There are 19 Exchange Traded Funds (ETFs) listed in Bursa Malaysia, and majority of them are thinly traded.
One of the more active one is GOLDETF (0828EA), which is also risen the most among the ETFs in Bursa Malaysia, with more than 28% 1 year historical return as of today.
Bursa Malaysia has just rolled out an ETF cashback program. An investor who invests (buys) one or multiple Bursa-listed ETFs with cumulative value of RM3,000 and above within the program period will be eligible to receive Touch ‘n Go eWallet Reload PIN worth RM150.
Terms and conditions:
Program period is valid from 3 August to 2 November, 2020.
Investors who invest (buy) one or multiple Bursa-Listed ETFs (stock code beginning with "08") with cumulative value of RM3,000 and above within the Program period will be eligible to receive a Touch ' Go eWallet Reload PIN worth RM150.
All above ETF buy trades must be carried out in the investor's Direct CDS Account.
Investors who have not made any buy or sell trades in Bursa-listed ETFs from 1 January 2020 until 2 August 2020 are eligible for this Program.
In his article about mastering fear, clinical psychologist Nick Wignall highlighted that confidence is a belief that you will be OK despite your fear.
He opined that confident people do not rule out fear, but they view fear and uncertainty as uncomfortable but not dangerous.
He believes that anyone can learn to become more confident. Becoming more confident doesn't mean eliminating fear from our life. It means learning to live with your fear, and achievable through building up the following 4 habits:
Rakuten Trade is a totally online Bursa Malaysia stock trading platform. It is a joint venture between Kenanga Investment Bank and Japanese-based Rakuten Securities. It has been in service since 2017.
If you haven't open a stock trading account with Rakuten Trade, now is a good time if you intend to do so, because there is promotion which going to end soon in 31 March 2020 worth RM60 upon account activation, and the best time to buy stocks is when the price of most stock counters were beaten down.
Opening account is just for preparation to trade with Rakuten Trade, hopefully in the near future, when you are mentally and financially ready to buy stocks. A good timing will be when good development of mitigating COVID-19 virus is announced (such as, proven vaccine is available) and the socio-economical traction is recovering from the damage made by the COVID-19 virus. That will be the time to ride on the rebounding wave of the stock market. Anyhow, if you are a risk taker, you might want to enter your position earlier too.
Why Rakuten Trade?
First of all, you can open account with Rakuten Trade totally online, without the need of filling and signing on any paper forms, and without the need of visiting to their office.
More importantly, opening CDS account(s) with Rakuten Trade is free of charge, while most other broking firms will charge you RM10 per CDS account.
Remember to use the Referral CodeVoyager8 during account opening to get 500 Rakuten Trade Points (RT Points) upon successful account activation.
If you open your account on or before 31 March 2020, remember to open both Cash Upfront and Contra accounts together, and key-in HelloGold as Promotion Code by following the instruction in this linked webpage, because you can get RM60 worth of gold in HelloGold, upon successful Rakuten Trade accounts activation. The RM60 will be emailed to you in the form of HelloGold promo code, which you can key-in under the Rewards > Enter Code section in HelloGold app to redeem as gold of equivalent price.
Among all the broking firms in Malaysia, Rakuten Trade is one of the one with the lowest brokerage fee (if and only if, there really exist another broking firm with cheaper brokerage than them).
Their brokerage is as low as RM7, and the maximum brokerage fee per stock per day is capped at RM100 only (while most other broking firm will charge brokerage unlimitedly).
Note that beside the cheaper brokerage fee, the clearing fee and stamp duty is at the same rate with the other broking firms.
You can earn RT Points while using Rakuten Trade, especially when you are first time user. Here are some of the ways to earn RT Points:
Open new account with Referral CodeVoyager8 and successfully activate it: +500 points
Open Margin account with Promotion CodeRakuMargin and successfully activate it: +1888 points
Deposit at least RM100 into new Cash Upfront account within 5 days upon activation: +500 points
Deposit at least RM100 into new Contra account within 5 days upon activation: +500 points
Deposit at least RM100 into new Margin account within 5 days upon activation: +500 points
Execute 1st trade successfully within 10 days upon Cash Upfront account activation: +1000 points
Execute 1st trade successfully within 10 days upon Contra account activation: +1000 points
Execute 1st trade successfully within 10 days upon Margin account activation: +1000 points
Refer new friends to Rakuten Trade with your own referral code: +500 points each
Trading stocks with Rakuten Trade: +1 point for every RM2 in brokerage
Transfer shares from other CDS accounts to Rakuten Trade CDS account: +500 points
What can you do with RT Points accumulated? You can perform 1-to-1 points conversion with AirAsia BIG, B Infinite or Bonuslink, which is a pretty good deal!
Beside the normal functions of stock buying, selling, monitoring, watch-listing, cash in, cash out, etc., Rakuten Trade provides a pretty comprehensive and up-to-date information and report about the stock counters under Stock Info section.
It also has a very nice Stock Screener to perform stock filtering at ease.
Beside the preset screening formula, you can also define your own screening formula as well, and there are many screening criteria for you to work with.
