szehau's weblog » investment

New On FBM KLCI

szehau — Mon, 03 Aug 2009 04:59:43 +0000

A few things have been implemented into our new stock market starting from today.

New tick size for securities and
Main board and Second board has been merged into Main Market and
MESDAQ has been renamed to *ACE Market.

*ACE stands for Access, Certainty and Efficiency.

FBM KLCI falls more than 10 points this early morning and then lower to 1169.17 (decreased 0.49%) on this afternoon. Most counters' share price seem moving slow due to the smaller tick sizes. Maybe the market still need some time to familiar themselves with the new tick sizes.

New Tick Sizes for Securities Traded on Bursa Malaysia

szehau — Fri, 24 Jul 2009 06:43:09 +0000

Effectively from 3rd August 2009, securities traded on Bursa Malaysia will be having new tick sizes. The new tick sizes are smaller than the current tick sizes.

I think, this may help in correctly reflect the actual price of a stock worth. But on other hand, this might be a bad news for most speculators because the price movement of a stock will be reduced greatly.

What do you think?

Read more on The Star: Bursa reduces tick sizes to boost market liquidity.

REIT – Real Estate Investment Trust

szehau — Sat, 11 Jul 2009 07:54:24 +0000

Recently, the investment term "REITs" come across my mind. I keep seeing news about REITs in newspaper, forums and personal blogs. A REIT or real estate investment trust is a real estate company that offers common shares to the public.

What is REIT? According to Wikipedia:

A Real Estate Investment Trust or REIT (pronounced /ˈriːt/) is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90% of their income, which may be taxable, into the hands of the investors. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks.

In Malaysia, REIT is a little bit different (source).

1. Investors' dividends will be taxed at investors' books.
2. Non-residents' dividends will be taxed at 28%. It is an upfront and final withholding tax.
3. There are NO explicit requirement of minimum payout ratio in the guidelines.

Like other stocks in Malaysia, public REITs are listed in KLSE too under "REITS" sector. Other than blue chip + high dividen stocks (e.g. PBBANK 1295 and BAT 4162), REITs seem to be a good alternative investment to me.

Like other stocks, stock prices of REITs fluctuate. However, as long as the rental properties are well managed, the rental markets are stable and the rental incomes are consistent, you can get consistent dividend incomes (as long as you buy it at the right price).

Due to the natural of REITs where they are required to distribute most of their income to the hand of investors, REIT stocks normally, consistently pay out high dividend yearly (normally around 10%) to investors. Other than that, you may also earn money from price changes (capital appreciation).

Currently (July 10, 2009), there are 13 REITs being listed in KLSE (stock code, stock name [price in RM per unit stock, dividend yield %]):

4952, AHP [0.835, 8%]
6696, AHP2 [0.590, 5%] (suspended)
5116, ALAQAR [0.935, 9%]
5120, AMFIRST [0.900, 10%]
5127, ARREIT [0.720, 10%]
5130, ATRIUM [0.700, 12%]
5106, AXREIT [1.570, 10%]
5124, BSDREIT [1.210, 9%]
5121, HEKTAR [0.940. 11%]
5123, QCAPITA [0.950, 8%]
5109, STAREIT [0.840, 8%]
5111, TWRREIT [1.020, 9%]
5110, UOAREIT [1.180, 8%]

AMFIRST, ATRIUM, AXREIT, HEKTAR and STAREIT are top, favorite stock counter among REIT investors. I have put AMFIRST, ATRIUM, AXREIT and HEKTAR into my stock watch list. In fact, I have just bought some AMFIRST and HEKTAR (click the links to read the companies' investment portfolio).

Since I don't have that much money to buy an office or a building like those big companies do, I can invest in REITs. To me, buying REITs' stock is like "having" a small part of the properties that the REIT companies owned.

I earn money from renting "really small part" of my "office" or "building" to the big customers (e.g. Nestle, AmBank and etc.). The best is that I does not need to worry about the occupancy rate of my "little properties" as they well are managed by the management team of my "REIT companies". Ha..

I wish to keep at least 20% of REIT stock in my stock portfolio. If these REITs perform consistently well, it is definitely a good place to park my cash. They give far better return than putting my money in saving accounts and even fixed deposit (FD) accounts.

Hopefully these few stock counters will perform better in future and bring better return to investors.

KLCI is now FTSE Bursa Malaysia KLCI (FBM KLCI)

szehau — Mon, 06 Jul 2009 03:16:15 +0000

Starting from today, KLCI is now known as FBM KLCI. The FBM KLCI is formed by 30 stocks in contrast to the previous 100-index linked stocks.

Today's market opens low, fell 6.02 points to 1072.69 at 11am. The market seems to be very "quiet". Is this the effect from the new FBM KLCI? Maybe everyone just wait and monitor.

Monthly Repayment for Housing Loan

szehau — Sun, 05 Jul 2009 17:23:21 +0000

Every time when I reading newspaper or websites and come across advertisement about properties (e.g. houses or shops), I always think how much I will need to pay monthly if after I got a loan from bank. And also what if I put more down payments, what would be my monthly repayment? Will it be much different?

So I decide to write myself a simple program. It is based on fixed rate mortgage. This simple program gives me a brief idea on the monthly repayment I will need to make if I take a loan from bank. Simple key in the total property price, down payment, annual interest rate and terms of loan, then the program will calculate the monthly payment for you.

Your can put the little program at your website too. Simple get the code at Mortgage Payment Calculator.

