Thursday, May 29, 2008

Great Eastern targets RM100m sales


KUALA LUMPUR: Great Eastern Life Assurance (Malaysia) Bhd is targeting sales of RM100 million for its newly launched single premium investment-linked plan.

In a statement yesterday, Great Eastern said the policyholder pays a one-time premium to put the policy into effect and the Centennial Max Plan had a minimum investment of RM20,000.

The company said it would invest in a five-year structured product that would provide capital protection as well as generate high and consistent returns. The plan also includes insurance coverage on death and total permanent disability.

Great Eastern said based on historical back-testing, the Centennial Max Plan targeted to give an average return of 74.2% upon maturity of the plan, which would potentially hit up to 160.7% return over five years.

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, May 28, 2008

AmDividend Income gets 0.5 sen income distribution per unit


KUALA LUMPUR: AmMutual has declared an interim income distribution of 0.5 sen per unit for its AmDividend Income for the financial year ending Nov 30, 2008.

In a statement yesterday, AmBank group’s funds management division chief executive officer Datin Maznah Mahbob said the semi-annual income distribution represented a yield of 2.04% investment return based on the net asset value (NAV) per unit of 24.45 sen as at Nov 30, 2007.

“As at April 30, 2008, the fund delivered a one-year return of 7.92%, outperforming the Bursa Malaysia Kuala Lumpur Composite Index (KLCI) by 11.13%,” she said.

“The fund has outperformed because of high exposure in sectors like palm oil and finance. Another factor was the cash and equity asset allocation switching strategy.”

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

ING Funds sees RM50m sales from partnership


KUALA LUMPUR: ING Funds Bhd is confident its tie-up with Perpetual Trustees Bhd to offer trust services will add RM50mil to its assets under management within the next six months.
Currently, the firm's assets under management stand at RM2.5bil.

Chief executive officer Steve Ong said the setting up of investment trusts with Perpetual Trustees provided investors with a one-stop wealth management solution for asset accumulation, protection and distribution.

“Having your money managed independently through a trust structure provides peace of mind to investors who can designate specific investment trusts to meet their personal and family financial obligations,” he said.

Ong said this at an agreement signing yesterday between ING Funds and Perpetual Trustees to formalise their alliance in offering ING Funds Investment Trusts.

He added that the launch of the service was “timely”, given that investors had become more sophisticated and “demanding”.

Perpetual Trustees general manager Sheela Vasuthevan said under the new offering, an investor could choose to create an educational investment trust plan, an inheritance retirement investment trust plan or a lifestyle investment trust plan.

“By doing so, the investor specifically invests for a particular purpose and the investment is protected and governed by a trust deed. This trust will then be administered by the trustee,” she said.

Perpetual Trustees is an associate company of ING Management Holdings Sdn Bhd, the holding company of ING Insurance Bhd and ING Funds.

Sheela said the tie-up was the first for Perpetual Trustees. “We will consider future tie-ups with other fund management firms, depending on the demand and response for this product,” she said.

ING Funds Investment Trusts is open to new and existing ING Funds investors, Ong said.

At least two new products were in the pipeline, he said, adding: “Capital-protected products are in demand now.”

Meanwhile, Ong said there were still investment opportunities in the current market.

“You are not buying the whole market. High-dividend stocks, especially those which have been sold down, remain attractive,” 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.

Tuesday, May 20, 2008

Fund managers turn defensive


Five fund managers and heads of research shared their views on the stock market and favourite stocks at a roundtable discussion at Menara Star. The participants were Aseambankers Equity Research head Vincent Khoo, Bhd head Tan Teng Boo, Meridian Asset Management chief investment officer Tan Beng Ling, CIMB-Principal Asset Management chief investment officer Raymond Tang and TA Securities Holdings Bhd head of research Kaladher Govindan.

Oil-based revenue, directly and indirectly, is financing about 45% of the government budget today.

StarBiz: There has been some renewed interest in stocks other than plantations. Do you expect this interest in certain sectors or stocks to continue?

Khoo: Obviously, the risk appetite has improved since March but we remain cautious of external headwinds. The US faces stagflation, with oil prices hitting new highs. This heightens worries that at some point, global economies are going to be weakened substantially.

