Current BLR 2009

Base Lending Rate (BLR) is a minimum interest rate calculated by financial institutions based on a formula which takes into account the institutions' cost of funds and other administrative costs.

CIMB's Current BLR = 5.55%
The first time CIMB cut their BLR from 6.5% to 5.95% happened in 3 Feb 2009. Then another revised downwards from 5.95% to 5.55% effective from 02 March2009.

Other Banking Institutions BLR ..........

No.	Banking Institution	Effective Fr.	BLR (% p.a.)
1	Affin Bank Berhad	02/03/2009	5.50
2	Alliance Bank Malaysia Berhad	02/03/2009	5.55
3	AmBank (M) Berhad	10/03/2009	5.55
4	Bangkok Bank Berhad	06/03/2009	5.55
5	Bank of America Malaysia Berhad	01/03/2009	5.55
6	Bank of China (Malaysia) Berhad	03/03/2009	5.55
7	Bank of Tokyo-Mitsubishi UFJ (Malaysia)	06/03/2009	5.25
8	CIMB Bank Berhad	02/03/2009	5.55
9	Citibank Berhad	10/03/2009	5.60
10	Deutsche Bank (Malaysia) Berhad	03/03/2009	5.55
11	EON Bank Berhad	10/03/2009	5.55
12	Hong Leong Bank Berhad	03/03/2009	5.55
13	HSBC Bank Malaysia Berhad	02/03/2009	5.55
14	J.P. Morgan Chase Bank Berhad	03/03/2009	5.25
15	Malayan Banking Berhad	02/03/2009	5.55
16	OCBC Bank (Malaysia) Berhad	01/03/2009	5.55
17	Public Bank Berhad	03/03/2009	5.55
18	RHB Bank Berhad	02/03/2009	5.55
19	Standard Chartered Bank Malaysia Berhad	03/03/2009	5.55
20	The Bank of Nova Scotia Berhad	05/03/2009	5.55
21	The Royal Bank of Scotland Berhad	27/02/2009	5.25
22	United Overseas Bank (Malaysia) Berhad	06/03/2009	5.55

Source : Bank Negara Malaysia
updated: 06 / 03 / 2009

Budget 2010 highlights - Personal Concerns

Income Tax:

* Govt to reduce maximum individual income tax rate from 27% to 26%, personal relief increase from RM8,000 to RM9,000 in 2010

* Personal tax relief raised to RM7,000 from RM6,000 now for EPF contribution and life insurance premiums.

* Govt proposes individual taxpayers be given tax relief on broadband subscription fee up to RM500 a year from 2010 to 2012.

* Govt to impose 5% tax imposed on gains from disposal of real property from Jan 1, 2010. However,it will be retained for gifts between parent and child, husband and wife, grandparent and grandchild. This tax exemption will also be given on disposal of residential property once in a lifetime


Others:

* Govt to launch scheme for EPF contributors to use current, future savings in account 2 to get higher financing to buy higher value house or additional houses.

* Govt to issue 1Malaysia sukuk totaling RM3b, for Malaysian aged 21 and above. 3yr maturity, with 5% annual rate of return

* Govt proposes RM50 service tax on each principal credit card, charge cards, including free cards. RM25 for supplementary cards by January.

How to Measure Company's Effectiveness with ROE?

Return on Equity (ROE) is a tool that helps you to measure how effectively the company is being managed. In other words, ROE measures the company's ability to make use of its assets to generate profits.

ROE = (Net Profits - Dividends / Total Shareholder's Fund) x 100%

In general, the higher the ROE, the more effective the company is at using its resources and the more productive the management team.

TIPS:
Some people consider ROE one of the most important measures of a company's overall financial performance. Simply because you only want to invest your hard earn money in a company that will take good care of your money to maximize the profits.

A company that has a strong management should have a minimum of 10 on its ROE for a period of 5 years. The goal is to look for companies with a rising ROE, greater than 15% and growing. This is one of the Warren Buffett requirement as well.

KNM - BUY

In the latest Maybank Equity Research dated 23 Oct 2009 has upgraded KNM group from SELL to BUY from previous target price RM0.69 to RM1.02.

