Showing posts from December, 2010

New Deposit Insurance Limit At RM250,000

Effectively today (31st December 2010), the deposit insurance limit will be increased to RM250,000 per depositor per bank, announced Perbadanan Insurans Deposit Malaysia (PIDM).
Below is the summary of the said announcement:- The new PIDM Bill 2010 has been passed in Parliament.The limit of RM250,000 will protect 99% of retail depositors in full.Under the new Bill, foreign currency depositors will now enjoy deposit insurance protection.The enhanced financial consumer protection package also includes the expansion of PIDM's mandate to include the administration of the Takaful and Insurance Benefits Protection System (TIPS).Licensed insurance companies and registered Takaful operators will automatically become member institutions of PIDM.PIDM was given the powers to intervene in or resolve troubled insurer members and ensure prompt payments to claimants. PIDM is Malaysia Government agency, mandated by Parliament, to protect depositors against the loss of their funds in the event of a…

The Electrifying TENAGA (Nuclear, USD, Tariff)

Tenaga Nasional Bhd (TNB), the national power producer of Malaysia, would embark on nuclear power in the next few years. Given the sensitivity of such issue, Malaysia government has again hinted that there are plans to construct nuclear power plants in the country to fulfill boost up the electricity capacity.
According to theStar recently, Energy, Green Technology and Water Minister Datuk Seri Peter Chin said Malaysia plans to build two nuclear power plants with a capacity of 1,000 megawatts (MW) each and commencement of operations in 2021-2022. This is part of the country's overall long-term plan to balance its electricity generation mix.
The two nuclear plants would represent 9% of peninsular Malaysia's existing power generation capacity of 21,817 MW. This is necessary for the country given that the peninsula's power reserve margin will drop from 44% currently to below 20% by 2016 while the 1,600MW Bakun undersea cable project has been discontinued.
While nuclear power is…

What's Ahead in 2011?

2010 was not all bad, by any stretch.

Probably the best news of all was that problems that have been swept under the rug(s) for generations have now surfaced and are regular conversation topics. It is now quite apparent that the Western economies' love affair with entitlements may be coming to an end. They now know, as they should have known earlier, that there is simply no way these entitlements are affordable. That discussion is now front and center. That's good.

Public employees are finally coming under scrutiny as virtually every one of the 50 states in the United States faces bankruptcy under the weight of the benefits that have been promised to these public employees. Teachers, for one, have long been showered with guaranteed job security and extremely generous pension and health care benefits. All of these public employee benefits are now in play. Unions are in the middle of this because almost all of union organizing successes in recent years has been in the publ…

Petronas Carigali will be the Largest IPO ever?

Petronas Caragali Sdn Bhd, the exploration unit of Petroliam Nasional Bhd (Petronas), may be listed on Bursa Malaysia next year and it is expected to attract a large number of foreign funds.

"The mother of all initial public offerings (IPO) next year will be Petronas Carigali. We need companies like this to make Bursa attractive," said MIDF Amanah Investment Bank Bhd senior vice president and head of research, Zulkifli Hamzah.

Petronas officials could not be reached for comment. Zulkifli said analysts have been told by Bursa officials of a possible IPO for Petronas Carigali.

OSK Research head Chris Eng said Petronas Carigali should be the largest IPO ever in Malaysia, with a potential market value of close to RM150 billion.

This would eclipse current leader Malayan Banking Bhd, with a market value of RM62 billion as at yesterday.
PETRONAS E&P Business Quick Facts

Malaysia’s hydrocarbon reserves stand at 20.18 billion barrels of oil equivalent (boe) with an average productio…

Brighter outlook for Glove Sector?

Yesterday, Adventa (Malaysia's 5th largest glove manufacturer) surprisingly reported 4Q10 net profit of RM11.8 million, up 50.8% year-on-year. According to RHB research, the results were above expectations, mainly because of of a deferred tax write back of RM5.6 million. Excluding the differed tax write back, FY10 net profit would have been RM30.2 million.