Are the funds overweight somewhere else or underweight everywhere?

Khoo: If you look at the share price performance of regional equities, there have been quite good recovery in badly hit markets such as Singapore. The funds are probably still overweight in the big markets.

The world could live with a US$100 oil price. Do you think the markets will take it gently at this level of US$125 or, if Goldman Sachs has it right, that it may go to US$150 and above?

Beng Ling: If you look at the numbers that are coming out, you may see the scenario of stagflation. Like Vincent, I’m a bit wary of the external front as well. In Malaysia, we have to admit that, unlike half a year ago, we have the political baggage that we are carrying, which perhaps explains why our market did not rebound as much as regionally.

Looking back with hindsight from the political tsunami, certain stocks came back quite well and it was a good buying opportunity.

Beng Ling: There were stocks that were dragged down in panic. These were not politically-linked stocks but with proven management and good balance sheet. These are the stocks that rebounded faster. But there are stocks that are more dependent on policy changes, for example, construction. Of course, construction stocks were also hit because of the rising prices of building materials. So it has become a very thematic market but overall market breadth is not quite there.

Do you agree with Beng Ling that political uncertainties are holding investors back from the market?

Tang: Yes I agree. It is not a change in government yet but a loss in a super majority. It’s quite a milestone in Malaysian politics. Unlike the Philippines and Thailand, which are used to changing governments, we are not. Therefore, investors look at us and say we don’t have experience or they've no memory of such a change compared to Thailand. When the Thai coup happened, it was business as usual. I would expect as time goes on, foreigners will form that kind of opinion of us too.

Foreign fund managers told us they were surprised and pleased that the handover of state governments was made with no problems or unrest on the streets. It showed the political maturity of both parties that they accepted the change although they might have not liked it.

The market requires political analysis now, not just economic analysis. But back to economic issues – do you think inflation will reduce consumer spending?

Beng Ling: Consumption spending will inevitably be affected at some point in time. With oil prices surging and increase in food prices, inflation is going to be a problem. And if I look at the latest export numbers, I’m quite concerned – a drop of over 20% in electronics exports.

Manufacturing exports have been weaker for Malaysia compared with other regional countries. To what extent is this a failure of the private sector and what is the role of the Government in this?

Kaladher: You have to consider what are the structural problems. Our education system is one of the main grouses of foreign investors. We do not have the talent pool of workers required to move up the value chain. Our broadband infrastructure, which is a key element for transactions, operates at a much slower speed than in other countries. Information is key and when you can’t transfer information fast, it partly affects the whole system.

Beng Ling: If you talked to some of the MNCs, they will tell you this – when they come to Malaysia and find the factories full of Indonesian workers, why do they need to come to Malaysia?

Tang: We should move up the value-added curve in commodities. Why don't we build the refineries here and export the final products instead of selling our oil and buying crude oil from Saudi Arabia to refine? If we continue to play the price arbitrage, it is just financial gains. The growth in the GDP is not distributed down to the lower level. It is only captured on the top fragment.

Crude oil is a major component of the GDP which does not reach the man on the street?

It is reaching the man on the street via a subsidy but subsidies do not put money into their pocket. A subsidy reduces the amount you spend but people would rather have money in their pockets than have cheaper goods.

They also want subsidies that take less from their pockets, such as petrol and electricity.

Tang: They are already subsidised and yet we’re still not competitive. It means there are a lot of moving parts in the equation which are not efficient. It could be labour, taxes, shareholding structure or policy. These are components that need to work together and not just relying on cheap electricity and petrol.

Beng Ling: When you talk about electricity being subsidised, there are Tenaga Nasional, IPPs (independent power producers) and consumers. Where does the subsidy go? That is a policy thing.

Tang: If you want to reduce subsidy, reduce the subsidy for manufacturers. Yes, manufacturing is 30% of the economy but where is the added value to the economy? Are we continuing to subsidise so that they can hop along for a few more years?

The man on the street feels that petrol should continue to be subsidised. Do you think we can manage that with our oil export revenue or is it fine in the short-term but could cause problems in the long run?

