Three matters lie ahead for me in the next two months. Matter one is ISM’s 60-person trip to New Delhi, Mumbai and Goa starting this Saturday. I will post daily blogs from India.
Matter two is the ISM EGM coming up on 18 December where we will be seeking approval from the membership to internationalise ISM and to change the name of the PCVS Division to the Property Management, Valuation and Estate Agency Surveying Division (PMVS). This change in name was requested by the Division and Council has agreed. We usually need sufficient proxy votes to have a quorum for constitutional changes, one third of membership, and we are asking all ISM members and fellows to send in their proxy forms. Even if you intend to come on that day, it will be appreciated if you could nonetheless send in the proxy form as this will help us to know, ahead of the EGM, if the EGM will go on, with sufficient quorum. On the day of EGM, when you turn up, the proxy form that you send now will automatically become invalid. Please help the council in this matter as there has been many attempted EGM’s that have been aborted due to lack of quorum.
Matter 3 is to inform you of the preparation of the production of a commerative book in conjunction of the 50th anniversary of ISM. In this connection, all members and fellows are urged to send the special levy of RM75 per member and RM150 per fellow as agreed at the EGM in June 2010 together with your annual subscription for 2010.
My Speech at the 28th ISM Sabah Annual Dinner and Installation on 16 October 2010
The Minister for Resource Development and Information Technology, Yang Amat Berhormat Datuk Dr Yee Moh Chai who is representing the Chief Minister of Sabah Sr Peter Ting, outgoing Chairman of ISM Sabah branch, Yang Bahagia Datuk Sr Kenneth Yen, incoming Chairman of the ISM Sabah branch, Sr Bernard Chia, Organising Chairman, Datuk Roderick Fernandez, State Attorney General of Sabah, Directors and Heads of Government Departments, Chairmen and Presidents of Professional Bodies, Distinguished Guests, Ladies and Gentlemen,
The Institution of Surveyors Malaysia would firstly like to express its utmost gratitude to Datuk Dr Yee Moh Chai, for being with us today to grace this 28th ISM Sabah Branch Annual Dinner and the installation of the new Committee of the Sabah Branch of the Institution of Surveyors Malaysia. We are deeply honoured Yang Amat Berhormat Datuk Dr Yee Moh Chai.
I am also very happy that you have invited me to your 28th Annual Dinner and Installation and I can see that it is well attended and supported. No doubt, this must be due to the very hardworking Sabah ISM Branch Committee under the outgoing Chairman Sr Peter Ting, the Incoming Chairman Yang Bahagia Datuk Sr Kenneth Yen and the Organising Chairman, Sr Bernard Siah.
Ladies and Gentlemen, the Institution of Surveyors Malaysia today stands at the threshold of our 50th Year of formal existence and starting from the 1st of January 2011, and throughout 2011, we will be celebrating our 50th Year Anniversary. We celebrate because we have been given this opportunity as surveyors to serve the Malaysian public with our various surveying skills, namely Land Surveying, Quantity Surveying, Property Consultancy and Valuation Surveying and Building Surveying. At the 50th year, we also recognise that we must re-brand ourselves so that we can serve our primary constituency, the Malaysian public, even better.
For our Anniversary celebrations next year, we have lined up a number of programs and they will be held, apart from Kuala Lumpur, throughout our five branches namely, Penang, Johor, East Coast of Peninsular Malaysia, Sabah and Sarawak. A highlight of the Celebration will be in June when we will be organising the 13th Surveyors Congress which will be held together with the South East Asian Survey Congress which is not only the flagship event of the ASEAN Federation of Land Surveying and Geomatics but for next year, it will encompass all the other disciplines in surveying as well, and like the past few Congresses it will attract largely surveying participants from the whole of East Asia and increasingly from Africa as well. Another major highlight for our 50th Year Celebration is the production of a Commemorative Book and as you may be aware we have been working on this book for the last two years. The book is I would say about 70% ready and we hope to have it completed by December this year and launch it on 18th of December when we will also be having an Extraordinary General Meeting to make some changes to our Constitution and about this I will speak to you shortly.
The membership of ISM is currently 5,678 made up of 375 Fellows, 2,219 Members, 1,476 Graduates, 390 Probationers and 1,218 Students and not only by virtue of numbers but because of our strong professional foundations, we are a fairly robust professional body and I say this in comparison with other similar professional bodies in this rapidly developing East Asian region.
