Public Mutual’s new Australian fund

Public Mutual’s new Australian fund
Written by Edge
Tuesday, 08 September 2009 13:59


KUALA LUMPUR: Public Mutual Bhd is launching a new fund, Public Australia Equity Fund (PAUEF), today to provide investors the opportunity to capitalise on the long-term growth potential of that market.
In a statement yesterday, Public Mutual chief executive officer Yeoh Kim Hong said this was on the back of Australia’s strong position in natural resources and its diversified services sector.

She said commodity exports in Australia were likely to benefit from a pick-up in demand from emerging economies such as China and India, while Australia’s services sector was supported by a wide range of services such as the property, financial, health, transportation and educational services. “In addition, the Australian government’s fiscal stimulus measures and expansionary monetary policies are expected to stimulate domestic demand and benefit both the services and consumer sectors,” she said.

Yeoh said despite the recent market rebound, both the Australian and New Zealand markets had lagged the performance of the Asian markets. Thus, she said long-term investors should tap the opportunities to accumulate undervalued blue-chip stocks, index stocks and growth stocks in the Australian market.
PAUEF is an equity fund that seeks to achieve capital growth over the medium- to long-term period by investing primarily in the Australian market with the balance invested in the New Zealand and domestic markets. The fund will mainly focus on sectors such as the natural resources, banking, real estate and consumer segments. The equity exposure of PAUEF will generally range from 75% to 90% of its net asset value (NAV).

Yeoh said PAUEF was suitable for investors with an aggressive risk-reward profile who could withstand extended periods of market volatility in order to achieve their objective of long-term capital growth. It is also suitable for investors who seek to hedge their children’s future educational expenses in Australia.
“Investing in Australian equities is expected to keep pace with the rising cost of Australia’s university education over the long term,” she said.

The initial issue price of PAUEF is 25 sen per unit during the 21-day initial offer period until Sept 28, 2009. The minimum initial investment is RM1,000 and the minimum additional investment is RM100

http://www.theedgemalaysia.com/personal-finance/148891-public-mutuals-new-australian-fund-.html

Comment:  As usual, do your own due diligence and in particular, be aware of the costs involved.

ASM unitholders get 6.3 sen per unit

ASM unitholders get 6.3 sen per unit

Written by
Tuesday, 23 March 2010 15:42


KUALA LUMPUR: Amanah Saham Nasional Bhd (ASNB) yesterday announced an income distribution of 6.3 sen per unit for Amanah Saham Malaysia (ASM) for the financial year ended March 31, 2010.

Last year, the government-owned fund manager declared an income distribution of 6.25 sen per unit, which was the lowest since its introduction in 2000.

The highest dividend given by the wholly-owned subsidiary of Permodalan Nasional Bhd (PNB) was 7.8 sen.
PNB chairman Tun Ahmad Sarji Abdul Hamid said the income distribution involved a total payout of RM654.06 million, an increase of 60.5% from RM407.58 million paid in 2009.

The payment will benefit 552,000 unitholders who had subscribed to 11.2 billion ASM units as at March 19, 2010.

When announcing the income distribution for ASM here, Ahmad Sarji said the equity market and the domestic investment environment had shown market improvement compared with the situation a year earlier, in line with the global economic and financial market recovery throughout the ASM financial year.

“These factors, combined with the successful implementation of the RM67 billion government stimulus package and accomodative monetary policy, has helped Malaysia to record positive growth in its gross domestic product (GDP) of 4.5% in the fourth quarter of 2009,” he said.

PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman said the payout of 6.3 sen was “still better” compared to payouts from other instruments with a similar risk profile.

“We feel that this figure is good enough for our unitholders. If we were to look in total, our capacity is to pay out 7.4 sen per unit but we only paid 6.3 sen because we want to have more reserves to bring forward next year,” he said, adding that PNB has about RM118 million ASM reserves for 2011.

“The performance of the fund still depends on the market performance, which we hope our stock market will be better in tandem with the positive GDP growth.”

Hamad Kama Piah said most analysts had projected the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to hover around 1,300 to 1,400-point level this year.

“Foreign interest in the stock market is considered the lowest at present. Most probably the buying appetite will come back soon, then we can see better margin,” he said.

