Historical Investment Data of Genting Malaysia GENM (7.6.2010)
http://spreadsheets.google.com/pub?key=tnwEh7I1JjIN3EviG6ZylQg&output=html
Monday 7 June 2010
Historical Investment Data for Parkson (7.6.2010)
Historical Investment Data for Parkson (7.6.2010)
http://spreadsheets.google.com/pub?key=to3QELB1TK3GBvszqFfJBdw&output=html
http://spreadsheets.google.com/pub?key=to3QELB1TK3GBvszqFfJBdw&output=html
Historical Investment Data for Coastal (7.6.2010)
Historical Investment Data for Coastal (7.6.2010)
http://spreadsheets.google.com/pub?key=t2V7YCN7GFYfboe6OYDJYpA&output=html
http://spreadsheets.google.com/pub?key=t2V7YCN7GFYfboe6OYDJYpA&output=html
Historical Investment Data for UMW (7.6.2010)
Historical Investment Data for UMW (7.6.2010)
http://spreadsheets.google.com/pub?key=tOedmb48POVTSD45xSQHWpQ&output=html
http://spreadsheets.google.com/pub?key=tOedmb48POVTSD45xSQHWpQ&output=html
Historical Investment Data for Latexx (7.6.2010)
Historical Investment Data for Latexx (7.6.2010)
http://spreadsheets.google.com/pub?key=t73kBT7EVW5Ca8Jxrct4ADw&output=html
http://spreadsheets.google.com/pub?key=t73kBT7EVW5Ca8Jxrct4ADw&output=html
Historical Investment Data of LPI (6.6.2010)
Historical Investment Data of LPI (6.6.2010)
http://spreadsheets.google.com/pub?key=t2Nr2da6bA6VYYpXZT28xeA&output=html
http://spreadsheets.google.com/pub?key=t2Nr2da6bA6VYYpXZT28xeA&output=html
Historical Investment Data of iCap (6.6.2010)
Historical Investment Data of iCap (6.6.2010)
http://spreadsheets.google.com/pub?key=tabklggxjRBwWBjk9zbdimg&output=html
http://spreadsheets.google.com/pub?key=tabklggxjRBwWBjk9zbdimg&output=html
Sunday 6 June 2010
Historical Investment Data of Petronas Dagangan (6.6.2010)
Historical Investment Data of Petronas Dagangan (6.6.2010)
http://spreadsheets.google.com/pub?key=tTnachNyggdEpwkw8WoYpHg&output=html
http://spreadsheets.google.com/pub?key=tTnachNyggdEpwkw8WoYpHg&output=html
Historical Investment Data of Public Bank (6.6.2010)
Historical Investment Data of Public Bank (6.6.2010)
http://spreadsheets.google.com/pub?key=tomlkx-CzLQC5pU4zTjbeGA&output=html
http://spreadsheets.google.com/pub?key=tomlkx-CzLQC5pU4zTjbeGA&output=html
Historical Investment Data of Guinness (6.6.2010)
Historical Investment Data of Guinness (6.6.2010)
http://spreadsheets.google.com/pub?key=tem-b3yiUnbRUIT1ZeZagbg&output=html
http://spreadsheets.google.com/pub?key=tem-b3yiUnbRUIT1ZeZagbg&output=html
Historical Investment Data of Hing Yiap (6.6.2010)
Historical Investment Data of Hing Yiap (6.6.2010)
http://spreadsheets.google.com/pub?key=tN3-xhvss_dmr7p3P3wsjHA&output=html
http://spreadsheets.google.com/pub?key=tN3-xhvss_dmr7p3P3wsjHA&output=html
Historical Investment Data of Dutch Lady (6.6.2010)
Historical Investment Data of Dutch Lady (6.6.2010)
http://spreadsheets.google.com/pub?key=tfBgUux9Lgr74vMAGgUygEw&output=html
http://spreadsheets.google.com/pub?key=tfBgUux9Lgr74vMAGgUygEw&output=html
Historical Investment Data of Nestle (6.6.2010)
Historical Investment Data of Nestle (6.6.2010)
http://spreadsheets.google.com/pub?key=tvQ6p-ho1Y6CO1ayJFIJW6A&output=html
http://spreadsheets.google.com/pub?key=tvQ6p-ho1Y6CO1ayJFIJW6A&output=html
Historical Investment Data of KLSE 1993 to 2010 (6.6.2010)
Historical Investment Data of KLSE 1993 to 2010
http://spreadsheets.google.com/pub?key=tVCJOWP_2GLeToC9ioAeuZw&output=html
Here are some interesting observations:
KLCI Index
Beginning of 1994: 1275.32
Beginning of 2010: 1259.16 :-(
Market Returns
During the period, the average annual capital appreciation of the stock market was 4.26%. Assuming a DY of 3%, the total return of the market was 7.26%.
Of the 17 years from 1994 to 2010:
What can we learn from studying the KLCI?
What investment strategies can be employed to safeguard your investments in the local stock market? What investment strategies can be used to maximise your investment gains?
http://spreadsheets.google.com/pub?key=tVCJOWP_2GLeToC9ioAeuZw&output=html
Here are some interesting observations:
KLCI Index
Beginning of 1994: 1275.32
Beginning of 2010: 1259.16 :-(
Market Returns
During the period, the average annual capital appreciation of the stock market was 4.26%. Assuming a DY of 3%, the total return of the market was 7.26%.
Of the 17 years from 1994 to 2010:
- There were 5 Bear Markets when the market index went down >20% from the beginning of the year.
- There were 4 Bull Markets when the market went up > 20% from the beginning of the year.
- The rest of the period (8 years), the market fluctuated between +/- 20%; there were 6 positive years and 2 negative years.
- The market was very volatile at times. For example, the KLCI was down 53.19% in 1997 and was up 55.91% in 1999. In the year 2008, it was down 36.52% and in 2009, it rebounded 42.37%.
What can we learn from studying the KLCI?
What investment strategies can be employed to safeguard your investments in the local stock market? What investment strategies can be used to maximise your investment gains?
How to be a wiser investor
Saturday June 5, 2010
How to be a wiser investor
Review by ERROL OH
errol@thestar.com.my
How to Smell a Rat: The Five Signs of Financial Fraud
Author: Ken Fisher, with Lara Hoffmans
Publisher: John Wiley & Sons
WHICH kind of investor are you – Confident Clark, Hobby Hal, Expert Ellen, Daunted Dave, Concerned Carl or Avoidance Al? If you’re one of the first three, there’s little chance that you’ll lose money in a scam, according to Ken Fisher, head of Fisher Investments, a California-based money management firm, and a longtime Forbes columnist.
But he believes that Dave, Carl and Al ought to be extra vigilant in making investment decisions, particularly when it comes to choosing advisers.
He warns: “Con artists love Dave, Carl, even Al. If you see yourself in one of them, you’re more likely to hire a pro, but you’re also more likely to be conned.”
Having spent decades managing money, and writing and speaking on investments, Fisher has learnt plenty about investors. With some clever use of alliteration, he divides them into six categories .
