TheEdge
KUALA LUMPUR: AmBank (M) Bhd sees an average potential return of 43.12% from its newly-launched AmAsia Link-Capital Guaranteed Fund at the end of its three-year investment period riding on potential gains from Asia’s property, equity and currency sectors.
AmBank retail banking managing director Mohamed Azmi Mahmood said the projection was based on the 10-year historical performance in the Morgan Stanley Asian Property Fund, JP Morgan Asia Currency Index and Hang Seng China Enterprise Index.
The fund, which is a collaboration between AmBank and AmAssurance Bhd, comes with an insurance protection of up to 125% from a single premium invested. It is underwritten by AmAssurance.
“AmAsia Link is a 100% secured capital guaranteed fund that is designed to tap and benefit from Asia’s lucrative investment market,” Mohamed Azmi said in a statement yesterday.
He said the approved fund size was RM100 million and expected “a very good response” from investors eager to take advantage of its attractive returns.
In conjunction with the country’s 50 years of independence, AmBank said it would reward the first 1,000 AmAsia Link investors with a limited edition coin card, and added that investors were also offered higher allocation rates on investment of over RM100,000.
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.
Thursday, September 27, 2007
Axis REIT properties revaluedto RM334m
TheEdge
KUALA LUMPUR: Axis Real Estate Investment Trust (Axis REIT) announced a revaluation surplus of RM30 million to be incorporated in its fund following the revaluation of its five properties in Petaling Jaya, Selangor.
In an announcement yesterday, it said the properties’ total net book value was RM334.2 million following the revaluation exercise in August compared with RM304.27 million as at June 30, 2007.
The five properties were the 14-storey Menara Axis, six-storey Crystal Plaza office building, five-storey Axis Plaza warehouse-cum-office building, four-story Infinite Centre industrial complex and Axis Business Park.
Revaluation of the properties had been in accordance with the Securities Commission’s REIT guidelines, stipulating a once-in-three years revaluation of property for SC approval before being incorporated into the fund, it 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.
KUALA LUMPUR: Axis Real Estate Investment Trust (Axis REIT) announced a revaluation surplus of RM30 million to be incorporated in its fund following the revaluation of its five properties in Petaling Jaya, Selangor.
In an announcement yesterday, it said the properties’ total net book value was RM334.2 million following the revaluation exercise in August compared with RM304.27 million as at June 30, 2007.
The five properties were the 14-storey Menara Axis, six-storey Crystal Plaza office building, five-storey Axis Plaza warehouse-cum-office building, four-story Infinite Centre industrial complex and Axis Business Park.
Revaluation of the properties had been in accordance with the Securities Commission’s REIT guidelines, stipulating a once-in-three years revaluation of property for SC approval before being incorporated into the fund, it 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.
China okays RM46b in new corporate bonds, says paper
TheEdge
BEIJING: China's economic planning agency has approved the issuance of 99.5 billion renminbi (RM46.5 billion) in new bonds by non-listed firms, bringing the total quota for this year to almost 200 billion renminbi, state media reported on Wednesday.
While the new quotas granted by the National Development and Reform Commission (NDRC) mark a significant expansion from the 60.8 billion renminbi issued in all of last year, they still fall short of the 300 billion renminbi that state media has said the agency could approve this year.
The new quotas have been allocated mainly for the railways ministry and the State Grid Corp, the semi-official China Business News said.
The corporate bond market has been relatively slow to take off, in part because of requirements such as one that most longer-term bonds need to be guaranteed by banks - something only large companies can achieve.
But the NDRC said in March that it was encouraging more bonds without bank guarantees - the first such issues came to market last year - and that it would further simplify the administrative procedures.
The NDRC is responsible for approving bonds by non-listed firms with a tenor of more than a year, while the securities regulator recently obtained the power to mandate listed firms' issuance of bonds with a maturity of longer than one year.
The central bank oversees a separate corporate paper market, for debt of one year or less. - 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.
BEIJING: China's economic planning agency has approved the issuance of 99.5 billion renminbi (RM46.5 billion) in new bonds by non-listed firms, bringing the total quota for this year to almost 200 billion renminbi, state media reported on Wednesday.
While the new quotas granted by the National Development and Reform Commission (NDRC) mark a significant expansion from the 60.8 billion renminbi issued in all of last year, they still fall short of the 300 billion renminbi that state media has said the agency could approve this year.
The new quotas have been allocated mainly for the railways ministry and the State Grid Corp, the semi-official China Business News said.
The corporate bond market has been relatively slow to take off, in part because of requirements such as one that most longer-term bonds need to be guaranteed by banks - something only large companies can achieve.
But the NDRC said in March that it was encouraging more bonds without bank guarantees - the first such issues came to market last year - and that it would further simplify the administrative procedures.
The NDRC is responsible for approving bonds by non-listed firms with a tenor of more than a year, while the securities regulator recently obtained the power to mandate listed firms' issuance of bonds with a maturity of longer than one year.
The central bank oversees a separate corporate paper market, for debt of one year or less. - 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.
Bank Negara further relaxes forex admin rules
BusinessTimes
BANK Negara Malaysia (BNM) has further relaxed certain foreign exchange administration rules to cut cost of doing business in Malaysia.
Taking effect from October 1, the changes include abolition of the five registration requirements and granting greater flexibility for Islamic funds managed onshore.
Non-Malaysians will also have more flexibility in hedging their ringgit exposure under the easier rules, BNM said in an announcement on its website, dated September 20.
Malaysia has been gradually relaxing foreign exchange administration rules to attract investors.
"The move is consistent with the spirit of Budget 2008 measures to cut cost of doing business in Malaysia and enhance the public delivery system, all for raising the nation's competitiveness," said Bank Islam Malaysia Bhd senior economist Azrul Azwar Ahmad Tajudin.
Among others, the central bank said that five types of currency-related transaction would no longer need to be registered, although they would still need authorities' approval.
"Doing away with certain registrations would mean less hassle for investors," Azrul 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.
BANK Negara Malaysia (BNM) has further relaxed certain foreign exchange administration rules to cut cost of doing business in Malaysia.
Taking effect from October 1, the changes include abolition of the five registration requirements and granting greater flexibility for Islamic funds managed onshore.
Non-Malaysians will also have more flexibility in hedging their ringgit exposure under the easier rules, BNM said in an announcement on its website, dated September 20.
Malaysia has been gradually relaxing foreign exchange administration rules to attract investors.
"The move is consistent with the spirit of Budget 2008 measures to cut cost of doing business in Malaysia and enhance the public delivery system, all for raising the nation's competitiveness," said Bank Islam Malaysia Bhd senior economist Azrul Azwar Ahmad Tajudin.
Among others, the central bank said that five types of currency-related transaction would no longer need to be registered, although they would still need authorities' approval.
"Doing away with certain registrations would mean less hassle for investors," Azrul 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.
Asia can weather credit crisis: Expert
BusinessTimes
THE subprime crisis in the US will not cause its economy to go into recession, and neither will Asian economies be greatly affected by it, says an expert in fund management.
Prudential Fund Management Services investment marketing head Robert Roundtree foresees no doom or gloom from the problem.
"Only the credit markets are talking about it when others in the equity markets, economists and corporates do not think so," he said in a media briefing in Kuala Lumpur yesterday.
Roundtree said from the figures he had seen, the financial systems worldwide are set to weather the credit crisis.
"US corporate sheets are generally strong, its corporate new issues remain at record-low levels, and Asian and European corporations have seen significant restructuring," he said.
He added that globally, companies have enough cash hence reducing the need to borrow, and in Asia, money growth is generally exceeding nominal gross domestic produduct growth.
"Even if bank lending freezes, there seems plenty of buffer. It is obvious that corporations are well positioned globally, so where is the problem?" asked Roundtree, who is based in Singapore.
He also said that despite the "credit crunch" factors, growth forecasts for Asia have been edging higher, noting that the region's long-term growth is increasingly driven by rising domestic demand.
Roundtree also noted that for Asia, it is no longer the case of when the US sneezes, the region catches a cold, but China's state of economy has more impact on Asia now.
He also said that in Asia, the equity markets are still relatively cheap, especially in India, the favourite of foreign investors."Malaysia is cheap too but not as cheap as India. So it is not about the weakness of the Malaysian market in attracting foreign money but more a strength of another market."
Roundtree believes that domestic investors here should take advantage of the cheap local market and start accumulating good 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.
THE subprime crisis in the US will not cause its economy to go into recession, and neither will Asian economies be greatly affected by it, says an expert in fund management.
Prudential Fund Management Services investment marketing head Robert Roundtree foresees no doom or gloom from the problem.
"Only the credit markets are talking about it when others in the equity markets, economists and corporates do not think so," he said in a media briefing in Kuala Lumpur yesterday.
Roundtree said from the figures he had seen, the financial systems worldwide are set to weather the credit crisis."US corporate sheets are generally strong, its corporate new issues remain at record-low levels, and Asian and European corporations have seen significant restructuring," he said.
He added that globally, companies have enough cash hence reducing the need to borrow, and in Asia, money growth is generally exceeding nominal gross domestic produduct growth.
"Even if bank lending freezes, there seems plenty of buffer. It is obvious that corporations are well positioned globally, so where is the problem?" asked Roundtree, who is based in Singapore.
He also said that despite the "credit crunch" factors, growth forecasts for Asia have been edging higher, noting that the region's long-term growth is increasingly driven by rising domestic demand.
Roundtree also noted that for Asia, it is no longer the case of when the US sneezes, the region catches a cold, but China's state of economy has more impact on Asia now.
He also said that in Asia, the equity markets are still relatively cheap, especially in India, the favourite of foreign investors."Malaysia is cheap too but not as cheap as India. So it is not about the weakness of the Malaysian market in attracting foreign money but more a strength of another market."
Roundtree believes that domestic investors here should take advantage of the cheap local market and start accumulating good 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.
Foreign funds stay cautious
TheStar
Analyst: They are focused on blue-chip stocks
PETALING JAYA: The main grouse of retail investors is that Bursa Malaysia is not attracting enough foreign funds and has under-performed regional markets such as Hong Kong, China and Singapore.
TA Securities chartist Stephen Soo said while foreign funds had returned to the local bourse, they had been relatively cautious.
“There are positive inflows although foreign funds are still nibbling,'' he said, adding that the funds were currently showing some interest in construction stocks.
Relatively speaking, the KL Composite Index has not recovered as much as the Hong Kong, Singapore or Jakarta markets.
“Malaysia is less sensitive to US funds flows than these markets,” Soo said.
In addition, the US subprime woes continue to hover in the background, acting as a “cap” on the interest of US-based foreign funds, he said.
On asset allocation, Soo said globally, there had been a move into equities as the downward pressure on US interest rates was expected to bring down the value of US Treasuries and corporate bonds.
OSK Investment Bank head of equity research Kenny Yee concurred that foreign funds were back in the Malaysian market but added that they were invested in blue-chip stocks.
“They are definitely in Malaysia but are concentrated on the blue chips,” Yee told StarBiz.
A broad-based buying of lower liners had not taken place in a big way, he said.
On Bursa's relatively weaker performance versus the regional markets, Yee said the comparison was not justified.
As these key markets go up, “we will benefit from the spillover,” he said.
On the asset allocation of foreign investors, Yee said a further cut in US interest rates would mean the greenback would weaken more and a potential flight of funds from America to other markets.
“Investors would then be looking at bonds, other assets and equities but on the whole, the interest will present itself as flows into equities,'' he said.
Singular Asset Management Sdn Bhd chief investment officer Teoh Kok Lin, when contacted, said the perception that the flow of foreign funds was weak could be due to the fact that a segment of funds – particularly large hedge funds that had been badly affected by the US subprime crisis – was now “missing” in action.