Up until March 19, 2010, ASM had recorded a gross income of RM800.83 million.

• Profit from the sale of shares contributed RM429.83 million, or 53.7% of the gross income.

• Dividend income provided RM259.69 million or 32.4% and 

• the remaining income of RM111.31 million or 13.9% was derived from investments in short-term instruments.

The income distribution will be reinvested in additional ASM units to be automatically credited into the unitholders’ accounts on April 1, 2010.

ASM is a fixed priced equity-income fund aimed at providing unitholders with a long-term investment opportunity that generates regular and competitive returns through a diversified portfolio of investments. — Bernama

http://www.theedgemalaysia.com/personal-finance/162136-asm-unitholders-get-63-sen-per-unit.html


Summary:

Up until March 19, 2010, ASM had recorded a gross income of RM800.83 million. 

• Profit from the sale of shares contributed RM429.83 million, or 53.7% of the gross income.

• Dividend income provided RM259.69 million or 32.4% and 

• the remaining income of RM111.31 million or 13.9% was derived from investments in short-term instruments.

LPI top gainer on earnings growth, bonus issue plan

LPI posted net profit of RM26.44 million in the second quarter ended June 30 versus RM22.74 million a year ago. It also declared an interim dividend of 10 sen per share.

The company proposed a bonus issue of up to 69.36 million new shares on a one for two basis and also a proposed renounceable rights issue of up to 13.87 million new rights shares at an issue price of RM7 per rights share.

The rights shares will be on the basis of one rights share for every 10 existing LPI shares held.


http://www.theedgemalaysia.com/business-news/169553-lpi-top-gainer-on-earnings-growth-bonus-issue-plan.html

LATEXX - CIMB Research maintains overweight on rubber glove sector

June 22, 2010
LATEXX - CIMB Research maintains overweight on rubber glove sector
Stock Name: LATEXX
Company Name: LATEXX PARTNERS BHD
Research House: CIMB

KUALA LUMPUR: CIMB Equities Research said despite the potential hiccups, it remains positive on the rubber glove sector and retain its OVERWEIGHT call.

It said on Tuesday, June 22 the outlook for rubber gloves remains positive as demand is still set to rise by at least 8-10% p.a., led by growth in the usage of medical gloves in emerging countries.

CIMB Research said the results announced during Apr- Jun proved that the rubber glove is a resilient sector and that cost changes have minimal impact on margins due to the transparent method of passing on the previous month's average latex price and RM:US$ exchange rate to customers.

'We expect earnings for rubber glove players to continue heading higher this year, especially given the additional capacity that is coming in. We make no changes to our earnings forecasts or Outperform calls for all the rubber glove players,' it said.

Its top picks remain are Supermax which sells most of its gloves under its own brand which allows it to command higher margins and gives it a strong presence in markets such as the US and Brazil.

It added that Latexx is well on course for continued growth, thanks to its aggressive expansion and move into the premium segment.

'Our Outperform call remains intact, along with our target price of RM5.44, which we continue to base on an 11.6x P/E or a 30% discount to Top Glove's target P/E of 16.5x,' it said.

http://bursapricetarget.blogspot.com/2010/06/latexx-cimb-research-maintains.html

Latexx Partners on aggressive expansion plans (3.2.2010)

Latexx Partners on aggressive expansion plans

February 3, 2010, Wednesday

KUCHING: Latexx Partners Bhd (Latexx Partners) is on aggressive expansion plans for the next few years to meet the increasing demand for rubber gloves.

HUGHER EARNINGS: A small box which contains nitrile disposable gloves. Latexx Partners, which is expected to release its earnings figure by the end of this week will witness the company reported strong earnings supported from higher prodcution capacity and more nitrile sales.

According to CIMB Investment Bank Bhd (CIMB) in a research report, it noted the company planned to bring forward the construction of its seventh plant this year from 2013.

The research firm observed that the company had been expanding its nitrile production capacity that made up about 20 per cent of sales in the fourth quarter of 2009 as compared with 18 per cent in the previous quarter.
It also observed that the company’s nitrile range had expanded to more than 30 per cent of its production as the group was recently awarded new contracts by major multi national companies.