Clark is the sort who thinks he’s the best person to decide where to put his money; he won’t trust somebody else to do that job. Hal is dead serious about investing and is always honing his skills and knowledge in this field. Even when he has an investment adviser, he’ll be in the thick of things. Fraudsters tend to stay away from Hal because he’s too involved in his investments.
Like Clark and Hal, Ellen knows a thing or two about investments and enjoys the challenge of extracting the best returns. However, she’s usually too busy to do it all on her own and will leave it to the professionals. Still, because she’s not easily fooled by fake profits and she’s more questioning than most investors, she’s not your typical fraud victim.
But Dave is, because he’s intimidated by the complexity of investing and prefers to hand his funds over to others to manage. Carl is similar except that his dependence on professional help is driven mainly by the worry that he can’t achieve his investing goals on his own.
Then there’s Al, who will have nothing to do with investments if he can help it. He doesn’t even like thinking about hiring an adviser, but when he does appoint one, he won’t bother keeping track at all.
“Rats are looking for financial illiterates. They want victims who won’t question too hard – either because they’re busy, intimidated, or easily distracted by outsized performance claims,” wrote Fisher.
Not-so-common sense
If you see yourself as Clark, Hal or Ellen, don’t be too quick to think that you’ll never be cheated. Fisher likens such false sense of security to a guy not taking care of his health just because his doctor has declared that he has a low risk of heart failure.
Ken Fisher
He explains: “You may feel like Clark or Ellen right now. But the same investor can actually morph over time into someone else – happens all the time. The way investors see their needs can easily change.”
For example, during bull markets, investors may be assured and aggressive in wanting growth, but when the bears are on the prowl, the same investors sing a different tune as they turn wary and instead focus on capital preservation.
It’s this kind of deep insight and understanding that makes How to Smell a Rat a worthwhile read. It essentially peddles common sense, but Fisher’s vast experience and expertise makes all the difference.
There will always be crooks on the prowl for easy marks, and there will never be a shortage of people who can be seduced by promises of generous returns on their money. As such, anything that helps us avoid investment scams is useful.
Fisher shows the goods very early in the game. On page 5, he lists the five signs (see box) referred to in the book’s subtitle.
“Note: Just because your manager displays one or a few signs, it doesn’t mean they should immediately be clapped in irons. Rather, these are signs your adviser may have the means to embezzle and a possible framework to deceive. Always better to be suspicious and safe than trusting and sorry,” he advises.
If you had committed these signs to memory, you might be tempted to ditch the book at this point, but you would have extracted only a fraction of its value.
Mere awareness of the red flags is inadequate protection; an enlightened and responsible investor should have a reasonable grasp of how con artists operate and of the weaknesses they exploit.
Critical signs
This is where the book comes in most handy. When elaborating on the five signs, Fisher illustrates with examples that highlight commonalities among infamous swindlers such as Charles Ponzi, Ivar Kreuger, Robert Vesco, Bernard Madoff and R. Allen Stanford.
Through this, you appreciate the fact that though the specifics vary, the scamsters’ game plans are pretty much alike. The investment schemes are typically structured in such a away that the advisers have way too much control over the money and the investments.
The advisers promise returns that are almost too good to be true, and they often have trouble articulating their strategies in simple terms. They prey upon the same types of people. If you’re wholly mindful of what these warning signs mean, consider yourself inoculated against the investment fraud virus.
How to Smell a Rat is in part a self-improvement title. It is enriching because Fisher discusses the foibles and circumstances that enable con games to thrive.
When writing about how the culprit behind a hedge fund scam used impressive-sounding gobbledygook to dupe people, Fisher is actually telling us that our pride can lead us down the path to financial ruin.
“Remember, his victims weren’t stupid. But folks who consider themselves smart may not always question -- they don’t want to reveal they don’t understand. Many smart people have a hard time getting their egos to openly admit they don’t understand,” he tells the readers.
Another lesson: The investor himself must do due diligence before handing over his money to the adviser. “(Due diligence is) not complicated, but enough folks won’t do the check – and con artists count on that. It’s your money – you alone must do the check. Don’t let anyone in the middle,” urges Fisher.
Of knights and the Net
Often droll and cutting, the author is an engaging guide and teacher.
A target of his barbs is Stanford, chairman of Stanford Financial Group. In February last year, the US Securities and Exchange Commission filed an action, alleging that Stanford and his companies orchestrated a US$8bil fraud and that he was conducting a Ponzi scheme.
In making his point that fraudsters are fond of crafting flashy facades, Fisher likens Stanford’s knighthood from Antigua to a Cracker Jack box prize. “Elton John’s been knighted – but at least he was knighted by the Queen of England. Still, do you want him managing your money?” he asks.
His opinions are always firm and passionately argued, but at times, they can be rather eccentric, such as his blithe dismissiveness towards the influence of New Media.
“I would never believe things I read on blogs about anyone, ever, good or bad. You have no way to know what’s behind them, and often it’s nonsense. Actually, more often than not, it is nonsense! The Internet and its natural feature of anonymity bring out the very worst in a great many people,” he grumbles.
“Don’t ever believe Internet blog postings or comments on articles on even major websites. There isn’t integrity there, so don’t buy it, either way – whether it’s helping the reputation or defaming it.”
Here he sounds out of step with what’s happening out there, but this shouldn’t detract from the wisdom that Fisher offers in How to Smell a Rat.
According to Ken Fisher, there are ways to tell if your investment adviser may be a swindler or may evolve into one. In How to Smell a Rat, he provides a checklist:
1. The biggest red flag – your adviser also has custody of your assets.
2. Returns are consistently great.
3. The investing strategy isn’t understandable.
4. Your adviser promotes benefits (such as exclusivity) that don’t impact results.
5. You didn’t do your own due diligence, but a trusted intermediary did.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/5/business/6327254&sec=business
Are remisiers still necessary?
Wednesday June 2, 2010
Are remisiers still necessary?
Personal Investing - By Ooi Kok Hwa
Online trading cheaper so remisiers should offer better and value-added services
MEMBERS of the general public have been complaining about the services of remisiers as they feel there is no difference between buying shares through remisiers and online trading. They feel that remisiers do not provide any value-added services.
Whenever they call to buy or sell shares, remisiers let the investors decide themselves whether to buy or sell stocks at the current prices.
They say remisiers seldom provide their views on whether to buy now or later as sometimes investors may be able to get better prices if they purchase the stocks later.
Some investors prefer online trading as some stockbroking firms provide the minimum brokerage cost of about RM10 per trade compared with the minimum brokerage cost of RM40 per trade if they use the services of remisiers.
On the other hand, a lot of remisiers have been complaining about their business. Some complain that the minimum brokerage cost of about RM10 per trade for online trading has put them at a disadvantage as their services are more expensive at the minimum brokerage cost of RM40 per trade.
In addition, despite the high stock market trading volume, they also notice that not many retail investors are actively involved in the stock market.
As a result, some remisiers are quite negative about their own profession.
The Securities Commission launched the Continuing Professional Education (CPE) programme and has made it mandatory for all licensed persons in the Malaysian capital market since 2001.
