JCY - Am wondering about the Company

I am on the downside as far as my roller coaster ride with JCY is concerned. Today's price at 0.615 has wiped up 53.5% of my investment, a paper loss. And its recent financial quarter loss did not help matters. Looks like  I am in for a long haul on this stock. I just hope that the company doesn't fold up under this intense low demand pressure. As the company was just listed in Feb 2010, its previous performance was not generally known unless you read the prospectus prior to listing that I must admit I did not as I bought the shares in July and Aug 2010. The opening price was 1.48 which was  lower than its IPO price of 1.60 and the highest price before the precipitous fall was 1.98 I think.

JCY performance spiralling downwards

From my observation  on economy-dependent stocks, JCY stock would likely to recover  in 2012 -2013 as the Euro zone debt crisis eases triggering demand for computers in such countries. So I am supposed to bite my lip and slog along just like I did with SIME in 2008 and realised my effort by 2010. Somehow when you do this, time seems to crawl. Yet this is a form of acceptance so that I can move on with other wealth creating strategies.

So JCY can go as low as it wants to ( no more dollar averaging for me!) and I am going on the sideline and just watch and wait for the time when it turns around hopefully and then end my adventure with technology stocks. Come to think of it I am now wondering why did the company decide to list in Feb 2010 because within less than six months the stock tumbled badly. Usually when you supply materials to big manufacturers you would have got forward orders for the following year then you would have known about your receivables/risks already...... I am thinking aloud. If what I think and fear happened as it was here then we investors have to be really be on the look out for such companies and protect ourselves. Have I thought this way  in July last year I would not have dollar averaged on three blinking occasions! No surging happiness in this stock.

Such are the challenges that small investors face! Some people would do anything to get at our hard-earned money so beware.

TM's Surging Profit and My Surging Happiness

My trust in TM stock is paying off. I am very happy to read that its profit for financial period ending Dec 2010 is substantially increased and a dividend of 13.1 sen per share has been proposed.And not only that TM is going for an capital distribution for its investors 29 sen to a unit or is it to a ringgit invested? I have yet to get the clarification on this distribution if it is the latter then it would be a windfall for me... let me dream about this before being shot down!

I am relieved that I did not sell the stock to apply for PChem IPO last year  as this turns out to be my Golden Goose. I will not let go this goose due to its regular high-dividend yield ( it is better than MAXIS in term of yield). In fact after the capital distribution exercise, it is expected that the stock price will fall just like in 2009 when TM gave a capital repayment of 98 sen per share, I am going to acquire some more units to make it 100K. So I can say goodbye to my non-performing stocks which I am tired of mentioning here. Yes, we need to buy blue chips as they will not disappoint in good and bad times. Forget about small caps as they will "torture" you with no end and test your patience and your fun. And do a lot of readings on companies you want to invest in and the industry they are involved in so that you would not regret like me and my JCY investment!

I am glad to know that many of our companies are doing well, for example Maybank,CIMB, KL Kepong, Axiata and they are rewarding their respective investors with good dividends. I hope that you all also have surging happiness in this present volatile period with Middle East turmoil and rising oil prices.

The feel good factor currently is fodder for talk on new mandate for present government leadership so be on the alert for those construction stocks! I am monitoring Gamuda.

BSDReit and CMMT- REITs Investment for Portfolio diversification and liquidity

When I was first exposed to the concept of passive real estate investment as opposed to direct real estate investment, I was rather hesitant to participate because I was looking at quick gains. I am not talking about purchasing properties, renting them and sell them later at a higher price but rather on capital appreciation of investments in REITs listed on Bursa Malaysia  ( stock exchange).

For people who are impatient and want to create wealth in a hurry, I supposed it is better for them to invest in well established companies' stocks, that is buying on the low and selling high. You are sure to improve your financial position on that premise. But it is not always easy to multiply your investment in that way for various reasons, one of which is when you find that the market is pretty saturated and desirable  stocks' prices are already high.

So where do you put your available investing fund? Well in Malaysia many people would point to high performance unit trust fund such as those managed by PNB ( National Capital Ltd). These funds have consistently given annual dividends higher than interest rates offered by banks. It is not surprising that they are likely to be fully subscribed. Fixed deposits are another alternative for conservative investors even though the interest rate is not that attractive unless you do not know what to do with your millions.