Additionally, the research firm pointed out that the fifth largest rubber glove manufacturer in the country also aimed to be a premium rubber glove player by exploring more opportunities to develop the natural rubber (NR) powder-free and nitrile range gloves.

Meanwhile, CIMB stated that Latexx Partners’ recent tied up with Dutch Company, Budev BV to develop protein-free natural rubber (NR) gloves currently unavailable in the market to provide a further boost to its earnings and margins.

The research firm said the rubber glove manufacturer was presently the only company licensed to produce such gloves.

Financially, CIMB estimated that Latexx Partners could report its fourth quarter net earnings of around RM17 million. The research firm highlighted that the strong figures would be supported by its additional annual production capacity of 800 million pieces of rubber gloves during the quarter and high nitrile products sales.
Therefore, CIMB believed that the fourth quarter earnings results for Latexx Partners were expected to be robust, boosted by higher production capacity and more nitrile sales. The research firm predicted that Latexx full-year net profit was likely to meet its forecast of RM51.9 million.

Thus, the research firm retained its earnings forecasts for Latexx Partners and maintained its positive outlook for the company with a target price of RM5.44 per share.

http://www.theborneopost.com/?p=8461

What to do with a "tip"? Do not Ignore, however study and scrutinise this further.

From my chatbox:

6 Jul 10, 11:38 PM
STOCK WATCH: Hi guys,tips of the year.....CRESBLD.....syndicate will goreng this stock soon...BEWARE!!!!!!!!
7 Jul 10, 08:26 AM
bb: stockwatch gave a "tip". My approach to tip is not to act on it. However, one may wish to study the stock further.
7 Jul 10, 08:26 AM
bb: Often when the "tip" reaches your ear, it is often at a late stage in the game.
7 Jul 10, 08:30 AM
bb: Don’t believe everything you hear In a market full of various news and hearsay, it is difficult to differentiate between facts and rumours.
7 Jul 10, 08:31 AM
bb: There are many instances where owners and syndicates who want to see higher stock prices purposely fabricate various news on potential contracts, corporate exercise, etc to analysts and reporters with
7 Jul 10, 08:31 AM
bb: .... with the intention to mislead investors.
7 Jul 10, 08:32 AM
bb: Every piece of news must be scrutinised to determine the authenticity and its impact on the earnings.
7 Jul 10, 08:32 AM
bb: Although this could be difficult in many cases, effort is still needed to avoid falling prey to unwarranted predators.
bb: One advice for investors is to only believe events which are more likely to happen, and only on those stocks where the management can be trusted.

The Illusion of International Small-Cap Investing

The Illusion of International Small-Cap Investing

Drew Spangler
Grantham, Mayo, Van Otterloo & Co. LLC
March 2001

Investing in international small-cap is a complicated and deceptive business.  Many of the common assumptions used to justify international small-cap investing are misguided.  The sticker must read “caveat emptor.”


Many investors are attracted to international small-cap because they believe that small companies are capable of faster earnings growth.  They reason that higher growth rates will lead to superior performance.  But the great irony of small-cap investing is that these companies do not grow any faster than their larger peers.  

• In fact, the corporate financial performance of international small companies is below average.  
• The small universe is populated with mediocre companies because the common definition of small contains an implicit bias for stocks with low valuations.  
• Low stock valuations are often the consequence of inferior corporate results. 

However, the hidden tilt towards value stocks actually provides the international small sector with the engine for excess returns and ironically enables international small-cap investing to be potentially very lucrative.  In addition, this value bias can be used to assess the future prospects for small stocks in the international equity markets.  This paper seeks to reveal the true identity of international small stocks and thereby equip investors with the information, insight and tools.


Executive Summary

Investors are beginning to awaken to the compelling case for small stock investing in the international markets. Recent outperformance, low valuations and increasing diversification benefits are all reasons investors are becoming attracted to this sector. Before they jump in head first, however, investors need to be aware of a few issues that make assessing the risks and rewards of international small stocks more challenging.

