Nanotechnology based Drug Delivery Systems

Nanotechnology based Drug Delivery Systems Richard Chen Introduction In the past century, nanotechnology has been a prominent theme for many science fiction writers. However, thanks to recent developments in chemistry and manufacturing, we are now able to bring things that were once unimaginable into fruition. The field of nanotechnology refers to the research, development and the production of materials under the size of 100 nanometers (nm). Over the past decade, the scientific community has experienced a boom in the research and development of nanotechnology. New technologies are being released with thousands of dollars of funding behind them. In this paper, the benefits, disadvantages, applications, governmental policies and recommendations of nanotech based drug delivery will be discussed. Overview At the forefront of the nanotechnology revolution lies in the field of nanomedical drug delivery. Nanomedical drug delivery is the concept of using minute nanomaterials (NM) to act as carrier substances for drugs. These nanocarriers will then be injected into the bloodstream and deposit drugs at specific cells. Compared to conventional drugs which target on a macro scale, nanocarriers are able to target on the micro scale, leaving neighbouring healthy cells unharmed. This precision will ultimately lead to benefits such as reduced drug dosages and reduced side effects. When tested in the lab, these particles have shown a high degree of success within lab animals. Currently, several forms of suitable nanocarriers exist. The most prevalent ones include nanocrystals, various forms of organic nanoplatforms (such as liposomes) and inorganic platforms, such as gold nanoparticles. Next, the benefits of nanotechnology will be discussed. Benefits Nanotechnology based drug delivery systems are able to deliver a wide range of benefits to the human body, increase the effectiveness of conventional drugs and eliminate the short falls of conventional methods. As mentioned before, nanocarriers are able to target specific cancerous cells while leaving healthy cells alone. The cause of this phenomenon is attributed to the enhanced Permeability and retention effect (EPR). (Bamrungsap, et al, 2012) Molecules who possess the EPR property have a tendency to accumulate at specific cancerous cells, leaving normal healthy cells largely alone. Indirectly, EPR can be attributed to a reduction in drug dosage, reduced side effect intensity, enhanced efficacy and reduced toxicity. (Bamrungsap et al, 2012) Another benefit of nanocarriers compared to conventional drugs is that their physical properties such as size, surface area, and functionality can be easily modifiable. This is seen nanocarriers based on liposomes. In addition to being easily mo difiable, liposomes are known for their ability to reduce side effects, toxicity and reducing drug clearance. (Bamrungsap et al, 2012) Nanocarriers are also able to be adapted to release drugs depending on environmental triggers. These environmental triggers can vary from physical (temperature), chemical or biological signals. Commonly seen in polymeric nanoparticles, this property allows drugs to remain inert unless they are activated by an environmental trigger. Hence, they only activate when they are required. (Bamrungsap et al, 2012) Nanoparticles such as gold nanocarriers are able to act as drug â€Å"reservoir† (Bamrungsap et al, 2012). This allows drugs to have a slow release into the targeted area. Finally, nanocarriers such as liposomes have the ability to isolate drugs away from the environment. This allows for more efficient drug delivery as the drug will not be carried away by other bodily fluids. (Bamrungsap et al, 2012) Through the application of nanotechnologic al drug delivery, we can expect to see difficult to treat diseases such as cancer to be significantly less invasive, more tolerable, and more treatable to the patient. In turn, with better survival prospects for the world’s number 4 most deadly disease, (WHO, 2014) we could expect to see a sizable increase in the average human lifespan. In the next session, the risks and disadvantages of nanotechnology will be discussed. Risks/Disadvantages Despite nanotechnology being vastly beneficial to the individual and society, there are extreme risks involved with every new technology. Nanotechnological based drug carriers are no exception. In recent years, with the rapid development of nanotechnology, the field of nanotoxicology has also developed in order to study the toxicity of nanoparticles toward organisms. (Bamrungsap et al, 2012) Nanoparticles differ greatly from the largely harmless micron sized particles. Nanoparticles have been linked to changed body distributions and triggering of blood clots. In addition, nanoparticles have been linked to more traditional particle related illnesses such as inflammation and lung cancer. However, nanoparticles are significantly more difficult to remove from the body and can also cause mitochondrial damage, platelet aggression, and cardiovascular diseases. (Jong Borm, 2008) In addition to broad nanoparticle risks, various other nanoparticles also have concerns regarding their safety. One