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Saturday, 23 July 2016

How to apply IPO via CIMB Clicks


How to apply IPO - Bursa Malaysia- CIMB Clicks

There are quite a few interesting IPOs that were listed in the market and their performance to date are excellent (Click to see the IPO Performance). I guess there will be an opportunity for us to catch the sweet treat from the capital rising activity of the new IPO.

First of all, who are eligible to apply IPO ?

1.Malaysian resident and citizen above 18 years old.
2.Has a Central Depository System (CDS) Direct Account registered in your own name.
3.Nominees or third party CDS Accounts are not allowed   

3.  If you wish to open a new direct trading account, please click here to make appointmentwe will reach out to you asap. Else, you may apply yourself by click the direct link

Let us get the latest IPO as example, there are a lot good information you can grab from the Bursa IPO Summary and the announcement page.


Kindly take note for below:
1) You may only make ONE share application for an IPO. Submitting multiple applications is an offence under the Capital Markets and Services Act, 2007. 
2) The eIPO application must be made via single person saving account that matched to the CDS/trading account name.
3) The IPO allotment is determined by the balloting process.
 
Timetable for IPO


Please find below for the Step by Step application at Cimbclicks. I believe that the other internet banking will share the similar process.
Step 1- Please Login to your internet banking, click on Investment > eIPO


Step 2 – Choose the IPO that you plan to apply

Step 3 –  Proceed to Fill in your CDS Number as per the statement– should be in the format of 15 digit, fill up the number of share to apply and Submit 

Congratulation, you are done for the application. You can get the result on the allotment day by checking the status at your online banking account.

How to Check your status 



Or ,you can check via https://tiih.com.my/index.php?p=results 

If the allotment to you is successful, you will get the shareholding on the day before listing at your CDS account. 

Hope this step by step guide is useful to you. Please press the ‘Like’ button on the top right on our homepage and share to your friend.

Thank you for your support!

Click Here! I want to open a trading account!

Friday, 13 May 2016

What is Stock Market?

From my understanding, Stock Market is a marketplace that allows Businessman to share their ownership of the business at a willing buyer willing seller price. It is a platform for investors to grow a small sum of money and create bigger wealth with less risk compared to starting own businesses. Stock Market provides investors a variety of companies and sectors to invest in, at the same time serves as an alternative channel for company to raise more capital.




There are few types of Stock Market investment channels that are accessible for Malaysian /Foreigner residing at Malaysia:
  •       Bursa Malaysia – Including Equity, Derivative, Islamic Market, ETF, Bonds and etc.
  •              Foreign Market – Including Singapore, US , Hong Kong , Japan , Indonesia , Thailand , Australia , UK ,Switzerland , New Zealand , Canada ,France , Germany and etc.


Pros and Cons of Stock market
Pros

Cons

ü  Anti-Inflation

*      RISKY when you gamble

ü  Income

*      RISKY when are lack of knowledge

ü  Liquidity

*      RISKY when there’s major bad news/ events happened in the industry, company or even country
ü  Diversification

*      RISKY when you do not remember what you had bought and invested
ü  Tax free on capital gain


ü  Wealth accumulation



What you can do in Stock Market?

You can invest like Warren Buffet and accumulate your wealth throughout your investing life. You also can Trade like George Soros to capture the short term capital appreciation. Basically investor are categorized into six which are –
·         Passive vs Active Management
·         Growth vs Value Investing
·         Small Cap vs Large Cap

How can you get into stock market?

First of all, you will need a trading account and CDS account before you get into the stock market. Once your account is ready, you are allowed to Invest / Trade at any exchanges that are available. To understand how to open the account, you can refer to the previous post on How to Open Share trading account?


How you can better understand the stock market?