And it is in this connection, that during the last AGM and the Dinner in June this year when I took office, I emphasised that this session's focus will be on the Internationalisation of ISM and the further strengthening of the ISM secretariat. The reason for the internationalisation is to take into account our inherent strength in surveying which is well recognised in the region and all over the world as evidenced by many of our Senior members being involved in leadership positions globally in land surveying, quantity surveying and valuation and property consultancy surveying. Added to this is the winds of liberalisation which are moving the profession towards firstly, liberalisation within ASEAN and then we anticipate, liberalisation on a global basis. Since we are robust enough, we should embrace this liberalisation because it opens up opportunities for us. No doubt we must also protect ourselves and liberalise on a mutually beneficial basis.
It is time for us to set our sights on the development of our profession beyond our shores and I believe this is also in line with government policy. If we can amend our Constitution and create a new class of membership and admit other practising surveyors in the region to become members of ISM, then that would be a major first step towards the internationalisation of the surveying profession from Malaysia. Later, following the initial opening up we could provide surveying education to aspiring surveyors in Asia and this would cement the enlargement of the footprint of ISM in Asia. When I refer to Asia I am particularly referring to the 580 million ASEAN, China, India, Pakistan and the Middle-East. In many of these countries surveying is not well established as a profession when compared to Malaysia and I am sure that from the pool of existing surveyors in these countries they would be keen if we allow them to do so to become members of ISM and not only use the ISM initials after their name, but also avail themselves to information about surveying that they can obtain from our now substantially upgraded portal and our soon to be effected, and substantially further upgraded, Journal. By becoming Associate members of ISM, as we propose it does not mean that they have an automatic right to practise in Malaysia because the licence to practice will be governed by the respective surveying boards i.e. Board of Quantity Surveyors, Board of Land Surveyors, Board of Building Surveyors and the Board of Valuers. But they can become part as our family.
Lastly, we look forward to the launching and implementation of the New Economic Model and the Economic Transformation Plan by the government and we are very grateful to the government for the grant of RM1.2 million given by MIDA to upgrade our services and we believe we have put it to good use in not only capacity building through seminars and training events but also upgraded our secretariat and our website which is now a state of the art portal. This move by the government is also a recognition that professional firms, and in our instance the surveying firms, are building blocks in society and they need to be nurtured and supported to play an effective role in nation building.
With that Ladies and Gentlemen, I thank you very much once again and I hope all of you will continue to have an enjoyable evening.
The EGM will be held on 18 December 2010 and I would like all members and we have in the past had difficulty to have EGM because the quorum -draft notice - hopefully you can sign the proxy forms which I have brought along. Later if you turn up for the event or alternatively if you change the proxy you can always pull it back. The reason is because we do not want a lack of quorum and have the meeting cancelled.
We also look forward to your support to purchase the ISM Diary at RM15 each.
My Speech as Chief Delegate at the Opening Ceremony of the 25th Pan Pacific Congress in Bali Indonesia on 27 September 2010
Distinguished Guests, Chief Delegates, Ladies and Gentlemen,
Two years ago, for the 24th Pan Pacific Congress, held in Seoul, we were in the immediate shadows of the collapse of Lehman Brothers, the watershed event for the Global Financial Crisis. Despite the fact, then, that the crisis was, in fact, coming to a head with the earlier outbreak of the sub prime mortgage crisis in August 2007, in Seoul, we did not place a lot of importance to the Lehman event. The said event in fact was only a week before the 24th Pan Pacific Congress. It was only much later, after the event that the enormity of the event slowly dawned on the world at large.
The United States in particular and the world in general was staring, in 2008, at a possible economic depression greater than the great depression of the 1930’s.
But governments acted quickly and with the extraordinary Keynesian pump priming the crisis was averted. But two years since then the imbalances that existed have still not been corrected and the root causes still elusive. But we know this: Real estate played a complicit role in this crisis (and for many other crisis in the past) and we must be keenly aware of the proximity, of the real estate market and the valuation professionals.
Some may say that is the real estate failure valuers are also to blame. Perhaps, but I think that valuations must be better recognised in the system and given greater importance for the needed taming of the extremities of the real estate cycles. This world leads to a better management and control of financial crises and ensure financial stability.