'You still need me'? asks a remiser.
Given that remisiers are licensed holders and have been attending classes over the past 10 years, we notice that their investment and financial knowledge has improved over the years.
At present, remisiers are looking for more advanced courses instead of simple courses like introduction to investment or financial knowledge or products. Hence, we feel that remisiers have the ability to provide better and value-added services to investors.
There are two main transaction costs when purchasing stocks, namely explicit and implicit costs.
Market impact refers to the price movement caused by placing the trade in the market, delay cost is the inability to complete the trade immediately due to the order size and market liquidity, while missed-trade opportunity cost is related to the unrealised profits or losses attributed to the failure to complete the trades.
For example, Stock A is currently selling at RM1.98 (buying price) to RM2 (selling price). Mr B intends to buy 50 lots of Stock A and to save on brokerage commission by buying online. However, he is not aware that there is some good news on and strong buying interest in Stock A.
A good remisier should be able to advise Mr B to give market order and buy Stock A at the best available selling price of RM2, rather than give a limit order of RM1.98. If the day’s closing price for Stock A is RM2.10 and Mr B did not manage to accumulate the stocks at RM1.98, the missed-trade opportunity to Mr B is 5% ((RM2.10-RM2)/RM2).
This missed-trade opportunity cost of 5% is much greater than 0.6% that he pays on the brokerage commission.
We tend to agree with the general public view that not all remisiers are willing to commit themselves to get the best prices for their clients. One reason may be the difficulty in judging whether the buying interest will persist throughout the whole day.
As a remisier, his key role is to get the best execution prices for his clients. We feel the minimum brokerage cost of RM40 per trade is fair to the remisier as the implicit cost of buying a stock is much greater than this explicit cost.
The RM40 is also used to cover the time required to monitor and to get the best prices; time spent on reading market developments and corporate news; costs required to acquire market information and attend classes; and administrative work involved in helping their clients on rights issues or any other corporate exercises.
In Malaysia, we have about 8,000 remisiers and dealers with a population of 28 million versus 3,000 remisiers with a population of about 4 million in Singapore. We strongly believe that the remisiers’ services are still required and have the potential to grow.
Nevertheless, remisiers need to upgrade and add more value to their services, on top of providing the best execution of trades to their clients, to differentiate their services from online trading.
The writer is one of the active CPE course trainers. He is also an investment adviser and managing partner of MRR Consulting.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/2/business/6381518&sec=business
Are remisiers still necessary?
Personal Investing - By Ooi Kok Hwa
Online trading cheaper so remisiers should offer better and value-added services
MEMBERS of the general public have been complaining about the services of remisiers as they feel there is no difference between buying shares through remisiers and online trading. They feel that remisiers do not provide any value-added services.
Whenever they call to buy or sell shares, remisiers let the investors decide themselves whether to buy or sell stocks at the current prices.
They say remisiers seldom provide their views on whether to buy now or later as sometimes investors may be able to get better prices if they purchase the stocks later.
Some investors prefer online trading as some stockbroking firms provide the minimum brokerage cost of about RM10 per trade compared with the minimum brokerage cost of RM40 per trade if they use the services of remisiers.
On the other hand, a lot of remisiers have been complaining about their business. Some complain that the minimum brokerage cost of about RM10 per trade for online trading has put them at a disadvantage as their services are more expensive at the minimum brokerage cost of RM40 per trade.
In addition, despite the high stock market trading volume, they also notice that not many retail investors are actively involved in the stock market.
As a result, some remisiers are quite negative about their own profession.
The Securities Commission launched the Continuing Professional Education (CPE) programme and has made it mandatory for all licensed persons in the Malaysian capital market since 2001.
'You still need me'? asks a remiser.
Given that remisiers are licensed holders and have been attending classes over the past 10 years, we notice that their investment and financial knowledge has improved over the years.
At present, remisiers are looking for more advanced courses instead of simple courses like introduction to investment or financial knowledge or products. Hence, we feel that remisiers have the ability to provide better and value-added services to investors.
There are two main transaction costs when purchasing stocks, namely explicit and implicit costs.
- Explicit costs refer to direct costs of trading like brokerage commissions, stamp duty and clearing fees whereas
- implicit costs refer to indirect costs of trading like market impact (or price impact), delay cost and missed-trade opportunity costs.
Market impact refers to the price movement caused by placing the trade in the market, delay cost is the inability to complete the trade immediately due to the order size and market liquidity, while missed-trade opportunity cost is related to the unrealised profits or losses attributed to the failure to complete the trades.
For example, Stock A is currently selling at RM1.98 (buying price) to RM2 (selling price). Mr B intends to buy 50 lots of Stock A and to save on brokerage commission by buying online. However, he is not aware that there is some good news on and strong buying interest in Stock A.
A good remisier should be able to advise Mr B to give market order and buy Stock A at the best available selling price of RM2, rather than give a limit order of RM1.98. If the day’s closing price for Stock A is RM2.10 and Mr B did not manage to accumulate the stocks at RM1.98, the missed-trade opportunity to Mr B is 5% ((RM2.10-RM2)/RM2).
This missed-trade opportunity cost of 5% is much greater than 0.6% that he pays on the brokerage commission.
We tend to agree with the general public view that not all remisiers are willing to commit themselves to get the best prices for their clients. One reason may be the difficulty in judging whether the buying interest will persist throughout the whole day.
As a remisier, his key role is to get the best execution prices for his clients. We feel the minimum brokerage cost of RM40 per trade is fair to the remisier as the implicit cost of buying a stock is much greater than this explicit cost.
The RM40 is also used to cover the time required to monitor and to get the best prices; time spent on reading market developments and corporate news; costs required to acquire market information and attend classes; and administrative work involved in helping their clients on rights issues or any other corporate exercises.
In Malaysia, we have about 8,000 remisiers and dealers with a population of 28 million versus 3,000 remisiers with a population of about 4 million in Singapore. We strongly believe that the remisiers’ services are still required and have the potential to grow.
Nevertheless, remisiers need to upgrade and add more value to their services, on top of providing the best execution of trades to their clients, to differentiate their services from online trading.
The writer is one of the active CPE course trainers. He is also an investment adviser and managing partner of MRR Consulting.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/2/business/6381518&sec=business
Lessons from Malaysia: Why Singapore needs a strong and stable government
Lessons from Malaysia: Why Singapore needs a strong and stable government
June 2nd, 2010 | Author: Your Correspondent
OPINION
When Law Minister Shanmugam spoke about the need for Singapore to have a “strong and stable” government which makes “quick and effective” decisions a few months ago in Parliament, he was greeted with a dose of cynicism and derision by some netizens who saw it as another lame attempt to justify the PAP’s dominant position in Singapore politics.
The latest developments in neighboring Malaysia have provided us ample lessons on why it is important for Singapore to have a strong government and a weak opposition in order not to hamper the decision-making process for the greater good of the nation.
