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Wednesday, April 30, 2008

“Failing to Plan = Planning to Fail”?

What is Financial Planning?

Financial Planning is really simple, and no different from planning for a day out. You will only need to think of the 3 points below:

1) Knowing where you are now,
2) Where do you want to go and
3) How to get there.

1st of all, we need to know what are our current resources, our financial goals and how to achieve them in the most effective and efficient manner. Financial Planning is important to everyone, not only to the rich, and especially the not-so-rich. Ya, you get me right! Especially the not-so-rich! If you are rich, you still can afford to be complacent and get away with it. A not-so-rich, if don’t carefully plan and implement with discipline, you will suffer at the end of the road.

Money may not be the most important thing in life, but nevertheless, you can’t live without it! Every single thing revolves around money, even when I sit in the room and switch on my laptop (you will still need electricity to run your laptop, and you’ll have to pay for your electricity).

Financial Planning is a systematic way of organizing our financial affairs in the most effective and efficient manner in order to achieve our Life Goals.

Financial Planning actually help us to understand our Wants and Needs. Our Wants are infinite, but unfortunately, our resources are finite! There is always Trade-Offs or Sacrifices to be made.

Besides, it helps us to cope with difficult times. The only constant in life is Change and learning to cope with changes early will be a plus point! If one day, unfortunately you lose your job, can the money you save let you live your life on until you get your next job? If not, how can you save enough for that? You don’t save any money? OMG!

Also, with a financial plan in place, creating wealth will not be big fuss. Wealth creation is not a sprint but a marathon, as it takes time, discipline and a lot of financial stamina. With the help of a qualified investment advisor, you can have the most appropriate investments that suit our risk appetite to achieve our desired goals. In the current market, there are many investments available for you to choose. By adopting various investment strategies and proper Asset Allocation, slowly but surely, you will get your 1st pot of gold!

Friday, April 25, 2008

Tech Ed SEA 2008!



Tech Ed SEA is back! Dubbed as the conference for "geek", Tech Ed SEA 2007 was an enormous success as there were more partners, sponsors and delegates who took part in that event.

And now! Tech Ed 2008 is back to KLCC Convention Centre again this year on 11-14 August. There is an early bird ticket of RM699. While RM699 is surely not a small amount for the average people like me, but when it comes to whether it is worthy or not, surely there are people who consider it as worthy, while some people will say "it's madness", as everyone has different category to evaluate.

With waves of products launch this year (i.e. Windows Server 2008, SQL Server 2008, Visual Studio 2008, Windows Mobile 6.1) it is guaranteed it will generate a lot of interests from all walks of people from the industry.

If you some how miss the Tech·Ed 2008 in KLCC, no worry! You can still attend the one in Sydney!Microsoft Australia's Tech·Ed 2008 will be held in Sydney from the 2nd to 5th September 2008 at the Sydney Convention Centre, Darling Harbour.

Tuesday, April 22, 2008

Review: The week ended 18/4/2008

The KLCI rose as selected plantation and oil & gas-related stocks rose on continued firmness in crude palm oil prices and record oil prices. Sentiment was also lifted by the rebound in U.S. equity markets towards the end of the week. The KLCI closed a 6-week high of 1,267.6 points for a gain of 1.7% for the week.

Average daily trading volume during the week remained unchanged at 0.5 billion units while average trading value fell to RM1.1 billion from RM1.4 billion in the preceding week.
On Wall Street, the Dow rose to the highest in three months as the latest set of 1Q2008 corporate profits for selected stocks were better-than-expected. The Dow rose by 4.3% to 12,849 points while the Nasdaq closed higher by 4.9% to 2,403 points over the week.

The U.S. headline inflation rate was sustained at 4% in March. However, the core inflation inched up to 2.4% in March from 2.3% in February on higher housing and transportation costs. U.S. retail sales growth decelerated to 0.1%in March from 7.1% in February due to lower sales of vehicles and furniture. U.S. housing starts contracted by 11.9% month-on-month to a 17-year low of 947,000 units in March after declining by 0.7% in February.

Crude oil prices rose to a record high of US$116.70/brl on 18th April to register a weekly gain of 5.9% on concerns that the Organisation of Petroleum Exporting
Countries (OPEC) would not increase oil supplies. OPEC's next meeting will be on 9 September 2008.

On the local front, manufacturing sales growth rose to 21.1% in February from 15.8% in January on higher sales of refined petroleum products. Malaysia’s foreign reserves decreased by RM8.6bil in the last two weeks of March to RM384.7bil as at 31st March 2008 compared to an increase of RM9.1bil in the first two weeks of March. The decline in reserves was due to the quarterly adjustment of foreign exchange revaluation losses as the Ringgit strengthened against major currencies in 1Q2008.

The Ringgit registered a weekly gain of 0.3% against the U.S. dollar to close at a 1-week high of RM3.142. On a year-to-date basis, the Ringgit has appreciated by 5.6% against the greenback.