First of all, you can consult your dealer / remisier to help you understand more on it and learn the basics of stock market. Besides that , there are plenty of websites with free information that you can access easily. As most of us are using smartphone in day-to-day task, you can also access to some free Apps in your Smartphone. Please do let me know if you notice any good Apps via the feedback form so I could add into the table below and share to the rest (as sharing is caring J).
Websites
SmartPhone Application
Bloomberg (Android)(IOS)
Investing(Android)(IOS)
Homily Chart (Android)(IOS)
KLSE Screener(Android)(IOS)
CNBC Real-time(Android) (IOS)
Broker Webside / Report (MBB , CIMB , RHB & ETC)


In summary, Stock market is one of the vital financial products to assist you in growing your wealth as it gives you the most freedom. Furthermore, the entry barrier is low (Almost to no min amount). The scariest weapon to destroy our wealth is not accident, not currency weakening, not war BUT inflation. Inflation will decrease our purchasing power and slowly wipe off our wealth.
Thank you for spending your precious time reading this. Please press the ‘Like’ button on the top right on our homepage and share to your friend if you think is useful.




Thursday, 12 May 2016

What is investing?

What is investing?
As investing is part of our journey to accumulate our wealth, we have to take it seriously and understand what we are doing and how it will help in our wealth accumulation. By simple street definition, investing means putting your money into a product that can give you return. Below are some brief ideas for the product that I can think of.

What are the product available for a Malaysian / Foreigner residing in Malaysia able to invest?
  • StockMarket – Including Equity and Derivative market
  • Bank Structure product – Paper commodity ( Gold , Silver)  / Equity link note       Dual Currency Investment
  • FundMarket – Including Foreign or Local , mutual , Islamic ,hedge Fund
  • Property Market  - Including landed, Condo, Resort, Shop
  • Insurance – Including Investment linked, Saving plan, Cash back insurance
  • Fixed Deposit – Including conventional or Islamic ,Cash money management Fund
  • Joint Business –Including all startup business, Venture Capital ,Private Equity
All the above Products have their own specification and characteristic, it is not necessary to have all of them in your portfolio but it is better to have a few in your own portfolio designed to your personality and desired goal.

Who should you look for the respective product?

  •         Stock Market – Licensed Dealer / Remisier 
  •      Bank Structure product – Licensed Dealer /Personal or Premier Banker
  •             Fund Market – Licensed Fund advisor / Bank Personal Banker
  •             Property Market  - Licensed Property agent and agency
  •             Insurance – Insurance agent / Bancassurance
  •            Fixed Deposit – Banker / Investment Banker
  •            Joint Business – Find a solid partner or franchise or Manager



How should you go for each product?

There are no shortcuts for all kind of investment. Knowledge is the first thing that you need to acquire before you get into a particular investment product. Strategy should come next. People who have knowledge and understand own personality will succeed in investment. People with strategy will also be able to get return in long run even though sometimes they might get caught in wrong market cycle or investment decisions.

Why should you go for each product?
  •             Stock Market – Low Entry barrier, Full access to the product
  •             Bank Structure product – Variety of investment, Diversifications
  •             Fund Market – Low Entry, Managed by professional
  •             Property Market  - Best hedge product to Inflation
  •             Insurance – Best protection product, hassle free on potential total loss
  •            Fixed Deposit – Safest Product to preserve capital
  •            Joint Business – 100% self decision making and make sure everything toward your vision

In summary, we should understand each of the products by consulting the professional (Shall always do this as this is the responsibility of the professional). Beside that, invest what you can afford and set your goal before you commit to it.

Thank you for spending your precious time reading this. Please press the ‘Like’ button on the top left on our homepage and share to your friend if you think is useful.

Friday, 18 March 2016

What is Share Margin Financing (SMF)

Share Margin Financing


Share Margin financing is a convenient facility offered to traders seeking to expand their trading potential or for investors to leverage on their positions. Maybe some of you have yet to hear about this product, but this is not something new in the Stock Market. It is available to all eligible Malaysians, Residents and Non-Residents who have sounds financial standing.

This facility can be provided by conventional bank as well as broker/Investment bank. It is very common that 2 different entities in the same group (Example: RHB bank vs RHB Investment Bank) provide the facilities with different term and conditions.
This is because each of them is bound by different regulation where conventional bank was regulated by Bank Negara Malaysia (BNM) whereas Investment bank is regulated by Securities Commission (SC).

