HLG aims for fund size of RM6bil

TheStar

It is introducing new products to meet the target by 2011

KUALA LUMPUR: HLG Asset Management Sdn Bhd aims to increase its total fund size to RM6 billion by 2011 from the current RM2.35bil.

HLG Asset Management Sdn Bhd’s executive director and chief executive officer, Richard Lin, said the company was confident of achieving its target with the introduction of new funds.

“The company has more new products in the pipeline. But it needs to review the regional markets first before deciding to launch the products,” he told reporters after the launch of HLG Shariah Inflation Select Fund yesterday.

HLG Unit Trust Bhd executive director/acting CEO Teo Chang Seng left) and HLG Asset Management Sdn Bhd executive director Richard Lin at the launch on Wednesday. - Starpic by Shaari Che Mat

Lin said he expected the new fund to perform well given the current inflationary pressures as it is a structured fund that is benchmarked against the performance of companies, both locally and abroad, that would benefit from an environment of rising inflation.

“The fund’s potential returns are benchmarked on three baskets of reference stocks in the agriculture, consumer staples and oil & mining sectors,” he said.

While global inflation rates are expected to ease, Lin does not expect them to get back to levels they were at one to two years ago.

“The surge in inflation is due to oil and commodity prices ... (but) if you look at the fundamentals of demand, we would not expect nature to produce more oil or minerals,” he said. “We are also not going to see a sharp correction as far as demand for food (is concerned).”

Lin reckoned that the robust economy of China will sustain the demand for food and oil and “that will underpin to a large extent inflationary pressures.”

“We are not saying that inflation is going to go all the way up. It has peaked but it will still be going to be at a high level and (that is) something we have to contend with,” Lin added.

The response to the new fund has been promising since it was launched two days ago, he said, adding that the fund has been seeing “double digit inflow of sales.”

Minimum initial investment for the fund is RM1,000 while the maximum amount is RM20mil.

The fund has a total approved fund size of 600 million units priced at 50 sen per unit during the offer period from Sept 22 until Nov 5.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Are you ready for this downcycle?

TheStar

The five phases of stock market cycles and where we are now

AS a result of the recent financial crisis in companies like Fannie Mae and Freddie Mac, Lehman Brothers as well as AIG, investors have been wondering whether there will be more companies affected by this crisis.

George Soros, in his book published in the early 2008 titled The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, said that “ .... the current crisis is not merely the bursting of the housing bubble. It is bigger than the periodic financial crises we have experienced in our lifetime.”

According to him, we should expect the current situation to get worse before it can get better.

Hence, investors need to prepare themselves for this downturn. Even though nobody will know exactly when the market will recover again, we must be ready when the market moves.

In order to do that, we need to understand stock market cycles and where we are now.

Stock market cycles can be divided into five phases €“ expansion, settlement, contraction, crisis and recovery.

During expansion, the overall stock market sentiment will be bullish with higher stock market volume and prices.

In every market rally, there is always a main theme. For example, the bull market in 2007 was mainly attributed to positive sentiment in the plantation sector.

During this period, we should buy stocks in the sectors that benefit from the rally. If your portfolio owned a lot of plantation stocks last year, you would benefit from the overall market rally last year. Hence, we should pick stocks that follow the market theme.

Then it will enter into settlement for some profit-taking activities. If the overall market sentiment remains bullish, it will resume its uptrend.

The bullish trend will reach a period where reality can no longer sustain the exaggerated expectations. Then the market will enter into contraction where long-term investors get very uncomfortable with the market situation.

In this period, we should sell poor fundamental stocks as well as stocks in sectors which will be seriously affected in a downtrending market.

There are still some short-term traders who may enter the market at this stage as they believe it may rebound later.

However, when the market drops further, it will enter into crisis where long-term investors as well as short-term traders are selling stocks.

Our market is currently in this phase where long-term investors as well as short-term traders are not willing to commit themselves. This is given the unsettling of the US financial crisis in companies like Lehman Brothers and AIG.

Despite the US government’s plan to rescue banks, not many analysts or fund managers are convinced that we have seen the worst.

Soros applied the theory of reflexivity to explain the current crisis.

According to him, the market participants’ misjudgements and misconceptions affect the stock market prices.

He said that later, these biased perceptions would affect both prices and the fundamentals that those prices are supposed to reflect.

When a market drops in prices, it creates fear. As a result of this fear factor, prices will drop further and later cause panic selling as the fundamentals will also be affected by lower prices. Then it will turn the investors’ perception into reality.

Soros called this a two-way reflexivity connection between perception and reality, which can give rise to initially self-reinforcing but later self-defeating.

Hence, in every stock market cycle, regardless of any stock market, while it may take a long time to reach its peak, when it drops, the drop will accelerate and be followed by panic selling.

At present, most investors will be eager to know when our market will enter into the recovery phase where the market will start to recover. It will be a mammoth job to predict the market bottom.

Nevertheless, we should consider buying some stocks whenever the market experiences panic selling like the recent global market crash on the fallout of Lehman Brothers and AIG.

According to Lauren C. Templeton and Scott Phillips in their book on Investing the Templeton Way, investors need to buy stocks whenever the market experiences panic selling.

They that we should take advantage of problems that are exaggerated in the minds of sellers because of the sellers’ near-term focus.

Even though they agree that buying into crisis may affect your portfolio performance, you will gain in the long term.

However, you need to make sure that you have enough cash to average down your purchases.

Ooi Kok Hwa is an investment adviser licensed by Securities Commission and managing partner of MRR Consulting.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Unit trust funds to remain resilient

TheEdge

KUALA LUMPUR: Unit trust funds’ net asset value (NAV) has fallen significantly due to the equity market downturn and volatility, though the industry will remain resilient, said fund experts.

When contacted, Fundsupermart told The Edge Financial Daily that local funds had been affected although they did not have a direct exposure to the United States’ financial crisis.

