CIMB Dynamic Market Rider NID-i reaching maturity at last.

I am amazed at my rather impulsive action of buying the CIMB investment products in early 2008. I have written about this  purchase in 2009 blog post on how worried I was about my capital being reduced or worse still totally wiped out following the financial crisis in late 2008. There was some discussion between the term capital-protected and capital guaranteed ( and now I am told under the sharia-compliant products, it is called "capital-preservation").

Following the Lehmann Brothers'collapse precipitating the global crisis in 2008, many of their products supposedly capital-protected were not honoured and many investors were left high and dry. Despite CIMB's assurance that the product is capital protected upon the three-year maturity date, I remain apprehensive. Though as the market picked up in 2009 and 2010, my apprehension gradually subsides.

I was talked into buying the product for its high return and capital protection which are attractive features for any investor. The downside is you are forced to leave it, like fixed deposit, untouched for three to five years, the longer you put it the more returns you would get. Unlike fixed deposit with a known interest rate, this product would have dividend calculation varying with market performance of variety of equities they are exposed to. So your investment is supposed to be relatively "safe" like the mutual funds/unit trusts.

I must admit I had never monitored the product's performance as it was rather complicated to access the web page. I gave up after a couple of attempts despite being informed on how to do. Perhaps I did not mind so much since my capital will be protected. I know that this is an indifferent investor's attitude. Please do not follow my bad example. Anyway, even if I monitored it, what could have I done before it reaches maturity? If it was not doing well and I withdrew then my capital is no longer protected so I decided to just ignore it and take things one day at the time. In less than three weeks my " Islamic Negotiable Instrument of Deposit- NID-i , will finally mature. Thanks goodness and I hope my delayed gratification mode is not an exercise in futility. I hope to get back my capital with some "great dividends".....

I will know whether it is worth leaving my money there for three years  as I have calculated the returns (with compound interest)  I would have got if I had put the same money for example in ASM for three years. Should it be lower than ASM-derived dividends, then I know I have been taken for a ride. When I bought the product I was told that I could get 10%  more than ordinary PNB trust funds. Let us see whether what the bank says is what you get.

A non-medical disease - A Tragedy

This morning a 61 year old male patient came in with a complaint of joint pain which, he claimed, was recurrent in nature. When I examined the joints there were really no evidence of inflammation like swelling, redness,tenderness or warmth. It was a rather non-specific kind of complaints.

Actually the patient had been on my follow up for almost one year since the first time I saw him in 2008. I found him then to be suffering from anaemia not amenable to treatment with iron tablets and after determining that the condition was not due to iron deficiency, I promptly referred him to the haematology (blood diseases) unit at the hospital. I did not see him for more than one year when he turned up in my clinic in the middle of 2010 with chronic cough and my investigation showed that he had TB. He was immediately put on anti-TB short-course therapy for three months and regularly monitored.

He seemed to have gone away for several months till he turned up again today at my clinic. He was still anaemic, thin and tired. His joints, despite his complaints were not flaring up, so what was it that made him come see me? My curiosity was promptly answered when he took out of his bag a letter from the Insolvency Department asking him to pay a certain amount of money owed from a loan company and he wanted to get a letter from a doctor to say that he could not work so is unable to pay the stated amount instead  he wants to reduce it by 50%.  He had borrowed the money some years ago to buy a car and according to him he was not able to meet his monthly commitment soon after and the car was taken from him and finally auctioned off.

Borrowing money for a lifestyle which one cannot afford is a disease. It is not the same as borrowing money for a vehicle which one uses, for example, to transport goods as part of a business deriving income. And what is a man of 61 doing at this late stage of his life paying off a loan  for which he has no regular income and no saving? It is a desperate situation indeed. A doctor cannot treat this disease.

I wonder how many people are bankrupt as a result of keeping up with the Joneses. I suppose it only happens in urban areas where materialism seems to have been entrenched. It is also a lesson to people who fail to plan for their future which in this man, would include having the possibility of being burdened with diseases in old age thus unable to continue working for income.

Holiday in the sun by the pool and the beach

For those of us blessed with health and youth, it is time to have a proper financial planning if you haven't already started. Start with regular saving and then make the money work for you through prudent investing and diversifying. In the process, delayed gratification is essential. Health and especially youth, needless to say, are not forever. And remember a non-medical disease is a tragedy.