Khoo: Financially, the Government can afford it. Oil-based revenue, directly and indirectly, is financing about 45% of the government budget today. Petronas can probably be called in to cough out more to support the consumer. The other question is – will it encourage a subsidy mentality and discourage innovation and productivity?

Are there other comments on the petrol subsidy?

Kaladher: If they want to cut the subsidies, the same rule should be applied elsewhere in the supply chain. On the one hand you want to cut the subsidy, on the other hand, you should be doing something about car prices.

Teng Boo: If car prices were 40% to 50% lower than what they are now, a lot of us can afford the extra 20% to 30% increase in petrol prices. So it’s not just petrol price per se. It is because there is no efficiency thrust across the entire economy. If you’re able to achieve that, you can free up a lot of other subsidies and we can still afford petrol prices at RM3 a litre.

Sales taxes on cars are also a subsidy for the Government since it is a major component of tax revenue now.

Teng Boo: That’s a static situation. If you have a very efficient economy, FDIs (foreign direct investments) are going to come in and you will receive revenue from different sources. Singapore and Hong Kong are growing at 7% and both economies are having budget surpluses. Why are we having higher taxes and we’re still running at budget deficit of 3%?

What are the stock picks of your choice?

Khoo: Our picks are based on a short-term horizon without looking for “multi-baggers” against the stagflation scenario. For the meantime, there are stocks that the market may be interested in – these companies are benefiting from strong earnings momentum.

They are Public Bank, UMW Holdings, Ann Joo, Hap Seng Consolidated and Alam Maritim. The large-cap companies are fairly valued in most cases. The deep value is in mid- and small-cap stocks. But we’re still defensive and we want to have a good mix.

Public Bank is more for safety, being the bank with the largest market cap. We like it for its good sustainable yields. UMW is a twin play of oil and gas and auto. Auto is one of the sectors besides steel that we like a lot because it is going to beat consensus forecasts by a wide margin. UMW is trading at 10 times forward earnings. There is a lot of room for upside since historically, the company traded at 13 times. Based on our earnings forecast, we’re 15% ahead of consensus and even with that, we’ve only assumed that auto earnings will be up 10% to 15%.

We like Ann Joo because we believe the second quarter will again surprise on the upside. The first quarter had already surprised, partly because of its low inventory costs. Beyond that, this company, which is trading at a single-digit PE, offers a good transformation story. It’s the first steel company to adopt a mini blast furnace in Malaysia and this brings a structural change to the company, in its ability to lower cost and produce more value added items such as flat products.

Hap Seng Consolidated Bhd is also trading at single-digit PE. It’s more of an opportunistic buy call because it is trading at deep discount to its break-up value, which runs to RM5 a share. It’s a resource play, benefiting from the rise in palm oil prices. It owns 51% of Hap Seng Plantations Bhd. There is also a big run in the prices of fertilisers. Hap Seng is one of the key distributors of fertilisers in Malaysia and Indonesia. This division will see a 10-fold increase in earnings year-on-year from a modest base.

The oil and gas theme will rage on. Alam Maritim is one of those companies growing at least 30%. It is growing also because it has an interesting leaseback strategy which allows it to finance off balance sheet. It is looking into two new areas. The first is fleet ownership which provides 20% returns on a five-year payback period. Secondly it is bidding for an underwater maintenance contract. We believe these initiatives would bear fruit.

Teng Boo: Padini is still strong in our buy list. Local consumption growth is still strong and we like it because of its strong balance sheet. They used to rely on the Vincci brand but now the Padini brand has overtaken it. It will give them a better source of growth in the coming years.

The next one, PIE, was on our 2006 list when I was last at a roundtable here. PIE’s share price has gone up 80% to 90% since. It has a strong balance sheet. Its prospects are still attractive to us.

Tong Herr came down to our buying range. It's another Taiwanese company with a strong balance sheet. Valuations for these three companies are attractive.

Parkson went up a lot but has dropped to a price where valuation is attractive again. The exposure is basically China. This is one of the purest retail plays for exposure to Asian consumer spending. Yet Parkson, listed on Bursa Malaysia, is trading at a hefty discount to Parkson in Hong Kong, which only has Parkson China. Parkson in Malaysia has exposure to Vietnam where, in less than two years, it has four to five outlets that are profitable. We find this kind of divergences pretty attractive.

