Bursamalaysia news, views, research and opinions

Interesting take on Mutual Funds (Unit Trust funds in Malaysia)

2007-08-14T06:36:00.000-07:00

John Chow talks in depth of his view on why the mutual fund industry is a scam. According to John, who has a penchant for fast cars and electronic gadgets, the whole mutual fund industry is set up to scam investors of their money. He does have a point, given the exorbitant entry fees for unit trusts 5 to 6% of initial capital invested, and 1% per annum management fee. He says basically you are giving them money to keep the workers in that industry employed. So, food for thought?

But John does say that if you want to invest in mutual funds, invest in a low cost index fund. Is there such a thing on Bursamalaysia? You betcha. Few weeks ago, Bursamalaysia launched its first index ETF (Exchange Traded Fund), the FBM30ETF, which is benchmarked against the FTSE Bursamalaysia Large 30 index. This means the fund invests in index weight the 30 component stocks of the FBM30 index. Cost to pay? Brokerage and stamp duty for in and out transactions, but there is a small management fee. And for those who have visions to 'invest abroad', as the unit trust companies are pushing here, ETFs are available on most stock exchanges. For example if you want exposure to the tech sector in the USA, you can achieve this by investing in the QQQQ, the Nasdaq 100 index tracking ETF. You only need a broker.

Win a Microsoft Zune contest

2007-04-06T05:11:00.000-07:00

I was surfing and browsing the internet on the topic mutual funds. So I came across a page on Investing by John Chow dot com. And then came the main page make money on the internet, by John Chow dot com. Lo and behold, a contest to win a Microsoft Zune from John Chow dot com. So here I am, going to put my name in the hat. "Got such good thing on the internet one meh?", you Malaysians may ask. Let's see how my luck goes to win this USD250 item. By the way, the investing section of John Chow dot com has some thought provoking and institution busting write ups...

2007-04-06T02:54:00.000-07:00

20070407 Malaysian Airports is one of the stocks in my portfolio. This year is Visit Malaysia year 2007. With this theme in mind, one can look to enter into such a 'tourism' sector related stock. In the above chart on 19 March 2007, it closes above simple trendline resistance of at RM2.49. The trend has taken the stock to RM3.02 today, and closing at RM2.97.

Banking sector to drive stockmarket expansion

2006-11-21T16:12:00.000-08:00

20061122 Articles from www.thestar.com.my on some foreign parties negotiating to take strategic stake in AMMB Holdings. This is an indication of the rerating of Malaysia in the eyes of foreign investors, which could be the precursor of a flood of money into the country, thereby fuelling a medium term expansion in Bursa shares. This money is not just looking for short term gain, as Newbridge puts it, they are in investments for 10 or more years. Banking sector in Malaysia in their eyes provide growth and value, hence the attraction. The 10 year expansion of the Australian sharemarket, has just seen this sort of private equity flooding in, that drove the S&P ASX 200 to multi year expansion. Will this happen to Bursamalaysia? Odds are in favour, if things are done right by the regulators.

2006-10-15T20:07:00.000-07:00

20061016 An essential piece in the Malaysian Capital Market Development, is delayed, due to structural reasons. Hopefully in 3 months RSS will be available.

Cross border trading for stocks is here, next STP for Bursamalaysia Derivatives

2006-10-03T05:48:00.000-07:00

The BNM forex relaxation on Malaysian residents investing overseas has seen stockbroking firms like CIMB provide cross border trading of stocks to its customers. The technology is already in place. All that remains is for Bursamalaysia to roll out the Bursatrade, then DMA (Direct Market Access), where direct STP (straight through processing) for trading Bursa products will open up to the rest of the world. Hopefully then Bursa will see the explosion in volume (the big bang) other world markets experienced with DMA introduction. The 2 Oct 2006 launch of Bursatrade encountered teething problems, with the launch delayed. Hopefully the software boffins at Bursa can get their act together and successfully launch Bursatrade for derivatives. (then 3Q 2007 for equities) Once launched, Bursa aims to provide the DMA access for brokers like CIMB, who already have the technology in place.

