no no not pnb fund.. im asking bout the bank rakyat invesment plan.. hvnt drop to their branch yet, and their website also not very clear..

why not uols invest ke unit trust?kn diluluskan BNM..kalo xbagus,xdanya BNM nk luluskan..tol x?

Can speak English ?

every investment has their own risk. but, nowadays, I can says that most of people looking for unit trust why?
because we have well-trained fund managers & if you go through the fund review report, u can look the historic return from launch date till current year.

why not we difersify our saving to get more return??especially in EPF, they just give average only 5-6% & why not we difersify them via invest in Unit trust.. If unit trust is bad instrument,I dont think BNM allow the epf holder to risk their retire money...right??

if any u can contact me directly..thanks.

Hi,
I am new to bond fund, I have few doubts:

1. What is the return from Bond fund? by market price or dividend payment?

2. Bond fund is base on market price buy/sell?

3. Will the Bond fund lower than FD e.g. 4%pa?

4. When market is going to recession, is it the best time to buy Bond fund? e.g. KLCI from 1600 drop to 1400

5. Any lock in period when buy bond fund?


Thank you very much!

this is not the right thread to answer u this question.
All your questions could be found by googling online.

Hi guys, would like to ask rgrding maybank asb loan.. Is there any different between maybank asb and maybank asb-i?

Real bonds you need min RM250k. Return varies from 4.5% upto 7.5% eg in Public Bank bonds, even upto 8.25% in OSK investmenet bank bonds.

If you dont have so much, then you buy the UT as mentioned. Yes you buy/sell at market price, but on average the return as mentioned above, so it means by the time you sell the price already increased to that level.

Can it be lower than FD 4%?, i suppose it can drop in price also, becos you buy and sell at market price, depending on when you buy/sell that UT.

However as for the real bonds, you wont get less. LIke the PBB Bond, it is fixed -you get the 7.5% pa return, year after year. Better still is, even the bond price also increase (good demand now) so if you sell now, you can get back more than your original capital of 250k.

Best time to buy Bond is when bank interest rate is low. When bank interest rate is very high, bond is not in demand.

Lock in period, yes for real bond. OSK is 5+5 years. PBB bond is 50 years if you look at the maturity date on the paper!!

How do we purchase direct bond from Public bank?

Walk into the bank and tell them or need go through certain agents?

You have to wait for new issue. once it is launched open, it is very quickly taken up.

After that you have to buy from open market.

The old bonds mentioned above, if you want, you go to the bank and buy it from secondary market, that would be at a premium.
Eg when it was launched the first owner paid RM256k for a 250k bond, if you were to buy from secondary market now, may be you have to pay RM280-290k.

After buying it up, you will be receiving all the subsequent dividends/interests till maturity/call back.

Good bank bonds are hard to come by now. The one available mostly pay low returns, 4.5% or so.

Corporate bonds if you want regularly available.
but rather high risk.

Eg. like the recent Malakoff bond -paying 9.5% pa return.

But recently i read that soon malaysia will open its bond market to retailers.

LOL have you even bought bonds? Bond earnings are inverse with interest rate, If interest rate goes up, bond prices falls and vice versa. You should buy bond when the interest rate is HIGH, and wait for it to fall to reap multiple earnings both from the interest and the rise of bond prices.

If you plan to hold until maturity, then the interest rate does not matter.

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Added on July 16, 2012, 1:12 pmYes the bonds have all risen in prices due to interest rates has been steadily declining not only in Malaysia, but in the world. If interest rates starts to shoot up, the bond value of 280k-290k will drop back to 250K or EVEN LESS if the interest rate EXCEEDS the bond coupon value. Be very very careful on this aspect. Even if you wait until maturity you will have capital loss as the bond will pay back it's nominal-value which is 250K when launched.

To buy bond, don't look at the bond price or the coupon value. You need to calculate the yield to maturity %.

This post has been edited by gark: Jul 16 2012, 01:15 PM

done a lot of home work b4 replying.

OK i shouldnt tell people, best time to buy is when interest rate is LOW. I said already when bank interest rate low, good demand for bond, sure the price would be higher.

