Tuesday, January 8, 2013
Last year, we were informed that Bursa Malaysia plan to launch it first ETBS in Malaysia and I write something about it. (click here) However, the plan was delayed until 2013. Last few days, only noticed they plan to launch ETBS on 8 Jan 2013. The proposed Exchange Trade Sukuk will be issued by Dana Infra (guarantee by Government of Malaysia) with profit rate of at least 3.70%, payable half yearly with 10 years of expiry date.
ETBS is a bond / Sukuk issued by Government of Malaysia or corporates to raise fund for their need. Sukuk is bond issued compliance with Shari'ah principles.
With ETBS, investors can now have a broader choice of product which yield stable returns with capital protection if held to maturity. Investor can expect steady flow of income knows as coupons / profit.
Now the question is, should you invest this ipo, the first retail bonds in Malaysia through IPO? Some would say yes, if you look at the point, the bond is guarantee by Government of Malaysia. Also, if you have no idea where to park excess funds, no harm to enter this low risk product, balance your portfolio with 3.70% stable income every year.
For me, I will only try small portion of fund in this ETBS as I can still find other investment option which provide better return of more than 3.70% per year. Let the market force to decide the pricing for this bond, if anything unexpected happen and cause the yield return to be about 5% or more, then it's an opportunity!
p/s: As expected, the listing of ETBS on 8 Feb 2013 not really exciting, the price quote was RM101.30 compare to IPO price of RM100.00. (stock code: 0400GA)
Saturday, January 5, 2013
Many research report shows that only about 10% of investors are making money in stock market. Meaning to say, most of the investors are losing money in stock market! Few years back, I was not quite agreed with this statement. However, after I became a Dealer, from the record, seem it's true that almost 80% of “investors” are losing money.
After buying, XYZ stock price become stagnant, but ABC stock price start to go up. In this case, should you change horse again or wait? This is the problem faced by most investors, what they buy never go up, but what never buy go up in price! In fact, if you keep on changing horse, this is not investing but speculating... nothing wrong with speculating. The problem is, the investor use the method of investing apply on speculating, that's the killing part, every goes wrong!
Investing is long term process, where one need to study the company's profit and agreed with company's management style then only put in the money to invest. After invest, if the stock price fall in price, investor dare to put more money to invest more shares at the low price. In this case, investors need few years to grow with the company. When the company start to bear fruit, the stock price will double or triple, and of course, follow by handsome dividend too!
However, speculating is the process of hit the right horse. If jump on a wrong horse, then change immediately and find another black horse. Once you find the right horse, stick to it until last drop of blood, jump down when the horse is tired. Meaning, for a speculator, he need choose the right stock, and let the profit run until momentum slow down, before decide to sell!
A friend of mine had brought a stock which went up nearly 200% recently. That day I meet him and I thought he earn a lot for this stock. But guess what? He sold the stock when it just move up 50%... the reason? He couldn't stand the “shaky horse” so he get out quickly. Oh boy! If you take a plane to US and weather is not so good, the plane will become shaky as well, do you jump down the plane before it reach the destination? Whether speculating or investing, as long as you know what you are doing, then it's fine. After all, they have the same goal, that is making money. “We don't care it's a black or white cat, as long as it's able to catch mouse, it's a good cat!”