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Showing posts from October, 2012

Launching of Association of Financial Advisers (AFA)

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31stOct 2012 would be a historic day for Malaysia financial planning industry with the launching of newly formed Association of Financial Advisers (AFA) at Lanai Kijang, Bank Negara Malaysia. From now onwards, AFA will effectively represent all the Licensed Financial Advisers and Corporate Unit Trust Advisers (CUTA) Firms. The association is approved by Registrar of Societies on the 16th August 2012 with the support from Bank Negara Malaysia.

In conjunction with its launching, AFA also held its inaugural financial advisers conference titled “Charting New Frontier – FA the Future”. During the conference, audiences were empowered with up to date practices by Bank Negara and Securities Commission. Then, an interesting forum on the Future of Malaysia Financial Advisers Industry was discussed with everyone attentions. How we benchmark ourselves with other countries? We heard some success stories from Singapore and Hong Kong.

It was a successful milestone event for financial planners and CUTA…

Sandy is a Negative

Don't believe the argument that natural disasters fuel economic growth.  That argument is only true if what is being destroyed is something that should have been demolished in the first place.  Otherwise, things like "Sandy" should be viewed as a net wealth loss.  So, who steps up to make up for the wealth loss....the government?

Governments at all level are broke.  Sandy will only exacerbate the problems of state and local governments and everyone knows the federal deficit is on a path to disaster.  So, there is no silver lining here.

The loss is not confined to destruction.  Shutting down New York City and much of the East Coast for two days is not going to be completely made up later.  Some substantial loss is inevitable from the shutdown.

Sandy is a reminder that bad things can happen randomly. It is also a reminder of why people and governments should save for a rainy day.  Sometimes it rains.

New Fund: AmTactical Bond

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Still remember one fund called AmDynamic Bond fund? If yes, you definitely knew the superb performance of that bond fund, which had became the flagship fund for AmMutual for past years. However, it was sad that, since few months ago, no more subscription was being allowed for AmDynamic Bond fund because it has reached the maximum limit set by regulators. In other words, too hot the demand for that fund. Then how?

Because of that reason, AmMutual is proud to launch another new fund, AmTactical Bond fund, which was managed by using the same strategy, but with a little bit more flexibility. The Fund aims to provide income and to a lesser extent capital appreciation by investing primarily in bonds.
How Flexible is it?
The Fund seeks to achieve its objective by investing primarily in sovereign, quasi-sovereign and corporate bonds including convertible bonds. There is NO minimum rating for a security purchased or held by the Fund.


To construct the portfolio of the Fund, the Investment Manager w…

The Fiscal Cliff

The President, in the third and final debate with Governor Romney, said that sequestration was "not going to happen."  Wonder what he knows that we don't?  In any event, it has already happened in some sense.  The expectation of increased tax rates and of sequestration are already playing into the economy.

Business folks don't wait until January to make decisions.  They are making them now.  Business has ground to a halt in the US, excepting a spurt in housing and the buoyant energy sector.  The combined impact of Dodd-Frank, of Obamacare, of the expiration of the Bush tax cuts, and of the coming sequestration are enough to scare any self-respecting entrepreneur about America's future.

We are already careening down the fiscal cliff. 

The question is, if the President loses his re-election bid, can we climb back out of the abyss.  That depends upon what a President Romney would prioritize.   In the short run, the economy needs the government to step back.   Rolling …

New IPO: Astro Malaysia Holdings

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The Return of a Pay TV Giant!!! Astro Malaysia Holdings (AMH) is poised to list on Bursa's Main Market on 19th Oct with a market cap of RM15.6bil. The largest pay-TV operator in Malaysia has a de factor monopoly, commanding a 99% market share. Are you excited, again?



Background
AMH is the leading media entertainment group in Malaysia with 3,100,000 customers and one of the largest in South East Asia. It is primarily engaged in the creation, aggregation and distribution of content over multiple delivery platforms including TV, radio, publications and digital media within Malaysia.
What's the different from the then delisted entity?
Recall that Astro All Asia Networks (AAAN) was the one taken private in 2010 by its single largest shareholder Astro Holdisngs SB. Meanwhile, AMH is effectively the domestic media business arm of previously-listed AAAN.
How good was Astro Malaysia Holdings? A monopoly in the pay TV segment with 99% market shareA capital intensive industry, creates a high b…

Taxing the Rich As a Political Issue

It plays well to say that some hedge fund guru who makes $ 100 million per year should pay higher taxes.  Who can't sympathize with the view?

But, of course, that is never what is actually proposed by the Obama folks.