2006-09-09T00:44:00.000-07:00

20060910 11 months on from this report. When will DMA be a reality? I suspect pretty soon. Couple of comments are in order here. Korea experienced the big bang boost to volume and liquidity through DMA. But the DMA is open and available to both institutions and the individual traders/investors, creating a level playing field for the market mechanism and price discovery to flourish. The average derivatives trading volume in Korea is well over 1m shares per day. So, Bursa need to make DMA accessible to all, in my opinion.

Bursatrade Open API should be expediated

2006-09-07T19:41:00.000-07:00

20060908 As traders all know, "The Trend is Your Friend". The trend worldwide is definitely tilting towards online trading via the internet.(Finextra article above) Not just online trading but direct straight through processing which eliminates the human button pusher. Even a young exchange like Thailand Futures Exchange commenced online trading for futures end Aug 2006. For Bursa, the open API release should be expediated, as soon as Bursatrade is launched, so that trading on Bursa can move down this path towards the 'big bang'. TFEX approach is interesting to note, they use a centralised software developer SETTRADE, who consulted the experts in this field, from S Korea. Korean's futures market have bounded exponentially in volume and participation ever since they incorporated online trading in 1997. Using an exchange developed platform will cut costs and pass on the economies of scale benefits to market participants.

2006-05-05T21:17:00.000-07:00

20060506 Another positive move by Bursamalaysia for the market and confidence. This will classify more PN17 companies, so as not to channel unwary funds to them. On the other hand, more corporate restructuring plays could come out of this, as the 'dead wood' companies' management will have to revive these companies, adding to the positive news on the market.

2006-05-05T04:02:00.000-07:00

20060505 Ringgit strength indicates and support the premise that the foreign $ is pouring into the country, despite all the doubters.

2006-04-19T20:08:00.000-07:00

20060420 Bursamalaysia is another stock that can point to whether 'foreign funds' are headed to Bursa shares ownership. Substantial shareholder filings show that Newton Investments of London owns 48.091 m Bursa shares representing 9.34% of the paid up capital.

2006-04-19T08:54:00.000-07:00

20060419 Much has been flouted around about 'foreign funds', is there any, are they coming to Malaysia, have they deserted Malaysia, is Bursa stocks off these foreign funds radar screen etc. This chart of Digi.com tells a story of how, maybe 'foreign funds' are reevaluating Bursamalaysia stocks. Theedgedaily.com reports that Goldman Sachs has become a substantial shreholder these few months, buying as much as 40 million Digi shares on the open market.

2006-04-02T21:04:00.000-07:00

20060403 Bursamalaysia Derivatives has some plans to introduce new products. Interactivebrokers is one of the biggest market maker firms in the world options/futures markets. Would be a good idea to get this firm in to the Bursamalaysia market, since none of the 5 foreign stockbroking firms nor any of the institutions want to make the market for derivative profucts. Case in point is the index options on the KLCI which has zero trading for years.

2006-03-28T17:12:00.000-08:00

20060329 The FKLI has tendency to trend well sometimes on the intraday timeframe.

2006-03-27T17:22:00.000-08:00

20060328 9:15 am. FKLI spot month. Remember this is a 30 min chart, many would say Bursa is a better 'trade', but with the leverage and this sort of move, I'd say FKLI is a way better trading instrument than any stock.

2006-03-27T00:30:00.000-08:00

20060327 Which one would you trade? The FKLI April futures, or Bursamalaysia Bhd. the answer lies in the risk profile and effective use of capital. Buying one fkli april contract at the breakot level 915 would yield a return of 11 points or 35% return on initial margin deposit of RM1,500. Buying 100 shares wuld yield a return o 21% on a cost base of RM4.70 (within the timeframe that the futures contract went up the 11 points). It can be argued that the FKLI provides a flexible and more return/risk effective trading instrument. Of course trading the stock would make the stockbroker richer, as the commission costs are relatively high. Some in the stockbroking industry would argue that trading stock (contra in this case) provide free money. But what about the risks, which are infinite if no capital outlay is required.

2006-03-23T20:00:00.000-08:00

20060324 Short selling to be revived. A great move by the authorities. Basically a market can do 3 things: 1 go up 2 go down 3 go sideways. For so long the share trader in Malaysia are missing the 3rd (most fun) part of trading, now the way is open, and market liquidity will certainly be enhanced.