“Almost all equity funds were down while the returns for fixed income fund were also lower than over the last six months. Based on the 70 funds we sold, equity funds were down 11.9% on average over the last six months, with the majority of them falling in a range of 7% to 17%,” the online unit trust portal said in an email reply.

It said balanced funds dropped on average 7.3% over the last six months, while fixed income funds fared the best, with a declining average of 1.7% with a few managing to turn in a positive return of under 1%.

Fundsupermart said the resilience of fixed-income funds tended to be stronger during such times as investors took “flight to safety” as an option to stay out of equities.

The online portal added that apart from the US turmoil, rising inflation and slowing economic growth had also affected the market. Political instability was also a short-term worry for the Malaysian market.

It noted that volatility was likely to continue, and it was very difficult to time the market bottom but it believed that it was a good opportunity to start accumulating cheap securities by going through the fund investment route.

“Markets will not keep on dropping indefinitely. They will eventually recover. It is better to position for the recovery now in two to three years’ time, as there are attractive bargains to be had now.

“The industry will remain resilient even to market changes such as those we saw over the last two weeks. In fact, it should come out stronger when the worst is over and the dust has settled,” it added.

Fundsupermart said unit trusts would be appreciated as investors would realise the importance of diversification to access global markets and sophisticated sectors or asset classes, rather than risking putting their money into just one investment or stock in light of the vulnerabilities exposed by the fall of Lehman Brothers and AIG.

“With the fall of giants such as AIG and Lehman Brothers, it has shown that no company, no matter how large, is entirely safe. This means that diversifying your holdings is now even more important. Markets will eventually recover, but the casualties from this financial turmoil, however, will not,” it said.

From a purely research point of view though, the online portal felt that equities generally looked more attractive at the moment as they had been sold down severely.

It likes Asian equities in particular due to their current low valuations, with forward price-earnings ratio (PE) of about 11 to 12 times, which is close to levels during the SARS outbreak in 2003.

It is not aware of any large withdrawals from the unit trust industry despite the battered investor confidence and bearish mood.

Meanwhile, HwangDBS Investment Management Bhd chief investment officer David Ng expects near-term volatility to continue in the global equity and fixed-income markets.

He said the fund management house would continue to hold a defensive posture with relatively high cash buffer and may re-deploy assets to work in Malaysia when local politics stabilised.

He added that the local market, particularly involving funds which had exposure in the equity market, was likely to underperform any global recovery unless there was a decisive resolution to the current political impasse.

Citing Bloomberg, Ng said global equity funds in general had fallen by 4.3% in the MSCI Emerging Markets Index.

“For the more aggressive investors, the coming quarter should present excellent opportunities to invest in equity funds. Meanwhile, the fixed-income fund is suitable for the conservative investor,” Ng said.

Kumpulan Sentiasa Cemerlang (KSC) Sdn Bhd director Choong Khuat Hock said some investors had redeemed their unit trust funds and switched to safer money market investments.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

CIMB to manage MAA Takaful's funds

BusinessTimes

MAA Takaful Bhd has hired CIMB-Principal Asset Management Bhd to manage its investment-linked fund portfolio.

Under the pact, three of MAA Takaful's funds will be managed by CIMB-Principal - the Syariah Growth Fund, Syariah Balanced Fund and Syariah Income Fund.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Reactions of fund managers, analysts to portfolio swap

TheEdge

KUALA LUMPUR: Surprise, confusion and uncertainty.

These are the words used by the investment community to describe the swapping of portfolios between Prime Minister Datuk Seri Abdullah Ahmad Badawi and Deputy Prime Minister Datuk Seri Najib Razak.

As Najib takes on the mantle of Finance Minister as a prelude to his ascension to the premiership, most fund managers and analysts say it is too early to tell whether this will help stabilise a market that has been battered and bruised by political uncertainty and the meltdown on Wall Street.

While some say that it represents an effort to smooth ruffled feathers in a cabinet that is becoming increasingly divided, others say it could be the start of a comprehensive revamp of the current administration.

Abdullah, who now holds the Defence Ministry portfolio, had said that he could step down as prime minister even sooner.

Most fund managers polled by The Edge Financial Daily said that they would only pass judgment if and when the new finance minister makes his first move.

CIO of TA Investment Management Bhd — Choo Swee Kee
It is a rather confusing move. People will question the reason for the switch and the timing of it as well. Since the Umno elections are coming up, there will already be a fine-tuning of the cabinet then.

The main concern about the switch is that it tends to create uncertainty. It seems as if every week the government comes up with policy changes, which makes it difficult for investors to project the future.

Case in point, when the news came out about the swap, the market reacted negatively because investors were confused and unsure. Going forward we hope to see more stability in the government’s policies.

Portfolio manager for Aberdeen Asset Management Sdn Bhd — Abdul Jalil Rashid
It came as quite a surprise. Perhaps it is Badawi’s way of making a clear point that Najib is his successor, and there has been a call within the party for Najib to be given wider responsibility.

I think he has also been made deputy chairman of Khazanah to give him the responsibility over treasury, future government investments and restructuring, and also perhaps to give him a role in shaping the economic policies of the country.

Although Najib has not managed the Finance Ministry portfolio in the past, he has strong support. Tan Sri Nor Mohamed Yakcop is still there. The prime minister’s role has always been more of a strategic one while Nor Mohamed is more of the executor. Similarly, I think we can expect Najib to have the same role.

This is when Najib gets to show everyone what he is capable of — the Finance Ministry makes or breaks you. This is where policies are made and positions are implemented. If he can show he can implement good policies, this will be a confidence and morale booster when he takes on the top job.

But it is still too early to call how it will affect investor sentiment. We can only tell when he starts implementing policies. This is not a major reshuffle, just a swapping of roles. There will probably be more clarity when he (Najib) starts implementing policies, I think he will be closely watched (by investors).