Our last pick is TM International. If you look at mobile phone companies generally, the valuation of TMI seems to be on the low side.

PIE has done surprisingly well in the electronics sector.

Teng Boo: Its cable harnessing is also doing well because of strong global demand. Their major businesses have donbe well, not just the electronics side.

How comfortable are you that Parkson will stay focused on what it's doing since Lion tends to be diversified?

Teng Boo: If you look at the entire group, they realised strategies in the past were not yielding the results desired. I can’t imagine Parkson Retail in Hong Kong or in Malaysia changing their names, or going into construction or computer assembly. They can go into other business but the massacre will be cruel. I don’t think that's going to happen. Parkson Holding Bhd will stay focused on retail and it is still expanding in Malaysia, Vietnam and China. Their capital expenditure in China is huge.

Beng Ling: I’m looking at stocks that have done worse than the KLCI, which have fallen 15% from the top this year. SP Setia’s share price has weakened by some 30%. You’re buying into the management, brand name and at this stage, they are moving out of the Klang Valley to Penang and Vietnam. This is probably the top property group to buy in Malaysia.

For the construction sector, I like IJM Corp Bhd, which has been bashed down. I don’t have to elaborate on the strong management team. They have a proven track record in Malaysia and overseas. It has property undergoing restructuring and there is a capital repayment following the completion of the exercise. It also has exposure in plantations. The share price has come off some 30% this year.

I like Tan Chong Motor, which is trading at 7 to 8 times PE. They have two very successful models that are set to double its earnings this year. More importantly, there is a change in the Nissan relationship with Tan Chong, which will sustain its long terms earnings prospects.

My next choice is CBIP which makes palm oil mills. With so many plantations setting up, there will be demand for palm oil mills. CBIP is trading at 7 times PE. Whether the palm oil price goes up further or not is not an issue for this company. Muhibbah Engineering’s share price has corrected a bit. The company has proven itself locally and overseas. The group has heavy exposure in the oil and gas sector.

There seems to be some differing views on SP Setia among analysts.

Beng Ling: You have to take a longer view on both SP Setia and IJM, and not expect them to recover in three to six months. They have proven management and it’s a good time to gain exposure.

Is SP Setia's Vietnam story conceptual at this stage?

Beng Ling: It’s interesting that SP Setia was nowhere 10 years ago. It has come a long way. With the same management, I’m confident that they have a good chance of delivery.

How has Tan Chong’s relationship changed with Nissan?

Beng Ling: They took a bold move to build a plant in Serendah, which cemented the relationship with Nissan. There are plans to launch three new models every year. The two newly launched models have a waiting list of six months.

There seems to be concerns over steel input costs for CBIP.

Beng Ling: That is a valid concern but they could pass on the steel costs. The share price has also corrected so much. Typically, plantation stocks are valued to 15 times PE. This proxy is trading at 7 times to 8 times.

Tang: It will be a difficult market this year. We focus on earnings sustainability of companies and transformation of certain firms. One of my picks is the same as Teng Boo's, which is Parkson so I shall not elaborate more on it. Its expansion in China would go beyond the coastal cities. It's looking at second and third tier cities with 15 million to 20 million population. In five years' time, these cities will become first and second tier cities.

The second tier cities will probably take 10 to 15 years to become first tier while third tier cities will take about the same duration to move up to second. You have a long-term sustainable model to move your stores to future markets. It is also buying out a lot of minority shareholders and at cheap valuations. It’s enhancing valuation immediately. It also has revenue sharing in its retail concessions. It is not a normal model where you rent out the shelf space.

Lion Industries Bhd is traded cheaper against its peers because of shareholder risk – it is trading below 5 times PE. We don’t expect it to be rated to the same valuation as its peers, but even going to 7 times, there is a 40% upside potential.

Resorts World Bhd has divested its stake in Star Cruises. It generates cash flow of about RM500mil every year and with that kind of cashflow, it is self-repairing for any balance sheet. Within a year or two, Resorts will be back with a big war chest. They can easily raise a couple more billion to make acquisitions. I don’t think the much-rumoured privatisation is going to happen because it is too costly.