He expects the local bourse to be volatile over the next few weeks, as both foreign and domestic investors remained uncertain over external factors and their impact on the market.
Over six to 12 months, however, funds would be attracted to Asia post-subprime, Teoh said.
“As long as the US does not go into a deep recession, economies in the region are strong enough to grow under their own steam over the next four years, which should attract investors,” he 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.
Analyst: They are focused on blue-chip stocks
PETALING JAYA: The main grouse of retail investors is that Bursa Malaysia is not attracting enough foreign funds and has under-performed regional markets such as Hong Kong, China and Singapore.
TA Securities chartist Stephen Soo said while foreign funds had returned to the local bourse, they had been relatively cautious.
“There are positive inflows although foreign funds are still nibbling,'' he said, adding that the funds were currently showing some interest in construction stocks.
Relatively speaking, the KL Composite Index has not recovered as much as the Hong Kong, Singapore or Jakarta markets.
“Malaysia is less sensitive to US funds flows than these markets,” Soo said.
In addition, the US subprime woes continue to hover in the background, acting as a “cap” on the interest of US-based foreign funds, he said.
On asset allocation, Soo said globally, there had been a move into equities as the downward pressure on US interest rates was expected to bring down the value of US Treasuries and corporate bonds.
OSK Investment Bank head of equity research Kenny Yee concurred that foreign funds were back in the Malaysian market but added that they were invested in blue-chip stocks.
“They are definitely in Malaysia but are concentrated on the blue chips,” Yee told StarBiz.
A broad-based buying of lower liners had not taken place in a big way, he said.
On Bursa's relatively weaker performance versus the regional markets, Yee said the comparison was not justified.
As these key markets go up, “we will benefit from the spillover,” he said.
On the asset allocation of foreign investors, Yee said a further cut in US interest rates would mean the greenback would weaken more and a potential flight of funds from America to other markets.
“Investors would then be looking at bonds, other assets and equities but on the whole, the interest will present itself as flows into equities,'' he said.
Singular Asset Management Sdn Bhd chief investment officer Teoh Kok Lin, when contacted, said the perception that the flow of foreign funds was weak could be due to the fact that a segment of funds – particularly large hedge funds that had been badly affected by the US subprime crisis – was now “missing” in action.
He expects the local bourse to be volatile over the next few weeks, as both foreign and domestic investors remained uncertain over external factors and their impact on the market.
Over six to 12 months, however, funds would be attracted to Asia post-subprime, Teoh said.
“As long as the US does not go into a deep recession, economies in the region are strong enough to grow under their own steam over the next four years, which should attract investors,” he 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.
OSK-UOB offers new theme-based equity fund
TheStar
KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd has launched a new theme-based equity fund, OKS-UOB Thematic Growth fund, which aims to give returns exceeding 8% per annum.
“The thematic approach offers flexible investment strategy that focuses on generating positive return, under all market conditions.
“It also offers the flexibility of switching between equity and fixed income, with minimum market benchmark constraints,” CEO Ho Seng Yee said at the launch yesterday.
Ho said the fund, which was relevant to today's global market conditions, would invest on a 70:25:5 ratio in equities of Malaysian companies identified to be benefiting from the evolving domestic and global trends, fixed-income securities, and cash.
A 50:50 ratio will be allocated to high-growth themes such as Ninth Malaysia Plan (9MP) and oil and gas, and themes providing steady returns such as consumption and capital management.
“Our strategy is to identify the themes from the evolving domestic and global trends in its early phrase to capitalise on the growth.
“The current themes include beneficiaries of the 9MP, growth corridors, capital management, property, oil and gas, commodities, mergers & acquisitions, and consumption plays,” Ho said, adding that the fund would focus on a minimum of three themes.
“The fund is aimed at investors who want medium- to long-term capital appreciation through investments in securities of Malaysian companies that will benefit from evolving domestic and global trends,” he added.
The fund has an approved size of 800 million units (RM200mil), and an initial unit price of 25 sen. It is available from Sept 26 to Oct 16 at the initial minimum investment of RM1,000.
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.
KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd has launched a new theme-based equity fund, OKS-UOB Thematic Growth fund, which aims to give returns exceeding 8% per annum.
“The thematic approach offers flexible investment strategy that focuses on generating positive return, under all market conditions.
“It also offers the flexibility of switching between equity and fixed income, with minimum market benchmark constraints,” CEO Ho Seng Yee said at the launch yesterday.
Ho said the fund, which was relevant to today's global market conditions, would invest on a 70:25:5 ratio in equities of Malaysian companies identified to be benefiting from the evolving domestic and global trends, fixed-income securities, and cash.
A 50:50 ratio will be allocated to high-growth themes such as Ninth Malaysia Plan (9MP) and oil and gas, and themes providing steady returns such as consumption and capital management.
“Our strategy is to identify the themes from the evolving domestic and global trends in its early phrase to capitalise on the growth.
“The current themes include beneficiaries of the 9MP, growth corridors, capital management, property, oil and gas, commodities, mergers & acquisitions, and consumption plays,” Ho said, adding that the fund would focus on a minimum of three themes.
“The fund is aimed at investors who want medium- to long-term capital appreciation through investments in securities of Malaysian companies that will benefit from evolving domestic and global trends,” he added.
The fund has an approved size of 800 million units (RM200mil), and an initial unit price of 25 sen. It is available from Sept 26 to Oct 16 at the initial minimum investment of RM1,000.
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.
Wednesday, September 26, 2007
Lessons from the Dutch tulipmania
TheStar
Retailers suffered huge losses during the Dutch tulipmania from 1634 to 1637. We need to be extra careful in view of the excessive speculation in the China and Hong Kong markets as well as the subprime problems in the US housing market.
Q: What can we learn from the past market speculative manias, like tulipmania?
A: Lately, the Shanghai Index and Hang Seng Index touched new highs again. Besides, the Dow Jones Industrial Average was just about 2% shy of its recent peak of 14,000 points. Some analysts and fund managers have started to wonder when this excessive speculation would end, especially for the China market.
In this article, we will look into one of the past speculative manias, the Dutch tulipmania, which happened in the Netherlands from 1634 to 1637.
The tulip originated in Turkey but diffused into western Europe in the middle of the 16th century. The bulb can propagate either through seeds or buds that form on the mother bulb.
Due to slow propagation and popular demand, the tulip was viewed as an expensive, beautiful and rare flower. Hence, as the tulip was grown from bulb, the main object of this mania was the tulip bulb, not its flowers.
The market for bulbs was originally limited to professional growers. However, as a result of the inflow of large amounts of foreign funds and a rising demand for bulbs in France, the speculative buying interest started by end-1634. Many retailers liquidated their assets just to participate in tulip speculation.
Towards mid-1635, prices rose rapidly and people could buy it on credit. Many big merchants showed little interest while many lower middle and working classes were speculating in tulips.
At the latter stage of speculation just before the market crash, bulb prices surged 26 times within a month in January 1637. However, as the late buyers were unable to resell them at higher prices, they were forced to cut losses.
As a result of panic selling, the price tumbled to just 5% of its peak value in the first week of February 1637. Many middle-class people suffered huge losses.
Even though tulipmania happened more than 300 years ago, the recent speculative mania in the China and Hong Kong markets worry us.
According to Guillermo Calvo in his research titled, “Tulipmania”, he defined tulipmania as: “Situations in which some prices behave in a way that appears not to be fully explainable by economic fundamentals.”
Given that the China market jumped from the low of about 1,000 points to the present 5,400-level within a two-year period, it is hard to believe that its economic fundamentals can sustain such high market valuations.
Even though we are quite bullish on its long-term prospects, we are also concerned about the sudden surge in market value within such a short period of time.
Q: Given that the US Federal Reserve has lowered its Fed rate, can we say that we have seen the worst of the subprime woes?
A: Although the sub-prime issue has been outstanding for more than a year, it appears to be getting bigger rather than smaller. Nobody knows how serious the problem will be.
We like to use the Cockroach theory to explain the current phenomenon. Based on this theory, when you discover one cockroach in your cabinet, most likely there are more cockroaches there. This theory explains that one piece of bad news is an indication that there is more bad news to come.
Our view is as long as the US property prices continue to dip, we need to be extra careful as they can spread to other types of mortgages.
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.
Retailers suffered huge losses during the Dutch tulipmania from 1634 to 1637. We need to be extra careful in view of the excessive speculation in the China and Hong Kong markets as well as the subprime problems in the US housing market.
Q: What can we learn from the past market speculative manias, like tulipmania?
A: Lately, the Shanghai Index and Hang Seng Index touched new highs again. Besides, the Dow Jones Industrial Average was just about 2% shy of its recent peak of 14,000 points. Some analysts and fund managers have started to wonder when this excessive speculation would end, especially for the China market.
In this article, we will look into one of the past speculative manias, the Dutch tulipmania, which happened in the Netherlands from 1634 to 1637.
The tulip originated in Turkey but diffused into western Europe in the middle of the 16th century. The bulb can propagate either through seeds or buds that form on the mother bulb.
Due to slow propagation and popular demand, the tulip was viewed as an expensive, beautiful and rare flower. Hence, as the tulip was grown from bulb, the main object of this mania was the tulip bulb, not its flowers.
The market for bulbs was originally limited to professional growers. However, as a result of the inflow of large amounts of foreign funds and a rising demand for bulbs in France, the speculative buying interest started by end-1634. Many retailers liquidated their assets just to participate in tulip speculation.
Towards mid-1635, prices rose rapidly and people could buy it on credit. Many big merchants showed little interest while many lower middle and working classes were speculating in tulips.
At the latter stage of speculation just before the market crash, bulb prices surged 26 times within a month in January 1637. However, as the late buyers were unable to resell them at higher prices, they were forced to cut losses.
As a result of panic selling, the price tumbled to just 5% of its peak value in the first week of February 1637. Many middle-class people suffered huge losses.
Even though tulipmania happened more than 300 years ago, the recent speculative mania in the China and Hong Kong markets worry us.
According to Guillermo Calvo in his research titled, “Tulipmania”, he defined tulipmania as: “Situations in which some prices behave in a way that appears not to be fully explainable by economic fundamentals.”
Given that the China market jumped from the low of about 1,000 points to the present 5,400-level within a two-year period, it is hard to believe that its economic fundamentals can sustain such high market valuations.
Even though we are quite bullish on its long-term prospects, we are also concerned about the sudden surge in market value within such a short period of time.
Q: Given that the US Federal Reserve has lowered its Fed rate, can we say that we have seen the worst of the subprime woes?
A: Although the sub-prime issue has been outstanding for more than a year, it appears to be getting bigger rather than smaller. Nobody knows how serious the problem will be.
We like to use the Cockroach theory to explain the current phenomenon. Based on this theory, when you discover one cockroach in your cabinet, most likely there are more cockroaches there. This theory explains that one piece of bad news is an indication that there is more bad news to come.
Our view is as long as the US property prices continue to dip, we need to be extra careful as they can spread to other types of mortgages.
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.
Tuesday, September 25, 2007
Prudential Fund appoints new syariah investments director
TheEdge
KUALA LUMPUR: Prudential Fund Management Bhd (PFMB) has appointed Zulkifli Ishak as its new drector of syariah investments, with effect from Aug 10, 2007.
PFMB’s chief executive officer Mark Toh said that Zulkifli would be responsible for building its syariah investment business and driving its vision to be the regional hub of Islamic fund management for the Prudential group.
“His 16 years of investment experience, strong fund management expertise and excellent understanding of Islamic unit trusts will be a great asset to PFMB,” he said in a statement.
Zulkifli joins Prudential from Amanah Raya-JMF Asset Management where he managed RM5 billion of portfolios mainly in fixed income and structured product investments.