Reasons are: (source from Maybank Equity Research)
1. Replenishment risk abating.
KNM's oustanding order book has stabilised at RM2.7b as at Sep 09. Also new job flows have started to pick up.

2. Job enquiries also on the rise.
To-date, 50% of KNM’s RM14b in tenders have been activated versus 10-15% 6 months ago.With job enquiries growing, we expect higher contract flows in 2010. New order wins will come from Malaysia and overseas (i.e. Middle East, Australia, PNG). We think KNM stands a strong chance of winning another RM400-500m contract from Verwater alone for Phase 2 of the storage terminal and marine facilities project in Yan, Kedah.
3. Exiting Chad to be positive.
Elsewhere, KNM’s intended venture into Chad is likely to be off unless it secures bank financing for the Sedigi project. The market would react positively should KNM drop its interest in Chad as a turnkey contractor or just surface as a sub-contractor for this project considering the security, execution and financial risks involved.
4. Expect earlier recovery, by 2010.
Forecast for 2010-11 will raise by 16% and 28% respectively as we expect full order book revival by 2H10. This suggests earnings growth revival from 2010, ahead of our initial expectations.

Tips:
Top 10 high volume stock with high fluctuation and speculation. This counter will be able give you an excitement everyday like riding a roller coaster. The current KNM's price is RM0.85 and if the TP is being realized then its going to be 23% profit. The lowest it can be speculated maybe at RM0.70, a very strong support level. So again....which way are you speculating? I voted up! I bought it in when it down to the support level and even now I still believe KNM still strong fundamentally with its businesses and growth.

Want to Know How Much A Company Made? Look at EPS!

Earning per Share(EPS) is to determine how much money the company makes.

It measures the shareholder returns for every shares invested. This is the most basic indicator because no matter how good you think a corporation is or how much you love its CEO, if the company is not earning money, eventually its stock price will fall.

EPS = Net Profit - Preference Dividens / No. of Ordinary Shares

Exp: Company A has $100,000 profits for the year with 1 million of outstanding shares. The EPS would be $0.10 (100,000/1,000,000).

TIPS:
If a company is earning more money, it obviously should be rewarded with a higher stock price or higher dividend payout (depending on its policies). That's why it's important to look at the history and forecast of company's EPS. Companies that grow (EPS) by more than 15% is the picked.

Tracking stocks with your HP

Ticker Tape is my favourite window mobile (WM) software. An application allows you to watch the stock market and updated the quotes in real time. More importantly, it is free.

The data are retrived from Yahoo Finance and it's allows you to track the stock prices anytime you want with the 3G or wifi connection. Besides, the history can be retrived up to 5 years as you can see in the pic.

How to install?
For this program, it's requires .Net CF 3.5 to be in your WM phone. Then you can download the freeware from
http://www.freewarepocketpc.net/get-tickertape.html.

How to key in my favourite stock into the portfolio?
The stock code has to follow Yahoo Finance format which you can check online.
For example:
^KLSE = FTSE Bursa Malaysia
7164.KL =KNM Group Bhd
5108.KL = ICAP
5098.KL = Masteel

Car Insurance - NCD Calculation

No Claim Discount (NCD) is a discount given to the policyholders upon renewal of their motor insurance if no claim is made from the policy for 12 months. The discount given is based on a fixed rate provided by Persatuan Insurans Am Malaysia (PIAM) Motor Tariff.

Period of Insurance - NCD
After 1st year = 0%
After 2nd year = 25%
After 3rd year = 30%
After 4th year = 38.33%
After 5th year = 45%
5th year onwards = 55%

Tips:
* NCD is transferable to your new car or even you change the insurance company. The tactic is that you can buy a cheaper car and pay lower insurance premium for 5 years. When you have reached the maximum NCD (55%), then you will be able to save a lot for your luxury dream car.

Link for Private Vehicle Insurance Premium Calculator
http://malaysia.kurnia.com/Insurance/Calculators/Car-Insurance/Default.aspx

What PE ratio to BUY?