Ramunia is undergoing a major exercise to be taken over by a subsidiary of MISC. When the exercise is completed, MISC will be the biggest shareholder and it will channel a lot of work from its yard to Ramunia. That’s a transformational play.

Dialog is a unique oil and gas play. The company is in project financing and looking at sustainable earnings. They have a share in the projects they build. This is one of the few oil and gas companies that is totally un-geared but with cash.

How long do you think this steel cycle will last?

Tang: It took over a year for investors to latch on to the CPO theme. There were a lot of sceptics in 2005. There was a mental block in the market when the price crossed RM1,500 and people thought it wasn’t sustainable but it went on to RM3,500. In steel, there has been a lot of under-investment in plants. The market wants high-grade cold roll and high-grade hot roll. It does not want the long rolls for construction anymore. They want all these to make cars and so on. The market has shifted to more quality and not quantity.

There were concerns that Ramunia's Indian contract bid was too low.

Tang: That is one of the concerns but we’re looking at the transformation story, which entails the shift of projects to Ramunia from MMHE, the subsidiary of MISC. That will overshadow the Indian contract. If the Indian contract doesn’t flow through, it doesn’t affect the transformation.

Kaladher: Our stock picks are defensive but we’re still bullish on the oil and gas sector. There are about 20 PSCs (production sharing contracts) and 16 new discoveries. Petronas is likely to pump up its capex to RM30bil by 2010 or 2011. Those that are asset heavy, like SapuraCrest, will benefit a lot.

Another stock in the oil and gas sector is Dayang Enterprise. Its profit margins are the best among listed entities at around 25%. This is because they are enjoying economies of scale and their specialty vessels are new. Its 15 months forecast in its IPO was about RM45mil and if you annualised that, it will be around RM35mil. The last six-month performance showed profits of about RM20mil at core level. I believe the company can easily do RM60mil this year and that translates to about 8 times PE.

I’m still bullish over plantation play. I have KL Kepong on my list because it is the cheapest among the three big-cap plantation stocks under our coverage. It is trading at 12 times PE. KLK has a good palm age profile with about 34% at prime age and another 35% of young palms. It is the only plantation player with exposure to rubber prices. Some 13% of its planted areas are rubber trees.

Tanjong plc is defensive in nature with 85% profit contribution from the power sector. Investment in Globeleq is turning around strongly. This year, we’re expecting RM109mil of profit for this financial year. Dividend yield is about 6.5% and EPS is expected to grow about 20% this year. It has RM1bil cash in its balance sheet and the company is looking for merger and acquisition opportunities in South Africa or Asia this year.

LCL Corp is benefiting from the oil boom in the Middle East. It has a RM1.3bil order book and its exposure in India is also huge

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, May 16, 2008

Public Mutual named Best Fund Manager in Asia


KUALA LUMPUR: Public Mutual Bhd has been named “Best Fund Manager in Asia” for the second consecutive year by Dubai-based Failaka Advisors.

Failaka Advisors managing director Mark Smyth presented the award to Public Mutual chairman Tan Sri Teh Hong Piow during Public Mutual's Annual Awards night yesterday.

“In terms of syariah-compliant funds, Public Mutual's funds have once again outperformed the benchmarks by the highest percentages.

“In a market where many clients have demonstrated a preference for Islamic funds, Public Mutual is well placed to take advantage of this demand,” he said before the award presentation.

The Failaka Islamic Fund Awards is an annual award recognised as a standard for excellence in Islamic fund management.

Teh said the award reflected Public Mutual's commitment to providing the utmost value to its unit holders.

“The year ahead will be challenging and competition will remain tough. We will continue to push ourselves and aim higher,” he added.

Public Mutual is the largest private unit trust company in Malaysia and manages 62 funds for more than 1.8 million account holders.

As at Apr 30, the total net asset value of the funds managed by the company was RM27.8bil.
Public Mutual chief executive officer Yeoh Kim Hong said the company would be launching more Islamic funds.

“We are looking at launching more local and region specific Islamic funds, as well as funds that are investing in commodities to met the diverse investor needs.”

“To facilitate growth, we will expand some of our branches and open a few more new branches this year.” she said via e-mail.

Public Mutual currently has 26 branches nationwide

“We will also continue to enhance our customer service, especially our Mutual Gold priority service,” Yeoh 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.

