How to top up SSPN-i saving using Maybank2u

If you have opened a National Education Savings Scheme (Skim Simpanan Pendidikan Nasional, SSPN-i) account for your kid, and you intend to top up your kid's SSPN-i saving by using Maybank2u online facility, this is the way.

Don't waste your time looking for the SSPN-i top up link inside Maybank2u online banking website, you can't find it there.

Instead, go to the webpage below:
http://www.ptptn.gov.my/web/english/sspn/debitpayment

Look for the black button with caption "Bayaran Debit Maybank2u.com Debit Payment" on that webpage and click on it, then follow the steps to complete the money transfer.

In order to use this online method to top up SSPN-i saving, you need to have all of the following:

• A Maybank savings or current account (to transfer money from)
• Activated Maybank2u online banking facility (through Maybank ATM machine)
• SSPN-i account (to transfer money to)
• A handphone number that linked with your Maybank2u account (to receive the TAC SMS during money transfer)

You might probably be interested to also read about:

• Does it worth to put saving in Skim Simpanan Pendidikan Nasional (SSPN-i)?
• Online SSPN-i Statement of Account (for income tax relief)

57 mutual funds with 0% sales charge at eUnittrust.com.my

In conjunction with Malaysia's 57th year of independence (Merdeka) and the recent recent PhillipCapital 5th Annual Investment Conference 2014, Philip Mutual is now offering 0% sales charge to 57 funds available in their https://www.eunittrust.com.my/ website should you invest more than RM10,000 in the selected funds, or 0.5% sales charge should your investment amount is between RM5,000 and RM9,999.

This "eUnitTrust Raya & Merdeka Promotion 2014" will end on 31 August 2014.

You can trade unit trust funds managed by various fund management companies including Eastspring Investments Berhad, Hwang Investment Management Bhd, Kenanga Investors Berhad, etc. with this online  unit trust distribution channel.

For more information, visit to https://www.eunittrust.com.my/fundInfo/promotions.asp.

Impact of Malaysia GST to Investors

Malaysia is expected to implement Goods and Services Tax (GST) on 1 April 2015 at the initial rate of 6%. The cost of a lot of things will be affected, including investment vehicles and products.

I believe nowadays everybody deals with banks. How the GST will impact our deposit, interest, loan, credit card, bank charges, etc.? Refer to the table below.

The next of our concerns is our investment in the local stock market and unit trust funds. The brokerage and clearing fee will be affected, but not the stamp duty. The impact on unit trust funds is more severe, so your fund manager has to work much more harder to bring you a good profit after minus all the charges and fees and now the additional GST imposed.

How about insurance policies? Your premium paid to life and education policies will not be imposed with GST, but it seems that most if not all other insurance policies are affected. Note that general insurance products including car insurance, house/fire insurance, accident insurance, etc. will be affected too.

For those who invest in precious metals (gold, silver), jewellery, collectibles, etc., if you trade with the physical product, you are affected.

If you trade with a gold/silver investment account with a bank without touching on the physical product, you are probably not affected.

A 6% GST of PAMP Suisse 100g gold bar selling at RM14,000 will be RM840, quite a big sum.

The worst reason in the world to buy anything is just because someone else did

How many times you can find yourself buying something as a result of just following the crowd or because someone else did?

It could be a hand phone, a gadget, a book, a music album, a drink, a food, a car, a property, or even an investment instrument (stock counter, futures, forex, mutual fund, etc.).

Why is it being the worst reason in the world to just follow someone else to buy something? Well, the keyword in the sentence is "just".

It is really a bad idea to blindly follow other people, particularly in buying, without your own reason(s) to do so.

Always remember the saying: one man's food is someone else's poison.

So, do not simply buy a stock just because Warren Buffett bought it. You need to find several other reasons to convince yourself before making the order.

Do not simply buy a property just because people around you have bought theirs. You need to assess your own financial situation, your gut feeling about the property, your planning, your willingness to manage it, etc.

Do not simply buy certain brand of smartphone just because people around you are using that phone. Have you find out the pros and cons of the phone? Have you find out the features and map them to your own need? Have you compare it with some other alternatives?

A lot of time, if we chose that worst reason in the world to buy something, we might end up buying the wrong thing, or buying the unnecessary, or even buying a nightmare. This is particularly true in the investment world.

MSWG Seminar on Privatization & Take-Over Matters

The corporate scene has witnessed a spate of privatization and take-over exercises carried out particularly over the last one year. Launching of privatizations or take-overs seem to be the trend, and many are amazed or baffled with such news reported with increasing frequency.

 

Against this backdrop, the compelling and burning questions ringing in the minds of many is why the increasing need to privatize and exit from the public domain and particularly more important to minority shareholders or the non-interested shareholders is whether the price offered to them is fair and reasonable.

As a result, the Minority Shareholder Watchdog Group (MSWG) is organizing a seminar themed "Privatization & Take-Over Matters",  to be held at MSWG Training Centre on 25 March 2014.

MSWG aims to look for a particular outcome from each of the current privatization or take-over bids in question to curb what is seen as short-term motivations, delivering a target listed issuer easily into the hands of the bidders.