1. First, it is not entirely clear how to define small-cap and there is a diversity of opinion about what method is most appropriate for identifying the small universe. In this paper, we compare and contrast the construction methodologies of the two leading international small-cap indices.
2. Second, most conventional methods for defining small use market capitalization to measure company size.This introduces an implicit bias for companies with low stock valuations relative to corporate fundamentals such as earnings or assets.
3. Third, it is the quality of cheapness rather than smallness that drives small stock performance and is a powerful tool for forecasting the future performance of these stocks.
4. Fourth, although investors are often tempted by small-cap because they perceive these stocks to be capable of higher earnings growth, our empirical analysis shows this to be a fallacy.  In fact, the fundamental corporate performance of small stocks is below average.

Finally, the diversification benefits of international small are alive and well. Not only have correlations with international large stocks decreased, but international small continues to be asynchronous with both US large and US small stocks.

In conclusion, while international small stocks currently present a compelling opportunity, investors need to be educated and informed in order to take full advantage of this potentially lucrative sector.


Read the full report here.

Training the Government towards a Good Governance

If the government is trained well enough, then they would be able to move towards a good governance. So, to set an example, the starting point for the training should be government itself.

The areas of training should be at least include:

- How to avoid Corruption
- How to respect and implement Law and Ethics
- How to implement Justice
- How to become a genuine and sincere Leader
- How to build Public and National Interest first and throw personal interest at the end.

This "Training Program” is required in the Government from top to bottom.

What is Your Company's Altman's Z Score?

What is Your Company's Altman's Z Score?

A fundamental step in determining the health of a company is the analysis of a company's historical financial statements. Historical data analysis provides a picture of the financial health of a business and a roadmap outlining the direction the business is heading. An integral part of historical analysis is the use of financial ratios. Financial ratios are analytical tools applied to financial data, which are used to identify positive and negative trends, strengths and weaknesses, investment attributes, and other trends, which measure the viability of a company's business.

Ratio analysis is typically used to measure a firm's liquidity, leverage, activity, profitability and growth. No single ratio calculation can provide a meaningful picture of a firm's financial condition. This article will focus on a model, which captures the predictive viability of a firm's financial health by using a combination of financial ratios that ultimately predicts a score, which can be used to determine the financial health of a company.

In 1968, Professor Edward Altman of the New York University School of Business developed what is known today as the "Z-Score." The Z-Score is a statistical model that incorporates the use of five different ratios, which serve to predict the health of a firm. Professor Altman believed that selecting various financial ratios and applying a certain weight to each ratio could develop a meaningful prediction model. The model was developed by sampling 66 publicly traded manufacturing companies that all had assets in excess of $1 million. Professor Altman evaluated 22 different ratios that ultimately were reduced to five balance sheet and performance ratios, which were weighted by established coefficients that account for their importance.

The following calculation is used to arrive at the total Z-Score:

Z = 1.20(X1) + 1.40 (X2) +3.30(X3) +.60(X4) + .99(X5)

X1 = Working Capital / Total Assets

X2 = Retained Earnings / Total Assets

X3 = Earnings before Interest and Taxes / Total Assets

X4 = Market Value Equity / Book Value of Total Debt

X5 = Sales / Total Assets

Z = Overall Score

The above calculation represents the overall index for a publicly traded manufacturing company. The calculation would be modified for a privately held business by implementing book value of equity because the privately held company's stock is not publicly traded. The private company Z-Score calculation would be calculated as follows:

Z = .717(X1) + .847(X2) + 3.107(X3) + .420(X4) + .998(X5)

Professor Altman further modified the formula for non-manufacturing companies by eliminating X5 (sales / total assets) due to the fact that sales / total assets can vary from industry to industry. The non-manufacturing company Z-Score would be calculated as follows:

Z = 6.56(X1) + 3.26(X2) + 6.72(X3) + 1.05(X4)

There is a different interpretation for each model. Professor Altman concluded that a Z-Score in the unhealthy category meant a company had the risk of going bankrupt, whereas a Z-Score in the healthy category represented a stable healthy company. Those companies that were in the gray area were considered misclassified.