You can even go into detail analysis of the filtered result.
Beside web online trading platform, Rakuten Trade also has mobile trading platform called iSPEED.my which you can download from Google Play Store or Apple App Store. However, its user interface is very old style and has many rooms of improvement.
If you find that Rakuten Trade is better than your current online trading platform, just go ahead to open your Rakuten Trade account to enjoy its benefit. After all, open new CDS accounts in Rakuten Trade is free of charge. You can of course continue using your existing trading platform, if you want, even though you have opened new account in Rakuten Trade.
The Employees Provident Fund (EPF, a.k.a. KWSP) has just declared the dividend rate for financial year 2019.
For year 2019, the dividend declared for conventional account is 5.45% while for Shariah account is 5.00%. The dividend has already credited into members' account, and you can check for it by login into your EPF i-Account.
Year 2019 was the third year of dividend declaration for Shariah account, while dividend for conventional account has been declared annually since 1952. The dividend for Shariah account in all the years from 2017 to 2019 were lower than the dividend for conventional account of the same year.
The 5.45% dividend for EPF conventional account in 2019 is 11.38% lower than the 6.15% dividend declared for 2018 (last year).
It is 9.00% higher than the 5.00% Shariah dividend declared for the same year.
Calculation: (5.45-5.00)/5.00 = 0.45/5.00 = 9.00%
The table below shows the historical EPF dividend payout rate since 2001, for you to judge yourself whether the dividend payout rate in 2019 is satisfactory or not.
Equity crowdfunding (ECF) is something new but yet not so new in Malaysia investment market.
It provides a Securities Commission regulated platform that allows start-up companies and SME to get new capital fund through small equity investments from the public crowd by using approved online platform.
On the other hand, it provides a governed platform that allows general public to gain access to invest in share equity of non-listed companies that are on the growing track, and has the potential to become a unicorn that brings in multi-fold returns.
Previously, investment in such early stage equities of those non-listed companies is a privilege to sophisticated investors (a.k.a. rich people with millions of personal investment fund), private equity funds, angel funds, etc. Equity crowdfunding enables ordinary retail investors to participate in investment to those companies with a more affordable, smaller amount of money, as low as a few hundred ringgit.
The main advantages, which are also the disadvantages at the same time, of ECF are that:
The selling price of the new shares issued during a crowdfunding campaign is fixed. Even though it might be very hot-selling, the price will not go up, and even though it might be having very few investors, the price will also not go down. The price is also not affected by general investment market sentiment, or socio-political affairs. This is of advantage to the investors, as the price is solely based on fundamentals. Major events such as Wuhan virus outbreak will not shaken the offering price.
The shares purchased (regardless ordinary shares or preference shares) are not volatile and quite hard to resell to the other investors, until the company is public listed or there is big fund that makes offering to buy the shares from existing shareholders.
Today, there are altogether 10 Securities Commission approved equity crowdfunding platforms. Those platforms are tasked as a middleman to help start-ups or SME wanting to finance their business growth through equity crowdfunding by issuing new shares to reach their investors crowd, at the same time to help the investors to perform preliminary filtering and due-diligent to the companies to ensure their pitching and information provided are genuine and meet certain level of integrity.
Among the 10 approved ECF platforms in Malaysia, Crowplus is the first mover, but it seems that they had not gained much advantage of being the first mover. PitchIN is a market leader whereby many companies who seek for ECF and also many investors who want to look for non-listed growth companies investment are putting their trust on PitchIN. MyStartr has been an aggressive challenger that has gained traction in the Chinese speaking community beside the English speaking community.
MyStartr just launched their ECF platform in December 2019. So far, there are 2 successfully funded companies while others are on their way to reach their minimal funding target.
The first successfully funded company is Biztory which raised more than a million ringgit capital through ECF on MyStartr, and they did it within a very short period of 8 days only. Currently, funding activity of this company in MyStartr has stopped.
The second successfully funded company is Rtist, which already raised more than their minimum target of RM200,000. Currently their funding activity in MyStartr is still ongoing towards their ultimate target of 1 million ringgit. Therefore, you can still participating in their growth by becoming one of their minority shareholders through ECF, and you can make your investment there by using your credit card. The Rtist ECF closing date for this round is set on 15 February 2020.
Bank Negara Malaysia (BNM) has just reduced the overnight policy rate (OPR) by 25 basis points from 3.00% to 2.75% on 22 January 2020. This is back to the rate 9 years ago at 2011.
Below is the chart of historical OPR rate over the years.
In general, a reduction in interest rate will have a positive impact to bond price (and therefore, the bond funds as well), and vice-versa. OPR and bond price are having an inverse relationship to each other.
This is because most of the bonds are paying fixed interest rate. When the general financial interest rates fall, the bond's fixed interest rate will become more attractive to investors; when the general financial interest rates rise, the bond's fixed interest rate will, in turn, become less attractive.
The Opus Income Plus Fund (IPF) has been performing pretty well recently (refer to the chart below). The reduction in OPR is expected to further boost up its performance.
HelloGold is a Shahriah-compliant online platform to make it easy for us to buy, sell and/or transfer 99.99% (24 Karat 999) pure gold.