The seminar will discuss and look at various matters and issues pertaining to privatization and take-over bids, including:

• Factors leading a listed company to consider a privatization or a take-over bids
• Review of legislations and regulatory rules governing privatization of listed companies
• Role of various parties and relationships in a privatization or a take-over bids
• Privatization or take-over implications: Voluntary general offer vs mandatory general offer scheme of arrangement (SOA), selective capital reduction/repayment, assets & liabilities acquisition, offerors and parties in concert
• Practical issues, and useful tips, Qs and As on case studies in question

The fee for this seminar is RM80 per seat.

Click here for more information and Registration Form of this MSWG Seminar on Privatization & Take-Over Matters.

The historical relationship between FIFA World Cup and stock market performance

The 2014 FIFA World Cup soccer tournament will take place in Brazil from 12 June until 13 July 2014. Have you wonder what will be its immediate impact to the stock market before, during, and after the tournament?

Based on historical charts of Dow Jones and KLCI from 1990 until today, I have summarized the stock market performance in US and Malaysia during the years with FIFA World Cup, for the short period of early May to end July. The FIFA World Cup normally held in summer of northern hemisphere (around June) and last for about a month.

Here is the summarized chart (click to enlarge):

Based on historical stock market performance, in the US market, there is equal chance to be sideline (yellow box), trending up (green box), or trending down (red box) before and during the FIFA World Cup tournament. After the tournament, it is very likely to go down. Historically from 1990-2010, only 2006 US market goes up after the tournament.

For the Malaysian stock market, it has high chance of going down before the tournament, sideline during the tournament, and going up after the tournament.

These are the considerations during the FIFA time which might affect the stock market performance:

• Retail participants in stock market might allocate their time and money to football gambling, therefore temporary gone out of the stock market.
• In Malaysia, as FIFA held in western host country happens at mid-night, the market participants who watch the matches during mid-night might be sleeping during market opening time, or not having enough concentration to the market.
• The FIFA news will overwhelm other news, including industry and business news.

So, what will happen to the stock market this year around FIFA time? Let's wait and see.

The actual return of my Manulife investment-linked insurance after about 13 years of regular premium payments

My first investment-linked insurance is purchased with John Hancock (later acquired by Manulife and now known as Manulife) in April 2000.

Every month, I have to pay RM120 to the insurance company for the sum assured of RM30,000, and the bank will charge me RM1 for auto-debit from my savings account to Manulife. I was told that Manulife does not accept auto premium payment by credit card. Anyhow, I have added in this RM1 to the cost of this insurance, so its monthly payment is RM121.

Of course, the sum assured of RM30,000 is too small an amount. I have a much larger sum assured in another whole life saving assurance with cash bonus policy to cover up my protection need, which is out of topic here.

Every end of year since 2007, I have the habit of login to Manulife eLITE Customer Service System to check and record down my investment-linked return, and here is my record from 2007 to 2013.

As you can see, every month my premium paid will be invested into Equity Fund (40%) and Managed Fund (60%). The admin fee, insurance fee, etc. will also be deducted from the invested units accordingly.

Today (31 December 2013), I have paid a total amount of RM18,513 for this investment-linked insurance, and my return is RM30,507.62 which translates to 64.79% gain of total premium paid, annualized to 5.08% per year. (This is a rough annualized calculation, the more precise annual return is around 5.58%)

This return is better than putting the money in fixed deposit, not to forget that on top of the actual return, I still have a protection of up to RM30,000 for death, TPD, etc.

However, it also shows that the actual return is lower than the projected return that the insurance agent shown to me 13 years ago.

My actual return in investment-linked insurance as shown in the table above should be good enough to tell you that, don't expect too much return from investment-linked insurance. As my age grow, the insurance charges will also become higher and higher, which will erode into the invested portion of premium paid. I probably will surrender this insurance policy and get back my return around the age of 55-60.

For me, the best investment option is still directly invest in stock market. I can't imagine after 13 years, the money still unable to double up. In my own stock market investment, that return figure should have added one more digit behind.

Registering for CDS eStatement

Whenever our Central Depository System (CDS) account has share movement (buy shares, sell shares, transfer share, receive bonus shares, subscribe to rights shares, etc.), Bursa Malaysia Depository Sdn Bhd will send a Statement of Account (Penyata Akaun) to us via snail mail on the next month.

Even though there is no share movement at all, as long as there are still some shares in our CDS account, we will also receive the Statement of Account at a longer interval.

Now, we are given an option to subscribe to Electronic CDS Statements and Notices (eStatement) from Bursa Malaysia Depository Sdn Bhd to receive such Statement of Account and other notice paperlessly with our email account instead of the paper statement.

Converting to eStatement is free of charge, and can be done online at Bursa Malaysia website, as long as you have received your Password Phrase in your latest Statement of Account.

Here is how to do it.

Step 1: Open your web browser and go to the Request for eStatement webpage.

Step 2: Fill in the online form as shown above and click the Submit button. The Submit button will appear after you fill up the form.

Note that your complete CDS no. is "XXX-YYY-nnnnnnnnn", in the CDS Account No. field, you just need to key in "nnnnnnnnn" which is the last portion of your complete CDS no. You would not be able to submit the form if you keyed in the complete CDS no.