such concern is the potential for cadmium containing quantum dots to release free Cd2+ ions. (Jong Borm, 2008)These ions have been linked to large amounts of cell death when in vitro studies. Another concern is the possibility for Cationic nanoparticles (gold and polystyrene) to cause hemolysis, blood clotting and colon carcinoma in lab rats. Anionic nanoparticles, in contrast, are not known to be toxic. When in high doses, both Anionic and Cationic nanoparticles are both poisonous to the blood brain barrier (BBB). (Jong Borm, 2008) Similar to cationic and anionic particles, some forms of silica would result in a reduction of cell viability while other forms of silica are rendered to be non-toxic. (Jong Borm, 2008) Other potentially poisonous nanoparticles include carbon nanotubes, fullerenes, and Dendrimers. (Jong Borm, 2008) It is clear that no two nanoparticles have the same properties. Hence, it is key for researchers to analyze each nanoparticle on a case-by-case basis. The final concern is the ability for nanoparticles to contaminate the environment. Owing to their small size, nanoparticles are exceedingly difficult to remove. When nanoparticles are introduced into the water supply, their behavior is relatively unknown. (Wrigth, n.d.). However, nanoparticles do have the tendency to bond with water molecules and porus media. They resist removal when industrial purification is used and whey deposited in soil, they tend to attract other nanoparticles towards them. This is likely to cause marine die offs due to them ingesting toxic nanoparticles. In addition, some studies have shown that the at certain pH levels, there is increased nanoparticle deposition levels. When nanoparticles enter the air, they behave similar to gasses. They rapidly disperse causing a wide area of contamination. When inhaled in, these particles behave very similarly to how asbestos behaves in the lungs. (Wrigth, n.d.) Hence, before nanotechnology can be widely introduced, extens ive testing should be conducted to mitigate any potential risks involved. Current and Future Applications Currently, nanocarriers are still considered to be in their infancy. They are too unstable for use and their behavior in humans is also completely unknown. Despite that, in the near future, nanocarriers will be capable of treating a great deal of human ailments with minimal invasiveness. For example, nanocarriers that are coated with the membrane of a red blood cell will be able to circulate around the body for a longer time. (2 days) (Boysen, n.d.) This longer time will provide the nanoparticle more time to attach to cancerous cells. Another application of nanocarriers is to use nano-sized silicon wafers and allowing the wafer to lodge inside the tumor. UV light is then focused upon the tumor, activating the silicon wafers, effectively killing tumor cells. (Roberts, n.d.) Another application for nanoparticles is for treating heart disease. Nanocarriers are able to attach to damaged arteries and apply drugs specifically to that area. Finally, nanotechnology is able to treat for diabe tes by releasing insulin depending on environmental triggers. (Boysen, n.d.) Perhaps what could be considered to be the holy grail of nanocarriers is the passage through the BBB. Passage through this barrier means access to the brain. With this passage, treatment for brain tumors can be less invasive and neurodegenerative diseases such as dementia and ALS could potentially have a cure in sight. (Jong Borm, 2008) Governmental Regulation Currently, in Canada, the development of nanotechnology falls under the regulation of 6 legislations. These regulations are: Canadian Environmental Protection Act Food and Drugs Act Food additive Regulations Medical devices Regulations Natural Health products Regulations Cosmetic Regulations (Government of Canada, 2014) The supervision of the use and production of nanoparticles falls under the responsibility of Health Canada and Environment Canada. The role of Environment Canada is to evaluate the ecological impact a nanoparticle will have while Health Canada is responsible for evaluating the risks a particle has on human health. (Government of Canada, 2014) A regulatory framework for Nanoparticles does not exist as of right now. However, a 2-phase plan is currently being discussed. The first phase of the plan involves the continued partnership with various international organizations such as ISO and OECD to create a standardization. This phase also involves the notification of the public and various industries. Simultaneously, Voluntary information and mandatory information submission will occur. The purpose of this is to build a strong framework on the development of nanotechnology. During voluntary information submission, information is remains confidential under section 313 of the CEPA. If manda tory information submission were to occur, they would fall under the jurisdiction of sections 46 and 71. These require the company to not only submit the required documents but also to answer potential questions to the best of their ability. Finally, legislative amendments will be made the CEPA in order to suit nanotechnology better (Environment Canada,Health Canada, 2007). In