Source: Public Mutual Market Wrap

Monday, April 21, 2008

The Power of Perception

Sometimes I just feel ridiculous how perception can overpower substance so easily. Have you noticed?

KLCI surges 12.38 pts. The reason? Asian markets rallied, notching gains of between 1.75% and 2.49%, as investors’ sentiment was boosted by the strong close on Wall Street last week, ignoring the record high price of US$117 (RM367.61) earlier.

Light crude oil was trading at US$116.60, off the record high of US$117 while crude palm oil futures fell RM93 to RM3,460 per tonne. Malaysian tin price hit a new high of US$21,560 per tonne due to the record London Metal Exchange prices and firm demand.

Commodities are still at all time high. But the perception of the people changed. They feel more optimistic by Google's better than expected quarter earnings. It is as if that suddenly the US economy is going strong again, therefore Wall Street close strongly, Asian market all follow suit. This sudden optimism (or pessimism) can really make a hell of a difference.

Wednesday, April 16, 2008

Significant Review for Week ended 11/4/2008

Consumer confidence in the U.S. as measured by the University of Michigan’s consumer sentiment index fell to a 26-year low of 63.2 in April from 69.5 in March on concerns over the job market and rising inflationary pressures.

U.S. export growth rose to 20.8% in February from 16.7% in January as the weaker dollar made U.S. products more competitive. However, import growth accelerated to 16.4% in February from 12.4% in January over the same period. As imports outpaced exports,the cumulative trade deficit for the first two months of 2008 widened to US$121.3 billion from a deficit of US$115.6 in the same period last year.

Crude oil prices rose to a record high of US$110.87/barrel on Wednesday on renewed concerns over a weak US dollar and tight oil supplies before easing to close at US$110.14/barrel to register a weekly gain of 3.7%.

On the regional front, China’s export growth accelerated to 30.6% in March from 6.5% in February due to increased exports to U.S. and Hong Kong. However, import growth eased to 24.6% from 35.1% over the same period. China’s cumulative trade surplus for 1Q2008 narrowed by 10.5% to US$41.4 billion compared to the same period last year.

On the local front, industrial production growth eased to 6.3% in February from a revised 7.6% in January on slower manufacturing activities amidst lower electronics orders from the U.S. Due to the weakening of the U.S. dollar against major currencies, the Ringgit registered a weekly gain of 1.3% against the U.S. dollar to close at RM3.151.

Saturday, April 12, 2008

5 Reasons Why You Should Invest in Public China Titan Fund (PCTF)!

1) Stablility
Larger corporations are better positioned to weather economic cycles due to their sheer size, stronger cash flows and dominance in their respective industries. Thus, an equity fund that focuses on large cap stocks can potentially offer attractive long-term capital growth by investing in large companies with strong track records. Due to their size, these companies are able to weather the impact of tougher economic conditions compared to their smaller counterparts.

2)Foreign Direct Investment
The Greater China region has benefited from significant inflows of foreign direct investments (FDI) with China accounting for the largest share. Thanks to its industrialisation drive, total FDI into China amounted to US$529.5 billion over the past ten years. Almost half of China's exports are currently produced by these foreign-owned enterprises. Investment spending, which accounts for 41% of China's Gross Domestic Product (GDP), has been growing at a robust pace of 20% per annum over the 2003-2006 period.


3)Major Importer and Exporter

Exports have been a major source of growth for the greater China economies. Hong Kong, Taiwan and China are among the most export-driven economies with exports contributing 167%, 63% and 36% to their GDPs respectively in 2006. China is a major destination for Asian exports with two thirds of China's imports sourced from Asia.

4)Consumer Spending
Higher standards of living have fuelled consumer spending in the region. In China, domestic consumer spending grew at a healthy rate of 14.1% per annum in the last four years. Consumer spending has been supported by the rising trend of urbanisation in Chinese cities with the urban population ratio increasing from 26.4% in 1990 to 43.9% in 2006.

5)Low Interest Rates
China enjoys a low real interest rate environment which is conducive for consumer spending and investments. Despite the recent monetary tightening measures by the central bank, real interest rates in China have continued to remain low at 0.8% currently.

The macroeconomic factors that contributed to the rapid growth of the greater China region are expected to continue driving the region's economic prospects in the medium-to long-term. The combined nominal GDP of the Greater China region's is estimated at US$3.2 trillion in 2006 accounting for 6.7% of global GDP and 34.3% of the Far East region's GDP.

Due to their significant revenues and strong share performance in the past year, three listed Chinese companies are currently among the top ten largest companies in the world based on market capitalisation (Source: Bloomberg, February 2008). These three companies are Petrochina Company Ltd., China Mobile Ltd. and Industrial and Commercial Bank of China (ICBC).

Petrochina Company Ltd., with a market capitalisation of US$576.7 billion as at 21 February 2008, has become the largest listed company in the world after its listing on the Shanghai stock exchange in November 2007.


