KLSE Market PE is 17.7 (20.10.2012)

KLCI 19.10.12 Index Stock M.Cap Earnings Dividends Stock Name Price (RM m) PE DY NTA (RM m) (RM m) AMBANK 6.44 19411.3 12.7 3.1 3.70 1528.4 601.8 AXIATA 6.68 56828.1 23.9 2.8 2.28 2377.7 1591.2 BAT 64.00 18273.9 25.4 4.3 1.51 719.4 785.8 CIMB 7.62 56637.7 14.1 2.9 3.49 4016.9 1642.5 DIGI 5.48 42607.0 34.0 3.2 0.18 1253.1 1363.4 GAMUDA 3.43 7139.1 13.0 3.5 1.95 549.2 249.9 GENM 3.59 21315.5 14.2 2.4 2.11 1501.1 511.6 GENTING 8.75 32545.5 11.3 0.9 4.77 2880.1 292.9 HLBANK 14.20 26694.7 14.3 2.7 1.23 1866.8 720.8 HLFG 12.84 13517.5 11.6 1.9 8.07 1165.3 256.8 IOICORP 5.06 32530.5 18.2 3.1 1.73 1787.4 1008.4 KLK 21.42 22865.9 14.5 4.0 6.64 1577.0 914.6 MAXIS 6.87 51528.5 20.4 5.8 1.08 2525.9 2988.7 MAYBANK 9.09 75142.9 13.2 4.0 4.38 5692.6 3005.7 MHB 4.74 7584.0 36.7 2.1 1.52 206.6 159.3 MISC 4.23 18881.8 0.0 0.0 5.00 0.0 0.0 MMCCORP 2.70 8221.7 24.6 1.5 2.04 334.2 123.3 PBBANK 14.88 52555.0 15.0 3.2 4.24 3503.7 1681.8 PCHEM 6.56 52480.0 19.9 2.4 2.51 2637.2 1259.5 PETDAG 22.24 22094.4 33.7 3.6 4.81 655.6 795.4 PETGAS 19.70 38981.0 36.1 2.0 4.48 1079.8 779.6 PPB 12.60 14937.3 15.2 1.8 11.86 982.7 268.9 RHBCAP 7.48 16723.5 10.9 3.4 5.19 1534.3 568.6 SIME 9.79 58832.6 14.2 3.6 4.33 4143.1 2118.0 TENAGA 6.96 38348.4 76.0 0.6 5.53 504.6 230.1 TM 6.05 21643.3 18.2 3.2 1.95 1189.2 692.6 UMW 10.08 11776.4 23.4 3.1 3.65 503.3 365.1 YTL 1.79 19033.9 15.2 1.1 1.25 1252.2 209.4 YTLPOWR 1.63 11956.2 9.6 2.9 1.30 1245.4 346.7 TOTAL 871087.6 49213.0 25532.2

Market PE	17.7
Market DY	2.9%
KLCI  1,666.35 19.10.2012

Adopted from the Star Newspaper 20.10.2012

What is Investing?

Graham, Chapter 1: 

Graham lays out his definition of investing right from the start of this chapter. His description is "an investment operation is one which, upon thorough analysis promises safety of principal and an adequate return" (p. 18). He labels anything not meeting these standards as speculation. 

Graham then describes two different approaches to investing: defensive and aggressive. 

Obviously, safety is a big concern for the defensive investor, and that shows in his example of putting half of your money in stocks and half in bonds. He lists other approaches of defensive investing, like investing only in well established companies, and dollar-cost averaging. 

Graham's take on aggressive investing isn't as kind. The three types of the aggressive approach (trading the market, short-term selectivity, and long-term selectivity) are all considered to have less profitability. This is explained by the possibility of the aggressive investor being wrong on his or her market timing.

The Intelligent Investor by Benjamin Graham

Related:

Investment, speculation and gambling

The Intelligent Investor: The Defensive Investor and Common Stocks

The Intelligent Investor: General Portfolio Policy for the Defensive Investor

The Intelligent Investor: The Positive Side to Portfolio Policy for the Enterprising Investor

The Intelligent Investor: A Negative Approach to Portfolio Policy for the Enterprising Investor

Investment Policies (Based on Benjamin Graham)

Using Market Fluctuations as a guide to making Investment Decisions*

Graham, Chapter 8:

In chapter eight of Graham's book, he brings up the subject of market fluctuation. I think he makes an important point to those people who are monitoring their retirement portfolios almost on a daily basis. 