Also note that you need to obtain your Password Phrase from your latest Statement of Account. It will appear on every pages of the CDS statement.

Upon successful submission, you will be able to see the webpage as below.

Step 3: Wait for the confirmation email sent out by Bursa Malaysia to you. In fact, Bursa Malaysia still sent a paper confirmation letter to my postal address.

It's pretty simple, isn't it?

Does it worth to put saving in Skim Simpanan Pendidikan Nasional (SSPN-i)?

Now has entered the last month for our income tax planning for year 2013, and no doubt SSPN-i which can bring up to RM6,000 tax relief is one of the major consideration, especially for tax payers who fall in the highest income tax bracket.

The National Education Savings Scheme (Skim Simpanan Pendidikan Nasional, SSPN-i) is setup by the National Higher Education Fund Corporation (Perbadanan Tabung Pendidikan Tinggi Nasional, PTPTN) for the purpose of higher education.

PTPTN is an education financing scheme established for the purpose of providing education financing (government study loan) to Malaysian students pursuing studies in local public or private institutions of higher education.

Over the years, PTPTN has been facing difficulty in getting back the loan repayment from graduated students, and there are RM2.3 billions of unsettled loan as reported in September 2013.

As such, there is little doubt to view SSPN-i to be setup to maintain the cash flow of PTPTN, or new students might not be able to obtain loan from PTPTN as their cash flow dried up.

Back to our question. Does it worth to put saving in Skim Simpanan Pendidikan Nasional (SSPN-i)?

From the income tax saving perspective, if you are in the highest income tax bracket of 26%, and you deposit RM6,000 into the SSPN-i account for your children, you will enjoy a tax relief of up to RM6,000 x 26% = RM1,560.

On top of that, SSPN-i will give tax exempted dividend of about 4% every year. If you only deposit the money in December, you won't get much dividend for this year, and you will need to wait for another year to get your first full-year dividend.

As long as the SSPN-i account has savings of RM1,000 and above, there will be free Group Takaful insurance as below:

1. Coverage of RM to RM (dollar to dollar) of up to RM50,000 (general insurance)
2. Death benefit / compensation for the depositor (RM2,000) and the beneficiary (RM500)

The depositor must be 18-65 years, and the beneficiary must be 1 day to 28 years.

There is also a matching grant of up to RM10,000 if your family income is below RM2,000 by the time your child is accepted into and registered with a higher education institute recognised by the government.

If you want to enjoy the tax relief again next year, you need to top up your SSPN-i account with additional savings.

Note that once the money is put inside SSPN-i, it is very difficult to withdraw it. You can only withdraw once per year, up to RM500 or 10% of the savings (whichever is lower). You can only close the account with 100% withdrawal when:

• Your child is offered a place in any higher learning institution
• Your child has voluntarily withdrawn from the education system
• Your child has been expelled for a specific reason
• Suffering from an illness certified by a doctor as being incurable
• Experience total permanent disability as certified by a doctor;
• Death of the child
• Death of the depositor

Assuming that you keep your RM6,000 in SSPN-i account for 20 years, your total return, including the income tax savings of 26% relief, is about RM8,200.

In order to see whether it worth or not to put the savings in SSPN-i, I have expanded the table above to show the accumulated gain every year, and the annualized return in percentage.

 

As you can see from the table above, it is a good choice to put saving in SSPN-i if your child is above 15 years old and going for tertiary education in 5 years time. You will get the annualized return of approximately 8.6% and above based on 4% dividend rate.

After that, your annualized return will drop due to the low dividend rate, but still comparable to the return rate of Employees' Provident Fund (EPF) which estimated to be around 6% annually.

However, take note that the SSPN-i dividend between 2009-2011 are below 4%:

• 2009: 2.5%
• 2010: 3.25%
• 2011: 3.75%
• 2012: 4.25%

So it is not guaranteed you will get 4% dividend every year.

What if the dividend rate is estimated at around 3% per year? The table will be as below:

It is still a good choice to put your money in SSPN-i with an estimated dividend rate of 3% per year, for a period of below 5 years. More than that, there are a lot of investment instruments for your consideration which can give better return.

What if the estimated dividend rate dropped to 2%? The table will be as below:

Well, I think you won't consider it at that kind of dividend rate if your child is less than 10 years old now.

You might probably be interested to also read about:

• How to top up SSPN-i saving using Maybank2u
• Online SSPN-i Statement of Account (for income tax relief)

The Edge giving away iPad Mini 16G or Samsung Galaxy Note 8 in 3-year subscription bundle

From now until 31 August 2013, you can get the following at the price of as low as RM1413.60 (with CIMB credit card, option for 12-month 0% interest EPP easy payment plan):

• 3 years subscription of The Edge Malaysia (printed + 3 digital access)
• 3 years subscription of The Edge Singapore (1 digital access)
• 3 years subscription of The Edge Review (1 digital access)
• iPad Mini 16G WiFi & cellular or Samsung Galaxy Note 8

This deal looks attractive if you have intention to buy the iPad Mini or Samsung Galaxy Note 8, as RM1413.60 alone is an attractive price to get the phablet with credit card payment and 12-month interest free instalment. Now, on top of that, you can get 3 years subscription of 3 weekly papers from The Edge.