Prior to that, he was a fund manager at Amanah Saham Mara, managing equity and fixed income investments. He was also head of treasury in Danamodal Nasional Bhd, a special-purpose vehicle set up by Bank Negara Malaysia from 2000 to 2002, where he was responsible for establishing strategic investments in conjunction with the recapitalisation exercise of banking Institutions.
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.
KUALA LUMPUR: Prudential Fund Management Bhd (PFMB) has appointed Zulkifli Ishak as its new drector of syariah investments, with effect from Aug 10, 2007.
PFMB’s chief executive officer Mark Toh said that Zulkifli would be responsible for building its syariah investment business and driving its vision to be the regional hub of Islamic fund management for the Prudential group.
“His 16 years of investment experience, strong fund management expertise and excellent understanding of Islamic unit trusts will be a great asset to PFMB,” he said in a statement.
Zulkifli joins Prudential from Amanah Raya-JMF Asset Management where he managed RM5 billion of portfolios mainly in fixed income and structured product investments.
Prior to that, he was a fund manager at Amanah Saham Mara, managing equity and fixed income investments. He was also head of treasury in Danamodal Nasional Bhd, a special-purpose vehicle set up by Bank Negara Malaysia from 2000 to 2002, where he was responsible for establishing strategic investments in conjunction with the recapitalisation exercise of banking Institutions.
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.
Hedge funds plan to break up Northern Rock
TheStar
LONDON: Three leading hedge funds are planning a break-up of beleaguered British bank Northern Rock Plc, according to a newspaper report on Sunday.
The move could generate hundreds of millions of pounds in profits but would leave shareholders with virtually nothing, the Sunday Telegraph said.
The plan is to acquire the bank's mortgages at below face value and make a big profit by holding them until they mature. The proposed deal would see the funds divide up the mortgage book, worth more than £100bil.
The paper said Chris Flowers, the former Goldman Sachs banker who made a fortune from the rescue of Japan's Long Term Credit Bank in 2000, was among the group, along with the funds Cerberus and Citadel.
The funds, however, have yet to approach the Northern Rock board. A Northern Rock spokesman declined to comment.
Britain's fifth largest mortgage lender has been seen as a likely takeover target after being engulfed by a funding and customer confidence crisis, triggering the worst run on a UK bank in living memory.
Rival banks, though, have been slow to show any interest in taking over the troubled business. The Sunday Times reported that at least a dozen of the biggest financial institutions in Britain and Europe had snubbed pleas from the authorities and Northern Bank's adviser Merrill Lynch to rescue it. – 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.
LONDON: Three leading hedge funds are planning a break-up of beleaguered British bank Northern Rock Plc, according to a newspaper report on Sunday.
The move could generate hundreds of millions of pounds in profits but would leave shareholders with virtually nothing, the Sunday Telegraph said.
The plan is to acquire the bank's mortgages at below face value and make a big profit by holding them until they mature. The proposed deal would see the funds divide up the mortgage book, worth more than £100bil.
The paper said Chris Flowers, the former Goldman Sachs banker who made a fortune from the rescue of Japan's Long Term Credit Bank in 2000, was among the group, along with the funds Cerberus and Citadel.
The funds, however, have yet to approach the Northern Rock board. A Northern Rock spokesman declined to comment.
Britain's fifth largest mortgage lender has been seen as a likely takeover target after being engulfed by a funding and customer confidence crisis, triggering the worst run on a UK bank in living memory.
Rival banks, though, have been slow to show any interest in taking over the troubled business. The Sunday Times reported that at least a dozen of the biggest financial institutions in Britain and Europe had snubbed pleas from the authorities and Northern Bank's adviser Merrill Lynch to rescue it. – 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.
Wednesday, September 19, 2007
HwangDBS targets returns of up to 12pc for new fund
BusinessTimes
HWANGDBS Investment Management Bhd is targeting annual returns of up to 12 per cent for its newly-launched Environmental Opportunities Fund (EOF).
The global equities growth fund is the first in the country that focuses on green investments, in particular renewable energies, water and waste management. The fund offers the opportunity to benefit from Sustainable and Responsible Investments (SRI) which in the last 20 years has drawn more than US$4 trillion (RM14 trillion).
Its chief executive officer and executive director, Teng Chee Wai, said the fund is targeted at risk-tolerant investors seeking to diversify their investments.
The fund's objective, said Teng, is to achieve capital appreciation over the time horizon by investing globally in companies involved in environmental markets.
EOF is externally managed by BNP Paribas Asset Management that manages 7 billion SRI funds via 20 open ended funds.According to BNP Paribas Head of Sustainable/Responsible Investment, Eric Borremans, EOF will invest in diversified companies each with a market cap of 500 million and that are active in one or several environmental markets.
About 75 per cent of the fund will be invested in Europe and North American markets. EOF has an approved size of 600 million units at 50 sen a unit. The minimum initial investment is RM1,000.
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.
HWANGDBS Investment Management Bhd is targeting annual returns of up to 12 per cent for its newly-launched Environmental Opportunities Fund (EOF).
The global equities growth fund is the first in the country that focuses on green investments, in particular renewable energies, water and waste management. The fund offers the opportunity to benefit from Sustainable and Responsible Investments (SRI) which in the last 20 years has drawn more than US$4 trillion (RM14 trillion).
Its chief executive officer and executive director, Teng Chee Wai, said the fund is targeted at risk-tolerant investors seeking to diversify their investments.
The fund's objective, said Teng, is to achieve capital appreciation over the time horizon by investing globally in companies involved in environmental markets.
EOF is externally managed by BNP Paribas Asset Management that manages 7 billion SRI funds via 20 open ended funds.According to BNP Paribas Head of Sustainable/Responsible Investment, Eric Borremans, EOF will invest in diversified companies each with a market cap of 500 million and that are active in one or several environmental markets.
About 75 per cent of the fund will be invested in Europe and North American markets. EOF has an approved size of 600 million units at 50 sen a unit. The minimum initial investment is RM1,000.
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.
Tuesday, September 18, 2007
3.5 sen payout for Alliance Optimal fund
TheEdge
KUALA LUMPUR: Alliance Investment Management Bhd has announced a record gross cash distribution of 3.5 sen per unit for its Alliance Optimal Income Bhd (AOIF) for its financial year ended Aug 31, 2007.
The distribution, which represents a 7% yield for six months based on average selling price, is AOIF’s second cash distribution payout in a year.
The distribution is declared on a half-yearly basis, with the first distribution of 1.5 sen in March this year, or a 3% yield based on the initial price of 50 sen.
The total cash distribution for the year amounted to 5 sen, which translated to a yield of 10% — the highest AOIF had paid out. Said Alliance Investment Management Bhd’s head Nik Azhar Abdullah, adding that AOIF is popular among investor with low risk appetite.
He said the fund appealed to those prefering a stable income stream and potentially higher than fixed deposit rates by investing in high dividend yielding stocks and fixed income securities.
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.
KUALA LUMPUR: Alliance Investment Management Bhd has announced a record gross cash distribution of 3.5 sen per unit for its Alliance Optimal Income Bhd (AOIF) for its financial year ended Aug 31, 2007.
The distribution, which represents a 7% yield for six months based on average selling price, is AOIF’s second cash distribution payout in a year.
The distribution is declared on a half-yearly basis, with the first distribution of 1.5 sen in March this year, or a 3% yield based on the initial price of 50 sen.
The total cash distribution for the year amounted to 5 sen, which translated to a yield of 10% — the highest AOIF had paid out. Said Alliance Investment Management Bhd’s head Nik Azhar Abdullah, adding that AOIF is popular among investor with low risk appetite.
He said the fund appealed to those prefering a stable income stream and potentially higher than fixed deposit rates by investing in high dividend yielding stocks and fixed income securities.
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 to raise stock market allocation
BusinessTimes
THE Employees Provident Fund (EPF) expects to increase its allocation for equity investments, which stands at about RM55 billion currently, by an additional RM4 billion to RM5 billion this year, a top official said. Johari Abdul Muid, its new deputy chief executive officer for investments, said the EPF gets about RM25 billion of fresh money to invest each year, of which about 20 per cent is for equities.
"As our fund size increases, so will the allocation for equity. I expect, from the new money alone this year, another RM4 billion to RM5 billion will be allocated to equity," he told Business Times in his first interview with the media.
"But whether we fully invest or under-invest a bit, there is a tactical range in which we can play around," he added.
The EPF is currently invested in about 190 public-listed companies in Malaysia, a sharp drop from 425 companies about three years ago.
Johari explained that the drop was because the EPF had in recent years become more "focused" on the types of stocks it wants to invest in.
"There are many good companies on Bursa, definitely more than 190, but as a pension fund, we have to look from the perspective of size, liquidity and dividend yields as well. Hence, the reason why we are left invested in about 190 companies," he said.
The EPF will continue to let go of a few more companies, but at the same time, plans to include some new ones into its list when the time is right.
"There are not many, but once in a while, one comes about and we include it," he said.
The EPF has US$2 billion (RM6.96 billion) to invest in equities overseas, about 70 per cent of which has already been allocated to fund managers to invest on its behalf.
At the moment, its external fund managers are Aberdeen Asset Management, Nomura Asset Management and BNP Paribas. Locally, it has Pheim Asset Management.
Besides Asean, the EPF has also invested globally, concentrating on the US, the UK, Australia and Japan.
Its private equity investments are still "very insignificant", he said.
Johari said the EPF, which makes only long-term investments of generally five years and above, chooses to invest in companies mainly on the strength of their fundamentals and liquidity in addition to other factors such as company management and shareholders.
Given these criteria, it has invested mainly in blue-chip companies. "Companies which we are not sure of, or which don't have a long track record, we prefer to steer clear of," he remarked.
In recent years, however, to protect itself in case of a market slowdown, it has begun to increasingly rely on its dividend income to supplement its income through sale of stocks.
"(It's) not just buying the stocks which issue dividends; it's also going to meet these companies to talk to the management about having a dividend policy ... telling them that we (have) a better preference for a company with a dividend policy against one that doesn't," he said.
The EPF is expected to benefit from the strategies it has employed.
"We're a lot more focused and the income will be a lot more consistent and, surprisingly, very much better," Johari 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.
Friday, September 14, 2007
South Korea to ease rules on asset managers, funds
TheEdge
SEOUL: South Korea will loosen regulations on foreign asset management firms and domestic private equity funds as early as this year, the finance ministry said on Thursday.
The draft law, to be reviewed by the cabinet, is the latest in a series of deregulation moves for the financial industry as the government strives to raise its financial clout in Asia.
For foreign asset managers selling overseas funds in South Korea their minimum asset size under management will be cut to 1 trillion won (RM3.6 billion) each, from the current 5 trillion won, the ministry said in a statement.
The ministry also will exempt domestic private equity funds from regulations limiting overseas investment, enabling them to buy more foreign assets via special purpose companies based in other countries.
"We are aiming for the revised law to be in force within this year," said Hong Seong-ki, a finance ministry deputy director in charge of securities law.
Under the revised law, investment funds are able to buy equity-linked warrants and securities issued in other countries.
Plus, they can borrow or lend exchange traded funds (ETFs) for arbitrage trade, taking advantage of differences between market prices and net asset value.
ETFs are similar to index funds tracking key stock indexes and traded on stock exchanges.
Meanwhile, to win a fund management licence, top shareholders in foreign asset managers should have not taken administrative measures for domestic rule breaches in the past few years, according to the statement.
Top global fund managers, including Fidelity and Franklin Templeton, have been building a presence in Asia's third-largest asset management market, valued at $300 billion, betting on the country's burgeoning corporate pension management market. - 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.