He states that "the investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances" (p. 206). 

With this in mind, he suggests using these fluctuations in the market as a guide to making investment decisions. 

More precisely, he suggests using the dips in the market as points to acquire more of a quality stock along with finding new opportunities for suitable investments.

The Intelligent Investor by Benjamin Graham

Benjamin Graham: Mutual Funds

Graham, Chapter 9:

Mutual funds are the subject of the ninth chapter of The Intelligent Investor. Fund performance and the different types of funds available to the investor are covered. 

One of those types of funds is the performance fund, which seeks to outperform the Dow Jones Industrial Average in this case, so they are the more aggressive of the funds. 

Another type, the closed-end fund only offers a specific number of shares at one time, instead of continuously, and is the most illiquid of the bunch. 

The last mutual fund type Graham mentions in this chapter is the balanced fund. These types of funds contain a certain percentage of bond holdings. Even the conservatively investing Graham suggests you would be better off investing in bonds by themselves, rather than mixed in a fund with stocks.

The Intelligent Investor by Benjamin Graham

Buying Good Quality Stock versus Buying Poor Quality Stock

Graham, Chapter 20:

Chapter 20 is entitled "Margin of Safety as the Central Concept of Investment" (p. 512). I think this chapter sums up Graham's investing philosophy. 

He not only covers the risk of buying a good quality stock at a high price, but buying a poor quality stock at a high price during an up-trending market. The latter is one of the riskier moves you can do with your money in the context of the margin-of-safety. On the other hand, purchasing stock in a good quality company, even if it's at a high price, will ultimately end up being the better choice.

One other important point in this chapter is the mention of diversification as a tool of safety, not perfection. While he doesn't go into specific methods of diversification, Graham does point out that even if one stock tanks, diversifying your portfolio "guarantees only that (you) have a better chance for profit than for loss - not that loss is impossible" (p. 518).

Intelligent Investor 

by Benjamin Graham

Main lesson:  

Buying a poor quality stock at a high price during an up-trending market is one of the riskier moves you can do with your money in the context of the margin of safety.   AVOID.  AVOID.  AVOID.

The Day Ahead: The Perils of Bottom-Fishing

By Brian Sozzi | TheStreet.com – Tue, Oct 23, 201

By choice, I will stitch together earnings-season notes and play in Excel from the comfy confines of a space no bigger than a restroom in a one-bedroom apartment. To some this would appear akin to self-torture, but to me if offers a physical bubble around any harmful toxins that want to enter the analyses I'm conducting. Stupidly, I allowed a toxin to cross through to the other side on Monday evening, and its name was "Bottom Toxin." After the Dow gagged Friday, we've heard that the world's economic growth rate is now bottoming, and we must quickly welcome an array of earnings-season violators into the portfolio -- or, if you are me, onto the client watch list.

Snauseges? I comprehend that everyone in the #FinServices sphere wants to be the next rock star, that person of perfection who predicts that a market or a stock will likely head higher or lower by 10%. Sure, my dudes, we have to justify fees, be they for execution (research is an add-on, the ultimate "intellectual capital") or some other business being promoted through Google'sGOOG search algorithms.

But as a person who has been trained to first-smash a company's fundamentals into small pieces and then be the pitchman for or against exposure to the stock, I have to ask this simple question: Do the masses truly grasp the characteristics of a "bottom" in a company's performance or in country's economy? Further, for those identifying bottoms all over the place, I fancy there should at least be more than a few data points to support the brick-laying that are alleged to have brought us to financial spoils.

I took a momentary trip to the "bottom," and this is what I learned.

A Bottom, Deconstructed

● Pricing power is hard to come by, as companies become promotional to maintain market share. If Company A is ramping promotions, best believe that Company B and Company C will promote. Inside of that, it's hard to tell which company is winning and with what detriment to margins. Specific to this earnings season, the chatter was that third-quarter profit estimates would be eclipsed with ease. Guess what? That isn't happening, and it's starting on the top line. Are you willing to model for an  expansion in the price-to-earnings multiple in this scenario?

● There are excess goods sitting in end markets. This leads to a mouse-eats-snake development as goods bulge in factories and stockrooms. In upcoming 10-Q releases, skip to the inventory section and target the "finished goods inventory" component -- it's unlikely to be pretty for many companies that had earnings shortfalls. It requires time to sell off products collecting dust, even if a price discount has been enacted.