This deal is also attractive if you do not have intention to own the phablet. If you manage to sell it out, your 3 years subscription of the 3 weekly papers will be free or almost free of charge to you. In addition, you can get a pretty good cashflow, as you only need to pay the RM1413.60 over a 12 month period, but you can collect the full cash once you sell out the phablet.

Click here for more information about The Edge collection deal.

Attended PhillipCapital 4th Annual Investment Conference 2013 @ Istana Hotel

I have just attended the PhillipCapital 4th Annual Investment Conference 2013 held at Istana Hotel on 20 July 2013.

Overall, it is a good investment conference, with topics covering stock investment, derivative investment, gold investment, etc. Speakers include famous fund managers such as Chen Fan Fai who made his name in Kenanga and now is the Chief Investment Officer of Eastspring, Ang Kok Heng the Chief Investment Officer of Phillip Capital, etc.

The maximum harvest I reaped from this conference is a booklet called Hugh Young's Ten Golden Rules of Equity Investing distributed by Aberdeen Asset Management to their audience of Bharat Joshi's talk on Golden Rules of Investing. Hugh Young is the co-founder of Singapore-based Aberdeen Asia.

The 10 Golden Rules are:

• Treatment of minority shareholders
• Remember that companies are about people not asset
• Balance sheet strength is critical
• Understand what you're buying
• Be wary of overambition
• Think long term
• Benchmarks are measuring devices not portfolio construction tools
• Take advantage of irrational behaviour
• Do your own research
• Focus on industries in which it is possible to have a sustainable competitive advantage

If you want to know more about these 10 golden rules of Hugh Young, you can click here to read the article on this topic posted by Aberdeen Asset Management. Alternatively, you can also try to get a copy of the booklet or eBook from Aberdeen, or from Amazon, Apple iTunes, etc.

Most of the speakers are talking from the macro-economics viewpoint, and they are kind of bullish to the near term local and world economics.

Chen Fan Fai in his topic "How is an Asian Fund Managed?" honestly pointed out that, in the long run, most of the fund managers are underperform the market index.

Symphony Life (SYMLIFE, 1538, f.k.a. BOLTON) transforming to unleash its value

Talking about property stocks listed in KLSE nowadays, few will thought of Symphony Life (SYMLIFE, 1538), but I think this counter worth for investors and analysts to take a look.

In fact, SYMLIFE is a rebranded name from BOLTON just a few months ago. The company said the name change was the 1st phase of its transformation exercise, expected to be complete by year-end.

SYMLIFE transformation involve selling off non-core businesses, and refocusing to property development. Their immediate aim is to return  to the premier league of property developers. Their property development unique selling points focus on quality lifestyle, which brought about their new name Symphony Life.

BOLTON is an old-timer property stock, listed in KLSE since 1973. Its chairman Datuk Mohamed Azman bin Yahya was one of the six individuals in Najib's circle while Najib was appointed Finance Minister in 2008 before becoming the Prime Minister later on (click here to read the news report about Najib's circle). Datuk Mohamed Azman Yahya is also director of Khazanah, founder and group CEO of Symphony House (SYMPHNY, 0016), and ex-CEO of Pengurusan Danaharta Bhd.

SYMLIFE current project includes:

• Surin in Tanjung Bungah, Penang (GDV: RM201m)
• Lavendar Heights in Senawang, Negeri Sembilan (GDV: RM370m)
• Bandar Amanjaya in Sungai Petani (GDV: RM490m)
• Arata in Bukit Tunku, KL (GDV: RM120m)
• Sixceylon in Bukie Ceylon, KL (GDV: RM180m)
• The Wharf in Puchong (GDV: >RM650m)
• Summer Homes in Puchong (GDV: RM55m)
• Tijani Ukay in Ukay Perdana (GDV: RM300m) 
• 51 Gurney in KL (GDV: RM210m)

Note that along with the transformation exercise to bring in more value to investors, the estimated GDV of some of the projects above has been revised in their quarterly report, mainly resulting from the change of project blueprint:

• Tijani Ukay: from RM323m to RM300m since 2012Q4 report onwards.
• The Wharf: from >RM500m to >RM650m since 2013Q3 report onwards.
• Summer Homes: from RM40m to RM55m since 2013Q3 report onwards.
• 51 Gurney: from RM207m to RM210m since 2013Q1 report onwards.

SYMLIFE has a total GDV of RM2 billions worth of new projects to be launched in 2013-2014.

Their reported quarterly revenue and unbilled sales is as below:

Note that its revenue has surged to RM140.518 million during last quarter, at the same time its unbilled sales doesn't decrease following the recognised sales, but in fact increased from RM514 million to RM517 million.

Dynaquest has in its Stock Performance Guide 2013 March Edition estimated the EPS of SYMLIFE in 2013 to be 30.7 sen. With its today's closing price of RM1.18, its PE is only 3.84 which is unbelievably cheap compared with other property stocks in KLSE.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

Are we heading towards a new secular bull market?

The investment sentiment has been gaining momentum recently, especially after the general election.