The Valuation Profession must, today, sieze the moment and march forward and plan a major role in the coming redesign of the global financial architecture.
The Pan Pacific Congress, being one of the foremost valuers event could work hand in hand with valuation organisation around the globe and in this respect perhaps it is timely for the Pan Pacific Congress to anchor a Permanent Secretariat and have a formal organisational structure.
In the meanwhile for this so well organised 25th Pan Pacific Congress, as we have seen so far, in this enchanting island of Bali, I say, as Chief Delegate of Malaysia, many thanks to Indonesia and to the hardworking and very talented organising committee.
The following is the speech made by the President recently in Beijing:
Speech delivered at the China Appraisal Society (CAS) Valuation Standards Advisory Committee Meeting at Beijing on 11 September 2010
(The speech was accompanied by a number of documents that are referred to herein, and included in a bundle)
The recent global financial crisis, like many other crises in the past, was one where real estate played a central, complicit role.The crisis itself brought the United States and the rest of the world to almost a "depression deeper that the Great Depression", as narrated by Andrew Ross Sorkin in his Bestseller “Too Big To Fail”.The United States economy and the economy of the world was saved only because they managed to act boldly, as they did, in a coordinated manner, and supported by many other countries from around the world, by pumping billions in stimulus money into the world economy.
The stimulus money was at best a Keynesian measure as when it is withdrawn or as the flow ebbs, the world economy will still need to adjust to a new, sustainable level of consumption and supply of goods and services.
Many eminent authors including Nobel laureates have, since the crisis, dwelt into the causes of the crisis and from the many books that have been published, including "The Great Inflation and its Aftermath" by Robert Samuelson, “The Crash of 2008 and what it means” by George Soros, "Fool's Gold" by Gillian Tett, "Freefall" by Joseph Stiglitz, "The Meltdown Years" by Wolfgang Munchau, "Crisis Economics" by Nouriel Roubini with Stephen Mihm, and "Fault Lines" by Raghuram Rajan, it is clear as to the complicit role of real estate in the crisis, and there are hints that valuations need to be better conducted in a reconstituted new global financial architecture.
To the valuation profession, it must be a cause for concern that real estate played a large and complicit role in the crisis and that it was not just in this financial crisis, but in many or most financial crises of the past.The valuation profession is a profession that operates in the real estate markets, notwithstanding the recent, yet insignificant, efforts to enlarge its role to businesses and financial interests.
Post the crisis, in the search for measures to recalibrate the financial system, or at least to make a start to such an effort, the rating agencies have been singled out because their ratings of the collateralised debt obligations that were built up from mortgages were not accurate enough.It may be noteworthy that light has not been shone at the valuation profession for supporting values for lending purposes that were, with the benefit of hindsight, clearly in bubble territory. Not yet anyway.But that prospect is worth being concerned about, at least as an internal examination within the Valuation Profession. For example, is the mere, timely, opinions of market value sufficient as a support mechanism for lending based on the collateral of real estate?Should not the Valuation Profession contemplate other options such as market worth calculations as well, and for project financing insist on proper and detailed market and feasibility studies as undertaken by Valuers acting also as property consultants, as they do in some jurisdictions?
Valuation Standards can be, and ought to be, substantially strengthened from the current levels to emphasise a clear distinction between market value on the one hand and market worth on the other, and the need for both estimates to be undertaken for effective decision making in the real estate markets.The requirement that market value derives only from valuation models whose inputs (including discount rates) come from market derived data must be given greater emphasis than as is required now.If the inputs are not market derived you cannot call the end result a market value. Valuation Standards especially for more important valuations, for example public domain valuations, must require explicit and substantial justification and substantiation and where required, reconciliation between comparables or between approaches.Valuation models that are developed to estimate the market value of properties for various purposes must be calibrated to the market. Whilst valuation processes for real estate are made more rigorous, similar substantial, justification and reporting requirements must be demanded from Valuers of businesses, including intangibles and financial interests.
The Malaysian real estate valuation framework is fairly robust because:
At the apex, it is overseen by an Act of Parliament, The Valuers, Appraisers and Estate Agents Act 1981 (as amended and as being amended again currently) - See a copy of the Act and Rules in the bundle that accompanies this paper.
