THE world’s stock markets, including Malaysia’s, have recovered lately.
Some analysts have viewed this recovery as window dressing activities while others have called it bear market rallies.
And there are those who wonder whether we have seen the worst.
They are eager to know whether the current stock market level has reflected all the negative news, like the sharp drop in consumer spending, higher unemployment rates or lower sales and lower profits for most of the listed companies in the coming corporate result announcements.
Every investor wants to know when will the market recover.
Some investors may be excited about the current stock market level as a lot of good quality stocks have been hammered down to attractive levels, and are keen to start accumulating them.
However, if the stock market continues to dip for long periods, certain investors may run out of “bullets” to average down their purchasing prices.
Then, they will start losing interest in the stock market as they do not have cash to purchase further and their earlier purchases also start to show losses.
We need to prepare ourselves for the market turnaround.
However, we need to be patient and wait for the right time to invest.
In this article, we will look into the past two major downcycles: the 1998 crash and 2000 crash versus the current 2008 crash.
From the table, it can be seen that the Kuala Lumpur Composite Index (KLCI) tumbled by almost 80% in a period of 18 months during the 1998 crash versus a drop of 45% in a period of 13 months during the 2000 crash.
The percentage drop and duration of the 2000 crash were much less severe and shorter compared to the 1998 crash.
For the current 2008 crash, our KLCI has plunged by 47% to its lowest level of 801 points on Oct 28.
If investors believe that the current crash is quite similar to the 2000 crash, then we may have seen the worst as the current percentage drop of 47% is near the 2000 crash of 45%.
However, if the 2008 crash mirrors the 1998 crash, then we may have to wait until the KLCI touches about the 300-point level (assuming the same 79.4% drop in the 1998 crash) before we can see any real recovery.
Hence, we may have to wait for another nine months or until September 2009 (assuming the same duration of 18 months).
We do not think the 2008 crash is similar to the 1998 crash.
Our current economic situation, like central bank reserves, the health of the banking sector as well as economic fundamentals, are much better compared to 1998. However, as mentioned earlier, we need to prepare ourselves for the worst.
What to expect from here on?
Our market will try to absorb all the negative news.
As long as the market continues to drop as a result of negative news, we know we have not seen the bottom yet.
We have to wait for the day when the stock market refuses to come down even when it is loaded with massive negative news; that should be the right time to buy.
Unfortunately, based on our past observations, by then most investors may not have any more cash to purchase or they will still worry about the economic situation.
Investors need to understand that stock market cycles are always ahead of economic cycles.
Normally, when the stock market hits the bottom, the economic situation is uncertain or is still getting worse.
by OOI KOK HWA
Tuesday, December 30, 2008
Friday, December 12, 2008
Unit trust is important !!!
11-12-2008: Saving through unit trusts adds up to the future, says PNB by Regina William Email us your feedback at fd@bizedge.com
GEORGE TOWN: While the government is encouraging spending to stimulate the economy, Permodalan Nasional Bhd (PNB) chief executive officer and president Tan Sri Hamad Kama Piah says savings in the form of unit trusts would go a long way for the future.
Over the past month, PNB has issued RM2 billion worth of units in Amanah Saham Nasional (ASN), Amanah Saham Wawasan (ASW) and Amanah Saham Didik (ASD).
Hamad said while those with money could spend as encouraged by the government, there were others with less who wished to save up slowly.
"As long as you spend your money effectively, it would help the economy," Hamad said after giving a lecture titled Navigating the Rough Ocean at Universiti Sains Malaysia's School of Business Studies here yesterday.
Hamad said with the RM2 billion raised from the unit trusts, PNB would be able to invest effectively with the prevailing low prices.
"Our unit trusts have always been well received. Last week, when we launched the RM1 billion units of ASN, they were snapped up within 3.5 hours. A week earlier, the ASW worth RM490 million was finished in six hours while the RM455 million ASD was also snapped up fast.
"If there is a requirement, we will launch more," Hamad added.