Some of my chartist friends who use technical analysis in their investment mentioned that the next secular bull market is now right in our doorstep.

If you search the Internet now for the keyword "secular bull market", you will find a handful of articles supporting this bullish view in the worldwide market. You can also easily find the long term DJIA chart similar to the one below in those articles.

Meanwhile, layman investors and other who don't rely much on technical analysis in their investment are also remembering the previous super bull run which started in 1983, 1993, and 2003. So, will the history repeat again in 2013?

To me, I am more than happy to see the next secular bull market formation right now and ride on the bull for the next couple of years (if our chartist friends are correct in their analysis and prediction now).

On the other hand, if the secular bull market delays and not happening in this year or next year, I will also not be disappointed, because you and me have already survive through the past 14 years of secular bear market, aren't we?

If the secular bull market come, it will be a great bonus to all of us in the stock market. If it hasn't come yet, then it is just life as normal.

What do you think?

Semiconductor sector showing sign of turnaround. Which stock to pick?

Year 2012 has been a challenging year for semiconductor industry, with Semiconductor Equipment and Materials International (SEMI) Book-to-Bill ratio sunk below 1.00 and bottomed at the 3rd quarter.

The SEMI Book-to-Bill Report provides a first look at the book-to-bill ratio for North American Headquartered Semiconductor Equipment Manufacturers. The 3-month average global bookings and billings are a strong indicator for trends in the worldwide semiconductor industry. A book-to-bill ratio above 1.00 indicates strong demand, while a ratio below 1.00 implies weaker demand.

The chart above shows the SEMI book-to-bill ratio has been continuously improved for 8 months, and managed to stay above 1.00 since January 2013. It is predicted that this year will be much better for semiconductor sector than 2012.

Currently there are 6 public companies in this sector listed in Bursa Malaysia which have a market capital of above RM100 million. They are Globetronics Technology Bhd (GTRONIC, 7022), GUH Holdings Bhd (GUH, 3247), Inari Bhd (INARI, 0166), D&O Green Technologies Bhd (D&O, 7204), Malaysian Pacific Industries (MPI, 3867) and UNISEM (M) Bhd (UNISEM, 5005).

Let's see how they are performing over the last 6 quarters.

The big players MPI and UNISEM are not doing well, with lost-making quarter results. The 3rd biggest player GTRONIC is doing pretty well, and reported the highest net profit among 6 of them for the last 2 quarters.

Among the smaller players, D&O is not doing well, GUH and INARI are doing well.

The 3 counters that didn't make any lost during the past 6 quarters are GTRONIC, GUH and INARI.

Digging into more detail, GTRONIC and GUH are the winners for having much stronger financial position than INARI.

Note that GUH has diversified into other non-semiconductor related businesses, including property development, electrical trading, oil palm plantation, water/waste water and power generation.

The chart below is extracted from GUH FY2012 Annual Report. It seems that GUH does not show a growth pattern in profit making over the last 5 years.

As a result, we can see that the stock price for GUH is also side-lining.

Meanwhile, GTRONIC has also ventured into several new businesses within the industry. Currently, their business is running on 4 key drivers:

• Integrated circuits
• Timing and quartz crystal devices
• LED components
• Sensor manufacturing

In FY2012, they have spent RM37.7million on CAPEX, including RM30million strategic investments in sensors products for the smart phones and tablets markets.

Their existing sensor products are single-port sensors, i.e. power management devices that ensure power efficiency in smartphones and tablets. They are co-developing with their clients a new generation of multi-port proximity sensors that support multiple functions, which are expected to materialize by 4Q13 or 1Q14.
Their LED components are mainly found in automotive applications, general lighting and household electrical applications. The LED business has been challenging as more and more players are jumping into the bandwagon, squeezing out the profit margin. To counter this competition, GTRONIC keeps moving on with latest technology and innovation.

They now using innovative US LED technology to produce HB LED modules with single bin or single group of white light that could be fully utilised in the general lighting market. They are also working with a multi-national corporation to produce multi-colour programmable LEDs for the stage and display lighting markets in Europe. They are also venturing into the LED components for smartphones and tablets.

GTRONIC has a pretty solid financial track record. The table below is extracted from their FY2012 Annual Report. They show continuous growth in profit making since 2009.

As a result, the stock price of GTRONIC also steadily growing, and hit 100% gain in 2 years time.

Between GTRONIC and GUH, GTRONIC also has the upper hand in dividend yield. Its DY is even higher than most of the REIT counters listed in Bursa Malaysia. They mentioned in their FY2012 Annual Report that they are among the top 50 dividend yielding stocks in Bursa Malaysia.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

DAYANG (5141) share price hit new historical high again

Dayang Enterprise Holdings Bhd (DAYANG, 5141), an oil & gas company specilized in offshore topside maintenance services (TMS), offshore hook-up and comissioning (HUC) services, etc. is considered to be one of the largest offshore platform services providers in Malaysia.

Just like most other East Malaysia companies listed in KLSE, most of the time DAYANG remained undetected from the radar screen of most investors. It gained attention since Q4 2012, especially after announcing a superb quarterly report on 19 November 2012 with single quarter EPS of 7.52 sen, and its share price hitting historical record one after another from then onwards.