But, that was what i did. Bank interest rate so low why keep in bank? might as well go buy bonds which pay higher return.And i found the 7.25% pa bonds, even buy first hand also there is fees (actual is RM4400). I even buy some from secondary market paying upto RM12k premium, i remember calculated it, the 12k fees can be recouped after some 18months+, subsequently can enjoy the nett extra returns.

I dont buy bond to sell it at higher price, but now i am pleasantly surprised that the value is 280-290k! Would i sell for the profit? i dont think so, what to do with that money, where to earn return higher than 7.25%, i am not good at investments.

Genting Singapore Bond at fixed coupon of 5.125% payable semiannually.
How to compare this with AS1M if assuming AS1M average return is 6%?

That one is a perpetual bond, which means no redemption date and the period is infinite. Even a slight increase in interest rate will kill the bond value. Very risky. But if interest rate is further reduced, you get a jackpot. Don't play if you don't understand.

Buying single bond CAN be as risky as equity. If you want to invest in bond, suggest to go a bond fund, where they have a basket of bond to mitigate the risk.

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Added on July 18, 2012, 9:57 amLike previously said, you need to calculate the yield to maturity. This can be calculated from the bond price, remaining period and coupon value. If you can list the above, we can calculate the yield to maturity to see if you got a bargain.

This post has been edited by gark: Jul 18 2012, 09:59 AM

Got a sms from RM OCBC on this.

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Added on July 18, 2012, 10:25 amThanks Gark, I am a newbie in bond, have much to learn

This post has been edited by MGM: Jul 18 2012, 10:25 AM

If you can calculate for us to see, why not?
Here is the details:


1) Public Bank Berhad Non-Innovative Tier 1 Stapled Capital Securities ("NIT-1")
Offer period 25.5.09-28.5.09

I bought 1 lot during offer period at RM101.7600 = RM254400 .
Then another from open market in December 2009 at RM104.8200 = RM262820.55
So far dividend pay out at 7.5% , has been as expected. Half yearly RM9349.32-9400.68.

Statement dated 30.6.12 showed that the market price is now RM115.7700 = RM290,555.14

Is it worth selling now?


Ratings AA2
Maturity - Perpetual with first call at 10 year. On paper it is 5.6.2059

If no call...until 2059

1st lot Yield To Maturity = 7.37%
2nd lot Yield To Maturity = 7.12%

If you buy now at current rate, YTM = 6.4%

If your bond is called in 10 years by the bank (you have no choice in this)...

1st lot Yield To Call = 7.25%
2nd Lot Yield To Call = 6.78%

If buy at current rate, YTC = 4.72%

IMHO, the bank is very likely to call the bond and re-issue one with lower interest rate... looking at the interest rate environment
Also the returns are somewhat higher than A-AAA diversified bond funds (5%-6.5%)... although some bond funds posted 9%-11% last year.

This post has been edited by gark: Jul 18 2012, 04:16 PM

Thanks for the calculation.

So it looks like the first buyer tend to make more and the later buyer would gain less, since the YTM or YTC seems to be falling with time, as the price moves up.

So can we say for someone who expects a minimum return of 4%, there is no point in buying up this bond when the calculation
produces a YTC of less than 4%, even though after buying it up it actually pays you 7.5% pa?

Then, by extrapolation, shall we say by the time the calculated YTM/YTC falls below that expected min of say 4%, that is the time to sell and get out of this bond?

Thanks for your input.


PS: If by maturity the price of this bond falls below cost, the bank interest rate would have been very high right? may be 12% or more?? just curious....

Yes the cheaper the bond to the face value, the higher the yield, for example greek bond is selling at 30%-50% face value with yield as high as 35%, but the risk is greater. The shorter the period the lower the yield but more stability in interest rate movement, so this is risk vs. gain. Some people can sacrifice lower yield for better loss protection, so yes there are people who buy short term low yield bonds. Although the cuopon pays you 7.5% but since you have bought at inflated price, the yield will be lower. The decision to sell the bond depends on the YTM/YTC or the interest rate outlook in the future. If you think the interest rate going up then sell, if maintain stable or lower in the future then keep. Bond purchasers eye BNM announcement like a hawk.

You need to ask your RM to advice you all this the next time you buy bond, if he/she can;t answer or advice, find another RM.

This post has been edited by gark: Jul 20 2012, 10:45 AM