Top 50 Best Bursa Malaysia Dividend Stocks of the Year (2018)

Stock Name	Total Dividend (cents)
NESTLE	280
PANAMY	248
DLADY	200
PEB	195
BAT	155
UTDPLT	140
CARLSBG	100
HEIM	94
PETGAS	72
PETDAG	70
PBBANK	69
LPI	68
AIRASIA	64
F&N	57.5
MAYBANK	57
BKAWAN	55
TENAGA	53.27
HLBANK	48
HLIND	47
AJI	46.5
KLK	45
AEONCR	41.13
HLFG	40
ORIENT	40
ALLIANZ	40
HAPSENG	35
UCHITEC	34
BURSA	33.6
PCHEM	32
MISC	30
PERSTIM	30
CHINTEK	30
MPI	29
PPB	28
AMWAY	27.5
LITRAK	25
CIMB	25
SAM	23.36
GENTING	21.5
SDRED	21.5
ATLAN	21
TIMECOM	20.56
RHBBANK	20.5
IOICORP	20.5
SCIENTX	20
MAGNI	20
HARISON	20
PETRONM	20
HAIO	20
MAXIS	20

https://www.malaysiastock.biz/Report-Analysis/Top-KLSE-Dividend-Stock.aspx

3 Years Continuously Improvement in Dividend (2017,2018,2019)

3 Years Continuously Improvement in Dividend (2017,2018,2019)

Stock Name	Dividend (2019)	Dividend (2018)	Dividend (2017)
AHP	5.75	5.63	5.2
AIRASIA	90	64	12
ALLIANZ	65	40	12
ALLIANZ-PA	78	48	14.4
ARREIT	6.2	6.08	5.49
AXREIT	9.26	8.74	8.26
BIMB	16	15.5	14
BOILERM	2	1.75	1.5
CARING	6	5	3
DIALOG	3.8	3.2	2.65
FPI	11	10	8
FRONTKN	2.5	1.5	0.5
HLBANK	50	48	45
HLFG	42	40	38
HLIND	50	47	45
JOHOTIN	6.4	5	4
KLCC	38	37	36.15
KOTRA	7.4	5	4
MAGNUM	16	15	11
MASTER	2	1.5	1
MBMR	13	12	3
METFSID	2.17	1.99	1.51
OPENSYS	1.5	1.25	1
PBBANK	73	69	61
PETGAS	82	72	66
PTRANS	1	0.95	0.7
RCECAP	9	7	3
SAM	29.05	23.36	17.23
SUNREIT	9.59	9.57	9.19
TIMECOM	29.03	20.56	17.2
TMCLIFE	0.2	0.18	0.17
ZHULIAN	12	10	7.5

https://www.malaysiastock.biz/Report-Analysis/Continuously-Improvement-Dividend-KLSE-Stock.aspx

Negative Interest Rates Explained

Excellent video on negative interest rates.

How Negative Yields Work | WSJ

What Would Negative Interest Rates Mean For Consumers And The Economy?

Why you should invest early

The Complete VALUE IMVESTING Guide That Works! by K C Chong (Published 2020)

I picked up this book in Popular Bookshop last week for RM 69.90 and has read many pages.

The author K C Chong has been an active participant in i3 investor forum,  and has shared his investing knowledge generously with the many readers in that forum for many years.

You can now refer to this fine book for the many knowledge, and more, that  K C Chong has shared.

Congratulations to K C Chong.

Topics：
Section 1: Before starting to invest
Section 2: The Stock Market
Section 3: Value Investing, the proven successful investing framework
Section 4: Stock Analysis
Section 5: Investing in good companies at reasonable or cheap price
Section 6: Some proven successful investing strategies
Section 7: Miscellaneous topics

Who is KC Chong?

KC Chong is a retired qualified engineer with more than 40 years of experience in stock investing. He is a dedicated value investor & has coached more than 1,000 students on fundamental value investing. He has a Master in Finance degree & writes frequently on investing & personal finance.



Comments by Cold Eye

Cold Eye "Currently there is a shortage of good reading materials on fundamental investing written by local investment gurus for investor especially stock market newbies. The series of articles written by Mr. KC Chong have certainly helped to fill the vacuum. I am confident that this book will bring a lot of benefits to those looking for guidance. I therefore strongly recommend this book to those who are keen to sharpen their acumen in share investments.