Commendable action by Bursamalaysia, now for the follow through to clean up the sampah, not just this first action against 4 errant companies.

2006-03-12T22:29:00.000-08:00

Bravo Bursamalaysia, now go the next mile

2006-03-10T22:46:00.000-08:00

20060311 Everyday if you look at the Bursamalaysia website, we see plenty of "public reprimand" for companies breaching the Listing Rules. Bursamalaysia surveillance must be commended in bringing attention to errant public listed companies. There is an adage among participants on Bursa that there is a sector of stocks called 'rubbish' stocks. The number and frequency of breaches of Listing Rles and public reprimands brings attention to the poor quality of these sampah stocks, with no regard to corporate governance and safeguarding of minority shareholder's rights. Bursa should go the extra mile, and pblish prominently the public reprimands in major newspapers in Malaysia. I mean not in some smal corner, but in bold and prominently in noticable columns. Other action would be to fine the companies on continual breaches of the LR. There needs to be a cleanup of the stocks.

Now how would they know who bought?

2006-03-09T22:38:00.000-08:00

20060310 The statement in the rectangle, is a prime example of nonsense. How would anyone know it were local fund buying, unless they were the ones orchestrating the buying or they told people outside they were buying blue chips. The system is set up to take money away from 90% of investors/traders wh are unwary, and get unwittingly caught up in all the news, rumours and excitement of the market. Yes 90% do lose money, either realised or unrealized, but the participants in the sell side won't be seen to allude to this very real statistic. So, it is best to have a plan of action in place, with objective rules for investing or trading and always practice good money management. Most of all con't get caught up in what the system spits out, be it news headlines, rumours or inuendo.

2006-02-06T16:15:00.000-08:00

20060206 In an rising rate environment (which we might or might not have at present) this article highlights the possible asset switching or reallocation from the banks with different portfolio spread of fixed v floating interest rate assets. Could be worth keeping an eye on this aspect of the banking sector on Bursamalaysia.

2006-02-06T05:50:00.000-08:00

20060206 Some positive reports come out, slowly but surely, there is a realisation that the bull is upon us. The apathy and total disregard for the Bursa stocks we saw in Dec 2006 was just a classic capitulation, whereby whoever couldn't stand it totally cut loss of the stock positions held and gave up on Bursa stockmarket.(including one Singapore fund manager described by Amresearch as having "totally sold out of his Malaysian stock portfolio) When people hold on to losses for a long time capitulates, it signals the beginning of the end for the bear and a new beginning. It is a symptom of Asian markets where not many are willing to stick their necks out to anticipate a possible turn in markets. Just last week's theedge daily newspaper's roundtable meeting with a few research heads who were "unanimously not bullish" on the Bursa stocks. Now we have to see how far the market can go, it may yet be not too late for the 'latecomers'.

2006-02-06T04:23:00.000-08:00

20060206 Market Roundup JetFM

Welcome Mat for the Year of the Dog

A late surge in buying left the KLCI near its day high at close. The KLCI added 1.54 point (+1.54%) closing at 929.39. Retaill investors swamped back into the market nudging the trade volume today to more than 1.011 bln shares traded. Key blue chips barely budged but gainers swamped losers 451 to 371 but 274 counters were unchanged. Indicative of renewed retail interest, the Second Board Index rose 1.60points (1.80%) to close at 90.32. The Emas Index rose 0.40 points (0.19%), closing at 212.25.

Amongst the actively traded issues, volume leader Fotronics rose 2.5 sen closing at RM0.41. Iris Corp rose 1 sen closing at 29 sen. AP Land rose 8 sen closing at 28 sen. Berjaya Corp rose 0.5 sen, closing at 15 sen. Recently listed Wimems rose 5.5 sen to 73 sen. Kai Peng added 7.5 sen, closing at 34.5 sen. Compugates rose 19 sen closing at RM1.87 while Latexx rose 21.5 sen to end at RM0.715.