● There is this natural tendency for executives to believe an improved macroeconomic environment will alleviate the aforementioned issues, but they are hesitant to share this with analysts and shareholders for fear of over-promising and under-delivering. As a result, we are left exposed to potential false reads by the market -- as is currently the case, with stocks reacting harshly to earnings misses.

These are the primary takeaways to my trip to the bottom. I don't want to completely ruin your day with zillions of earnings bullets flying by. You see, the bottom is an ugly place to be, a barren wasteland where the slightest bit of rain brings hope. Stock-pickers will play with their discounted cash flow models, modeling in "reasonable" free cash flow and P/E multiple assumptions -- yet there is no real assurance they are reasonable enough.

At some point, yes, we will have to circle back to the industrial complex, call the big names oversold and then plunk down wagers on brighter quarters in 2013. However, I remain hesitant to call that in names such as Caterpillar CAT and Texas Instruments TXN , as the market is not telling us that should be the game plan right around now.

Deep Thought

Caterpillar traded off the lows of the session in response to earnings. If that was a type of stealthy bullish tell, am I a complete whack job in saying that the action should have spilled over to comparable companies in industrials -- for example, General Electric GE ? Heck, shouldn't the stock have closed at session highs? Theoretically, if a name like Caterpillar is moving counter to conventional wisdom -- that the world stinks -- then sentiment must be mirrored elsewhere in terms of sectors.

Uncensored

On Sept. 5, I said this on Decker's Outdoor DECK : "I'm not feeling how its outlook is shaping up on cost of goods sold, nor on what this means to consumers." On Oct. 23, I say this: Stay far away from this stock. Holiday-quarter guidance will be slashed, inventories are likely to be elevated (again), and core Ugg brand sales will be weak. But why stay far away? Well, there is an outside chance lower prices cleared some excess inventory, and that could trigger hope consumer appetite still exists for the brand -- which would crush the shorts.

http://finance.yahoo.com/news/day-ahead-perils-bottom-fishing-120000614.html

Is Dollar-Cost Averaging Overrated?

By Adam Zoll | Morningstar – Tue, Oct 23, 2012

Question: Every year I add money to my IRA account in a lump sum. Would I be better off using dollar-cost-averaging over the course of the year?

Answer: Dollar-cost-averaging, which is a technical term for buying shares of a stock or mutual fund in equal dollar amounts and at regular intervals, is assumed by many investors and financial pros to be the best way to invest. The advantages are clear: By investing a given amount over time and in equal-sized chunks rather than all at once, the investor ends up buying more shares when prices become cheaper and fewer when they become more expensive.

For example, let's say you get a $1,200 tax refund. Rather than invest all $1,200 at once, you could invest $100 per month for a year. Now let's say the fund you're investing in sells for $10 a share in the first month but drops to $5 a share in the second. Using the dollar-cost averaging method, you would end up buying 10 shares in the first month, before the market drop, but 20 shares in the second, after the drop. Had you invested the entire $1,200 in the first month you would have owned 120 shares, which, in month two, would have declined in value to $600. In this way, dollar-cost averaging helps reduce an investor's exposure to a potential market downturn, a danger inherent in the lump-sum approach.

Dollar-cost averaging also fosters a level of investing discipline. Rather than trying to figure out the best time to invest a lump sum, dollar-cost averaging uses a more systematic approach that helps investors conquer bad habits such as buying shares only when the market is up.

If you have an employer-sponsored retirement account, you may be using dollar-cost-averaging without even knowing it. That biweekly or monthly contribution made to your 401(k) is a form of dollar-cost-averaging.

Putting Dollar-Cost Averaging to the Test
However, despite the conventional wisdom that dollar-cost averaging is usually the best way to invest, there is an opportunity cost to be paid for holding money in cash while it waits to be invested in the market. If the market goes up while you're dollar-cost averaging into it, you've lost out on any gains you would have had by investing the entire amount right away.

In fact, a recent Vanguard study found that, on average, lump-sum investing resulted in higher returns than dollar-cost averaging about two-thirds of the time. The authors looked at historical monthly returns for $1 million invested as a lump sum and through dollar-cost averaging over periods as short as 6 months and as long as 36 months, assuming that funds were kept in cash before being invested. They tested various stock/bond allocations ranging from an all-equities portfolio to an all-bond portfolio. Finally, they tested these variations on the dollar-cost averaging vs. lump-sum question over rolling 10-year periods from 1926-2011.