Account opening and all transactions can be performed in the HelloGold mobile app, available for free download in Google Play Store and Apple App Store.
You can check for its gold trading price from the app's opening screen, even without the need to login to the system. The price is updated every few seconds.
HelloGold separates gold price from trading and administrative charges. So, there is only a single reported trading price for both buy and sell, without any spread between them.
You can login the system by either using password or Touch ID fingerprint.
It has a very straight forwards menu, which is self-explanatory.
It used to have an Add Cash option, but that option was recently taken out from the menu.
The gold that you purchased is claimed to be kept in a vault in Singapore. For each single day the gold is kept by HelloGold, they will charge you a fee on daily basis, and the fee is deducted from the quantity of your gold held with them.
You can opt to redeem physical gold that you have purchased, which needs to be in whole gram of PAMP Suisse gold bar. However, redemption will take some times, and it will incur charges from administration, shipping and insurance services, which added up together will not be a cheap amount.
To buy gold, you can make payment by using your cash balance (the cash proceed from previous gold selling), FPX online banking, or Boost e-wallet.
The advantage of using Boost is that it has zero processing fee (compared with RM1.20 processing fee per FPX transaction). In addition, this Boost payment will be entitled for Boost shake for coins, and occasionally there will be joint promotional campaign between HelloGold and Boost for additional cash rewards or benefits.
After selling your gold, you can withdraw the cash by online transfer to your bank account at no cost.
The cost involved in trading gold in HelloGold including:
Buy fee (weekday): 0.79% of buying cost
Buy fee (weekend): 2.79% of buying cost
Sell fee (weekday): 2.00% of selling price
Sell fee (weekend): 4.00% of selling price
Keeping cost: 0.0055% of your gold deducted per day (equivalent to 2% per year)
The keeping cost is a major drawback with HelloGold. The longer you keep your gold in the system, the lesser your gold will become, as every single day, a little bit of your gold will be deducted to pay for the keeping cost. If you keep for a long time, lets say 5 years, then you will lost 10% of your gold by paying the keeping cost. As such, HelloGold is OK for short term and mid term trading, but will be harmful to your gold keeping for long term due to the cost involved.
If you have already opened a HelloGold account, either new or old, you can go to the Rewards page, choose Enter code, key in FOON5YPH and apply.
You will get a cash reward of RM5 the next time you buy gold worth RM50 and above in HelloGold.
Note that the rewards code can only be used one time per account.
Starting from 15 January 2020 until 14 March 2020, there is a promotional campaign whereby you can get RM10 cashback from Boost and also another RM10 cashback from HelloGold if you buy RM200 and above worth of gold in HelloGold and paid using Boost and keep the gold for 30 days without selling it out.
Assuming you buy RM200 gold with this method, you will get RM20 which is an immediate 10% return, on top of a Boost shake reward.
Note that you are only eligible to buy gold with this campaign for up to 2 times only. So, for the 2nd time of buying RM200 or more gold, you will get another round of cashback.
Opus Asset Management has a track record of more than 14 years in fund management industry, and is specialized in fixed income investment.
They used to offer wholesale funds for the sophisticated investors (i.e. rich people) with minimum investment starting from RM50,000.
Recently, they have launched 3 unit trust funds targeted for ordinary investors with minimum investment starting from a much lower RM1,000.
The 3 unit trust funds are:
Opus Income Plus Fund (IPF) which is a kind of bond fund seeks to achieve higher returns than Maybank 12-month fixed deposit rate over the medium to long term, while preserving capital and providing an opportunity for income.
Opus Money Plus Fund (MPF) which is a kind of money market fund seeks to achieve higher returns than 1-month fixed deposit rate and to provide liquidity while preserving capital.
Opus Shariah Income Plus Fund (SIPF) which is a kind of sukuk fund seeks to achieve higher returns than Maybank 12-month Islamic fixed deposit rate over the medium to long term, while preserving capital and providing an opportunity for income.
As you can sense from the description above, all these 3 unit trust funds are pretty conservative, emphasizing more on capital preservation, at the same time trying to beat the fixed deposit rate.
Therefore, they can be used as alternative to fixed deposit savings. They have the following advantages over fixed deposit:
You can withdraw your invested money either partially or in whole at any time, without those restrictions as imposed to fixed deposit.
You can potentially earn a higher return than fixed deposit rate. In fact, the MPF is pretty safe with minimum chance of losing money, at the same time able to produce slightly better return than fixed deposit.
On top of that, if you invest directly through their website called Opus Touch (URL: https://touch.opusasset.com/), you can enjoy 0% sales charge and 0% repurchase charge, which means that 100% of your money will be utilized to buy the fund, and none will be gone as sales commission.
The self-service Opus Touch website is pretty straight forwards to use. It can be accessed either from the web browser of your handphone, tablet or computer. It works flawlessly with Google Chrome.
It seems like Opus Touch does not have a mobile app yet, and can only be accessed with web browser. Hopefully in the near future, they can come out with Opus Touch mobile apps for easier use from handphone.
