I have been reading numerous posts in Lowyat.NET but only started joining the forum recently. Starting this thread as would like to share some of my knowledge in various investments in Malaysia since I'm working in a broking firm. The following are investments I am aware of in Malaysia : -

a) FD (Return is basically low but rest assured there are no risks)

Unit trusts (Return is good. This of course depends on which unit trusts you are looking at. Before engage into one, have to look into the portfolio)

c) Shares (This is most common in Malaysia. However, many ppl get burnt out in 1997. The stock exchange in Malaysia does not have a strong fundamental. Will illustrate further later)

d) Futures (I can help most on this as I am in this line Not many ppl know the existence of this unless ppl who are in the investment sector. Will illustrate further on this as well)

e) Property (This is for high rollers. Haha... Anyways can help on this a lil as was working as a sales executive for mortgages for high end properties)

f) Exchange Rate (Not available in Malaysia but can do online trading. I'm currently trying it out. Can give minimal views based on what I've studied and noticed. Not much experience here)

*** Since moderators has merge my thread, I guess there's no choice. Just quote my nick if there are any questions

This post has been edited by Silveru: Nov 6 2005, 05:20 PM

Its really interesting reading this thread. I've learned a lot myself as well. However, I've started another thread on this and would like to share some of my views on investment in Malaysia. Particularly on Futures, Shares and Exchange Rates. Do drop by and questions are highly welcomed.

*Thread merged, links removed

This post has been edited by Geminist: Nov 6 2005, 05:12 PM

=SHARES=

There are a few shortcomings in Malaysia's stock exchange:-

a) Quite a number of retail players do not trade based on fundamentals. Many are based on rumours. Like this Dato' is buying this share. The director of the company is dying and all. So, shares without strong fundamentals do collapse easily.

Volume is still very thin compared to countries like Korea and India. As i'm working for a broker, it dissapoints me to see our thinly traded volume in both the shares and furtures market (will further explain on futures later)

c) No short selling. This contributes to the low volume as well. Basically, related parties are afraid with the introduction on short selling will crash out market down.

d) A lot of hidden gems unexplored. There are a lot of shares in the main board unexplored. Mostly traded shares are bluechips. This has caused some of the bluechips overpriced. Also, market breadth is very low. Sometimes, you will see that our Kuala Lumpur Composite Index (KLCI) is up but number of decliners is higher than number of gainers.

If you want to go into shares, what should you be looking at? Do you want to be a long term trader or are you more a speculative person????

=LONG TERM TRADER=

Then you should be looking more into fundamentals. Make sure the company has a good dividend scheme. For a company to have a good dividend scheme, they must have healthy profitability and cash flow. The company must not be a growth company.

Reason being, if the company is a growing company, they will expand their production with their money rather than giving the extra money to ppl. Example good stock is PBB and Genting. I know it's expensive but these companies do have strong fundamentals. Look into the companies financial statements. They will give you an overview of how a good company should look.

= Speculative =

Recent news on SBB is a great example of speculative trading. Do bear in mind before engaging into any speculative stance, most important is the company must at least have some fundamentals. If not, you will engage into the first shortcoming I stated earlier.

Every quarterly, some companies will report their earnings and all. During this time, it is a good time for speculative stance as well. Window dressing during mid of the year also attracts some speculators.

Personally, for beginners, do not go into speculative as you do not have the capital to do so. I've talked to several big time speculators. They were targetting small cap stocks, in fact, they were targetting limit down stocks. Its like a gamble for them as they have money. So for beginners (especially those who like to limit their risks), look into long term trading.

For BEGINNERS, do look into this site:
http://www.klse.com.my/website/listing/cbrs.htm
This site was given to me by someone working in Bursa. I find it useful as I'm able to get a rough idea on how ratings agencies look into companies. Use it for reference. Do not make decisions based 100% on it. This will give you and overview what you should look at if you want to buy a stock.

=FUTURES=

There are three different segments of futures in Malaysia.

