Of course it's beneficial to the banks, it's their product (although many people still think it's PNB's product). Loans which brings interest with it never benefits anyone else other than the party giving out the loan

It's only beneficial to the person borrowing if the margins stay healthy. But still, it depends on whether the interest that one pays year after year during the loan tenure outweighs the benefit of constantly putting their own money for saving. For that calculation, I'll leave that to the other experts/sifus here

You're correct but I never bothered with the BLR-x.xx% portion of the equation because not everybody is guaranteed to get that rate. It would depend on the applicant's existing commitments, exposure and credit history/profile.

It's the same logic I apply in terms of ASB bonuses too. Not everyone gets the absolute value and the same applies to the discount rate one may get from the base lending rate

Hahahaha... I knew it Before someone starts screaming "where's the 1Malaysia spirit" bla bla bla crap, it's good to note that the savings rate has gone considerably down since those double-digit dividend hey-days. In an environment of high savings rate and high coupon rates, it's very easy to give high dividends when even FD would give you very good returns

Are you referring to either AER/APR for the interest rates? I'm a bit confused with your query but will try to help where I can

Hypothetically one could speculate that when times are bad, PNB dips into this "retained earnings" pool to ensure consistent dividend returns. Say economic cycles come in 10 year intervals, judging that some unit trust funds had negative returns during the last economic crisis (I only know of PM funds that suffered from this), if each "good" year PNB carries 1 sen into retained earnings when the time comes, they could easily still pay 6 or 7 sen dividends when others are suffering negative returns during the bad years.

I guess that's the benefit of being conservative in one's dividend payments. Yes other unit trust may look spectacular when dividends are declared showing high yields but at least with PNB, you know that you'll still get above average returns all the time.

Hopefully this will continue for a long, long time

It is a good idea for as long as the interest rates remain at the current low levels. As it has been mentioned previously, the spread between the dividend (ex-bonus) against BLR is only between 1% to 3% max. As the OPR increases, so will the BLR thus squeezing one's margin.

It's very simplistic and also foolish to assume that interest rates does not rise overtime. Given where it is now, the only way is up. Central banks use interest rates to contain inflation and we're certainly starting to see the effects of reduced subsidies in the CPI. BNM would also increase rates to defend the local currency in its fight against capital flight from the MYR.

Central banks also raise interest rates to contain asset bubbles which everyone knows one is building in the housing sector and also to reign in debt if it starts getting out of control. The household debt of Malaysia is high as everyone knows and BNM may look at using its monetary policy to contain it too.

A lot of people who get into ASB loans make the assumptions that the table that banks print out is cast in stone when it is not. Everything revolves around the BLR-discount % which means that not only can the margins can go up, it can also go down.

Before tying yourself into an extremely long loan tenure, ask yourself what would you do if you would have to top-up the monthly installments in the event the interest rates go up. As I had mentioned earlier, OPR can go either way but at this very moment, there's more potential upside as compared to downside in terms of movement of the OPR.

The latest development also does indicate not only towards a shorter loan tenure but also including ASB loan deductions as part of a person's commitments/liabilities. If and when it does happen, than remember that your ability to take loans in the future may be restricted accordingly.

That's the challenge that PNB faces with its fixed priced products. While these investments are not guaranteed, PNB "honors" the value of the investment (Ringgit to Ringgit) regardless of a fund's actual PAR value/price.

If you're old enough than you may recall that back in 1997/98, PNB had no choice but to honor redemption by investors at RM1.00 even though calculations/valuations done at that moment in time by analysts indicated that fund prices ranged anywhere between RM0.70 to RM0.80 cents. So this "short" of a couple of cents "must be honored" by PNB no matter what. And unlike other unit trust companies, they honor redemption requests pretty much on the spot. So to add a 3rd dimension of challenge, PNB has to stay liquid in order to honor redemption requests and not have everything invested in equities.