You can open your master account there with an initial investment in IPF of at least RM1,000. Once your master account is successfully opened, you can invest in any of the 3 available funds there.
You can also perform up to 4 times of fund switching per year for free, after that there will be a charge of RM25 per switching of fund.
Note that there are annual management fee and annual trustee fee, accrued on a daily basis. Their rate is pretty low compared with other unit trust funds in the market:
IPF: mgmt. fee <= 0.85%, trustee fee <= 0.025% or min RM12k
MPF: mgmt. fee <= 0.35%, trustee fee <= 0.025% or min RM12k
SIPF: mgmt. fee <= 0.85%, trustee fee <= 0.025% or min RM12k
As such, the total fees per annum is less than 1% for all of the 3 funds above.
One of the thing I like about Opus Touch is that you can invest by using either Boost e-wallet or FPX (bank transfer).
By investing with Boost, you can also enjoy Boost rewards such as the shake rewards, mission rewards, etc.
Home inspection is part of the essential process right after receiving vacant possession of brand new home from the property developer. Normally it is conducted by the buyer (new owner) of the property, and there is a 24 months defects liability period whereby the buyer can report any defect found in the property to the developer, and the developer has the obligation to rectify and fix the defects reported by the buyer.
There is another common scenario of home inspection. When the buyer is going to buy a pre-owned property, he can request to perform a home inspection to the property on sale, and get the seller to fix the defects found before signing the sales and purchase agreement (S&P) with the seller. This is because pre-owned property is normally sold as-is, without the 24 months warranty period as in the case of new property. It is imperative for the buyer to ensure the property is in good condition before signing the S&P with the seller. After the property is sold, the buyer will need to use his own money to fix for any problem with the property.
While home inspection can be performed by ourselves, it also worth to consider using professional home inspection service from a company that provide such service, because they have the knowledge, experience, skillset and related tools to perform detail home inspection. In addition, a complete home inspection can take several hours to finish checking, and another several hours to prepare the property defects report. Home inspection service charge is normally within 3-digit RM, depends on the size and type of the property to be checked.
The Construction Industry Development Board Malaysia (CIDB) has already established a guideline called the Quality Assessment System in Construction (QLASSIC), which is a system or method to measure and evaluate the workmanship quality of a building construction work based on Construction Industry Standard (CIS 7). When engaging with a home inspection service provider, you might want to ask if their service is conformance to QLASSIC standard or equivalent.
After confirmation to engage for home inspection service, the buyer will need to set an appointment with the service provider to visit the property to perform the inspection, which will usually take a half day.
The home inspection specialist will then visit the property with all the required tools, including camera (or handphone with camera), torchlight, magnifying glass, ruler, spirit level, stickers, electrical outlet tester, etc.
The scope of home inspection encompasses checking on house components and fitting of:
Architectural: floor, wall, ceiling, door, window, stairs, drain, furniture, etc.
Mechanical and electrical: lights, power, switch, socket, plumbing, sanitary fittings, etc.
Specification compliance: area size measurement, fitting quantity, material used, etc.
Water leakage testing in toilet, bathroom, balcony, basin, sink, etc.
Stickers will be used to mark down any detected defect point, and photo will be taken for documentation.
After the checking, a home inspection report will be compiled and delivered to the buyer.
The report will normally contain:
i) a summary of inspection result:
ii) a floor plan marking the defect areas:
iii) description of the defects with photo taken:
The home inspection report can easily go between 50 to 200 pages for normal home, depends on the amount of defects found.
If you live in a service apartment which sit on a piece of commercial land title, you might be paying higher electricity bill every month if your electricity usage is charged based on commercial tariff.
You can file an application with Tenaga Nasional (TNB) to request to change your commercial tariff to the cheaper residential tariff, either by visiting to TNB branch in your area and submit the paper form, or submit the online form in myTNB portal anytime anywhere.
Either way, your application will be processed pretty soon. Normally, your tariff will be changed to residential rate during the next business day after online submission.
You can click here to access to myTNB portal. If you haven't created an account in myTNB, you will need to register for one before you can login.
After login, go to the Apply menu, and select the option "I want to do something else".
Then, select "I want to find out more about other services".
After that, select "Change My Tariff".
There are 4 steps to fill in the online form. Make sure you select "Domestic" as premise type, and select the correct residential type.
At the end of the process, you are required to submit a scanned copy of your MyKad. The name on the MyKad should be the same with the name printed on your electricity bill.
If you confirm to submit the application, you will be charged for RM10 stamp duty, which will be reflected in your upcoming electricity bill.
Upon successful submission, you will receive an email like below.
However, there seems to be no further notification on successful tariff change. You can login to myTNB after 24 hours later to check if your electricity tariff has been changed to residential rate or not.
For your information, current TNB commercial tariff is as below:
and current TNB residential tariff is as below:
If you don't apply for the conversion to residential rate, you might end up being charged double or more in your bill for same amount of electricity used in your service apartment unit.
The Employees Provident Fund (EPF, a.k.a. KWSP) has just declared the dividend rate for financial year 2018.
For year 2018, the dividend declared for conventional account is 6.15% while for Shariah account is 5.90%. The dividend has already credited into members' account, and you can check for it by login into your EPF i-Account.
