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Investors are being carried away by a surprise Government’s Policies measures planned. Although the intention of US and China governments are good as the words goes-by, share markets could not stand it that way. What was being implemented in China? · Issuing government bonds with higher yield, this is to reduce the liquidity in the market, by encouraging money flowing back to the government’s war chest. · Increasing the minimum down-payment for property purchases from 20% to 40%. · Increased bank reserve requirement by 0.5% to 16% for big banks, and 14% for smaller banks. What was being planned in US? Obama’s bank plan composing two main elements: 1. Limitation of bank’s size. 2. Limitation of products and services offered, which is deem lucrative for banks. As such, US and China market have corrected by 5.1% and 4.4% respectively. The percentage was no big deal, given the bull-run since March 2009. However, investors just can’t take it anymore, and this kind of policy changes gave the...

Recently, there are a few capital protected funds being matured. However, most of the investors are not satisfy with the performances as promised when the fund was launched years ago. Is this the fault of investors who don’t understand it? Or, the fault of the product itself? To make things worse, most of the investors are conservative in nature – older age group. If your mum or dad was one of them, make sure you finish this and explain to them. Although Capital Protected Funds have been exist in Malaysia since early 20s, many investors still unclear about the structure of this type of fund. Is it safe as the name goes by? What is the return like? And, are there any terms and condition apply to it? Questions usually asked were answered below: What are capital-protected unit trust funds? · They are investments that promised to repay 100% of your capital, when held until maturity, which means your downside risk is protected. · They do not guarantee returns to investors, but only promise ...

After some spectacular performances displayed by global equity markets, how is 2010 heading? In fact, 2009 is a year, in which, share market around the world performed the best in recent years. Indonesia is leading all the way with an awesome 87% gains, follow by China, India, Brazil, Hong Kong, Singapore, and Taiwan… Meanwhile, Malaysia too joining the bandwagon by rising 45%, which was the index’s biggest annual gain since 1993. All of this was started since March 2009 when risks appetite increased and low interest rate environment surfaced. Is this Sustainable? However, all of this was fueled by excessive liquidity, couple with low interest rate, with oversold position of global markets only. The next engine would be earnings growth from companies, where this is the real food for the “Bull”. Because low interest environment forced people to invest, and a lot of people borrow USD to invest globally, which gave them handsome profit. So, what’s the prediction of 2010? As long as US do ...

Once, Dubai World has a motto saying: “The sun never sets on Dubai World”. The state-backed group was the mastermind of world’s famous 7-star hotel, incredible man-made Palm Island, and world’s tallest building – The Burj. By utilizing the oil wealth, Dubai had diversified into property and tourism since 2001. Property prices had gone up several folds – in this desert. Foreign workers are several times more than their own population. It was doing very well until overspending sets fire on its huge debts. With up to $80 billions of debts due end of 2009, Dubai is scratching its heads very hard now. This was all started a year ago when the global economic downturn ended the sizzling hot property boom. Dubai was empty pockets after their oil money was drained by collapsing real estate prices and over-ambitious development plans, which sparked panic selling across the world on fears of, prolong global recession. HSBC and Standard Charted Bank were believes to be the biggest financier to Dub...

Recently, I have more time to walk around and seek for others' opinions regarding their view on "whether recession was end?". After fooling around, I'm proud to make a conclusion: " 50% YES , 50% NO " (Real conclusion: NO conclusion at all). Haiz... Then, I'm frustrated and came out with my own conclusion. However, my conclusion depends on the following 5 indicators: An improvement in the Unemployment Rate - 1st Sign – Corporate silence, which means no more job-cut announcement - 2nd Sign – Companies might start hiring again (slowly) More stable home prices - Housing prices had fallen for 2 years now, 20% worldwide - Once prices stabilize, buyers will stop worrying and bargain-hunting activities will pick-up slowly again Consumer confidence rebound - When corporate silence, housing and stock market will turn around - People feel more secure about their jobs and income, and will start to spend/consume again . A less volatile stock market - When corporate ...

Credit Card - Life of Banks The most talk-about topic of the boring 2010 Budget is the Credit Card's Service Tax. Rm50 for principal and Rm25 for every Supplemental card. I believe almost every qualified person on the street owned at least one card. And, many of us own more than what our purse can accommodate. If this new policy is to be inforced starting next year, what's the impact? Banks: CC is a new income source for banks. If we took the interest off the picture, I think it's fair enough that CC makes consumers more convenient, and banks charge merchants for using their credit service. For those banks which are promoting their CC heavily sure would suffer a massive blow. NO new card application + Card cancellation = Problems Cardholders: For sure, actions will be taken to cancel as many cards as possible. Unused cards sure not a problem, but how about those with installments? Congrats, you are forced to continue and pay Rm50 extra. How about those who still have CC deb...

Right after the worst bear-run of the century, 2009 seems to be one of the best year in history of Stock Market. Although unexpected, the bull rally almost unstoppable yet. Will it last? Or, when would it last? W, V or L shape recovery is a hot topic among investment community. Anyway, all of this is depending on the basic fundamentals of the economies. the current bull-run is started just because of the low-base effect in terms of pricing. When stock prices are so low after 2008, many people became Warren Buffet - with no fundamental checks. They bought because of the stock prices only. And, they make some profit though. Not a bad investment, if they are lucky as far as I concerned. after the first phase of recovery, the second phase is earning potential. This is the phase where we must go back to the fundamentals of a company. Earnings growth is what will drive the share prices higher after the first phase. This is why share market traded range-bound now (Oct 09). What would excite t...