However, profit before tax was lower due to a time lag as only about 70%-80% of the higher costs incurred as a result of rising latex prices and the weakening of the USD against MYR were passed on to customers --- OSK research.
To sweetened the announcement, Adventa also declared a final tax-exempt dividend of 7 sen, which translates into a net payout of 30% and net yield of 3.6%.
Indicating a revival of Glove counters? As all of the glove counters are in the red this year, experiencing a whopping 30%-40% drops, Adventa's result sure will catch the eyes of investors again. But, Finance Malaysia cautions about it, because Adven…

Top 3 Commodity Picks for 2011

Forget about supply and demand issue of commodity, everyone knows the main mover now is Emerging Market, especially China. As long as US economy not yet recovered, China was expected to continue its great appetite to consume commodities globally. Not for its consumptions, but mainly because of China's currency management.

China, already the largest creditor of US by holding USD which was slipping with a series of quantitative easing programs, would definitely forced China to diversify its holding elsewhere. However, China would hand-picking according to its own local demand. As such, Finance Malaysia forecasts those commodities which were used heavily in construction, infrastructure, production will continue to perform in 2011.

Top pick #1: Palladium One in four goods manufactured today either contain platinum group metals or the platinum group metals play a major role during their manufacturing process. Palladium was used in many electronics including computers, mobile phones, multi…

Super BIG Xmas gift for KNM

After a long suffering period, KNM investors can be very joyous coming this Christmas celebration with another good news announced today. In a statement after trading hours, KNM announced that its wholly owned subsidiary, KNM Process Systems Sdn Bhd (KNMPS), had landed a RM2.19 billion job in the United Kingdom. The contract is for the engineering, procurement, construction and commissioning of works towards the development of an 80MWe gross capacity energy from biomass and waste recycling centre project known as EnergyPark Peterborough. Duration of the contract is about 4 years.
KNM drive into Renewable and Clean Energy Sector... This mark another important milestone for KNM to venture into renewable energy sector, which is so popular in this energy-hunting world. This came as a surprise to investor because KNM had never been in that sector, and even surprising us was the multi-billion value contract.
The project was said expected to contribute positively to KNM's earnings for the …

English Premier League from Maxis?

Recently, TM and Maxis concluded a 10-year agreement for TM to provide High Speed Broadband (HSBB) Access Services to Maxis. According to RHB research, Maxis with the agreement, can instantly roll out fixed home services to a potential pool of higher ARPU customers with last mile access via TM’s HSBB network to 700k premises, and up to 1.3m premises by end-2012.
Currently, Maxis’ fixed home services is limited to Bandar Utama, Sierramas, Bangsar and Sri Hartamas via its own fibre-to-the-home (FTTH) network. And, as Finance Malaysia know, Maxis is targeting to launch its service in the newly popular township of Puchong.

Maxis's secret weapon - Content
All in one, Maxis plans to roll out are IPTV, VoIP, video-on-demand (VoD) and high speed Internet. In fact, TM itself already offers some form of IPTV and VoD bundled in together with its core service of high speed Internet in its UniFi packages. Hence, content is indeed a very important element for Maxis to stand out. It is very likely…

Understanding Exchange Traded Fund (ETF)

What is an Exchange-Traded Fund (ETF)? An ETF is an open-ended investment fund listed and traded on a stock exchange, which aims to track the performance of an index and to provide access to a wide variety of markets and asset classes. By holding a basket of individual securities, an ETF allows an investor to expose to many companies or fixed income securities with one single trade.

