Just to add some point regarding the dividend yield

The calculation = total dividend per year/share price

It is correct Maxis gave out 400+% dividend in a year but Maxis par value is only 10c not as usual RM1 for most stock so is around 40+c per stock which is turn the dividend yield is 0.40/8.6 = 4.6%

For this few years, a handful of company give out good dividend yield because there are abundant of acculumated cash in their bank balance and found out no much opportunity (economy quite in stagnant stage) to reinvest, therefore you see a lot of capital repayment, special dividends etc but this doesn't necessary sustainable and some may be one off so be care when studying their dividend yield is one off or not and long term high dividend is only sustainable with sustainable profit every year.

yup, what dreamer said is true, if not bad loan all banks are highly profitable with the margin around 3% because banks in Malaysia is well protected by the gov with the widespread between BLR and FD rate.

Pbbank is the top most well-managed bank which has default loan less than 3%. Ambank top the default list with 12% and average default loan is around 6% if not mistaken. Actually pbbank is the one of the blue chips which long term investor should be paying attention on.

What I am trying to highlight is the situation involving the plantation sector few years back.
Previous few year when CPO at the level of RM2000 all plantation stock has 10+% dividend yield so dividend is declared in the form of like final dividend 30c + special dividend 50c = 80c if the share price is RM8 then dividend yield is like 10% but with CPO now RM 1400+ only final dividend 30c is declared then dividend yield become 3.75%.

Most plantation management know that RM2000 for CPO is not sustainable in the long term so they declared the extra profit generated as special dividend while final dividend is the value they can expect to give out every year.

Real estate also falling when recession hit. Most of industries will suffer during recession that's why share tumbled during recession. However, certain industry will at least perform better (not necessary rising but at least not as bad) than the other especially consumer based industry like food, tobacco etc. since you still smoke and eat no matter how the economy is doing. That's why they call consumer based industry/stock as more or less defensive stock.

Normally, gov bond/treasury will rise during recession since during recession, gov normally will push the interest rate to a low point so that industries can survive and recover therefore, the fixed coupun rate of the gov bond/treasury will be seen as far more attractive. Corporate bond also will rise (depends also the quality of the bond, rating) but bare in mind the default rate of the corporate bond will rise also since corporate generally not doing well during recession.

There is my brief and simple view, not certainly true/correct also.

But generally, recession is not good for everyone.

When investing mutual fund, timing also an important factor especially equity type of mutual fund since it goes up and down together with the stock market.

FD can be classified as the most conservative type of investment but still carrying mainly 2 risk -> inflation and devaluation of the currency just like the financial crisis during 97-98.

Only FD return rate is fixed, others like mutual fund and insurance their return rate is not at a certain rate every year. They (primary mutual fund) only used the previous, historical achieved returns rate as a benchmark but for the future 1, 3, 5 or 10 years time, nobody can give you an answer, it may 1%, 10%, 50%, 100% or even with negative return rate.

Insurance primary objective is to give you the financial protection especially for your family if anything happened , investment purpose is its secondary objective.

This post has been edited by cherroy: Feb 8 2006, 09:52 PM

He might be talking about 250% ROI by selling his 'Power System' rather than for you to gain 250%. then the statement make sense

Out of money means that the warrant is worthless to be converted eg.

mother share - RM0.50
warrant conversion price RM0.80

then the warrant is out of money since the mother share price is lower than the conversion price, better still buy directly the mother share.

The purpose of investing in warrant is to have high gearing (small knife cut big tree) eg.

Mother share RM10
Warrant conversion price RM5
Warrant current price RM6

Take the scenario of the share goes up tp RM15 and warrant follow suit to RM10

(15-10)/10 = 50% (the percentage gain from investing in the share)

(10-6)/6 = 66% (the percentage gain from investing in warrant)

Also you use less capital RM6 only compared to RM10 in share.

But if the share goes down below RM5 then the whole warrant become worthless and if expired at the time then you lose 100% of you RM6 capital but if you bought the mother share rather warrant at that time, you still can wait the market condition to improve and may be one day it will goes up to RM10 again. So the main enermy of the warrant is its expiry time.

Since the currency control during the financial crisis, malaysia market always being outlook by the foreign investor that's why Malaysia market sometimes is quite dull and stagnant for the last few years. Generally, foreign fund are much more aggressive than local fund house. Normally with their (foreign fund) participant, the market will go up and down quite drastically and causing share trading much more active.

The SSF is good to boost the market liquidity since KLSE is somehow dead and buried currently (up and down less than 3 points/day for months) how boring it is, and also seriously lack of foreign interest.
But whether is will be a success or not still can't be told. The bursa/gov somehow a bit 'chicken' to launch the futures and short-sell product, afraid that it will drag down market which is well-supported by them (EPF,PNB). The logic is EPF and PNB are the among the largest shareholders in the KLSE or BURSA, so they don't want anybody to short-sell the push the price downwards which affect their returns rate .

If short-sell is permitted, I reckon MAS won't stay at RM2.80, it may well under RM1 already.