Year 2018 was the second year of dividend declaration for Shariah account, while dividend for conventional account has been declared annually since 1952. The dividend for Shariah account in both 2017 and 2018 were lower than the dividend for conventional account of the same year.
The 6.15% dividend for EPF conventional account in 2018 is 10.87% lower than the 6.9% dividend declared for 2017 (last year).
Recently listed in the ACE market in March 2018, Wegmans Holdings Bhd (WEGMANS, 0197) is a wood-based (mainly rubberwood) home furniture manufacturer, targeted for the medium-income level customers. Its products are sold both directly to customers and also through agents.
This holding company only has a single 100% owned subsidiary called Wegmans Furniture Industries Sdn Bhd which carries out the actual furniture designing, manufacturing and selling business.
If you are unfamiliar about this company, the 8 minutes corporate video below will give you a good idea about its background.
In its IPO, 100 million shares were placed out at the price of RM0.29 per share at the placement proportion as follow:
25% - Malaysian public
15% - Directors, employees, business partners, suppliers & customers
10% - Private placement to institutional and selected investors
50% - Private placement to identified bumiputera investors
Its IPO was well received with an over-subscription of 16.38 times. Its price closed at RM0.295 during the first trading day on 6 March 2018.
The proceeds from IPO were allotted as follow:
RM11 million for construction of new factories
RM11 million for purchase of new machineries and equipment
RM3.5 million for working capital
RM3.5 million for listing expenses
Therefore, it is pretty clear that the purpose of its IPO is for expansion and fuel for continuous growth.
The key historical milestones of WEGMANS is as below:
1994 - Wegmans Trading founded with a small factory on a piece of 2,000 sqft. rented land at Jeram Masjid, Muar, Johor, to produce and supply furniture parts for wooden dining chairs and sofas to local furniture manufacturers.
1997 - Production floor space expanded to 6,000 sqft.
1999 - Wegmans Furniture was established to replace Wegmans Trading, with an aim of becoming a furniture manufacturer and exporter.
2000 - Started to manufacture and sell dining tables and dining chairs.
2001 - Production floor space expanded to 14,000 sqft. Began to export products to customers in South Korea and Australia.
2002 - Started exporting to more countries including Belgium, Denmark, Finland, Germany, Greece, Netherlands, New Zealand, Saudi Arabia, Spain, Singapore, Sweden, United Arab Emirates and USA.
2003 - Widened product range to include living room furniture.
2004 - Production floor space expanded to 18,000 sqft.
2005 - Began spraying works in Block B (49,400 sqft). Widened product range to include bedroom furniture.
2006 - Factory Block A (55,952 sqft) started operation.
2009 - Total export markets to 44 countries.
2010 - Factory Block C (42,846 sqft) started operation.
2012 - Obtained ISO 9001 certification
2015 - Purchased 254,436 sqft land to build own factory for raw material storage and wood preparation. Will be operational soon in 2018 to takeover current facilities on a piece of land rented from Poh Huat (POHUAT, 7088).
2016 - Purchased 905,397 sqft land for production expansion.
Today, WEGMANS revenue is still heavily depend on dining room furniture. Its proportion of revenue contribution is as follow:
93.13% from dining room furniture
4.17% from living room furniture
1.67% from bedroom furniture
1.03% from others
Its major customers are:
Nitori Co Ltd, Japan (17.73% revenue contribution)
Super A-Mart Pty Ltd, Australia (10.22% revenue contribution)
Home Retail Group (Hong Kong) Ltd, United Kingdom (5.64% revenue contribution)
Its major suppliers are:
Chinfon Timber (7.03% of total purchases)
Plymax Veneer Sdn Bhd (10.42% of total purchases)
Price and supply-demand situation of raw materials, particularly rubberwood, is a kind of risk that might affect the business and financial of WEGMANS. Anyhow, WEGMANS has not been hit with this kind of issue, as they maintain many years of good long-term relationship with suppliers.
99.03% of its revenue is derived from exports to over 70 countries around the world. Of which, there are 14 countries with consistent export orders, namely: Australia, Canada, Denmark, Estonia, France, Germany, Japan, Korea, Norway, Singapore, Spain, Sweden, United Kingdom (UK) and United States of America (USA).
The revenue contribution from export countries are as below:
Since WEGMANS is export oriented, it is exposed to foreign exchange risk. Every 5% change in USD/RM exchange risk will bring fluctuation of RM430,000 to its profit after tax. Since the USD is strengthening against most of the currencies including MYR over the past few months, this situation is expected to have positive effect to WEGMANS upcoming 2018 Q3 financial result to be announced in November 2018.
(USD/MYR chart generated from Bloomberg website)
WEGMANS develops and maintains its competitive strengths through:
Own design and development
Stringent QC
Established business relationships
From these information, we can view that WEGMANS is able to maintain its bargaining power towards customers and suppliers, and able to sustain against threat of new entrance and threat of substitute products.
It is also able to maintain quite a sustainable competitive advantage.
WEGMANS currently has a staff strength of about 600, of which 84.22% are foreign workers.