For over 50 years, Malaysia is governed by the ruling Barisan Nasional coalition (formerly known as the Alliance) which enjoyed two-thirds majority in the Dewan Rakyat (Malaysia’s Parliament) till the 2008 elections when the opposition won an unprecedented 82 out of 222 seats in Parliament and lost control of 5 states including the two richest states of Penang and Selangor. (the number is now reduced to 72 after a spate of defections and resignations of MPs from Parti Keadilan Rakyat)
Malaysia used to be an attractive investment destination for MNCs, but the political uncertainty has made a dent on foreign investment with net portfolio and direct investment outflows reaching US$61 billion in 2008 and 2009. Little money has also flowed into equities, according to central bank statistics.
Investments into the opposition-controlled states have slowed down too as investors are unsure if the state governments will survive till the next election after the Perak fiasco which saw Barisan wrestling control of the state back from the Pakatan Rakyat following the “defection” of three lawmakers.
The recent spate of resignations of PKR MPs from the states of Kedah and Selangor have spooked potential investors who are left wondering if business deals signed with the present state governments will be honored in the event that there is a change in government.
At the Federal level, the resurgent opposition has kept the Malaysian government on its toes, preventing it from implementing much needed reforms to liberalize the economy.
Malaysia spent 15.3 per cent of total federal government operating spending on subsidies in its 2009 budget when its deficit surged to a 20-year high of 7 per cent of GDP.
A Minister warned recently that unless Malaysia cut back on the subsidies, it will become bankrupt in 2019.
Prime Minister Najib Razak, an economist by training, has proposed the New Economic Model (NEM) to replace a four-decades old Malay affirmative policy known as the New Economic Policy (NEP) which gave a wide array of economic benefits to the “bumiputras” or ethnic Malays sometimes at the expense of other races.
Investors have long complained that abuse of the policy spawned a patronage-ridden economy, promoted corrupted practices, retarded Malaysia’s competition and causing foreign investors to favour Indonesia and Thailand.
Najib’s moves to roll back the NEP have met with stiff opposition from Malay rights group Perkasa which rejected the NEM outright and called on the NEP to be preserved.
Though cutting back on subsidies will have an immediate impact on low-income Malaysians, it will benefit the country in the long run leading to increased competitiveness and foreign direct investment.
Unfortunately, many analysts believe that the proposed reforms will be delayed, watered down or even abandoned altogether to avoid losing votes.
With the ethnic Chinese firmly behind the opposition Pakatan Rakyat, Barisan needs the votes of the Malays to shore up its flagging support base.
Rolling back the NEP at such a crucial juncture will definitely cause Barisan to lose the support of the Malays which may cause it to be voted out of office in the next general election due to be called by 2013.
Najib’s hands are tied out of political considerations to the detriment of the entire nation.
Malaysia will not be in such a conundrum if it had a strong and stable government like Singapore as well as a weak and non-existent opposition to create trouble for the ruling party.
Unpopular policies which are beneficial to the nation can be implemented swiftly on the ground without the lingering fear of losing votes in the next election.
Singapore’s economy took off between the years 1968 – 1980 when the PAP controlled all the seats in Parliament without a single opposition member.
Critical and sometimes painful decisions are made and policies implemented quickly and efficiently with no opposition from other parties.
For example, the Chinese language and vernacular schools were closed down and replaced by national schools during this period of time.
In Malaysia, this archaic system of education divided by language has remained because no Malaysian Prime Minister has the courage or determination to deal with the expected outcry from Malay rights groups and Chinese clans.
As such, Malaysia’s standard of education continues to lag behind Singapore to this very day.
Singapore does not have any natural resources like Malaysia to fall back on. That is why we need a strong and stable government to make quick and effective decisions for the good of the nation.
The present system has served us well for the last fifty years and has delivered unprecedented economic success and prosperity to our nation. Let us not go down the slippery slope of multi-party partisan politics which have ruined our neighbors like Thailand, Philipines and Malaysia.
http://www.temasekreview.com/2010/06/02/lessons-from-malaysia-why-singapore-needs-a-strong-and-stable-government/
June 2nd, 2010 | Author: Your Correspondent
OPINION
When Law Minister Shanmugam spoke about the need for Singapore to have a “strong and stable” government which makes “quick and effective” decisions a few months ago in Parliament, he was greeted with a dose of cynicism and derision by some netizens who saw it as another lame attempt to justify the PAP’s dominant position in Singapore politics.
The latest developments in neighboring Malaysia have provided us ample lessons on why it is important for Singapore to have a strong government and a weak opposition in order not to hamper the decision-making process for the greater good of the nation.
For over 50 years, Malaysia is governed by the ruling Barisan Nasional coalition (formerly known as the Alliance) which enjoyed two-thirds majority in the Dewan Rakyat (Malaysia’s Parliament) till the 2008 elections when the opposition won an unprecedented 82 out of 222 seats in Parliament and lost control of 5 states including the two richest states of Penang and Selangor. (the number is now reduced to 72 after a spate of defections and resignations of MPs from Parti Keadilan Rakyat)
Malaysia used to be an attractive investment destination for MNCs, but the political uncertainty has made a dent on foreign investment with net portfolio and direct investment outflows reaching US$61 billion in 2008 and 2009. Little money has also flowed into equities, according to central bank statistics.
Investments into the opposition-controlled states have slowed down too as investors are unsure if the state governments will survive till the next election after the Perak fiasco which saw Barisan wrestling control of the state back from the Pakatan Rakyat following the “defection” of three lawmakers.
The recent spate of resignations of PKR MPs from the states of Kedah and Selangor have spooked potential investors who are left wondering if business deals signed with the present state governments will be honored in the event that there is a change in government.
At the Federal level, the resurgent opposition has kept the Malaysian government on its toes, preventing it from implementing much needed reforms to liberalize the economy.
Malaysia spent 15.3 per cent of total federal government operating spending on subsidies in its 2009 budget when its deficit surged to a 20-year high of 7 per cent of GDP.
A Minister warned recently that unless Malaysia cut back on the subsidies, it will become bankrupt in 2019.
Prime Minister Najib Razak, an economist by training, has proposed the New Economic Model (NEM) to replace a four-decades old Malay affirmative policy known as the New Economic Policy (NEP) which gave a wide array of economic benefits to the “bumiputras” or ethnic Malays sometimes at the expense of other races.
Investors have long complained that abuse of the policy spawned a patronage-ridden economy, promoted corrupted practices, retarded Malaysia’s competition and causing foreign investors to favour Indonesia and Thailand.
Najib’s moves to roll back the NEP have met with stiff opposition from Malay rights group Perkasa which rejected the NEM outright and called on the NEP to be preserved.
Though cutting back on subsidies will have an immediate impact on low-income Malaysians, it will benefit the country in the long run leading to increased competitiveness and foreign direct investment.
Unfortunately, many analysts believe that the proposed reforms will be delayed, watered down or even abandoned altogether to avoid losing votes.
With the ethnic Chinese firmly behind the opposition Pakatan Rakyat, Barisan needs the votes of the Malays to shore up its flagging support base.
Rolling back the NEP at such a crucial juncture will definitely cause Barisan to lose the support of the Malays which may cause it to be voted out of office in the next general election due to be called by 2013.