JCY and the "touching" Dividend of less than a Sen

I wrote about the blunder I made by buying the technology stock in June 2010 before the Euro Debt Crisis was highlighted. As everyone knows, the IPO for JCY listed late in 2009 was 1.60 so who would blame me when I rushed in to buy it as it started to fall below the offer price? My only guilt was I did not read about the chip makers' supplier's news a week before! It was so funny that as it was falling, I kept on buying on the basis of dollar cost averaging. I only stopped when I read the news belatedly!

I bought the technology stock because I wanted to diversify my portfolios, as simple as that. Unfortunately I went in with the wrong step. My spirit lifted a bit a couple of months back when the JCY CEO maintained that this industry is cyclical and the time will come (When oh When?) that it will pick up again. So I am supposed to leave my money to hibernate in the market till such  a time comes. I kind of decided to just let it be and not to think much of the stock for the time being. Let us see the development by 2012.

So it is indeed a surprise that JCY announced a dividend of 0.75 sen in the last week of December 2010. Oh gosh! I salute the company for honouring its promise to give a dividend from their annual profit though I have not expected this. I thought they need the money more than we do especially when they have to pay workers' salary, maintain their machinery, building etc. This is the company I will stick to till it has fully recovered.

What was really funny was when I calculated the amount due to me at the end of this month. I thought I had a windfall considering the substantial number of  JCY shares I have. When I saw the amount I couldn't believe it, look Maxis has posted profit quarterly and yet the dividend for last quarter is only 8 sen. I have almost equal number of shares in both company.... then I realised that I needed to multiply it with 0.0075 and not 0.075!!  A slip of the mind and a non-cerebral act of the pen, it is  0.75 sen and not 7.5 sen.

It is touching nevertheless. But I am sure JCY will be able to give its investors more dividend and perhaps a bonus once this "low demand" thing is over. In the meantime I hope the company will innovate its products as the new iPad apparently  is no longer using the usual  traditional hard disk drive but flash memory instead and as its popularity is increasing among the gadget-conscious consumers, it is time for the technology industry such as leading hard drive manufacturers, Western Digital and Seagate to formulate new strategy.

I intend to give the JCY  dividend as "ang pow" come the New Year of the Rabbit!

Plantation stocks' rise and my usual dilemma

Despite being much aware of  the slowly rising CPO prices since the middle of 2010, I decided to let go  three of  my five plantation stocks in September 2010. The main reason was to purchase the recent Petronas related IPOs as well as I am currently putting more of my money into unit trusts. As you can discern, I am restructuring my portfolios

Whatever the decision is, it depends on the timing of the sale and a small investor like me would tend to attribute it to luck. Some savvy big shot investors would smirk and call this kind of transaction pure speculation.

Fortunately I left some shares in THPLANT and UNICO which are actually small caps among the plantation counters but they turn out an exciting climb especially the former which posted quick gain to surpass 2.00 before end 2010. Imagine that it had pitifully gone down to 1.47 early in 2010!  The dormancy of the plantation counters for nearly two years from the point of the global financial crisis in 2008, made me very anxious to get rid of them at the very moment their price showed any indication of going up. And that, my friend, is the mistake many unseasoned investors make.

Having read some very sensible articles from wealth creation blogs especially from across the Causeway, I managed to balance my investing behaviour. One of the things that I learnt is that not to dispose of everything in your porfolios when the BEAR is sauntering in. Leave some as you need them to ride the BULL when it comes by. If you take them all out, then you have nothing to ride! Sensible indeed. I should have read the advice before I disposed of my MHC, SWKPLNT and KWANTAS. Anyway, my two plantation counters are riding at the moment.

Rising CPO price driving up plantation stocks

Yes, the CPO price is set to go higher as the demand especially by the two economic and consumer giants, India and China is set to increase. And it seems that due to La Nina effect causing heavy rainfall in parts of the world including us in South East Asia, the oil output will be affected causing a tight supply and not only that ( our fortune is someone else misfortune!), the weather pattern is also causing a drop in soybean output in South America, so palm oil will be the alternative for consumers. It is expected that this plantation stocks' uptrend will continue in the medium term till the middle of 2011. There you have it, ride the bull till it stops to catch its breath.