Here, a high percentage of traders in futures market use it purely as speculative tool just like betting big and small rather than properly studying the market and valuation. If you trade in CI future, you must at least know what is its 100 component stock and which stock affecting the movement of CI most,for example a 10cents increase in Maybank will result in 0.8 point movement and if Maybank and other big guns(TNB, TM) share are doing poorly then surely CI won't have much chance to go up.

Speculative is kind of good for the market also which will spur up the trading activity, but blindly trade in futures just for sake like betting big or small is something not healthy for the development of futures derivative market.

In a well developed market like US, the primary function of the futures market is for investors to do hedging and protect their fund/holding while speculation is kind of secondary for you to make extra profit if marketing condition falls in line with your strategy.

This share has been 'goreng' quite fiercefully, from around 13 cents to over 60 cents so went down to 31cents is no surprise, still rather expensive. At the end, the share price will go back its fundamental worth.

There are lots of MESDAQ counters which are under 'goreng' currently. Rotation play among them, the king of 'goreng' should be IRIS, huge volume everyday from 18 cents to 68 cents 277% rise in few months time. The 'goreng' season surely will burst one day with that kind of ridiculous speculation, just be careful.

The listing requirement sometimes is quite loosely which resulted quite a lot of rotten apples in the market. Some CEO of the company are seeing the listing of the company is to make profit out of it then 'cabut', let the company do and die on its own and some sort like sucking the money from the company until the last drop.

If you noticed careful, it can't be classified a bull run yet. The huge volume is generated through lower liner and mesdaq stocks which only few penny, blue chips counters still relative calm and quiet, only minor buying activity mainly from PNB and EPF which push up the index to 940.
A stock which only 10cents, you won't trade 1 lots, isn't it, that's why volume is so huge but total value traded is way below its highest level. The market is full of speculative rotation play from the 'hot money' as well as some local syndicate while real foreign investors still shy away Malaysian market, they only interested in ringgit.
If you take out the mesdaq counters' volume and some below 10cents lower liners, you will notice that the volume traded in the main board only is not that much.
Having said so, some speculative play definitely bring some life to the market but must be always be careful, you won't know when it will stop.

For those interest in Reit, there are also a few listed one like Axreit, Stareit, Uoareit, AHP which generally give you a return ranging from 5-7% as mentioned in their prospectus. You also can invest through mutual fund which specifically in property trust. Better still is to invest yourself in real estate (house, land etc) but must be well-knowledgable about the location and property market.

In long term, Real estate investment is also a good investment as least it protect you against the inflation threat.

Whether it (index) breaks and able to sustain thousand level, it will come to the valuation issue. Currently, KLSE valuation is not cheap with PE multiple around 14. With Ringgit appreciation which cause CPO to drop further, a handful of index-linked counter like Sime, KLK, IOIcor won't able to show good financial result next year. While TNB, Telekom, Proton also won't able to show impressive earning unless gov allows massive increase in tariff. So basically, earning for next year won't so impressive unless economic condition improves drastically.

With the valuation of PE 14 which is comparative expensive than other regional market, don't think foreign investor will show heavy interest in Malaysia market. But on the other hand, there also not much selling activity since there are no major issue/ reason to sell the market. So in the end, in my personal view, the market will stay at this level for quite some time. It is kind of not cheap, also not expensive scenario.

Quite agree with the Silveru's statement about plantation stock issue but the plantation stocks actually affect the index around 10+%, not so big or not so small. The major beneficiers of the ringgit appreciation are those with huge foreign currency debt company especially TNB and TM.

On the other hand, I am a bit neutral about the restructuring of GLCs and not so optimistic especially regarding proton and mas. Another important point that foreigners avoid Malaysian market is partly due to the effect of financial control since 1998.

That's only my point of view, whether the restructuring of GLCs is successful or not, only time will tell. There is a thing even a top CEO can't do about it ->political influence.

With annoucement of BNM's foreign currency reserves recently (31 Mac)clearly shows that there is minimal foreign interest on Malaysia market.

May be the market is waiting some real event of restructuring of GLCs to happen, until now, every GLCs said want to restructure but still yet to materialise. Although the massive restructuring exercise requires lot of planning and details to be iron up, they must at least give some clear signal and direction to the company. A lot of promise but result is the most important aspect to drive the market.

Sometimes they are just nominee acting on behalf of its client, which is quite common practice so that the real person involved won't be known.

Another problem to lure foreign investors is that policy and regulations are not consistent throughout which I don't think anyone would disagree on this one even listing and trading regulation is keep on changing. You needs some consistency to build the market confident over times.
Now they said short-sell is permitted but after market plunged may be short-sell will be prohibited again.

Seems like quite a number of 'goreng' stocks lose some steam already, only the 'King of Goreng' Iris still 'hot', (18c -> 90c!) not yet finish 'goreng'.
May be they want to repeat the history of Repco (from around RM5 shoot to near RM200).

Actually for those low paid up capital and low liquidity stock (Mesdaq and 2nd board) it is quite easy to manipulate it provided the syndicate has sufficient 'bullet'


This post has been edited by cherroy: Apr 13 2006, 11:20 AM