SEOUL: South Korea will loosen regulations on foreign asset management firms and domestic private equity funds as early as this year, the finance ministry said on Thursday.
The draft law, to be reviewed by the cabinet, is the latest in a series of deregulation moves for the financial industry as the government strives to raise its financial clout in Asia.
For foreign asset managers selling overseas funds in South Korea their minimum asset size under management will be cut to 1 trillion won (RM3.6 billion) each, from the current 5 trillion won, the ministry said in a statement.
The ministry also will exempt domestic private equity funds from regulations limiting overseas investment, enabling them to buy more foreign assets via special purpose companies based in other countries.
"We are aiming for the revised law to be in force within this year," said Hong Seong-ki, a finance ministry deputy director in charge of securities law.
Under the revised law, investment funds are able to buy equity-linked warrants and securities issued in other countries.
Plus, they can borrow or lend exchange traded funds (ETFs) for arbitrage trade, taking advantage of differences between market prices and net asset value.
ETFs are similar to index funds tracking key stock indexes and traded on stock exchanges.
Meanwhile, to win a fund management licence, top shareholders in foreign asset managers should have not taken administrative measures for domestic rule breaches in the past few years, according to the statement.
Top global fund managers, including Fidelity and Franklin Templeton, have been building a presence in Asia's third-largest asset management market, valued at $300 billion, betting on the country's burgeoning corporate pension management market. - 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.
Asean fund set to deliver 10pc yearly return
BusinessTimes
THE newly launched CIMB-Principal Asean Equity Fund - which will invest in the region's stocks, exchange traded funds and derivatives - is expected to register an annual return of 10 per cent to 12 per cent, driven by the region's strong growth.
"In less than a decade, the performance of Asean stock market indices has been nothing short of phenomenal; the Jakarta Composite Index rose by 413 per cent from January 1999 to August 2007, Singapore's Straits Times Index rose by 139 per cent while the Stock Exchange of Thailand was up by 123 per cent."
According to the Asian Development Bank, the economies of South-East Asia are projected to reach 5.6 per cent this year and edge upwards to 5.9 per cent in 2008," CIMB-Principal Asset Management Bhd chief investment officer Raymond Tang said after the launch of the CIMB-Principal Asean Equity Fund in Kuala Lumpur yesterday.
The fund, with the initial fund size of RM150 million comprising 300 million units of 50 sen a unit, will invest in stocks of five South-East Asian countries namely Singapore, Malaysia, Thailand, Indonesia and the Philippines.
The firm's head of retail equity Arnold Lim said about 38 per cent of the funds will be invested in Singapore stocks, 18 per cent in Malaysia, 20 per cent in Thailand, 18 per cent in Indonesia and six per cent in the Philippines.
The fund allows investors the opportunity to own stocks of the region's top companies such as Singapore Airlines, DBS Group, United Overseas Bank, OCBC and Telekomunikasi Indonesia.
"The fund is suitable for investors seeking capital growth and diversified investments by accessing multiple stock markets in the region. This is an opportune time to take advantage of Asean's rising economic prospects. We believe this fund will be well-received by Malaysian investors," Tang explained.
Lim added that investors are focusing more in the South-East Asian region now. "Today, investors are mainly focused in China and India. We believe Asean region is coming back in terms of focus, and there are signs that indicate so," Lim 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.
THE newly launched CIMB-Principal Asean Equity Fund - which will invest in the region's stocks, exchange traded funds and derivatives - is expected to register an annual return of 10 per cent to 12 per cent, driven by the region's strong growth.
"In less than a decade, the performance of Asean stock market indices has been nothing short of phenomenal; the Jakarta Composite Index rose by 413 per cent from January 1999 to August 2007, Singapore's Straits Times Index rose by 139 per cent while the Stock Exchange of Thailand was up by 123 per cent."
According to the Asian Development Bank, the economies of South-East Asia are projected to reach 5.6 per cent this year and edge upwards to 5.9 per cent in 2008," CIMB-Principal Asset Management Bhd chief investment officer Raymond Tang said after the launch of the CIMB-Principal Asean Equity Fund in Kuala Lumpur yesterday.
The fund, with the initial fund size of RM150 million comprising 300 million units of 50 sen a unit, will invest in stocks of five South-East Asian countries namely Singapore, Malaysia, Thailand, Indonesia and the Philippines.
The firm's head of retail equity Arnold Lim said about 38 per cent of the funds will be invested in Singapore stocks, 18 per cent in Malaysia, 20 per cent in Thailand, 18 per cent in Indonesia and six per cent in the Philippines.
The fund allows investors the opportunity to own stocks of the region's top companies such as Singapore Airlines, DBS Group, United Overseas Bank, OCBC and Telekomunikasi Indonesia.
"The fund is suitable for investors seeking capital growth and diversified investments by accessing multiple stock markets in the region. This is an opportune time to take advantage of Asean's rising economic prospects. We believe this fund will be well-received by Malaysian investors," Tang explained.
Lim added that investors are focusing more in the South-East Asian region now. "Today, investors are mainly focused in China and India. We believe Asean region is coming back in terms of focus, and there are signs that indicate so," Lim 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.
Thursday, September 13, 2007
CIMB Private Banking unveils 2 more funds
BusinessTimes
CIMB Private Banking has launched two investment funds, tailored to help its high net worth clients achieve consistent returns by picking good value and under-researched local stocks.
The funds are defensive in nature, designed to achieve consistent returns even in times of market uncertainties, co-head of CIMB Private Banking Alan Inn said.
At least 30 per cent of the funds will be put into high dividend-yielding stocks and the fund manager may choose to invest up to 70 per cent in cash and money market instruments.
Inn was speaking to reporters after the launch of CMS Absolute Return Fund and CMS Absolute Return Syariah Fund in Kuala Lumpur yesterday.
He said the launch is timely despite the current market uncertainties arising from the US subprime housing loans issue.
Inn believes that the fundamentals of Malaysian stocks are still good, as reflected in the strong corporate earnings, robust domes-tic consumption trend and the government's expansionary initiatives.
Malaysia is also one of the more defensive markets in the region, although exter-nal factors remain the key risks to local stocks, he said.
"The impact of the US subprime problem will come and go. If you look at our long term outlook, it is fine," said CMS Asset Management Sdn Bhd portfolio manager Philip Tan, who manages the two new funds.
"Analysts are now expecting 28 per cent growth in corporate earnings this year after companies delivered above than expected results this recent quarter. The estimates will probably be revised upwards for 2008 after the fourth quarter," he added.
Tan said the funds will only buy stocks listed on the main board of Bursa Malaysia, with high earnings and growth visibility.
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 Private Banking has launched two investment funds, tailored to help its high net worth clients achieve consistent returns by picking good value and under-researched local stocks.
The funds are defensive in nature, designed to achieve consistent returns even in times of market uncertainties, co-head of CIMB Private Banking Alan Inn said.
At least 30 per cent of the funds will be put into high dividend-yielding stocks and the fund manager may choose to invest up to 70 per cent in cash and money market instruments.
Inn was speaking to reporters after the launch of CMS Absolute Return Fund and CMS Absolute Return Syariah Fund in Kuala Lumpur yesterday.
He said the launch is timely despite the current market uncertainties arising from the US subprime housing loans issue.
Inn believes that the fundamentals of Malaysian stocks are still good, as reflected in the strong corporate earnings, robust domes-tic consumption trend and the government's expansionary initiatives.
Malaysia is also one of the more defensive markets in the region, although exter-nal factors remain the key risks to local stocks, he said.
"The impact of the US subprime problem will come and go. If you look at our long term outlook, it is fine," said CMS Asset Management Sdn Bhd portfolio manager Philip Tan, who manages the two new funds.
"Analysts are now expecting 28 per cent growth in corporate earnings this year after companies delivered above than expected results this recent quarter. The estimates will probably be revised upwards for 2008 after the fourth quarter," he added.
Tan said the funds will only buy stocks listed on the main board of Bursa Malaysia, with high earnings and growth visibility.
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.
Wednesday, September 12, 2007
Balanced Funds: A Safer Approach To Investing In Volatile Markets
PublicMutual
In times of volatile market movements, it is a challenge for some investors to keep their emotions in check. When markets are in a strong rally, our herd instinct compels us to join the crowd and ride with the upside. But when markets correct, we are prone to sell out in panic. Yet, the wisest thing for investors to do at such times may be to remain calm and maintain a focused approach for their investments. Keeping an investment portfolio that is invested across different asset classes is a sound and effective strategy to ride through periods of adverse market movements.
Stock markets are volatile by nature and as illustrated in recent weeks, extended periods of rising share prices can often be interrupted by sudden bouts of consolidation. In such times, investors with moderate risk profiles should consider holding a balanced fund which is invested in both equities and bonds in near equal proportions. Balanced funds aim to provide income and capital growth over the medium to long term period by adopting a balanced asset allocation approach - 40% to 60% of the fund's Net Asset Value (NAV) is invested in equities while the balance is invested in debt securities and liquid assets. In comparison, equity funds generally have asset allocations of 85% or more in equities and the balance in fixed income securities and liquid assets.
The main benefits of investing in balanced funds are:
1. More Stable Returns: The overall portfolio risk of a balanced fund is reduced because the returns of equity and bond investments are generally not positively correlated. The potentially higher but more volatile returns from equity investments are moderated by the fund's investment in bonds. As a result, the returns of a balanced fund should be less volatile than a conventional equity fund.
2. Rebalancing: Another benefit of balanced funds is that in times of rising markets these funds "automatically" rebalance the portfolio by taking profits on equity investments which have appreciated and rebalancing the portfolio to its original equity: bond asset allocation of 60:40. Thanks to this rebalancing process, the unit trust investor need not worry about when to take profits on their investment.
3. Capital growth: A balanced fund will allow the investor to participate in the long term capital growth of equity markets because a sizable portion of up to 60% of the fund is invested in equities.
In conclusion, balanced funds are suitable for medium to long term investors with conservative to moderate risk reward temperament with a preference for receiving income and a respectable measure of capital growth. Investing in a balanced fund helps unit trust investors stay focused on achieving their long term investment goals without requiring them to evaluate the prevailing market cycle. Once they have selected a well-managed balanced fund in line with their risk profiles and investment objectives, they can be assured that the managers of the fund will take the necessary steps to rebalance the fund on a regular basis.
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.
Pacific Mutual launches global fund - Investments based on GDP expectations of countries
TheStar
PETALING JAYA: Bullish on the global economic outlook, Pacific Mutual Fund Bhd yesterday launched a global fund, Pacific ADVANTAGE GDP Momentum Fund, that invests based on the gross domestic product (GDP) of a country.
Chief executive officer and chief investment officer Michael Auyeung told StarBiz the fund’s uniqueness was that it searched beyond traditional stock market valuations and index-weighted methods to build its portfolio.
“The fund will analyse and take into consideration the GDP size and growth momentum of countries and regions it invests in, rather than merely looking at market value or capitalisation,” he said.
The fund does not target pre-set sectors, industries or regions but has a continuous flexible investment allocation seeking better potential returns by investing in diversified securities based on present and future GDP expectations.
GDP momentum-based research, however, the same portfolio would be heavily weighted into stocks from US, Japan, China, Germany, France, Russia and even Eastern Europe.
The benefits of such an investment philosophy is that it is more diversified across different global regions, thus risk is less concentrated.
The fund also had an additional feature, whereby to maintain capital stability and minimise the potential adverse effects of foreign exchange risks, it would also invest a significant portion in local fixed income instruments, Auyeung added.
This combination, he said, was an important feature for investors today in light of increased volatility in global equities, especially during the sharp market corrections at end-February and early August.
The fund would be distributed by HSBC Bank Malaysia Bhd and is available at all of the bank’s branches nationwide.