Earlier in his speech, Hamad said there was no direct danger of a financial crisis in Malaysia as seen elsewhere due to the active efforts of the government during the 1997-98 financial crisis.
"Then the banks had to address a situation of overlending and bad loans. Due to the active efforts of the government, our financial institutions are now much stronger in capital, and far more prudent in lending and investing.
"There is no issue of lack of trust or confidence and our housing market did not undergo the type of bubble market seen elsewhere," he added.
Hamad said the problem for Malaysia was not so much contagion from the financial crisis, but the slowdown in the economies of the West that would have an impact on its international trade.
Hamad said with exports being the key driver of the economy especially after the 1997-98 crisis when the depreciation of the ringgit helped make Malaysia's exports more competitive, the recession affecting the US, Japan and Europe, which are Malaysia's major trading partners, would have a negative impact on exports.
"On the other hand, our economy has seen strong domestic demand over the last three years particularly in the services sector.
He said the additional RM7 billion spending by the government, with the reduction of the overnight policy rate from 3.5% to 3.25% and the statutory reserve requirement from 4% to 3.5%, should help support the economy.
He said the Malaysian banking system, particularly commercial banks, was well-positioned to survive the expected downturn in economic activities, with strong capitalisation, sustained profitability and continued improvement in the level of non-performing loans.
"Given their sound balance sheets and ample liquidity in the financial system, banking institutions remain well positioned to meet the financial needs of the economy," he added.
Taken from:
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_24a50c66-cb73c03a-19ccba00-3be3f72b
GEORGE TOWN: While the government is encouraging spending to stimulate the economy, Permodalan Nasional Bhd (PNB) chief executive officer and president Tan Sri Hamad Kama Piah says savings in the form of unit trusts would go a long way for the future.
Over the past month, PNB has issued RM2 billion worth of units in Amanah Saham Nasional (ASN), Amanah Saham Wawasan (ASW) and Amanah Saham Didik (ASD).
Hamad said while those with money could spend as encouraged by the government, there were others with less who wished to save up slowly.
"As long as you spend your money effectively, it would help the economy," Hamad said after giving a lecture titled Navigating the Rough Ocean at Universiti Sains Malaysia's School of Business Studies here yesterday.
Hamad said with the RM2 billion raised from the unit trusts, PNB would be able to invest effectively with the prevailing low prices.
"Our unit trusts have always been well received. Last week, when we launched the RM1 billion units of ASN, they were snapped up within 3.5 hours. A week earlier, the ASW worth RM490 million was finished in six hours while the RM455 million ASD was also snapped up fast.
"If there is a requirement, we will launch more," Hamad added.
Earlier in his speech, Hamad said there was no direct danger of a financial crisis in Malaysia as seen elsewhere due to the active efforts of the government during the 1997-98 financial crisis.
"Then the banks had to address a situation of overlending and bad loans. Due to the active efforts of the government, our financial institutions are now much stronger in capital, and far more prudent in lending and investing.
"There is no issue of lack of trust or confidence and our housing market did not undergo the type of bubble market seen elsewhere," he added.
Hamad said the problem for Malaysia was not so much contagion from the financial crisis, but the slowdown in the economies of the West that would have an impact on its international trade.
Hamad said with exports being the key driver of the economy especially after the 1997-98 crisis when the depreciation of the ringgit helped make Malaysia's exports more competitive, the recession affecting the US, Japan and Europe, which are Malaysia's major trading partners, would have a negative impact on exports.
"On the other hand, our economy has seen strong domestic demand over the last three years particularly in the services sector.
He said the additional RM7 billion spending by the government, with the reduction of the overnight policy rate from 3.5% to 3.25% and the statutory reserve requirement from 4% to 3.5%, should help support the economy.
He said the Malaysian banking system, particularly commercial banks, was well-positioned to survive the expected downturn in economic activities, with strong capitalisation, sustained profitability and continued improvement in the level of non-performing loans.
"Given their sound balance sheets and ample liquidity in the financial system, banking institutions remain well positioned to meet the financial needs of the economy," he added.