=Equities based futures=
FKLI (Futures of the Kuala Lumpur Composite Index)

=Non equities based futures=
KLIBOR (interest rates futures)
FMG5 (5 years government bonds)
FMGA (10 years government bonds)

=Commodity=
FCPO (Futures of crude palm oil)
FKPO (Futures of kernel palm oil)

The most commonly traded by retailers are FKLI and FCPO. Basically if you want to open an account you need to look for a broker. To open an account, you need at minimum RM2000. How to trade on futures???

There are jargons like margins for futures. What is margins? For beginners, you can take margins as a deposit. Take for example, you have deposited RM2000 to open an account and you bought 1 lot of FKLI. Margin for FKLI which is set by the Clearing House (this is a body set by Bursa). Currently, margin is RM2300. Very high because of the public holidays. Usually the margin is about RM1400. FCPO usual margin is RM1300. Currently, because of the recent public holidays, the margin has been raised to RM1600.

Basically, how does futures work? Every futures have a base asset. Like FKLI, the base asset is the KLCI. For FCPO the based asset is our crude palm oil. There are three types of ppl who engaged themselves into futures. Hedgers, speculators and arbitrageurs. We will be speculators.

So how to we speculate??? Futures is like a gamble to a lot of people. Is like choosing big or small. But for futures, you choose to BUY OR SELL.

I'll give you and example now. Say we look int FKLI. You have deposited RM2000 and you buy one FKLI at the market price. Say market price is 901. We just take for an example the margin for FKLI is RM1400. Take for example today the FKLI close at 905. You gained 4 points. 1 point in FKLI is RM50. So that's RM200. So your total balance or NET EQUITY will be RM2200. So that's good. If tomorrow, the market went up again to 910 and you think it's time to make your unrealised profit realised, you will then sell it out because you bought the futures. With that, you will then earn RM450. This does not take into account of commission. Commission is RM50 per lot. End of everything, your account will have RM2000 + RM450 - RM50 = RM2400

What happens when you get margin call??? As mentioned earlier, margin for FKLI now is RM2300. So if you only have RM2000 in your account and you buy one lot today, you will get margin call the next day. Your dealer will be calling you up and tell you that you have a margin call. You have two choices. Either to top up or to sell your positions. How much you need to top up? Simple computations, will be your Cash balance - Commissions - Unrealised loss (if profit the plus) - margins required. The answer will be how much you need to top up. To make your life easier, just ask the dealer. They have the statements printed everyday.

The beauty of futures is you can sell also. How to sell. Say you think tomorrow the price will go down. You just sell. Say you sell at 901. If indeed it goes down to 891, then you earn 10 points. But if it does go up, then too bad lah

For FCPO, 1 point is RM25. But FCPO's fluctuation is higher at times So despite earning lesser, with the fluctuation, it'll be better. This is just a very very brief overview on the futures market. Do feel free to give some opinions or to ask any questions. BTW, I'm a dealer of all the futures


This post has been edited by Silveru: Nov 6 2005, 09:22 PM

"reserve"

Thanks. I'm in the learning process as well. Do hope I can help you out. Well, are you looking into the cash index aka Kuala Lumpur Composite Index (KLCI). I'll give you a brief overview of KLCI. Everyday, you should be observing from the news, that the Index is up 3 points... blah blah blah. Everyone will be wondering how does this come up. Basically, our index consists on 100 shares. These 100 shares are known as the bluechips as well.

Some news might quote heavyweights. Heavyweights usually refers to Maybank, MISC, Tenaga and Telekom. Reason being is of the 100 shares, these shares has the highest weightings. Say if Maybank drop 10 cents, our KLCI index will drop 1 point. If PBB drop 20 cents, our KLCI might only drop 0.5 points as the wightings are lower. I will post up the weightings of the top 20 bluechips so you can have a rough knowledge. This is the same for other countries as well. But Malaysia BOLEH! Have the most stocks wan. Haha... Hong Kong's Hang Seng on has 30, Singapore's STI has 50 and Japan's Nikkei also has very little only la. Can't remember

Also becoz we have so many, our index don't move a lot. This is because volume traded already low. Back to your question, you cannot trade in the KLCI. You can do so by buying the 100 shares based on the weightings but no one will do that. The easiest way is through futures. Do look into my FUTURES posts.