At the end of each 10-year period, the portfolio value of the lump-sum method was compared with that of the dollar-cost averaging method. The result: The lump-sum method delivered higher returns compared with the 12-month dollar-cost averaging method about 66% of the time regardless of whether an all-equities, all-bond, or 60% equity/40% bond allocation was used. When the authors conducted a similar analysis using historical returns for markets in the U.K. and Australia, a similar pattern emerged, with lump-sum investing consistently outperforming dollar-cost averaging.

The authors note that the longer the dollar-cost averaging time frame, the greater the chance of the lump-sum method outperforming. For example, dollar-cost averaging over 36 months lost out to the lump-sum method 90% of the time (for U.S. markets).

It's also worth noting that while lump-sum investing consistently outperformed dollar-cost averaging, the average rate of outperformance was relatively modest. Using a 60/40 equity-bond allocation in U.S. markets and dollar-cost averaging over a period of 12 months, the authors found that after 10 years the initial $1 million investment would have grown to $2,450,264 on average using the lump-sum method versus $2,395,824 using dollar-cost averaging, a difference of about $54,000 or 2.3%.

DCA Better in Declining Markets 
So the Vanguard study proves it's always best to invest in a lump sum if possible, right? Not so fast. As the authors concede, during market declines, the dollar-cost averaging method often performs better because it helps mitigate the effects of falling share prices, whereas the lump-sum method puts all the capital at risk in the market at once. They examined more than 1,000 rolling 12-month periods in U.S. markets and found that lump-sum investors would have seen their investment decline in value 22.4% of the time vs. 17.6% for dollar-cost averaging.

The Takeway
So what should we make of these findings? There appears to be little doubt that, when investing for the long-term, you'’re more likely to end up ahead using the lump-sum approach than dollar-cost averaging. (Again, assuming you have a choice--with a work-sponsored retirement account, you may not.) However, there are three important points in dollar-cost averaging's favor.

If you expect a market downturn in the near future, dollar-cost averaging is the better choice. By spreading out contributions at regular intervals, you are essentially limiting your exposure by keeping some of your money in cash. 

For some investors, a relatively modest shortfall in return is a small price to pay for piece of mind. If dollar-cost-averaging helps you sleep better at night than you would with an all-in strategy, it may be worth it.

Dollar-cost averaging, especially through an automatic contribution mechanism such as a 401(k) or automatic deduction from a bank account, offers a level of investing discipline that lump-sum investing doesn't. The lump-sum approach, by its nature, involves market timing, and that's a dangerous game to play, especially during times of volatility. Dollar-cost averaging provides a smoother, more consistent entry into the market.One last factor to consider is investing costs, which may provide an advantage for the lump-sum method. For example, if using dollar-cost averaging requires paying multiple brokerage fees to buy shares of a stock in several lots rather than just once, this may further erode your returns as compared with the lump-sum method.

Ultimately, your comfort level with lump-sum investing and your expectations about the market's near-term direction should help you decide if it makes sense for you. If moving a lump sum into the market all at once gives you a queasy feeling in the pit of your stomach, that may be all the answer you need.

Have a personal finance question you'd like answered? Send it toTheShortAnswer@morningstar.com.

http://finance.yahoo.com/news/dollar-cost-averaging-overrated-110000051.html;_ylt=Ak3sPEM.jQXx6OUrSMiBBUOiuYdG;_ylu=X3oDMTN2NWJtbGFlBG1pdANGUCBDb21tb2RpdGllcwRwa2cDN2IyYjg4NGYtNjljNi0zMGZhLThiOWMtMDBkZmUwZjk4ZjIwBHBvcwMzBHNlYwNNZWRpYVNlY3Rpb25MaXN0BHZlcgM2NDUxNzkxMC0xZDAxLTExZTItOWZmZS1lNGZmYjE2YjhmYzA-;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

Are Earnings Coming Back to Earth?

By Jeremy Glaser

Morningstar – Sun, Oct 21, 2012

Corporate earnings have long been a bright spot during this recovery. Even when everything else in the economy looked bleak, corporations seem to keep delivering better-than-expected news quarter after quarter. But is that turning around? So far in this third-quarter earnings season, we've seen disappointing top-line numbers that could be a sign that the momentum in corporate earnings might be beginning to slow.