KLCI 30 Component Stocks (Market PE, DY, ROE)

Company	Market Cap (b)	PE	DY	ROE	Price
AIRPORT	10.32	19.22	2.25	5.76	6.22
AMBANK	11.152	7.18	5.41	8.47	3.7
AXIATA	37.112	27.18	2.35	8.42	4.05
CIMB	44.653	9.79	5.56	8.11	4.5
DIALOG	18.843	31.04	1.14	15.31	3.34
DIGI	32.5	22.68	4.35	230.38	4.18
GENM	16.33	11.7	6.91	7.19	2.75
GENTING	18.88	9.46	4.41	5.61	4.87
HAPSENG	23.527	20.23	3.7	15.83	9.45
HARTA	21.068	51.32	1.32	16.63	6.23
HLBANK	33.903	12.74	3.2	9.64	15.64
HLFG	18.177	9.44	2.65	9.63	15.84
IHH	49.134	89.03	0.54	2.47	5.6
IOICORP	26.397	40.31	1.9	7.04	4.2
KLK	23.48	43.99	2.3	5.15	21.72
MAXIS	42.074	27.7	3.72	21.58	5.38
MAYBANK	95.889	11.7	6.68	10.05	8.53
MISC	33.077	23.19	4.45	4.11	7.41
NESTLE	33.065	49.14	1.99	101.04	141
PBBANK	69.878	12.68	4.06	12.64	18
PCHEM	45.28	16.08	3.18	9.41	5.66
PETDAG	21.935	26.44	3.85	13.87	22.08
PETGAS	32.372	16.73	5.01	14.61	16.36
PMETAL	19.625	41.68	1.03	13.25	4.86
PPB	25.834	22.41	1.54	5.38	18.16
RHBBANK	22.897	9.22	3.59	9.63	5.71
SIME	13.603	14.57	5	6.42	2
SIMEPLT	33.321	378.12	0.35	0.66	4.84
TENAGA	71.882	15.87	4.21	7.81	12.64
TOPGLOV	14.682	39.46	1.31	14.38	5.73
KLCI (Total)	960.890	17.70	3.55%	8.83%
Company	Earnings (m)	Dividends (m)	Equity (m)	DPO
AIRPORT	536.9	232.2	9321.9	0.43
AMBANK	1553.2	603.3	18337.7	0.39
AXIATA	1365.4	872.1	16216.3	0.64
CIMB	4561.1	2482.7	56240.2	0.54
DIALOG	607.1	214.8	3965.1	0.35
DIGI	1433.0	1413.8	622.0	0.99
GENM	1395.7	1128.4	19412.1	0.81
GENTING	1995.8	832.6	35575.3	0.42
HAPSENG	1163.0	870.5	7346.7	0.75
HARTA	410.5	278.1	2468.6	0.68
HLBANK	2661.1	1084.9	27605.2	0.41
HLFG	1925.5	481.7	19995.1	0.25
IHH	551.9	265.3	22343.4	0.48
IOICORP	654.8	501.5	9301.8	0.77
KLK	533.8	540.0	10364.2	1.01
MAXIS	1518.9	1565.2	7038.5	1.03
MAYBANK	8195.6	6405.4	81548.7	0.78
MISC	1426.3	1471.9	34704.3	1.03
NESTLE	672.9	658.0	665.9	0.98
PBBANK	5510.9	2837.0	43598.8	0.51
PCHEM	2815.9	1439.9	29924.8	0.51
PETDAG	829.6	844.5	5981.4	1.02
PETGAS	1935.0	1621.8	13244.1	0.84
PMETAL	470.8	202.1	3553.6	0.43
PPB	1152.8	397.8	21427.3	0.35
RHBBANK	2483.4	822.0	25788.2	0.33
SIME	933.6	680.2	14542.5	0.73
SIMEPLT	88.1	116.6	13351.9	1.32
TENAGA	4529.4	3026.2	57995.2	0.67
TOPGLOV	372.1	192.3	2587.4	0.52
KLCI (Total)	54284.3	34083.1	615068.3	0.63

Summary:

KLCI 1491.03    5.3.2020

1.  The total market capitalization of the KLCI 30component stocks is RM 960.89 billion.
2.  The PE of the KLCI 30 component stocks is 17.70, giving a Earnings Yield (E/P) of 5.65%.
3.  The DY of the KLCI 30 component stocks is 3.55%.
4.  The ROE of the KLCI 30 component stocks is 8.83%.
5.  The total earnings of the KLCI 30 component stocks is RM 54.28 billion.
6.  The total dividends distributed by the KLCI 30 component stocks is RM 34.08 billion
7.  The total equity of the KLCI 30 component stocks is RM 615.07 billion
8.  The DPO of the KLCI 30 component stocks is 0.63.
9.  The Price to Book Value ratio of the KLCI 30 component stocks is 1.56

Analysts see rubber glove stocks bouncing off

TheEdge Thu, Mar 05, 2020


KUALA LUMPUR: The Covid-19 epidemic has pushed investors into stocks of rubber glovemakers, which have seen an uptick in demand.