With so much political uncertainty present now, most are just wishing for all of it to end.

Private equity fund director for KSC Sdn Bhd — Choong Khuat Hock
This helps to enhance Najib’s position during the period of transition. It reiterates that the transition is real and it is going to happen given the importance of the position he was given.

However, there has yet to be a reaction from the market as the cloud of uncertainty still remains. The hope is that Najib will come out with more investor friendly and consistent policies, as it is the recent flip-flop of policies that have unnerved investors.

CIO for Phillip Capital Management Sdn Bhd — Ang Kok Heng
There may be a short-term uneasiness in the market as there will be that initial scepticism on whether he is the right candidate. Most people will be more comfortable with someone who is more relevant.

But we will wait and see. It was like Anwar, everyone wasn’t sure at first because he didn’t have any experience in a portfolio that has to do with the economy.

The sooner Najib has a dialogue session with the local fund managers to share his views and suggestions, the easier it will be for everyone to gauge the condition. In terms of foreign investment, there would be a little uncertainty present as there could be the emergence of new policies and new directions.

OSK Research analyst — Chris Ng
Although this move is a sign that the transition is definitely in the works, political uncertainty still weighs heavily on the market. Hopefully this will indicate a smoother transition of power, which will help end the uncertainty.

But it is really hard to say at this point how this switch will affect the market, which means that the outlook over the next few months will continue to be hazy. However, each leader has his or her own style so most are just waiting to see what Najib does first.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Portfolio funds outflow to continue

TheEdge

PETALING JAYA: The outflow of portfolio funds is expected to continue for the rest of the year in view of the political tension engulfing the country and the lack of support for regional currencies, including the ringgit.

“The recent shift in the flow of funds, especially out of the equity market, is not only confined to Malaysia but is a regional phenomenon as investors tend to return to the stable havens of the developed markets in volatile times,” HwangDBS Investment Management Bhd’s chief investment officer David Ng told The Edge Financial Daily.

He said HwangDBS would take the “look West” stance by parking some of its investments in stable and developed economies that provided potentially high-yielding returns, while it would also hold a considerably high level of cash as it moved into the remaining half of this year.

“We will continue to take this stance as we wait for positive cues in the local and regional markets, before seeking to deploy more funds into the equity markets as the weakening currencies make Asian equities to dollar investment less attractive and political instability may continue to deter foreign investments from our shores,” Ng said.

It has been reported that the second quarter of this year had suffered an unprecedented outflow of portfolio funds to the tune of RM32 billion, driven partly by unrelenting political tension since the March 8 general election and the broad selloff of the stock market.

The outflow from the commodity market and the downswing of CPO price were also caused by the weak crude oil price and improving supply prospects for global edible oils.

Last Thursday, the Kuala Lumpur Composite Index (KLCI) fell to a 22-month low at 1,041.07 as foreign funds continued to sell down on heavyweight plantation and finance stocks. The benchmark index rose 2.96 points to 1,044.03 the next day. The ringgit, meanwhile, fell to its 52-week low of 3.4710 per US dollar last Thursday, and also recovered slightly to 3.4525 per dollar the following day.

Nevertheless, Ng said in a bull market environment, emerging markets would tend to be the prime recipients of foreign capital inflows due to the obvious growth potential.

He would not dimiss the fact that Malaysian corporations with sound fundamentals such as those in the soft commodity space, namely crude palm oil (CPO), were beginning to emerge as an attractive asset class after its valuation recently took a beating from the slide in CPO prices.

“We believe that it will, in the long run, continue to benefit from strong demand in the emerging markets such as China and India due to increase use of biodiesel source of energy globally,” he said.

Analysts have said CPO price may rebound by year-end despite the European Union (EU) finally voting to lower the target for using biofuel in road transport to 6% last week.

Last Friday, CPO for November delivery on Bursa Derivatives rose RM71 to RM2,380. It was traded at a peak of RM4,486 per tonne on March 4, according to Bloomberg data.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

AmInvestment launches unique capital protected fund

TheStar

KUALA LUMPUR: AmInvestment Bank Group yesterday launched an unconventional capital protected fund called AmCommodities Active-Capital Protected (AACP) that has several unique features.

AmInvestment Bank Group chief executive officer and executive director (funds management) Datin Maznah Mahbob said it was one of the few local funds that invested in the commodity market for retail investors.

The fund has an authorised fund size of 200 million units at RM1 per unit and is offered to the public from Sept 8 to Oct 7.

The minimum investment amount is RM5,000.

AmBank Group chairman Tan Sri Azman Hashim (left) and AmInvestment Bank Group chief executive officer and executive director Datin Maznah Mahbob at the launch of the new fund on Monday.

The close-ended fund will invest mainly in three-year ringgit-denominated zero coupon negotiable instruments of deposits from financial institutions to ensure that 100% of investors’ capital was paid back upon maturity.

Maznah told reporters after the launch of AACP yesterday that 10% of the fund would be invested in an option linked to an actively managed commodity investment strategy to generate income and capital appreciation.

She said the strategy determined the allocation exposure of the portfolio based on a volatility management index called “Isovol Index” to a commodity index, AmIslamic Bank Makmur Commodity Index.

“The purpose of Isovol Index is to cap the volatility of exposure to the AmIslamic Bank Makmur Commodity Index at 15%.

“With this mechanism in place, the portfolio then manages the allocation of exposure to the Isovol Index at between 20% and 200%,” she said.

On the fund’s returns, Maznah said on average, investors could expect about 8% to 10% per annum based on track record.

“The fund would attract investors wanting exposure to an actively managed strategy in commodities investment and suit those seeking potentially higher income and capital appreciation over the longer term,” she said.

AACP is sold via AmBank branches, AmBank Financial Services and its authorised institutional unit trust advisers, including United Overseas Bank, Alliance Bank and EON Bank.

Currently, AmInvestment Bank Group has 41 unit trust funds marketed under its retail brand AmMutual and two exchange-traded funds.