Among big gainers were Kosmo Technology Industrial rose RM1.36, closing at RM1.36. The stock has risen sharply after its debut on June 30 2005. The company's mobile-phone unit signed a deal with Saudi Television Manufacturing Co. to build a plant in Saudi Arabia. Kosmo's 30 percent-owned unit, M dot Mobile Sdn., will make at least 1 mln mobile phones a year which the company expects will generate an estimated RM2 bln in sales in the next five years. WTK made one of its rare foray into the top gainers' list, rising RM0.22. Supermax which will see its new shares issued following its bonus issue listed tomorrow, rose 20 sen, closing at RM3.88. Dreamgate rose 19 sen to close at RM1.46.

In corporate news, Antah Holdings Bhd said trading in its shares had been suspended since February 2 as the company is yet to release its annual audited accounts for the financial year ended June 2005. The company was to have released the results by Oct 31 2005. Suspension will continue until further notice.

Bucking the trend in the market, Landmarks shed 11 sen or 12%, closing at 95 sen after the Securities Commission rejected its bid to sell its signature Sungei Wang retail mall to a REIT.

Nam Fatt added 2 sen, or 4.9%, to close at 43 sen. The construction company said it received a RM261 mln contract to build 6,500 low-cost apartments for the National Housing Authority in Thailand.

Telekom Malaysia Bhd. added 10 sen, or 1%, to RM9.85 despite news its unit Celcom will pay USD232 mln (RM870 mln) in compensation to DeTeAsia as compensation under a Tribunal Award by the International Court of Arbitration of the International Chamber of Commerce in London. Its other unit, Fiberail, has received regulatory approval to provide broadband network services throughout Malaysia.

In earnings announcements security document manufacturer and operator of the local mint Fima Corp said its 3Q2006 earnings to Dec2005 rose to RM11.48 mln up from RM7.0 mln in the corresponding quarter a year ago. For the 9-month period earnings rose from RM18.21 mln to RM24.69 mln.

Leong Hup Holdings, the largest integrated poultry player in Malaysia, is in talks to sell its 530-acre freehold land in Johor Bharu worth RM138 mln,, which has been approved for a proposed mixed development. The land is valued at RM6 per square foot, compared with RM3.00 per sq ft when it was acquired in late 1996. Leong Hup is benefiting from the recent 20 sen per kg hike in
ex-farm chicken price, lower feed cost, higher efficiency of its farm and hatchery. Management says the 20 sen price hike will add RM12 mln annually to profits.

In the region, stocks mostly rose. Taiwan's Weighted rose 1.90%, leading the pack. Hong Kong's Hang Seng rose 0.77%, the Korean Kospi rose 0.61% while Singapore's STI rose 0.38% while Japan's Nikkei rose 0.53%. Jakarta's Composite rose 0.12%. Bucking the regional trend were the Philippines' Composite and the Thai SET indices down 0.256% and 0.40% respectively.

2006-02-02T23:48:00.000-08:00

20060203 3:48 pm. Expectatns were for a quiet market with few participants. Overseas markets were mostly weaker, but at this time, Bursa CI +9 pts, Gainers 544 Losers 213 Unchanged 215 Untraded 360 volume 676m shares worth RM1.122 billion. Oops what happened? Bursa is UP and with brisk trade from the above activity numbers. The round table in theEdge paper of experts were unanimously "not bullish". This is an example of how the smart money catch the unwary off guard, they move in when people all think there is no action, and when the masses do catch up and become overcome by greed and the feeling of 'not wanting to miss out' the smart $ is getting out and the masses are left holding the box when the music stops.

2006-01-07T02:13:00.000-08:00

20060107 This news item appeared on theedgedaily.com. For traders and investors, basically the comments in the article can be boiled down to the supply and demand forces which govern every market. In this case the market is for GLC shares. When the revamp were announced, buyers (demand) all rush in to buy ghe GLC stock causing an increase in demand. In the meantime, sellers would pull their orders, perceiving the GLCs might increase in value or undergo a rerating, causing a shrinkage in supply. Consequence? Demand exceeds supply so the prices move up, overshooting the fair or 'true' value as markets often do due to the speculative fervour and emotional behaviour of human fear and greed. This is the basics of how markets function. OK, later those who rushed in to buy and read the 'slow' progress reports of the GLC revamps. What happens? The process is reversed and now supply exceeds demand, whereupon prices are driven lower. Fear now ruled the market as greed ruled before.