Public Companies:
1.81 Unhealthy
1.81 - 2.99 Gray Area
2.99 Healthy

Private Companies:
1.23 Unhealthy
1.23 - 2.90 Gray Area
2.90 Healthy

Non-manufacturing Companies:
1.0 Unhealthy
 1.11 - 2.60 Gray Area ;
2.6 Healthy

The Z-Score is used by financial professionals, consultants, bankers, investors and various courts of law to measure a company's viability as an ongoing entity. Predictive models and ratio analysis are useful tools in measuring the health of a subject company. It should be noted that not every model is without shortcomings. First, ratio analysis is only as good as the underlying account data, which can be subject to manipulation. Additionally, ratio calculations can produce erroneous values when abnormal data is used.

The Z-Score is one way to provide a measure of a company's stability and its ability to function as a going concern. Many predictive models like the Z-Score provide credibility to the process. However, the Z-Score is just one method of predicting financial health and should not be the sole basis of evaluation. First hand knowledge of the operations and management are an integral part of the overall analysis necessary to come to any formal conclusions related to the final conclusion.


http://www.vercoradvisor.com/articles/CompanyScore.html

What Is a Trade Deficit?

What Is a Trade Deficit?

With all the talk of globalization, trade imbalances, imports, exports and deficits, it's easy to become confused and misunderstand some of the terms used by politicians and economists. The trade deficit is one of the more important issues facing American society. Knowing what it is and what it means to you can help make sense of what people and politicians say about it.

Significance
1. Trade is the lifeblood of any country. In the United States, literally trillions of dollars are generated by the importation and exportation of goods to U.S. shores. Ideally, the United States should export more than it imports, particularly if the value of those goods is high. For instance, selling raw lumber nets a relatively low profit. Turning the lumber into furniture, however, adds value to the lumber. These "value-added" products are then sold at a much higher profit and though less of them may be send abroad, the trade-off is a "surplus" of revenue.

Geography
2. The United States trades either directly or indirectly with every country on the planet, with a few minor exceptions. Some countries import American value-added goods and send raw materials to the United States. Underdeveloped nations, usually in Latin America and Africa, export agricultural or mineral products in exchange for American products. For example, Jamaica produces a mineral called "bauxite," which is used to make aluminum. The United States exports cars, computers and telecommunications equipment. With developed or developing countries, the United States trades finished goods (toys, electronics, machines) in return for finished goods from those countries. Another example is when the United States trades with China; China purchases high-tech equipment and some raw materials such as lumber and in return, the United States imports everything from toothpaste to flatware to clothing.

Effects
3. When a trade deficit is in effect, the United States is purchasing more from another country than it is selling to that country. In the examples mentioned earlier, the United States may have a trade "surplus" with Jamaica but a trade "deficit" with China. This means more of America's money is going to China than Chinese money is coming to America. A trade deficit may mean that products made in America are becoming too costly for Americans to purchase, or it may mean that foreign products are made more cheaply and thus are more attractive to American consumers. Either way, American companies are forced to cut jobs, cut production or close altogether in the face of dwindling sales. This means less jobs domestically and less money in consumers' pockets, which may reinforce the cycle of purchasing cheaply made imported items.

Types
4. Though there may be a deficit with one or even several countries, the aggregate value of all products exported is compared to the value of all products imported. If the result is a positive number, the United States is said to have an "overall trade surplus." If that number is negative, the United States is said to have an "overall trade deficit." Trade deficits vary from year to year; certain years may favor products from certain countries. French wines, for example, may be in fashion for a few years, but then as the price becomes too high, consumers may choose to drink Australian, Chilean or even domestic wines instead.

Prevention/Solution
5. Trade deficits, if left running for several years, can adversely affect the United States. Businesses, particularly small businesses, may cease to function or may be harmed by falling profits. As consumers become aware of the deficit between the United States and another country, they may opt to purchase products from another country or domestic versions. For instance, the proliferation of Japanese electronics in the 1980s and 1990s led to a growing dissatisfaction with Japanese dominance in that area. The result was purchases of domestic electronics, as well as the purchasing of Korean, Taiwanese and European electronics. For example, in the personal music industry, Japanese electronics giant Sony's Walkman product was the best-selling personal music player throughout the 1980s and into the 1990s. With the advent of Apple's iPod, however, Sony found itself unable to make a product that appealed to American audiences and lost considerable market share.

http://tradedeficitbytrade.blogspot.com/2010/01/what-is-trade-deficit.html

Understanding Value Traps

If you believe a stock has an a true ("intrinsic") value, you will try to buy it below that level (when it's "cheap"). So why sell if it gets even cheaper.