The Healthcare Index climbed 13.77 points or 1.03% to close at 1,344.72 yesterday, with the Big Four rubber glove players dominating the list of most active counters on Bursa Malaysia.

Among the most active stocks was Careplus Group Bhd, which saw 62.9 million shares change hands. The stock closed up 12.73% at 31 sen with a market capitalisation (cap) of RM165 million.

Shares in Adventa Bhd gained 10.77% to settle at 72 sen, bringing a market cap of RM110 million.

Supermax Corp Bhd rose 5.59% to end the day at RM1.70, while Hartalega Holdings Bhd and Kossan Rubber Industries Bhd were up 3.48% and 1.46% to close at RM6.24 and RM4.85 respectively. Top Glove Corp Bhd shares were unchanged at RM5.70.

Analysts said the stage is now set for a solid growth in the rubber gloves sector in 2020 following three quarters of anaemic quarterly earnings growth.

“From a low base due to the lacklustre demand of the past 12 months, the sector will benefit from restocking activities, ramping up demand as the current outbreak of Covid-19 enforces higher hygiene standards,” Kenanga Research analyst Raymond Choo Ping Khoon said in a sector report on Feb 7.

He noted that even before the Covid-19 crisis set in, the third quarter of 2019 (3Q19) results season had indicated a positive recovery in demand and hence, volume growth of industry leaders such as Top Glove and Hartalega. Both players recorded 6% and 14% sequential volume growth, respectively.

“From our ground checks, demand for nitrile gloves is picking up again with players’ new capacities swiftly taken up. We believe this uptick in demand is turning positive and should be reflected in players’ bottom line in subsequent quarters.

“For illustration purposes, going forward, assuming nitrile:latex [ratio] of 80:20 (currently 67:37) and based on estimated global demand of 308 billion pieces in 2020 (forecast for 2019 is 300 billion pieces and assuming an 8% growth rate in 2020), this implies nitrile growth rate of 30% or an additional 51 billion pieces from switching to nitrile gloves,” he added. Kenanga Research has an “overweight” rating on the sector.

Affin Hwang Investment Bank said earnings growth for rubber glovemakers declined slightly in the just-ended 4Q19 as some of the manufacturers were still feeling the negative impact from the labour shortage issue.

“However, most of them have started to deliver stronger quarter-on-quarter earnings growth due to stronger demand from the US, as buying patterns have started to normalise since the tariff hike in China gloves in 3Q19. We believe that as most manufacturers are already operating at high utilisation rates, the recent surge in demand due to Covid-19 would provide them more flexibility in setting selling prices,” it said in a strategy note on Tuesday.

On Jan 24, Malaysian Rubber Glove Manufacturers Association president Denis Low announced that its members are prepared to gear up to produce more gloves to meet the requirements if the Covid-19 outbreak becomes pandemic.

At press time, the number of confirmed cases of Covid-19 totalled 93,500, with at a death toll of at least 3,204 people worldwide.

Confirmed cases have also been ballooning in other parts of the world, including in advanced and developing economies such as South Korea, Italy and Iran. Malaysia reported 14 new cases yesterday, bringing its tally to 50.

According to Bloomberg data, most of the glove counters are still trading below analysts’ consensus target price (see table), except for Hartalega. At yesterday’s closing of RM6.24, the stock is trading above its average target price of RM6.15.

Those currently trading below the analysts’ consensus target prices are Comfort Gloves Bhd (21%), Kossan (15%), Supermax (14%) and Top Glove (5%).


https://www.klsescreener.com/v2/news/view/647178/analysts-see-rubber-glove-stocks-bouncing-off

ADVENTA    0.715
AFFIN           1.770
BURSA         5.480
CAREPLS     0.305
COMFORT   0.875
HARTA         6.220
KENANGA   0.440
KOSSAN      4.940
SUPERMX   1.720
TOPGLOV    5.720

Investing: When to bet the farm

Big payoffs often require big risks. 

• Bet wrong, and you could lose everything. 
• Do you have what it takes? 
• And how do you assess whether a dicey investment is worth it?

You want a big return? 

• How big a risk do you want to take to get it? 
• Gauging the risks associated with really promising investments, and 
• handling those risks appropriately, can change your life.

"It's never safe to take a risk, by definition." 

