly explain about Klang Valley, middle-income group, history of REITs in Malaysia, types of REITs, how REITs work, and REITs companies and also about the legislation of REITs. Klang Valley: My research focus on awareness towards REITs among middle-income people in Klang Valley, Malaysia. Malaysia is located in Southeastern Asia, peninsula bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and South China Sea, south of Vietnam. It is comprised of two separate geographical regions which are Malay Peninsular and the states of Sabah and Sarawak. Klang valley is an area in Malaysia comprising Kulala Lumpur and its suburbs, and adjoining cities and towns in the state of Selangor. Tis valley is named after Klang River, the principal river that flows through it which is closely linked to the early development of the area as a cluster of tin mining towns in the late 19th century. Development of Klang Valley took place largely in the area between Gombak and Port Klang but the urban areas surrounding Kuala Lumpur have since growth towards the border of Negeri Sembilan and the north towards Rawang. Klang Valley has a total population around 7.6 million people in 2009 and estimated to growth due to the people migrate from other states towards Klang Valley and also a population growth. Klang Valley is the heartland of Malaysias industry and commerce. Regions of Klang Valley and their corresponding local authority: Federal Territory of Kuala Lumpur. Kuala Lumpur City Hall. Federal Territory of Putrajaya. Putrajaya Corporation. Selangor district of Petaling. Shah Alam City Council. Petaling Jaya City Council. Subang Jaya Municipal Council. Selangor District of Klang. Klang Municipal Council. Selangor district of Gombak. Selayang Municipal Council. Selangor district of Hulu Langat. Ampang Jaya Municipal Council. Kajang Municipal Council. Selangor district of Sepang. Sepang Municipal Council. For further information about the location of Klang Valley. Middle-Income Group: There are three classes of income in Malaysia. These classes indicate Malaysian monthly income and also their household. The three (3) classes including low-income people, middle-income people, and high-income people. Below is the income groups in Malaysia. Middle-class income is define as the socioeconomic class between the working class and the upper class, usually including professionals, highly skilled labourers, and lower and middle management.( Source: http://www.answers.com/topic/middle-class). Background of REITs in Malaysia: Malaysia is the first country in Asia to introduce property trusts. In 1989, the first trust was listed in Kuala Lumpur Stock Exchange. The regulatory framework of property trust, approved by the Bank Negara in 1986, was restrictive and provided no tax transparency. But there still an issues that arise such as lack of focus on property management and also conflict of interest which led the property trust to be private. In 1995, a revision of the property trust guidelines were done but it fail to give a good impact to investors and also to market. Then, in February 2005, there is another revision with led the property trust be renamed as Real Property Investment Trust (REITs). The major income of REITs is from rental and the profit is required to distribute to holders or investors in dividend. The guidelines also been revised to provide a good regulation for a REITs in this country. Malaysia was the first Islamic country to certify REITs and also the first country in Asia where REITs conquer agriculture land. A plantation REITs also much like conventional REITs. It will be the crops planted on the land and the success will depend on the sizes of assets injected to the trust. The potential plantation to be expected is oil palm because of the high demand on the production. Other than that, palm oil also undergoing the research to become a biodiesel product and in become more attractive after the increasing in oil prices. The plantation land or agriculture land also can be developed to residential area or commercial area due to the development of town. Types of REITs: REITs has several types with drives to a different prospect of REITs but it still relates to property as a main core to invest on. In others country they apply a lot of types of REITs. But in Malaysia we only apply three types of REITs. There are Equity REITs, Mortgage REITs and also Hybrid REITs. Equity REITs: Equity REITs is a publicly traded company that, as its principal business, buys, manages, renovates, maintains and occasionally sells real properties. (block,2006).Properties are usually purchased to invest is an income-producing real estate such as hotels, shopping malls and also apartment buildings. This type of REITs is different from others because REITs usually companies will purchase or develop the property and operate it as a part of their portfolio rather than sell it. Besides, Equity REITs is a long term investment because they earn dividend from rental. In additional, this type will let investors not only just to choose the type of property they want to invest in, but also the location of the properties. (Block, 2006). It means that the investors can make a choice on their own with the advice of the agent or REITs managers in order to make a good investment and to gain a good dividend. Mortgage REITs: A mortgage REITs is a REITs that focus on makes on holds loans to the property developers. (All about Investing: The Easy Way to Get Started by Esme Faerber: page 89). Rather than investing in properties,this type of REITs sometime loans money for purchase existing mortgages. The revenue earns is from the interest charge on the mortgage loans and pass on shareholders. Mortgage REITs is more sensitive compare than other REITs because of the prices of mortgage REITs react opposite from interest rates. It is good REITs to invest if there is a rumour of dropping in interest rates. Hybrid REITs: Hybrids combine the investing principles of mortgage and equity REITs, diversifying between making mortgage loans and direct property ownership. They earn both rental and interest income. (http://www.allaboutskyscrapers.com/REIT_types.htm). They buy, develop, and manage the properties and provide financing through mortgage loans. Most hybrid REITs have a stronger position in their financing account. The most famous industry that using hybrid REITs is private healthcare industries, where the financial company will provide mortgage to healthcare company, hospital management and also to buy properties such as land and building and also medical appliances. Equity REITs seem to be the most popular REITs recently. Between three types of REITs, mortgage REITs is the most risky which in involve in lend money to developers. Every type of REITs has different level of risk so investors should study and evaluate which REITs they want to invest in. The wise result will make the investors smile widely because of the big fish. Chan, Erickson and Wang (2003) find that equity REITs pay out more dividends than mortgage REITs. The reason is that equity REITs offer the potential for capital gains in addition to current income. Structure of REITs: Source: Practice and Prospect of Islamic Real Estate Investment (I-REITs)in Malaysian Islamic Capital Market by Dr. Asyraf Wajdi Dusuki. Manager: A man or woman who controls an organization or a part of organization. Property manager: A man or woman who controls the management and maintenance of the building. He or she will ensure the building in the good condition which safe to fit tenants in. Tenant: A person who pays money (rent) to the owner of a room, flat, building or piece of land so that he or she can live in it or use it. Trustee: A person who looks after money or property for somebody else. Unit holder: An owner of one or more units in a mutual fund. How REITs Works: Its true that investment most favourable today will be the one most prized tomorrow, and then real estate is definitely due for love-in. Investing in income-generating real estate can be a great way to increase your net worth. But for many people, investing in real estate, particularly commercial real estate is simply out of their budgets. REITs is a saviour to people when with REITs people can invest in small amount but with a large-scale of real estate group. REITs which means real estate investment trust essentially the organization that own and manage a portfolio of real estate and mortgages such as shopping malls, hotels, apartment buildings and also agriculture lands. REITs does not mean for a restrict group, but this share can be own buy anyone. REITs offer people the ownership of the property without any risks because all of the problems will be covered by agents or REITs managers. There are advantages when investing in REITs because of the liquidity and diversity. It is unlike actual real estate, where REITs can be easily and quickly sold. People will face less financial risk because of investing in a portfolio rather than single building because of the problems such as irresponsible tenants, economy impact to the property rental market and market value, and so on. REITs has a board of directors that elected by the shareholders. The shareholders have a power to eliminate any board of directors that does not fulfil their requirement. The board of directors usually came from a people with an investment background especially in REITs field. They will assist a REITs managers; person who will manages the operation of the property. The power to choose what types of real estate to invest in is on board of directors. REITs investment for investors starts when they invest certain amount of money in a REITs fund. The amount of money depends on the REITs managers who will arrange the investment on the properties that have been agreed by board of director. The investors can have an eyes and ideas on what types of the properties and the location. They have a choice whether want to agree or not with the properties. If they agree with the properties, they can sign a document to clarify the investment. Then the properties will be rent out or mortgage in order to earn money. REITs has a several method to measuring the profit but the suitable one called Funds From Operation (FFO). The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as: Net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. Source: http://home.howstuffworks.com/real-estate/reit2.htm. The REITs industry use FFO to measure performance and to establish dividend payouts. Kallberg et al (2003) reported that REITs consistently pay out about 85% of FFO as dividends. The payouts from REITs are consistently higher than other types of equities. In other words, FFO is defined as the net income, excluding gains and losses from debt restructuring and property sales, adding back property depreciation and amortisation, and