The furniture industry is labour intensive, unless more automation is employed.
Any change in foreign worker policy in Malaysia or in the countries which the foreign workers are employed from, may result in difficulties for them to maintain a sufficient foreign labour workforce.
In addition, cost of hiring labour may increase in the future and they might not be able to pass on such increase in cost with corresponding increases in the prices of their products.
Furthermore, their future expansion plan requires a significant increase in labour to meet increased manufacturing activities.
There may also be disruption in the supply of foreign workers to Malaysia, which may delay them to hire new foreign workers in time after the expiry of the contracts of the existing foreign workers.
As a result, their business operations and financial performance may be materially and adversely affected. It is imperative for them to go for more automation and furthermore to embrace the Industry 4.0 revolution.
Other risks inherent in the furniture industry include fire hazards and disruption to electricity supply.
WEGMANS is led by 2 key senior management persons.
Mr. Keh Wee Kiet, 48, is its managing director who in charge of strategic planning and overseeing the manufacturing operations of the company. He has more than 24 years of hands-on experience in the furniture industry.
He is the main founder who built and grew the business from a sub-contractor to a reputable exporter, especially during the period when Mr. Collin Law was still a sleeping partner before he eventually joint as executive director in 2005.
Mr. Collin Law Kok Lim, 48, is its executive director who is currently responsible for overseeing their business development and Design and Development (D&D) departments.
He joined as the Executive Director in February 2005 to set up the sales and marketing department to secure customers directly so as to reduce the reliance on third party agents. In the same year, he was also instrumental in setting up the D&D team.
He keeps abreast with the latest market developments globally by participating in international furniture trade exhibitions and events.
WEGMANS practices a good corporate government by having different person as board chairman and managing director.
The chairman, Mr. Chan Wan Seong is an independent non-executive director. He is primarily responsible for matters pertaining to the Board and the overall conduct of the Group.
The distinct and separate roles of the Chairman and Managing Director, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making. The Managing Director oversees the day to day management and running of the Group and the implementation of the Board’s decisions and policies.
In 2017, the 2 executive directors received annual remuneration below RM400,000, whilst the 3 non-executive directors received annual remuneration below RM50,000. This is pretty reasonable.
In 2017, WEGMANS trade receivables increased from 4.8 million to 6 million, whilst trade payables increased from 10.3 million to 12.5 million. The working capital situation is in control.
Credit risk is minimal, as trade receivables past due in 2017 is only RM308,520 (2016 was RM385,925).
As revealed in Annual Report 2017, WEGMANS has only 1,121 shareholders, of which 70% shares are held by the 2 executive directors. Top 30 shareholders are holding 88.6% of the shares, leaving only 11.4% with minority shareholders.
Construction work has already commenced on the 905,397 sqft (20.8 acres) land purchased in 2016 in Mukim Parit Jawa, Muar, Johor. It is broken down into 3 phases.
Phase 1 is to built the following using the proceeds from IPO:
New head office and showroom (36,198 sqft)
Workers' hostel (140,272 sqft)
1 factory (144,494 sqft)
Construction of the building has been approved by MPM on 29 July 2018.
The construction work has already started. Estimated completion is by early 2019.
The new factory in Phase 1 will be able to double up WEGMANS annual production of chairs from current 0.48 million to 0.96 million, and tables from current 0.19 million to 0.38 million.
The HQ and showroom will also be shifted to this new building, and the existing HQ will be converted into documents storage room, production office and expanded D&D office.
Phase 2 construction will build another 2 factories with land area of 211,079 sqft, and Phase 3 will build another factory on the remaining land area of 151,512 sqft.
Based on current total share issued of 500 millions after IPO, WEGMANS past 4 years financial result is as below:
The slight reduction in net profit in 2017 was due to higher labour cost arising from higher sub-contract wages incurred to meet the production requirements and delivery deadlines for their sales orders.
WEGMANS net debt in 2017 stood at RM19.7 million, forming a Debt/Equity ratio of 56.29%. Hopefully this can be reduced with higher revenue and profit generated, especially after the doubling up of production capacity soon.
WEGMANS past 3 announced quarterly results are as below:
Note that 2018 Q1 net profit was dragged down by a one off charge of listing expenses amounting to RM1.71 million.
WEGMANS share price closed at 34.50 sen on 14 September 2018. Its estimated PE based on 4 trailing quarters, assuming its 2018 Q3 EPS stood at 0.75, will be 19.6.
Its past financial results show that it has been in a growing path.
Its 3 phases future plan with 4 upcoming new factories show that it is well prepared for future growth.
WEGMANS is showing traits of continuous growth, and it is anticipated that its growth will be boosted once its new factory commence operation to double up its production capacity.
WEGMANS has laid out their future plan and strategies as follow:
Market penetration - increase production capacity
Market development - diversify customer base
Product development - increase product range and develop new product designs
On top of these, WEGMANS could be further improved if they could consider to:
Employ more automation and embrace for Industry 4.0 to reduce dependency on foreign workers.
Put up measure to reduce the Debt/Equity ratio to 30% or below.
Gradually increase its dividend yield.