Tuesday, May 13, 2008

AmBank sees 23% return in AmAsia Star


KUALA LUMPUR: The AmBank Group, Malaysia's fifth largest financial services group by assets, is targeting an annual average return of 13.5% to 23% for its newly launched RM200mil AmAsia Star closed-end three-year capital guaranteed investment-linked fund.

AmAsia Star is also the second in the series of AmAsia funds, the first being AmAsia Link, which was launched last September with a fund size of RM100mil.

The minimum investment for AmAsia Star is RM5,000, the minimum additional investment RM5,000, while the maximum investment is RM1.5mil. The offer period is 45 days from the date of launch or upon full subscription.

AmAssurance Bhd general manager (investments) Philomena Jan said the target annual return was based on back testing of the four underlying asset classes the fund invests in - equities, property, industrial metals and precious metals.

She said back testing done on three-year periods since 2001 showed that the equities and commodities traded on the four Asian indices on which the fund was tracking - DAXglobal Asia Financial Service Index, Morgan Stanley Asia Property, S&P GSCI Industrial Metals and S&P GSCI Precious Metals - had an average return of 40.6% to 67%.

“We're confident in the secular bull run of the underlying asset classes and we've a risk-management system incorporated into the fund where the best three performing indices will be accorded weightage every six months in order to maximise returns,” Jan told reporters after the launch of AmAsia Star yesterday.

She said the AmAsia Link's performance was steady despite the volatile global equity markets. The group's target average annual return for the three-year capital guaranteed fund is 8%.

Meanwhile, AmAssurance general manager (corporate and bancassurance sales) Firozdin Abdul Wahab said the AmPreferred Medicare, a medical insurance policy, and an investment-linked education product, would be launched in June.

“We're also launching a critical illness product in July and the third series of the AmAsia funds some time in November,” he said.

AmBank chairman Tan Sri Azman Hashim, who witnessed the launch, said the group would launch up to seven new insurance products this year, as financial planning was now core to the group's bancassurance activities.

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.

PNB offers commercial fund


KUALA LUMPUR: Permodalan Nasional Bhd (PNB) is expanding its scope to commercial fund management with its newly launched PNB Structured Investment Fund (PNB SIF).

Chairman Tan Sri Ahmad Sarji Abdul Hamid said the fund marked the expansion of PNB's customer base from traditional individual investors to a broader market segment comprising institutions, companies, cooperatives and other fund holders.

PNB SIF is an RM3bil closed-end structured fund with a maturity period of five years. It will be transacted at a net asset value of RM1 during the initial offer period, or 45 days from the launch date.

From left: Tan Sri Ahmad Sarji Abdul Hamid, Tan Dri Nor Mohamed Yakcop and Tan Sri Hamad Kama Piah Che Othman at the fund launch.

The fund will invest mainly in PNB's real estate investment trusts (Reit), structured products and cash instruments.

Deutsche Bank (M) Bhd will issue the structured products while PNB will place its Reit, comprising seven properties in Kuala Lumpur and Johor Baru, into the fund.

The PNB properties registered healthy occupancy averaging over 93%, Sarji said at the fund launch yesterday.

Deutsche Bank, meanwhile, will provide the financial products including bonds, equities, equity-linked products and hybrid products.

“We hope this unique product will fit the criteria of prudent investors looking for exposure to the exciting and growing potential of Reit and structured products,” he added.

PNB president Tan Sri Hamad Kama Piah Che Othman said PNB Reits' prime properties – PNB Building, PNB Darby Park, PNB Damansara, Menara Tun Ismail and Wisma KPMG in Kuala Lumpur as well as Menara Pelangi, Plaza Pelangi and Pelangi Leisure Mall – were estimated to be worth almost RM1bil.

On the potential listing of PNB Reit, he said: “If the opportunity arises, we believe we've got the capital appreciation from our prime property assets.”

Earlier, Second Finance Minister Tan Sri Nor Mohamed Yakcop said the 13 Reits listed on Bursa Malaysia had a market capitalisation of more than RM5bil.

He said PNB's initiative to incorporate PNB Reits into PNB SIF reflected the fund manager's commitment to cater to investors' need for more sophisticated investment products.