after adjustments for unconsolidated partnership and joint ventures. The net income is referring to rent and sales computed according to Generally Accepted Accounting Principles (GAAP). However FFO is not a necessary way to determine performance and dividend payouts. Not all REITs calculate FFO according to the NAREIT definition because some of the important items are missing from the formula such as maintenance, repairs and also expenses. Thus, investors must always read a companys report and any others supplemental information in order to get an exact FFO. REITs Companies: In Malaysia, there are several amount of business runs base on REITs. These companies have been success to put property market in this country in a good condition. These companies also expend the real estate industry with so much new types of building. Below is briefly an explanation about ten (10) well known REITs companies. Al-Aqar KPJ: Al-Aqar KPJ REITs established on 28 June 2006 is a Malaysian-based unit trust. The objective of this investment is to own and invest in Syariah-compliant real estate and it has been acceptable to invest in properties which compromise Ampang Puteri Specialist Hospital Building, Damansara Specialist Hospital Building, Johor Specialist Hospital Building, Ipoh Specialist Hospital Building, Puteri Specialist Hospital Building and Selangor Medical Centre Building. There are nine (9) others hospital under KPJ that potential to be injected under Al-Aqar KPJ such as Tawakal Hospital, Seremban Specialist Hospital and also Penawar Hospital. Amanah Raya: Amanah Raya REITs is subsidiary of Amanah Raya Berhad and wholly-owned by Minester of Fianace Incorporated. Amanah Raya REITs listed on Bursa Securities Malaysia Berhad on 26 February 2007 with a total asset siza of RM337 million. Today, Amanah Raya REITs has a diversification portfolio comprising hospitality, education and also commercial properties such as SEGI College, Holiday Villa Langkawi, Holiday Villa Alor Star, Wisma Amanah Raya Berhad, Wisma UEP, Permanis Factory and also Blocks AB South City Plaza. AmFirst: Established on 28 September 2006 under the Trust Deed, AmFIRST then entered into between Am ARA REIT Managers and Mayban Trustee Berhad. AmFIRST managed by Am ARA REIT Managers Sdn Bhd. Three months then, Am FIRST was listing on the Main Board of the Bursa Saham Malaysia Berhad on 21 December 2006. It shows an innovative makeover of AmFIRST, the first listed property trust fund in Malaysia. This REITS company is the largest Malaysia-based commercial REITs with exposure to the office, retail and hotel sector in Klang Valley area. Currently manages six office building, where three are located within the Kuala Lumpur Golden Triangle; AmBank Group Leadership Centre, AmBank Group Building, and also AmBank Tower, and one each in Petaling Jaya, Kelana Jaya, and Subang Jaya. AmFIRST also manages four-star hotel and a retail mall located in Subang Jaya, The Summit Subang, USJ. Atrium: Atrium REITs is a first logistic property approved in Malaysia. The objective of Atrium REITs is to invest in portfolio in order to reward investors or unit holders a maximise income and to acquire a high quality assets to achieve a long-term growth in a net income for distribution of dividend. This REITs then was first approved by the Securities Commission in October 2006 and then listed on Main Board of Bursa Saham Malaysia Berhad in April 2007. Atrium REITs has an 809, 668 sq ft (75, 220 sq mt) approved portfolio of investment properties which comprises of four freehold industrial properties currently leased to reputable and strong financially tenants. All of their properties located in Kuala Lumpur and Selangor, the fastest growing area in this country. Axis: Axis REITs is the first REITs list on Bursa Malaysia Securities Berhad on 3 August 2005. On 11 December 2008, Axis launched Islamic REITs which is the first in Malaysia. Axis own diversified portfolio of properties especially in Klang Valley, Kedah and Johor comprising of commercial offices, light industial building and also warehouse. Buildings that portray an image of Axis are Axis Tower and also Crystal Plaza. Both if this building are next door to each other and located along the busiest road, Federal Highway. These buildings are well maintain and easier accessibility. Other Axis properties are Delfi Cocoa in and BMW Asia Technology Centre PTP in Johor and also Giant Hypermarket in Sungai Petani, Kedah. Hektar: Hektar REITs is a Malaysias first retail-focused REITs. Listed on the Main Board of Bursa Saham Malaysia Securities on 4 December 2006, Hektar portfolio currently consists of shopping centres in Subang Jaya, Melaka and Muar. As of 31 December 2009, all of these properties was value of RM720 million. Hektar REITs is managed by Hektar Asset Management Sdn Bhd which a part of Hektar Group. QCT: QCT (Quill Capita Trust) REITs was listed in Main Board of Bursa Malaysia Securities Berhad on 8 January 2007. QCT is managed by Quill Capita Management Sdn Bhd. QCT main investment in REITs is a commercial properties. Until 31 December 2009, QCT has ten (10) properties with 1,288,149 sq ft net lettable area valued RM 788.4 million. The properties including part of Plaza Mont Kiara, Quill buildings, Wisma Technip and also tesco building in Jelutong, Penang. Starhill: This REITs was established on 18 November 2005 by a trust deed entered between Pintar Projek Sdn Bhd and Mayban Trustee and listed on Main Market of Bursa Malaysia Securities Berhad on 16 December 2005. Starhill REITs is focusing on retail and hotel properties investment. As for February 2010, Starhill REITs is the largest Malaysias real estate investment. This REITs has four (4) portfolio located in the heart of Kualu Lumpur; Starhill Gallery, JW Marriot Hotel, Lot 10 Shopping Centre and also The Residence at The Ritz-Carlton. Tower: Tower REITs is established on 21 February 2006. The objective of this company is to invest primarily in a portfolio of quality office building and commercial properties to provide regular and stable distributions of dividend to unit holders or investors and also to achieve a medium-term growth in the net income. In order to achieve their objective, Tower REITs implement several key strategies such as optimisation of capital structure, active asset management and also acquisition growth. The portfolio of this REITs company consists of three buildings located in Kuala Lumpur. First is Menara HLA, the 32-storeys office tower located in the heart of Kuala Lumpur Golden Triangle. With a net lettable area of 396, 820 sq ft, it has a blue chip tennats such as Hong Leong Assurance Berhad. Next, HP Towers comprises of two blocks of 9-storeys and 21-storeys and 3 levels of connecting podium. Situated in Bukit Damansara, this towers has a net lettable area of 350, 056 sq ft with a Hewlett-Packard (M) Sdn Bhd as a tenants. Lastly, Menara ING situated in Jalan Raja Chulan, the main central business district of Kuala Lumpur. Tower REITs only own 78.3% of the total share unit of the building and 100% leased out to ING Insurance Bhd. UOA: nbsp  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  UOA REITs was established on 28 November 2005 and listed on the Main Board of Bursa Saham Malaysia Securities Berhad two days later. UOA REITs is focusing on commercial properties. With a diversification portfolio of properties, UOA manages to maintain four building in Kuala Lumpur area. First is UOA Centre, a stylish 33-storeys office building situated between Jalan Pinang and Jalan Perak. Tenants of the building include financial services companies and also trading companies. Next is UOA II which located near to UOA Centre. With a contemporary designed, this 39-storeys building has a mixture of tenants from government agencies, multinationals insurance companies and law firms. Other than that, a 13-storeys office building located in Jalan Dungun, Damansara Heights name UOA Damansara is one of the UOA properties. Law firms, international associations and trading companies are a part of tenants for this building. Last is UOA Pantai located strategically in front of Menara TM. This 7-storeys of building consists of tenants include multinational corporations and so on. Regulation of REITs: In Malaysia, REITs govern by a statutory body name Security Commission Malaysia (SC). SC was established on 1 March 1993 under the Securities Commission Act 1993 and it is a financial regulatory agency. It is the central authority to regulate and develop the capital market. SC has big responsibilities in order to ensure the safety of the investors under the Act includes: Registering authority for prospectuses of corporations other than unlisted recreational clubs. Approving authority for corporate bond issues. Regulating all matters relating to securities and future contracts. Regulating the take-over and mergers of companies. Regulating all matters relating to unit trust schemes. Licensing and supervising all licensed persons. Supervising exchanges, clearing houses and central depositories. Encouraging self-regulation. Ensuring proper conduct of market institutions and licensed persons. Source:http://www.sc.com.my/main.asp?pageid=350menuid=376newsid=linkid=type= New Islamic REITs: The introduction of Islamic REITs is viewed as one of the most significant initiatives to broaden and deepen the product base of Islamic capital market in Malaysia. It can also help to enhance competitiveness of Malaysian Islamic capital market by attracting global Islamic investors who wish to diversify their investment portfolio which are Shariah compliant. Islamic REITs regulation was outlined in the Guidelines for Islamic REITs issued on 21st November 2005 by Securities Commission. (Securities Commission,2005). The Guidelines were introduced to facilitate the development of new Islamic capital market products, making Malaysia the first jurisdiction in the global Islamic financial sector to issue such guidelines and setting a global benchmark for the development of Islamic REITs. The Guidelines essentially stipulate Shariah compliance criteria to guide management companies in their activities relating to an Islamic REITs, including the types of Shariah permissible and non-permissible rental and investment activities for such fund. Islam prohibited Muslim from investing in properties whose tenants sell alcohol, pork or allo Analysis of Awareness of Real Estate Investment Trusts Analysis of Awareness of Real Estate Investment Trusts Investment in general, and property investment in particular, have been traditionally regarded more as an art than a science, where investors, decision-makers and analyst rely more on their experience, subjective judgement and quantified evidence. Real Estate Investment Trust or REITs is a new medium of investment specifically in property investment in