So does the banks in Hong Kong.

wow

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Added on June 8, 2009, 9:15 pmi have invest nzd last year, thought it was good, cause that time interest high, ppl recommend also. but now fall heavily....
until recently the price went up bit by bit, don't know want to sell or wait... if wait, go up good, but wat is terbalik....


This post has been edited by loke8888: Jun 8 2009, 09:15 PM

someone knows how to transfer money from china to msia's acc in the most save money way? sorry if im not using those specific term coz i kinda poor knowledge in this field... thanks ya

I believe only Citibank Citigold and HSBC Premier can help you in this regard.

i was first introduced to this investment years ago unti recently, Standard chartered bank call me again to review it. from my rough understanding, it is a buying a foreign currency with guaranteed interest payment.

for assumption -

gbp/myr

1. The bank strike rate of 7th sept 2009 is - 5.71
2. spot rate as of 7th sept 2009 - 5.77
3. Lock in period - 2 weeks (minimun)
21st of sept, the spot rate is above 5.71, we will get the 8% interest in MYR.

SECOND SCENARIO,

if the spot rate is below strike rate of 5.71, we still get 8% interest, but the money will be converted to GBP.

Once converted to GBP, we can still exercise the above scenario, with interest paing of 8% and waited to be converted to myr. But, from here, how the strike rate and spot rate is determined, i am confused.

so, perhaps someone experienced can share the info here.

It is called DCI or some called pairing which become more and more popular now.

A lot of currency choice from AUD (the most popular) to NZD, GBP, Euro, etc.

You can do MYR -> GBP or GBP -> MYR (provided you have GBP on hand now).

Strike rate is based on spot rate +/- how many basic point to wish, the more +/-, the less interest will be given. While tenure range from 1 week, 2 weeks, 1 months even 3 months.

yes, is called dual currency investment.
But, in the scenario that if the pair falls below the strike rate, it ill be automatically converted into gbp. what i not sure is, once converted into gbp, what will happen then ?

Cherroy, perhaps u can help me to understand.

Once converted, your money will be deposited in the account as GBP, not RM anymore.

But you can do DCI for your GBP to convert to RM, which the strike rate issue applied again.

cherroy,

did u personally deposit in this dci ? what is ur opinions about it? as for me, i just made the first deposit with standard bank. it is my first time into it.

damn, i have few thousands USD in bank.... still waiting the right time to sell it...

how much in usd and what is the rate u converted ? i think last few weeks is quite good the rate, which mostly above 3.51 till 2 yesterday, it was 3.46

if u want to convert from USD to RM, better withdraw USD cash notes (in overseas bank) and convert it with local Money changer, u can get better rate compare to converting via banks, the bank rates suck.

For example Maybank today's buying rate for TT/cash rate is 3.4410/3.3990 respectively, if u take usd cash to convert to RM via money changer, u can get 3.470, u can use the following money changer website as a reference:-

http://www.wawasanmoneychanger.com.my/exchangeRates.asp

I was paid in USD and thus credited in bank account (Foreign currency account).

The problem is, I asked UOB Bank and they don't have physical cash note and allow me to withdraw such a huge amount. They even don't have USD100.

All their stocks are depend on seller and if no one sells, they don't have notes. I believe no one will sell their USD to banks since their buying rate is lower than money changer.

How ar....

You must ensure the your target DCI pairing currency is strong one, so that even converted, you still stand a chance for currency appreciation side.

The one the most risky target now is USD, which is keep on sliding to new record level, due to ongoing economy problem of US as well as monetory issue.

I would say for if fundamental nothing change, don't do pairing in USD.

AUD is the bullish one at the moment and carry higher interest rate (3% for AUD FD).

Just my 2 cents.

Can u find out from UOB if u can convert the usd in the account in traveller's cheque? then u can encash the traveller cheque with money changer. Money changer pay better rates than banks when u convert it from USD to RM.

There is another type of investment, someting like the dual currency thing also. It workls like this : you can get a loan from the bank in a denomination (denom) which has a low interest rate, eg the yen, and at the same time, get a loan in a denom which has a high interest rate, eg, the AUD for now. Put the AUD back into the Foreign Currency Fixed Deposit to continue to earn the interest, while you leave the yen alone.

Since the AUD interest rate is higher than the yen's, you earn a net interest rate. Of course, the risk would be the yen appreciating very strongly versus the AUD after you started the investment, which makes the yen interest becomes more, thus reducing your net interest earned.

Otherwise, you just leave the two denoms on their own and the net interest earned will keep piling up.

You get a double advantage if the AUD strengthens against the yen,.... meaning you will earn :-

a) the net interest from the AUD FD; and

b) the appreciation of the AUD vs the yen.

Tell me your opinions,.....

This post has been edited by Lawyer1: Sep 26 2009, 02:23 AM

i know HKG and SIN have these kind of investment opportunity, but we dont have it in Msia right?

This is carry trade, it is not risk free.

You forget to add on
c) if Yen appreciate against AUD, you loss the capital as net interest gain might not able to cover the capital loss.

A lot of this kind investors get burn previously using Yen-Aud for carry trade before the 2008 crisis unfold. As that time, Yen interest is like 0.5%, while AUD interst is 7%, so the diffence is so much prompt a lot of investors borrow Yen to invest in Aud, but after the financial crisis unfold, Yen surged to the roof against Aud, so you have to pay back even more which extra interest earned might not able to cover the capital loss.

Borrow Yen is very risky, because Japan keep on having high surplus of trade, if really want to play this game, it is better to borrow USD (which sink like no tomorrow, even some media commentator joke it is US Peso, not US dollar anymore )

so can i ask you guys, now invest in the foreign fd is it a good time?

let say, i put my money in yen currency since the FD rate is damn low now, and im going to study in Japan soon, will it be advantage for me ? pls, i need the help as i have a FD going to mature in october and i dont want to put it in local bank FD again with 2.5% interest.

ok... i found the right thread to ask my question below

If i want to hedge against ringgit, what are the best selection currency ?

and last year financial crisis ..... ASD and NZD going very low....................and any one buy it......

as ASD and NZD most of the time having high interest rate...