Taken from:
http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_24a50c66-cb73c03a-19ccba00-3be3f72b
Friday, December 5, 2008
Neutralizing Your Two Major Fears by Brian Tracy
The Greatest Obstacle to Success
The fear of failure is the single greatest obstacle to success in adult life. Taken to its extreme, we become totally pre-occupied with not making a mistake, with seeking approval for security above all other considerations. The experience of the fear of failure is in the words of "I can't", "I can't." We feel it in the front of the body, starting at the solar plexus and moving up to the rapid beating of the heart, rapid breathing and a tight throat. We also experience this fear in the bladder and in the irresistible need to run to the bathroom.
The Fear of Rejection Holds You Back
The second major fear that interferes with performance and inhibits expression, is the fear of rejection. We learn this when our parents make their love conditional upon our behavior. If we do what pleases them, they give us love and approval. If we do something they don't like, they withdraw their love and approval-which we interpret as rejection.
The Roots of Type A Behavior
As adults, people raised with conditional love become preoccupied with the opinions of others. Many men develop Type A behavior which is characterized by hostility, suspicion and an obsession with performance to some undetermined high standard. This is expressed in the attitude of "I have to, I have to," and is associated with the feeling that "I have to work harder and accomplish more in order to please the boss" who has become a surrogate parent.
The Most Common Trap
More than 99 percent of adults experience both these fears of failure and rejection. They are caught in the trap of feeling, "I can't, but "I have to," "I have to," but "I can't."
The Key to Peak Performance
The antidote to these fears is the development of courage, character and self-esteem. The opposite of fear is actually love, self-love and self-respect. Acting with courage in a fearful situation is simply a technique that boosts our regard for ourselves to such a degree that our fears subside and lose their ability to effect our behavior and our decisions
Action Exercises
Here are two things you can do to increase your self-esteem and self-confidence and overcome your fears.First, realize and accept that you can do anything you put your mind to. Repeat the words, "I can do it! I can do it!" whenever you feel afraid for any reason.Second, continually think of yourself as a valuable and important person and remember that temporary failure is the way you learn how to succeed.
The fear of failure is the single greatest obstacle to success in adult life. Taken to its extreme, we become totally pre-occupied with not making a mistake, with seeking approval for security above all other considerations. The experience of the fear of failure is in the words of "I can't", "I can't." We feel it in the front of the body, starting at the solar plexus and moving up to the rapid beating of the heart, rapid breathing and a tight throat. We also experience this fear in the bladder and in the irresistible need to run to the bathroom.
The Fear of Rejection Holds You Back
The second major fear that interferes with performance and inhibits expression, is the fear of rejection. We learn this when our parents make their love conditional upon our behavior. If we do what pleases them, they give us love and approval. If we do something they don't like, they withdraw their love and approval-which we interpret as rejection.
The Roots of Type A Behavior
As adults, people raised with conditional love become preoccupied with the opinions of others. Many men develop Type A behavior which is characterized by hostility, suspicion and an obsession with performance to some undetermined high standard. This is expressed in the attitude of "I have to, I have to," and is associated with the feeling that "I have to work harder and accomplish more in order to please the boss" who has become a surrogate parent.
The Most Common Trap
More than 99 percent of adults experience both these fears of failure and rejection. They are caught in the trap of feeling, "I can't, but "I have to," "I have to," but "I can't."
The Key to Peak Performance
The antidote to these fears is the development of courage, character and self-esteem. The opposite of fear is actually love, self-love and self-respect. Acting with courage in a fearful situation is simply a technique that boosts our regard for ourselves to such a degree that our fears subside and lose their ability to effect our behavior and our decisions
Action Exercises
Here are two things you can do to increase your self-esteem and self-confidence and overcome your fears.First, realize and accept that you can do anything you put your mind to. Repeat the words, "I can do it! I can do it!" whenever you feel afraid for any reason.Second, continually think of yourself as a valuable and important person and remember that temporary failure is the way you learn how to succeed.
Sunday, November 16, 2008
Miskin Selepas Pencen??
