u can google the company. I have posted about Ample Zone Bhd's info 6 months ago to advice visitors to look into this firm, despite the good performance of RHB Islamic Bond Fund

google, only get the info about its credit rating.

It is a subsidiary of Talam ?

B+ is not good lo. It is highly speculative bond, according to wikipedia.

An alternative to RHB Islamic Bond Fund, investor may consider Public Islamic Strategic Bond Fund.

Top 5 holding of PISTBF (as at 31 Oct 2011)

1) Malakoff Corporation / 2022/ (Rating : AA3) (Industry: Power Plant)
2) Special Power Vehicle/2015 (AA3) (Industry: Power Plant)
3) Sarawak Energy Bhd/ 2018 (AA1) (Industry: Diversified Holding)
4) Gulf Investment Corporation/ 2016 (AAA) (Industry: Finance)
5) Encorp Systembilt Sdn Bhd/ 2014 (AA2) (Industry: Construction)

The top 5 holdings are quite good. This fund has foreign exposure (i.e. Gulf Investment Corpo) so the price of the fund usually updated on the next day noon.

Sources:
1) https://www.zawya.com/sukuk/Story.cfm/sidZAWYA20110729052042
2) http://www.marc.com.my/home/userfiles/file...ober%202011.pdf
3) Public Mutual Funds Q3 Report
4) Public Mutual PISTBF 6 months report.
5) bond fund rating: http://en.wikipedia.org/wiki/Bond_credit_rating

If it's me, I will switch out half of my holdings, not everything yet. Reduce the risk factor by half.

Talam Corp never failed to impress me ('negatively') , don't know about others....

Everytime there are news in Malaysia about bad debts, bad ratings, anything related to bad things in the debt market or capital markets, this name will surely surface, and will involve Kumpulan Europlus too. Really amazing these two companies. And now they start involving IJM too, I wonder why IJM would want to associate themselves with bad apples ?

Back to the subject, if Ample Zone is a subsidiary, even a distant one with T, then switch all. Very, very low chances to recover. The people behind are merciless against investors' money !!!!!!!!!!!

This post has been edited by Hansel: Nov 9 2011, 12:42 PM

Cause got very-very big "NAGA or Dragon" seat in BOD since 2003......

Right,...

Among the best minded in Investment & Business strategy

http://www.pbebank.com/corporate/cnt_press347.html

The Company is pleased to announce that t Ample Zone Berhad (Ample Zone), a special purpose vehicle and also a subsidiary of Talam as proposed to raise Sukuk Al-Ijarah of RM150,000,000 (Sukuk). The Securities Commission (SC) has approved the Sukuk via its letter dated 30 December 2004 which was received by the Company on 3 January 2005. Malaysian International Merchant Bankers Berhad (MIMB) is the Lead Arranger and Primary Subscriber for the Sukuk.





RHB Islamic Bond Fund (Fundsupermart Risk Rating: 1-Lower Risk)

RHB Islamic Bond Fund ranked top among Malaysia Bond funds for the past one-year period ended March 2011. It was also the best performing Malaysia Bond fund in 2008 and 2010. The fund ranked third under our performance criterion out of the 17 Malaysia Bond funds. In terms of resilience, the fund has high resilience during market downturns as it ranked third under our risk criterion. The fund’s expense ratio was lower than the average of its peers. We like this fund for its consistent performance, high resilience and low expense ratio.

credit risk are expected to be low as the fund is invested wholly in Malaysian bonds with investment-grade ratings.

---

Added on November 9, 2011, 3:47 pmI m considering to switch to Ambond ? (no exit fee)

Any comment ?

This post has been edited by Irresistible: Nov 9 2011, 03:47 PM

If you switch now, means you take the 8% paper loss into actual loss straight away. If you stay put in the RHB Islamic bond fund you will at least recover your loss, and possibility of getting a write-back to the fund. This will take approximately 1-1.5 years based on previous performance However if you are scared of more write down, then switch your money to another fund.

Your future money can then be put into another bond fund. If you want to put in AmBond it is ok, as it is a more conservative fund than AmDynamic, and should be less risky. Other than that take a look at bonds funds by Public Mutual as they are reasonably run and have lower management fees of (0.75%) than other bond funds.

I hold
1) Public Sukuk Fund.
2) Public Strategic bond fund.

This RHB is part of my investment in Supermart. Interested in its Kenanga growth fund.

Frankly, I worry write down of RHB islamic bond. The Ample Zone Bhd due repayment on Jan 2012 (consist 12%).
But, I also wan the write back of the fund. In dillema.

When King MIdas touches an object, it changes to gold. When T Corp and the T boss touches anybody, "gone case".

thanks u guys

WHAT IS OUR CONCERN?

As at 30 September 2011, RHB Islamic Bond Fund (the Fund) has an investment in Ample Zone Class C sukuk of RM5 million and RM3 million holdings in nominal value which were purchased on 13 May 2005 and 18 May 2005 respectively. Ample Zone Class C Sukuk is the largest holdings of the Fund and constituted 13.65% of the fund size.

The credit rating of this Class C Sukuk has been downgraded by Malaysian Rating Corporation Bhd (MARC) from B+IS to B-IS to reflect that there is a heightened risk that the Class C Sukuk may fail to honour repayment when it matures on 27 January 2012.

WHO IS AMPLE ZONE?

According to MARC, Ample Zone is a special purpose vehicle established in 2005 for the sole purpose of raising fund via issuance of RM150 million Sukuk (refer to Table 1).