DAYANG share price hit RM2.72 on 21 January 2013 with high volume of 5.07 million shares transacted. After that, its share price dropped gradually to as low as RM2.34 on 25 February 2013, probably due to the sell down from Lembaga Tabung Haji.

It announced a poorer quarterly result on 26 February 2013 with lower revenue, but net profit is not affected too badly due to higher margin. A 5 sen tax-exempt dividend was announced, going to ex on 15 March 2013. Its share price moved up again, testing the previous high of RM2.72 on 3 March and 6 March 2013. Then, its price corrected to RM2.6x before regained momentum and hit its new record high of RM2.98 today morning and closed at RM2.85 at high volume of 6.58 million shares transacted.

Its intraday chart for 12 March 2013 is as below:

DAYANG is an associate company of Naim Holdings Bhd (NAIM, 5073) and the financial performance of NAIM is currently pretty much depends on its 33.6% holdings of DAYANG. NAIM share price rose 10 sen from RM2.23 to RM2.33 today (12 March 2013).

DAYANG is financially healthy with strong cash position  of about RM300 million. It recently acquired about 26.1% shares of its new associate company Perdana Petroleum Bhd (PERDANA, 7108). PERDANA and PERDANA-WA prices also rose in tandem with DAYANG and NAIM today (12 March 2013).

PERDANA was not doing well financially before DAYANG's acquisition, and is currently on its way making a turnaround. Recently, it disposed 7 old vessels with average age of approximately 30 years to PT Ninda Pratama Vriesindo from Indonesia, for a total consideration of US$3.45m. This move is expected to save about RM10-12 million annually in maintenance cost for PERDANA, and is viewed as an important move in its financial restructuring exercise.

DAYANG is teaming up with PERDANA to bid for a contract potentially worth RM3 billion from Shell, involving the Pan Malaysia Umbrella HUC project. Both DAYANG and Petra Energy Bhd (PENERGY, 5133) are shortlisted and the contract is predicted to be announced soon. Interestingly, PENERGY is an associate company of PERDANA, as PERDANA holds about 29.6% shares in PENERGY.

DAYANG has outstanding contracts worth some RM1.2 billion that could keep it busy until 2016.

The oil and gas activities in Malaysia is very active now. In 2012, Petronas has made  22 domestic discoveries, signed 9 Production Sharing Contract (PSC) agreements, awarded more contracts for marginal field Risk Service Contract (RSC), etc.

Today (12 March 2013), Lundin Petroleum, a Swedish-based independent oil and gas explorer, announced that it found more oil trapped in sand offshore Pahang, Malaysia after drilling in Block PM308A, as an extension to its discovery of oil sands in the same area in 2011.

Malaysia's deepwater reserves potential is estimated to be 10 billion barrels of oil equivalent (BBOE), and only 3 BBOE have been discovered so far, leaving  another 7 BBOE yet to be discovered.

All these new oil and gas development in the region are expected to bring benefit and money to the Malaysian O&G companies. This is the catalyst that will bring analysts' attention to O&G counters in KLSE.

DAYANG is currently covered by HwangDBS, OSK, Public Bank, HLG, RHB, BIMB, etc. All are making "buy" call. HwangDBS and HLG both set its target price to RM3.36 as of today.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

EPF declared 6.15% dividend for 2012

Few hours ago, the Employees Provident Fund (EPF, a.k.a. KWSP) has just declared the dividend rate for financial year 2012 to be 6.15%, which is 0.15% higher than the 6.00% dividend declared for 2012 (last year).

This is the highest dividend rate declared by EPF over the past 10 years.

If you have already registered as an EPF i-Akaun member to access your EPF account detail with their online service, you can login to your online account now and check the actual amount of dividend in RM added to your EPF account by viewing your 2012 online statement.

With this dividend rate, it seems that those who have withdrawn their EPF Account II savings to reduce their housing loan during 2012 might be regreted to do so, as the effective mortgage rate is generally lower than 6.15% in 2012, due to a lower housing loan financing rate along the year (BLR-2.4% = 6.6%-2.4% = 4.2%).

If you have withdrawn your EPF Account I savings for investment in unit trust or fund, your fund manager has outperformed EPF if your 2012 ROI in the fund is greater than 6.15%. Otherwise, you might want to meet up with your unit trust agent or fund manager to find out what's wrong.

In 2012, EPF has put the highest proportion of its investment portfolio into the equities (share) market, forming 38.77% of the portfolio.

The EPF 2012 investment return is reported as below:



 

Therefore, EPF's return of investment (ROI) for year 2012 is 31,024.94/469,035.43 = 6.6146%. Among them, the EPF's equities ROI for year 2012 is 13,912.54/162,089.56 = 8.5832%. However, in their announcement, EPF says their equities ROI is 10.06% instead.

The KLCI at 30 December 2011 (Friday) closed at 1,530.73 with  volume of 1.329 billion and value traded at 1.528 billion. The KLCI at 31 December 2012 (Monday) closed at 1,688.95 with volume of 0.835 billion and value traded at 1.314 billion.