Many investors in the stock market like to talk about PE ratio, what is it exactly?

PE ratio = Price Earning Ratio
PE ratio = Share price / EPS (EPS=Earning Per Share)

This is one of the common tools many people use it to get a quick indication of whether the share price is reasonable given the company's earnings. Meaning to determine whether a stock is fairly valued.

What PE ratio to BUY?
There is no fix answer for this. It will be meaningful if you compare the PE ratios within the same industry and overall market to gauge if the stock is overpriced.

Misconception
Low PE = Cheap & you should buy the stock.
High PE = Expensive & you should avoid the stock.
This is not true. Sometimes a high PE ratio does not mean the stock is expensive because the stock may have high growth prospects in its future earnings. Growth investor don't mind buying high PE stock because they expect the companies's earning to improve in the future.

Conclusion
Generally I will buy only companies with trailing PEs of 10 or less. As what Warren Buffett is doing. On top of that, Lower PE means a shorter time period to recoup your investment and it's also more resilient to market crashes.

How to Calculate Commission & Brokerage Fees

Do you know how much you pay everytime you buy a share from stock market?
There are 3 components:
1. Brokerage fees
2. Clearing Fees
3. Stamp Duty

Brokerage Fees
Retail trades valued above RM100,00 = 0.3% of contract value
Retail trades valued below RM100,00 = 0.6% of contract value
Online retail trades (online trades) = Up to 30% discount of min rate
Same day buy and sell trades = 0.15 of contract value
Minimum charge of RM40 per counter.

* I'm using Maybank Online Trading which charges 0.49% with RM12.00 minimum charge.
To avoid to loss out for the minimum charge, it's recommended to make each transaction minimally at RM2500.
X = (100/0.49)x12
= 2449

Clearing fee
Computed at 0.03% of the contract value. No Minimum fee here.

Stamp Duty
Calculated based on every RM1000 range, with maximum of RM200.
Contract Value - Stamp Duty
RM0-RM1000 = RM 1
RM1001 - RM2000 = RM 2
RM2001 - RM3000 = RM 3
RM100001 - RM200000 & above = RM 200

Example:
If you buy 50 lots (5000 units) shares of KNM at 0.70, how much do you have to pay in total?

Answer:
Total Commission & Fees
= Brokerage fee + Clearing fee + Stamp duty
= (RM0.70 x 5000 x 0.49%) + (RM0.70 x 5000 x 0.03%) + RM4
= RM17.15 + RM1.05 + RM4
=Rm 22.20
So, the total purchase price = RM3500 + RM22.20
= RM 3522.20

The Rule of 72

Everyone should know this basic investment rule. No excuse for saying that my school teacher never taught me this.
Rule of 72 is to help you estimates the amount of time to double your money.

72 / Interest rate = Years to double the money

For instances:
1. If your have $10K in wws2020/unit trust which give you return at 10% every year. 72/10=7.2 which means your money will double to become $20K in 7.2 years.

2. If inflation rates reported at 3% averagely. 72/3=24 which means your money will lose half of its value in approx. 24 years. If you are planning to retire with $1mil, you need to take the inflation into the calculation because 1mil today = 500K 24 years later. Now adjust your target to $2mil if you want to have $1mil worth Quality of Life (QoL) in 24 years later.

MASTEEL 5098 UP

Masteel, one of my highly invested counter due to its strong fundamental.
Current Price: 0.945
Upd: As I writing this its standing at 1.00 (changed +5.82%)
Net Assets Per Share: 2.21
EPS: 48.17 Sen
P/E Ratio: 2.46
DY: 0.03
my TP: 1.50
Steel is just like O&G the demand will definitely increase together with the market recovery.

Other Steel counter
Kinsteel: BUY CP:0.96 TP:1.30 (Source: Maybank research)
Cscstel: BUY1.03 CP:1.23 TP:1.4-1.80 (Source:The Edge & many other bloggers)

History moment

This is the history moment 21 Oct 2009 2:31am when this blog is created. I will record down all my research and insights about personal financial management and stock investments into this blog from now on. So at least I have a place to review my research conclusion later. It's here.