phase 2, the adoption international standardizations will occur. ISO/TC 229 will be applied into law. In addition, monitoring for Significant New activities will occur. (sNAC) a sNAC is defined as â€Å"a significantly greater quantity or concentration of the substance in the environment† or a significantly different manner or circumstances of exposure to the substance† (Environment Canada,Health Canada, 2007). If any substance meets this criteria, they would be deemed as toxic under CEPA 1999. The current regulations in place are evidently not enough for the rapidly developing nature of nanotechn ology. However, if the framework is implemented, (in addition to the recommendations of ISOTC 229) it should be meet all the demands of nanotechnology satisfactorily. On the international level, there are several organizations in charge of overseeing the development of nanotechnology. One such group is the OECN working party on nanotechnology. This group is in charge of addressing the political, scientific, technological, and innovation related aspects of nanotechnology. (Government of Canada, 2014) Another group is the OECD working party Manufactured Nanomaterials. This group is responsible for addressing issues of health and environmental impact caused by the manufacture of nanomaterials. (Government of Canada, 2014) Finally, the International organization for standards Technical Commission (ISO/TC) is responsible for developing a set of nomenclature specific to nanomaterials. This is done under the bill ISOTC 229. Addressing the problem of nomenclature will identify gaps in knowledge and identify the need to invest more in nanotechnology. In addition, ISOTC 229 will make it easier to facilitate the exchange of legal documents regarding nanomate rials. (ISO/TC, 2011) Public Perception Public perception is currently a key factor in the acceptance of nanotechnology in society. Currently, it is assumed that the average civilian has low knowledge of nanotechnology. In surveys conducted by the Woodrow Wilson in 2006, 42% respondents said that they did not know anything about nanotechnology. When the same study was conducted again in 2009, 37% of respondents indicated no knowledge of nanotechnology. In contrast, 24-31% of respondents indicated a high degree of knowledge in nanotechnology. (Besley, 2010) In another study, the majority of respondents chose â€Å"[nanotechnological] benefits outweigh the risks† between 3 choices. The other two choices were â€Å"benefits will equal the risks† and â€Å"risks outweigh the benefits†. (Besley, 2010) Contrary to many new technologies, nanotechnology has been reported in a positive light in the press. Studies done in 2004 have shown that the technological benefits of nanotechnology have been more frequently reported. The risks and disadvantages have been shown to be rarely reported. (Besley, 2010) Cost As with any new technology, the initial costs are expected to be high. However, as mass production occurs and inefficiencies in the production like are smoothened out, it can be assumed that the price of nanocarriers will drop drastically. According to the United States National Nanological Initiative, the impact of nanotechnologies is expected to reach a $2.4 billion by 2015. (National Nanotechnological Initiative, n.d.) Conclusion As evidenced from this paper, the benefits of nanotechnological are substantial. In the near future, they can developed to treat cancer and can potentially treat incurable diseases such as dementia with direct cell targeting. However, the risks of such new technologies cannot be ignored. As stated before, nanocarriers have been directly related to be toxic towards biological organisms. In addition to several risks, a lack of legislation and international standardization causes the development of nanoparticles to be unregulated. However, this is no reason to stop the development of nanotechnology. In contrast, this is a reason to invest even more into the field of nanotechnological based drug delivery to see what the future unlocks. Although there currently are several side effects associated with then, it is important to keep in mind that this field is in its infancy. With correct government legislation and support, drug delivery based nanotechnology can yield great benefits, ultimat ely extending the human lifespan and raising the human standard of living. Works Cited Bamrungsap, S., Zhao, Z., Chen, T., Wang, L., Tan, W. (2012). Nanoparticles as a drug delivery system [Medical Journal]. Retrieved September 24, 2014, from http://www.medscape.com/viewarticle/770397_1 Besley, J. (2010). Current research on public perceptions of nanotechnology. Emerging Health Threats Journal, 3(e8). Boysen, E. (n.d.). Nanotechnology in Drug Delivery. Retrieved September 24, 2014, from http://www.understandingnano.com/nanotechnology-drug-delivery.html Environment Canada,Health Canada. (2007, September 10). Proposed regulatory framework for nanomaterials under the Canadian Environmental Protection Act, 1999. Retrieved September 27, 2014, from http://www.ec.gc.ca/subsnouvelles-newsubs/default.asp?lang=Enn=FD117B60-1 Government of Canada. (2014, August 19). NanoPortal Regulation and Standards. Retrieved September 