 

Coming back to investing in REIT (Real Estate Investment Trust), if you study the dividend yield, you would notice that it is higher than FD and  most stocks on the market. In fact the gross dividend yield in the FTSE Bursa Malaysia index is about 2.9%, while the average yield for a REIT in Malaysia is about 8%. REITs yield higher returns because commercial real estate generate a huge amount of cash flow from rentals.

Thus begin my foray into REIT investment. I applied successfully for IPOs of Starreit, Arreit and Twrreit and kept them for almost three years but found that except for Twrreit, the first two were not giving me my expected returns ( post financial crisis of 2008) so I cleared them off. Twrreit was affected by the global financial crisis just like the others but later staged a remarkable recovery and despite a relatively good dividend yield I sold it on its 15% capital appreciation. Then I bought BSDReit which manages plantation properties and CMMT, newly listed last year and manages "pure shopping" malls properties in Gurney Plaza, Penang, Sungai Wang Plaza, Bukit Bintang and the Mines near Kuala Lumpur. I have been to those malls and seen for myself their positive potentials.

BSDReit has promised an annual dividend of more than 8% and CMMT had estimated theirs at 7.6%. So far the former has not disappointed me. In 2009 it was 11.3% and  in 2010 the annual dividend was 9.3% and this year the first dividend has been declared at 6.2 sen so I am expecting the annual dividend to be slightly higher for 2011. As for CMMT, it  has recently declared an initial dividend of 3.6 sen and its positive reported earning through high capacity rentals  will ensure that it achieves its promised dividend, in fact according to the CEO, would be higher than first estimated at its listing.

I see my investment in REITs as another form of diversification and for passive/conservative income generation. I am not looking at rapid capital appreciation  as even though I bought BSDReit and CMMT at 1.40 and 1.04 respectively, I must admit the individual unit price hardly moves. Lately BSDReit has moved to 1.50 and CMMT has ever reached 1.13. As the unit prices are sustained by the yield factor, you can take it that their volatility will not be an issue. And as by its nature it is not attractive to foreign investors, you can sleep easy when the foreigners take out their investment in the stock market like the recent pre- and post- CNY flight of capital.

I am quite happy with my current REITs as I see them as an investment that bridges the gap between a fixed deposit (FD) and the stock market. It is low risk and more liquid than say owning a real property. Low risk means low reward but at the rate these two REITs are doing, I am contented especially whenever I think of some of my existing nightmarish stocks such as PICORP and JCY. In diversifying into REITs I am now having a balanced portfolio to counter my recent purchase of  a couple of volatile oil and gas stocks...Ahah..

My new year resolution of being more low risk in 2011 went out of the window in the third week!

Contented Caterpillar (courtesy photo)

 

 

CIMB Dynamic Market Rider NID-i ..... Am really taken for a ride!

I received the final statement on the performance of the investment product yesterday morning and in the afternoon the bank relationship manager texted me that my capital had been credited into my account (purposely opened for this product) and that he was sorry that there was NO DIVIDEND! Definitely worse than the normal FD but luckily my capital is "PROTECTED". I SMS the staff that I would come to the bank this morning and take out all the money and close my account.

No amount of persuasion would make me participate in any of their products. Once beaten twice shy.Anyway I also do not fancy when the chief of the Islamic Bank division of CIMB addressing me as "Dear valued investor" there is a certain coldness in the tone. Perhaps GLC Bank is like this, taking customers for granted. He should not have bothered to sign his name.

Actually I had a bad vibe about this investment the moment I chose it in early 2008(after being persuaded for its "expected high returns" and capital protection) and put my signature on the form and given my personal cheque. I regretted it almost instantly. I bought it without much thought as the closing date for the product was around the corner. After the financial meltdown in October 2008 I started to receive statement that the certificate value was lower than the capital and that made me upset especially when I read in the Singapore Law journal 2009 report that Capital Protection is not the same as Capital Guarantee.It doesn't matter now.

True, I should read the fine prints over and over again before putting my signature next time. And,yes, CIMB Dynamic Market Rider NID-i is good only for capital-protection, the touted high returns is garbage and to think that my 3-year investment is fruitless can be quite distressing even though I have had losses on the stock market which is supposed to be riskier and therefore tolerable. A real lesson learnt indeed.