In essence, this is a loan facility to leverage on your new/existing stock holding position. Market participants can use Share Margin Financing as additional funding to purchase shares quoted or to be quoted on Bursa Malaysia.

As we know there are someone will finance their stock purchase by using some financing tools provided by the Bank for example like OVERDRAFT facilities. However most of the Overdraft charge you the rate of around 5%-7% and share margin will only charge you around 4.65%-4.85%. If you are holding a share that you will not be selling off no matter what price it is, you can actually transfer into margin account by pledging as collateral and withdraw the cash anytime whenever you need some cash.

Below Table show the difference if you Finance to buy share using Overdraft
Financing /Monthly Interest
Share Margin Financing
4.85%
Overdraft
7%
Saving
100,000
RM404
RM583
RM179
500,000
RM2020
RM2917
RM897
1,000,000
RM4040
RM5833
RM1793


There are a few important terms that you should know before you apply share margin financing as below:

When Application:
TERMS
DESCRIPTION
Document
Photocopy of IC;
1 of the following document:
Ø  CDS Statement from Bursa
Ø  Latest 3 months bank statement(With salary detail)
Ø  Latest 3 months salary slip
Ø  Latest Tax document(B/BE/EA)
Drawdown facilities
Usually bank will have financing amount of at least RM50,000
Stamp duty
0.05% of financing amount
Interest rate
BLR- X%(1.5-2.5%) or Base Rate + X% rate
Fees And charges
Rollover fees, Committement fees, annual renewal fees, cash withdrawal charges, Nominees charges
P/S: Most of the bank will waives all kind of abovementioned charges except Nominees charges(corporate action fees) .


Before Trading:

Accepted Collateral
In a form of Cash/ FD/Listed Securities
Limit
= Cash/FD x 2.5 or Securities x 1.5 (Depend on the Bank Marginable percentage on respective securities & cannot exceed financing amount )

When Trading:

There will be a different calculation method for the Margin ratio but all should practice the same concept.
Security Coverage =           Equity Value­­­­_________ x 100%
Current Outstanding Balance

TERMS
DESCRIPTION
Share Margin Financing ratio
Some bank will call it Margin of advance, Margin of Finance(MoF), which is your current Financing status /Security Coverage Ratio
P.s : Some lenders calculate margin of finance using an inverse of the above formula.
Margin Call Ratio:
Below 150% (<150%)
Force Selling trigger Ratio :
Below 130% (<130%)
Withdrawal Request Minimum ratio
Cash Withdrawal =<167%
Securities Withdrawal =<200%

Scenario 1(Financing/Loan Amount = RM 150,000)

Investor A Profile
Ø  Collateral = RM50,000 (Cash /FD)
Ø  Limit Can be utilize = 50,000 x 2.5 = RM125,000

If Fully utilize the RM125,000

Securities Coverage =  _________RM125,000 (Total securities value)   ­­­­               x 100%
 RM125,000 (Total utilized loan) - RM50,000(Colleteral)


Margin Call =<150%
You will be on margin call when your share drop below RM112,500
(Use your outstanding balance times the ratio –> RM75,000 * 150%)

Force selling = <130%
Same calculation here which mean you will need to rectify your account when your Equity Value drop below RM 97,500

P.s : Please always consult your dealer /Remisier if you have the difficulty on calculate this ratio.
Above is the common thing that an investor shall know when they open a share margin account. However,I would like to highlight another benefit of using Share Margin Account which might not be known to all investor.

Let me show you how this thing works.

Scenario 1-Investor B Profile
Ø  Collateral = RM60,000 (Public bank 3,000 unit @RM20.00)
Ø  Limit Can be utilize = 60,000 x 1.5 = RM90,000

You can choose to buy additional RM 90,000 worth of stock based on your collateral (Please bear in mind you might get margin call if both your PBB and new purchase is dropping)

Or you can withdraw cash based on your collateral. (In this cash PBB shares) (All price movement and corporate action including dividend still belong to you)

Securities Coverage          RM 60,000     ­­­­__      x 100% = 167%
          RM 35,925

The outstanding amount is RM35,925 and mean you could withdraw maximum up to this number out for your own usage and bank will charge you interest on your withdrawal amount as well. 