27, 2014, from http://nanoportal.gc.ca/default.asp?lang=Enn=23410d1f-1 ISO/TC. (2011, December 1). Nanotechnologies. ISO/TC. Retrieved from http://isotc.iso.org/livelink/livelink/fetch/2000/2122/687806/ISO_TC_229__Nanotechnologies_.pdf?nodeid=6507632vernum=-2 Jong, W., Borm, P. (2008, June). Drug delivery and nanoparticles: Applications and hazards [Medical Journal]. Retrieved September 24, 2014, from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2527668/ Laurie Roberts. (n.d.). Nanoparticle Technology in Cancer Care. Retrieved from http://www.ele.uri.edu/courses/bme281/F09/LaurieR_1.pdf National Nanotechnological Initiative. (n.d.). Frequently Asked Questions. Retrieved September 27, 2014, from http://www.nano.gov/nanotech-101/nanotechnology-facts WHO. (2014, May). The top 10 causes of death. Retrieved September 27, 2014, from http://www.who.int/mediacentre/factsheets/fs310/en/ Wrigth, J. (n.d.). Nanomedicine: Small Particles, Big Concerns | Honors Journal | CU-Boulder. Retrieved September 24, 2014, from http://www.colorado.edu/honorsjournal/content/nanomedicine-small-particles-big-concerns

Teen Pregnancy Is One Hundred Percent Preventable

Teen Pregnancy Retha McDonald Argument Essay ? Abstract The following research paper contains important information on how you can prevent your teen from becoming pregnant. The thesis is clearly stated in my argument. Topic sentences and sub-topics support my theory. Teen Pregnancy and prenatal care are very important issues but can be avoided all together with patience, guidance and instruction from responsible parents. Parents have to discuss issues such as safe sex, prevention of pregnancy along with topics such as birth control and being abstinence until marriage.This paper will also cover issues dealing with peer pressure. ? Teen pregnancy and prenatal care Parents need to discuss the importance of abstinence with their teenagers. If a teen was to become pregnant, prenatal care is the best way to provide and insure the safe arrival of an unborn child. Teenagers are not being taught at home about the practice of safe sex and prevention of an unwanted pregnancy. Teenagers that are sexually active need to be put on birth control and taught about STD’s, which mean sexual transmitted disease. Teen pregnancy is one hundred percent preventable.Sex and prevention Teenagers are not being taught at home about safe sex and prevention. When a child starts puberty or even before puberty parents should discuss changes that are happening with their bodies. Explaining that it is normal to feel attraction toward the opposite sex, but acting on those feelings can result in serious consequences. Parents should also go into particular issues dealing with the dangers such as STD’s, and unwanted pregnancies. Discussions about birth control and abstinence should be discussed at an early age.Parents should talk to their teens in a comfortable setting so the child won’t feel like they are being lectured, but feel like they are in an open conversation that they can join in and ask for advice. Parents should allow time during the end for teenagers ask any questi ons that they might have. In the article† Is Parenting Associated with Teenagers ‘Early Sexual Risk-Taking, Autonomy and Relationship with Sexual Partners? â€Å"Crabtree, S. (2005) states â€Å"very extensive Research showed that relationships between parents and teenagers are linked to various outcomes associated with teenager’s first sexual experience. Parents have a big influence on their children future and they play a major role in the behavior that their child will exhibit. Parents have to set values, perfect communication about sex will help build beliefs in teenagers and they will have the necessary skills to deal with situations if confronted with sexual advances. Parkes, A. (2011) states â€Å"teaching teenagers to abstain from sex is also associated with teenagers not engaging in risky sexual behavior, positive parenting has shown it will delay first sex. † Proper prenatal careAdolescent childbearing negatively affects society and families, an d increases health risks, as well as developmental and childrearing problems for mothers and children (Letamo &Majelantle 2001; Smith & Pell 2001). Underage childbearing may result in miscarriage, preterm births and repeated pregnancies, with increased rate of low birth weight delivery, neonatal death and subsequent incidence of infant illness (Williams &Delavan 2006). Teens that do become pregnant do not receive the proper prenatal care because they are afraid to approach parents; they have feelings of being ashamed of what they have done.They are embarrassed, and they feel that they may have let the family down. Majority of teen pregnancies are hidden and kept secret up until month six or seven, simply because the teens are afraid to speak up. They come to a crossroad where they know that soon they will need medical attention. What teens don’t realize is that they are compromising their health and the health of their unborn child every pregnancy needs to be monitored by a d octor; prenatal vitamins need to be given, possibly iron pills.While pregnant the teen could form serious conditions such a preeclampsia