Therefore, the ROI of KLCI in 2012 is (1,688.95-1,530.73)/1,530.73 = 10.3362%

This means that the ROI of EPF in equities portion is lower than the ROI of KLCI!

Click here to read the official announcement from EPF, and the investment structure of EPF in 2012, etc.

Source of the chart and tables above are from EPF website:

• Chart for historical dividend rate
• Tables for 2012 and 2011 investment proportion and return

PTARAS and FAVCO: the 2 well-performing counters in construction support industry

In my current stock investment portfolio, there are 2 well-performing counters in construction support industry, both having forward PE ratio below 5. Despite the recent KLSE market slowdown, I still hold on to them and will consider to contrarily increase my position should their price drop following the market sentiment.

Both of them have healthy order book, consistent earning growth, and their business are very unlikely to be affected by the outcome of the upcoming general election of Malaysia.

The main business of Pintaras Jaya (PTARAS, 9598) is piling & foundation systems, civil engineering and superstructure building. In 1999, it acquired Prima Packaging which manufactures metal pails & cans as container for paint, chemical, lacquer, motor oil, ink, food, etc.

One of the attractive points of PTARAS is it managed to obtain high profit margin from its business.

PTARAS is cash rich with zero debt, and they have engaged with 3 fund managers to invest a large portion of their cash reserved into the share market. The 3 fund managers are: Kumpulan Sentiasa Cemerlang, Singular Asset Management, and Pheim Asset Management. This should be a better option than keeping the cash in bank and earning the low interest rate, as long term return of well-managed stocks is expected to be better than bank interest. However, certain people might not like this, as its investment gain/lost will fluctuate its earning figure in financial reports.

PTARAS is trading around its NTA of RM3.14 now. It has declared a final dividend of 12.5 sen single tier in respect to its last financial year, which will gone ex on 27 December 2012 and payable on 15 January 2013.

Favelle Favco (FAVCO, 7229) was an Australian company, bought over by Muhibbah Engineering (MUHIBBAH, 5703) in 1995 and becomes a subsidiary of the later since then.

FAVCO's business involve in the designing, manufacturing, supplying, servicing, trading and renting of tower cranes, offshore cranes, crawler cranes, wharf cranes and marine winches.

FAVCO has manufacturing facilities in Malaysia, Denmark, USA and Australia. They have own marketing arms in Malaysia, Singapore, Australia, UK, UAE, etc. as well as a strong dealer network around the world. In fact, 90% of the world's 13 tallest buildings had used Favco's tower cranes during their construction.

As at 21 November 2012, FAVCO's outstanding order book stood at RM746.1 million, of which majority is from the oil and gas cranes for the offshore oil and gas exploration and production activities. Remaining are from the shipyard, construction and wind turbine industry. This will keep them busy for the whole year of 2013.

FAVCO's D/E ratio has been declining from year to year. The D/E for FY2011 is at healthy level of 22%, and it is in a cash surplus position. Its net profit margin has been kept on improving over the past few years from 4.17% in FY2007 to 9.87% in FY2011.

It seems that the stock price of FAVCO has been laggard behind its strong fundamental and business performance, probably caused by its parent MUHIBBAH which has some issue in its Asia Petroleum Hub (APH) project. Anyhow, the problem with MUHIBBAH should not affect the fundamental and business of FAVCO at the time being.

MUHIBBAH has just sold a crane fabrication yard in Australia to FAVCO recently, which I see is positive to FAVCO future financial.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

ICAP AGM over, Tan Teng Boo and ICAP BOD got overwhelming support from shareowners

The 8th AGM of close-end fund iCapital.biz Bhd (ICAP, 5108) which lasted from 9am to 3pm (with 2 hours lunch break to allow calculation of votes to Resolutions #3 onwards) on 10 November 2012 was finally concluded, with overwhelming support given to Tan Teng Boo and the current BOD of ICAP. It is still very far away for Laxey Partners to attempt to obtain a seat in the BOD of ICAP.

About 2000 shareowners have attended this AGM, and apparently 99.8% of the attendee headcounts are on Teng Boo's side, while 0.2% in the hall was in favour of Laxey.

Laxey Partners has recommended to use share buyback mechanism to try to minimize the discount gap between the ICAP's share price and its net asset value (NAV), which we still unsure if it is approvable for CEF in Malaysia to do so, and the method is not bulletproof and has no guarantee whether will really work or not, and even if it works, it "will only benefit short-term traders" as said by Teng Boo.

Meanwhile, Teng Boo has revealed an innovative way of introducing a dual-listing global fund with attached warrants to address the discount gap issue. He didn't disclose much as he is still working on it, and said that hopefully it will be materialized in early 2013.

From the percentage of votes casted to the resolutions, it is clear that City of London Investment Management Company Ltd. was not on Laxey's side. I doubt they are on Teng Boo's side too. They possibly did not cast any vote.

Although Teng Boo managed to beautifully win the battle this round, he has to really ensure that his proposed "dual-listing global fund with attached warrants" can get materialized and can really work. If not, that will be a good attack point from Laxey, and Teng Boo might not be getting as much support from ICAP shareowners again if he failed to deliver.