Total assets under AmMutual funds management, including two exchange-traded funds and discretionary mandates, are worth RM18.4bil as at Aug 31.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Manulife to enter Japan mutual fund market

TheEdge

TOKYO: Manulife Financial Corp, North America's No 2 life insurer, said it would enter the Japanese mutual fund business next month to tap the country's US$14 trillion (RM48.02 trillion) in household assets.

Manulife executives told an investor conference in Tokyo that it had obtained a licence for investment trusts, which are similar to mutual funds, and planned to launch global asset allocation products in October.

There is room for growth in Japan's mutual fund industry given that more than half of the country's household financial assets are in deposits earning close to no interest, compared with just 14% in the United States, Manulife said.

Mutual funds also make up a much larger portion of invested assets in the US than in Japan.

"That discrepancy doesn't really make sense and that difference is worth in a Japanese context hundreds of billions of dollars. So we would like to have a piece of that," Craig Bromley, executive vice president and general manager Japan, told the conference. -- Reuters

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

ING to make Malaysia its regional hub for Islamic funds

TheStar

KUALA LUMPUR: ING Funds Bhd aims to make Malaysia its hub for syariah-compliant products in the Asia-Pacific.

This is in line with the Malaysia International Islamic Financial Centre’s campaign to strengthen the nation’s position as an international Islamic financial centre.

Chief executive officer and director Steve Ong said the group expected to launch the next syariah-compliant fund overseas early next year once it had obtained Bank Negara approval.

“This fund will not only cater to domestic but also international investors from markets such as China, India, Japan, Hong Kong and the United Arab Emirates.

ING Funds Bhd chief executive officer and director Steve Ong (left) and Citigroup Global Markets Ltd head of structured products sales (ASEAN) and director Lee Shu Weng (right) during the launch of the ING Annual Income Climate Structured Fund in Kuala Lumpur on Wednesday. - Starpic by Azman Ghani

“We plan to produce and manage the fund locally, and distribute and market it through our 13 offices in the Asia-Pacific,” he said after launching ING Annual Income Climate Structured Fund (Climate) yesterday.

Climate is a syariah-based close-ended fund that offers 5% annual income distribution for three years plus potential capital gain with 100% capital preservation in Australian dollar-denominated underlying assets at maturity in 39 months.

Citigroup Global Markets Ltd is the guarantor of the 5% income and the capital invested.

Ong said ING Funds had developed Climate as a “safe” solution for investors following their concern over preserving assets under the current high inflation and uncertain market conditions.
Citigroup Global Markets head of structured products sales (Asean) Lee Shu Weng said Climate aimed to capitalise on companies that focused on alternative, efficient and renewable energy, fuel and transport development and technology.

This include nuclear power, battery, solar, biofuel and hybrid vehicles.

“Climate is based on Citi Climate Change Opportunities Index that contains 10 to 30 global stocks which are selected through stringent criteria.

“These stocks are quarterly rebalanced and must be rated ‘buy’ by Citi Investment Research,” she said, adding that the bulk of the stocks were from the US and European companies.

Next year, Ong said, ING Funds would introduce three or four products but that would depend on the results of its research and the needs of investors. There are no plans for other launches this year.

Currently, the group has RM2.6bil worth of funds under its management and it is on track to achieve its target of RM3bil this year.

Climate has an approved fund size of 500 million units and the entry price is 98.52 sen per unit.

Entry fee is 1.5% of the offer price per unit and the management fee is 1% per annum. The minimum initial investment is RM5,000.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

AmInvestment Bank pays distributions

TheStar

KUALA LUMPUR: AmInvestment Bank Group has declared income distributions of 2 sen, 1.5 sen and 2 sen per unit for unitholders of AmBon Islam, AmIttikal and AmBond funds respectively.

It said in a statement that as at July 31, the AmBon, AmBond and AmIttikal gave a three-year return of 9.9%, 11.24% and 29.23% respectively — Bernama

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Global funds opt for cash, bonds: Survey

BusinessTimes

HONG KONG: Fund houses managing US$4.2 trillion (US$1 = RM3.45) of investments turned negative on global stock markets heading into the third quarter, opting for higher exposure to safe-haven cash and bonds, according to a survey by HSBC released yesterday.

The survey of 12 international fund managers taken in early August, including the bank's own HSBC Global Asset Management unit, found the firms were hit by US$28.5 billion in net outflows in the second quarter, with investors yanking an estimated US$50 billion out of equity funds.

The outflows from equity funds were partly offset by net inflows of US$15 billion into balanced funds and US$11 billion into money funds, the survey found.

Asked what asset allocation strategy they would adopt in the third quarter, 44 per cent of managers said they were underweight equities, up from 10 per cent in the previous quarter. Just 22 per cent were overweight and 33 per cent were neutral.

By comparison, no managers surveyed were underweight cash or bonds. Some 44 per cent were overweight bonds, up from 20 per cent in the previous quarter, and 38 per cent were overweight cash, up from 30 per cent.

Funds investing in Asia-Pacific markets outside of Japan were hit particularly hard by redemptions in the second quarter, posting an estimated net outflow equivalent to 20 per cent of sector funds under management. This compared with net inflows in the previous quarter.

Fund managers participating in the survey included AllianceBernstein, Allianz SE, Baring Asset Management, Deutsche Bank, Fidelity Investment Management and Franklin Resources Inc.

Invesco, Investec Asset Management, JPMorgan Chase & Co's JF Asset Management, Schroders plc and Societe Generale also participated. - Reuters

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

CMS Trust, OCBC in fund tie-up

BusinessTimes

CMS Trust Management Bhd, the unit trust arm of Cahya Mata Sarawak Bhd, has teamed up with OCBC Bank to launch its first structured fund.

Dubbed the Financial Recovery Structured Fund, it will increase CMS Trust's fund capacity to four billion units from the 3.8 billion units, which equates to a potential increase of RM200 million worth of new assets under its management.