Najib’s hands are tied out of political considerations to the detriment of the entire nation.
Malaysia will not be in such a conundrum if it had a strong and stable government like Singapore as well as a weak and non-existent opposition to create trouble for the ruling party.
Unpopular policies which are beneficial to the nation can be implemented swiftly on the ground without the lingering fear of losing votes in the next election.
Singapore’s economy took off between the years 1968 – 1980 when the PAP controlled all the seats in Parliament without a single opposition member.
Critical and sometimes painful decisions are made and policies implemented quickly and efficiently with no opposition from other parties.
For example, the Chinese language and vernacular schools were closed down and replaced by national schools during this period of time.
In Malaysia, this archaic system of education divided by language has remained because no Malaysian Prime Minister has the courage or determination to deal with the expected outcry from Malay rights groups and Chinese clans.
As such, Malaysia’s standard of education continues to lag behind Singapore to this very day.
Singapore does not have any natural resources like Malaysia to fall back on. That is why we need a strong and stable government to make quick and effective decisions for the good of the nation.
The present system has served us well for the last fifty years and has delivered unprecedented economic success and prosperity to our nation. Let us not go down the slippery slope of multi-party partisan politics which have ruined our neighbors like Thailand, Philipines and Malaysia.
http://www.temasekreview.com/2010/06/02/lessons-from-malaysia-why-singapore-needs-a-strong-and-stable-government/
Saturday 5 June 2010
Kenmark stock an easy buy after force-selling
Saturday June 5, 2010
Stock an easy buy after force-selling
By IZWAN IDRIS
izwan@thestar.com.my
MORE than half of Kenmark Industrial Co (M) Bhd’s entire paid up share capital were pledged as collateral at various financial institutions by the main shareholders of the company, based on information from the company’s latest annual report.
It is believed that large blocks of these shares were force-sold into the market in recent days, which had paved the way for a shrewd former shareholder to gain control of the troubled furniture maker.
The force-selling on Kenmark shares gained momentum on Monday after some clients failed to top up their margin accounts in the aftermath of the stock’s sudden price collapse the week before, according to several stockbrokers contacted by StarBizWeek.
Kenmark’s annual report 2009 showed that as at Aug 6 last year, about 55% of the company’s total 181.75 million shares were pledged as collateral for the margin financing facilities. That works out to about 100 million shares held in custody by several banks and stockbrokers.
A chunk of these shares belonged to managing director James Hwang, director Chen Wen-Ling @ Dolly Chen, as well as several privately held companies. Executives from two stockbroking firms confirmed that they no longer hold any Kenmark shares as they had dumped the shares in the market.
Another broker confirmed that his firm had to force sell shares in Kenmark earlier this week after a client failed to top up his margin account. An industry observer said that it is highly likely that these institutions would have to bear significant losses as the stock price had plunged considerably.
Kenmark made headlines last week after its key management went missing and bankers demanded the company pay back it loans. Its failure to submit its latest quarterly financial account fuelled speculation the company was deep in a financial quagmire.
Kenmark’s counter has been on a wild roller coaster ride since then. Shares in Kenmark were suspended from trading by the exchange on Monday after just over an hour of trade on extended sell-down to a paltry 10.5 sen which led to a massive surge in trading volume to 71.9 million shares.
Trading resumed on Tuesday and the stock closed at a record low of 6 sen on 191.1 million shares transacted. However, it rebounded on Wednesday to close at 11.5 sen with 138 million shares changing hands.
The stock was suspended for the second time this week on Thursday, and resumed trading yesterday; it shot up 14.5 sen to close at 26 sen on trading volume of 101 million shares.
On Thursday, the market was in for another shock when it was revealed that Datuk Ishak Ismail had acquired a huge block of shares in Kenmark, a company he had helped list back in 1997. He had mopped up some 57.7 million shares in the open market at near rock bottom prices.
Based on press statement issued on Thursday by managing director James Hwang, Ishak had bought the shares on Tuesday and Wednesday. Recent filings to Bursa Malaysia did not offer any indication about Ishak’s purchase cost, but the stock’s average price over the two-day period was well below 10 sen a piece.
The week before Ishak had resurfaced, Kenmark’s share price was trading at 83 sen on May 25 with a mere 55,000 shares transacted. The stock had kept within a tight trading range of RM1 and 80 sen for the past four years right, up until late May this year.
It is however unclear at this stage, whether Hwang’s stakes in Kenmark has been reduced following the recent sell-off.
Based on the latest availaible information on Kenmark’s shareholding structure, Hwang owned 49.48 million shares, or 27.61% stake in Kenmark as at Aug 6 last year.
It was estimated that Hwang had pledged about 13% of his interest in Kenmark as collateral to several financial institutions including Kenanga Investment Bank, Alliance Group, Maybank and SJ Securities. Company director Chen owned 33.5 million shares, or 18.7% stake in Kenmark, with about 10% of her total stake pledged as collateral.
The annual report showed stockbroker A.A. Anthony held 12 million Kenmark shares that was pledged by Paduan Gangsa Sdn Bhd, while TA Enterprise held 8.34 million shares put up by Rancak Bernas Sdn Bhd and 7.28 million shares pledged by a shareholder Mohd Noh Ibrahim.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/5/business/6406163&sec=business
Stock an easy buy after force-selling
By IZWAN IDRIS
izwan@thestar.com.my
MORE than half of Kenmark Industrial Co (M) Bhd’s entire paid up share capital were pledged as collateral at various financial institutions by the main shareholders of the company, based on information from the company’s latest annual report.
It is believed that large blocks of these shares were force-sold into the market in recent days, which had paved the way for a shrewd former shareholder to gain control of the troubled furniture maker.
The force-selling on Kenmark shares gained momentum on Monday after some clients failed to top up their margin accounts in the aftermath of the stock’s sudden price collapse the week before, according to several stockbrokers contacted by StarBizWeek.
Kenmark’s annual report 2009 showed that as at Aug 6 last year, about 55% of the company’s total 181.75 million shares were pledged as collateral for the margin financing facilities. That works out to about 100 million shares held in custody by several banks and stockbrokers.
A chunk of these shares belonged to managing director James Hwang, director Chen Wen-Ling @ Dolly Chen, as well as several privately held companies. Executives from two stockbroking firms confirmed that they no longer hold any Kenmark shares as they had dumped the shares in the market.
Another broker confirmed that his firm had to force sell shares in Kenmark earlier this week after a client failed to top up his margin account. An industry observer said that it is highly likely that these institutions would have to bear significant losses as the stock price had plunged considerably.
Kenmark made headlines last week after its key management went missing and bankers demanded the company pay back it loans. Its failure to submit its latest quarterly financial account fuelled speculation the company was deep in a financial quagmire.
Kenmark’s counter has been on a wild roller coaster ride since then. Shares in Kenmark were suspended from trading by the exchange on Monday after just over an hour of trade on extended sell-down to a paltry 10.5 sen which led to a massive surge in trading volume to 71.9 million shares.