The external investment manager for the offshore equity portion of the fund is HSBC Investments (S) Ltd, which is part of the HSBC Group Investment Businesses.
As at end-May, the HSBC Group Investment had total assets of US$339bil, of which the Singapore office contributes S$4.5bil.
The fund, which has an approved fund size of 600 million units (RM300mil), is currently being offered at the net asset value (NAV) per unit of 50 sen plus a service charge of up to 5% of NAV per unit during the offer period ending Sept 23.
Pacific Mutual currently manages a total of 17 funds, including Pacific ADVANTAGE GDP Momentum Fund.As at end-August, the company has over 54,000 accounts under management worth more than RM1.6bil.
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.
PETALING JAYA: Bullish on the global economic outlook, Pacific Mutual Fund Bhd yesterday launched a global fund, Pacific ADVANTAGE GDP Momentum Fund, that invests based on the gross domestic product (GDP) of a country.
Chief executive officer and chief investment officer Michael Auyeung told StarBiz the fund’s uniqueness was that it searched beyond traditional stock market valuations and index-weighted methods to build its portfolio.
“The fund will analyse and take into consideration the GDP size and growth momentum of countries and regions it invests in, rather than merely looking at market value or capitalisation,” he said.
The fund does not target pre-set sectors, industries or regions but has a continuous flexible investment allocation seeking better potential returns by investing in diversified securities based on present and future GDP expectations.
GDP momentum-based research, however, the same portfolio would be heavily weighted into stocks from US, Japan, China, Germany, France, Russia and even Eastern Europe.
The benefits of such an investment philosophy is that it is more diversified across different global regions, thus risk is less concentrated.
The fund also had an additional feature, whereby to maintain capital stability and minimise the potential adverse effects of foreign exchange risks, it would also invest a significant portion in local fixed income instruments, Auyeung added.
This combination, he said, was an important feature for investors today in light of increased volatility in global equities, especially during the sharp market corrections at end-February and early August.
The fund would be distributed by HSBC Bank Malaysia Bhd and is available at all of the bank’s branches nationwide.
The external investment manager for the offshore equity portion of the fund is HSBC Investments (S) Ltd, which is part of the HSBC Group Investment Businesses.
As at end-May, the HSBC Group Investment had total assets of US$339bil, of which the Singapore office contributes S$4.5bil.
The fund, which has an approved fund size of 600 million units (RM300mil), is currently being offered at the net asset value (NAV) per unit of 50 sen plus a service charge of up to 5% of NAV per unit during the offer period ending Sept 23.
Pacific Mutual currently manages a total of 17 funds, including Pacific ADVANTAGE GDP Momentum Fund.As at end-August, the company has over 54,000 accounts under management worth more than RM1.6bil.
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.
How to maximise returns - Part 3
TheStar
Having learnt the benefits of investing early, the next step is to further enhance one’s wealth. In this last of a three-part series, CIMB Private Banking defines wealth enhancement and how asset allocation can have a positive impact on investment returns.
To be wealthy, one needs to create wealth, but to stay wealthy, one has to enhance, optimise and preserve his assets and investments. The question is how to enhance one’s wealth when the investment choices and offerings are becoming more complex?
Wealth enhancement is a methodology of planning a strategy and executing a plan to achieve certain financial objectives through the following process: Determining the investor’s goals and objectives, understanding the investor’s risk profile, analysing the investor’s current financial state, planning a financial strategy, detailing a recommendation and action plan, and executing the plan.
The key areas to focus on are the last three. For an investor, wealth enhancement is about maximising returns based on a certain level of tolerance for risk to returns.
The concept of risk to returns is also known as volatility in returns and is best described as the odds of expected returns not materialising, deviating from what an investor is expecting to earn from an investment.
Investors will always choose an investment that is able to generate the highest returns with the lowest level of risks possible. This is known as the Efficient Frontier (see Chart 1). According to this frontier, Investment X is more desirable than Investment Y because the former has the potential to earn higher returns based on the same level of risks than the latter.
A common mistake investors make is to load up on what’s hot and find that when markets turn, they face difficulty in dealing with the volatility in their portfolio.
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.
Having learnt the benefits of investing early, the next step is to further enhance one’s wealth. In this last of a three-part series, CIMB Private Banking defines wealth enhancement and how asset allocation can have a positive impact on investment returns.
To be wealthy, one needs to create wealth, but to stay wealthy, one has to enhance, optimise and preserve his assets and investments. The question is how to enhance one’s wealth when the investment choices and offerings are becoming more complex?
Wealth enhancement is a methodology of planning a strategy and executing a plan to achieve certain financial objectives through the following process: Determining the investor’s goals and objectives, understanding the investor’s risk profile, analysing the investor’s current financial state, planning a financial strategy, detailing a recommendation and action plan, and executing the plan.
The key areas to focus on are the last three. For an investor, wealth enhancement is about maximising returns based on a certain level of tolerance for risk to returns.
The concept of risk to returns is also known as volatility in returns and is best described as the odds of expected returns not materialising, deviating from what an investor is expecting to earn from an investment.
Investors will always choose an investment that is able to generate the highest returns with the lowest level of risks possible. This is known as the Efficient Frontier (see Chart 1). According to this frontier, Investment X is more desirable than Investment Y because the former has the potential to earn higher returns based on the same level of risks than the latter.
Therefore, by choosing Investment X, an investor is able to maximise his returns given his appetite for risk, which in turn would enhance his wealth. To achieve this, prior to executing an investment plan, it is imperative for an investor to determine and know his level of tolerance for risk.
One of the most effective ways to have an investment portfolio that maximises risk-adjusted returns is to invest in a range of different investments or undertake diversification, particularly those that have low or no correlation to one another.
In short, investments with returns that do not move in tandem with one another.
To illustrate the importance of diversification, the table outlines four different investment proposals for an investor looking to invest RM10mil.
Portfolio A is fully invested in fixed deposits and it is the safest portfolio from a returns perspective since it is free from volatility in returns. However, it is also the one with the lowest returns.
When the investor decides to take on 20% equities in search of higher returns, referred to as Portfolio B, the volatility of his portfolio increases to 2.4% per annum although returns now stand at 5%.
He can increase his exposure into equities, but the volatility of his portfolio will also increase to a point where he could get uncomfortable with the volatility.
To enhance risk-adjusted returns to the portfolio, the investor now, via Portfolio C, starts shifting some of his fixed deposits and invests 30% in bond papers, which he holds till maturity.
Bond is a fixed-income instrument that generally has low correlation to equity returns. While maintaining his 20% exposure in equities, the investor now has higher returns than Portfolio B for the same volatility.
To further illustrate our point on risk-adjusted returns, in Portfolio D, investor now allocates 20% of his portfolio into other low-equity correlated investments, such as in private equity and absolute return funds.
In this case, returns increase faster than volatility and the portfolio has the highest risk-adjusted returns as measured by returns/volatility compared with the other portfolios.
By taking this approach, the investor has been able to maximise his returns, provided he can accept the degree of volatility that comes with it.
Devising an appropriate portfolio with suitable investments and a proper asset allocation strategy is a demanding and dynamic process that requires an awareness of the investor’s volatility tolerance level and a deep understanding of the various investments’ risk-and-returns profile.
In achieving this, investors need to be aware that there are various investment choices available today that deliver varying magnitude of returns with distinct volatility of returns as shown in Chart 2.
Given the complexity of products and the process of enhancing wealth, engaging the service of a professional financial advisor will help ensure a higher degree of success in wealth management.
In summary, it is worth noting that by diversifying the investments, it can act as the primary defence against unexpected market volatility, as was the case recently with the US subprime housing loans fiasco.
A common mistake investors make is to load up on what’s hot and find that when markets turn, they face difficulty in dealing with the volatility in their portfolio.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 liberalisation to benefit consumer sector
TheEdge
KUALA LUMPUR: The further liberalisation of withdrawals from the Employees Provident Fund (EPF) to make monthly payments for housing loans will benefit not just the property market but also the consumer and retail sectors, said analysts.
The move may substantially increase house owners’ purchasing power if they were allowed to settle their monthly housing instalments via their EPF funds.
“EPF contribution is expected to be around RM32 billion annually and the change can potentially release RM9.6 billion into the system. We expect this to benefit the property and consumer sector the most,” said HLG Research in a research note.
“The amount available for withdrawal is significant to the overall annual property market of RM30 billion, total housing loans of RM135 billion and the retail and wholesale segment of the economy at RM55 billion,” it said.
The government has proposed in Budget 2008 that effective Jan 1, EPF contributors could make monthly withdrawals for housing loan repayments.
Calling it a major move, the government said it would benefit five million active EPF contributors and make available up to RM9.6 billion annually for the purchase of houses.
SJ Securities Sdn Bhd research head Cheah King Yoong said there would be some indirect impact on consumer spending arising from the change, as it could create more liquidity in the market with the potentially higher disposable income.
“Any retail or consumer play, however, will only be visible in the second half of next year. Eventually, EPF contributors will take up this benefit as it could free up their cash flow.
“Most people would likely then spend a little more on leisure activities like holiday or travel, and in some cases increase retail purchases,” he said.
He said it was too early to speculate on this as the withdrawal mechanism or procedures were not clear.
The EPF, on its website, says details of the new withdrawal scheme will be announced in December.
Cheah conceded that some EPF contributors would rather use the monthly withdrawals to speed up settlement of their housing loans instead of using the facility to make part-payment of the loans.
He said among the stocks that could potentially benefit were Aeon Co (M) Bhd, Bonia Corp Bhd, Padini Holdings Bhd, Degem Bhd, Poh Kong Holdings Bhd, AirAsia Bhd, Genting Bhd and Resorts World Bhd.
Inter Pacific Research Sdn Bhd head of research Anthony Dass said while he expected the feel good factor among households to remain, the impact from EPF move arising from the monthly withdrawal would be minimal if not negligible.
“Improving employment opportunities, low interest rates, higher civil servant salaries, firm commodities prices and positive wealth effect are believed to be the main contributory factors,” he said.
“The real multiplier effect is still very tricky to assess. Certainly, the property development sector will benefit from this facility but to say others will enjoy similar boost in business will be remote,” he said.
He said individuals would possibly opt to buy better houses, or settle existing loans faster than spend on other items.
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.
KUALA LUMPUR: The further liberalisation of withdrawals from the Employees Provident Fund (EPF) to make monthly payments for housing loans will benefit not just the property market but also the consumer and retail sectors, said analysts.
The move may substantially increase house owners’ purchasing power if they were allowed to settle their monthly housing instalments via their EPF funds.
“EPF contribution is expected to be around RM32 billion annually and the change can potentially release RM9.6 billion into the system. We expect this to benefit the property and consumer sector the most,” said HLG Research in a research note.
“The amount available for withdrawal is significant to the overall annual property market of RM30 billion, total housing loans of RM135 billion and the retail and wholesale segment of the economy at RM55 billion,” it said.
The government has proposed in Budget 2008 that effective Jan 1, EPF contributors could make monthly withdrawals for housing loan repayments.
Calling it a major move, the government said it would benefit five million active EPF contributors and make available up to RM9.6 billion annually for the purchase of houses.
SJ Securities Sdn Bhd research head Cheah King Yoong said there would be some indirect impact on consumer spending arising from the change, as it could create more liquidity in the market with the potentially higher disposable income.
“Any retail or consumer play, however, will only be visible in the second half of next year. Eventually, EPF contributors will take up this benefit as it could free up their cash flow.
“Most people would likely then spend a little more on leisure activities like holiday or travel, and in some cases increase retail purchases,” he said.
He said it was too early to speculate on this as the withdrawal mechanism or procedures were not clear.
The EPF, on its website, says details of the new withdrawal scheme will be announced in December.