Benefits of Investing in ETFs... Prices are available throughout the day (according to trading time of Bursa Malaysia)Flexibility and Liquidity, due to combination of trading on an exchange and the continuous offering of units Transparent portfolio. Investors will know exactly what stocks they are investing inDiversificationLower management costs as compared to mutual funds How is the pricing of an ETF done?
The market price of units in the ETF is subject to supply and demand. Although Net Asset Value (NAV) of the ETF will approximate the trading value of the underlying securities held plus any undistributed …

2010 Top 10 Malaysian Companies

Wall Street Journal (WSJ) recently announced the result of Asia 200survey, which ranked the top 10 companies of selected countries according to financial reputation, corporate reputation, quality, vision, and innovation. Want to know the winners of Malaysia?
Wall Street Journal: "For the second year in a row, Public Bank Bhd ranked 1st overall among Malaysian companies. The bank's profit rose 20% to RM 2.2 billion on a 12% rise in revenue during the first nine months of the year.
Customer deposits grew at an annualized rate of 12.2%. Public Bank, Malaysia's 3rd largest lender by assets behind Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd (CIMB), also ramped up its Tier 1 capital ratio while touting a dramatically lower impaired-loans ratio at 1.2%, versus 3.4% for the industry overall."

Meanwhile, CIMB Group this year makes a new showing on the Asia 200 list, with a #7 spot. The group helm under Dato' Sri Nazir Razak, spearhead CIMB as a regional univers…

Cypark Resources Bhd – Our Environmental Friend

Cypark International is an integrated landscape and environmental services group that provides design and build services, build services and landscape maintenance. Cypark is also a supplier of plant materials, granites, and landscaping and architectural lighting. Cypark currently operates through its own offices and network offices in Qatar, UAE, Saudi Arabia, Thailand, China and Singapore.

Philip Capital Management (PCM):

About Cypark – Cypark is the only locally listed environmental technology & engineering specialist. It was established in 2004 and was listed on the Main Board of Bursa Malaysia on 15 October 2010. Its principal activities involve landfill closure and upgrades, construction of waste transfer stations and operating and maintenance of waste facilities (O&M) (see Picture 1). 

Unlike Alam Flora, Cypark is NOTinvolved in rubbish collection; its business actually starts from the construction and operation of transfer stations. Transfer stations are centrepoints where…

Revised EPF approved funds effective 1 Sept 2010

Effective 1 September 2010, there are 223 unit trust funds approved under the EPF Members Investment Scheme (EPF-MIS). The list of EPF approved funds is updated upon conducting the fund evaluation exercise based on EPF-MIS fund evaluation methodology (FEM).

Under the FEM, funds must meet the set standard criteria, including:- At least 3-years track recordsHave investment mandate of not exceeding 30% in overseas assetsConsistency in return performance among peers/ with benchmarkHow frequent will it be reviewed?
By using an international research house rating data as input in the assessment and evaluation of funds, the exercise will be conducted once a year. 
Suspended Funds? Funds that underperformed their peers will be suspended, until they are qualified to be reinstated. Suspended funds are not allowed to received new investment under the EPF-MIS, yet investments made by investors prior to the suspension are nevertheless allowed to remain in the funds.
Suspended Funds are loss-making fund…

Reconciling Tax Cuts with Long Term Debt Issues

Hail to the Wall Street Journal! In one short paragraph the Journal has summed up the heart of the US debt problem and why keeping all of the Bush tax cuts in force make sense as well. In today's Journal and I quote:

"While in a hopey-changey mood, let's note for his (Obama's) benefit that the real fiscal problem today is not the immediate deficit, which does not call for radical action. The real problem is a system of health-care and retirement finance that deters us from saving and budgeting for our own needs while at the same time piling up disencetivizing taxes on those who work and whom we expect to pay for us in old age. Fix this and the government is solvent again."

Wow! The WSJ nailed it. .

3 wrong perceptions on Malaysia's Properties

In Malaysia, property investment is gaining momentum since last year. And, the property sector seems unstoppable with record breaking sales. New launches are fully taken up within few hours. Speculators are becoming greedier than ever. Calming down, figuring out, is it so attractive after all? Let's have a look at the 3 big wrong perceptions

Wrong perception #1: 
Malaysia's properties still attractive?