Trading resumed on Tuesday and the stock closed at a record low of 6 sen on 191.1 million shares transacted. However, it rebounded on Wednesday to close at 11.5 sen with 138 million shares changing hands.
The stock was suspended for the second time this week on Thursday, and resumed trading yesterday; it shot up 14.5 sen to close at 26 sen on trading volume of 101 million shares.
On Thursday, the market was in for another shock when it was revealed that Datuk Ishak Ismail had acquired a huge block of shares in Kenmark, a company he had helped list back in 1997. He had mopped up some 57.7 million shares in the open market at near rock bottom prices.
Based on press statement issued on Thursday by managing director James Hwang, Ishak had bought the shares on Tuesday and Wednesday. Recent filings to Bursa Malaysia did not offer any indication about Ishak’s purchase cost, but the stock’s average price over the two-day period was well below 10 sen a piece.
The week before Ishak had resurfaced, Kenmark’s share price was trading at 83 sen on May 25 with a mere 55,000 shares transacted. The stock had kept within a tight trading range of RM1 and 80 sen for the past four years right, up until late May this year.
It is however unclear at this stage, whether Hwang’s stakes in Kenmark has been reduced following the recent sell-off.
Based on the latest availaible information on Kenmark’s shareholding structure, Hwang owned 49.48 million shares, or 27.61% stake in Kenmark as at Aug 6 last year.
It was estimated that Hwang had pledged about 13% of his interest in Kenmark as collateral to several financial institutions including Kenanga Investment Bank, Alliance Group, Maybank and SJ Securities. Company director Chen owned 33.5 million shares, or 18.7% stake in Kenmark, with about 10% of her total stake pledged as collateral.
The annual report showed stockbroker A.A. Anthony held 12 million Kenmark shares that was pledged by Paduan Gangsa Sdn Bhd, while TA Enterprise held 8.34 million shares put up by Rancak Bernas Sdn Bhd and 7.28 million shares pledged by a shareholder Mohd Noh Ibrahim.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/5/business/6406163&sec=business
Kenmark - A bizarre run of events
Saturday June 5, 2010
A bizarre run of events
An implausible series of happenings at Kenmark requires that the authorities take note and do the needful
ANYONE following the strange sequence unfolding at furniture manufacturer Kenmark Industrial Co (M) Bhd can be forgiven for thinking that there is more – much more – than meets the eye.
A disappearing managing director and senior management saw its share price collapsing and in its aftermath, a new controlling shareholder emerged, along with the re-emergence of the MD made known via a press release.
First indications of trouble came when the share price collapsed on the eve of Wesak day, on Thursday May 27 and again on Monday, May 31, there being no trading on Friday because of the public holiday. From nearly 80 sen a share, it had collapsed to about 10 sen, in just over a day, wiping out nearly nine tenths of its value.
On Monday morning – 10.10am – after one hour and 10 minutes of trading, Bursa Malaysia suspended the shares and shot a query to the company on the unusual market activity.
Back came the shocking reply on the same day: Kenmark said its independent directors, Zainabon @ Zainab Abu Bakar and Yeunh Wee Tiong, were the only ones present at an audit committee meeting that was to be held at 10.30am on May 27, incidentally, the day the share prices collapsed.
Neither managing director James Hwang nor another executive and non-executive director, all from Taiwan, could be contacted. The deputy general manager and the finance and administration manager had resigned. There was no management representation at the meeting and therefore the meeting could not proceed.
The independent directors visited the company’s premises in Port Klang on May 29 and found it sealed and the premises secured by a guard. In a further announcement the same day, the independent directors revealed that there were letters of demand for borrowings which totalled over RM60mil and that they were unable to ascertain the financial position of the company or offer any other opinion.
And the independent directors said the company would enter PN17 status requiring its operations to be regularised. They also said that the company would be unable to release its quarterly report in time and that the shares would be suspended five trading days later on June 8. This was confirmed by Bursa Malaysia. All these announcements were made on May 31.
In short, it was utter chaos and no one knew what was happening with key board members and senior management having resigned or disappeared or otherwise unable to be located. That must have been a sort of record even for the Kuala Lumpur stock exchange where strange things have sometimes been known to happen and set the stage for a sell-off.
Incredibly, with such a state of uncertainty surrounding the company, the suspension of the shares was lifted the following day, June 1. Prudence should have dictated that the suspension be maintained until more information was forthcoming so that all shareholders could act from a position of equal information.
That would have discouraged needless speculation and ensured that insiders did not have a trading advantage. If syndicates were in the market, they could have been flushed out as more information about the company came into the public domain.
On May 31 when trading was shortened by the suspension, turnover of the company’s shares had already ballooned to an incredible 72 million shares from 1.5 million shares the previous trading day, May 27 and just 55,000 shares on May 26. That 72 million represented nearly 40% of Kenmark’s issued shares, enough to tell anyone that activity was not just unusual but terribly, terribly unusual, considering the shares changed hands in just one hour and ten minutes of trading. .
If you thought turnover was high on May 31, wait for the next day when the suspension was lifted. It shot up to a massive 190 million plus, more than the entire paid-up capital of Kenmark, implying the same shares were changing hands several times. The following day it was still an incredible 138 million shares.
And then came the next shocking announcement on June 2, when the shares were suspended from trading at the awkward time of 4.43pm and remained suspended until yesterday, June 4
Suddenly, managing director Hwang was contactable. He even issued a press release. He had been sick and unconscious, he said, and his family had barred all calls. But he did not explain why his other directors could not be contacted as well. He apologised for the confusion caused.
“I have spoken with a friendly party who has already acquired a substantial stake in the company and there will be new appointments of directors, including two executive directors to manage the situation there,” he said.
He did not say when he spoke to the friendly party.
His letter to the independent directors said that four new directors should be immediately appointed to the board. They were Ho Soo Woon, Ahmed Azhar Abdullah, Woon Wai En and Datuk Abd Gani Yusuf. The last was appointed executive chairman. The independent directors then resigned.
It transpired that the friendly party and new major shareholder was Datuk Ishak Ismail, who managed to pick up some 32% from the market on June 1 and June 2. Ishak, at his own admission, was the bumiputra partner when Kenmark was listed in 1997.
Yesterday, trading continued to be active and the share closed at 29.5 sen, more than double the previous close of 11.5 sen, on a turnover of 100.8 million shares but still well below its recent price of around 80 sen.
The series of events can only be termed incredible and highly volatile. Any reasonable person who follows the case closely will have serious questions to ask at each juncture of the transactions.
It is now up to the authorities, Bursa Malaysia and the Securities Commission to investigate and establish what happened and bring those responsible to book.
At the very least, there was gross negligence in terms of corporate governance and the proper running of a company.
But things could be a lot worse than that.
l Managing editor P Gunasegaram says that smoke usually indicates fire.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/5/business/6407063&sec=business
A bizarre run of events
An implausible series of happenings at Kenmark requires that the authorities take note and do the needful
ANYONE following the strange sequence unfolding at furniture manufacturer Kenmark Industrial Co (M) Bhd can be forgiven for thinking that there is more – much more – than meets the eye.