or develop high blood pressure. Proper prenatal care is a must with any pregnancy this is to ensure the safe arrival of a baby and making sure the mother is healthy before, during and after the birth. Immaturity is implicated as a cause of most problems with preterm labor. Monitor your children â€Å"Teenage parenthood passed down through generations, with the children of young mothers becoming parents themselves at an early age, such a difficult tradition to break. Frances, G. (2011) monitor your children. Know where your children are at all times. Know the company that they keep. Most of the time parents like to feel that they know what their child would and would not do. That is not always the case when you have one bad apple; sometime teens can easily be persuaded to fit in with the popular crowd, it is important to know the company that your teen is surrounded by. Bad association and peer pressure can lead down a terrible road of destruction for example an unwanted pregnancy.Teens should not have a lot of idle time. Engaging in an after school program or sports can keep your teen busy from just hanging out with friends and possibly experimenting with sexual behavior. Family outings on the weekends learning activities, family oriented activities that can include all the kids not just the teen, helping with yard work, building something with dad, planting and gardening with mom are ways to insure that your teen is safe and not being pressured in the streets and forced into sexual behavior too soon.Activities with the family will ensure you are monitoring your teen correctly and know where they are at all times. Conclusion Teen pregnancy is one hundred percent preventable parents need to discuss the importance of abstinence. If a teen was to become pregnant prenatal care is the best way to provide and insure the safe arriv al of an unborn child. Monitoring your teen’s friends and who they are affiliated with, by finding out where they like to hang out and go in their free time can warrant some behaviors that you wouldn’t want your teen engaging in.Start talking to your teen about safe sex at an early age and teaching them about the dangers that come with having sex is a sure way to keep away the STD’s and the unwanted pregnancies. Work Cited and Reference: Crabtree, S. (2005). Teens on Sex Education: Abstinence-Only or Safe-Sex Approach. Gallup Poll Tuesday Briefing, 1-3. Parkes, A. (2011). Is Parenting Associated with Teenagers' Early Sexual Risk-Taking, Autonomy And Relationship with Sexual Partners. Perspectives On Sexual ; Reproductive Health, 43(1), 30. doi:10. 1363/4303011 Chen, C. W. , Tsai, C.Y. , Sung, F. C. , Lee, Y. Y. , Lu, T. H. , Li, C. Y. , ; Ko, M. C. (2010). Adverse birth outcomes among pregnancies of teen mothers: age-specific analysis of national data in Taiwan. Child: Care, Health ; Development, 36(2), 232-240. doi:10. 1111/j. 1365-2214. 2009. 01039. x Mahavarkar, S. H. , Madhu, C. K. , ; Mule, V. D. (2008). A comparative study of teenage pregnancy. Journal Of Obstetrics ; Gynaecology, 28(6), 604-607. doi:10. 1080/01443610802281831 Frances, G. (2011). Teenage pregnancy: successes and challenges. Practice Nursing, 22(1), 12-16.

Kellogg’s Marketing

Phase 1 Company’s Market Planning Colorado Technical University MKT210-1301B-07 Fundamentals of Marketing Lou Piermatteo February 25, 2013 Frosted Mini-Wheat’s The product I have chosen is Frosted mini-wheat. Frosted mini-wheat is one of the number one products of breakfast food. Frosted mini-wheat was first launched on the east coast in 1961. In 1961 Frosted mini-wheat’s was nationally debuted making mornings shine from sea to shining sea. Frosted mini-wheat is made of whole-grain fiber to keep you at your best all morning long. We will be discussing the market strategy and mission goals of Kellogg’s frosted mini-wheat.Kellogg’s and frosted mini wheat’s take pride in helping people stay healthy and in fit. Company’s Mission Statement Frosted mini-wheat’s mission statement or jingle is â€Å" Keeps’em full and focused† (Kellogg’s 2012). Frosted mini-wheat’s is a big breakfast in a little biscuit. Kell ogg’s believes that every morning should start with a healthy breakfast. Kellogg’s frosted mini-wheat’s has commercials all over the television today. They are ranked number 17 in television advertising. Frosted mini-wheat’s is one of the top cereal marketers; they market directly to the parent’s and not the children.The television commercial’s target children to get them to eat a more healthy breakfast to get their day started. Kellogg’s frosted mini-wheat’s is packed with fiber and almost a full days’ worth of gains to keep you full all morning(Kellogg’s 2012). Kellogg is a Global Company Committed to Building Long-Term Growth In Volume and Profit and to Enhancing its Worldwide Leadership Position by Providing Nutritious Food Products of Superior Value Company’s Business and Marketing objective and goalsKellogg’s is focused on enriching and delighting the world though foods and brands that matter. They are nourishing families so they can thrive and flourish. Kellogg’s is a company of possibilities and promises of people and their well-being. Today nutrition continues to be the core