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, May 9, 2008

OSK-UOB eyes 15%-23% return from new fund

KUALA LUMPUR: OSK-UOB Unit Trust Management Bhd is confident that its latest product, the OSK-UOB Capital Protected Gold-Linked Fund, will yield potential annual returns of 15% to 23%.

Executive director cum chief executive officer Ho Seng Yee said the three-year closed-end capital protected fund aimed to provide regular income over the medium term from rising gold prices whilst protecting investors’ capital at the end of the fund’s maturity period.

“In these uncertain times, when economies around the world are still reeling from the impact of the US subprime mortgage crisis and rising oil prices, a commodity like gold would act as a safe haven for investors’ hard-earned money,” he told reporters at the launch yesterday.

The fund’s principal strategy is to invest 87% to 100% of the capital raised in a three-year zero coupon negotiable instrument of deposit to protect the fund's capital and the remainder of up to 10% of the capital raised in over-the-counter options issued on a gold index, JP Morgan Gold Excess Return Index, to generate the returns.

“The options are purchased from JP Morgan Chase Bank (London branch) and has a participation rate of 100%,” Ho said.

He said fund managers expected gold prices to appreciate in the short to medium term due to the increasing demand for gold, particularly from China and India while the weakness in the US dollar might lead to central banks, especially the ones in Asia, diversifying from the dollar and increasing their gold reserves.

“The weak dollar also favours investments in gold as it is negatively correlated to the greenback, hence it could be the prime beneficiary as a result of the structural weakness in the US economy.

“And with the recent turmoil in oil and food prices, which inevitably induce inflationary pressures, gold comes into play again as it is traditionally a hedge against inflation,” Ho added.

The fund has an approved size of 200 million units at an initial price of RM1 per unit.

The minimum initial investment amount is RM5,000 and the subsequent minimum top-up is RM1,000.

The company is targeting to increase the funds under management to RM5bil from over RM3.7bil currently with the launch of five new products this 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.

Thursday, May 8, 2008

RHB Investment Management targets 5 new funds


KUALA LUMPUR: RHB Investment Management Sdn Bhd (RHBIM) aims to launch five new funds by year-end as part of its plans to grow its asset management business, its managing director Sharifatul Hanizah Said Ali said.

She said the firm would be keen to launch a mix of funds, targeted at both corporate and retail investors. Through its new product offerings, Sharifatul said it would be looking at “a very encouraging rate of growth”.

“We would also like to increase our offshore investments in the future,” she said after the launch of its RHB Commodities Capital Protected Fund here yesterday.

The commodity fund, managed by RHBIM, is its first following the merger between RHB Asset Management Sdn Bhd and RHB Unit Trust Bhd.

Through the commodity fund, RHB would be investing at least 85% of the capital raised during the initial offer period (IOP) in zero-coupon negotiable instruments of deposit (ZNIDs).
The ZNIDs would provide capital protection if held to maturity.

The remainder of the capital raised would be invested in an over-the-counter option linked to the performance of futures contracts of four commodities, namely soybean, wheat, aluminium and copper.

“Given that the markets have been volatile of late, we want to offer investors an opportunity to participate in the commodities outlook, which will be bullish at least for the next 12 to 16 months.

The one way to do this is via capital protection,” said Sharifatul Sharifatul said the initial size of the commodity fund had been fixed at 150 million units of RM1 each, with a minimum investment of RM5,000. As the fund was a closed-ended fund, the units would be very limited, she said.

Sale of the units began April 30, with a 30-day IOP which would end on May 29. “We can certainly enlarge the fund size if response during the IOP is very encouraging,” Sharifatul said.

With the launch of the commodities fund, RHBIM, a wholly owned subsidiary of RHB Banking Group, would have 24 different unit trust funds with close to RM4 billion in total investment assets under management.

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, May 7, 2008

AmFIRST outperforms prospectus forecast


KUALA LUMPUR: AmFirst REIT posted a net property income of RM40.64 million on the back of revenue RM57.85 million for the financial year ended March 31, 2008, outperforming its forecast stated in its listing prospectus.