Percayakah anda kita akan miskin selepas pencen, ikuti keratan akhbar yang dipetik dari utusan malaysia ini.
Petikan dari Utusan Malaysia 19 Oktober 2007
KUALA LUMPUR 18 Okt. – Kumpulan Wang Simpanan Pekerja (KWSP) mempunyai caruman terkumpul berjumlah RM224 bilion sehingga Disember 2006 namun secara purata simpanan seorang pencarumnya yang mencapai usia 55 tahun cuma RM114,000.
Dengan simpanan sebanyak itu, seseorang pencarum KWSP yang bersara hanya mampu membelanjakan RM475 setiap bulan bagi membolehkannya menampung hidup sehingga usia 75 tahun. Perbelanjaan RM475 sebulan akan meletakkan pesara berkenaan dalam kategori golongan berpendapatan di bawah paras kemiskinan.
Pendapatan orang yang dikategorikan miskin di Semenanjung kini ditetapkan RM530 sebulan, Sarawak (RM585) dan Sabah (RM685).
Pengurus Kanan Perhubungan Awam KWSP, Nik Affendi Jaafar memberitahu, pada masa ini purata caruman terkumpul kira-kira 47,500 pencarum KWSP yang akan genap umur 55 tahun pada tahun ini
ialah RM114,000.
“Jumlah simpanan ini tidak mencukupi berdasarkan anggaran mereka akan menggunakan wang itu selama 20 tahun berikutan jangka hayat yang semakin panjang serta kos sara hidup yang terus meningkat,” katanya kepada Utusan Malaysia dalam satu temu bual di pejabatnya di sini.
KWSP mempunyai kira-kira 11 juta pencarum dengan 47,500 orang akan mencapai umur bersara pada tahun ini. Menurut Nik Affendi, bagi memastikan pencarum KWSP dapat bersara dengan selesa, setiap ahli dana pencen itu perlu mengubah sikap mereka yang berharap sepenuhnya kepada caruman KWSP untuk menampung hidup selepas bersara.
“Caruman KWSP setiap bulan hanya melibatkan 11 peratus daripada gaji mereka, jadi masih terdapat 89 peratus pendapatan pencarum yang boleh digunakan untuk membuat pelaburan yang akan menghasilkan pulangan tetap pada usia tua,” ujarnya. Nik Affendi menasihatkan para pencarum supaya berhemah ketika membuat pengeluaran awal sebelum persaraan membabitkan pelbagai skim yang telah disediakan oleh KWSP termasuk pengeluaran rumah, pendidikan dan kesihatan.
“Jika mereka mempunyai sumber lain, simpanan KWSP harus dijadikan sebagai pilihan terakhir,” tegasnya. Ditanya mengenai langkah-langkah yang telah diambil bagi memastikan simpanan persaraan setiap ahli bertambah, katanya, struktur akaun ahli KWSP telah disusun semula daripada tiga akaun kepada dua mulai 2 Januari lalu. Sebelum ini, sebanyak 60 peratus daripada caruman bulanan ahli dikreditkan ke dalam Akaun I manakala 30 peratus ke dalam Akaun II dan 10 peratus ke dalam Akaun III.
Penstrukturan itu menyebabkan Akaun I – yang khusus untuk tujuan persaraan dan hanya boleh dikeluarkan setelah pencarum mencapai usia 55 tahun – ditingkatkan sebanyak 10 peratus kepada 70 peratus. Selaras dengan perubahan itu, ujar Nik Affendi, pengeluaran kesihatan yang sebelum ini hanya boleh dibuat daripada Akaun III kini boleh dikeluarkan daripada Akaun II.
Wang dalam Akaun II yang melibatkan 30 peratus caruman ahli juga boleh dikeluarkan untuk pembiayaan perumahan, kesihatan, pendidikan dan apabila cukup umur 50 tahun.
Dari itu hendaklah kita merancang kewangan kita lebih awal, pelbagaikan sumber kewangan anda dari sekarang, bebaskan diri anda dari belenggu hutang...
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