New FTSE Bursa Malaysia KLCI

szehau — Thu, 02 Jul 2009 15:29:50 +0000

The new FTSE Bursa Malaysia (FBM) KLCI will replace the existing one, KLCI which is 100 stocks, with 30 stocks, effectively July 6, 2009.

The 30 stocks in the FBM KLCI weightings are:

Bumiputra-Commerce Holdings 10.28%
Sime Darby 9.90%
Public Bank 9.87%
Maybank 9.45%
Tenaga National 8.00%
IOI Corporation 6.8%
Genting 5.10%
Axiata Group 4.75%
MISC 4.07%
Genting Malaysia 2.66%
Telekom Malaysia 2.25%
AMMB Holdings 2.19%
DiGi.com 2.16%
PPB Group 2.11%
Kuala Lumpur Kepong 2.00%
Bitish American Tabacco 1.99%
PLUS Expressways 1.99%
PETRONAS Gas 1.81%
YTL Corporation 1.79%
YTL Power International 1.60%
Berjaya Sports Toto 1.58%
UMW Holdings 1.51%
Hong Leong Bank 1.12%
Tanjong 0.82%
MMC Corporation 0.79%
Astro All Asia Networks 0.78%
Pakson Holdings 0.77%
PETRONAS Dagangan 0.76%
RHB Capital 0.59%
Malaysia Airline System 0.51%

GENM

szehau — Thu, 25 Jun 2009 03:49:37 +0000

The stock RESORTS (4715) has been changed name to GENM or Genting Malaysia Berhad. The main purpose of the change is to reflect the company's primary country of listing, origin and current operations.

Trade Online With Cheaper Brokerage Rate At HLeBroking

szehau — Fri, 12 Jun 2009 18:39:51 +0000

I have a pretty good experience using HLeBroking. HLeBroking is well known with its system performance and low brokerage rate. I'm quite satisfied with their service and system performance.

Recently I found that there is a new promotion for new customer who signs up HLeBroking. The promotion's brokerage rates are 0.38% for RM100,000 and below, 0.19% for RM100,000 above and 0.10% for intraday trade.

I think the old customer should have the same benefits too. So I sent them a mail last few days to ask if I can get the same rate and also asked a question about the interest rate in the share account.

Very promptly, the next day they replied me and said that my brokerage rate will be:

(Online) 0.00 - 100,000.00 : 0.380%
100,000.01 - Max : 0.190%

Not bad huh?

About the interest rate for cash money in the share account, they replied that the cash deposits will be placed in a trust account with Hong Leong Investment Bank Berhad. A minimum credit balance of RM1,000 will earn you an interest of 1.65% p.a, subject to variations from the bank.

The interest rate is much higher than a saving account! You can put you money there while not buying any stocks to earn some interest.

If you have a HLeBroking account and trade online, you can send them an email to see if you can get the same offer.

Read more about the promotion: http://www.hlb.com.my/promo/eb/trade/tc.jsp?s=promo

Maybankard Ezy Cheque – Will You Take the Offer?

szehau — Tue, 09 Jun 2009 19:15:46 +0000

I received a Maybankard Ezy Cheque yesterday. It is a cheque with amount of RM2,000. You can get extra cash by simply bank in the cheque.

There is no document to fill in, no waiting approval and 0% interest-free for six months. You will need to pay back (by charging to your credit card) the money within 6 months, RM333.33 each month.

It is an interest-free for the installments but you will need to pay the cash advance fee which is RM77.60 (3.88%). Will you take that offer?

Personally I think it is not worth to take it unless you need the money urgently. The cash advance fee for credit card normally is around 18% p.a. So it is consider cheaper to take the Ezy Cheque than to take credit card's cash advance.

If the cash advance fee is 2% or less, I think I will take it because I can use the money to invest in stock market or mutual funds, where I think I will get a better return on the investment (more than 2%).

What Have You Done to Achieve Financial Freedom?

szehau — Fri, 05 Jun 2009 17:06:40 +0000

I think most people may have a same dream in their life - to achieve financial freedom. I am having the same dream too.

Financial freedom means that you are in control of your money, rather than it controlling everything you do. It's a long journey to achieve freedom: learn, fail, learn and fail... the only success.

What have you done to achieve financial freedom?

I have my own plan which I believe it is a long learning road and may take some time to achieve.

I'm now consider self-employed. So saving my income is a must and is the most straight forward way to increase asset.
I invest in stock market, 80% on fundamental analysis and 20% on technical analysis. I know I will still need to learn a lot in stock market. To me, investing in stock market is the simplest way own a company and as a shareholder for the company and you can share the company profit without actually doing anything in the company.
I invest in unit-trust (mutual funds). My unit-trust account is just like my saving account where I will try to use any money in that account. When stock market is bearing, I switch most of my unit trust funds' money to unit trusts with low risk profile (which have lower return but most of the time get better return than a fixed deposit account). When stock market is bulling, I switch most of my unit trust funds' money to unit trusts with higher risk profile (which hopefully to get higher return).
Internet Business - I'm not taking very serious on this but it does help in contribute me some pocket money every month. Some of the types of Internet business I will try is blogging (earn from advertising revenue and selling affiliate products) and online stores (as long as the operation cost is less that RM1k per year).

Currently stock markets and mutual funds are the most comfortable zone for me to make most of my investment. I'm not investing in any real estate because it is not suitable for me now. Investing real estate will require a lot of money, time and efforts. If I make a wrong step in real estate investment, it could turn a good debt into a really bad debt.

What about you? What you have done to make your way to financial freedom? Share your thoughts or stories here.

szehau's weblog » investment

New On FBM KLCI

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