of our business. And cereal is an integral part of how we can help to meet the nutritional needs of people all over the world (Kellogg’s 2012). Kellogg’s believes in integrity, accountability, passion, humility, simplicity, and results.The more the company can do for the community the more people will want to buy their products. (Kellogg2012). What is the Company’s position in the Marketplace and it’s Differentiation Strategies? Kellogg’s is ranked number three is marketing facts from 2009 reports. They use television and internet marketing for their advertising. In February 2012, Kellogg’s introduced 2 dozen new products. They expected 15% of 2012 global sales from products introduced in the previous three years. Kellogg’s is commitment to pr oduct innovation has brands that consumers know and love (surperformance 2013).Kellogg’s financial highlights of 2011 show increases over the past five years. The net sales were up 4%, operation profit up by 2%, and the net earnings per share were up by 6%. Kellogg’s net sales for 2011 were $13. 2 billion dollars (Kellogg’s annual report 2011). The 2011 report shows the progress and future direction in four key areas; Marketplace, workplace, environment, and the community. Kellogg’s is dedicated to help the community. In February 2013, Kellogg’s pledged to provide one-half billion servings of breakfast to children and families who need it the most.They are the number one cereal company in the U. S. Kellogg has pledged $1 million in grants in the U. S. to nonprofit partners Action for Healthy Kids ®, Share Our Strength's No Kid Hungry ® campaign and Food Research and Action Center so that more schools can participate in federally-funded breakfas t programs. The company will also work to expand breakfast programs around the globe, maximizing product donations and advocating for the important role breakfast plays in the diet. (Kellogg2012).Control 42% of global market share for Pre-sweeter cereal, which is more than triple the market share of any of their competitors. They have the strongest brand recognition and advertising recollection of all the cereal manufacturers (Kellogg2012). Kellogg’s is a very passionate company. They look out for their customers just as much as their employee’s. The more a company does for the community the more people will buy their products. Frosted mini-wheat’s is a cereal that Kellogg’s has promoted and made a number one cereal.There are many different kinds of frosted mini wheat’s to keep up with the changes and taste of people today. Frosted mini wheat’s are a nutrition and healthy breakfast for everyone. They're packed with fiber! That's what makes w hole grains so terrific. Starting your day with one bowl of Frosted Mini-Wheat’s ® cereal delivers 24% of the daily value of dietary fiber for adults. That's 3 times the fiber compared to Honey Nut Cheerios. (Kelloggs2012). Kellogg maintained its previously provided outlook for 2013.For 2013, Kellogg expects net sales growth to be approximately 7%, while reported earnings (excluding impact of mark-to-market adjustments but including Pringles integration costs) are expected to grow between 5% and 7%. Reported operating profit ((excluding impact of mark-to-market adjustments) is expected to increase at a higher rate than earnings growth (Zacks2013). References www. 4-traders. com/kellogg-company. com www. kelloggcompany. com www. kelloggcompany2011annualreport. com http://sg. finance. yahoo. com/news/kellogg-beats-overall-keeps-2013-181621345. html www. frostedminiwheats. com www. sbaweb. wayne. edu/~ssasser/pp29. ppt

Overview Of The Malaysian Institutional Situation Finance Essay - Free Essay Example

Sample details Pages: 6 Words: 1736 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? CHAPTER 2 2.1 Introductions This chapter presents an overview of the Malaysian institutional situation. Section 2.2 briefs on the background of the political economy which formed the Malaysian capital market. Informations on the development of the Malaysian Code of Corporate Governance (MCCG) are given in section 2.3. Finally, Section 2.3 concludes this chapter. 2.2 The Malaysian Political Economy Malaysian capital market is shaped from the close identification between the racial and economic function in Malaysia (Gomez Jomo, 1999). Malaysian society consist of multi-racial which shaped the country and business are run externally, thorough political (Mohammad, Hassan, Chen, 2006), and internally through cultural values (Haniffa Cooke, 2002). The three main groups in Malaysia are Bumiputeras which refers to Malays and the Malaysian indigenous ethnic groups (Haniffa Cooke, 2000). The Malays and indigenous literally means sons of soil are consisting of little half the Malaysian population. Second main population is Chinese (almost one third the total populations) and third main population Indian (slightly less than one tenth of the total population) of Malaysian population. Chinese and Indian population considered as non-bumiputeras which do not share some privileges of Bumiputeras group benefits. Since the independence day of Malaysia on 31 August 1957, Malaysian political landscape in Malaysian has been lead by the coalition front (Barisan Nasional) representing by the three dominant ethnic groups: United Malay National Organization (UMNO), Malaysia Chinese Association (MCA) and Malaysian Indian Congress (MIC). Although, political power is shared amongst ethnic groups but the economic wealth is dominated by Chinese. Only 1.5 percent of the corporate equity in Peninsular Malaysia is dominated by Malay Bumiputeras in 1960s. The imbalance of the economic wealth among the ethnicity has cause the 1969 riot between the Malays and the Chinese. The riots have force the government to initiate the New Economic Policy (NEP) in 1970 in order to reduce the imbalance wealthy among the races and overcome the inter-ethnic crisis. The NEP formulated to restructure the controversial socio-economic problem during the year of 1971 under the second Malaysian Prime Minister Tun Abdul Razak. The main focus of NEP is to achieve national unity by reducing the ga p of poverty among the races, create a unity among the races by restructuring the society to achieve inter-ethnic economic parity between the Malay Bumiputeras and Chinese non-Bumiputeras (Gomez Jomo, 1999). However, the NEP has impact positive institutionalised discrimination in favour of Bumiputeras by offering them concession such as grants, education, trade and employment (Haniffa Cooke, 2002). The government play an important role in order to achieve the NEP objective (Gomez Jomo, 1999). Among the important role taken by the government is increasing the corporate ownership of Bumiputeras in three government bodies. The first body are comprises of public sector such as water supply, telecommunication, civil aviation, and refuse collection. While second body consists of statutory bodies established by law at federal and state level and third body comprises of government-owned private or public firms established under the 1965 Companies Act. The main objectives of these t hree government bodies are to promote Bumiputeras involvement in education, employment and mainly to corporate stock ownership. The restructuring of foreign equity participation has raise the equity from zero to 30 percent and Chinese and Indian equity maintained at 40 percent (M.Norhashim Aziz, 2005). After 20 years of the NEP policy, the Chinese equity ownership rose from 27.2 percent 1970 to 45.5 percent in 1990. Furthermore, NEP has successfully reduced the dominance power of foreign ownership control of economy from 63.3 percent in 1970 to 25.4 percent in 1990. However, the 30 percent of Bumiputeras ownership targeted still yet to be met, then the fourth Malaysian Prime Minister Tun Dr Mahathir replacing the NEP with the National Development Policy (NDP) 1991. Don’t waste time! Our writers will create an original "Overview Of The Malaysian Institutional Situation Finance Essay" essay for you Create order 2.3 The Malaysian Code on Corporate Governance (MCCG). The 1997 financial crisis has revealed the important of corporate governance practise which cause many organizations in Asian region collapse because of the poor corporate governance practise (Fraser, D.R, C.Derasid, 2006). The pressure of globalization, external funding needs and effective investor protection increased the demand of information transparency. Corporate Governance practise in organization become a main concern issue for the shareholder, investors and etc. A joint survey done by KLSE (now known as Bursa)/Price Waterhouse commissioned by the Ministry of Finance in 1998 find that 94 percent of firm surveyed desired the needs for investors confidence, need of transparency in directors, protection of minority shareholder and focus on directors fiduciary duties. The main purpose of the survey is to improve the corporate governance framework and ensure companies conduct their business operation with the best possible standard of practise. To monitor the best practis e of corporate governance in Malaysia, the Finance Committee on Corporate Governance (FCCG) was created on 24 March 1998. FCCG responsible to look into establish the corporate governance framework and setting the best practise for Malaysian public listed companies. FCCG is chaired by the Secretary-General of Treasury of the Minister of Finance and its members consists of Governor of Central Bank, the Chairman of Securities Commission, the Chairman of the Bursa, the Chairman of the Financial Reporting Foundation and representative from various industry organisations. Result from the FCCG members discussion into deep consultative process where feedback was required by the respected practitioners and academics, a report by the FCCG was handed to the Ministry of Finance. The report from the FCCG led to the birth of the Malaysian Code on Corporate Governance (MCCG) in March 2000. The consideration of FCCG toward the corporate governance practise is not only to the shareholder but to o ther stakeholders. As define .the process and structure used to direct and manage the business and affairs of the firm toward enhancing business prosperity and corporate accountability with the ultimate objective of realising long term shareholder value, whilst taking into account the interest of other stakeholders.. (FCCG, 2000). In 2001, the MCCG became the