All things considered, most large firms handled the great recession fairly well. Faced with collapsing sales and an uncertain future, most managers became very defensive. They cut staffing to the bone, shut down unprofitable divisions, paid off debt, and raised additional capital if needed. These moves not only helped keep the lights on during the worst of the downturn, but they positioned firms well for the upturn. As the economy slowly began to come back, the leaner and more efficient companies were able to consistently boost their margins and surprise investors, even when revenue growth remained anemic. The charts below show just how high corporate profits have reached, and how profits have hit an all-time high as a percentage of gross domestic product. Shaded areas on these charts represent U.S. recessions.

US Corporate Profits After Tax data by YCharts

US Corporate Profits After Tax as % of GDP data by YCharts

But high levels of profitability can't go on forever. Eventually firms are going to have to hire more workers, invest in equipment, and face new competitors. Many (including GMO and others) have predicted that margins are due for a mean reversion and that regardless of the strength of the recovery, corporations are going to get squeezed. It's hard to extrapolate too much from the earnings we've seen during the last two weeks, but that squeeze could be starting.

Squeeze Play
To be sure, earnings have not been a disaster so far. According to data from FactSet, of the 98 members of the S&P 500 that have reported earnings so far, 70% have exceeded analyst expectations. But of those 98 firms, only 42% have beaten estimates for sales. During the last four years, an average of 59% of firms had beaten revenue estimates at this point in the reporting cycle. Some of those current misses are being driven by unrealistically high expectations and very strong currency headwinds, but some firms are starting to show signs of weakness. Given that most firms have already cut about as much as they can from their organizations, the drop in sales is likely to eventually lead to a drop in profit as it will be harder to cut deeper to keep profit growing.

One of the highest-profile misses this past week was Google(GOOG), which surprised the market not only with a premature earnings release but also with disappointing results. Revenues were below expectations, and operating costs rose quickly as the firm spent money to launch a new tablet and invest elsewhere in the business. Morningstar analyst Rick Summer thinks that as the firm continues to shift its revenue stream away from ads hosted on its sites toward ads on partner sites, content, and hardware it will become even hard to "gain operating leverage from the business" and increase margins at all. Google was hardly the only tech firm that reported a rough quarter. Microsoft(MSFT) and Intel(INTC) are feeling the impact of slowing PC sales ahead of the Windows 8 launch. International Business Machines(IBM) missed expectations as its revenues declined 5% (partially because of currency headwinds) as the firm launched its mainframe refresh.

Beyond tech, earnings misses could be found in plenty of other sectors. Sales at
McDonald's(MCD) and Chipotle Mexican Grill(CMG) both fell short of expectations. Profitability at the oil-services firms took a big hit this quarter, and
pressure pumping remained challenged. Baker Hughes(BHI) reported a North American margin of 10.5%, a nearly 300-basis-point sequential decline. This is more than Schlumberger's(SLB) 230-basis-point decline but less than
Halliburton's(HAL) 660-basis-point decline.

Sluggish global growth is causing some of these misses, and some are idiosyncratic based on product cycles or one-time issues. Certainly, some of the misses are driven by heightened expectations after such a long stretch of good earnings. But part of it is also that corporate earnings have reached very high levels, and firms are beginning to feel the force of mean reversion. The weak sales this quarter could be the canary in the coal mine that earnings are about to be pressured, too. Even if margins don't come all the way down to historical levels, the reduction in profitability could be a major headwind for investors in the coming years.

http://finance.yahoo.com/news/earnings-coming-back-earth-110000773.html

iCap Distribution of Shareholdings FYE 31-5-2012

iCap

FY ended 31-5-2012
Distribution of Shareholdings


Click to view:
https://docs.google.com/open?id=0B-RRzs61sKqRWjZDT0dFSF9KSm8

The Top 30 shareholders own 44,633,291 shares.
This is 31.88% of the total number of shares of iCap of 140,000,000 shares.


Top 30 Shareholdings

1		9,028,491
2		5,748,600
3		2,700,000
4		2,500,000
5		2,150,000
6		2,000,000
7		1,737,000
8		1,540,200
9		1,370,000
10		1,316,000
11		1,250,000
12		1,080,000
13		1,000,000
14		845,200
15		800,000
16		722,000
17		719,400
18		705,000
19		701,000
20		689,000
21		688,000
22		658,000
23		640,000
24		637,500
25		610,200
26		600,000
27		594,000
28		554,500
29		525,000
30		524,200
Total		44,633,291

Very Pessimistic News for the gold "investors" of Genneva Malaysia Sdn Bhd.