Malaysia. Malaysia is the first country in Asia to introduce property trust and only in 1989 was listed in Kuala Lumpur Stock Exchange. The property trust was then facing some issues such as potential conflict of interest, a lack of focus on asset management and thin trading volume and then led the Real Property Investment Trust to be announced. REITs in Malaysia growth perfectly with stimulate the growth of property sector in this country. Malaysia then introduces the first of its new REITs, with the Axis REIT. YTL Corporation, Malaysias biggest builder, established the second REITs later, with properties in the REIT including the JW Marriott Hotel and Starhill Shopping Center in Kuala Lumpur. Besides that, other REITs that now established in Malaysia are Hektar REITs, Tower REITs, and also UOA REITs. Other companies in Malaysia that are expecting to join for REITs include Sunway City and the Landmarks Group. Most of the REITs companies in Malaysia own the real property asset such as shopping malls, hotels and also apartment buildings and they generate income from owning the building and also rental income from the buildings. The investors physically own a part of the building depending on the size of the share that they invest. Through REITs, investors can invest any amount that they want to own REITs. They can sell it anytime with the easiest way through stocks market. Compared to normal properties, the transaction cost of buy and sell REITs are much lower. But REITs does not like other unit trust, which is sold through agents or other peoples, but it is traded in stock exchange. So it gives return to investors in form of dividend and also capital appreciation from price change. This way, shows that REITs is a secured investment that protect investors interest and it works under the guidelines or frameworks that have been set up by government. Background: The investment characteristics of property are significantly different from the characteristics of assets in other investments. REITs in Malaysia is so attractive as Malaysia now is developing country. There is still a gap between Malaysia and others develop country in Asia. In order to put Malaysia in same level with Asia develop country, most of REITs managers are with option and plan to growth their property portfolio to trade or manage rental in order to achieve it. It also will give a better yield for investor if our country is same level with others. In order to improve market performance of REITs, the REITs Company should consider developing new opportunities, acquiring more properties into their portfolio and also to some countries, or joint developing property project. The relation of both legal frameworks and the market performance will give a picture to investor and other people who interested in this investment. The REITs sector need to provide more chance to other people to invest and it will help Malaysian generate more income others than monthly salary and to boost up economy in this country. Research Question: Finance in real estate is just a popular way of investment nowadays. The market performance of REITs shows the good results this few years. With the regulation that set up by government, surely REITs is the secured investment. But is there many people in Klang Valley that come from middle-income group realise about this investment in this develop country? Objectives: The main objective of this study is to determine the level of awareness towards REITs among middle-income group in Klang Valley. In line with above, this study also seeks to study types of REITs available in Malaysia Besides, these study also to discuss about the way to introduce REITs in Malaysia in order to make REITs the favourable investment medium. Scope of Study: In overall, this research is confined to REITs in Malaysia which in an attractive investment nowadays. This study covers the types of REITs available in Malaysia and also people awareness about it. Other than that, this study is carried out to know what is the way of promoting REITs that people prefer. Methodology: This research would be done in an analytic study manner. The information that is needed to examine the issue will be obtained from primary and secondary data. The primary data refers to the first-hand data, which required data collection that is the distribution of questionnaire. The questionnaire will be distributed to certain amount of Malaysian with a different background. Secondary data or desk research refers to the data that already exist, mostly in quantitative form. In this study, most of the secondary data were obtained from; Academic research on REITs and journals. Website of REITs Company. Other dissertations. Data analysis will be done through frequency analysis. Frequency analysis is used to determine the frequency of certain choice for the questions. Most frequent answer will be given the priority. The results will be shows in diagram or graph to show the popularity answers. Significance: It is hoped that the anticipated outcome of this study can benefit the: The REITs Company where they will more alert toward the middle-income people awareness of REITs and the way people wanted REITs to be promoted. The interested investor and also the student, as a reference on the information that relates to REITs. Organisation of Research: This study consists of five chapters where the first chapter provides a brief concept and view on the topic that will be studied in this research. It consists of introduction, objective of study, scope of study, significance on research and also organisation of research. Chapter two discuss on literature review about REITs in Malaysia. The discussion will be on definition of REITs, the types of REITs in Malaysia and also the list of REITs companies. Other than that, the discussion also will describe on how REITs work and also the benefit of REITs. The definition on middle-income people and background of Klang Valley also will briefly explain. The next chapter, chapter three is on methodology. In this chapter, methods used to construct the questionnaires will be outlined. This chapter will highlight how the administration of the questionnaire which will conduct to respondents. Chapter four is the finding and analysis of data obtained through questionnaires survey. The analysis of data obtained will determine the level of awareness towards REITs among middle-income people in Klang Valley. Through the survey, the preference way of promoting REITs also can be discover. The last chapter, which is chapter five, is the conclusion and limitation of this study. The best suggestion of promoting REITs also will be stated in this chapter. The weaknesses and strengths of the study may be included. Some suggestions for further study will also be included in this study. In the next chapter, a review of related information about REITs will be explained. The explanation will cover definition, types, how REITs work, REITs companies in Malaysia, the legislation of REITs Islamic REITs and also the future prospect of REITs. Chapter 2: Literature Review: LITERATURE REVIEW: REITs which stand for Real Estate Investment Trust is an investment that relates to properties. Trust fund has been introducing in this country since 1986, but REITS; a part of trust fund is a new medium investment only famous around few years back. REITs is an investment vehicle for investors to invest in large-scale income producing real estate. With the concept like unit trust, this investment gathers pool of money from all sizes of investors. REIT based companies will invest, manage and distribute rental as dividend back to the investors by yearly basis or depends on the agreement that have been signed before.REITs is a liquidity investment which It is being trade in Bursa Kuala Lumpur with ease of buy and sells back like a normal equity. As the years flow, REITs is not new to the world especially in many other developed countries. REITs usually targets for a long term investor with moderate risk such as insurance companies, unit trust funds and even individual investors. REITs invest in a variety of real estate properties such as office buildings, shopping malls, warehouses, apartments and hotels. The investor also has the added advantages of holding a liquid asset in the form of shares that can be sold on the market unlike the real estate itself which is illiquid. Investing in REITs provides the investor with dividend income and also allows them to own a real estate portfolio rather than just a single building. This chapter then will briefly explain about Klang Valley, middle-income group, history of REITs in Malaysia, types of REITs, how REITs work, and REITs companies and also about the legislation of REITs. Klang Valley: My research focus on awareness towards REITs among middle-income people in Klang Valley, Malaysia. Malaysia is located in Southeastern Asia, peninsula bordering Thailand and northern one-third of the island of Borneo, bordering Indonesia, Brunei, and South China Sea, south of Vietnam. It is comprised of two separate geographical regions which are Malay Peninsular and the states of Sabah and Sarawak. Klang valley is an area in Malaysia comprising Kulala Lumpur and its suburbs, and adjoining cities and towns in the state of Selangor. Tis valley is named after Klang River, the principal river that flows through it which is closely linked to the early development of the area as a cluster of tin mining towns in the late 19th century. Development of Klang Valley took place largely in the area between Gombak and Port Klang but the urban areas surrounding Kuala Lumpur have since growth towards the border of Negeri Sembilan and the north towards Rawang. Klang Valley has a total population around 7.6 million people in 2009 and estimated to growth due to the people migrate from other states towards Klang Valley and also a population growth. Klang Valley is the heartland of Malaysias industry and commerce. Regions of Klang Valley and their corresponding local authority: Federal Territory of Kuala Lumpur. Kuala Lumpur City Hall. Federal Territory of Putrajaya. Putrajaya Corporation. Selangor district of Petaling. Shah Alam City Council. Petaling Jaya City Council. Subang Jaya Municipal Council. Selangor District of Klang. Klang Municipal Council. Selangor district of Gombak. Selayang Municipal Council. Selangor district of Hulu Langat. Ampang Jaya Municipal Council. Kajang Municipal Council. Selangor district of Sepang. Sepang Municipal Council. For further information about the location of Klang Valley. Middle-Income Group: There are three classes of income in Malaysia. These classes indicate Malaysian monthly income and also their household. The three (3) classes including low-income people, middle-income people, and high-income people. Below is the income groups in Malaysia. Middle-class income is define as the socioeconomic class between the working class and the upper class, usually including professionals, highly skilled labourers, and lower and middle management.