How margin call work

Investor B Profile
Ø  Collateral = RM60,000 (Public bank 3,000 unit @RM18.00)
Ø  Limit Can be utilize = 54,000 x 1.5 = RM81,000

Securities Coverage          RM 54,000     ­­­­__      x 100% = 167%
          RM 32,335

You will have to top up RM35,925-32,335 = RM 3,590 within 3 days grace period.


In Summary, this is a flexible facility that allows you to withdraw the cash and look for some higher return investment without selling your share or utilize it to repay your debt which charges you higher interest rate.

This is a guest post contributed by Martin Heng Sin Soon, an Equity Dealer with RHB Investment. You may contact him via martinheng87@gmail.com

Saturday, 12 March 2016

Be your Own EPF Fund’s Manager

Be your Own EPF Fund’s Manager

How to maximize your return by using your EPF Account 1( This Scheme is temporary freeze to apply but good for your knowledge)

Have you ever notice that you are able to withdraw your money in EPF account 1 to invest in the Malaysia Equity Market in selected Broker firm even when you are yet to reach the age of 55? As a resident in Malaysia, you might not be fully aware of the option that you are able to do with your EPF savings unless you find it out.

The purpose of this article is to help you understand how you can invest yourself in the Malaysia Equity market by using a small portion in your account 1 to potentially increase your return and have a better financial return upon your retirement age. As quoted in the Wikipedia, EPF is legally obligated to provide only a 2.5% return rate annually, but historically it has been far more generous than that. Please find below the article for your additional knowledge about the EPF investment account :

EPF recently declared 6.75% dividend in 2014. Many might ask, “The price of share has gone up more than 10% last year, but the dividend from EPF was only 6.75%?” Please find the below data for the history return from EPF


The benefit of Using this EPF Investment Account :

1.Be your own Fund Manager
You can now decide when to buy and when to sell the particular share from your holding when you know the sentiment in the market is changing. Below is the top 30 investment as of 2015
EPF Latest top 30 Investment
No. Share % Holding
Dividend from The company
1 Malaysia Building Society Bhd
64.17
3.82
2 RHB Capital Bhd
41.49
2.03
3 Malaysian Resources Corp Bhd
38.94
0.73
4 Shell Refining Co F.O.M. Bhd
16.55
0
5 Media Prima Bhd
15.75
7.52
6 Genting Plantations Bhd
15.52
4.48
7 Alliance Financial Group Bhd
15.33
4.5
8 UMW Holdings Bhd
15.2
4.01
9 Telekom Malaysia Bhd
14.73
2.24
10 Public Bank Bhd
14.7
2.63
11 CIMB Group Holdings Bhd
14.65
3.79
12 MBM Resources Bhd
14.46
2.22
13 Tenaga Nasional Bhd
14.37
1.69
14 AMMB Holdings Bhd
14.36
3.8
15 United Plantations Bhd
14.15
7.15
16 Sime Darby Bhd
14.13
3.37
17 Kuala Lumpur Kepong Bhd
14.02
2.18
18 Axiata Group Bhd
13.54
3.08
19 Malayan Banking Bhd
13.32
5.75
20 Sapura­Kencana Petroleum Bhd
13.3
0.84
21 Digi.com Bhd
13.27
3.91
22 Hong Leong Bank Bhd
13.1
3.08
23 IJM Corp Bhd
13.02
3.53
24 Malaysia Airports Holding Bhd
12.99
1.54
25 Axis Real Estate Investment Bhd
12.63
4.87
26 Petronas Gas Bhd
12.14
2.68
27 IJM Plantations Bhd
12.04
1.79
28 Dialog Group Bhd
11.89
0.97
29 Pos Malaysia Bhd
11.53
3.83
30 Capitamalls Malaysia Trust Bhd
11.25
6.26

There are many shares have hit their historical high price in last year before the weakening of RM and the slump of Oil price. With this EPF investment account, you can decide when to exit the market or switch the stocks to your own preference portfolio.