Genneva Malaysia’s liabilities exceeded assets, says Awang Adek

October 23, 2012

File photo shows the Bank Negara headquarters in Kuala Lumpur. The central bank says the liabilities of gold investment firm Genneva Malaysia Sdn Bhd (Genneva Malaysia) exceeded its assets. Early this month, BNM together with the Royal Malaysia Police, Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several of Genneva Malaysia’s premises as well as the residences of its directors.

KUALA LUMPUR, Oct 23 – Bank Negara Malaysia (BNM) has found the liabilities of gold investment firm Genneva Malaysia Sdn Bhd (Genneva Malaysia) exceeded its assets, said Deputy Finance Minister Datuk Dr Awang Adek Hussin.

He said the situation clearly shows Genneva Malaysia was unable to pay returns to its investors.

Awang Adek, likening Genneva Malaysia’s operations to most illegal get-rich-quick schemes, said BNM’s initial investigations showed the company actually sold gold bars to attract investors, but later changed to just taking deposits.

“There was already an element of deposit taking in Genneva, and the company’s assets were so small compared to the amount invested by the people, so there was a very big gap between assets and liabilities.

“So how could it (Genneva) pay when its liabilities ran into billions of ringgit while its assets were just in the millions (of ringgit),” he said when concluding the Finance Ministry committee-level debate on the 2013 Supply Bill at the Dewan Rakyat here today.

Early this month, BNM together with the Royal Malaysia Police, Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia carried out joint raids on several of Genneva Malaysia’s premises as well as the residences of its directors after several investors who had become victims lodged police reports.

Awang Adek said it is not possible for Bank Negara, which is considering what appropriate action to take on Genneva Malaysia, to pay back the company’s customers the value of their investments.

“At first, some got a return of two per cent a month, but this was wrong. We cannot say the investors were blameless, they invested and there were risks.

“The company was really to be blamed. Where is there a scheme that can give such good returns, if it’s too good to be true, then it’s not true,” he said. – Bernama

iCap Investment Portfolio (12.9.2012) and its distribution of Shareholders

iCap Investment Portfolio as at 12-9-2012
https://docs.google.com/open?id=0B-RRzs61sKqRbDNNXzR4V1pyLXc

There are 11 stocks in this concentrated portfolio as at 12-9-2012.

The top 5 stocks in the portfolio constitute 80.7% of the portfolio value and they are (in order of their value ranking):

1. Petdag,
2. Padini, 
3. Parkson, 
4. F&N and 
5. Boustead.

Maybank quashes Thai bank bid speculation

Maybank quashes Thai bank bid speculation
Published: 2012/10/10

KUALA LUMPUR: Malayan Banking Bhd (Maybank) today clarified that its private placement exercise on Monday was not meant for a possible bid for Bank of Ayudhya, quashing speculation that it may be keen to bid for a stake in the Thai bank.

In an email statement to Bernama today, Maybank reiterated that the private placement exercise was a proactive move to boost its equity capital ahead of the implementation of the Basel III capital framework.

The book-building process was also to support the bank's growth objectives particularly in relation to the rapid expansion of its business in Indonesia, Philippines and other regional markets.

On Monday, the bank embarked on a private placement exercise to raise RM3.66 billion through the issuance of 412 million new Maybank shares at an issue price of RM8.88 per placement share.

The new share issuance represented 4.98 per cent of the enlarged issued and paid-up capital of the bank as at Sept 30, 2012. 

"Maybank also wishes to clarify that Permodalan Nasional Bhd (PNB) did not participate in the private placement. 

"PNB does not fulfill the waiver criteria by Bursa Malaysia Securities that allow major shareholdres of the company to participate in the private placement by virtue of their representation on the board of Maybank," it said. 

Maybank closed unchanged at RM8.96 today. -- BERNAMA 
SRH SRH NN

Read more: Maybank quashes Thai bank bid speculation http://www.btimes.com.my/Current_News/BTIMES/articles/20121010195048/Article/index_html#ixzz29t01tMLO

Public Bank ranked as strongest bank in M’sia

Thursday, 18 October 2012 16:22 Farah Adilla

Public Bank has leapfrogged both CIMB Group Holdings Bhd and Malayan Banking Bhd to the top spot in 2012 as Malaysia’s strongest bank, according to the Asian Banker 500 2012 (AB500) report.