A disappearing managing director and senior management saw its share price collapsing and in its aftermath, a new controlling shareholder emerged, along with the re-emergence of the MD made known via a press release.
First indications of trouble came when the share price collapsed on the eve of Wesak day, on Thursday May 27 and again on Monday, May 31, there being no trading on Friday because of the public holiday. From nearly 80 sen a share, it had collapsed to about 10 sen, in just over a day, wiping out nearly nine tenths of its value.
On Monday morning – 10.10am – after one hour and 10 minutes of trading, Bursa Malaysia suspended the shares and shot a query to the company on the unusual market activity.
Back came the shocking reply on the same day: Kenmark said its independent directors, Zainabon @ Zainab Abu Bakar and Yeunh Wee Tiong, were the only ones present at an audit committee meeting that was to be held at 10.30am on May 27, incidentally, the day the share prices collapsed.
Neither managing director James Hwang nor another executive and non-executive director, all from Taiwan, could be contacted. The deputy general manager and the finance and administration manager had resigned. There was no management representation at the meeting and therefore the meeting could not proceed.
The independent directors visited the company’s premises in Port Klang on May 29 and found it sealed and the premises secured by a guard. In a further announcement the same day, the independent directors revealed that there were letters of demand for borrowings which totalled over RM60mil and that they were unable to ascertain the financial position of the company or offer any other opinion.
And the independent directors said the company would enter PN17 status requiring its operations to be regularised. They also said that the company would be unable to release its quarterly report in time and that the shares would be suspended five trading days later on June 8. This was confirmed by Bursa Malaysia. All these announcements were made on May 31.
In short, it was utter chaos and no one knew what was happening with key board members and senior management having resigned or disappeared or otherwise unable to be located. That must have been a sort of record even for the Kuala Lumpur stock exchange where strange things have sometimes been known to happen and set the stage for a sell-off.
Incredibly, with such a state of uncertainty surrounding the company, the suspension of the shares was lifted the following day, June 1. Prudence should have dictated that the suspension be maintained until more information was forthcoming so that all shareholders could act from a position of equal information.
That would have discouraged needless speculation and ensured that insiders did not have a trading advantage. If syndicates were in the market, they could have been flushed out as more information about the company came into the public domain.
On May 31 when trading was shortened by the suspension, turnover of the company’s shares had already ballooned to an incredible 72 million shares from 1.5 million shares the previous trading day, May 27 and just 55,000 shares on May 26. That 72 million represented nearly 40% of Kenmark’s issued shares, enough to tell anyone that activity was not just unusual but terribly, terribly unusual, considering the shares changed hands in just one hour and ten minutes of trading. .
If you thought turnover was high on May 31, wait for the next day when the suspension was lifted. It shot up to a massive 190 million plus, more than the entire paid-up capital of Kenmark, implying the same shares were changing hands several times. The following day it was still an incredible 138 million shares.
And then came the next shocking announcement on June 2, when the shares were suspended from trading at the awkward time of 4.43pm and remained suspended until yesterday, June 4
Suddenly, managing director Hwang was contactable. He even issued a press release. He had been sick and unconscious, he said, and his family had barred all calls. But he did not explain why his other directors could not be contacted as well. He apologised for the confusion caused.
“I have spoken with a friendly party who has already acquired a substantial stake in the company and there will be new appointments of directors, including two executive directors to manage the situation there,” he said.
He did not say when he spoke to the friendly party.
His letter to the independent directors said that four new directors should be immediately appointed to the board. They were Ho Soo Woon, Ahmed Azhar Abdullah, Woon Wai En and Datuk Abd Gani Yusuf. The last was appointed executive chairman. The independent directors then resigned.
It transpired that the friendly party and new major shareholder was Datuk Ishak Ismail, who managed to pick up some 32% from the market on June 1 and June 2. Ishak, at his own admission, was the bumiputra partner when Kenmark was listed in 1997.
Yesterday, trading continued to be active and the share closed at 29.5 sen, more than double the previous close of 11.5 sen, on a turnover of 100.8 million shares but still well below its recent price of around 80 sen.
The series of events can only be termed incredible and highly volatile. Any reasonable person who follows the case closely will have serious questions to ask at each juncture of the transactions.
It is now up to the authorities, Bursa Malaysia and the Securities Commission to investigate and establish what happened and bring those responsible to book.
At the very least, there was gross negligence in terms of corporate governance and the proper running of a company.
But things could be a lot worse than that.
l Managing editor P Gunasegaram says that smoke usually indicates fire.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/5/business/6407063&sec=business
Institutional and retail investors in the GCC have short time horizons compared to global benchmarks
Friday 4th, June 2010 -- 23:20 GMT
Invesco Middle East Asset Management Study finds a consistently high demand for emerging markets across the region
Posted: 26-05-2010 , 09:35 GMT
Invesco Asset Management Limited today unveiled the findings of its inaugural Invesco Middle East Asset Management Study. This regional study is the first of its kind and reveals a fascinating insight into the complex and sophisticated investment habits of this continually evolving region. The company, who opened its Dubai office in 2005, has been working with Middle East clients for decades, offering financial institutions and investment professionals access to global investment expertise.
Surveying the attitudes and behaviours of both institutional and retail markets across the six Gulf Co-operation Council (GCC) countries, the study revealed a number of key findings:
• There is currently a consistently high demand for emerging markets across all companies and territories
• Institutional and retail investors in the GCC have short time horizons compared to global benchmarks
• Investor location within the GCC has a strong influence on exposure to investment sectors
Interestingly, the study also indicated that both the institutional and retail market are becoming increasingly risk averse.
Nick Tolchard, Head of Invesco Middle East commented: “The Middle East is often portrayed as a homogenous region; this report clearly shows this is not the case, though there are some surprising similarities. The influence of investor location over asset allocation makes it quite clear that the Middle East is a highly diverse investment region.”
He continued: “We believe that this diversity is explained by access to investment products, which varies across the region. Certain markets, such as Saudi Arabia, have restricted access to international investments whereas others, such as the UAE, are dominated by offshore life wrappers with large international fund ranges.”
Investor type also plays a key role in asset allocation, according to the study. In the growing retail market, preferences vary according to distributer. Private client portfolio managers favour global equities and alternative assets, while retail banks prefer local equities and cash and IFAs opt for global equities and cash.
On the institutional side, preferences are even more diverse:
o Sovereign Wealth Funds prefer alternative investments (private equity and hedge funds)
o Institutional investors tend to invest in mainstream asset classes (equities, bonds and cash)
o Corporates (commercial banks and diversified financial services) prefer local over international assets.
o Asset managers prefer property
Commenting on these asset allocation preferences, Nick Tolchard said: “Sovereign Wealth Funds’ preference for private equity and hedge funds may align to opportunistic investment strategies to exploit any short-term market volatility and below average allocations to local securities and commodities is expected given that the source of funding for Sovereign Wealth Funds (government revenue) is heavily dependent on commodity prices and the performance of the local economy.”