( Source: http://www.answers.com/topic/middle-class). Background of REITs in Malaysia: Malaysia is the first country in Asia to introduce property trusts. In 1989, the first trust was listed in Kuala Lumpur Stock Exchange. The regulatory framework of property trust, approved by the Bank Negara in 1986, was restrictive and provided no tax transparency. But there still an issues that arise such as lack of focus on property management and also conflict of interest which led the property trust to be private. In 1995, a revision of the property trust guidelines were done but it fail to give a good impact to investors and also to market. Then, in February 2005, there is another revision with led the property trust be renamed as Real Property Investment Trust (REITs). The major income of REITs is from rental and the profit is required to distribute to holders or investors in dividend. The guidelines also been revised to provide a good regulation for a REITs in this country. Malaysia was the first Islamic country to certify REITs and also the first country in Asia where REITs conquer agriculture land. A plantation REITs also much like conventional REITs. It will be the crops planted on the land and the success will depend on the sizes of assets injected to the trust. The potential plantation to be expected is oil palm because of the high demand on the production. Other than that, palm oil also undergoing the research to become a biodiesel product and in become more attractive after the increasing in oil prices. The plantation land or agriculture land also can be developed to residential area or commercial area due to the development of town. Types of REITs: REITs has several types with drives to a different prospect of REITs but it still relates to property as a main core to invest on. In others country they apply a lot of types of REITs. But in Malaysia we only apply three types of REITs. There are Equity REITs, Mortgage REITs and also Hybrid REITs. Equity REITs: Equity REITs is a publicly traded company that, as its principal business, buys, manages, renovates, maintains and occasionally sells real properties. (block,2006).Properties are usually purchased to invest is an income-producing real estate such as hotels, shopping malls and also apartment buildings. This type of REITs is different from others because REITs usually companies will purchase or develop the property and operate it as a part of their portfolio rather than sell it. Besides, Equity REITs is a long term investment because they earn dividend from rental. In additional, this type will let investors not only just to choose the type of property they want to invest in, but also the location of the properties. (Block, 2006). It means that the investors can make a choice on their own with the advice of the agent or REITs managers in order to make a good investment and to gain a good dividend. Mortgage REITs: A mortgage REITs is a REITs that focus on makes on holds loans to the property developers. (All about Investing: The Easy Way to Get Started by Esme Faerber: page 89). Rather than investing in properties,this type of REITs sometime loans money for purchase existing mortgages. The revenue earns is from the interest charge on the mortgage loans and pass on shareholders. Mortgage REITs is more sensitive compare than other REITs because of the prices of mortgage REITs react opposite from interest rates. It is good REITs to invest if there is a rumour of dropping in interest rates. Hybrid REITs: Hybrids combine the investing principles of mortgage and equity REITs, diversifying between making mortgage loans and direct property ownership. They earn both rental and interest income. (http://www.allaboutskyscrapers.com/REIT_types.htm). They buy, develop, and manage the properties and provide financing through mortgage loans. Most hybrid REITs have a stronger position in their financing account. The most famous industry that using hybrid REITs is private healthcare industries, where the financial company will provide mortgage to healthcare company, hospital management and also to buy properties such as land and building and also medical appliances. Equity REITs seem to be the most popular REITs recently. Between three types of REITs, mortgage REITs is the most risky which in involve in lend money to developers. Every type of REITs has different level of risk so investors should study and evaluate which REITs they want to invest in. The wise result will make the investors smile widely because of the big fish. Chan, Erickson and Wang (2003) find that equity REITs pay out more dividends than mortgage REITs. The reason is that equity REITs offer the potential for capital gains in addition to current income. Structure of REITs: Source: Practice and Prospect of Islamic Real Estate Investment (I-REITs)in Malaysian Islamic Capital Market by Dr. Asyraf Wajdi Dusuki. Manager: A man or woman who controls an organization or a part of organization. Property manager: A man or woman who controls the management and maintenance of the building. He or she will ensure the building in the good condition which safe to fit tenants in. Tenant: A person who pays money (rent) to the owner of a room, flat, building or piece of land so that he or she can live in it or use it. Trustee: A person who looks after money or property for somebody else. Unit holder: An owner of one or more units in a mutual fund. How REITs Works: Its true that investment most favourable today will be the one most prized tomorrow, and then real estate is definitely due for love-in. Investing in income-generating real estate can be a great way to increase your net worth. But for many people, investing in real estate, particularly commercial real estate is simply out of their budgets. REITs is a saviour to people when with REITs people can invest in small amount but with a large-scale of real estate group. REITs which means real estate investment trust essentially the organization that own and manage a portfolio of real estate and mortgages such as shopping malls, hotels, apartment buildings and also agriculture lands. REITs does not mean for a restrict group, but this share can be own buy anyone. REITs offer people the ownership of the property without any risks because all of the problems will be covered by agents or REITs managers. There are advantages when investing in REITs because of the liquidity and diversity. It is unlike actual real estate, where REITs can be easily and quickly sold. People will face less financial risk because of investing in a portfolio rather than single building because of the problems such as irresponsible tenants, economy impact to the property rental market and market value, and so on. REITs has a board of directors that elected by the shareholders. The shareholders have a power to eliminate any board of directors that does not fulfil their requirement. The board of directors usually came from a people with an investment background especially in REITs field. They will assist a REITs managers; person who will manages the operation of the property. The power to choose what types of real estate to invest in is on board of directors. REITs investment for investors starts when they invest certain amount of money in a REITs fund. The amount of money depends on the REITs managers who will arrange the investment on the properties that have been agreed by board of director. The investors can have an eyes and ideas on what types of the properties and the location. They have a choice whether want to agree or not with the properties. If they agree with the properties, they can sign a document to clarify the investment. Then the properties will be rent out or mortgage in order to earn money. REITs has a several method to measuring the profit but the suitable one called Funds From Operation (FFO). The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as: Net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. Source: http://home.howstuffworks.com/real-estate/reit2.htm. The REITs industry use FFO to measure performance and to establish dividend payouts. Kallberg et al (2003) reported that REITs consistently pay out about 85% of FFO as dividends. The payouts from REITs are consistently higher than other types of equities. In other words, FFO is defined as the net income, excluding gains and losses from debt restructuring and property sales, adding back property depreciation and amortisation, and after adjustments for unconsolidated partnership and joint ventures. The net income is referring to rent and sales computed according to Generally Accepted Accounting Principles (GAAP). However FFO is not a necessary way to determine performance and dividend payouts. Not all REITs calculate FFO according to the NAREIT definition because some of the important items are missing from the formula such as maintenance, repairs and also expenses. Thus, investors must always read a companys report and any others supplemental information in order to get an exact FFO. REITs Companies: In Malaysia, there are several amount of business runs base on REITs. These companies have been success to put property market in this country in a good condition. These companies also expend the real estate industry with so much new types of building. Below is briefly an explanation about ten (10) well known REITs companies. Al-Aqar KPJ: Al-Aqar KPJ REITs established on 28 June 2006 is a Malaysian-based unit trust. The objective of this investment is to own and invest in Syariah-compliant real estate and it has been acceptable to invest in properties which compromise Ampang Puteri Specialist Hospital Building, Damansara Specialist Hospital Building, Johor Specialist Hospital Building, Ipoh Specialist Hospital Building, Puteri Specialist Hospital Building and Selangor Medical Centre Building. There are nine (9) others hospital under KPJ that potential to be injected under Al-Aqar KPJ such as Tawakal Hospital, Seremban Specialist Hospital and also Penawar Hospital. Amanah Raya: Amanah Raya REITs is subsidiary of Amanah Raya Berhad and wholly-owned by Minester of Fianace Incorporated. Amanah Raya REITs listed on Bursa Securities Malaysia Berhad on 26 February 2007 with a total asset siza of RM337 million. Today, Amanah Raya REITs has a diversification portfolio comprising hospitality, education and also commercial properties such as SEGI College, Holiday Villa Langkawi, Holiday Villa Alor Star, Wisma Amanah Raya Berhad, Wisma UEP, Permanis Factory and also Blocks AB South City Plaza. AmFirst: Established on 28 September 2006 under the Trust Deed, AmFIRST then entered into between Am ARA REIT Managers and Mayban Trustee Berhad. AmFIRST managed by Am ARA REIT Managers