A stock that stays at a large discount to intrinsic value is a "value trap". It's an important issue for value investors and there are are few methods of avoid value traps.

One way to avoid a value trap with a cheap stock (like Benjamin Graham liked) is to buy them with catalysts, i.e. new management or new plans to unlock that value through buybacks, dividends, or sale/merger.

The best way to avoid a value trap is to buy a growing business that increases value over time.

LPI Capital Records RM84.72 Million In Pre-Tax Profit

July 08, 2010 20:59 PM

LPI Capital Records RM84.72 Million In Pre-Tax Profit

KUALA LUMPUR, July 8 (Bernama) -- General insurer, LPI Capital Bhd, chalked up a 17.3 per cent increase in pre-tax profit to RM84.727 million for the first half-year ended June 30, 2010, from RM72.231 million registered in the same period last year due to higher underwriting profit.

The group's revenue rose 12.2 per cent to RM423.510 million, during the period under review, from RM377.253 million recorded in the corresponding period on the back of increased premium income of 14.2 per cent, said Chairman Tan Sri Dr Teh Hong Piow in a statement Thursday.

He said LPI's earning per share for the six months period jumped to 47 sen from 42 sen previously.

Meanwhile, LPI's wholly-owned subsidiary, Lonpac Insurance Bhd, contributed RM63.7 million to the group's profit in the first-half of the year.

For the second-quarter ended June 30, 2010, the group's pre-tax profit fell 17.7 per cent to RM35.896 million, from RM29.994 million chalked up in the corresponding quarter, due to higher investment income received in the preceding quarter.

"Barring unforeseen circumstances, the group is confident of recording a satisfactory performance in the second-half of 2010," Teh said.

In consideration of the group's strong and commendable performance over the years, Teh said the board was proposing a one-for-ten rights issue of RM7.00 per share and a one-for-two bonus issue.

The proposals were, however, subject to the approval of relevant authorities.

The company also declared an interim single tier dividend of 10 sen per ordinary share.

LPI's total asset base rose 26 per cent to RM1.9 billion as at June 30, 2010.

"The group continued to create and enhance shareholder value through the efficient utilisation of its capital and increasing its return on equity while maintaining excellent corporate governance," Teh added.

-- BERNAMA

http://www.bernama.com/bernama/v5/newsbusiness.php?id=512025

Bursa Malaysia Reprimands Dealer Representative For False Trading

July 08, 2010 18:26 PM

Bursa Malaysia Reprimands Dealer Representative For False Trading

KUALA LUMPUR, July 8 (Bernama) -- Bursa Malaysia Securities Bhd publicly reprimanded, imposed a fine of RM100,000 and ordered to strike off Lee Beng Huat a commissioned dealer's representative (CDR) with Kenanga Investment Bank Bhd, from the Register for false trading and market manipulation.

In a statement, it said Lee had carried out false trading and market manipulation in his dealing activities in the shares of Axis Incorporation Bhd of approximately 41 million shares out of the market turnover of 104 million Axis shares for 87 trading days in 2006-2007.

During the said period, Lee had dealt in Axis shares predominantly through the accounts of 10 clients (10 Accounts).

The statement said he had entered buy and sell orders which were manipulative in nature and led to false or misleading appearance of active trading in, or market for, Axis shares and this tantamounted to stock market manipulation.

The breach by Lee, among others, involved entry of orders by Lee which were several bids lower than the last done price with no real intention to have the buy orders matched.

Lee also engaged in order splitting, entering a series of buy orders in succession through any one of the 10 Accounts with the same price which gave rise to, and created an impression, of continuous demand for Axis shares which led to false or misleading appearance of active demand/market for Axis shares.

Therefore, the buy and sell orders executed in the 10 Accounts had cross trades which were matched among each other for approximately 12 million units of Axis shares involving Lee as their common CDR in carrying out dealing activities in Axis shares in their accounts.