No doubt, many analysts and researchers comment that the local market price is still low if comparing to regional markets, such as Singapore and Hong Kong. This was wrong because we cannot simply compare with islands, where land is limited. We cannot simply compare with China, where billions of people chasing for limited supply of houses.

Wrong perception #2: 
KL Developers are going high-end?

Yup… KL developers are focusing at launching those high-end residential units. But, do not come into conclusion just that. First, we must look into the locations of these new launches, especial…

Two cents for Government’s Talent Retaining Program

First, congratulates Talent Corp for continuing trying to achieve the objectives of bringing back Malaysian or foreign talent back home. Indeed, this was a very tough task, as Malaysians already implant the thinking inside. Every year, our "bright stars" migrate to other countries searching for their dream jobs.

Why it happens?
It was started when those bright graduates being in love with the countries they studied. Many of them pursue their degree in US, UK, and Australia. And, after they graduate, they became in love with these countries, and tend to get a job there, stay there, and forget here.
Highly specialized jobs are unavailable to these professional locally, such as doctors, engineer, scientists, new technology innovators… If you're hand phone innovator, would you join Apple or Nokia abroad or remain here?
Professional tends to feel proud by doing something that they can showcase their skills or capabilities. This is another reason for them to venture aboard, becaus…

KNM – Good & Bad

Recently, KNM is coming back to the limelight in Bursa Malaysia. After the 4 to 1 share consolidation exercise, KNM is inching up since securing a contract worth RM680 million in Uzbekistan. Then, KNM held a briefing with research outfits indicating that the company was on the road to recovery after a hiatus one-and-a half year.

Good facts:
Order book had grown to RM2.4 billion
Tender book grown to RM16 billion
Better capacity utilization
Re-surging of crude oil price which touches USD90 per barrel now
Malaysia government's intention to spur oil & gas sector
Listing of Petronas' subsidiaries enhancing the viability of local listed companies
Impending projects roll-out by Petronas soon
Planning to tap into nuclear industry in Africa Bad facts:
Foreseeable losses in its operations in Brazil, Canada and Indonesia
High debt levels with RM1 billion borrowings, against net cash balance of RM300 million
Future cash flows constraint would jeopardize the company credit rating
Would BUY Calls fro…

A Beginning

The compromise between the President and Mitch McConnell on taxes represents a new beginning for the President and, perhaps, for the country. The compromise will definitely help the economy. The economy needs it.

There are still problems, especially on the unemployment front. Employees are still too expensive, laden down by government-imposed mandates and implied litigation liabilities for businesses. But capital expansion should pick up dramatically in 2011.

It's not perfect, but this deal is definitely an improvement over the policies of the past two years.

The looming debt problems are still there -- both for the US and for Europe. Hopefully, the idea of "workouts" and "defaults" will soon take the place of "bailouts." The debt problems have no easy fix.

New Fund: AmConstant Multi Maturity

AmConstant Multi Maturity is a close-ended bond fund that seeks to provide regular income from 3 investment portfolios comprising of local and/or foreign bonds. These investment portfolios will mature respectively on the 3rd, 4th, and 5th anniversary of the commencement date and scheduled Capital Repayment(s) will be made to the unitholders following the respective anniversary.

The fund intends to invest a minimum of 95% in a multitude of local and/or foreign bonds carrying a minimum "A" rating by RAM or MARC equivalent to "BBB" by S&P or Moody.

As this is a close ended bond fund, the fund adopts a buy and hold strategy whereby bonds purchased will be held until its respective maturity. At the maturity of these bonds, issuers of bonds held by the fund will be obligated to pay the face value provided there is no occurrence of credit default by issuer.

A downgrade in credit rating may result in additional credit risk assumed by the fund. The manager may choose to li…

Proton loves Perodua to avoid extinction?

There has been a longstanding issue which has to be solved in Malaysia automobile industry – demise of Proton. The national car manufacturer had before storming the local car industry with its popular models such as Wira and Waja. While Proton was unbeatable during that time, Perodua (national 2nd car manufacturer) had approached Proton for a merger, but was turned down.