Instead the "tax on millionaires and billionaires" is aimed at the very large group of Americans who make far less than a million dollars per year.  The Obama "tax on the rich" aims it's bazooka at Americans who make $ 250,000 or more.  How did that group get labeled "millionaires and billionaires?"

There are a lot more families with income between $ 250,000 and $ 1,000,000 than families with income above $ 1,000,000, so Obama's plan is to soak the folks that aren't millionaires and billionaires, but, perhaps, aspire to be.  Worse, anyone aspiring to join the $ 250,000 plus crowd should take note.  This bazooka is aimed at your economic future. 

No point in starting that new business or hire that extra employee!  The President is…

New Fund: TA Total Return Fixed Income Fund

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Just another new fund from TA Investment Management (TAIM)? Think again... In fact, this is the first bond fund launched by TAIM and it will take on the other bond funds in the market with a "Wow"effect. Why? Believe me, you gonna put this fund into your radar of unit trust investment. And, you will know why after reading this post.

The TA Total Return Fixed Income Fund is a feeder fund which invests a minimum of 95% of its NAV into the PIMCO Funds: Global Investors Series plc - Total Return Bond Fund (SGD Hedged) and the balance in liquid assets. What? PIMCO !!! Yup, it's the leading global investment management firm, especially on fixed income investment.
5 Reasons Why you should invest into this Fund?
Total Return Strategies, Global Diversification & Flexibility
It aims to maximize the total return, consistent with preservation of capital and prudent investment management by investing 2/3 of its assets in a diversified portfolio of fixed income instruments of varying …

The Uncertainty Trade-Off

The main reason that free markets struggle to achieve political legitimacy is that outcomes can be unpredictable.  There can be booms, busts, cycles, and anxiety.  In a regime like the old Soviet Union, there was no anxiety and no booms and busts.  There was simply perpetual stagnation.  Is there anything in between these two alternatives?

Probably not.

The idea of a 'mixed economy' is a common staple of university courses in economics and politics, but one wonders if a 'mixed economy' is a stable outcome.  Once a large part of the population derives its income from government, then a 'mixed economy' has a tendency to move more toward a government-dominated economy.  People vote their economic interests.  Public school teachers, once the most conservative voters in America are now among the most liberal voters.  Why?  They vote their economic interests, which they identify with the liberal economic policies that expand government and boost the compensation for pu…

Smirkin' Joe

Smirking and rolling his eyes as a substitute for discussing policy, Joe Biden showed why the US economy and foreign policy has been run into a ditch.  Neither Biden nor Obama has any real interest in the issues of the day.  The discussion of the catastrophe in Libya provided an excellent summary of the Obama Administration's approach to life:  "We will get to the bottom of this!"  Really?

Biden seemed to think that any real discussion of policy was unnecessary.  His attitude was so condescending that it made one wonder what he and Obama really think of the American people.  The idea that government knows everything and the people are sheep to be lead was so pervasive in Biden's attitude, that it is easy to see why the Obama Administration feels that it doesn't need to produce budgets, programs, plans or anything.  Just smirk your way forward.

Biden constantly interrupted Congressman Ryan and talked over Ryan during Ryan's time.  Biden's contempt for the de…

Should we learn from Robert Kiyosaki from now on?

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When news broke out that "Rich Dad, Poor Dad now a Bankrupt Dad", everyone was so excited to share it out to their circles of friends. Maybe thanks to the interesting news title created to attract the attention of us. In fact, it succeed (because it reaches Finance Malaysia attention now). Well, since we're a financial related blog, we must blog about this hyped news without second thought. Should we learn from Robert Kiyosaki from now on?

About the Bankruptcy... According to UK dailymail, "the financial guru behind New York Times bestseller Rich Dad, Poor Dad has filed for bankruptcy on one of his companies after losing a $24 million judgement." Read carefully... It's on one of his companies, not under his own name. Meaning, Robert Kiyosaki didn't bankrupt. Then, what's the difference?

The liability of the debt was limited to the extent of the company only. It's doesn't affect the other business or on Robert Kiyosaki personal either. Doesn'…

Plantation: Start of a sector 'SELL-OFF' or CPO prices to recover? (Oct 2012)

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While CPO prices have declined 20% over the past one-month to M$2,300/t, share prices of our upstream plantation universe have not reacted materially moving by -8% to +3% (-3% to +3% for our top picks) Key question hence is whether this raises the risk of a further sell-off in plantation stocks or will CPO prices recover?



Key reasons for the CPO price fall: 1) High inventory levels amid the current high output season. 2) Some easing in demand (though not materially) mainly from slower bio-diesel production. 3) Softening crude oil prices. 4) Better soybean supply prospects with improved weather.