Had I put my money in a PNB unit trust at a regular dividend of 6% per annum for three years I would have made 20% out of my capital, a real big amount. For this overrated investment, I made air. So people my delayed gratification for this product was really an exercise in futility. Never again will I be adventurous with this organisation and with salespersons with glib tongue. Serve me right as well for not doing more research on this kind of investment products. And indeed diversification at times could be bad for some of us who are not really financially savvy. My only consolation is I did not maximise the investment neither did I agree to leave it for five years as suggested by the female staff who by the way has resigned from the bank ( I noticed the staff turnover is high in this bank).

I am taking out all my money plus an additional amount and tt it in USD to a private fund based in Hong Kong and recover my "opportunity loss" for the last three years in three years to 2015. No risk no gain as the saying goes, but this fund I am going into has a proven track record as my better half has been with it for the last 10 years and he is extremely happy with the consistent high performance even during the global financial crisis.

So here I go again for the fun ride and thank goodness, the fund is not named "MARKET RIDER". Come to think of it I now wonder how come the CIMB product did not ride on the vast global and local market improvement in 2009 and 2010? Was it riding on worthless investment products itself? I thought a structured product is exposed to multi equities/investments designed for optimum returns for investors. It looks to me that the product was a gimmick managed by foreign fund managers paid by the bank. I am now convinced that I was really taken for a ride!

Queensland Floods - Remembering My Friends

I read and saw news being broadcast on the heavy rainfalls over northern Queensland especially in Rockhampton areas  as 2010 was drawing its curtain. The accompanying flood was pretty bad by the second week the flood was reaching a "biblical" proportion with an "inland tsunami" rushing down to destroy everything in its path in Toowoomba, the Garden City, about 125 Km west of  Brisbane. Harrowing stories of death and destruction were  related. Cars were picked up and tossed about like toys in the surging water. Mothers, fathers, grandparents, daughters and sons whose lives were snapped by the torrential water in their homes and outdoors. Most of them without warning.

Toowoomba CBD in  flood 

Houses submerged

Toowoomba, Australia's cleanest city in 2008, brought a special memory for me as I did my elective posting as a medical student at the General Hospital there. The Superintendent was the late Dr Michael O'Rourke who was quite a personality who would call us female medical students following his ward rounds, with names such as Miranda and Mirabelle prompting my colleague Jenny to whisper that those names were actually used for cows! Jenny came from a farming town so she would know these things.

Even horses are not spared in rural Grantham QLD

The Drift Restaurant before it was carried away by the torrential water

Toowoomba in the Lockyer Valley, is at the higher elevation than Brisbane and it has a cooler weather. I still cannot believe how the flood could have inundated the city and its surrounding. That was on the 11 January 2011 then later the body of water along with the incessant rainfalls and high tide, came to Brisbane with the Brisbane river bursting its banks and torrential water ravaging the low-lying and flood- prone areas submerging many houses and businesses. I watched the TV news with disbelief at the volume of  water clogging up the streets of  the city causing total disruptions to traffics and communication. Even power was cut off to prevent untoward incidents. Such was the seriousness of the calamity.

The last big flood in Brisbane was in 1974 but this year 2011 seemed to be more disastrous as more development has taken place since then. A waterfront restaurant was unceremoniously carried away by the swollen Brisbane river. On 13 Jan I saw on TV the canopy of the cafe striking the bridge as it was being pushed by the surging water. It was an anxious moment. The day before that the owner was lamenting that he did not have insurance for that kind of disaster.

Brisbane River flash torrent

It was not a great flood, it was an inundation.

The scale of the disaster was enormous as much as 75% of the areas with houses, properties and businesses were affected. Losses have been estimated at billions of dollars. Many people are affected and some have lost everything. My heart goes out to the people of Queensland particularly Brisbane where I spent eight years of my life studying at a high school there and later at the Queensland University at St Lucia and at Herston Medical School. I could just imagine the level of devastation at the university campus with all those colleges, Grace college, St John, Emmanuel, Union and International House as they are just next to the Brisbane River! I also read that many houses in Toowong area were totally submerged. Many Malaysian students used to live in this suburb.I stayed at the lovely International House at Rock St when I was a medical student from year I to III and from year IV to VI  clinical years in a flat nearer to Herston.

Queensland is special to me as I have made friends and met some great people during my stay there.

I remember my friend Julie Lauman from Rockhampton and I can only pray that she and her family are coping well with the flood situation should it affect her. Julie I know you as a strong person and I hope you continue to be so during this difficult time.

I know a friend from Toowoomba, Darryl Burstow now a prominent Cardiologist in Brisbane. Darryl,  a quite but highly intelligent man in our group whose family has a thriving business in the Garden City. I am very proud of your achievement in the medical field. I hope you and your family are not too badly affected.