By engaging in False Trading and Market Manipulations, Lee managed to sell about 72 per cent (or 40.98 million out of 56.67 million units) of the sell orders entered for the 10 Accounts and bought 55 per cent (or 41.6 million out of 76.14 million units) of the buy orders.

The higher volume and percentage of the buy orders, which were subsequently cancelled and/or lapsed due to the orders being lower than the market/last done price resulting in lower percentage of buy orders matched, not only gave an impression of and created an inflated demand for Axis shares but also led to a false or misleading appearance of active demand/market for Axis shares.

-- BERNAMA

http://www.bernama.com/bernama/v5/newsbusiness.php?id=511931

Nazir: Retail investors moving offshore to expand investment options

Written by Bernama
Wednesday, 07 July 2010 16:37


KUALA LUMPUR: Retail investors are moving towards investing offshore as part of their strategies to grow investment options, CIMB Group Holdings Bhd group chief executive, Datuk Seri Nazir Razak, said.

He said for the past 18 months, retail investors had been investing offshore through many networks, including CIMB.

"That's a growth area. It may not make Bursa Malaysia terribly happy but at the end, retail investors are growing their investment options.

"The United States and Asean had been the top offshore destinations," he told reporters after delivering the keynote address at the CIMB Private Banking Second Annual Investment Conference here on Wednesday, July 7.

Nazir was commenting on the lack of participation by retail investors in the local bourse.

A recent Bursa Malaysia's report, "Rethink Retail", showed that 61% of the potential retail investors did not know how to invest in equity markets.

Furthermore, 48% of non-investors cited high risks as the main reason for their non-participation in the stock market.

Nazir said through the revival of CIMB Securities brand, the group was growing the number of remisiers to 1,000 across the region as part of its strategy to encourage more retail investor participation in the local bourse.

On the private banking potential, he said, the group, which currently has RM7 billion worth of asset under management (AUM), would grow it to RM10 billion within five years.

"The group is currently in the process of integrating its private banking capabilities across the region," he said.

At the same event, Nazir also announced that CIMB Group's automated teller machine (ATM) users could withdraw cash via its ATMs in Malaysia, Indonesia, Singapore and Thailand for free immediately.

On another note, Nazir said the bank was concerned with the recent development of SJ Asset Management (SJAM), which was currently being examined by the Securities Commission (SC) due to irregularities in its accounts.

"SJAM is one of the approved fund managers for our private bankers to recommend to our clients, so therefore, by extension, clients will have some money invested in," he said.

On CIMB's level of exposure in SJAM, Nazir said: "Even one sen will concern me because this is our clients' money in SJAM ... this is something that we are monitoring and engaging with SC closely."

According to newsreports, a number of banks' clients may have financial exposure to SJAM. - Bernama

http://www.theedgemalaysia.com/business-news/169431-nazir-retail-investors-moving-offshore-to-expand-investment-options.html

Bank Negara ups OPR by 25bps to 2.75%

Written by Joseph Chin
Thursday, 08 July 2010 18:11


KUALA LUMPUR: Bank Negara raised the Overnight Policy Rate (OPR) by 25 basis points to 2.75% at the Monetary Policy Committee (MPC) meeting on Thursday, July 8.

"The floor and ceiling rates of the corridor for the OPR are correspondingly raised to 2.50% and 3% respectively," it said.

The central bank said the MPC considered the new level of the OPR to be appropriate and consistent with the current assessment of the growth and inflation prospects.

It also said the stance of monetary policy continues to remain accommodative and supportive of economic growth.

On the domestic economy, it said recent trends in industrial production, financing activity, labour market conditions and external trade indicate that economic activity has remained robust in the second quarter.

"Going forward, while external developments may result in some moderation in the pace of growth, the domestic economy is expected to remain strong with continued improvements in private consumption and investment, and augmented by public investment spending," it said.

Domestic inflation recorded modest increases in April and May, mostly on account of supply factors.

Bank Negara said prices were expected to rise at a gradual pace in the coming months, in line with the continued improvement in domestic economic conditions, and taking into account possible adjustments in administered prices.

"Overall, inflation is, however, expected to remain moderate going into 2011," it said.


http://www.theedgemalaysia.com/business-news/169531-flash-bank-negara-ups-opr-by-25bps-to-275.html