Will Hong Leong Bank in trouble?

Below are some figures showed in Hong Leong Bank Berhad annual report 2010.
Loans, advances and financing    RM 38,555,670,000
Fixed deposit                             RM 41,089,439,000
Short term deposit                      RM 28,623,253,000
Cash on hand                             RM 15,682,086,000

What can you see from here?

Fixed deposit + Short term deposit + cash on hand = RM 88,394,778,000
If we use all the deposit + cash on hand divide with Loans, advances and financing, it gives 2.2
Which means RM 2.20 back up for every single RM 1.00 borrow out.

Is it HLBank play too safe of it? why they need so much money to back up in the bank?
This definately will erode HLBank profit margin. It will be more risky if market suddely goes wrong and some of the loans turn into bad debt, then HLBank will face a big problemm at that time.

Bought Success

Today bought Success at RM 1.17, I have noticed this stock a long time ago and I know it is fundamental wise. I buy it just because one of the fundamental Sifu is calling to buy it also, then I decided to follow it as well.It is call follow the wind~ :p

Equilibrium theory

We are born in the equilibrium world, everything at the end will come up at a balance point. When the market over-run, at the end, it will burst; When the market underperformed, then market will start to catch up; When something over supply, then the price will drop because demand is low; When supply is low but demand high, then the price will up until the supply can fulfill the demand.

When some new thing come up, there must be something to overcome it at the end. We are not need to too optimise on something and also not need to too depress on something. Human are born to adapt the life in this Earth. This theory can be apply at anywhere. No matter on market, relationship, finance, new rule and so on.

When the market bull run, always be careful about it, because it will turn down back; When the market bear run, prepare well your bullet, because the market will definitely come back in one day~

When politician announce some new policy, do not argue it if your argument cannot change the fact, what we can do is find out what can we do to suit the new policy. We are human, we have a brain, we should use it to find out is it any chance for us to get benefit from this new policy.

Sold out supermx

Sold out Supermx at RM 4.79 with profit around 1k.

Warisan Tower??

Do you all remember when is the time World trade centre, New York is completed? It was at year 1973, and the market crash was started at the same year 1973.

Do you all remember when is the time Petronas Twin Tower, Kuala Lumpur is completed? It was at year 1998, and the market crash was started at year 1997.

Do you all remember when is the time Burj Dubai, Dubai is completed? It was at year 2009, and the market crash was started at year 2008.

What all these story tell?

When is our next tower "Warisan Tower" finish build? It will be completed at year 2015.
What do you think the market at that time?

When there is a bloom in market and everybody start to spend money to build luxury building, but it always end up a sorry~

Market condition~

Today I went to public mutual branch, when the time I walked in, I was surprised by the scene there. It was full of people there, a lot of the agents were helping their client to submit their investment form. Is it a kind of sign of the market bubble now?

I still remember there is one story about the clean shoe boy said when the auntie also rush to buy share, then you have to be bewared~

But I think the time is not reach yet, because no aunties yet to tell me to buy share now... :P

What are the difference of loan interest between fixed rate and compound rate?

When bank offer you a loan by saying that the interest rate is fixed, is not compounded, should you be happy and excited?

Many of the people might think fixed rate is more benefit to us and it is not compounded, so the interest we pay should be less, but actually you are paying more with the fixed rate loan.

When bank offer you a fixed rate loan, the interest is actually charging on the lump sum of the amount. Lets say you are borrowing RM100,000 with 10% fixed rate interest, then actually you are paying total RM110,000 and divide into 12 months (RM 9,166.67 per month).

But if you are taking a compound rate with 10%. You only need to pay RM8,791.59 (total RM105,499.08), which means you are only paying 5.5% instead of 10%.

How can it be? Actually the magic behind this is, with taking the compound rate interest, the interest rate is charging on the amount that you not yet to pay, however with the fixed rate interest, they are charging you on the lump sum that you borrow. Below are 2 figures that show you how the fixed rate and compound rate work.

Figure 1: How the fixed rate works

Figure 2: how the compound rate work

So next time, when you see bank offer you any attractive rate, try to ask them, how they charge on the interest first.

Should we refinance our house to do investment?

Our latest BLR is 6.30% and of the house loan offer by bank are BLR - 2.00%, we need to pay 4.3%.

Lets us assume house loan rate fix at 5%, by borrowing RM100,000 at 5% interest rate with 20 year tenures. You are need to pay RM859.96 and total RM7,919.47 in one year. If you manage to use the RM100,000 to make a return of 8%, then you are safe.

So should we refinance our house to get a loan and invest in somewhere else? It is depends on how much return you can get back from your investment.

Lets us consider some bad scenarios, what if BLR go higher? then how much is the return that we need to survive?

Assuming Borrowing RM 100,000 and loan tenure is 20 years.
5.0% house loan rate, you need to pay RM 7,919.52 per year (=8.0%)
5.5% house loan rate, you need to pay RM 8,254.68 per year (=8.3%)
6.0% house loan rate, you need to pay RM 8,597.16 per year (=8.6%)
6.5% house loan rate, you need to pay RM 8,946.84 per year (=9.0%)
7.0% house loan rate, you need to pay RM 9,303.58 per year (=9.3%) 

It is unlikely for house loan rate to go higher than 7.0% unless it is on bull market, if so, then your investment should be able to make more than it. So if you able to make a return from your investment more than 10% per year, you are actually using bank money to make money and this is how the rich doing.