The reason I went big time for the plantation stocks in early 2008 was that these are the companies which "produce,market and profit" from the blood and sweat of the agro industry unlike finance stocks  such as OSK, BURSA, MAYBANK, MANULIFE etc. But on the contrary, the finance stocks recovered much earlier and by much higher than the "product-based" stocks. Plantation stocks lingered like sick  turtles while its finance counterparts were having quantum leaps, a good example is Bursa which went from the low 4.00 in late 2008 to a high 8.66 in November 2010!  UNICO, on the other hand  was  about 0.50 in late 2008 and  stayed at 0.98 for the better part of 2010. How unfair! Trying to  invest on principle is not always the best strategy though I will still not buy those gaming stocks come what may.

So for this year onwards I am going into the finance stocks by selling off my agro stocks and other laggards and terribly slow coach like PICORP ( but keeping my TELCOS for regular high dividends as they churn out telecommunication services to their million of customers and earning good profit). Though most of the attractive finance stocks are already high, you just have to catch them when when they hit a low.

In the meantime, my remaining plantation stocks are riding the bull and will stop when my target is reached which I believe will be sooner than expected. I will not be greedy as I've also subscribed to  a pearl of wisdom, that is, you should not hang on to your high performance stock too long, get out and leave some on the table for others to partake. For instance if I had made 2.00 per share, I should not wait till it goes to 4.00 per share  though it very well will be, so that some other investors will make another 2.00 per share as well. So sharing the wealth is the best way of making this world a better place for all of us.

I hope those who are hanging on to the rising finance stocks will do the same :)

MAXIS - My First e-Dividend Notification

I was pleasantly surprised to read an email message on my phone from Standard Chartered Bank advising me that my 8 sen per share Maxis dividend has been sent to my bank account on 30 Dec 2010. It went on to say "The crediting monies to your account will be subject to final clearance by the Clearing House and the Beneficiary Bank. In the event the above transaction to your account is not successful, a cheque for the same amount will be issued and sent to you at your address as per the Record of Depositor. Please retain the tax voucher.......Should you not received the payment please contact your Registrar accordingly".

Well, apart from being a cause for celebration for an end of year extra pocket money, I am very happy that they have placed this system of notification so that we would not miss checking our bank account. Promptly I checked my account through internet banking and noticed that it had not yet been credited, I expect it to be shown on my account by 5 Jan 2011. No longer do I dread not receiving any dividend cheque and having to pay for a missing cheque through no fault of mine. I also had a bad experience with a Tricor staff (share registrar)  when I complained to her that my cheque had not arrived for nearly three weeks after the date of payment. She had asked me to pay RM10 for a new one! What cheek I thought.

This is the Dividend no 6 and including this latest one, Maxis has paid out 28 sen since it was relisted  on September 2009. My calculation has shown that this is a much higher return than the bank  and as good as  PNB's unit trusts. While the share price has been kept relatively low, the company is making good its promise to give at least 50% of its profit as dividend. I was mulling over buying Bursa stock as it is now at its 12-month low, but I am thinking hard about injecting more investment into Maxis for regular high return like this at least for the next two years. I think this is a good investment for me ( I am not soliciting for anyone to buy the stock, CAVEAT EMPTOR!).

I am hoping my other Telco, AXIATA would announce a dividend soon though I am not really complaining as the stock price had uptrended more than 100% from the time I bought it.

So thank you Mr Ananda Krishnan for sharing your massive wealth with us small-time investors. And thank you policy makers for e-dividend  that makes life much easier for busy investors. E-dividend will be compulsory by April 2011.

In the meantime, I am sure we will all continue to invest to drive our economy and financial market.