It is a three-and-a-half-year close-ended unit trust fund that invests mainly in structured products.

Investors are assured of 100 per cent capital preservation upon maturity as well as potential additional returns of quarterly coupon payouts of up to eight per cent per annum. This is done through investments in a basket of up to six global financial stocks.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

HLG Unit Trust launches strategic fund

TheStar

PETALING JAYA: HLG Unit Trust Bhd and Hong Leong Bank Bhd (HLB) recently launched the GEM Resources Strategic Fund to leverage on the current inflationary situation.

The fund, which would invest in global resources and global emerging markets equity securities, was structured to take advantage of current market uncertainties.

In a statement yesterday, HLG said the fund was a growth and income fund to provide protection against inflation and long-term growth of capital.

It would invest in global resources-related equity securities of companies involved in the extraction, processing, transportation and distribution of natural resources of any kind, in any part of the world.

HLG Asset Management Sdn Bhd executive director and chief executive officer Richard Lin said the fund would invest in natural resources, which was one of the few asset classes that benefited from inflation.

He also said the fund would also invest in global emerging markets equity securities for long-term capital growth.

The fund has a total approved fund size of two billion units priced at 10 sen per unit during the initial offer period.

Minimum initial investment is RM1,000 while the minimum additional investment is RM1,000.

Newgate Capital Management LLC is the external foreign investment manager to manage the global equity securities of the fund.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

HwangDBS IM declares income distributions

TheStar

KUALA LUMPUR HwangDBS Investment Management Bhd (HwangDBS IM) declared annual income distributions of four sen for its Dana Fahim Fund and five sen for Dana Izdihar Fund.

It said on Monday the income distributions were for the two funds’ financial year ended Aug 31. The Dana Fahim Fund is an Islamic growth and income type fund while the Dana Izdihar Fund is an Islamic growth type fund.

The annual gross income distribution of four sen for Dana Fahim Fund’s FY Aug 31 was its third and final distribution since its launch on June 28, 2004.

The Dana Fahim Fund posted total growth of 22.96% on its NAV per unit since inception and all the unit holders registered as at Aug 22 were eligible for the income allotment.

HwangDBS IM also declared an annual gross income distribution of five sen for Dana Izdihar Fund’s FYAug 31. This is its sixth and final distribution since its launch in October 2002.

HwangDBS IM chief executive officer Teng Chee Wai said the Dana Izdihar Fund’s specific focus and favour for companies that practised good corporate governance had benefitted the Fund.

Teng said these securities generally command higher market valuation and would potentially yield better returns over a medium investment horizon.

As for Dana Fahim Fund, its focus would continue to provide investors an affordable access into a diversified investment portfolio containing a “balanced” mixture of quality Shariah-compliant equities and sukuk with similar attributes.

Teng said HwangDBS IM intended to maintain a defensive stance in the interim in-light of uncertainties prevailing in the local markets.

“Domestic equity portfolios will continue to hold a high level of cash holdings and the company will patiently wait for further clarity in local and regional markets before seeking to deploy cash into equities,” he said.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Growing your Income with Sukuk

PublicMutual

In the current environment of global economic uncertainties amidst the U.S. subprime mortgage crisis and elevated inflationary pressures, investors with a conservative risk-reward temperament may wish to settle for more stable, albeit lower returns on their investments. Investing in sukuk and Islamic money market instruments provides investors with a steady stream of income along with the opportunity to take advantage of current attractive fixed-income yields for the medium to long-term period.

Sukuk is a document or certificate evidencing an undivided pro rata ownership of an underlying asset; a capital market financial instrument tradable in the secondary market.

Benefits of Investing in the sukuk market

Rising demand and a growing number of sukuk issuers have resulted in the rapid growth of the Malaysian sukuk market in recent years. This has provided higher liquidity which allows investors easier access to the sukuk market. The primary sukuk market in Malaysia is one of the world’s fastest growing, with an average annual growth of 22%1 per annum recorded in the period between 2001 and 2007.

Sukuk are required under Shariah requirements to be backed by assets supported by underlying cashflows. This provides additional security to the investor and hence, making sukuk relatively safer than conventional bonds that may not have this feature.

Investing in sukuk offers better security to investors’ investment portfolios. Generally, investors should diversify their investment portfolios with a mix of equity, bond and money market securities based on their risk profile and investment objectives. However, given current volatility in global financial markets, investing in high quality sukuk can help reduce the overall risk in an investor’s investment portfolio as sukuk are able to yield stable profit rates throughout their tenures.

Following the government’s cut in petrol and diesel subsidies on 5 June 2008, the domestic inflation rate is expected to accelerate in the second half of 2008, resulting in a projected inflation rate of 5.5%-6.0% for 2008 versus 2.0% for 2007.

Higher expectations of inflation have caused bond market yields to trend higher. The current environment of higher bond market yields presents opportunities for investors to lock-in and earn higher yields on their investments. Furthermore, should inflationary expectations stabilise in 2009, bond yields may decline. Thus, investors may benefit from capital appreciation on their fixed-income investments as bond yields move in opposite direction to bond prices.

The yields on the 3 and 10-year Government Investment Issues (GII) have risen by 30 and 70 basis points to 4.03% and 4.90% respectively for the year-to-date as at 8 August 2008 while 3 and 10-year AAA corporate sukuk yields have risen by 80 and 97 basis points to 4.97% and 5.94% respectively over the same period.

Growth Prospects of the sukuk Market

As the pioneer in the global sukuk market, Malaysia boasts many “world-first” issues in sizeable amounts and innovative structures. Malaysia offers the world’s largest sukuk market with a total issuance size of RM121.3 billion2 in 2007, accounting for more than half3 of the global sukuk market. Rapid growth of the sukuk market has contributed to the growth of the Malaysian Islamic capital market, bringing it up to par with the conventional capital market. Given Malaysia’s leadership and dominance in the development of the Islamic capital market, the sukuk market is envisaged to continue to grow in the years ahead.