In addition, one of the most striking findings is the universal preference for emerging market assets. Across all participants 82% of respondents forecast exposure to emerging markets over the next 3-5 years compared to 30% for North America, 14% for Europe and 8% for Japan. The key driver for this appears to be simply that GCC investors expect returns to exceed those in developed markets.
The Retail and institutional respondents in the GCC are also unified by their perceptions of change in risk appetite – they have indicated that 79% of institutional and 70% of retail investors have changed their attitude to risk in the last six to twelve months and in both cases, more investors have become increasingly risk averse.
In addition, the study indicated that the respondents also share similar very short-term investment time horizons, 38% of retail respondents have a time horizon of less than a year compared to 33% in the institutional market. Of those surveyed, only 12% of institutional respondents have an investment horizon beyond 5 years, significantly below global comparatives for institutional markets.* Invesco believes that the short retail time horizons in the retail market can be explained by the transient nature of retail expatriate clients, investment losses during the global financial crisis and the coverage on Dubai’s debt restructuring. Looking forward it expects retail time horizons to lengthen as markets stabilise, but to remain shorter than global retail benchmarks.
Nick Tolchard explained: “Perhaps the most surprising finding was the short term and highly volatile investment attitudes in the institutional sector. However, this could be explained by nimble and fast moving investment behaviour of Sovereign Wealth Funds in the GCC region, in contrast to other institutional markets which are typically dominated by large insurance and pension funds managing a high proportion of their assets against long-term liabilities.”
He concluded: “The Middle East is a growing investor force in the world and we see this research as part of our strategic commitment to understanding the perspective of investors, as well as the investment and savings culture of the Middle East. We intend to carry out this research on a regular basis, monitoring the retail investment market as it continues to grow, and learning even more about the behaviour and preferences of the highly sophisticated institutions operating in the GCC.”
© 2010 Mena Report (www.menareport.com)
http://www.menareport.com/en/business/316494
Summary:
This research studied the investment and savings culture of the Middle East. It highlights the growing retail investment market and the behaviour and preferences of the highly sophisticated institutions operating in the GCC.
Invesco Middle East Asset Management Study finds a consistently high demand for emerging markets across the region
Posted: 26-05-2010 , 09:35 GMT
Invesco Asset Management Limited today unveiled the findings of its inaugural Invesco Middle East Asset Management Study. This regional study is the first of its kind and reveals a fascinating insight into the complex and sophisticated investment habits of this continually evolving region. The company, who opened its Dubai office in 2005, has been working with Middle East clients for decades, offering financial institutions and investment professionals access to global investment expertise.
Surveying the attitudes and behaviours of both institutional and retail markets across the six Gulf Co-operation Council (GCC) countries, the study revealed a number of key findings:
• There is currently a consistently high demand for emerging markets across all companies and territories
• Institutional and retail investors in the GCC have short time horizons compared to global benchmarks
• Investor location within the GCC has a strong influence on exposure to investment sectors
Interestingly, the study also indicated that both the institutional and retail market are becoming increasingly risk averse.
Nick Tolchard, Head of Invesco Middle East commented: “The Middle East is often portrayed as a homogenous region; this report clearly shows this is not the case, though there are some surprising similarities. The influence of investor location over asset allocation makes it quite clear that the Middle East is a highly diverse investment region.”
He continued: “We believe that this diversity is explained by access to investment products, which varies across the region. Certain markets, such as Saudi Arabia, have restricted access to international investments whereas others, such as the UAE, are dominated by offshore life wrappers with large international fund ranges.”
Investor type also plays a key role in asset allocation, according to the study. In the growing retail market, preferences vary according to distributer. Private client portfolio managers favour global equities and alternative assets, while retail banks prefer local equities and cash and IFAs opt for global equities and cash.
On the institutional side, preferences are even more diverse:
o Sovereign Wealth Funds prefer alternative investments (private equity and hedge funds)
o Institutional investors tend to invest in mainstream asset classes (equities, bonds and cash)
o Corporates (commercial banks and diversified financial services) prefer local over international assets.
o Asset managers prefer property
Commenting on these asset allocation preferences, Nick Tolchard said: “Sovereign Wealth Funds’ preference for private equity and hedge funds may align to opportunistic investment strategies to exploit any short-term market volatility and below average allocations to local securities and commodities is expected given that the source of funding for Sovereign Wealth Funds (government revenue) is heavily dependent on commodity prices and the performance of the local economy.”
In addition, one of the most striking findings is the universal preference for emerging market assets. Across all participants 82% of respondents forecast exposure to emerging markets over the next 3-5 years compared to 30% for North America, 14% for Europe and 8% for Japan. The key driver for this appears to be simply that GCC investors expect returns to exceed those in developed markets.
The Retail and institutional respondents in the GCC are also unified by their perceptions of change in risk appetite – they have indicated that 79% of institutional and 70% of retail investors have changed their attitude to risk in the last six to twelve months and in both cases, more investors have become increasingly risk averse.
In addition, the study indicated that the respondents also share similar very short-term investment time horizons, 38% of retail respondents have a time horizon of less than a year compared to 33% in the institutional market. Of those surveyed, only 12% of institutional respondents have an investment horizon beyond 5 years, significantly below global comparatives for institutional markets.* Invesco believes that the short retail time horizons in the retail market can be explained by the transient nature of retail expatriate clients, investment losses during the global financial crisis and the coverage on Dubai’s debt restructuring. Looking forward it expects retail time horizons to lengthen as markets stabilise, but to remain shorter than global retail benchmarks.
Nick Tolchard explained: “Perhaps the most surprising finding was the short term and highly volatile investment attitudes in the institutional sector. However, this could be explained by nimble and fast moving investment behaviour of Sovereign Wealth Funds in the GCC region, in contrast to other institutional markets which are typically dominated by large insurance and pension funds managing a high proportion of their assets against long-term liabilities.”
He concluded: “The Middle East is a growing investor force in the world and we see this research as part of our strategic commitment to understanding the perspective of investors, as well as the investment and savings culture of the Middle East. We intend to carry out this research on a regular basis, monitoring the retail investment market as it continues to grow, and learning even more about the behaviour and preferences of the highly sophisticated institutions operating in the GCC.”
© 2010 Mena Report (www.menareport.com)
http://www.menareport.com/en/business/316494
Summary:
This research studied the investment and savings culture of the Middle East. It highlights the growing retail investment market and the behaviour and preferences of the highly sophisticated institutions operating in the GCC.
The study indicated that the respondents share similar very short-term investment time horizons,
- 38% of retail respondents have a time horizon of less than a year compared to 33% in the institutional market.
- Of those surveyed, only 12% of institutional respondents have an investment horizon beyond 5 years, significantly below global comparatives for institutional markets.
- the transient nature of retail expatriate clients,
- investment losses during the global financial crisis and
- the coverage on Dubai’s debt restructuring.
Perhaps the most surprising finding was the short term and highly volatile investment attitudes in the institutional sector.
- However, this could be explained by nimble and fast moving investment behaviour of Sovereign Wealth Funds in the GCC region, in contrast to other institutional markets which are typically dominated by large insurance and pension funds managing a high proportion of their assets against long-term liabilities.”
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