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 Employees Provident Fund (EPF, a.k.a. KWSP) has just declared the dividend rate for financial year 2017.
If you still remember, earlier on, EPF has launched its Simpanan Shariah Islamic saving account beside its conventional saving account. Members can apply to switch their account type from conventional to Shariah at their own will.
Year 2017 was the first year of dividend declaration for Shariah account, while dividend for conventional account has been declared annually since 1952.
For year 2017, the dividend declared for conventional account is 6.9% while for Shariah account is 6.4%. The dividend has already credited into members' account, and you can check for it by login into your EPF i-Account.
The 6.9% dividend for EPF conventional account in 2017 is 21% higher than the 5.7% dividend declared for 2016 (last year).
Calculation: (6.90-5.70)/5.70 = 1.20/5.70 = 21%
It is also 7.8% higher than the 6.4% Shariah dividend declared for the same year.
Calculation: (6.90-6.40)/6.40 = 0.50/6.40 = 7.8%
It seems that members who had opted to convert their account to Shariah might be upset and regret, due to the lower dividend in 2017.
According to EPF, the Shariah account derived its income solely from its portion of shariah assets while for conventional account, a total of 38% of the income was generated by its share of Shariah assets and 62% from non-Shariah assets.
The returns for conventional account were enhanced by the income generated from non-shariah investments following the outperformance of global banking stocks, while Shariah account does not include conventional banking stocks due to their non-Shariah compliant status.
In addition, equity impairments from shariah-compliant stocks, particularly the oil and gas, and telecommunication counters, has lowered the income of the EPF's shariah portfolio.
Is the 6.9%/6.4% dividend considered good or not? The 6.9% dividend rate is the best since year 1996. However, EPF had been consistently declaring dividends of above 7% from 1976 until 1996! The dividend rate had even been consistently above 8% during 1980-1994. So, you judge yourself!
As expected, Bank Negara (BNM) has, at its Monetary Policy Committee (MPC) meeting today (25 January 2018), made the decision to increase the Overnight Policy Rate (OPR) by 25 basis points from 3% to 3.25%.
This is the reverse of the last action taken on 13 July 2016, which reduced the OPR by 25 basis points from 3.25% to 3%.
For investors, if you are holding shares of financial institutions, this is a short term good news to you. If you are holding shares which the company is having high debt/equity (D/E) ratio, you need to evaluate how much will this OPR rise impact on the company's financial situation.
If you are planning to take a hire purchase (eg. buying a vehicle), act fast before the borrowing interest rate increases soon. If you are serving a home loan, expect your monthly commitment to your mortgage to slightly increase from now on.
You might probably also be interested to read about:
The government has allocated a fund for the first 500,000 existing and new SSPN depositors who deposited at least RM500 new fund into their account during 2018, whose beneficiary is studying in primary school. These accounts will received a free matching grant incentive of RM500 in their SSPN account (Insentif Geran Sepadan Percuma RM500 a.k.a. GS500).
The terms and conditions are for this GS500 are as follow:
This RM500 free matching grant incentive is only allocated to 500,000 eligible SSPN accounts on and first come first serve basis.
The age of the beneficiary of the SSPN account is between 7 to 12 years old or is studying in primary school in Malaysia.
New fund of RM500 must be deposited into the SSPN account between 1 January 2018 to 31 December 2018 (deposit - withdrawal >= RM500).
This RM500 free matching grant incentive can only be withdrawn after the beneficiary has reached the age of 18 years old, or during closure of account due to either the depositor or beneficiary has passed away.
This RM500 free matching grant incentive cannot be used for tax relief.
This RM500 free matching grant incentive will be automatically given to the eligible SSPN accounts. There is no form to be filled up.
You might be awared that the National Education Savings Scheme (Skim Simpanan Pendidikan Nasional, SSPN-i) setup by the National Higher Education Fund Corporation (Perbadanan Tabung Pendidikan Tinggi Nasional, PTPTN) for the purpose of higher education is able to provide you personal income tax saving, which is one of the good personal finance means for resident individuals to reduce their payable income tax.
The maximum amount of personal income tax relief for new saving deposits placed in SSPN-i for the benefit of your children during each year of assessment is RM3,000. This mean if your children's SSPN-i account is deposited with RM3,000 additional savings (new deposit - withdrawal = RM3,000) in the year, you can deduct your taxable income for the year by the same amount of RM3,000.
If the additional savings during the year is less than RM3,000, you can deduct your taxable income for the year by the same amount, which is less than RM3,000.
If the additional savings during the year is more than RM3,000, you can deduct your taxable income for the year by RM3,000 only, as RM3,000 is the maximum.
However, National Budget 2013 had announced that this maximum amount of SSPN-i tax relief be doubled to RM6,000 for a period of 6 years from assessment year 2012 until 2017. The maximum amount will fall back to RM3,000 after 2017.
Now, the good news is, National Budget 2018 announced on 27 October 2017 has further extended this SSPN-i maximum RM6,000 tax relief period for another 3 years, which will continue from assessment year 2018 until 2020.
This means that the maximum tax relief from SSPN-i new deposits will remain as RM6,000 until assessment year 2020.