Outlook for the Malaysian Economy

Despite uncertainties on the external front, Malaysia's gross domestic product (GDP) growth is projected at 5.0% in 2008. Our forecast assumes a moderation in private consumption growth to 6.5% in 2008 compared to 10.8% in 2007 while public spending is envisaged to grow at a sustained pace of 6% in 2008 versus 6.6% in 2007. Thus, sustained growth in private consumption and public spending will mitigate the anticipated slowdown in external demand for Malaysia's major export markets namely the U.S., Europe and Japan.

From the supply perspective, the Malaysian economy continues to be spearheaded by a resilient services sector. The services sector, which includes real estate, retail and financial services and accounts for 54% of the GDP, is expected to grow by 7.7% in 2008 compared to 9.7% registered in 2007.

In the mining sector, which comprises largely the oil and gas industry, growth is anticipated to gain pace to 6.0% in 2008 from 3.3% 2007 as the oil & gas industry has benefited from an environment of elevated crude oil prices.

The agricultural sector is projected to register a growth of 3.4% in 2008 compared to 2.2% in 2007 on the back of resilient demand for agricultural commodities. Meanwhile, growth in the construction sector is envisaged to rise to 5.5% in 2008 from 4.6% in 2007, supported by the rollout of the 9th Malaysia Plan.

The Benchmark's Track Record

An appropriate benchmark to be used to evaluate the performance of a sukuk fund is the 12-month General Investment Account-rates (12-months GIA). For the 1, 3 and 5-year period, the 12-months GIA achieved commendable total returns of 3.65%, 11.06% (ie. annualised return of 3.56%) and 18.63% (ie. annualised return of 3.48%) respectively.


Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Asset manager warns of tough times ahead

TheStar

Most firms will experience tight margins in next few quarters

COMPANIES will still feel margin pressures in the next few quarters, as they cope with higher input costs and waning demand.

“This puts everyone in a difficult position to make headway and is unlikely to change in the next few quarters.

“Companies have to go through this period and work for the long term,” Aberdeen Asset Management senior investment manager of global equities Jeremy Whitley told StarBiz recently.

Whitley was one of the speakers at the recently held Second Institutional Investor Series Seminar: Maximising Returns in Uncertain Times organised by the Securities Industry Development Corp (SIDC).

The global investment company has some 12% to 15% of its portfolio in Asian stocks.

Whitley said the fund invested in “sensible” companies with sustainable cashflow and a strong balance sheet.

“We look for companies that are doing sensible things with their cashflow and we keep monitoring the progress,” he said, adding that investors should stay long term and be patient with their investments.

With commodity prices coming off their highs, inflationary pressures may too be unwinding. Whitley, however, cautions on the risk of deflation.

“Deflation is more worrying because once you have deflation, it’s extremely difficult to get rid of,” he said. Deflation happens when prices go down while demand is weak in the economy.

The de-leveraging and unwinding of commodity, housing and financial positions are deflationary pressures that are pushing prices down.

Whitley said Asia’s demand should be stronger to pick up the slack of any recession risk. Until Asian consumers gain more confidence, the region would be unable to decouple itself from the US and the rest of the world.

Nonetheless, Asia would still see decent growth compared with the Anglo-Saxon countries, he added.

SIDC chief executive officer John Zinkin said Asians had a culture of high savings. “The Chinese, for example, believe in holding to what they have,” he said.

Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose also noted that Malaysia’s savings rate was 37% of gross domestic product. “The confidence level could still be comfortable if the savings rate fell to 25% and this would release about RM200bil into the system.”

Malaysia has the luxury of crude palm oil exports as well as opportunities from the Middle East in sectors like construction, halal food and Islamic finance.

“The issue with Malaysia is the wage structure, which causes brain drain. Talent is leaving the country for more lucrative salaries. You don’t value labour when you don’t pay for it,” he said.

Meanwhile, China may have been attracting foreign investments, thanks to its low cost of labour but it will take them some 20 years to add value, as this will require scientific expertise and innovations.

“Twenty years is not a long time if you consider that the Americans took 80 years to become an industrialised country, Japan 40 years while the South Koreans 25 years,” Zinkin said.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

HwangDBS Investment launches Steady Income Fund

TheStar

KUALA LUMPUR: HwangDBS Investment Management Bhd had on Thursday launched Steady Income Fund (STDIF) targeted at corporate and institutional investors.

The STDIF is the latest addition to its institutional/corporate suite of products and its first corporate feeder fund. It offers steady performance and potentially regular, high income yield.

HwangDBS Investment Management chief executive officer and executive director Teng Chee Wai said the new fund demonstrated its commitment to provide innovative solutions for investors.

“We are also targeting to ramp up our institutional business and are confident that despite market environment, a specialist credit product like the STDIF will be well received locally,” he said.

Teng said institutions and corporations are drawn to unit trust-based cash management products which could enable them to optimise their returns on existing cash by outperforming returns on existing deposit products.

“The additional benefit of performance stability and potentially higher yields will certainly be a key attraction for them,” he added.

STDIF would allocate 70% of its net asset value into an Australian registered managed investment scheme, the AMP Capital Structured High Yield Fund.

The AMP fund -- managed by an Australian specialist investment manager AMP Capital Investors Limited -- comprises of a diversified portfolio of high-yielding private debt assets (PDS). These PDS are ssued by mature global companies in stable infrastructure sectors like utilities and industrial logistics.

These features provide a high level of stability and reliability in terms of income yield as returns are not hinged on equity market movements.

The other 30% of its NAV would be invested in domestic cash and money market instruments, creating an optimal asset allocation balance.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

CIMB-Principal Islamic raises size of funds

BusinessTimes

CIMB-PRINCIPAL Islamic Asset Management Sdn Bhd has raised the size of two funds due to strong demand.