Cheah conceded that some EPF contributors would rather use the monthly withdrawals to speed up settlement of their housing loans instead of using the facility to make part-payment of the loans.
He said among the stocks that could potentially benefit were Aeon Co (M) Bhd, Bonia Corp Bhd, Padini Holdings Bhd, Degem Bhd, Poh Kong Holdings Bhd, AirAsia Bhd, Genting Bhd and Resorts World Bhd.
Inter Pacific Research Sdn Bhd head of research Anthony Dass said while he expected the feel good factor among households to remain, the impact from EPF move arising from the monthly withdrawal would be minimal if not negligible.
“Improving employment opportunities, low interest rates, higher civil servant salaries, firm commodities prices and positive wealth effect are believed to be the main contributory factors,” he said.
“The real multiplier effect is still very tricky to assess. Certainly, the property development sector will benefit from this facility but to say others will enjoy similar boost in business will be remote,” he said.
He said individuals would possibly opt to buy better houses, or settle existing loans faster than spend on other items.
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.
RHBUTM plans up to 5 fund launches next year
TheEdge
KUALA LUMPUR: RHB Unit Trust Management Bhd (RHBUTM) is planning to launch up to five funds next year to add to its current fund size under management of RM1.3 billion.
Its chief executive officer Michael Tan Lib Chau said it anticipated its fund size to grow to at least RM2 billion by the end of the first quarter.
"“RHBUTM expects to have up to five new funds in year 2008," he told reporters after a community programme event here yesterday.
At the event, RHBUTM donated RM600,000 from investors of two Islamic unit trust funds, RHB Islamic Growth and RHB Mudharabah Fund, comprising RM300,000 to needy students and the remaining RM300,000 to 41 charitable organisations and orphanages.
RHB Investment Bank Bhd chairman Datuk Abdullah Mat Noh and RHBUTM chairman Tan Sri Hanafiah Ahmad gave away the donations.
The donations represent the "cleansing" of gains made from investments by the Islamic funds to remove all profits that may have been derived from non-syariah based sources.
In his speech, Hanafiah said since 1999, RHB Mudharabah Fund had contributed about RM2.9 million to charitable organisations and orphanages, while RHB Islamic Growth Fund contributed RM240,000 to 60 needy students last year.
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.
KUALA LUMPUR: RHB Unit Trust Management Bhd (RHBUTM) is planning to launch up to five funds next year to add to its current fund size under management of RM1.3 billion.
Its chief executive officer Michael Tan Lib Chau said it anticipated its fund size to grow to at least RM2 billion by the end of the first quarter.
"“RHBUTM expects to have up to five new funds in year 2008," he told reporters after a community programme event here yesterday.
At the event, RHBUTM donated RM600,000 from investors of two Islamic unit trust funds, RHB Islamic Growth and RHB Mudharabah Fund, comprising RM300,000 to needy students and the remaining RM300,000 to 41 charitable organisations and orphanages.
RHB Investment Bank Bhd chairman Datuk Abdullah Mat Noh and RHBUTM chairman Tan Sri Hanafiah Ahmad gave away the donations.
The donations represent the "cleansing" of gains made from investments by the Islamic funds to remove all profits that may have been derived from non-syariah based sources.
In his speech, Hanafiah said since 1999, RHB Mudharabah Fund had contributed about RM2.9 million to charitable organisations and orphanages, while RHB Islamic Growth Fund contributed RM240,000 to 60 needy students last year.
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.
China REIT finds rent missing, asks for revaluation
TheEdge
HONG KONG: Chinese property trust RREEF China Commercial Trust said on Tuesday it had asked for an independent valuation of its Beijing office complex after it discovered tenants were paying less rent than expected.
In a case that highlights the risks in China's booming but immature property market, the Hong Kong-listed real estate investment trust (REIT) said actual rents paid by tenants were lower than outlined in tenancy agreements.
The trust, managed by Deutsche Bank's property investment arm, RREEF, said the former landlord of its Beijing Gateway Plaza building, Tin Lik, had agreed to pay HK$278,526,708 (RM125.3 million) in compensation for the missing rent.
A spokesman for the company said the amount was equal to the shortfall for the remainder of tenancy agreements at the building, which was bought by the REIT and packaged into a June initial public offering.
"Mr Tin Lik has agreed to make further payment should that be necessary," RREEF China said in the statement.
"Because of the payment, the manager considers that RREEF CCT will not suffer a shortfall of rental revenue by reason of the discrepancies identified."
Tin Lik could not immediately be reached for comment.
RREEF China said it was investigating the rental shortfall, which the former landlord had attributed to "pre-leasing rental concessions to tenants" documented in agreements that had not been disclosed to the REIT manager.
RREEF China's units were at HK$4.52 before trading was suspended on Sept 6, pending Tuesday's announcement, 12% below their June IPO price, and giving a 2007 dividend yield of 7.05%.
Trading in the units would resume on Tuesday, the statement said.
Although China has not yet drawn up rules allowing REITs, two property trusts of only mainland Chinese assets are listed in Hong Kong - RREEF China and GZI REIT - and the CapitaRetail China Trust is listed in Singapore.
REITs, which pay most of their rental income as dividends, have caught on across Asia in the last five years because they give higher yields than bonds but tend to be less volatile than stocks.
Many investors are eager for China to pass REIT legislation to allow them to tap rental growth in a booming property market without having to buy a whole building. Because REIT units are traded, they are seen as less risky than direct investment. - 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.
HONG KONG: Chinese property trust RREEF China Commercial Trust said on Tuesday it had asked for an independent valuation of its Beijing office complex after it discovered tenants were paying less rent than expected.
In a case that highlights the risks in China's booming but immature property market, the Hong Kong-listed real estate investment trust (REIT) said actual rents paid by tenants were lower than outlined in tenancy agreements.
The trust, managed by Deutsche Bank's property investment arm, RREEF, said the former landlord of its Beijing Gateway Plaza building, Tin Lik, had agreed to pay HK$278,526,708 (RM125.3 million) in compensation for the missing rent.
A spokesman for the company said the amount was equal to the shortfall for the remainder of tenancy agreements at the building, which was bought by the REIT and packaged into a June initial public offering.
"Mr Tin Lik has agreed to make further payment should that be necessary," RREEF China said in the statement.
"Because of the payment, the manager considers that RREEF CCT will not suffer a shortfall of rental revenue by reason of the discrepancies identified."
Tin Lik could not immediately be reached for comment.
RREEF China said it was investigating the rental shortfall, which the former landlord had attributed to "pre-leasing rental concessions to tenants" documented in agreements that had not been disclosed to the REIT manager.
RREEF China's units were at HK$4.52 before trading was suspended on Sept 6, pending Tuesday's announcement, 12% below their June IPO price, and giving a 2007 dividend yield of 7.05%.
Trading in the units would resume on Tuesday, the statement said.
Although China has not yet drawn up rules allowing REITs, two property trusts of only mainland Chinese assets are listed in Hong Kong - RREEF China and GZI REIT - and the CapitaRetail China Trust is listed in Singapore.
REITs, which pay most of their rental income as dividends, have caught on across Asia in the last five years because they give higher yields than bonds but tend to be less volatile than stocks.
Many investors are eager for China to pass REIT legislation to allow them to tap rental growth in a booming property market without having to buy a whole building. Because REIT units are traded, they are seen as less risky than direct investment. - 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.
Public Mutual raises fund size
BusinessTimes
PUBLIC Mutual Bhd has increased the size of its Public Far-East Property & Resorts Fund to 3.375 billion units due to strong demand from investors. Launched in July this year, this is the second time the company has increased the equity fund's size. The fund is suitable for investors with moderate risk-reward temperament who wish to participate in the long-term growth potential of property investments in the region.
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 Bhd has increased the size of its Public Far-East Property & Resorts Fund to 3.375 billion units due to strong demand from investors. Launched in July this year, this is the second time the company has increased the equity fund's size. The fund is suitable for investors with moderate risk-reward temperament who wish to participate in the long-term growth potential of property investments in the region.
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.
New scheme from Hong Leong Tokio
TheStar
KUALA LUMPUR: Hong Leong Tokio Marine Takaful Bhd has introduced its first capital protection investment-linked scheme, in which returns are benchmarked against the performance of property-related indices or commodities.
Chief executive officer Ezamshah Ismail said the scheme, based on the concepts of Murabahah and Wa'd, was an affordable investment instrument.
He said its returns at maturity were benchmarked against the performance of indices such as the European Public Real Estate Index and the Tokyo Stock Exchange real estate investment trust (REIT) index.
Initial investment starts from RM10,000 with an upfront fee of 3%. “There is also takaful protection of up to 125% of a single contribution,” Ezamshah said at the product launch yesterday.
The three-year syariah-compliant scheme is managed by Hong Leong Tokio Marine Takaful, with Citibank Bhd as the structure provider. It is distributed by Hong Leong Bank.
Hong Leong Bank general manager, wealth management, Karen Ng said the product had a wide target market.
“It is for any individual who wants to always remain invested in global markets,” she said.
Ezamshah, meanwhile, said the company would introduce more products in the future. “The economic (growth) is still on an uptrend,” he said, adding that new products would be driven by market demand.
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.
KUALA LUMPUR: Hong Leong Tokio Marine Takaful Bhd has introduced its first capital protection investment-linked scheme, in which returns are benchmarked against the performance of property-related indices or commodities.
Chief executive officer Ezamshah Ismail said the scheme, based on the concepts of Murabahah and Wa'd, was an affordable investment instrument.
He said its returns at maturity were benchmarked against the performance of indices such as the European Public Real Estate Index and the Tokyo Stock Exchange real estate investment trust (REIT) index.
Initial investment starts from RM10,000 with an upfront fee of 3%. “There is also takaful protection of up to 125% of a single contribution,” Ezamshah said at the product launch yesterday.
The three-year syariah-compliant scheme is managed by Hong Leong Tokio Marine Takaful, with Citibank Bhd as the structure provider. It is distributed by Hong Leong Bank.
Hong Leong Bank general manager, wealth management, Karen Ng said the product had a wide target market.
“It is for any individual who wants to always remain invested in global markets,” she said.
Ezamshah, meanwhile, said the company would introduce more products in the future. “The economic (growth) is still on an uptrend,” he said, adding that new products would be driven by market demand.
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.
The 80:20 rule on asset allocation
TheStar
To protect ourselves from the present market volatility, investors can consider using the simple “80:20 rule” on asset allocation — invest up to 80% when the market is bullish and reduce to 20% if the market is in for a big correction.
Q: GIVEN the uncertainties over the future direction of the stock market, what should I do now?
A: Despite all the goodies from Budget 2008, our market was unable to escape from the effects of sharp drop in the US market.
The weaker-than-expected US job data raised concerns over a possible economic recession soon. At present, given that our market is highly influenced by the performance of the overseas markets, some retailers have started to feel uneasy, mulling over whether to sell all their shares and hold only cash, or continue holding on to their stocks given our positive economic outlook for next year.
It is always difficult to time the stock market. It requires the ability to depart from a normal investment stance when the market offers an unusual opportunity. Hence, to stay on top, investors need to be able to act in contrary to a misguided consensus with a thorough analysis on the risks and rewards.
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.
To protect ourselves from the present market volatility, investors can consider using the simple “80:20 rule” on asset allocation — invest up to 80% when the market is bullish and reduce to 20% if the market is in for a big correction.
Q: GIVEN the uncertainties over the future direction of the stock market, what should I do now?
A: Despite all the goodies from Budget 2008, our market was unable to escape from the effects of sharp drop in the US market.