Proton Inspira

The first model is proton + misubishi new car model "Inspira",

the second model is mitsubishi car model "lancer".

Are they look like the same? lol~

Proton is very smart in this way, 

use back mitsubishi engine and car design to reduce design and production cost.

Are our country car designer lack of capability to design a new model?

Dividend update @ 17/10/2010

Received dividend from
Rcecap RM 732 (1 Oct 2010) and
XDL RM 300 (6 Oct 2010)

Alam Maritim Resources Berhad @ 16Oct2010

Long time didn't update Alam Maritim Resources Berhad.
Its latest action is one bonus issue share with every two existing shares which translate to 254.2 million new outstanding shares listed in bursa. Together now with total 762.7 million outstanding shares.

Its latest Jun 2010 quarter result showed revenue registered at RM 67.4 million, which is almost flat with Mar 2010 quarter result (RM 66.8 million)

The business seems yet to improve and its latest EPS is 2.2 cents, which gives PE 12.52 at current price (RM 1.10).

The price is not attractive yet, I will stay away and wait again~

Hong Kong Trip part 1

HongKong is really an amazing place to visit~

I was amazed by their transportation system at the first day I arrived Hong Kong, you can see all the taxi around you and you can just as easy as wave your hand to hire one. Their taxi are all running with meter bill, so you are not need to ask for the price from them. It is fair enough, unlike malaysia, we have to ask for the price first before taking taxi. 

The second I was shocked was their escalator speed, it is very fast until I almost fall down from the escalator at the first step I step on it, I used to go to Singapore before this, but I think Hong Kong escalator speed is faster than Singapore speed. The reason why Hong Kong and Singapore need such a high speed escalator is because they need to serve the high dense population in their country. Malaysia should be followed them as well especially in high dense population places like KL central.

The third shock was the speed of their Mass Transit Railway (MTR) system, the MTR system is so perfect and their speed is so fast. If you want to change the railway, you not need to go out to the MTR station and change it likeMalaysia, all you need to do is just walk a few steps to get another railway and all are in air-conditioning. Normally we are used to wait for monorail or LRT about 4 to 7 minutes, and 15 to 20 minutes for KTM (sometime wait 30 minutes also can't get it), but in Hong Kong, the time you need to wait is just about 1 to 2 minutes (sometime I am not even have a change to sit down to take a rest, then the train already arrive). I am not sure how long is the train, but I judge it is atleast 4 to 5 times longer than our LRT.

So imagine our Malaysia LRT in your mind now, then now imagining another railway which is moving 4 times faster, 4 times longer, the escalator speed 2 times faster, not need to walk out railway station to change the train, all air-conditioning, all the people are using touch n go (they called "octopus card")~is
How it looks like? lol~ is it scary?

Will blog up another view in next post. Time to search for food~ :p

Is it look yummy?

HongKong & Macau Trip

Hi all, I am back from my HongKong and Macau Trip~ What a wonderful trip, really widen up my view..

Will blog it up what i see in the trip later~

Watta Holdings Berhad

Watta Holdings Berhad is a Malaysia-based company engaged in investment holding and the provision of management services. The Company has three segments: Trading, which is involved in the marketing and distribution of automotive batteries and related products; Services, which is involved in the marketing and distribution of telecommunication equipment and related products, and Investment holding. During the fiscal year ended September 30, 2009, the Company has four subsidiaries, namely Watta Battery Industries Sendirian Berhad, Syarikat Perniagaan Leko Sdn. Bhd., Watta Energy (M) Sdn. Bhd. And Mega Meranti Sdn. Bhd.

From its last 5 years earning record, company registered 4 continuous financial years lost from year 2005 to 2008, but achieved a earning at year 2009. Is it mean the company already recover and back to business?
Hold a second, lets us look at its revenue. Revenue was decreasing continually since year 2005 to 2009.
What this mean? This mean there are something wrong with this business, either they cannot compete with market or their products are not demanding anymore.

Remarks: Above statement is my personal point of view, it doesn't recommend any sell or buy.

What is money?

Money is nothing if you do know how to spend it~

Money is something if you know how to earn it~

Money is everything if you know how to use it~

Weird Market, weird analysts, weird "investors"

Do you all ever notice, when a company do well in a single quarter year, all analysts mark up the target price of the company, and when a company show a bad result in a single quarter year, they turn down their target price.

How can a business be valued just from a single quarter year result? Will you go and buy a business, and tell the current boss "hey boss, today your business seems terrible and no customer at all, I think your business worth nothing! I think I buy it from you at 50k! (actual worth 100k)".

What do you think the current boss will answer you? He must think you are crazy~

But this is actual how the market looks like, the market analysts and those so called "investor" are judged a business by just a single quarter year result or is it any theme play on this industry.

Benjamin Graham golden word #1

"An investment operation is one which, upon through analysis promises safety of principal and an adequate return. Operation not meeting these requirement are speculative~"