In a statement yesterday, AmFirst manager Am ARA REIT Managers Sdn Bhd said the increase in revenue and income was mainly owing to the contribution from Kelana Brem Towers, which was acquired in June 2007, six months into AmFirst’s listing.

It said at the distributable income level, AmFirst achieved RM31.3 million against the projected RM31.1 million for the financial year.

“This translates to a distribution per unit (DPU) of 7.3 sen which gives unitholders an attractive distribution yield of 8.39% based on closing price of 87 sen for AmFIRST on March 31, 2008,” it said.

Am ARA REIT said it intended to pay out a DPU of 3.676 sen for the six-month period ended March 31, adding that 3.623 sen had earlier been paid out last November.

Am ARA REIT acting chief executive officer Anthony Ooi said the company was pleased to outperform its forecasts in terms of revenue, net property income and distributable income.

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 Wealth’s new plan


KUALA LUMPUR: CIMB Wealth Advisors Bhd expects to sell 5,000 packages annually of its flexible 3-in-1 education plan that doubles up as a savings plan for those without children or other beneficiaries.

The plan is a collaboration with CIMB Aviva, CIMB Trustee Bhd and CIMB-Principal Asset Management Bhd.

Chief executive officer Tan Beng Wah said the target was to sell 400 packages a month or up to 5,000 packages a year.

“Households today spend on average 5% to 7% of their annual income on education, with most of them depending on investments or scholarships for their children's tertiary education,” he said at the plan launch yesterday.

Tan said although households had seen their discretionary spending curbed due to the escalating costs of living, the plan came at an opportune time since there were no such product in Malaysia combining investment, insurance and nomination services.

The package's investment feature is based on an evolving strategy whereby investments are made in higher risk products in the beginning and in lower risks or fixed-income products as the plan nears maturity.

Tan said the package's insurance or takaful feature would safeguard the fund in the event of death or disability while the trust would make sure the beneficiary received the amount at maturity.

The 3-in-1 education plan combines unit trust investment, insurance or takaful coverage and trust nomination services. It is targeted at households with a monthly income of at least RM5,000.

The package is available in the conventional and syariah-compliant versions, with investment tenure from nine to 20 years and a targeted savings horizon.

The minimum initial investment is RM1,000, excluding nomination fees. After that, it would depend on the investor's package timeline and amount to be saved.

Tan said CIMB Wealth Advisors was also looking at rolling out post-retirement and other long-term investment products.

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, May 6, 2008

Public Mutual declares payouts for 3 funds


PUBLIC Bank's wholly-owned unit, Public Mutual has declared gross distributions for three of its funds for the financial year ended April 30 2008; 2 sen per unit for the Public Islamic Dividend Fund, 1.75 sen per unit for the Public Far-East Balanced Fund and 0.40 sen per unit for the Public Islamic Asia Dividend Fund.

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

MAA: New fund may chalk up RM50m in sales


MAA Assurance Bhd's new fund to be launched next month could chalk up RM50 million in sales.MAA vice-president of life business development services division, YC Chan said the insurer is confident of attracting up to 700 investors to subscribe to the new fund, given the guarantee element in the scheme.

"Based on the outstanding performance of our existing four guaranteed funds, we are confident of achieving the target," Chan said.

He said MAA is waiting for the right time to launch the new fund as bond yields are not that encouraging now.

However, he was optimistic that the equity market will perform better in the second half of the year.

The new fund, he said, will be a structured product with a promise to return 100 per cent of the principal invested at maturity and linked to the performance of underlying assets.

It will maintain a 90 per cent bond portfolio while the balance 10 per cent will be in equities. The minimum investment for the new fund is RM10,000.

MAA has achieved sales of RM165 million for its existing four guaranteed funds - Maaster Capital Guaranteed Plan 1 (MCGP1), MCGP2, MCGP3 and MCGP4-Asia Pacific.

The MCGP1, a single premium investment linked plan, matured last March returning 33.4 per cent over a five year period.

"This is a remarkable achievement for the MCGP1 which I believe is one of the highest for a capital guaranteed plan," Chan said.

The MCGP1 average returns of 6.68 per per cent per annum outperformed the 12 month fixed deposit returns.MAA has now 16 funds worth RM600 million under management. - By Rupinder Singh

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.