Look into this URL so you have some rough overview on how KLCI news is being reported: http://www.bernama.com.my/bernama/v3/news_...s.php?id=163546

Indeed, for currency, very very easy to get burnt. You can only trade online. You can look into http://www.fxcm.com/ or http://www.xpresstrade.com/. They have something called mini account whereby you don't need to be rich to trade. Only a small amount of USD300 is required to start an account.

Why get burnt easily:-

a) You are trading in USD. Meaning more money is used.
Depending on which currency you are trading, some fluctuations are very big. Especially if you are trading the Great Britain Pound (GBP) or Japanese Yen (JPY). Take for example you think GBP will go down. So you sell GBP and buy USD. Do bear in mind the mechanism of currency is whereby you need to buy one and sell one currency. So after you sell GBP, say it went up. then you think it might come back down, in only a matter of 30 mins, it might go up 200 pips. For the mini account, say you only buy 1 lot, that costs you USD200. Then you think it will go up. But it doesn't until 3 days later. Maybe by then you deposit with them already finish and they will automatically close out your position. So you can lose all easily.
c) High volatility of currency is because everywhere around the world is trading currency 24 hours a day. Some banks want to hedge their risk. Big big petrol companies are constantly buying or selling currencies to hedge their business risks. Compared to a small potato like us, we are nothing. This is the reason for the danger in currency trading.

Their is a simulation given on http://www.fxcm.com/. Download it and try using it. It's free. You no need to pay anything. They will like give you money and you just use the money and play for fun. Like a game. Try it and you will know roughly how trading of currencies work

Hope this helps

Woah!!! Seriously, I have no idea Sorry... I can help out if you need infos on shares and futures. But on funds, I do not have access to it. They have several choices under its principal fund. But I can try to help you to check on the Bloomberg tomorrow. I do know someone from CIMB but not in UT... I'll ask and see if he has any idea or not. Not tried it before on funds though. You're considering because of the 50% discount??? Any ideas guys???

Anyways, there's a financial expo in Mid Valley's Convention Center this 12th and 13th (coming Sat and Sun). I'll be based there on Sunday Urmmm think they have all kinds of financial products offered there. That includes insurance, UT, equities and futures.

This post has been edited by Silveru: Nov 8 2005, 10:55 PM

dEviLs, the Financial Expo's title is "Money & You." I've not been to one but according to my collegue, you will be expecting banks, brokers and insurance companys. Basically whoever stations there will be selling their products. So it'll be a one stop center to learn on how to manage your money!

Exibition is held in the Mid Valley's Convention Center this 12th and 13th (coming Sat and Sun) from 10am to 8.30pm. I think the expo will end earlier on Sunday. The Convention Center should be near to the World of Feng Shui located at the Cinema level.

Well, technically, we are seeing some bearish signals... As the index did break the 930-935 level which has been an overiding hurdle to crack, it is usual to see this kinda reaction. 5th Apr vol was very high even for the futures side. I think bullish traders should be cautious. If market fails to sustain tomorrow, or having a lower low than today, should prepare to go on short.

Nevertheless, in long term, there is a likelihood of our market to break the previous high of 954. Current chart picture is showing me not in this point of time. Well, at least we do see some activities in the Malaysian market despite we don't have much faith in it

Btw, I'm a futures broker Anyone interested in LIVE KLCI, FKLI and FCPO prices can look into

http://mr.apexetrade.com/bin/stkrealtimefuture.asp

It's free At least for now!

Indeed, Ringgit appreciation does affect the CPO negatively, nevertheless, KLK, Sime, PPB Oil and IOI don't contribute a huge chunk to the KLCI. KLK is a laggard of plantations stocks compared to IOI and PPB and I'm pretty bullish with the company. PPB has been aggresively expanding into Indonesia. Last but not least, IOI has rich valuations with good dividend payout. These are fundamentally strong companies. Both Malaysia and Indonesia are largest exporter of palm oil. The ringgit might have appreciated a fair bit but if you do track the rupiah, it has appreciated at least 8% since this year. That's far more than the ringgit.

Also, Bank Negara will definitely intervene on the Ringgit to and extent it is manageable for all parties. Also, due to the relaxation of certain currency control rules of the Yuan has directly appreciated the Ringgit.

Finally, with all the hype of biodiesel taking off next year, basically, these plantation stocks will have minimal effect towards the KLCI.