Teng Boo and the new 7-people BOD must work really hard for ICAP to sustain the victory and avoid subsequent attack. This should be good to all the shareowners of ICAP, including Laxey. After all, we believe Laxey is here to gain money from investment, and not to make trouble for no reason.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

The upcoming AGM of ICAP on 10 November 2012 will be crucial for all shareowners

Most of the shareowners of close-end fund iCapital.biz Bhd (ICAP, 5108) have been wondering why the AGM of this year comes so late.

It was 2 weeks after the announcement made on 18 October 2012 about its 8th AGM to be held on 10 November 2012, an Addendum to the 8th AGM notice has been dispatched through Bursa Malaysia's Company Announcements webpage, that a shareowner named Ms. Evelyn Ho is nominating 3 persons (including a foreigner who is the CEO of Laxey Partners) to enter the board of directors of ICAP. On the other hand, the present BOD is also nominating 2 more friendly partners to contest for the directors election.

As you might notice, the share price of ICAP has been trading at discount to its NAV since 2008, and the gap has widen to more than 20% from 2011 until today. This is a good investment opportunity for anyone who want to invest in ICAP with discounted price to its NAV. In addition, ICAP fund management has been performing well, with its NAV keeps rising despite the discount in its share price.

Then, we saw a foreign fund City of London Investment Management Company Ltd. emerged as substantial shareholder of ICAP since August 2011 and keeps on accumulating until holding about 7% of ICAP to date. Later, we also saw another foreign fund Laxey Partners Ltd. also emerged as substantial shareholder of ICAP since April 2012 and also keeps on accumulating until holding about 7% of ICAP to date. 

Laxey Partners Ltd. has many track records of accumulating the shares of close-end funds at discount, then getting into the BOD of the fund, replace the chairman/CEO and hostily take over the control of the fund. The sudden nomination of 3 persons apparently from Laxey Partners Ltd. to ICAP's BOD is definitely a threat to the existing BOD, and if the replacement of the directors does happened, it will affect the fund's future direction and hence affect the interest of all ICAP shareowners.

According to its 2012 Annual Report, ICAP has 3000+ shareowners, of which about 65.8% are held by about 2,000 minority holding 100-10,000 shares. CDAM, the fund manager, also holds about 0.5% of the shares.

In its Annual Report, ICAP reiterates that it "exists for one simple reason : to allow long-term shareholders or more aptly called share owners, to benefit from value investing. Investing in your Fund allows the power of compounding to work for you. If we succeed in achieving this, we would have also shown that serious long-term investing in Bursa Securities can offer superior returns." This is inline with its IPO Prospectus stating the investment strategy to be "intelligently eclectic".

If the existing shareowners want to maintain ICAP's investment philosophy and agree that the fund has been well managed and the present BOD has been taking care of the interest of all shareowners, they should show support to the existing BOD during the coming AGM.

Anyway, let's see what Laxey Partners going to propose, and what the existing BOD and the fund manager is working on to enhance the value to the shareowners. If City of London is on their own, we might see a triangular war, else, we'll see a cut-and-thrust war. The party who can convince the minority shareowners with 65.8% holding will be the winner, but the minority shareowners must be present to the AGM or appoint proxy the exercise their rights.

That's why, the upcoming AGM of ICAP is very crucial to the fate of ICAP.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

The Edge Financial Daily app for smartphones and tablets

Digital format of The Edge Financial Daily business paper has been made available to smart mobile devices including iPad, iPhone, iPod, Android smartphones and Android tablets for quite some times.

It is delivered with the free The Edge Financial Daily app available in Google Play Store and iTune AppStore. Currently, the digital format of the paper can be downloaded for free too.

However, this app doesn't bring good and convenient user experience to its readers yet, and still need quite a lot of improvement.

• The app is running on Adobe AIR, which requires user to install Adobe AIR app before able to run The Edge Financial Daily app. Adobe AIR consumes about 9 MB of storage space of your smartphone/tablet.
• Before we are able to read the paper, we need to download it from the Internet. The file size is around 30 MB per paper, taking some times to download, and consuming quite a lot of precious storage space of your smartphone/tablet too. Worse still if you are not connecting to the Internet via WiFi or HSDPA and need to download with slow speed, it really tests your patient.
• Probably because it is an Adobe AIR app instead of native app, its navigation respond is sluggish, page loading and rendering is slow too.
• The navigation buttons don't respond well. Sometimes need to tap a few times before it start working.
• It does not support multi-touch gesture. To zoom the text, you need to double tap the screen instead of pinching.
• I don't find any feature to jump to a particular page. Everytime you open the paper, you need to start reading from its cover page.
• Deleting the downloaded papers (especially to save valuable storage space) is a pain. There is no multi-select deletion. You need to delete the files one by one, and each deletion takes a few steps to complete.

It is very nice to be able to read the digital format of The Edge Financial Daily anytime, anywhere with our smart mobile devices. With this digital format delivered through the Internet, we no longer need to look for the paper in newspaper stand, or need to wait for the paper boy to deliver at our doorstep. Being paperless, it is environmental friendly too.

However, it would be better if the app can be redeveloped as native app instead of using Adobe AIR, optimize on the download time and file size, and improve on user interface and experience.