Sdn Bhd. Three months then, Am FIRST was listing on the Main Board of the Bursa Saham Malaysia Berhad on 21 December 2006. It shows an innovative makeover of AmFIRST, the first listed property trust fund in Malaysia. This REITS company is the largest Malaysia-based commercial REITs with exposure to the office, retail and hotel sector in Klang Valley area. Currently manages six office building, where three are located within the Kuala Lumpur Golden Triangle; AmBank Group Leadership Centre, AmBank Group Building, and also AmBank Tower, and one each in Petaling Jaya, Kelana Jaya, and Subang Jaya. AmFIRST also manages four-star hotel and a retail mall located in Subang Jaya, The Summit Subang, USJ. Atrium: Atrium REITs is a first logistic property approved in Malaysia. The objective of Atrium REITs is to invest in portfolio in order to reward investors or unit holders a maximise income and to acquire a high quality assets to achieve a long-term growth in a net income for distribution of dividend. This REITs then was first approved by the Securities Commission in October 2006 and then listed on Main Board of Bursa Saham Malaysia Berhad in April 2007. Atrium REITs has an 809, 668 sq ft (75, 220 sq mt) approved portfolio of investment properties which comprises of four freehold industrial properties currently leased to reputable and strong financially tenants. All of their properties located in Kuala Lumpur and Selangor, the fastest growing area in this country. Axis: Axis REITs is the first REITs list on Bursa Malaysia Securities Berhad on 3 August 2005. On 11 December 2008, Axis launched Islamic REITs which is the first in Malaysia. Axis own diversified portfolio of properties especially in Klang Valley, Kedah and Johor comprising of commercial offices, light industial building and also warehouse. Buildings that portray an image of Axis are Axis Tower and also Crystal Plaza. Both if this building are next door to each other and located along the busiest road, Federal Highway. These buildings are well maintain and easier accessibility. Other Axis properties are Delfi Cocoa in and BMW Asia Technology Centre PTP in Johor and also Giant Hypermarket in Sungai Petani, Kedah. Hektar: Hektar REITs is a Malaysias first retail-focused REITs. Listed on the Main Board of Bursa Saham Malaysia Securities on 4 December 2006, Hektar portfolio currently consists of shopping centres in Subang Jaya, Melaka and Muar. As of 31 December 2009, all of these properties was value of RM720 million. Hektar REITs is managed by Hektar Asset Management Sdn Bhd which a part of Hektar Group. QCT: QCT (Quill Capita Trust) REITs was listed in Main Board of Bursa Malaysia Securities Berhad on 8 January 2007. QCT is managed by Quill Capita Management Sdn Bhd. QCT main investment in REITs is a commercial properties. Until 31 December 2009, QCT has ten (10) properties with 1,288,149 sq ft net lettable area valued RM 788.4 million. The properties including part of Plaza Mont Kiara, Quill buildings, Wisma Technip and also tesco building in Jelutong, Penang. Starhill: This REITs was established on 18 November 2005 by a trust deed entered between Pintar Projek Sdn Bhd and Mayban Trustee and listed on Main Market of Bursa Malaysia Securities Berhad on 16 December 2005. Starhill REITs is focusing on retail and hotel properties investment. As for February 2010, Starhill REITs is the largest Malaysias real estate investment. This REITs has four (4) portfolio located in the heart of Kualu Lumpur; Starhill Gallery, JW Marriot Hotel, Lot 10 Shopping Centre and also The Residence at The Ritz-Carlton. Tower: Tower REITs is established on 21 February 2006. The objective of this company is to invest primarily in a portfolio of quality office building and commercial properties to provide regular and stable distributions of dividend to unit holders or investors and also to achieve a medium-term growth in the net income. In order to achieve their objective, Tower REITs implement several key strategies such as optimisation of capital structure, active asset management and also acquisition growth. The portfolio of this REITs company consists of three buildings located in Kuala Lumpur. First is Menara HLA, the 32-storeys office tower located in the heart of Kuala Lumpur Golden Triangle. With a net lettable area of 396, 820 sq ft, it has a blue chip tennats such as Hong Leong Assurance Berhad. Next, HP Towers comprises of two blocks of 9-storeys and 21-storeys and 3 levels of connecting podium. Situated in Bukit Damansara, this towers has a net lettable area of 350, 056 sq ft with a Hewlett-Packard (M) Sdn Bhd as a tenants. Lastly, Menara ING situated in Jalan Raja Chulan, the main central business district of Kuala Lumpur. Tower REITs only own 78.3% of the total share unit of the building and 100% leased out to ING Insurance Bhd. UOA: nbsp  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  UOA REITs was established on 28 November 2005 and listed on the Main Board of Bursa Saham Malaysia Securities Berhad two days later. UOA REITs is focusing on commercial properties. With a diversification portfolio of properties, UOA manages to maintain four building in Kuala Lumpur area. First is UOA Centre, a stylish 33-storeys office building situated between Jalan Pinang and Jalan Perak. Tenants of the building include financial services companies and also trading companies. Next is UOA II which located near to UOA Centre. With a contemporary designed, this 39-storeys building has a mixture of tenants from government agencies, multinationals insurance companies and law firms. Other than that, a 13-storeys office building located in Jalan Dungun, Damansara Heights name UOA Damansara is one of the UOA properties. Law firms, international associations and trading companies are a part of tenants for this building. Last is UOA Pantai located strategically in front of Menara TM. This 7-storeys of building consists of tenants include multinational corporations and so on. Regulation of REITs: In Malaysia, REITs govern by a statutory body name Security Commission Malaysia (SC). SC was established on 1 March 1993 under the Securities Commission Act 1993 and it is a financial regulatory agency. It is the central authority to regulate and develop the capital market. SC has big responsibilities in order to ensure the safety of the investors under the Act includes: Registering authority for prospectuses of corporations other than unlisted recreational clubs. Approving authority for corporate bond issues. Regulating all matters relating to securities and future contracts. Regulating the take-over and mergers of companies. Regulating all matters relating to unit trust schemes. Licensing and supervising all licensed persons. Supervising exchanges, clearing houses and central depositories. Encouraging self-regulation. Ensuring proper conduct of market institutions and licensed persons. Source:http://www.sc.com.my/main.asp?pageid=350menuid=376newsid=linkid=type= New Islamic REITs: The introduction of Islamic REITs is viewed as one of the most significant initiatives to broaden and deepen the product base of Islamic capital market in Malaysia. It can also help to enhance competitiveness of Malaysian Islamic capital market by attracting global Islamic investors who wish to diversify their investment portfolio which are Shariah compliant. Islamic REITs regulation was outlined in the Guidelines for Islamic REITs issued on 21st November 2005 by Securities Commission. (Securities Commission,2005). The Guidelines were introduced to facilitate the development of new Islamic capital market products, making Malaysia the first jurisdiction in the global Islamic financial sector to issue such guidelines and setting a global benchmark for the development of Islamic REITs. The Guidelines essentially stipulate Shariah compliance criteria to guide management companies in their activities relating to an Islamic REITs, including the types of Shariah permissible and non-permissible rental and investment activities for such fund. Islam prohibited Muslim from investing in properties whose tenants sell alcohol, pork or allo

Fractal Geometry :: essays papers

Fractal Geometry The world of mathematics usually tends to be thought of as abstract. Complex and imaginary numbers, real numbers, logarithms, functions, some tangible and others imperceivable. But these abstract numbers, simply symbols that conjure an image, a quantity, in our mind, and complex equations, take on a new meaning with fractals - a concrete one. Fractals go from being very simple equations on a piece of paper to colorful, extraordinary images, and most of all, offer an explanation to things. The importance of fractal geometry is that it provides an answer, a comprehension, to nature, the world, and the universe. Fractals occur in swirls of scum on the surface of moving water, the jagged edges of mountains, ferns, tree trunks, and canyons. They can be used to model the growth of cities, detail medical procedures and parts of the human body, create amazing computer graphics, and compress digital images. Fractals are about us, and our existence, and they are present in every mathematical law that governs the universe. Thus, fractal geometry can be applied to a diverse palette of subjects in life, and science - the physical, the abstract, and the natural. We were all astounded by the sudden revelation that the output of a very simple, two-line generating formula does not have to be a dry and cold abstraction. When the output was what is now called a fractal, no one called it artificial... Fractals suddenly broadened the realm in which understanding can be based on a plain physical basis. (McGuire, Foreword by Benoit Mandelbrot) A fractal is a geometric shape that is complex and detailed at every level of magnification, as well as self-similar. Self-similarity is something looking the same over all ranges of scale, meaning a small portion of a fractal can be viewed as a microcosm of the larger fractal. One of the simplest examples of a fractal is the snowflake. It is constructed by taking an equilateral triangle, and after many iterations of adding smaller triangles to increasingly smaller sizes, resulting in a "snowflake" pattern, sometimes called the von Koch snowflake. The theoretical result of multiple iterations is the creation of a finite area with an infinite perimeter, meaning the dimension is incomprehensible. Fractals, before that word was coined, were simply considered above mathematical understanding, until experiments were done in the 1970's by Benoit Mandelbrot, the "father of fractal geometry". Mandelbrot developed a method that treated fractals as a part of standard Euclidean geometry, with the dimension of a fractal being an exponent. Fractals pack an infinity into "a grain of sand". This infinity appears when one tries to measure them.