The weaker-than-expected US job data raised concerns over a possible economic recession soon. At present, given that our market is highly influenced by the performance of the overseas markets, some retailers have started to feel uneasy, mulling over whether to sell all their shares and hold only cash, or continue holding on to their stocks given our positive economic outlook for next year.
It is always difficult to time the stock market. It requires the ability to depart from a normal investment stance when the market offers an unusual opportunity. Hence, to stay on top, investors need to be able to act in contrary to a misguided consensus with a thorough analysis on the risks and rewards.
According to a groundbreaking study in 1986 by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower titled Determinants of Portfolio Performance, asset allocation affects more than 90% of portfolio performance. Hence, in view of the uncertainties over the future direction of the stock market, we need to make the appropriate asset allocations to hedge against any risks as a result of big volatility in the stock market.
Assuming investors have only two types of asset classes in one portfolio, i.e. cash and stocks, we would suggest that the asset allocation ratio between cash and stocks should always be 20:80.
If there are any uncertainties over the future market direction, investors should reduce their equity exposure on a staggered basis to 20%. The remaining 80% of the assets will be in cash.
However, if the market has dropped to a very low level and the overall market sentiment starts to turn bullish, we will increase our equity exposure to a limit of 80% and maintain 20% in cash.
The main reason for setting an upper limit for stock investments at 80% is the fact that stock price movements are always unpredictable and random. Unless there is a very attractive opportunity, we should always try to maintain a minimum 20% cash in the portfolio.
If more than 80% of our portfolio is invested in equity, any increase in stock prices would be a good opportunity to sell down to our target level of 80% in stocks and 20% cash.
If the stock market touches a new high and starts to show signs of a correction, investors need to consider adjusting down their equity exposure to about 20%.
However, the 20% invested level is with the assumption that the economy remains intact and the outlook positive. We should only start to increase the invested percentage when the market has found a bottom and shows a clearer outlook.
Besides, investors may need to set a target floor level, which is the maximum loss that they can tolerate.
According to Andre F. Perold and William F. Sharpe in their study titled Dynamic Strategies for Asset Allocation, one of the suggested methods is called Constant-Proportion Portfolio Insurance (CPPI).
This method entails setting a floor limit for the inventor’s portfolio based on his tolerance level. If the overall portfolio drops below this floor level, the portfolio will hold only cash and has no exposure in equity. This method is found to be quite useful in a super bear market when the economy slips into recession.
The above simple “80:20” rule is just a basic guide on asset allocation and is not foolproof. The ultimate asset allocation is still dependent on the stock market outlook and investors’ risk tolerance. (This rule is not the same as the Pareto Principle (also known as the 80:20 rule), as the latter states that 80% of the consequences stem from 20% of the causes).
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.
Thursday, September 6, 2007
Public Bank to launch Islamic regional fund
TheEdge
KUALA LUMPUR: Public Bank will launch its first Islamic regional sector fund, PB Islamic Asia Strategic Sector Fund tomorrow (Sept 6), which will invest in securities, mainly equities, in domestic and regional markets.
The fund will be managed by its unit, Public Mutual Bhd, and it will seek long-term capital appreciation and 50% to 90% of the fund’s net asset value (NAV) can be invested in markets.
Public Mutual chairman Tan Sri Teh Hong Piow said yesterday these markets included Japan, South Korea, China, Taiwan, Hong Kong, India, the Philippines, Indonesia, Singapore, Thailand, Australia, New Zealand and other approved markets
“The equity exposure of the fund will generally range from 75% to 90% of its NAV,” he said.
The fund would invest in three to six most promising market sectors, which include basic materials, communications, consumer (cyclical and non-cyclical), diversified, industrial and technology.
Teh said Public Mutual would adopt top-down approach to analyse factors such as macro economic outlook, business cycles income levels and demographic trends of various regional markets, and bottom-up approach to determine which industries and sectors would perform well based on the analysis.
The fund’s initial offer price is 25 sen per unit. The minimum initial investment is RM1,000 and the minimum additional investment is RM100. The offer period ends on Sept 26, 2007.
During the offer period, the promotional service charge is 5.45% of NAV per unit. Investors subscribing for direct debit instruction with the fund will also be charged 5.45% of NAV per unit for its services as long as it is active.
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.
KUALA LUMPUR: Public Bank will launch its first Islamic regional sector fund, PB Islamic Asia Strategic Sector Fund tomorrow (Sept 6), which will invest in securities, mainly equities, in domestic and regional markets.
The fund will be managed by its unit, Public Mutual Bhd, and it will seek long-term capital appreciation and 50% to 90% of the fund’s net asset value (NAV) can be invested in markets.
Public Mutual chairman Tan Sri Teh Hong Piow said yesterday these markets included Japan, South Korea, China, Taiwan, Hong Kong, India, the Philippines, Indonesia, Singapore, Thailand, Australia, New Zealand and other approved markets
“The equity exposure of the fund will generally range from 75% to 90% of its NAV,” he said.
The fund would invest in three to six most promising market sectors, which include basic materials, communications, consumer (cyclical and non-cyclical), diversified, industrial and technology.
Teh said Public Mutual would adopt top-down approach to analyse factors such as macro economic outlook, business cycles income levels and demographic trends of various regional markets, and bottom-up approach to determine which industries and sectors would perform well based on the analysis.
The fund’s initial offer price is 25 sen per unit. The minimum initial investment is RM1,000 and the minimum additional investment is RM100. The offer period ends on Sept 26, 2007.
During the offer period, the promotional service charge is 5.45% of NAV per unit. Investors subscribing for direct debit instruction with the fund will also be charged 5.45% of NAV per unit for its services as long as it is active.
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 unveils new fund
TheStar
KUALA LUMPUR: AmInvestment Bank Group is confident that its latest product, AmDual Opportunities - Capital Protected, will provide annual returns of 6% to 8% on the potential upside arising from the expected volatility in the euro against the US dollar over the next two years.
Managing director Kok Tuck Cheong said the fund was unique as it had two-pronged returns.
“The first portion comes from the volatility of the euro against the dollar. The payout will be based on the difference between an average of the six best and the average of the six worst monthly movements in the euro and the dollar.
“The second is an additional payout of 5% if the initial payout is above a certain level,” he said at the fund launch yesterday.
According to Kok, the fund will invest primarily (minimum 90%) in two-year zero-coupon negotiable instruments of deposit to provide capital protection.
Kok Tuck Cheong and AmInvesment Bank Group, chief investment officer, fixed income, Yvonne Phe Kheng Peng
The euro is expected to be volatile due to factors such as the US subprime mortgage crisis as well as rising oil prices, which may lead to higher inflation and increased interest rates.
Kok said the fund was ideal for risk-averse investors who want to preserve their capital and at the same time enjoy yearly returns, depending on market performance.
AmDual Opportunities - Capital Protected has a total approved fund size of 300 million units priced at RM1 each during the initial offer period ending Oct 2.
The minimum initial investment is RM5,000 and the minimum additional 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.
Sunday, September 2, 2007
Tools to defy the myth - Part 2
TheStar
Creating and enhancing wealth is only half the battle. Will it outlast the proverbial 3-generation barrier?, writes CIMB Private Banking and CIMB Trustee Services in this conclusion of a two-part series
AS families become more prosperous and their businesses flourish, the task of managing and retaining the wealth and businesses gets increasingly complex. This is why many people believe that the chances of these family-owned money and other assets remaining intact beyond the third generation are slim.
Hence we have the Chinese saying: “Wealth never survives three generations.” And there is a Western equivalent: “From shirtsleeves to shirtsleeves in three generations.”
However, CIMB Investment Bank director and head of securities and trustee services Yap Huey Hoong, who oversees matters relating to trustee services such as succession and distribution, points out that a handful of families have avoided this pitfall by coming up with a family holding structure or an estate succession plan.
“Creating a family holding structure for succession requires a lot of thought. Deciding who gets the baton can be difficult and even heart-wrenching, as the choice involves emotions and can at times create friction in the family,” she says.
“We have seen many cases in which the founders, in trying to be fair, have given their children equal shares of the businesses, irrespective of whether they are good at running the businesses, or whether they are even interested.”
It is also common to see many a wealthy founder facing a dilemma when his daughter is far more capable or astute than the eldest son. Yet, the latter is the person most often designated to be the founder's successor. This is especially true among Asian families.
Says Yap: “It is clear that such succession and family structuring decisions are not easy. However, without a proper family holding structure and a succession plan, one is simply deferring a difficult decision to the next generation, thus forgoing a chance to preserve the family wealth and success of the business.”
The affluent, she adds, should seek the advice of professionals when establishing a family holding structure. “Having professional trustee advisors is important as they will devote their full attention to structuring a trust in accordance to one’s personal needs, goals and wishes,” she explains.
For generations, many wealthy American and European families have been relying on trust structures to preserve their family wealth. A trust is a good gatekeeper that can help hold together family businesses and wealth. The founder can use a trust to help him create a family holding structure to protect the business he has built. By doing this, he prevents the family business from being split into fragmented parts, with many different shareholders who may have varying expectations and requirements.
“Using a trust as a family holding structure also ensures that the business and wealth is kept intact and is passed down to the next generations in an orderly manner,” says Yap.
Another advantage of the family holding structure is that it protects the family's businesses and wealth in cases when the family members lack the business acumen to succeed the founder or when they are just too young to manage the wealth.
Yap advises that when identifying a suitable trust holding structure, it is important to overlay this by identifying a decision maker to succeed the founder and to lead the family business or to make decisions relating to the family wealth.
It can take years to work out successful succession planning. Founders or decision makers need to set in place the chosen plan and parameters, groom the successors and monitor their performance.
When picking a decision maker, openness and communication between the founder, the successor and the other family members are important. This includes understanding their own needs and the family’s needs versus the needs of the business.
One has to set clear goals for the successor and there has to be an ongoing inter-generational dialogue between the senior generations and the successors. In choosing a suitable candidate to lead the family business, it is also important to hire career professionals as the company’s managers.
Yap reveals that unlike Asians, Europeans are more willing to accept a professional running the family companies. The Europeans clearly see the hiring of professionals as a solution to keep the family intact and to keep family members away from day-to-day operations, as their participation can lead to disputes.
The Rockefeller family is a well-documented example of the survival of family wealth going beyond three generations.
The Rockefellers are a famous American industrial and banking family. Their wealth was built on a business empire founded by John Davison Rockefeller and his brother, William. This is a classic example of a complicated family business that could have dissipated as the family grew into multiple branches.
Instead, thanks to the founders' vision and plans, the Rockefeller family wealth has survived for over 140 years or six generations. The masterstroke was the setting up of the family trusts in 1934, which have locked up most of the wealth.
A powerful trust committee of decision makers govern the Rockefeller family trust structures. As at November 2006, there are over 160 members of the Rockefeller family, with aggregated wealth of over US$10bil.
This is a valuable lesson for families and founders who do not believe that their wealth can last for more than three generations.
Says Yap, “The failure of a family to preserve its wealth and business is not a curse. With proper preparation and most importantly, early planning and openness and communication amongst family members, this third-generation myth should remain just a myth, at least for those with the foresight to not leave anything to chance.”
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.
Creating and enhancing wealth is only half the battle. Will it outlast the proverbial 3-generation barrier?, writes CIMB Private Banking and CIMB Trustee Services in this conclusion of a two-part series
AS families become more prosperous and their businesses flourish, the task of managing and retaining the wealth and businesses gets increasingly complex. This is why many people believe that the chances of these family-owned money and other assets remaining intact beyond the third generation are slim.
Hence we have the Chinese saying: “Wealth never survives three generations.” And there is a Western equivalent: “From shirtsleeves to shirtsleeves in three generations.”
However, CIMB Investment Bank director and head of securities and trustee services Yap Huey Hoong, who oversees matters relating to trustee services such as succession and distribution, points out that a handful of families have avoided this pitfall by coming up with a family holding structure or an estate succession plan.