Source from: http://www.publicmutual.com.my/page.aspx?name=article_080404_1045_pg01

Tuesday, April 8, 2008

Dividend and Growth- Domestically

Today is the launch date of Public Islamic Optimal Growth Fund(PIOGF), which capitalise on dividend and growth stocks in the domestic market.

Many may ask why at this stage Public Mutual launched a domestic fund, when the political landscape of the country is still uncertain. The Bursa had drop significantly since the election, and many uncertainty still to come as the new state government in 5 states are in the process of reviewing the projects, introduced by the previous government, in their respective states. But while share prices keep on changing everyday, the fundamental of a company will not change overnight, which make this fund relevant to any investor.

First of all, if the state government will not stop a project that benefit the people, as they are much more eager to please everyone as they are new. If eventually a project is stop by the state government, that means it is not a beneficial project, which carry the meaning that, even though the project is carried out completely, it will not do well. Logical right?

PIOGF invests 50% of its equity investment in Shariah-compliant growth stocks in the domestic market while the remaining 50% of its equity investment is invested in Shariah-compliant stocks which offer attractive dividend yields.

The growth stock here, at the current price, can point to some of the blue chips. Counters like Tenaga and Sime have in recent time drop of so drastically that, when the political landscape become certain, they will get back to their normal level, which is almost 30% more of the current price.

As for stocks which offer attractive dividend yields, there are aplenty in our Bursa. One point need to be highlighted is that, Malaysian economy is NOT doing badly at the moment (as the record dividend declared by the listed companies show), therefore the current low pricing on the stocks are merely caused by perception, not fundamental.

PIOGF is a capital growth and income fund that is suitable for medium to long-term investors with aggressive risk-reward temperaments. PIOGF distributes annual income to the investors on a best effort basis.

Wednesday, April 2, 2008

Distribution for PAGF and PRSF

Public Mutual declares distribution for 2 funds, namely Public Aggressive Growth Fund(PAGF) and Public Regular Savings Fund(PRSF) for financial year ended 31 March 2008. The distribution detail is as below

Public Aggressive Growth Fund - Gross distribution of 15.00 sen per unit
Public Regular Savings Fund - Gross distribution of 10.00 sen per unit

Public Aggressive Growth Fund generated a five-year return of 150.8%, while Public Regular Savings Fund generated a five-year return of 119.2% respectively for the period ended 7 March 2008, according to The Edge-Lipper Fund Table dated 17 March 2008.

What about the KLCI during this period? KLCI registered a gain of 103.9% for the same period. That means these funds have outperformed the benchmark Kuala Lumpur Composite Index (KLCI). So if your investment in shares can't beat the performance of these 2 funds, you should seriously think of quitting the stock market,as you have lose out to another person who did nothing other than just buy unit trusts, while you have spent time and energy to choose the right counter to buy, trying to earn more but to no avail.

Public China Titans Fund (PCTF) : Capitalise on China’s large-cap stocks growth prospects

Public China Titans Fund (PCTF) was launched on 1 April 2008. It was April Fool's Day, but this is no joke. This fund offer a huge potential to be the best performing fund in the coming years. The logic? The current uncertainty in the market, particularly the US market.

The current credit crunch in US had actually sink the entire US financial market. Citibank lose its status as the world biggest bank (to ICBC),and also needed the injections of funds from Arab countries. Other notable banks are not exempted either. Bank of America, Merrill Lynch are all in deep shit now.

So the situation looks bad, why still want to invest in this fund? Actually when there are uncertainty, there are great bargain. The problem in these US banks is too big a hole that a certain Arab country or the US government cannot overturn. The proactive measures taken by the US Federal Reserve is a sign of trouble, but it is a sense of relieve to the people also, as these measures will actually speed up the recovery. But still, these holes need to be covered. But how?

"“The returns of funds that focus on large-cap stocks are usually considered to be more stable than small-cap funds as larger corporations are better positioned to weather economic cycles due to their sheer size, stronger cash flows and dominance in their respective industries." This is quoted from Public Bank and Public Mutual Chairman Tan Sri Dato’ Sri Dr. Teh Hong Piow. But the main point here is the word in bold: strong cash flows.

If these big cap companies in China take this chance to make a presence in the US financial sector, they are actually also putting a mark in the world economy. The US financial sector need cash to cover the hole, while the chinese need recognition and brand building. With the US financial sector's expertise, they can actually improve on the operation of these chinese banks. This is a win-win situation for both, and the potential for huge growth is high if this happened.

Below are some brief info on the fund.

Strategy:
Investing in companies with market capitalisation of RM10 billion and above in the Greater China region namely China, Hong Kong and Taiwan markets and including China-based companies listed on overseas markets.

Equity exposure: from 75% to 90% of its NAV.

Duration: Mediun to Long Term

Risk Profile: High risk