Now, the whole table turned the opposite direction, with Proton begging for a merger with Perodua. Why Proton so desperate right now?

Proton was over-taken as the#1 in Malaysia
Proton is running with an half-empty plant
Proton must address its problem as soon as possible
Why Perodua then?

In fact, Proton had identified two main areas where they have to improve on – technology and scale. To address it, Proton chose the technology path because it was the national icon, and only technology expertise could transform the company for the long-run independently.

First, Proton approaches Volkswagen, then General Motors, then Volkswa…

Credit Card Insurance, worth it?

I believe almost every credit card users had been offered a new type of insurance - credit card insurance.

What is credit card insurance?

it insured you of the outstanding amount owed in your credit card
it covers death and disablement of credit card holders
it charges card holders an insurance premium annually normally
And, in my case, it offers me a better plan which only charge me if there is any outstanding credit card loan. If you're a prompt paymaster, this is definitely the better option for you. If you agreed on the deal, all you need is to answer 'YES' through the phone. Then, they will issue a contract notes and mail to your home address.

Ya... Pretty easy and convenient though.
But, is it worth to have such insurance?

Finance Malaysia opine that it is not worth, and its a waste of money because of the following points:- Credit card supposed is for our ease of making purchases, especially for those 0% installment deals. Those who opts credit card loans would have been due…

Broad-Ban in Malaysia?

Forget about the old fixed line internet connections anymore. We have the on-the-go broadband services, which provide almost unlimited boundaries for internet lover to surf anytime anywhere. However, you may not know a very unpleasant scenario is happening in Malaysia (at least I found out now).

Although I comment about TM's monopoly status in fixed line internet connection previously, I still prefer Streamyx for its unlimited surfing, lower monthly charges, and stable connectivity. Most importantly, more than one people can online at the same time, without extra fees. Whereas, broadband cannot.

Don't know #1

Recently, I moved to a new area, and hopes to subscribe for Streamyx (fixed line internet service provided by TM). However, I was shock to found out that I cannot subscribe for Streamyx, because my area was under Maxis territory. Wow… Sounds like I am living in the battle-field, where Maxis won the game!!!

The reason given was that my area's telephone line is bought over …

E&O is the next take-over target?

The recent spate of mergers have been dominating the trading sentiment of local market, with IJM-MRCB, UEM Land-Sunrise, and Sunway-SunCity. Investors are wondering whether there is any mergers activities else, and the million-dollar question is "Who is the Next".
 Main factors of taking private... Undemanding valuationStrong brandingA well-run and profitable companyAfter screening through the list of property counters, E&O could potentially emerged as the next company of being privatized. The main reason being E&O's is trading at a huge discount to its revised net asset value (RNAV) of RM2.72* per share.

Other than that, E&O has a very good brand name in the premium market, having some prime land-bank in strategic locations (especially in Penang). Couple with its strong marketing acumen, this company fit nicely into the take-over picture currently.
Spicing it up, speculations to privatized E&O has emerged in one of the news portal few months ago, saying that…

Bursa Malaysia to take on ASEAN

Yesterday, news portal reported that Bursa Malaysia (BM) together with Singapore Stock Exchange (SGX) and Stock Exchange of Thailand (SET) are set to join the Asean Exchange Linkage which will go live by the 2nd half of 2011.

In addition to the linkage, the exchanges would also promote leading Asean public companies under the brand of "Asean Star". The cross-border offering of collective investment scheme would kicks-in after that.
Migration of local investors? In fact, many local investors are already trading overseas shares, especially Singapore and Hong Kong markets. For them, this made no significant difference, except that the new cross-border trading will reduce the lagging time, thus, boosting the participation and matching rate. If the overhead costs of trading is reduced accordingly, investors will be more reluctant to trade. Anyway, investors can diversify more effectively to regional markets soon.
Brokers do not "broke" anymore? Local brokers are expecting…