Misconceptions About Africa

Coming to America Paper In the movie â€Å"Coming to America† we can observe a wide variety of stereotypes, cultural differences, and language barriers throughout the movie. Now whether or not the stereotypes and cultural differences are accurate, it gives us a good idea of how America is difference then most countries around the world. In today’s world when people think of Africa they think of people who may not be as educated as Americans, and possibly people who grew up in the jungle or rainforest. When in fact â€Å"only a small percentage of Africa, along the Guinea Coast, Congo, and in the Zaire River Basin, are rainforests. Most of Africa's forests, like the forests of Europe and North America, have been cut or burned by humans to create farmland. † (MAA) We also witness language barriers come into play in the movie. When the Prince is trying to find a city in America to find his bride he says â€Å"what better place for a queen than Queen’s, New York†. When in all reality Queen’s, New York is known for being to have a relatively high crime rate and high poverty rate in 1988 when the movie was released, which in American culture, would probably not be the best place to find your â€Å"queen† or girlfriend. Cultural differences, language barriers, and stereotypes, come up quite often in the movie. The movie tries to show Americans in a somewhat comedic way how Africa and America have different cultures. The cultural differences in the movie also suggest that it may not be very easy to transition between the two cultures, because American’s and African’s may value different things greater in one country compared to the other. Stereotypes, cultural differences, and language barriers will always be around, but it is up to the people of the world to educate one another, and help them evaluate and understand their differences, which will in turn help the coexistence of nations throughout the world. Citations â€Å"Misconceptions About Africa. †Ã‚  African Studies Center, University of Pennsylvania. Ed. Ali B. Ali-Dinar. Web. 05 Oct. 2010. . (MAA)

JanMar Case Study Case Analysis

The US paint industry is divided into three broad segments: architectural coatings, original equipment manufacturing (OEM) coatings, and special-purpose lacquers. The paint industry is a maturing industry. In 2004, sales were estimated to be slightly over $16billion and an average growth of 1-2% per year. Architectural Paint Coatings Industry The industry estimates that architectural coatings and sundries (brushes, paint removers, thinners, etc. ) created sales of $12 billion in 2004. The architectural paint coatings segment is also considered to be projected between the 1-2% increase per year. The demand level for this segment is reflected by the level of home improvements and redecorating, the sales of new and existing homes, commercial and industrial construction. Competition Competition within this segment has been a result of slow sales growth and new governemtn regulations. The number of competitors has decreased by 40%; however, major competitors with low prices have come into place such as Sherwin-Williams and others who account for 60% of sales within the segment. They market paint under their own names as well as for private retailers. Architectural Sales Breakdown and Consumer Purchase Behavior About 50% of architectural sales are sold under private controlled brands such as Sears and Wal-Mart, 36% of sales are sold in specialty paint stores, and 14% are sold in hardware and lumberyards. There are three types of buyers of architectural paint which account for percent of total sales: â€Å"Do It Yourselfers† who account for 50%, professional painters who account for 25% and contractor/government sales who account for 25%. Home Improvement Research indicated that the â€Å"Do It Yourselfers† have increased the product line carried by retail outlets and spend on average $74. 0 per purchase on architectural paints and $12 on sundries. JanMar Coatings, Inc. Company JanMar, Inc. is a privately held corporation that produces and markets architectural paint under the JanMar brand name. They also sell sundries and operate OEM coatings. The company’s architectural coatings and product sales totaled to b e $12 million and $1. 14 million in net profit before taxes in 2004. Dollar sales have increased at 4% on average for year for the past decade. The company distributes in 200 independent paint sores, lumberyards, and hardware outlets. They service 50 counties in the Dallas Fort Worth Area and Non-Dallas Fort Worth Area. Of their outlet sales, 40% is based in the 11 counties within the Dallas-Fort Worth area while the remaining outlets are in the surrounded non-Dallas Forth Worth area. Of the industry findings, 70% of sales in the Dallas Fort Worth area are to professional painters who account for 25% total sales while 70% of sales in the Non Dallas Fort Worth area are to â€Å"Do it Yourselfers† who account for the 50% of total sales. (See exhibit 1. 1). JanMar Coatings, Inc. Company Current Situation. Competition has accelerated in recent years at the retail level and JanMar Coatings, Inc. is the highest priced paint in their service area. Therefore, JanMar, Inc. is in need of how and where to deploy corporate marketing efforts among the various architectural paint coatings markets in the southwest United States area in a cost effective way to increase market share, revenue, and awareness. Four Proposed Tactical Strategies Given by the Vice Presidents Among the four proposed tactical pans from the different vice presidents at JanMar Coatings, Inc. the solution to the problem is the Vice President of Sales strategy of increasing the sales force and here’s why: 1) Increasing the advertising budget through television could have a positive effect because of the current 25% awareness to consumers who purchase paint. However, research shows that consumers choose a store location before choosing the brand and 70% of the consumers reached through advertis ing are not buying paint. The advertising budget is already 3% of sales, so in 2004, the advertising budget was $360,000 which is reasonable for selling paint. To efficiently create awareness, JanMar would need to produce a cooperate ad with a retail outlet to get the buyer in the store. They would also need to increase sales by 8. 3% or $1 million to cover the cost of increase in advertising. (See appendix 1. 2). 2) To make a price cut of 20% would be unreasonable considering the costs of JanMar are unlikely to go down. Cutting price by 20% with the same variable costs would bring their contribution margin down to 19%. To get the same net contribution of $4. million using their current new contribution margin, they will have to generate $22,105,264. 16 in sales which is far above their past sales of $12 million and creating more volume to increase sales at this lower cost is not feasible which just one manufacturer in the Dallas Fort Worth area. (exhibit 1. 3) JanMar needs to focus not on cutting prices but positioning themselves differently from competitors as a superior quality and service company since they are a privately owned, focuse d just in the market of southwest United States. ) Increasing the sales force could have a positive effect if the sales representative is assigned to the non Dallas Fort Worth area since account penetration there is only 16% and focusing on the â€Å"Do it Yourselfers† because of the amount of sales they accumulate in that area. The amount of sales revenue needed to cover the cost of the one added sales representative of $60,000 base salary is $171,428. (See Appendix 1. 4) This amount of sales needed to incur this cost will be easy to achieve since the sales representative will be focusing on sales in the new area. ) JanMar has continuously controlled their 35% margin and costs even with added research and development. However, there are more competitors on the rise at big retail outlets such as Sears and Wal-Mart that the â€Å"Do it Yourselfers† will fall for if not guided properly. Therefore even though JanMar will be profitable if they keep everything the same as how it is with controlling costs and guarding the mar gin, they still cannot predict the future and there is growth within the marketing of 1-2%. Recommendation The problem that lies at hand is that there have only been five added accounts in the past five years. The account penetration in the Non-Dallas Forth Worth area is only 16%. With an added sales representative reaching out to the Non-Dallas Forth Worth area where half the sales and most the dealers already exist, they can focus solely on the retail account and â€Å"Do it Yourselfers† who contribute $6 billion to the total market sales per year of architectural products. (Appendix 1. 1) The sales representative will focus on the â€Å"Do it Yourselfers† in the non-Dallas Forth Worth area since they accumulate 70% of sales in that area as it is. We do not want to focus on the professional painters since 70% of our sales already comes from them in the Dallas Forth Worth area, and professional painters will chose our brand as it is because of the quality and knowledge and service of our representatives. We have to focus on reaching out to the â€Å"Do it Yourselfers† through retail accounts which is what the new sales representative will do. â€Å"Do It Yourselfers† 1) pick their project and product, 2) they gather information, 3) decide on the store, and 4) decide on the product they buy. So through a four step decision process of a â€Å"Do It Yourselfer† is where the sales representative will come into the picture to push them along to make the decision of choosing JanMar’s brand. Even if the sales representative made no new sales (which would not be the case if hired properly) and only was paid his salary, JanMar, Inc. still would still make $1,080,000 net profit before taxes which is smarter than implementing an added advertisement budget strategy, or cutting the price by 20%, or staying the same. It is better to have more people working in order to reach out to consumers and sell the product and brand. Sales representatives can truly connect to the â€Å"Do it Yourselfers† through their knowledge and passion; rather than just focusing solely on a mass advertising plan that wastes money reaching out to people not even needing paints or cutting the costs so low that it takes away from the superior quality aspect. Therefore, I suggest that you hire a new sales representative because this option will be the most cost effective way to increase market share, revenue, and awareness in the architectural paint coatings marketing in the Southwest United States.