“This was largely due to the cost and risk management as a result of the conservative approach of the bank,” the report said.

Further, the report also said that the Asia Pacific banking sector is expected to remain resilient as economies in the region continue to expand in 2011 albeit at a slower pace than last year.

Singapore-based financial services community strategic business intelligence provider Asian Banker said the Asia-Pacific regional banks saw a significant acceleration in asset growth in 2011 while the largest 500 banks from the US and the European Union did not grow as fast.

“If the momentum holds, Asia-Pacific regional banks are likely to overtake their Western peers by 2014.

“This is primarily due to a combination of resilient economic performance of the region’s economies, increasing private wealth and growth in the number of Asian high net- worth individuals and continual retrenchment of some Western banks from Asia and growing regional expansion by Asia-based banks,” it said in a statement.

Asian Banker said key performance indicators of the banking sector in the Asia-Pacific region such as assets, loans, deposits and net profit grew over 15% last year.

“In particular, net profit growth remains staggering at 43% to US$315.9 billion (RM958.3 billion) albeit slower than 2010’s growth rate of 53%,” it said.

Asian Banker said 2011 has been a good year for banks in Malaysia, achieving weighted average asset growth of 21.7% year-on-year (YoY) which was among the top in the Asia-Pacific region.

“The growth was mainly fostered by the strong and resilient gross domestic product growth of the Malaysian economy and Islamic banking growth of 5.1% YoY and 33% YoY in 2011 respectively as Malaysian banks embark on a regional expansion strategy in an attempt to increase their regional presence and to diversify their geographical revenue sources,” it said.

Asia-Pacific regional banks have been shoring up their capital positions as implementation of the new Basel III requirements draws near, it said. “Asset-weighted average Tier 1 and total capital adequacy ratio (CAR) grew much stronger to 14% and 16.5% in 2011 from 9.1% and 12.3% in 2010 respectively.

“For this iteration, Singapore and Philippine banks rank among the highest for Tier 1 and total CAR respectively,” it said. Asian Banker said lack of sovereign debts deter Asia-Pacific regional banks’ compliance to Basel III liquidity requirements.

“Although banks are able to withstand long-term stress to their operations as reflected in their strong capital positions, short-term risks such as liquidity continue to be one of the top issues for Asia-Pacific regional banks,” it said.

AB500 research manager Doron Foo said some regional banks in countries such as Australia, Singapore and Hong Kong are still unable to satisfy Basel III liquidity requirements due to the lack of sovereign debt in their domestic countries.

http://themalaysianreserve.com/main/index.php?option=com_content&view=article&id=2338:public-bank-ranked-as-strongest-bank-in-msia&catid=36:corporate-malaysia&Itemid=120

Shopping spree sends Bursa to all-time high

Saturday October 20, 2012

Shopping spree sends Bursa to all-time high

The FBM KLCI closed at a record 1,666.35. However, the broader market was weaker in line with Asian bourses, with declining stocks on Bursa Malaysia beating advancers 409 to 294 and 338 counters unchanged.

“I think the positive run had been anticipated, backed by the fundamentals. It is still on an evolving rotation with the telecommunication, banking and consumer stocks getting a fair bit of interest,” said Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew.

He said banking stocks were relatively attractive right now as it had rather been muted recently due to the upcoming Basel III framework that would see banks needing higher capital requirement, driving up the cost of lending.

“With the overall price to earnings ratio at about 11.5 times, it (banking stocks) is attractive when compared with the telco industry which some stocks are trading at about 30 times, except for Axiata, which is still the cheapest among the telco stocks. Funds might be positioning themselves now ahead of the upcoming results season, and shifting their funds to more attractive sectors of the market,” he said.

http://biz.thestar.com.my/news/story.asp?file=/2012/10/20/business/12200821&sec=business

Asian bank threat to Basel III

11/10/2012 | Elliot Wilson

Asian banks are meeting informally, seeking to decide whether to adjust the Basel III rules

Many of Asia’s leading banks are expected to meet today in Tokyo behind closed doors to decide whether to accept – or potentially reject – controversial financial regulations set to come into effect on the first day of 2013.