It puts into perspective PNB's ability in terms of managing its funds. Not only it has to give out good yields for its funds but it has also to make sure that the PAR value/price of ASB, AS1M, ASW2020 and ASM stays at par or above RM1.00 to "honor" client redemption. I feel sorry for those who work with PNB who has to face all the whining and complains about PNB's dividend yields when no other unit trust company is in its same position.

While I "smirk" at PNB when it says "we can declare x cents in dividend but we're reserving x cents for carrying forward etc..." I kinda understand the immense pressure that PNB goes through in not only providing good yields but also ensuring that it can honor the RM1.00 redemption request regardless of the condition.

I'd like to defer on this point. Just because it wasn't reported in the various news channel doesn't mean it didn't happen. Times WAS tough back then. Interest rates went through the roof (exceeded 12%) and the number of months in areas to classify a person/loan as non-performing was reduced considerably from pre-crisis levels.

It may not have been a "run" on PNB but if everyday, one would have to "top-up" up to RM0.30 cents for withdrawal (even during good times withdrawals from PNB and its agents can go up to 8 figures per day by most estimates) because the par value/price of its RM1.00 is not RM1.00 but RM0.70, it can't be good for business. Imagine making a loss of 30% for each transaction over a period of a year or so during the crisis.

Different people may have faced 1997/98 differently depending on one's economic health at that time and that's why I disagree with your statement that it didn't effect PNB. Doesn't mean that an investor wasn't turned away at the counter during redemption process means that PNB/ASNB had no issues with it because if PNB/ASNB did not honor "on-the-spot" redemption, they'd be in an even bigger problem

You could say that with 99% products in the entire unit trust industry. Unit trust products in general are variable priced where return on one's investment is not only from dividends but also capital appreciation. At the end of the day, it's all about how comfortable are you in investing in unit trust products. Each product from each company has its pro's and con's and as an investor, it's your job to ensure you know what you're getting into.

And unlike fixed deposits, I believe all unit trust products are not protected which means in the event that the unit trust company fails or go bankrupt, no one will come in and save you. So at the end of the day, it's all about risk vs reward. Higher risk, higher returns.

Unfortunately, far and I mean far too many want little or no risk yet want high returns

The local equity markets are going through a dip at the moment with the local bourse breaking the 1800 point resistance level. IMHO opinion, the best way to approach investment in variable priced products is through regular monthly investments. It helps you to absorb the shocks of price movements of which you seem to be very adverse to.

We've all gone through that phase before... some are still going through it

Inclusive of PNB's own branches and its agents, there's more than 1700 branches/locations where one can transact their unit trust product at any one time. As you rightly pointed out, there's someone trying to add to their investment every minute that these branches are open.

In the likelihood that someone redeemed 50,000 units of say ASW2020, there's probably a minimum of 1700 (that's only assuming each branch is doing only 1 PNB related transaction) people vying for those 50,000 units and the situation isn't help by those who have arrangement with the bank's tellers. Even if all 1700 people only invested RM50 each, not everyone is going to get a share of that 50,000 units redeemed earlier.

ASB declares 7.7 sen dividend and 1 sen bonus

http://www.theedgemalaysia.com/business-ne...MoBi69M.twitter

Agreed. Don't fall for it especially when the banks try to push their loan products to you...

ASB loans

Base Lending Rate. It's the interest rate that bank's charge its customers on loan/financing products.

Wow! They're giving away Prius C!


15 minutes? I think you're lucky. Judging by the photo I took from their HQ, it might take you hours to do so.



They were queuing up all the way till the outside. I bet many of the PNB's agents suddenly find their system "offline" to discourage people from flooding their branches. Give it a week or so before contemplating of doing any ASNB related transactions.

Agreed. There is no such policy. The only other way if you have inherited units even though you have hit the limit of 200k.

As mentioned earlier, there's no limit as long as the growth is due to dividends

I'm very intrigued as to how you believe PNB directly contribute to the government's coffers?

Wal lau wehh, the manager never heard before of PDPA? I remembered the banks have been practicing it and PNB has started to do the same this year. Hopefully she doesn't get into trouble