Got new candidate for FRMONBWFDP!

I know this is not applicable for most of you guys... but I just joined this FD program. Good or not?

Bank : OCBC NISP
FD Tenure : 5 years
Interest : 1.2% p.a. + Ipad3 32GB Upfront
Amount : Approx RM 12,600.

Expected FD rate : 2,199 / 12,600/ 5 years = 3.49% + 1.2% = ~4.7%

Link

Easiest and safest way with little or no risk to currency fluctuations is to purchase Currency Hedged Foreign Government Bonds. But please note that it is much riskier than FD, but pays yield of about 3%-5%.

And also expected to maintain the OPR rate at the next Nov meeting, which is the last meeting for the year.

Based on the 'Budget Preview 2013' reasearch paper by CIMB.... very election centric...

1. OPR is expected to be fixed at current rate, interest rate is expected to stay low for some time to encourage consumer spending. Also current GDP is mostly boost by government spending, so boost private spending is the target of this budget. Also the current debt to GDP ratio of 51.9% discourage the raising of interest rate. Budget deficit of 4%-4.5% is expected.

2. GST is expected to be further delayed, again to boost private spending. Implementation to be in 2014-2015

3. Expected 1 more round of handout via BR1M part 2.

4. Expected 1% cut in income tax and raising of the cap of relieve for EPF/Insurance premium from 6K currently

5. National Automotive Policy will be fast tracked to 2014-2015

6. RPGT will be raised to 10% for 3 years. Higher stamp duties for property >500K. Lower loan ratio to 50% for 3rd property. Foreiner minimum purchase price raised from 500K to 1 million.

7. Possible for reduction of withholding tax for REIT.

8. No hike for sin taxes and 1/2 month bonus for govt servant.

So don't save all your money in FD, spend it all like ajib gor says and save the Malaysian economy...

This post has been edited by gark: Sep 15 2012, 11:12 AM

REIT got 10% withholding tax.. lar..

REIT Withholding tax

Resident Individual = 10%
Non Resident Individual = 10%
Resident Institutional Investors = 10%
Non-Resident Institutional Investors = 10%
Resident Companies = 0% ; Subject to Corporate Tax at Prevailing Rate
Non-Resident Companies = 25% for Year of Assessment 2009



This post has been edited by gark: Sep 15 2012, 11:16 AM

As history always has shown if an economy crash, the interest rate tend to go DOWN instead of up to re liquidate the financial system, and to boost spending to re-inflate the economy. Look at historical Malaysian OPR rate and you will see the pattern.

The only time when interest rate tends to go UP is when inflation runs rampant and the economy is over heated due to speculation. So the words 'economy crash' and 'interest up' is more or less contradictory. But if you are talking about bonds then it is a different story since it moves in reverse of interest rate.

Basically in the period between 1992 - 1997, Malaysia was building a fiscal & market bubble with massive overvaluation of the stock exchange and very high property prices. Everyone was speculating rampantly as anything 'invested' is sure to generate big profits. This is similar to the 2001 'dot com' and 2008 'property' economic crash when the bubble is popped.



Thereafter the results from the fallout of the popping of the bubble, the interest rate did go very high temporary BUT in the same time the currency was devaluing hence those who are holding cash did not benefit from the high FD rate. Hyperinflation was happening overnight, as the purchase power was halved. Most people were quickly pulling out capital from the banks, risking a bank flight. Capital controls, high (temporary) FD rate and pegging of the currency finally put it to stop. So don't look at the high FD rate and 'thinking' that you can profit massively in 1998, as your 'real' losses from purchasing power is much greater.

Those that lived through this period is much more vary and will diversify their holdings accordingly. Remember not to put all the eggs in one basket.

This post has been edited by gark: Sep 17 2012, 11:45 AM

= ((3x2.98)+(3x3.38)+(3x3.68)+(3x6))/12 = 4.01 %.

This post has been edited by gark: Sep 18 2012, 07:29 PM

Got ah.. RM 1.2 mil per license. Want ah?

Use quicken lah.. can link to your Bank/FD/CC/Investment account (if your bank supports it) if not then download CSV to update your quicken.... If don't want to spend money then use mint.com... but no linkage to My bank account... MS Money 'die' because of quicken.

This post has been edited by gark: Sep 24 2012, 02:20 PM

Wah lau if all split like that.. mah many many FD accounts? For me i split into batches of 10K, 25k and 50k..no need so many FD accounts.

This post has been edited by gark: Nov 3 2012, 10:39 AM

Really ah.. lucky i use e-FD.. save on the hassle... otherwise if split all into 1K into physical cert, don't know where to put in the house leh?

If later the stack of FD cert get eaten by termites lagi 'suay'.... I used to print out the e-FD receipt ... now don't bother already just do a screen print to PDF.

Seriously got ppl really bring whole stack of FD cert to bank one meh? The teller see also 'pengsan' already...

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Added on November 3, 2012, 1:24 pmWait one hour is ok.. that day the RM told me the clerk all went out for lunch, you 'sendiri' go outside and take number...terrible...

This post has been edited by gark: Nov 3 2012, 01:24 PM

Remember REIT acts like bond/fd during good times but when the economy crash or during bad times it will act like a stock. REIT in SG dropped over 70% during the last financial crisis, although continuous dividend is still being paid with yield >15%-20%. MY REITs does better, dropping to 30%-40% during the time, with yield reaching 10%. The yield is more or less following the interest rate movements and being a leveraged investment, will have even higher swing. There is a risk factor to everything and no free lunch.

Basically during meltdown, people put their brain in their ass. You must have enough holding power and do not panic.

This post has been edited by gark: Nov 9 2012, 07:17 PM

Even higher risk, as business can 'rugi' one, but REIT at worse case make less money after 'nego' rental with tenants.

New retail bonds by CIMB... more or less as safe as FD unless the bank close down.

Offer period: 8 November 2012 - 7 December 2012
Minimum investment amount: RM250,000 in multiples of RM5,000
Tenure: Up to 10 years, First Call Date no later than 5 years from Issue date
Indicative Variable Coupon: 4.80% p.a.** referenced to 6-month KLIBOR

Principal will be returned on call or maturity date by reference to CIMB Bank Berhad Tier 2 Subordinated Debt (rated AA+ by MARC)
Receive Fixed Coupon of indicatively 4.00% p.a.* if investment is flipped or if the investment is not called (after year 5)
Transparent payoff features with assurance of daily prices and liquidity

Looks like a good deal if anyone wanna lock in very long term yield, interest paid every 6 months.

This post has been edited by gark: Nov 21 2012, 04:28 PM

As in any bonds, if klibor rate goes up, bond value drops and vice versa. But if you held until maturity you are assured of the coupon value and capital so it performs like a FD.

If you sell or redeem then your capital might be affected depending on the klibor rate movement.

No need talk and argue a lot here, give the figures, we count the yield for you. Then we compare against FD rate. Easy...

I have just placed BII Maybank FD.. put in RM 10,000 equivalent for 5 years.. get Samsung Galaxy Note 2 HP + 1% interest p.a. On average work out to be ~5.4% p.a. Just so happen need to buy HP....

Anyway not applicable for all of you...



This post has been edited by gark: Nov 28 2012, 06:32 PM

Yah... same offer if place 30K for 5 years, get ipad+samsung note 2+ mac airbook.... but already got tablet and laptop...

But never make any loan here.. can die faster.. average loan interest rate is 9.5%-12.5%...

This post has been edited by gark: Nov 28 2012, 06:21 PM