• Yet successful investors take major risks all the time. 
• They succeed because they do their research, can afford to lose the money they invest in high-risk schemes and are able to make up any losses they incur with other investments, which frequently involve complementary or counterbalancing risks.
• Whether considering an investment in a stock, a privately held startup or a hedge fund -- all high-risk propositions -- investors should start by digging through the details of the business case to figure out how the return on investment is likely to be generated. 
• How big a payoff might the investment produce? 
• And how likely is success?
• Successful investors look hard at the downside as well. 
• What would the price of failure be? 
• And how likely is that?

Just jump in and take a risk

• And what about all the outcomes in between?
• Successful investors tend to have a broad view, taking the downside into account with the upside. 
• They plan on an outcome somewhere in the middle of the range of possibilities. That is their "expected return."
• "An expected return is an average. It's the probability of all of the outcomes."

Risk assessment gets pretty sophisticated at risk-oriented hedge funds.

• These funds combine and counterbalance risks to put together exotic investment strategies that increase an investor's upside while controlling the downside -- all for a price. 
• But the basics are just common sense.

Our own personalities add complexity to high-risk situations.

• There are risks associated with overly emotional reactions.
• "What you don't want to happen is for people to get emotional with the market."
• The more emotional we get, the more likely it is we will make a mistake.
• A company's business prospects can be measured and evaluated statistically, but there is no easy measure for mood swings. 
• Before making any moves, people contemplating high-risk investments should come to grips with their emotional makeup and know how they are likely to react.

Three ways to analyze a company

• (Quantitative, Qualitative and Technical Analysis)
• Where risk is high, the investor needs to analyze his or her life situation.

Is financial risk really risky?

• "There are times in your life when it's appropriate to take different levels of risk."
• Age is a big factor. Age changes us in a lot of ways. We gain emotional maturity. At the same time, the nature of our financial obligations changes, and the time horizon for risk gets tighter.
• "Let's say you're young, in your mid-20s,"  "If you take a big risk and something goes wrong, you have time to recover." 
• On the other hand, the middle-aged homeowner probably needs a bigger safety net, especially if there are kids who need braces or there are college costs to consider.
• Even a high-risk investment can be a very positive part of a portfolio when it's appropriate to a person's situation and is well-managed."In investing and in life, you have to look at everything on a risk-and-reward basis.  Volatility is not the end of the world."

Risk lesson from owning the business

• He left the investment firm to start his own firm. 
• He knew most new businesses fail, but he had a lot of confidence in his own investment skills. If the business went under, he reasoned, he could always get a job with another firm.
• "Careers are actually the easiest place to take risks, as long as you don't burn your bridges." Younger investors, particularly, should be ready to gamble with their careers. 
• But in the same breath he cautions as professional investors often do: Risk only as much as you can afford to lose, he says.

How to win in a bear market

The secret is simply to invest when others are selling. To do this requires resisting our instinct (built into our genes over thousands of years) to follow the herd.

Regular savers also win in a bear market because they continue to buy shares or units when prices have fallen. Provided they keep doing this they will benefit when the next bull market comes along.

Patience and perseverance is the key, since the recovery could take several years, but rest assured, a bull market will follow a bear market as sure as night follows day.

Investing in a hedge fund that ""goes short"" is also a way to make money in falling markets. In this case the fund manager does not invest directly in stocks but actually borrows and sells them.

• He then repurchases and returns them at a later date. If he has judged correctly and the repurchase price is lower than what he paid then the difference, less expenses, is pure profit.
• Such a fund can be a useful component in a portfolio to soften the impact of a falling market, but much depends on the skill of the manager. It is not something you should try at home!

Growth Stocks: Searching for the Sprinters

Growth Stocks: Searching for the Sprinters

by Douglas Gerlach

Investors who focus on growth try to predict which companies will grow faster in the future -- faster than the rest of the stocks in the market, or faster than other stocks in the same industry. If you're successful in buying a company that does grow faster than other companies, then it's likely that the price of that company's stock will increase as well, and you can make a profit.
(My comment: Provided you did not pay too high a price to buy it.)

The stock of a company that grows its earnings and revenues faster than average is known as a growth stock. These companies usually pay few or no dividends, since they prefer to reinvest their profits in their business.

Peter Lynch primarily used a growth stock approach in managing the Magellan mutual fund. Individuals who invest in growth stocks often prefer it because their portfolio will be made up of established, well-managed companies that can be held onto for many years. Companies like Coca-Cola, IBM, and Microsoft have demonstrated great growth over the years, and are the cornerstones of many portfolios. Most investment clubs stick to growth stocks as well.