buy custom Rise of Capitalism essay

buy custom Rise of Capitalism essay Capitalism is a social and an economic system in which the land and capital, means of production or non-labor factors of production are owned by individuals (privately owned). This means that the labor, goods and other resources are traded in the market with the aim of making profit. The profit is then distributed to owners or even invested in industries and other technologies. In other words, this is a system where factors that make money, like the communications, factories, transportation system and land are owned by private traders and corporations with the aim of making profit. Private means of production, manufacturing of goods and services with the aim of making profit, wages and prices are the elements of capitalism. The economic elements of capitalism include the items like commodities which may be consumer or capital goods, money, labor power, cost of production, pricing and means of production. This usually leads to small group of people having a lot of wealth and big corpo rations hence creating an economic inequality between poor and the rich (John, 2000). Capitalism stresses on the individual economy enterprise freedom. Capitalism has been there from time of industrial revolution where it existed in limited forms in all civilizations economies. In Britain, merchants, industrialist and bankers started displacing ladowners due social, economic and political importance. This however was abused capitalism, government needed to take action so as to curb this; this was like the case of the slavery in United States and Britain and the apartheid in South Africa. This gave rise to monopolist cartels and the frauds in finance sector. Capitalism made the British to be faced with a lot of crises in many sectors like labor and social welfare. Due to unchecked situation, the Britain workers continued to struggle and demanded for more freedom and wages in the employment sectors like industries (Mark, Joel, Christopher Stephen, 2008). By the end of 19th century in United States, direction and the control of large areas of industries came into hands of financiers, trust and also holding companies. By this time, many companies or oligopolistic firms were getting or earning supernormal profits in their operations. Some of the major characteristics of capitalism in this era included the establishment of monopolies or large industrial cartels, management and the ownership of industries by financiers, changed process of production to profit making business; development of banking system that was complex and holding of corporate capital through the ownership of stocks. In late 19th century, Britain saw the industrial capitalism likee supernatural hands which had powers to make a country succeed. This was mainly expressed when Britain became first nation to be industrialized. The economic and political development in the Britain was seen to have been driven by the British capitalism. British capitalism was seen as a model which needed to be followed by other countries for them to be able to develop politically and economically. In 200 years since American constitution was written, there were some striking American capitalism attributes which included the organized improvement of North American continent natural resources; the diversification that was deliberate of national economy from agriculture into mining, services and manufacturing; and public policy effectiveness in promoting growth. The tension between the public and private interest was rising in United States mainly due to increased interest by the individuals to get everything to their own or rather maximizing on their profits. Individuals were putting the interest of their own as first priority rather than the welfare of whole society. Markets were supposed to be guided by a clear system which could not favor the interest of few individuals. Market was supposed to be guided by policies which were to look and serve the interest of the public and not giving few individuals a chance of making abnormal profits (Rubinstein, 1994). Buy custom Rise of Capitalism essay

Ethical Issues in Supply Chain

Ethical Issues in Supply Chain Introduction Supply Chain Management (SCM) is the integration of critical business operations in order to efficiently provide products and services to customers (Tariq Rehman, 2012).Advertising We will write a custom essay sample on Ethical Issues in Supply Chain specifically for you for only $16.05 $11/page Learn More Relationships along the supply chain generally tend to show how collaborating companies come together to offer reliable services that enable them retain their customers. Zaratà ©, Belaud and Camilleri (2008), defined a supply chain as a set of three or more companies linked together by the flow of products, finance, services, and information in an ideally seamless web. In the supply chain, companies move things, make things, store things, and throw things away. It is a part of an organization’s strategy to stay ahead of its competitors. Supply chain management thus has to do with the integration of both ethical and operational practic es of a company and is a proven way to reduce the chances of a company being seen to be irresponsible. This paper addresses the general nature of a supply chain as a human artifact with the potential for greatness and for failure like any other. The exact nature of the possible failures and successes are discussed, and the ethical issues are highlighted with regard to finance, research and development, and supplier/vendor management. E-commerce and Supply Chain Today, supply chain is widely recognized as a means of shortening cycle time, reducing inventories, decreasing logistic costs, and streamlining communication processes across a network. It is a mechanism through which diverse organizations are able to form alliances to meet a new form of Internet oriented consumer demand. For companies intending to take their supply chain to positions of market leadership, the addition of e-commerce services is a distinct advantage (Poirier Bauer, 2001).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More For many firms, e-commerce provides a strong foundation on which the supply chain can be built and strengthened. The availability of the Internet infrastructure and accompanying services present an incredible opportunity for companies to form supply chain networks that are smooth and effective. According to Ferrell and Hartline (2010), the goal of a supply chain is to facilitate the flow of goods or services across a network. This is, however, best achieved by ensuring that there is a smooth flow of information. Without an effective way of exchanging information, supply chain performance will be affected. E-commerce is thus an effective means of integrating customers and suppliers via the Web. Ethical Issues in Supply Chain According to Ferrell and Hartline (2010), true supply chain integration requires a fundamental change in how channel members work together. Among th ese changes is a move from a win-lose competitive attitude to a win-win collaborative approach in which there is a common realization that all firms in the supply chain must prosper. Rather than selling to the next level in the chain, channel members focus on selling products through the channel, to a satisfied customer. Information flows are meant to move from guarded secrecy to open, honest and frequent communications (Ferrell Hartline, 2010). In doing this, however, there are many ethical issues that must be addressed in order to satisfy the expectations of supply chain members. Generally, ethical questions center on whether actions are right or wrong, good or bad, bringing good or harm, are praise worthy or worthy of blame.Advertising We will write a custom essay sample on Ethical Issues in Supply Chain specifically for you for only $16.05 $11/page Learn More Achieving a high degree of channel integration is a challenging task and the reasons for this are almost easily noticeable. In the first place, each firm has its own mission, goals, objectives, and strategies that are unique to it. Secondly, the recognition and acceptance of mutual interdependence within the supply chain goes against our natural self interest seeking tendencies (Ferrell Hartline, 2010). The following subsections look at some of these issues classified into three broad categories. Under each category, ethical issues are discussed with regard to the topics of finance, research and development, and supplier/vendor management. Regulatory Issues Financially, adherence to accounting rules and regulations is an important regulatory issue. It is wrong for any supply chain member to indulge in any form of corruption that may affect other supply chain members. Supply chain management professionals must therefore take it upon themselves to alert senior management of any suspicious activities that could affect supply chain performance. As far as research and developmen t is concerned, all the supply chain members have an obligation to ensure that relevant regulatory guidelines are followed strictly. Although compliance with product related regulations such as the EU directive on restriction of hazardous substances is primarily the responsibility of manufacturing departments, supply chain professionals must ensure that their research and development activities do not go against such directives.