The Edge Malaysia has just announced the Top 10 winners in their Property Excellence Awards 2017, which are:
1. SP Setia Bhd (2016: #1)
2. Sunway Bhd (2016: #3)
3. Sime Darby Property Bhd (2016: #4)
4. IJM Land Bhd (2016: #2)
5. Eco World Development Group Bhd (2016: #6)
6. UOA Development Bhd (2016: #7)
7. Mah Sing Group Bhd (2016: #5)
8. IGB Corp Bhd (2016: #9)
8. IOI Properties Group Bhd (2016: #11)
9. UEM Sunrise Bhd (2016: #10)
10. Tropicana Corp Bhd (2016: #12)
Note that there are 2 developers ranked the 8th position in 2017. Most of the Top 10 winners in 2016 remain in the 2017 Top 10 list above, the only drop off is Gamuda Bhd - Property Division. IOI Properties Group Bhd and Tropicana Corp Bhd have successfully advanced into the list. Congratulations to SP Setia Bhd which managed to secure its 1st position for another year.
Following the Top 10 winners above, the subsequent Top 11-30 are:
11. Eastern & Oriental Bhd
12. MKH Bhd
13. Matrix Concepts Holding Bhd
14. Paramount Corp Bhd
15. Malaysian Resources Corp Bhd
16. OSK Holdings Bhd
17. Glomac Bhd
17. Selangor Dredging Bhd
17. TA Global Bhd
18. Sunsuria Bhd
19. KSL Holdings Bhd
19. WCT Land Sdn Bhd
20. Land & General Bhd
21. Hua Yang Bhd
21. I-Bhd
22. Wing Tai Malaysia Bhd
23. Selangor Properties Bhd
23. YTL Land & Development Bhd
24. LBS Bina Group Bhd
24. Malton Bhd
24. SHL Consolidated Bhd
25. Guocoland (Malaysia) Bhd
25. Titijaya Land Bhd
26. MCT Bhd
27. Ivory Properties Group Bhd
27. Ken Holdings Bhd
27. Plenitude Bhd
28. Symphony Life Bhd
29. Eco World International Bhd
29. MK Land Holdings Bhd
29. Naim Holdings Bhd
30. Tambun Indah Land Bhd
There are 2 winners of Outstanding Property Entrepreneur Award 2017:
Datuk Lee Tian Hock from Matrix Concepts Holdings Bhd
Tan Sri Ter Leong Yap from Sunsuria Bhd
There are 2 winners of Outstanding Property CEO Award 2017:
Datuk Khor Chap Jen from SP Setia Bhd
Sarena Cheah from Sunway Bhd - Property Division, Malaysia & Singapore
Tan Sri Ong Ka Ting is awarded with Outstanding Contribution to the Housing Industry Award 2017.
The following properties are awarded with Property Development Excellence Award 2017:
Mid Valley Megamall - Excellence in Suburban Family Mall
1 Utama Shopping Centre - Excellence in Suburban Family Mall
Sunway Pyramid - Excellence in Suburban Family Mall
Pavillion Kuala Lumpur - International Luxury Shopping Mall
Regeneration of George Town - Excellence in Urban Regeneration
DK of Penguin Random House is a publisher that differentiate themselves by producing a series of books that are very colourful, full of graphics and charts, and not so wordy.
How Business Works - A Graphical Guide to Business Success is one of them. It explains many important business concepts in a fun, easy to understand way. Its content is up-to-date with today's business environment, covering topics about leading-edge information system, modern business practices and industry standards.
I find this book very suitable for the busy start-up entrepreneurs, students who are planning to go to business school, business school students who need a quick revision, traditional businessmen who want to keep abreast of today's business world, managers, investors, or anyone who are interested to know about how businesses in this 21st century work.
This book is divided into 4 major sections with their respective chapters as follow:
1. How Companies Work
Business ownership
Start-ups
Buying and selling business
Who's who
Corporate structure
Human resources
2. How Finance Works
Financial reporting
Financial accounting
Management accounting
Measuring performance
Raising finance and capital
3. How Sales and Marketing Work
Marketing mix
Marketing approaches
Outbound marketing
Inbound marketing
Business development
Information management
4. How Operations and Production Work
Manufacturing and production
Management
Product
Control
Supply chain
This is how the pages content in the book look like:
This book is pretty comprehensive, covering a broad overview of essential business knowledge and concepts, though not going in-depth to the very detail.
One thing I found for this book to improve in future edition is that: in certain topics, it will mention about some interesting statistical statements, such as "44% of US companies had distinct CEO and chairman roles in 2012 - up from 21% in 2001". The book actually cited the sources of those statements in its Acknowledgements section at its very back, behind all the Index pages. While reading the book, readers like me have no idea about where are the sources of those statements because it is not mentioned anywhere that there is a "hidden" subsection called "sources of statistics, facts and quotes" under the Credits section inside its Acknowledgements. If you don't read until the last word of this book, you might possibly unaware of such subsection and wondering where the quotes are coming from. I suggest the editors of the book to mention about the location of this subsection in the Introduction so that we readers can be aware of it.
