Refer to this link

http://www.bursamalaysia.com/market/listed...cements/1195285

http://www.mih.com.my/index.php?page=press

You need to take in transaction cost, if buy and sell incurred 0.4% (as same with trading share), means 0.8% gone.
4.58% - 0.8% means 3.78% only.

There is no reason to invest into a 3.78% bond when FD also can get this rate.

There is little upside for bond except if interest going down.
Bond is not as same as equities.
When mature, it returns you the face value only.
So bond final worth is fixed already, whether the price can go up or not depended on interest rate difference between FD and bond.

You can't treat a bond as same as equities aka hope the price of bond can fly as equities when IPO listing time.

In my opinion, if die die must buy, choose a good return reit is better than this Bond, 6 - 7% is norm.

thank you so much for this information. it save me some research time....

There is no transaction cost if U buy thr' IPO and U hold for 15 years as on maturity U get back full principal invested.......means U get full 4.58% yrly rate.

If U buy from market and sell B4 maturity, say U buy at RM10,000 for 100 lots (1 lot = RM100) and sell after 6 years also at same rate f RM100 per lot.

Buy cost - RM6 brokerage (if U R using AmeSecurities) + $0 (Stamp duty is exempted) + RM3 (clearing fee - 0.03%) = RM9 which is 9/10000= 0.09%. Means for your 1st year, U earn 4.58% - 0.09% = 4.49%.

For year 2-5, U earn full 4.58% interest.

Sell at end of year 6 after u have received the 2 semi-annual interest. Sell cost. also same = 0.09%
U earn 4.58% - 0.09% = 4.49%.

If U average the 6 years interest = 4.49% x 2 + 4.58 x 4 = 4.55% yearly interest.

1) Bond is guaranteed by the Malaysian government, not so for REIT.
2) Bond rate is fixed, so U do not need to waste your time monitoring unlike REITs which can have wild swings in the dividend payouts, causing U to reshuffle your REIT portfolio.

Diversify yo investments ma...

Very gud analysis n simulation

Do we need to declare the interests we earned ? Is it taxable ?

Nope
Is tax free

Yet another advantage of investing in this bond. Dividend on shares sometimes tax at source and U then need to claim back the over-payment - meaning U still need to pay at your current tax bracket, right ? Any idea what would be the tax bracket for someone earning RM5,000 per mth ?

This post has been edited by topearn: Oct 25 2013, 03:16 PM

U r rite
No idea on RM5k per mth. It depends on deductions as well

What is your tax bracket then (if U don't mind telling, wink wink) ?

Off record la.....

It's ok. I'm just pushing my luck. I would guess most middle-income group would have a tax bracket of average 10%.

Current issue is the 2nd tranche with coupon rate of 4.58%, while 1st tranche only 4%, so does this mean this 2nd tranche is better than the 1st tranche ? Are all other terms & conditions of these 2 tranches the same ?

From 2014 onwards, we're moving to single-tier taxation for dividends. All dividends are taxed at source, and not taxable at the hands of shareholders.

In the previous regime of franked dividends, if your personal income tax level is say 15% and corporate tax rate is 26%, you are able to claim back the 11% difference.

In the single-tier regime, even if your tax bracket is 0%, your dividends will still be hit with the corporate tax rate and you cannot claim back anything.

All T&C remain unchanged
2nd tranche enjoy higher interest due to longer duration

Corporate tax is 25%