The heads of several leading Asian lenders, including Nazir Razak, group chief executive at Kuala Lumpur-based CIMB Group, are set to convene today in an informal closed-door session to discuss the Basel III rules, chaired by Andrew Sheng, president of Hong Kong-based, Asia-focused consultancy, the Fung Global Institute.

Although it is an informal meeting designed to gauge opinion among Asian leaders and regional financial regulators about the new rules, all the major Asian banks will be there, Razak said. “The subject is whether to agree to form a consensus view on Basel III, and whether to draw up recommendations to present to our regulators back home. We have to decide whether to adjust Basel III rules, or just tweak them.”

Razak’s comments mark the first time a senior financial figure has expressed public disquiet over the incoming regulations, drawn up in the wake of the 2008-2009 financial crisis in an effort to create minimum standards of bank liquidity and place a cap on liquidity levels.

He said it was too early to describe the meeting as concrete evidence of a rift between emerging and developed markets, but said all of the lenders meeting today in Tokyo were “growing increasingly and collectively concerned” over the rules, adding: “It makes sense to act collectively rather than individually over this matter.”

Among the banks meeting in Tokyo on Friday are believed to be Sumitomo Mitsui and Mizuho Bank of Japan, CIMB’s Malaysia peer Maybank, KB Kookmin Bank of Korea, and Singapore-based DBS.

Today’s meeting had its roots in an informal chat that took place in Singapore on 23 September during the Formula One motor race. “Lots of bankers got together then and there and decided to do something,” Razak says. “We all agreed to take the matter further in Tokyo this week.”

News of the meeting quietly spread throughout southeast and northeast Asia. Iwan Azis, head of the Office of Regional Economic Integration at the Asian Development Bank, heard about the gossip in Jakarta, where the news gained quiet but firm approval, he says, among smaller Indonesian lenders, along with the country’s financial regulators.

“The smaller Indonesian banks for instance are not happy about [Basel III] at all,” Azis said. “You didn’t hear them complain before, but the time is fast approaching where they have to impose these rules, and they are worried. If you are a bank with a lower rating, somewhere in the ‘Bs’, you are going to have to raise your capital adequacy levels considerably.”

Even the International Monetary Fund in September warned that new regulations were skewed toward the interests of developed-world lenders. The fund noted that big banking groups would be “better able” than smaller banks to absorb the cost of regulations, driving more business in direction of market leaders.

http://www.emergingmarkets.org/Article/3101381/Financial-Markets/Asian-bank-threat-to-Basel-III.html

Banks unlikely to raise capital

Wednesday October 10, 2012


By YVONNE TAN

PETALING JAYA: Banks in Malaysia are already well-capitalised and are unlikely to engage in capital raising activities in the near term unless they are looking at significant outlay in that time frame, said banking analysts.

In the case of Malayan Banking Bhd (Maybank) which recently raised a record RM3.66bil via a private placement exercise, the bank was priming itself to expand its current business in the region, a banking analyst said.

It is understood that via a conference call with analysts yesterday, Maybank said that it was looking to strengthen its current businesses in the region, including those in Singapore and Indonesia and that it was not looking at any merger and acquisition (M&A) activity for now as previously speculated.

“We believe that most banks in Malaysia are unlikely to engage in capital raising activities in the near term given that they are well capitalised to meet the Basel III requirement, unless they foresee that they may need capital for something else.

“We do anticipate that most banks will be in capital conservation mode to preserve their capital in order to meet the capital requirement under Basel III which will kick off next year,” Alliance Research banking analyst Cheah King Yoong said.

The core equity capital ratio, which measures the amount of capital a bank has, is generally above 7% for all banks in Malaysia and this is healthy enough to meet Basel 111 requirements, according to Cheah (see table).

The new Basel III rules require banks to hold top quality capital totalling 7% of their risk-bearing assets, from the current 2%.

Of the 7%, 4.5% comprises core tier-1 capital, which is made of shares and retained earnings, and an additional 2.5% of capital conservation buffer.

In a press release on Monday, Maybank said its private placement exercise was a move to boost its equity capital ahead of the implementation of the Basel III capital framework.

The funds raised would also support its growth objectives, particularly, in relation to the rapid expansion of its business in Indonesia, Philippines and other regional markets, it said.

Apart from the continued strength of the Malaysian domestic economy, Maybank was seeing tremendous opportunities in the economic growth across the Asean region, it added.

http://biz.thestar.com.my/news/story.asp?file=/2012/10/10/business/12147961&sec=business