Table 1: Breakdown of Ample Zone Sukuk
Class A
RM50 million
Class B
RM25 million
Class C
RM75 million
Total
RM150 million
Source: MARC, iFAST compilations
The proceeds from the Sukuk were used to acquire four properties, namely,

Menara Maxisegar
Wisma Talam
Midpoint Shopping Complex
Pandan Kapital Shopping Complex
The properties were subsequently leased back to the respective sellers, which includes three subsidiaries of Trinity Corporate Bhd (Trinity - formerly known as Talam Corporation Bhd) and one private company.

As Wisma Talam was disposed in January 2008, the RM50 million Class A Sukuk and part of Class B Sukuk were redeemed at the same time. The remaining properties supporting the Sukuk are Menara Maxisegar, Midpoint Shopping Complex and Pandan Kapital Shopping Complex, which are now leased to Trinity.

HOW IS THE SUKUK STRUCTURED?

Based on MARC, Ample Zone Class C Sukuk was structured based on expected cash surplus from the rental payments, after profit payments to the Class A and B Sukuk and all relevant expenses of Ample Zone. An Option Agreement is given by Trinity to the Sukuk Trustee, where the Sukuk Trustee can require Trinity to purchase the properties if the sellers fail to honour their payment obligation.

If Trinity are unable to honour its obligations on exercise of the Option Agreement, property agents will be appointed by Sukuk Trustee or Ample Zone to dispose off the properties in order to raise proceeds to meet the payment obligations for the Sukuk.

WHY AMPLE ZONE MAY MISS THE REPAYMENT?

Due to the continued non-payment of rentals from Trinity, the Sukuk Trustee has exercised the option given by Trinity to require Trinity to purchase the properties. However, due to its strained financial position, Trinity will only be able to honour its obligation by disposing the properties to external parties.

Referring to the announcement from MARC, the Sukuk Trustee has initiated the disposal of the remaining three properties since 1Q 2010 but has not been successful in concluding a sale of any of the three properties. Ample Zone, the issuer of the Sukuk, is dependent on the disposal of properties to meet its repayment obligations that are due on 27 January 2012. As such, failure to dispose the properties before the payment date may trigger Ample Zone to default on its repayment. Total repayment for Class B and Class C Sukuk amounted to RM88.5 million, of which RM84.6 million relates to principal repayment.

WHAT ARE THE IMPACTS TO RHB ISLAMIC BOND FUND?

As there is insufficient information on occupancy rates, rental rates and tenant diversification, current market value of these three properties cannot be estimated. Based on MARC’s valuation in 2006, the market value and the forced-sale value of the three properties are RM176.0 million and RM139.2 million respectively. This is more than enough to cover the RM88.5 million of repayment.

Table 2 shows the possible treatments of RHB Islamic Bond Fund in recoginising the Sukuk Value under different assumed situations.

Table 2: Impacts to RHB Islamic Bond Fund under different assumed situation

Situation
Possible Treatment
1. Manage to dispose the properties before payment date and the proceed is enough to repay RM88.5 million.
No default on Ample Zone Sukuk
No impairment and write-down
2. Manage to dispose the properties before payment date but the proceed is only enough to repay part of RM88.5 million.
Partial default on Ample Zone Sukuk
Possible impairment or no action taken
3. Not manage to dispose the properties before payment date.
Default on Ample Zone Sukuk
Possible impairment or write-down or no action taken
Source: iFAST assumptions
We believe that situation 2 and 3 are likely to happen going forward. The adverse impacts to RHB Islamic Bond Fund are much depended on the treatment of the Fund in recognising the Sukuk value after the default. The Fund may impair or write-down the Sukuk value after the default or may have no action taken due to the reason that the Sukuk is pledged by properties, which could be disposed later and subsequently repay the Sukuk holders.

Having said that, we remain unclear on whether RHB Islamic Bond Fund will do any impairment or write-down if Ample Zone fails to repay its repayment in January 2012. Any impairment or write-down will trigger a sharp decline on the Net Asset Value (NAV) of the Fund.

REMOVE RHB ISLAMIC BOND FUND AS RECOMMENDED FUND

Going forward, the outlook for RHB Islamic Bond Fund remains uncertain and the Fund faces the risk with regards to impairment or write-down of the Ample Zone Class C Sukuk. As such, we advise potential new investors not to buy into this Fund. Meanwhile, we will also remove the Fund as our Recommended Fund under the category of Malaysia Bond Islamic.

In our previous article, Dissecting The Recent Drop in RHB Islamic Bond Fund, we advised existing unit holders of RHB Islamic Bond Fund to hold on the Fund. Our advice for existing unit holders, after considering the potential default of Ample Zone is to switch to another Islamic bond fund. Fund to consider is AmBon Islam.

Besides RHB Islamic Bond fund, the next bond fund that most likely will default will be RHB Bond Fund. The later has 17% Ample Zone Bhd Bond, the 21 Oct 2011 report by MARC depicting that most likely Ample Zone will not able to pay their dividend that due next month Jan 2012.

Before the RHB bond write off the debt, if u still holding the bond fund, should quickly sell it. RHB islamic bond is a clear good example already.

Do u mind to share your views on amdynamic bond? I already read the report and everything seem to be normal. They dont really hold bad rating credit

Would the bond or any share, increasing during election i.e PRU13?

The portfolio of Am Dynamic Bond fund seems ok, mostly are banking bond, default risk is quite low. The killing point of this fund is back end charges. Withdraw fee of 1% regardless how long u hold the fund, and the annual management fee is 1% p.a. (compared to Public Mutual bond series 0.75%p.a.). If u r ok with the cost, Am Dynamic Bond Fund is investable...most of the outperform bond funds in PM already closed for suscription.