My 2010 Memorable Events

                                                                 

                                                                                      POSITIVE

                                               
                                                         Improving world stockmarket
                                                        FIFA World Cup South Africa
                                                    Cancun Climate Change Conference
                                                     Commonwealth Games New Delhi
                                                           Guangzhou Asean Games
                           Saving of 31 miners trapped underground for nearly two months in Chile
                                                    Zana returning for good from London
                                   Aung San Syu Kee Release from 10-year house arrest in Burma
                                                            My Mediterranean Cruise
                                                   Mus left to Study in Adelaide, Australia
                                                  FBM KLCI breached 1500 in November


                                                                  
                                                                     NEGATIVE

                                                                   Haiti Earthquake
                                                                    Pakistan Flood
                                                        BP oil Spill in the Gulf of Mexico
                                                     Merapi volcano eruption in Indonesia
                                                            Great flood in Queensland
                                                        Mining disaster in New Zealand
                                           Great flood in Northern Peninsular Malaysia states
                   Coldest weather/snowstorms  in northern hemisphere causing massive travel disruptions
                                                                  Mindless terrorism
                                                             Bombing of churches in Iraq
                                                        God's name controversy in Malaysia

                                                                   
                                                                         
                                                                                              RARE
                            
                                         Total Lunar Eclipse once in 400 years on 21 Dec 2010


                             

                                                         Let us celebrate similarities! 1 MALAYSIA, 1 WORLD

THE POSING MONKEY -                                                                                                                                                                                                                      I took this memorable photo while on a visit to Mangrove Rehabilitation Centre in Pontian Johor in July 2010

Good Bye 2010

Happy New Year 2011- A TruLy oNE- WoRLd CeLEBraTiON

As the new year was dawning I managed to text many of my friends wishing them all the best for a good NEW YEAR . In turn I received messages from those who I believe, like me, perceive the annual transition as  meaningful to their lives.

I think most people believe this annual transition as a mark on new hope/resolutions, on the  need to do better, to have learnt from mistakes and to improve their lives in every sphere. Otherwise how do you interpret/explain the beautiful fireworks in most of the capital cities of the world? From Sydney to Hong Kong, Taipei,  Tokyo, Dubai and New York, cold London where a quarter of a million people congregated to celebrate, joyous Edinburgh to  Rio De Janeiro. It was indeed touching to see humanities having a common celebration! Truly 1 World. The wonderful fireworks really lifted the new year spirit. It looks like all the great capital cities are competing with each other to showcase their best this year. Let us hope it the year 2011 will be better for all of us.

1 World Celebration of New Year 2011

Thank you to all those in the world capital cities who brought us the spectacular fireworks displays!

Now, what is a new year without the sound of firecrackers  and fireworks? Even the people around my city were doing their bits by putting up those individual fireworks display! As I sat by my veranda atop a hill, I saw all around me bright, colourful fireworks of different patterns, star-like, vertical, circular, sideways and around tall condominium apartments lighting up the sky right at midnight and they went on for about 20 minutes. It is so good to see people celebrating and having a whale of time. And I did wonder where did they get to buy those deafening firecrackers, they are supposed to be banned aren't they? I smiled to myself and prayed  that those who released them would not be caught, after all they were only celebrating once a year.

I turned on CNN/BBC/ ALJazeera and witnessed the joy in other parts of the world, such is the state of technology advancement in our world. We are closer "cyberly" and it is my earnest prayer that all the world inhabitants will be closer spiritually and make this beautiful planet of ours a safer place to live by eliminating senseless wars between nations, ethnic groups and different belief and ideologies. We have in our armament another major uniting factor in this world that is football/sports where almost all nations come together to participate, get to know others and learn to understand. Only through understanding do we seek to practice tolerance and perhaps concession wherever relevant.

We certainly need more tolerance in this world. Respect other peoples' belief and practices and keep on improving relationship by meaningful and mutual engagement.

I wish to share one of my fave messages from my friends.. here goes:

EXPIRY DATE: 31 Dec 10, for all things listed below: Sadness,Tears, Sorrow, Jealousy, Hate, Vengeance, Angry, Fear and  Disappointment ..... MANUFACTURING DATE: 1 Jan 11, for all things listed below : Smile,  Laughter, Happiness, Success, Friendship and Love.. May God bless you! Happy New  New Year 2011.

And I would add, Understanding, Tolerance and Forgiveness.

Happy new year 2011 to all my friends and blog visitors and in line with the pulse of this blog, may you all have good health and take measures to maintain it and may you all also have better times in our progressively vibrant stock market.

The new year may be  an opportune time  to restructure, diversify and adjust asset classes in your wealth creation. It is for me.