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Tuesday, January 6, 2015

Market Daily Report (06 Jan 2015)

As crude oil slids further down to a new low since May 2009, the FBM KLCI follow suits with a drop of 1.15%. 

As at time of writing of this post, the Brent crude oil was at US$51.57 a barrel while US crude oil was at US$48.81. 

The FBM KLCI closed at 1,716.580 pts, a drop of 20.04 pts or 1.15%. With the oil price slump continued, analysts are not being too optimistic. TA Research chartist Stephen Soo told that he did not see the market rebounding over the immediate term, and that it was possible the market could test new lows this year.

For the Top 10 Active, Top 10 Gainers and Top 10 Losers, you may find as below:

Iris leads the Top active counter for the day

United Plantation Bhd, DKSH Bhd, Ibraco Bhd and Muda Holdings Bhd are among the top 10 gainers today

The decliners were lead by British American Tobacco (BAT), Syarikat Takaful Malaysia Bhd
Regionally, market is also on a downtrend as oil price slump continued to present a negative and volatile environment....with Hong Kong's Hang Seng slipped 0.99%, Japan's Nikkei 225 was down 3.02%, while the Singapore's Straits Times Index shed 1.39%.

Monday, January 5, 2015

Market Daily Report (05 Jan 2015)

It's the first Monday of 2015 and the market is already showing where it's going....DOWNTREND.

FBM KLCI dropped 16.15 points as at 5pm today

As the crude oil price continued to remain sluggish and the introduction of base rate, FBM KLCI responded in similar fashion, with a drop of 0.92% to close at 1,736.620 points. Oil price hit a 5 1/2 year low while Ringgit slump continued.

Below are the top 10 gainers, top 10 losers and top 10 active for the day:

Among the Top 10 Gainers are Panasonic, Hong Leong Bank, F& N, Carlsberg...

Among the Top 10 Losers are British American Tobacco (BAT), Public Bank, PIE Industrial Bhd

The most active counter for the day is Minetec

With the oil prices and the Ringgit devalued even further, investors tend to get jittery about the possibility of another crisis happening, similar to what happened in 1998 although there are others who are optimistic about the future prospect in Malaysia and that the downtrend will not lead to a crisis. 

In its market commentary today, TA Securities Research said following last week's profit-taking correction, the KLCI should extend post window-dressing profit-taking as blue chips correct further amid slowing institutional participation.

On the regional front, things are also in the red with Hong Kong's Hang Seng closed the day after shedding 0.57%. South Korea's Kospi ended 0.55% lower, while Japan's Nikkei 225 was down 0.24%.

Sunday, January 4, 2015

The World's Two Richest Men Made $21 Billion Last Year

As everyone from Ted Turner to Drake has said, the hardest part of getting rich is making the first million. The rest just comes naturally.

The fact that wealth begets more wealth was illustrated once again last year by Bill Gates and Warren Buffett, currently the two richest people on Earth. According to Bloomberg, the pair finished 2014 a combined $21.1 billion richer than when the year began. (Gates' fortune rose $8.1 billion to a total of $86.6 billion. Buffett's rose $13 billion; he's now worth $73.8 billion.)

Gates and Buffett are aware of their privilege. They have both advocated for higher taxes on the wealthy. They have also poured billions of their own money into the Bill & Melinda Gates Foundation, one of the world's largest funders of charitable causes like infectious disease research, poverty reduction, and (more controversially) education reform.

Source: Mother Jones

Weekly Investment Term #9

One of the asset class that's not mentioned as often in this blog is property. Today, we will try to talk a bit about one of the common metric that's being used to evaluate the value of a piece of investment property.

EFFECTIVE GROSS INCOME is a metric commonly used to evaluate the value of a piece of investment property. It's calculated by adding the amount of income produced by the piece of property and the miscellaneous income, less vacancy costs and collection losses. 

Here is an example:

A condominium has an income of $1,000,000 if it is able to rent out all of its units (full occupancy). Historically, the condominium is unable to fill 10% of its units, meaning that it is unable to collect $100,000 ($1,000,000 * 0.1). 

The Effective Gross Income for the property is $1,000,000 - $100,000, = $900,000

Some things to ponder when calculating EGI is the factors that can influence the vacancy costs and collection losses for a piece of property. There is a need for investors to estimate the costs of the income lost what can be generated but the market might cause this to fluctuate up or down. 

When looking to purchase investment property, potential investors use the Effective Gross Income to gauge the expected amount to be paid for the property and the expected earnings from it. Low Effective Gross Income and high costs are a sign to reconsider about buying the property, vice versa for high Effective Gross Income and low costs.

Friday, January 2, 2015

Market Daily Report (02 Jan 2015)

FBM KLCI kick off the year with a decline of 8.48 pts to close at 1,752.770.

FBM KLCI started the year 2015 with a slight drop

The drop is about 0.48% as the oil price downtrend seems to continue.

Brent crude continues to trade at sluggish levels of US$57 per barrel. 

The top gainers for the day are as follow:

Nestle Bhd close at 68.88, up 0.038, Lafarge Malaysia Bhd increase 0.3 to close at 10.06, Hong Leong Financial Group Bhd up by 28 cents to 16.80 while Allianze also by 28 cents to 11.70. Below is the top 10 gainers for the day:

Top 10 Gainers

On the other end, leading the top losers are British American Tobacco with a decrease of RM1.10 to close at RM64, Kuala Lumpur Kepong dropped about 80 cents to RM22, DanaInfra Retail Sukuk also drop 80 cents to RM100. Below are the TOP 10 Losers of the day.

Top 10 Losers
Below are the top 10 Active counters for the day:

According to report from TheEdge, investors are still cautious as crude oil continues to slide. 

There is also a downward revision for the end-2015 target for FBM KLCI to 1,720 pts from the previously 1,930 by JF Apex Securities Research and said the local stock market will continue to exhibit choppy trade as long as crude oil price stays sluggish, with the continued weakening of the ringgit against the US dollar.

On the regional front, both the Hong Kong's Hang Seng and South Korea's Kospi were up by 1.07% and 0.57% respectively.