The Act is supported by The Valuers, Appraisers and Estate Agents Rules 1986, that can be amended from time to time by the Minister of Finance, usually with advise from the Board of Valuers, Appraisers and Estate Agents. It is expected to be further amended once the amendments to the Act go through the current session of Parliament.
Both, the Act and Rules are further supported by The Malaysian Valuation Standards that is set by the Board of Valuers, Appraisers and Estate Agent under powers conferred by the Act.The Standards are clearly not just principles based but rules based as well and it enables disciplinary action to be taken quickly and arising from any complaint from the public.There is a due process before any punishment is meted out. The Standards are in the process of being amended.
In the Asian context, in particular, purely principle based standards are inadequate for regulating the profession.There is a need for rules bases standards as well and this may come in the form of Best Practice guidelines.
The Securities Commission of Malaysia has much stricter, user guidelines, for public domain valuations.There is also a set of Best Practice Guidelines. See copies of the Asset Guidelines and Best Practice Guidelines in the bundle.
Valuers in Malaysia are usually also professional members of the Institution of Surveyors Malaysia.The Board is the regulatory authority whilst the ISM is the professional body.See www.ism.org.my
Valuers in private practice in Malaysia are usually also members of The Association ofValuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia. See www.peps.org.my
The Valuation and Property Services Department of the Ministry of Finance is a 2,000 strong public sector valuation organisation that undertakes valuations for taxation purposes as well as many other public sector related valuations and property consultancies. See www.jpph.gov.my.The Department is supported by two bodies (a) the National Institute of Valuation (INSPEN) (www.inspen.gov.my) and (b) the National Property Information Centre (NAPIC) (www.jpph.gov.my).The property sales data and property market data assist Valuers in Malaysia (public and private sector Valuers) in undertaking valuations, property consultancy, property management, estate agency, investment advisory and market and feasibility studies, the latter of which is a
requirement for any project financing by banks. The mere dissemination of substantial real estate data and information results in a more efficient real estate market which leads to a more efficient economy since real estate is a major pillar of any modern economy.
Malaysia is part of the 10 member South East Asian group of countries known as ASEAN.ASEAN has a current population of about 580 million and it is strategically located between the two emerging economic superpowers, China and India.For the past 30 years the ASEAN countries have had a valuation organisation known as the ASEAN Valuers Association or AVA.AVA is now poised for further, rapid growth as the forces of liberalisation sweep through the region, in line with an accelerated agenda that is driven by the governments of the 10 member countries of ASEAN. See www.aseansec.org and www.aseanvaluers.org
The Valuation profession is an infant, in a sunrise industry.
It has miles to go before it sleeps - to part quote Robert Frost.
"It does not matter how slowly you go so long as you do not stop." - Confucius.
This speech was been prepared by:
Elvin Fernandez, FISM, FRICS
President, Institution of Surveyors Malaysia (ISM)
At the recent Council Meeting on 26 August we have decided, after debate, that we need to act on our agenda on internationalisation. We propose to create a new class of membership for Surveyors who are not members of ISM and who are practising Surveyors, particularly in countries around the region such as ASEAN, China, India, Pakistan and the Middle East. Such members however cannot practice in Malaysia and can join ISM and use the ISM letters after their name and follow the developments in the profession though the dissemination of information through ISM channels and take part from time to time in ISM activities. Our journal is at the same time being upgraded and our website is becoming more and more state-of-the-art. Members are welcome to comment on this and start the debate. On 18 December 2010 we shall have an EGM in Kuala Lumpur to debate and if thought fit, pass the amendments to the Constitution to effect the changes.
We are also preparing to invite a very prominent personality on that day of the EGM to give us a talk on liberalisation.
The Sarawak Branch will be having a one day event on 20 October to get all the 400 ISM members in Sarawak to come together and take part in a whole day seminar. Members for other parts of Malaysia who want to take part are welcome to contact the Sarawak Branch.
The Technical Tour cum sightseeing trip to India (New Delhi, Mumbai and optionally Goa) for 7 and 10 days respectively is gathering steam. So far 45 persons have signed up. We can accommodate more. For more information please see details on this website.
Plans for our Pan-Malaysia celebrations for our 50th Year in 2011 are also gaining momentum and throughout next year we will celebrate our successes of the past 50 years as we pledge to rebrand and continue our services as Surveyors to the Malaysian public. The Commerative Book is in the final stages of preparation and hopefully will be unveiled on the 18th of December at our EGM.