Will CPO prices weaken further? CPO’s price competitiveness to soy-oil and crude oil is now at its best since the previous economic crisis in late-2008. CPO's price discount is currently at US$340/t to soy-oil (spot) versus its historical mean discount of US$160/t. CPO at current spot levels of M$2,300/t is also already discounting crude oil prices at US$72/bbl based on the bio-diesel breakeven su…

The Global Economy Weakens

The global economy is deteriorating.  There are no real bright spots.  The BRICs are slowing, Europe is in chaos, and the US is stuck in the mud.  For all the promises that governments make, real economic progress for the average person comes only when economies are growing.  Economies can only grow when markets are free and individuals are willing to take risks to make money. 

Unfortunately, no modern politicians seem committed to free markets.  Romney is probably better than the alternative, but even Romney sees government as an important player in the economy.  His Massachusetts history gives one pause.  The real problem is that Americans and Europeans generally believe that twenty or twenty five years in the work force deserves eighty years of compensation.  The arithmetic doesn't work for that.  Something has to give.

Things like social security and medicare are not affordable.  No society can afford them.  What is playing out in Europe and will someday play out in the US is th…

RHBRI Market Outlook & Strategy 4Q2012: Stormier Outlook

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RHB research institute (RHBRI) is of the view that it could still be a choppy few months for the equity market in the 4Q given weakening economic fundamentals in the major world economies and fears of an imminent general election on the home front. Whilst more rounds of quantitative easing have been unveiled in the developed world, the big question in investors’ minds is how all these quantitative easing measures will translate to better global economic outlook. Having said that, equity still stands up vis-a-vis the unappealing returns of the alternative asset classes, such as cash and bonds and any good news is still likely to prompt a rally in equities.



How was Malaysia fared? And, what's the strategy now? Thus far, Malaysia has fared relatively well in the global financial crisis, and this is partly on account of low reliance on foreign funding of its banking system and more importantly, the progress in the implementation of the Economic Transformation Programme to boost domestic …

New Fund: AmIncome Flexi

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In view of current uncertainties still lingering around investment universe, bond was considered as one of the asset class that most investors seeks to preserved their asset value, albeit lower risk. Just as the name of the fund, it's a flexible bond fund which has an interesting early repayment features. Let's have a look.

The Fund is a 3-year close-ended bond fund that aims to provide annual income distribution throughout the duration of the fund. To achieve the investment objective, the fund intends to invest its NAV in a portfolio of domestic and/or foreign sovereign issued bonds and corporate bonds. Domestic bonds:
--> minimum credit rating will be “A” rated by RAM or MARC’s equivalent. Foreign bonds:
--> minimum credit rating will be “A” rated by their respective local credit rating agencies which denotes strong capacity to meet financial commitments and/or “BB” rated by S&P or Moody’s equivalent at the time of investment.
As this is a close-ended fund, the Investme…

Budget 2013: What's the view by Foreign research houses?

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Hmmm... Yup, the title is correct. We at Finance Malaysia blog would like to hear the views from Foreign analysts only this time. Why? Because they tend to be more independent (we think), and we know that readers like you can easily access to local research reports. So, we made the decision to only show you what is written by foreign analysts as below:

Phillip Capital Management: An earnest & all-around Budget?

"People’s livelihood, affordable housing and tax issues topped the pre-budget wish lists. Weeks before the announcement, there were many discussions about the Budget 2013 in the media and various conjectures about the budget outcome. Everybody in town was anxiously waiting for the Prime Minister’s speech to reveal the Budget 2013, hoping the wish in one’s heart and mind will come true. TV camera shots have shown that people have been in high spirits cheering for the Santa Claus during the speech. We think Barisan Nasional has successfully drawn up the budget that appears…

This is Austerity?

Why are France and Spain (and everywhere else in Europe) in deep fiscal trouble?  -- Too many promises by government without any plans to come up with the money to pay for the promises.

So, what are France and Spain doing?  Spain's recently proposed 'austerity' budget includes a one percent increase across the board to pensioners.  Paying pensions is Spain's number one government expense.  So, why not make it even higher?  How about France?  Newly elected Socialist President Francois Hollande took quick action to move France's retirement age to 60 from 62.  He may as well have moved it to 40 for what little chance France has of paying future retirees.

No austerity plan in Europe touches things like retirement, public employee largesse, and laws that mandate hours and rule out employee terminations.  So, in reality, nothing of any real significance is taking place except that the Eurozone is taking on more debt and rolling the printing presses.

You wonder why anyone th…