important part of the change on the Bursa Listing Rules which requiring all firms to disclose extent of compliance with MCCG. Although compliance with best practices is voluntary, firms are required to reveal in their annual report the extent of their compliance with an explanation for any departure. Furthermore, the MCCG also follows the United Kingdom (UK) code. Internal governance structure enclosed in the Code of Best Practise of the Cadbury report was adopted and suit in the Malaysian context. These include the recommendation that same person should not appointed into two most powerful posts which are chief executive o fficer (CEO) and chairperson of the board. Besides that, the non-executive director should be adequate in order the independence of the boards decision making. Furthermore to mitigate the regulatory burden on firms, MCCG used a similar approach to corporate governance as recommended by Hampel (1998) where focus on the broad principle of good governance which should be applied flexibly based on individual firms operation rather than on explicit rules which is also need to be followed. Two primary objectives that concerned by the MCCG. The first objective is to enhance the corporate disclosure which benefits the investors in term of timely relevant information that contribute toward investment decision making. Second objective is MCCG provide the guide to the board of director such as clarify the board of director responsibilities and also provide prescription to strengthen the control which they exercise (MCCG, Part 1, paragraph 1.8). MCCG has identified and single out the followi ng principles in establishing good corporate governance: (i) every listed firm should be headed by an effective board which should lead and control the firm; (ii) the board should include a balance of executive director and non executive director (including independent non-executive) such that no individual can dominate the boards decision making. Best practise recommend that independent director should be at least one-third of the board; (iii) the board should be supplied with timely information of relevant form and quality for decision making and (iv) there should be a formal and transparent process for the appointed of new director to the board such as creating a nomination committee comprise of non-executives. 2.4 Intuitional Investor Investors in Malaysia are dominated (99%) by local institutional. Employees Provident Fund (EPF), Permodalan Nasional Berhad (PNB), Lembaga Tabung Angkatan Tentera(LTAT), the Pilgrim Funds Board or Lembaga Tabung Haji (LTH) and Social Security Organization (SOSCO) are the main big institutional in Malaysia. EPF was established in 1951 and considered as Malaysias largest contractual saving institution. The employees from private sector is mandatory to contribute as a key source of long term investment capital and public sector has optional whether to contribute to EPF or continue with the national pension scheme. As at 2009, EPF assets worth RM 98.8 billion and the investment portfolio are mandated by the Malaysia government. EPF has to invest 70 percent of it fund in Malaysia Government Securities (MGS) while domestic equity investment is limited to 25 percent of it funds (Thillainathan, 2003). Permodalan Nasional Berhad (PNB) is Malaysias first unit trust which created to en courage saving by Bumiputeras. PNB introduced with single unit trust named as Amanah Saham Nasional (ASN) and now PNB has provided more unit trust provide for all group of people such as youths (Amanah Saham Didik) and for non-Bumiputeras ( Amanah Saham Malaysia). These unit trust saving schemes pay competitive dividends that average of 7 percent since 2007 to 2010(www.pnb.com.my). Lembaga Tabung Angkatan Tentera, also known as LTAT, was established on August 1972 by an act of Parliament. LTAT is a superannuation fund, mean the serving members of the other rank in Armed Force are required to contribute 10% , while the employer contribute about 15% (www.ltat.org.my). The objectives are to ensure the members of Armed Forces have retirement fund and other benefit that able to support after their retirement age. Next, Lembaga Tabung Haji (LTH) was established in 1962 which target to encourage Malaysia Moslems to save money to perform Hajj in Mecca. LTHs role evolved from mere savi ng depository to provide some return from their investment. LTHs investment must exclude saving investment from non-halal company (e.g. ambling company, alcohol company and etc). Thus the investment advisory board includes Islamic scholars who monitored and ensure all investments are accordance to syariah.  [i] Finally, Social Security Organization (SOCSO) was established in January 1971 under act of Parliament through the Social Act 1969. SOCSO serves as an insurance scheme for all Malaysian employees working either in public or the private sector. The main objective of SOCSO is to ensure and guarantee the timely and adequate provision of benefit in a social and to promote occupational safety and health. Like the other institutional investors, SOCSO has an investment advisory board which consist from various representatives from the government, employers and employees.