QUOTE(cheahcw2003 @ Aug 5 2009, 08:46 PM)
Actually it is not a rumour, it is only an estimation as indicated by PNB's chairman
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According to PNB president and group chief executive officer Tan Sri Hamad Kamarul Piah Che Othman, AS1M will be benchmarked against the Malaysian Government Securities average 5-year yield which is currently between 3.7 and 4 per cent.
"Of course we target to do better," he told reporters this morning"the above is in The Malaysia Insider Link, u can also check the link as follows:
http://www.themalaysianinsider.com/index.p...able-from-aug-5Benchmark is benchmark, they are not guaranteed or expected to do it. It is just like a hurdle you aim to cross (in high jump), but whether you can jump over it or even higher, it is another story.
QUOTE(the snowball @ Aug 5 2009, 10:57 PM)
Yup, there are as big as you can get in Malaysia. But, does their profit they make is reinvested into equities or they are able to hold on to it in cash? Or do they have a minimum portion of their portfolio to be in equities as per prospectus? It would be better if they can hold on to cash because during the falling market, in order to pay the dividend and to cope with the increase in redemption ( it is unavoidable during recession), they need to sell, but due to their huge size, if they sell, they have a huge effect on the market which in turn lose money on their remaining investment in equities. It is like a catch-22 situation..
Yup, if treat it differently, one can treat ASM/ASB/ASW is just like gov investment arm borrow money from you (at 6-7%) so that they can invest.
The ability of giving stream of return which is higher than FD rate can come from MGS, previous decade of profit of equities etc.
Eg. they have made a lot of profit from previously year of investing, let say 50%, so now it is spreaded out to 5-6% pa which is not a burden for them. The fund is not aiming or like to be a UT (for fixed price at RM1 one), the aim is to let ordinary people to have alternative way to invest or just like what saving bond purposes.
That's why they have limitation of max amount on individual. As if no limit, those millionaire or billionaire will pour their fund into it instead putting FD in banks, which by then PNB will not able to pay out the yield already. That's why they need to control the amount of go in. As if it is too much, they won't able to pay the yield already.
Malaysia gov secruties/bonds are carring yield around 3.5%-4.0%, so if they solely invested in those area, they still achieve some rate which is better than FD rate, which is also a selling point already. As long as those ASx continue to pay some rate much better than FD, it won't have massive redeemption.
Yup, if equities continue to be poor over the next 10 years ro 20 years or something happen like 1997, which they can't generate any income, then yes, it is not sustainable to see them paying like previously.
Actually for the invested equities part, if those company still giving ok dividend, they PNB can pay the ASx holder already each year, if there is no redeemtion. Redeemption rate is very low in ASx fund, so it is not a problem for PNB to have a fixed price at Rm1.00 even though equities plunging.
If there is massive redeemption in poor equities market, then, yes just like what you had mentioned in the earlier post could be happening, but it is unlikely although not impossible, mainly due to the fact, equities price (for fundamental sounds company) always tend to go up over the long term.
Oct 4 2006, 05:23 PM
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), without knowing the actual fact of the fund.
) ASM, ASW which people mostly understood one, why this one people cannot understand on it?
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