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is also necessary for supply chain professionals to be aware of the main regulatory issues raised by the existing diversity of regulations in different countries. The geographic range of governmental regulation extends from planning commissions via regional, state, and national governments to global and intergovernmental organizations such as the United Nations or European Union. A recent example of an international, intergovernmental agreement of relevance to supply chains is the Kyoto Protocol which entered into force in 2005. The protocol established binding requirements for the reduction of certain green house gas emissions at national, and consequently, at company level. With regard to supplier/vendor management, it is the responsibility of each member of the supply chain to ensure that all regulatory issues are observed. In most countries, regulatory issues have to do with carriage and handling of goods, employment and working conditions, road safety, drivers’ hours, health and safety, pollution prevention, environmental protection, noise protection and many others. Besides these complexities, there is also a growing variety of regulatory instruments directly or indirectly related to logistics and transport. These include laws, directives, technical specifications, bans, and rules. To guarantee that the supply chain relationship operates smoothly, all members of the chain must be accountable. Every member should seek to protect the interests of other supply chain members and any company that refuses to comply with the regulatory requirements should be warned. Legal Issues Financially, any disagreements that end up in the courts will lead to huge financial loses to the involved parties. Such misunderstandings eventually damage the reputation of the affected supply chain partners in the eyes of the public. In most cases, small firms in the supply chain are made to suffer if the big firms decide to make nasty decisions (Zaratà © et al, 2008). Con sider the case of a manufacturer who operates through a dealer network. If the manufacturer chooses to distribute through its own factory outlets in addition to the dealer network, a number of ethical issues with financial implications may arise. The dealer may, for example, start distributing products from other firms in addition, switch completely to another manufacturer, move to court in case the involved parties had a contract signed and there is proof that the other party has not honored their part of the deal. This is certainly not inspiring and, depending on the dealer’s power in the market, the company may have a reason to be worry as the dealer may decide to respond in a way that may harm the company. With their meager resources, small firms may not be in a position to engage in lengthy legal tussles. Any involvement by such firms in legal wars will only serve to create financial problems. Under research and development, all supply chain members must be ready to abid e by the agreed upon rules. Any research and development activities must be undertaken in line with the existing legal requirements. Supply chain professionals must be familiar with legal requirements in different geographical areas so as to ensure that any research done does not put the supply chain members at risk. A common error is the lack of respect for intellectual property rights. This is a crime that if discovered could prompt the offended party to open a legal suit against the offending supply chain member. It is therefore essential for all supply chain members to respect and protect intellectual property rights. When it comes to supplier/vendor management, all supply chain members must do their best to protect any private information linked to a particular chain partner. In most situations, leakage of private information easily creates an environment of mistrust and this can affect the performance of the supply chain. Although there are cases where it is common for private information to be shared among members of the supply chain, including those who are competitors of the firm that gave the information, this may sometimes be taken wrongly. Therefore, it is important for supply chain members to know when it is in order to share private information and when doing so will constitute a serious criminal offence that could see the end of the supply chain relationship and give rise to a civil law suit (Zaratà © et al, 2008). Ethical Issues For most firms, a reduction in the number of employees is an important cost cutting element. There are, however, ethical and unethical ways of going about the downsizing task. The less ethical way is an abrupt shutdown of a facility without notice (Neef, 2004). If not handled ethically, this can lead to a damaged reputation for the company. As an example, Caterpillar has never recovered from the local loss of reputation it incurred in the United Kingdom from its abrupt closure of a factory. It is important to treat peo ple as an end in themselves and never just as a means to an end (Zaratà © et al, 2008). A firm that understands the art of dealing with people will seek to remove them by redeployment, by voluntary release supported by a payout, by providing counseling and consultancy and, perhaps by providing an office and a phone to assist them in their job search. A reputation for being a good employer in bad times is likely to give firm a great advantage when business picks up again (Neef, 2004). Clearly, the way downsizing is carried out will have severe financial implications on the supply chain members. Unfortunately, a mistake by one member of the supply chain may equally affect other supply chain members. When a downsizing activity is not properly handled by a particular chain member, the smoothness of the supply chain operations may be interfered with and may be left in an unhappy state. This in turn creates a wrong impression of the affected companies in the eyes of the customers and eve ntually, loss of income to the supply chain members. It is therefore important for all supply chain members to take a human approach in handling issues that may eventually interfere with cash flow. Unlike in the past, business organizations are today faced with pressure from various sources including government, consumer forums, and competition to improve upon working conditions in their supply chain. As far as research and development is concerned, supply chain professionals must ensure that all supply chain members undertake their activities in a selfless manner. Every supply chain member must carry out honest research that is directed towards ensuring that the customer receives the best products or services. No avenues should exist for supply chain members to take advantage of and carry out substandard research. At the supplier/vendor management level, a number of issues may arise given that supply chain members possess different resources, skills, and advantages that may lead to varying degrees of authority or power in managing or controlling the activities across a supply chain. Depending on how it is used by a channel member, power can create considerable conflict, or it can make the entire supply chain operate more smoothly and effectively. The different types of power include expert power, reward power, legitimate power, coercive power, and referent power (Rendtorff, 2009). It is unethical for any supply chain member to use power to treat others unfairly. Conclusion In the present business environment, where stiff competition is the order of the day, it is not enough to be an ethical company. The choice of partners is equally an important consideration and must be taken seriously. Generally, the adoption of ethical practices may have positive effects on brand image, perception and loyalty both in customers and in suppliers. Failure to have ethical policies or to apply them in practice exposes members of the supply chain to significant risks with respec t to both brand perception and legal issues. As has been demonstrated in this paper, a number of ethical issues must be considered in a supply chain context. To protect themselves from allegations of social irresponsibility, organizations need to consider very carefully those companies they do business with. Although carrying out a thorough financial audit of potential partners is important, any firm that intends to form a supply chain must be ready to go an extra mile in understanding partners. Focusing only on financial viability of a potential partner may ultimately have an adverse impact on the operations of a supply chain member. To some stakeholders, effective management of the issues in supply chain is one of the indicators of how well a company is ethically run. Supply chain members are therefore left with no option but to work extremely hard in ensuring that an effective and ethically managed supply chain exists. By so doing, the collaborating companies will be able to reta in their loyal customers and attract new customers. References Ferrell, O. C. Hartline, M. (2010). Marketing Strategy. Mason, OH: Cengage Learning. Neef, D. (2004). The Supply Chain Imperative. New York, NY: AMACOM Division of American Management Association. Poirier, C. C. Bauer, M. J. (2001). E-Supply Chain: Using the Internet to Revoltionize Your Business: How Market Leaders Focus Their Entire Organization to Driving Value to Customers. San Francisco, CA: Berrett-Koehler Publishers. Rendtorff, J. D. (2009). Responsibility, Ethics and Legitimacy of Corporations. Copenhagen, Denmark: Copenhagen Business School Press DK. Tariq, M. Rehman, S. (2012). From Suppliers’ Supplier to the Buyers’ Buyers A Relationship Perspective. Interdisciplinary Journal of Contemporary Research in Business, 3 (11): 604 – 610. Zaratà ©, P., Belaud, J. P. Camilleri, G. (2008). Collaborative Decision Making: Perspectives and Challenges. Fairfax, VA: IOS Press, Inc.