Investment merit at a given PRICE but not at another

Investment Policies (Based on Benjamin Graham)

PRICE: is frequently an essential element, so that a stock (and even a bond) may have investment merit at one price level but not at another.

______________________________________

Having selected the company to invest based on various parameters, the next consideration will be the price we are willing to pay for owning part of its business.

Price is always an important consideration in investing. At a certain price, the company can be acquired at a bargain, at a fair price or at a high price. Each scenario will impact on our investment returns.

We should ALWAYS buy a good quality company at a BARGAIN PRICE (margin of safety). This allows us to lock in our potential gains at the time of buying at a favourable reward/risk ratio. This maybe when the upside gain: downside loss is at least 3:1.

There maybe FEW exceptional occasions when we may be willing to pay a FAIR PRICE for a good quality company. This is often the case when a good quality company is fancied by many investors and is often quoted in normal time at a high price.

However, we should NEVER (NEVER, NEVER) buy a good quality company at HIGH PRICE, whatever its earnings and growth prospects maybe. To do so will not only diminishes our potential investment returns, but may even results in a loss of our capital due to the unfavourable reward/risk ratio.

Don't time the market, it is difficult. However, there will be time when the market is on sale and the prices of stocks are at a bargain and there will be time when the market is exuberant and the prices of stocks are high or very high.

The market will always be there and we should choose when to buy and when to sell. We should only buy a stock when the PRICE IS RIGHT FOR US and sell a stock when the PRICE IS RIGHT FOR US.


(What is market timing? Timing is a term that refers to investing by buying everything or selling everything on the basis of the (faulty) assumption that one can predict the market's next move. Attempts to time are common, but academicians and practitioners have concluded that success happens through luck only on occasions that are quickly reversed and very costly.)

Absolute Valuation: Calculating the Intrinsic Value of a Business

Absolute Valuation (calculating Intrinsic Value)

In absolute valuation of a stock, the worth of a business is calculated.  This is the Intrinsic Value.

The Intrinsic Value can be estimated from various ways, the two common ones are::

• from the assets* the company owns, and the other,
• from its expected future cash flows (also known as the discount cash flow analysis).

Relative Valuation

Some common market ratios for valuations of stock are PE, EV/EBIT, EV/EBITA, P/B and P/S.  The problem is these are all based on price; comparing what an investor is paying for a stock to what he is paying for another stock.

Relative valuation does not tell you the Intrinsic Value (IV) of the stock.  Without knowing the IV, at least an estimated one, the investors do not really know what price should be paid for it. 



Absolute Valuation versus Relative Valuation

Comparing ratios across companies and across time can help us understand whether our valuation estimate is close to or far from the mark, but estimating the IV of a company gives us a better understanding of its value and hence the price we are willing to pay for it.

Having an estimated IV also helps us focus more on the value of the business, rather than the price of the stock which changes every minute on the screen.

It gives us a stronger basis for making investment decisions.



Discounted Cash Flow Analysis (DCFA)

Discounted Cash Flow Analysis (DCFA) is a method of valuing the intrinsic value of a company.

DCFA tries to work out the value today, based on projections of all the cash it could make available to investors in the future.  

It is descried as "discounted" cash flow because of the principle of "time value of money" - that is, cash in the future is worth less than cash today.

DCFA starts with the premise that a stock's price should be equal to the sum of its current and future cash flows after taking the time value of money (discounted by an appropriate rate) into account. (John Burr Williams).

Stock Price IV 
= Sum of the Present Value of All Future Free Cash Flow (FCF).



Advantages of DCFA

• It produces the closest thing to an intrinsic value of a stock.
• DCF method is forward looking and depends more on future expectations than historical results.
• This method is based on FCF which is less subject to manipulation than some other figures and ratios calculated out of the financial statements.

Weakness of DCFA

• It is a mechanical valuation tool and is subject to the principle of "garbage in, garbage out."
• In particular, small changes of inputs in cash flows and discount rate can result in large changes n the value of a company.  
• Hence, IV obtained is never absolute and infallible, but rather an approximation.

Reference: 

Page 256 to 265  The Complete VALUE INVESTING Guide That Works! by K C Chong

Also  read:

* Warren Buffett Explains Why Book Value Is No Longer Relevant

http://myinvestingnotes.blogspot.com/2020/03/warren-buffett-explains-why-book-value.html

How to derive the intrinsic value of an asset?

https://myinvestingnotes.blogspot.com/2011/09/how-to-derive-intrinsic-value-of-asset.html