Being a high school student, I had a host family Mr and Mrs Emray with whom I have lost contact. They lived in Graceville which was inundated. I also recall my helpful and supportive Australian Education Dept officer, Mr  Richard Whittington and his Indonesian wife,Christine and their three lovely children, who used to live in the suburb of Kenmore which I understand to have been affected badly as well. And Mrs Dobelis whom I used to stay with in Milton when I was doing matriculation. Milton was one of the most badly affected suburbs as it is near the river.Dear, dear Mrs Dobelis who was like a mother to me. I hope your son Maurice would look after you and ensure your safety and comfort.

Yes, my best friend Allison Powell now practicing in Bundaberg which was also inundated. Allison you are in my prayer. I hope you insured your GP clinic.

I also remember my dear friends Edna and Lito who used to own a house by the Brisbane River and later sold it and moved to Capalaba which I believe, is  at a higher ground. I have yet to contact them. In fact I am supposed to visit them and my other old friends in Brisbane this February after so many years of leaving Brisbane but unfortunately I have to postpone the trip to June or July on account of the massive post-flood cleaning up that the city has to undertake. It is no joy when you see mud and things strewn all around the city. I want to see the Brisbane I left which was a beautiful city, clean and serene.

When I first stepped my foot in Queensland, I noticed many of the houses in areas such as Milton, Auchenflower and Rosalie were built on stilts. I did wonder why it was so and now I realised that the Brisbane river has been known to overflow and flooding had occurred in the past and only such houses were suitable in that situation. As the great flood seemed to occur a generation apart, people tend to forget and build their houses fairly low and as a result suffer terribly in terms of losses in their possessions. 

Last but not least, I fondly remember my friend JDC I hope and pray that he and his family are safe and that his house is spared though the Brisbane CBD was closed for the days when the flood was peaking and he could not conduct his court cases. J  if you read this posting you know that I have never forgotten you despite what had happened. I am following your court cases and the rulings you make. I remember when you were the young enthusiastic Barrister and I was the besotted medical undergrad, how you enjoyed telling me about your cases especially those you had won on technical ground.. Ahhh... I could hear now the melodious song "Nostalgie" by Julio Iglesias playing in my sentimental mind and of course your  favourite song  "Feelings" by Morris Albert... time now to wake up from my reverie..

Devastating Queensland floods  truly sadden me as I remember my friends. You are all in my thought and prayer.

NB: For those of you who would like to donate to the Disaster Relief Appeal  please go to the Queensland government website here  http://www.qld.gov.au/floods/donate.html


May God bless you all for your kindness to fellow human beings.

Remembering 123 Waterworks Road

Investment products diversification - where to park?

About three months ago I received a letter from CIMB advising me that my investment product was going to reach maturity soon and as an expression of their "caring" attitude, they invited me to re-invest in another of their products.

Well I have long made up my mind not to enter into any more financial transaction like this. I supposed it would be fine if I had millions to play around with and yet I am still not comfortable with the thought that you cannot touch your money at any time you like as it's kind of locked in and left to breed or being bred by other people. The promise of high return is attractive plus the lower risk afforded when compared to the stock market. But somehow the element of some control is lost here. Put it this way, this kind of products is not for all types of investing characters.

I am looking to park my excess fund in an instrument I am happy with. Without the help of a financial advisor, I have to read a lot to personalize my financial planning . In this respect, suitable asset classes and careful choice of portfolios cannot be overemphasised.

Looking at dividend yield is important when unit trusts are selected. For example if you were going to park your money in a fund whose unit price is RM1.00, for  say 100,000 units then you have to put in RM100,000.00 and if the annual dividend rate is 7% then you would get RM7000.00 at the end of the financial year. Consider then buying 100,000 units in a fund whose unit price is RM0.34, you then only need to fork out  only RM34,000.00 and if this fund is giving a regular dividend of say 4% then you will get RM4000.00, a yield of 11.76% compared to the former of 7.0%. 

So in line with my resolution to be more risk averse this year 2011, I have selected a fund with a high dividend yield and one that is not overly aggressive. This is done by studying its prospectus carefully. 

I wonder though how long I  can keep my resolution as the stock market has been bullish lately with FBM KLCI climbing up like nobody's business and with all these Economic Transformation Programmes going on, can I afford to keep on the sideline and just look?