TNB, Telekom, Proton and even MAS are all under the GLC restructuring which we won't be seeing much result as at this year. Nevertheless, I sincerely applaud the move of publishing the KPIs (eventhough i think those should be their conservative figures) At least they are moving a step forward on transparencyt. During the Invest Malaysia forum, these leaders spoke of their companies problems, how they are going to manage them and they are very determine.

Malaysia was the worse performing bourse last year. We still are this year. However, we will be seeing short selling of shares being reintroduced, new indicies and single stock futures. These are all to promote liquidity. One main reason why foreign funds avoid our market was mainly due to liquidity. We do have some very strong stocks with good fundamentals. Foreigners love Genting, YTL, MISC, BST, our Plantation Stocks, Bursa (i think Bursa is very underweight =p) and many more. However, it is liquidity which made them shy away from our market. I do think it is possible to hit at least above 960 again this year if given the current volume traded on our market continues and current sentiment prevailing with no huge issues of SARS, avian flu and etc.

www.fxcm.com
Free for 30 days.

Yup! Agree with you cherroy on the capital control part. Once bitten twice shy. If the local government could somehow give some assurance that something like this wouldn't happen anymore then the foreigners could perhaps be more confident. Well, that does take some time but I do know in the futures market, there is a substantial participation by foreign brokerage. Well, not a lot compared to financially developed countries like Singapore and Hong Kong.

As for the GLC, all we can do is wait for the results. Despite giving false hopes many times, its rather unfair to give them a judgment now. If Proton does come out with a strategic alliance, then it'd be a shorter route for its revamption. As for MAS, Idris Jala has been rolling out many ways to improve overall service and really look in depth into the main issues of MAS. But once again, the airline industry is one of the more fragile industry so in the end, we can just wait and see.

Yeah... Its been like 6 weeks + since I've seen the FCPO fly. Some pretty good export data released. Friendlier MPOB data as well. Any positions Mobiusone???

SSF... The bidding and offering prices are too far apart. Underlying stock doesn't fluctuate much as well. My clients were like "We'll see how it goes." So basically, everyone is saying the same thing. Probably through settlement we will see some slight increase of volume but not much. I'm looking forward to the FTSE indices though.

Anyone knows SBB Mutual well? Like its standing within the unit trust industry in Malaysia? How their products fare? Was it affected by the merging and so forth?

LOL... Once again Malaysia did it... Last min spurt of the CI. Haih... Always like that.

There have been some forums stating that the recent bullish sentiment were due to Iris. Iris basically brought lotsa market talks and punters to the market. Hence, if indeed Iris limit down, there should be panic selling not only on Iris but all the recently run up counters.

Next month World Cup.... Market is said to be quiet. True??? Any ideas? Never experience b4.

Indeed, many did say it will surpass 1000 and even more by year end... Didn't we hear that last year? So yeah agree with cherroy on this.

However, somehow, I do believe sentiment will be affected during the WC.
I did not look into it much but historically my clients tell me that during WC, market would be very quiet and the index usually seen sliding. Did a check on year 2002 WC month and market did come down. We'll just see how it goes. Guess this'll be a good experience for me

Another thing is the new FTSE. Any ideas how it works? Also, anyone knows how does DAX works? Anyone trades overseas market?

Once again the Dow took a dip erasing its previous days' gains. Massive selling are seen worldwide.

Bourses around Japan, Singapore, Indonesia and India are seen crumbling. As for HK and Korea.... Public Holiday...

Scary... June's futures massive discount.

I'm trading forex with FXCM... Also working as a futures broker. In Malaysia, the only broker that can trade with foreign futures is Okachi. They're in commodities though. Recently Bursa did mention on opening up our market. Whereby we can trade on other countries markets as well. Well, they've been saying it for sometime... Not too sure if its gonna happen or not.

mobiusone, any positions in FKLI or FCPO?

This post has been edited by Silveru: Jun 4 2006, 12:00 AM

CPO.... Think it will go up.. But dunno. Some bigshots keep whacking it down at the very last second. FKLI short ar... Okie, tell my clients to short too No need to apply for the license unless you really want to be a broker le.

I'm using FXCM.