2.Flexibility on your investment period

You can now decide when to invest and which Malaysia Equity stock to be invested into regardless whether the stock is Blue Chip, Growing, Defensive or dividend stock. You can adjust your own preference portfolio from time to time and adjust according to any macroeconomic changes. Even if you are not buying any share, the money you have drawn down from your account will stay inside your trading account and you will enjoy interest on your balance of amount.

3.One Time draw down cost (3%)
There will only be a one off fees of 3% incurred for the EPF investment account, which is different from the Unit Trust withdrawal. In most of the cases once you sell off your unit trust, the amount will be return to EPF account and if you want to invest in another fund, you will be charged another round of draw down fees.

Conclusion
If you are market savvy and wish to manage your own investment portfolio instead of hoping to earn only 4%-7% returns on your EPF monies, we would like to encourage you to take advantage of this low cost investment scheme that may help you achieve higher returns.

Please find the below for the criteria to participate in this investment product.
There is some requirement to be meet for this product.
1.Minimum withdrawal amount- 10K
2.Sufficient Account 1 Balance -How to calculate

Formula : (Account 1 Balance -Basic Saving) * 20%

EPF Member
Age
Account 1 Balance
Basic Savings(According to the table)
Computation
Eligibility to meet the min first investment

1
29
RM70,000
RM24,000
(70,000 -24,000) X 20% =RM9,200
Not qualified
2
30
RM80,000
RM27,000
(80,000 -27,000) X 20% =RM10,600
YES- You can withdrawal 10,600 from your account 1 to do your own investment

TABLE: EPF BASIC SAVINGS (EFFECTIVE FROM 1 JANUARY 2014)
AGE
BASIC SAVING
AGE
BASIC SAVING
AGE
BASIC SAVING
18
1,000
31
30,000
44
95,000
19
2,000
32
34,000
45
102,000
20
4,000
33
37,000
46
109,000
21
5,000
34
41,000
47
117,000
22
7,000
35
46,000
48
125,000
23
9,000
36
50,000
49
134,000
24
11,000
37
54,000
50
143,000
25
13,000
38
59,000
51
153,000
26
15,000
39
64,000
52
163,000
27
18,000
40
69,000
53
174,000
28
21,000
41
76,000
54
185,000
29
24,000
42
81,000
55
196,800
30
27,000
43
88,000




This is a guest post contributed by Martin Heng Sin Soon, a 5 year experience Equity Dealer with RHB Investment. You may contact him anytime to find out more via heng.sin.soon@rhbgroup.com.my






Appendix
The CPI data for calculating inflation rate is provided by the Malaysia time series on consumer price index here. With this data, we may derive the real rate of interest paid on EPF deposits as follows.

Malaysia
Year
Inflation rate
EPFInterest rate
Real interest rate
1983
3.70%
8.50%
4.80%
1984
3.60%
8.50%
4.90%
1985
0.50%
8.50%
8.00%
1986
0.50%
8.50%
8.00%
1987
0.80%
8.50%
7.70%
1988
2.60%
8.00%
5.40%
1989
2.90%
8.00%
5.10%
1990
3.10%
8.00%
4.90%
1991
4.20%
8.00%
3.80%
1992
4.80%
8.00%
3.20%
1993
3.60%
8.00%
4.40%
1994
3.90%
8.00%
4.10%
1995
3.50%
7.50%
4.00%
1996
3.50%
7.70%
4.20%
1997
2.50%
6.70%
4.20%
1998
5.20%
6.70%
1.50%
1999
2.80%
6.80%
4.00%
2000
1.50%
6.00%
4.50%
2001
1.40%
5.00%
3.60%
2002
1.80%
4.30%
2.50%
2003
1.20%
4.50%
3.30%
2004
1.40%
4.80%
3.30%
2005
3.00%
5.00%
2.00%
2006
3.60%
5.20%
1.60%
2007
2.00%
5.80%
3.80%
2008
5.40%
4.50%
-0.90%
2009
0.60%
5.70%
5.00%
2010
1.70%
5.80%
3.40%
2011
3.20%
6.00%
2.80%
2012
1.70%
6.15%
4.45%
2013
2.10%
6.37%
4.27%