CIMB Islamic DALI Equity Theme Fund has been boosted to two billion units while the CIMB Islamic Money Market Fund will have 150 million units now.

This is the third increase for the DALI fund and the first increase for the Money Market Fund.

CIMB-Principal Islamic chief executive Datuk Noripah Kamso said the encouraging response is a proof that investors recognise the investment opportunities of the funds.

"The DALI Equity Theme Fund optimises Malaysia's resilience in the face of uncertainty in global markets and is suitable for investors willing to accept above-average to high-risk in their investments.

"The Money Market Fund is suited for those who wish to 'park' their money temporarily while waiting for the next investment opportunity. This fund also aims to provide stability by giving investors a potential steady stream of monthly income," she said in a statement.

The DALI fund is a syariah-compliant fund that invests in Malaysian companies that will benefit from prevailing global and domestic investment themes. It also invests in sustainable sectors that potentially give long-term returns such as the oil and gas, plantations and construction sectors.

The fund invests up to 98 per cent of its net asset value in Syariah-compliant equities listed on Bursa Malaysia.

Meanwhile, the Money Market Fund invests in short-term Islamic money market instruments maturing in less than a year. As a tax-efficient alternative to traditional bank deposits, the fund seeks to provide potentially higher returns and allows investors to withdraw their cash anytime without penalty.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

RHB Investment declares two sen per unit distribution

TheStar

KUALA LUMPUR: RHB Investment Management Sdn Bhd has declared a gross distribution of two sen per unit for the RHB Asian Total Return Fund for the financial period ended July 31.

This is the second income distribution declared for the fund since its inception in February 2007. The first distribution of 1.535 sen was declared at the end of March.

Managing director of RHBIM Sharifatul Hanizah Said Ali said the company was pleased to be able to declare distribution twice this year and hoped to retain the trend every year.

Unit holders of the fund, as of Aug 25, would be entitled for the distribution, she said in a statement yesterday.

The RHB Asian Total Return Fund aims to provide investors with income return primarily through investment in a portfolio of bonds and other fixed and floating rate securities issued by governments, government agencies, supra-national and corporate issuers in Asia excluding Japan.

RHBIM is a wholly owned subsidiary of RHB Investment Bank, under the RHB Banking Group, and currently has 27 funds. — Bernama WB

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

EPF is the eighth largest fund in the world

TheStar

PETALING JAYA: Malaysia’s national pension fund, the Employees Provident Fund (EPF), was ranked the eight largest fund of its kind in the world with US$94.66bil.

This is according to the latest Watson Wyatt Global 300 survey conducted with Pensions & Investments, a US investment newspaper.

The list included the country’s Pension Trust Fund (KWAP), at 22nd spot with US$14.55bil.

Watson Wyatt Asia-Pacific investment consulting head Naomi Denning said in a statement that Asia-Pacific sovereign pension funds grew by about 20% to US$1.8 trillion in 2007.

“Sovereign pension funds in this region have seen tremendous growth in recent years, along with the rapid growth in assets of sovereign wealth funds,” she said.

She added that strong equity returns last year contributed to the boost in asset growth.

Denning said that among sovereign pension funds ex-Japan, funds that enjoyed growth of more than 30% from the previous year included China’s National Social Security Fund (up to 38th position from 69th), India’s Employees Provident Fund(from 88th to 68th), Singapore’s Central Provident Fund (from 32nd to 22nd) and Thailand’s Government Pension Fund (from 285th to 241st).

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Factors to consider when selecting fund managers

TheEdge

KUALA LUMPUR: Ethics and a forward-looking approach are key factors for investors to consider when selecting a fund manager, industry experts said.

Securities Industry Development Corp (SIDC) chief executive officer John Zinkin said investors should look at the integrity of the fund manager’s organisation — for example, how the fund manager was rewarded.

“The investor should also assess whether the fund manager has an understanding of the investor’s risk appetite, that they understand what you want in your time horizon.

“Do you want your fund manager to be engaged or passive? There are a lot of fund managers who are passive investors, they don’t go in with that engagement,” Zinkin said.

Speaking to The Edge Financial Daily, he said investors should also be clear on what they wanted out of their fund managers. “Do you just want to take your returns, or do you think through the fund manager, have an interest in the way the business (you are investing in) is being run?” he added.

Meanwhile, Zinkin said the size of Malaysia’s capital market was not enough to justify the inadequate level of corporate governance exercised.

“The governance problem is hurting the Malaysian equity market as a whole. Fund managers look at Malaysia and say it’s got a governance problem, but the market is not big enough to take the risk on.

“China’s got a much bigger governance problem, but the opportunities there are so big that people will live with that. There’s not enough going on in the market to make people want to come in here, if there’s also a slight question mark about governance.”

Watson Wyatt Worldwide practice leader (investment consulting) Puah Ser Sze added that the typical practice of looking at fund managers’ past performance was not sufficient to select the right fund manager.She said the investor should be in tune with the fund manager’s skill cycle, due to the amount of “noise” in the market.

“You have to base it on qualitative data. The criteria you should look at is the business, the people, and the investment process. You have to have good people because information gets arbitraged quickly in today’s seamless market, and with regard to the investment process, does the fund manager’s organisation have a competitive advantage?” Ser Sze said.

She added investors should be cautious of products offered by the fund manager, as part of the cause of the subprime crisis had been the over-incentivisation of low-quality products.

Meanwhile, Mercer (Singapore) Pte Ltd senior consultant Antony C Cherian said: “A skilled, active manager can add value to your investments. The challenge is to find that skilled, active manager, and this is where the research is required.”

He agreed investors should emphasise a forward-looking approach to identifying a fund manager, while criteria fund managers should have included business management skills, idea generation, portfolio construction and implementation.