“Creating a family holding structure for succession requires a lot of thought. Deciding who gets the baton can be difficult and even heart-wrenching, as the choice involves emotions and can at times create friction in the family,” she says.
“We have seen many cases in which the founders, in trying to be fair, have given their children equal shares of the businesses, irrespective of whether they are good at running the businesses, or whether they are even interested.”
It is also common to see many a wealthy founder facing a dilemma when his daughter is far more capable or astute than the eldest son. Yet, the latter is the person most often designated to be the founder's successor. This is especially true among Asian families.
Says Yap: “It is clear that such succession and family structuring decisions are not easy. However, without a proper family holding structure and a succession plan, one is simply deferring a difficult decision to the next generation, thus forgoing a chance to preserve the family wealth and success of the business.”
The affluent, she adds, should seek the advice of professionals when establishing a family holding structure. “Having professional trustee advisors is important as they will devote their full attention to structuring a trust in accordance to one’s personal needs, goals and wishes,” she explains.
For generations, many wealthy American and European families have been relying on trust structures to preserve their family wealth. A trust is a good gatekeeper that can help hold together family businesses and wealth. The founder can use a trust to help him create a family holding structure to protect the business he has built. By doing this, he prevents the family business from being split into fragmented parts, with many different shareholders who may have varying expectations and requirements.
“Using a trust as a family holding structure also ensures that the business and wealth is kept intact and is passed down to the next generations in an orderly manner,” says Yap.
Another advantage of the family holding structure is that it protects the family's businesses and wealth in cases when the family members lack the business acumen to succeed the founder or when they are just too young to manage the wealth.
Yap advises that when identifying a suitable trust holding structure, it is important to overlay this by identifying a decision maker to succeed the founder and to lead the family business or to make decisions relating to the family wealth.
It can take years to work out successful succession planning. Founders or decision makers need to set in place the chosen plan and parameters, groom the successors and monitor their performance.
When picking a decision maker, openness and communication between the founder, the successor and the other family members are important. This includes understanding their own needs and the family’s needs versus the needs of the business.
One has to set clear goals for the successor and there has to be an ongoing inter-generational dialogue between the senior generations and the successors. In choosing a suitable candidate to lead the family business, it is also important to hire career professionals as the company’s managers.
Yap reveals that unlike Asians, Europeans are more willing to accept a professional running the family companies. The Europeans clearly see the hiring of professionals as a solution to keep the family intact and to keep family members away from day-to-day operations, as their participation can lead to disputes.
The Rockefeller family is a well-documented example of the survival of family wealth going beyond three generations.
The Rockefellers are a famous American industrial and banking family. Their wealth was built on a business empire founded by John Davison Rockefeller and his brother, William. This is a classic example of a complicated family business that could have dissipated as the family grew into multiple branches.
Instead, thanks to the founders' vision and plans, the Rockefeller family wealth has survived for over 140 years or six generations. The masterstroke was the setting up of the family trusts in 1934, which have locked up most of the wealth.
A powerful trust committee of decision makers govern the Rockefeller family trust structures. As at November 2006, there are over 160 members of the Rockefeller family, with aggregated wealth of over US$10bil.
This is a valuable lesson for families and founders who do not believe that their wealth can last for more than three generations.
Says Yap, “The failure of a family to preserve its wealth and business is not a curse. With proper preparation and most importantly, early planning and openness and communication amongst family members, this third-generation myth should remain just a myth, at least for those with the foresight to not leave anything to chance.”
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.
Saturday, September 1, 2007
Sovereign wealth funds can influence markets
TheStar
PETALING JAYA: Regional markets are bracing for the impact of the sovereign wealth funds (SWFs), which a Bloomberg report on July 29 said controlled an estimated US$2.5tril.
These funds, whose controlling assets are larger than the hedge fund industry and are run by highly qualified teams under government mandates, are expected to make an impact on markets and economies.
Meanwhile, the Chicago-based Hedge Fund Research Inc estimated that hedge fund assets amounted to US$1.7tril year-to-date, a 22% increase from the end of last year.
However, this could be misleading as hedge funds leverage many times the worth of their assets. In contrast, SWFs were unlikely to leverage, said Rating Agency Malaysia Bhd (RAM) chief economist Dr Yeah Kim Leng, who elaborated on SWFs in a paper at a conference organised by RAM last month.
“The purpose is to invest the country's excess funds and not (for the Government) to borrow money to invest for maximum returns,” Yeah said.
Morgan Stanley in a report on Aug 24 said SWFs would be one of the most important structural factors for the financial markets in the coming years.
“We have written on SWFs and urged investors to pay more attention to what we believe will be one of the key themes in the coming years,” Morgan Stanley said.
However, the report focused on another class of sovereign funds.
“A close cousin to the SWFs, sovereign pension funds (SPFs) also have great potential to augment the impact of the sovereign funds,” it said.
Morgan Stanley believes that the SPFs in many countries would become much more outward-oriented than before, “just like the SWFs,” adding that the home bias was likely to decline sharply for many of these massive funds, with important implications for the international capital markets.
“We urge investors to pay attention to this category of funds,” said Morgan Stanley, citing Singapore's GIC, Australia's Future Fund, New Zealand's Superannuation Fund, South Korea's NPS and Japan's GPIF.
As to how and when SWFs would influence markets and to what extent, analysts and economists from both local and foreign investment houses said the information was hard to come by.
KSC Capital director of research Choong Khuat Hock ventured a guess that mining, oil and gas, and plantation companies could see a boost in asset prices.
“If they (SWFs) come in, it will definitely push up the value of the assets of these resource-oriented companies,” he said, but added that this would depend on the strategic interest of the fund from that particular country.
Owing to the rapid growth in China's foreign reserves, the scope of growth was greater for China's sovereign funds than others in the region, Choong said.
China's newly set up China Investment Corp manages US$200bil versus the Singapore's GIC (US$200bil), Australia's Future Fund (US$40bil) and South Korea's Korea Investment Corp (US$20bil).
The United Arab Emirates' Abu Dhabi Investment Authority manages US$875bil.
Yeah said where and how sovereign funds would flow depended on strategic objectives relevant to the national economy.
“With the size and market influence of any such funds, they would have to strike a balance between transparency and the market impact of disclosures,” he said.
Malaysia's Employees Provident Fund would be a good example of the kind of market impact SWFs could have in reporting their investment decisions, he added.
Sovereign funds would also operate in a very broad-based way, using multiple avenues to invest their funds and Morgan Stanley even suggested that they would be an important source of foreign direct investment rather than just portfolio investment.
As for private sector management of some of these funds, Yeah said that it would be more for competition and benchmarking of the various governments' own asset managers rather than the tapping of expertise.
With a global consensus among economists of a weakening of the US dollar and the US economy being burdened by the twin current account and fiscal deficits, Yeah expects sovereign funds to the region to flow substantially, given the consistently high economic growth among Asian economies.
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.
PETALING JAYA: Regional markets are bracing for the impact of the sovereign wealth funds (SWFs), which a Bloomberg report on July 29 said controlled an estimated US$2.5tril.
These funds, whose controlling assets are larger than the hedge fund industry and are run by highly qualified teams under government mandates, are expected to make an impact on markets and economies.
Meanwhile, the Chicago-based Hedge Fund Research Inc estimated that hedge fund assets amounted to US$1.7tril year-to-date, a 22% increase from the end of last year.
However, this could be misleading as hedge funds leverage many times the worth of their assets. In contrast, SWFs were unlikely to leverage, said Rating Agency Malaysia Bhd (RAM) chief economist Dr Yeah Kim Leng, who elaborated on SWFs in a paper at a conference organised by RAM last month.
“The purpose is to invest the country's excess funds and not (for the Government) to borrow money to invest for maximum returns,” Yeah said.
Morgan Stanley in a report on Aug 24 said SWFs would be one of the most important structural factors for the financial markets in the coming years.
“We have written on SWFs and urged investors to pay more attention to what we believe will be one of the key themes in the coming years,” Morgan Stanley said.
However, the report focused on another class of sovereign funds.
“A close cousin to the SWFs, sovereign pension funds (SPFs) also have great potential to augment the impact of the sovereign funds,” it said.
Morgan Stanley believes that the SPFs in many countries would become much more outward-oriented than before, “just like the SWFs,” adding that the home bias was likely to decline sharply for many of these massive funds, with important implications for the international capital markets.
“We urge investors to pay attention to this category of funds,” said Morgan Stanley, citing Singapore's GIC, Australia's Future Fund, New Zealand's Superannuation Fund, South Korea's NPS and Japan's GPIF.
As to how and when SWFs would influence markets and to what extent, analysts and economists from both local and foreign investment houses said the information was hard to come by.
KSC Capital director of research Choong Khuat Hock ventured a guess that mining, oil and gas, and plantation companies could see a boost in asset prices.
“If they (SWFs) come in, it will definitely push up the value of the assets of these resource-oriented companies,” he said, but added that this would depend on the strategic interest of the fund from that particular country.
Owing to the rapid growth in China's foreign reserves, the scope of growth was greater for China's sovereign funds than others in the region, Choong said.
China's newly set up China Investment Corp manages US$200bil versus the Singapore's GIC (US$200bil), Australia's Future Fund (US$40bil) and South Korea's Korea Investment Corp (US$20bil).
The United Arab Emirates' Abu Dhabi Investment Authority manages US$875bil.
Yeah said where and how sovereign funds would flow depended on strategic objectives relevant to the national economy.
“With the size and market influence of any such funds, they would have to strike a balance between transparency and the market impact of disclosures,” he said.
Malaysia's Employees Provident Fund would be a good example of the kind of market impact SWFs could have in reporting their investment decisions, he added.
Sovereign funds would also operate in a very broad-based way, using multiple avenues to invest their funds and Morgan Stanley even suggested that they would be an important source of foreign direct investment rather than just portfolio investment.
As for private sector management of some of these funds, Yeah said that it would be more for competition and benchmarking of the various governments' own asset managers rather than the tapping of expertise.
With a global consensus among economists of a weakening of the US dollar and the US economy being burdened by the twin current account and fiscal deficits, Yeah expects sovereign funds to the region to flow substantially, given the consistently high economic growth among Asian economies.
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.
Equity fund buying into Masterskill
TheStar
PETALING JAYA: A consortium led by Crescent Point Group is selling part of its 95% stake in Masterskill (M) Sdn Bhd, which operates the Masterskill College of Nursing and Health, to another equity fund, sources said.
The participation of the new shareholder would help strengthen the company’s shareholding and “add more value” to it, a source told StarBiz.
It added that the next possible move for the company was an initial public offering.
Given the current acute shortage of professional nurses worldwide, the rapid growth achieved by the nursing college was attractive to the new shareholder, which was constantly exploring promising investments, the source noted.
The rapid growth achieved by the nursing college is attractive to the new shareholder.
The company achieved an unaudited pre-tax profit of RM24mil on revenue of RM50mil for the financial year ended Dec 31, 2006. It posted a net profit of RM1mil on revenue of RM18mil in 2005.
Crescent Point formed a consortium to take over the nursing college in January. Masterskill is Crescent Point's second investment in Malaysia after AirAsia Bhd.
The investment house was the second largest shareholder before the low-cost carrier’s IPO in 2004.
Masterskill College’s core activities include training and producing qualified professional nurses and allied health graduates to serve at the local government hospitals and private medical centres.
Having Crescent Point as a shareholder would help broaden its horizon. Crescent Point partner and managing director Richard Scanlon was quoted as saying in January that there was a possibility of leveraging on Crescent Point’s strong ties in the Middle East to help Masterskill expand its business there.
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.
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