He added that while Malaysian fund managers were largely on par with foreign fund managers in managing Malaysian equities, foreign managers were more experienced in managing global equities, and hence there was a need for Malaysian investors to include more asset classes to their portfolio, instead of just Malaysian equities and bonds.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Public Mutual declares distributions for 2 funds

TheEdge

KUALA LUMPUR: Public Mutual Bhd has declared distributions for two of its funds - eight sen per unit for Public SmallCap Fund, and three sen per unit for PB Islamic Equity Fund.

In a statement on Sept 2, Public Mutual’s chairman Tan Sri Dr Teh Hong Piow said Public SmallCap Fund, which was launched in 2000, was ranked No 1 for its five-year returns in its category with an impressive return of 113.47% for the period ended Aug 8, 2008, according to The Edge-Lipper Fund Table dated Aug 18, 2008.

The fund is distributed by Public Mutual unit trust consultants, while PB Islamic Equity Fund which was launched in 2005, is distributed by Public Bank branches nationwide.

Public Mutual is the largest private unit trust company in Malaysia, and it manages 67 funds for more than 1,800,000 accountholders. As at July 31, 2008, the total net asset value of the funds managed by the company was RM26.3 billion.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Public Bank unveils new investment product

TheStar

KUALA LUMPUR: Public Bank Bhd has launched a new investment product called PB Commodities and Resources Basket (PB CARB).

The new product enables investors to invest in the currencies of countries that are rich in natural resources and net exporters of those natural resources.

It said in a statement PB CARB Investment was a short two-year investment via floating rate negotiable instrument of deposit and 100% capital-protected if held to maturity.

PB CARB Investment consists of a basket of four equally weighted currencies — Canadian dollar, Australian dollar, Russian rouble and Brazilian real.

The returns were locked in each time the basket of currencies appreciated over the lock-in levels on each of the monthly observation dates, the bank said.

“With each level that has been locked in, investors can look forward to returns at maturity of above 6% or 12%, depending on the lock-in levels triggered and the closing level of the basket as compared to its initial level,” it said.

The targeted issue amount for PB CARB Investment was initially set a RM100mil and the minimum size per investment was RM100,000 with multiples of RM50,000 thereafter, it added.

According to the bank, the investment is suitable for investors who are seeking potentially higher returns.— Bernama

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.

Commodities better option

TheStar

COMMODITIES are expected to remain one of the best investments this year amid the global economic slowdown as strong demand will persistently outstrip supply.

World-renowned commodity investment expert Jim Rogers maintained that the bull market in commodities was far from over, despite the current pullback in major commodity prices on recession fears.

He told StarBiz: “While I am a terrible market timer and the single worst investor you ever met, the commodities market can frequently correct 40% to 50% even during a bull market.”

Citing the crude oil bull market in 1999, he said the commodity prices had gone down 40% to 50% during that period.

“Currently, there are still attractive opportunities as most commodities, based on their historic price levels and adjusted-for-inflation, are relatively cheap and below their all-time highs.

“I will continue to look at agriculture commodities like sugar, coffee and cotton as well as base metals like zinc, silver, tin, lead and copper.

“Even if the world economy is going to collapse with everything coming down, I will opt to own wheat and cotton rather than Google or IBM shares!” Rogers said.

In April 2006, Rogers correctly predicted oil would reach US$100 a barrel and gold US$1,000 an ounce. Oil reached a record $142.99 a barrel on June 27.

“Investors should always buy low when things are correcting. It is too bad when most usually don’t take this advice.

“I personally prefer to buy when markets are declining rather than rising,” added.

Rogers’ inaugural visit to Malaysia was under the courtesy of Citibank Bhd, where he was the special speaker at the Citigold Wealth Management Leadership Series.

Rogers had co-founded the Quantum Fund, a global investment group with investment wizard George Soros. Rogers is also known for establishing his own commodity index – Rogers International Commodity Index (RICI) – a composite US dollar based total return index.

This index has risen a whopping 418.51% over the last decade.

On suitable investments for retail investors, Rogers said: “Most studies have shown that index investing is the best in every asset class in every industry.

“Index investing has outperformed active investment managers by 80% most of the time year after year.”

On investment in emerging markets, especially China, Rogers admitted that he had been buying some shares and renminbi and planned to buy more.

On the perception that commodity investment is highly risky compared with stocks, he said: “Many people lost in the dotcom bubble and stocks too over the years. Commodities, in fact, has turned less risky over the past two decades.

“Stocks can go to zero. In the case of natural gas-based Enron, its shares went to zero (after the financial debacle).

“On the other hand, natural gas can never go to zero. It can go down, obviously, but it can never go to zero.”

A study by Yale University indicated that investors could gain 300% more by investing in commodities than in commodity companies, with less volatility and a better inflation hedge.

In his latest book Hot Commodities: How Anyone Can Invest Profitably in the World’s Best Market, Rogers was quoted as saying, “History shows that the bull market in commodities will last a long time, meaning the current rally may continue through 2014 to 2022.”

Asked whether the bull run in agriculture-based commodities will be much shorter than metal-based commodities, Rogers said: “With agri commodities, the world is facing a new problem – the inventory of agri-based food products is currently the lowest seen in over 50 to 60 years.

“The world has never experienced such a situation. Even in the 1970 when we had a big bull market in agriculture products, the world still had a high food inventory. This time around, we don’t.”

Furthermore, in the advent of poor weather, the bull market in agriculture products and food could last much longer, he added.

He blamed the current low inventory levels in most agriculture-based commodities to the biofuel hype: “We are burning a lot of agriculture-based food products into our fuel tank. This is something which the world has never done before.”

Rogers said production of biofuel, especially from corn, was a horrible waste of time, money and energy.

“Global food prices have risen due to the biofuel drive,” he said.

But, does that mean biofuel production will stop?

“Unfortunately, no. Biofuel is here to stay at least in the foreseeable future. Politicans simply love it,” Rogers added.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.