There hasn’t been a high-profile IPO for a while already especially in the distressed economy. That is until Maxis announced their coming initial public offering (IPO) of 2.25 billion shares (30% of their total equity) at a price of RM5.20 per share.

Now, investors all over are waiting with bated breath for the magical date of 19 November 2009 when Malaysia’s top telecommunications company lists on the Bursa Malaysia. Will it be largely oversubscribed? It certainly looks to be heading in that direction. At approximately RM10.8 billion to be raised, it is the biggest listing in South East Asia in decades and the markets are certainly hungry for fresh and promising listings. Read on to see if you should invest in Maxis shares.

Lucky Maxis post-paid subscribers are given blue forms to complete which I have been told have at least an 80% chance of being lucky. Otherwise, mere mortals will need to consider picking up pink forms or buying it directly off the market once the stock lists although you might want to be prepared for quite a large premium especially on the first day of listing.

Should You Subscribe To The Maxis IPO?

Analysts are encouraging investors to consider subscribing, based on Maxis’ solid fundamental execution, superior margin and robust dividend growth. Interestingly though, OSK has placed the stock’s fair value has been placed between RM5.30 to RM5.80, derived from a projected 2010 price earnings multiple of 14.8 to 16.2 times. Other analysts are less optimistic believing that the IPO price is too high. (source)

Based on the analysis, the IPO price at RM5.20 does not offer much upside potential although a robust dividend payout is still likely over time. All in all, it still appears to be a fairly stable stock and one that promises potential dividend growth. It does not come at a cheap price but then again, good stocks rarely come cheap!

Good luck and do ensure you speak to your remisier before you invest.

Sometimes financial advice are found in the most unexpected places and seem so obvious we wonder why we did not have the foresight to market it ourselves first!

I happened to pick up a magazine last weekend and came across this interesting financial management method using Jars. Read on below to learn how it helps you manage your money better!

JARS System From The Secrets From The Millionaire’s Mind

Basically, this simple method popularised by T. Harv Eker’s “The Secret’s of the Millionaire Mind” involves managing your money in a very visual and effective method. Based on this method, your monthly income should be split into 6 different jars:

1. Necessity Account (NEC) – for everyday expenses and bills including utilities, rental, loans, etc.
2. Financial Freedom Account (FFA) – for investments and passive stream incomes. Never dip into this jar and do not spend the principal!
3. Education Account (EDU) - for investment in yourself, purchase of books and education through seminars and talks.
4. Long Term Saving For Spending Account (LTSSA) - for nice to have purchases, e.g. a nice luxurious holiday or a luxury handbag or shoes.
5. Play Account (PLAY) - for purchases you don’t really need but would like to spend on.
6. Give Account (GIVE)  – for charity or foundations you subscribe to

The article I read recommended splitting 50% into your necessity account and the remaining 50% into equal portions into the other 5 jars. However, the percentage you put is entirely up to you. What is most important is that you make the effort to distribute your monthly income into the above categories.

Personally, I found it quite an interesting read and something worth exploring into as it definitely helps manage your money better and you will know exactly where all your money is going. If you’ve tried this method before, do share if it worked well for you!

Did you rush to queue for the Amanah Saham One Malaysia launch today? Interestingly enough, the turnout wasn’t as huge as previous launches of other Amanah Saham related funds. I remember several years back how the funds for non-bumiputras were all wiped clean nationwide in just 30 minutes! However, today, the selling of the Amanah Saham One Malaysia seemed a little more orderly. Read on for my experience below.

No Long Queues To Buy Amanah Saham One Malaysia

I decided to buy the Amanah Saham One Malaysia funds from the post office which opened at 8.30am instead of from the banks which opened at 9.15am. Before the post office opened, there were approximately 25 people ahead of me which was a pretty manageable number instead of the huge hoards I expected.

Numbers were given out and the waiting game began. When it was my turn, the clerk took my completed form and photostated identity card, checked all the details and keyed them into the system. He then printed all details into the little passbook, got me to sign on the dotted line and print my left thumbprint.

All in all, I was done in 1 hour and 15 minutes which wasn’t all that bad! However, I noticed that in typical Malaysian efficiency, only 3 out of 7 counters were open. If more had been open, all waiting applications could probably have been processed faster.

Perhaps the demand is less this time around as the fund is the biggest fund ever launched at RM10 billion. Or perhaps, investors are just a little short on cash and are a little more wary about putting so much money in funds like these.

How about you? Did you experience long queues and disappointments in purchasing your Amanah Saham One Malaysia units?

Prime Minister, Datuk Seri Najib Tun Razak has announced that some 50,000 fresh undergraduates of local public institutions of higher learning will get 100 units of the newly launched Amanah Saham 1Malaysia, absolutely free!!

If you are a student, ensure you get your free units this coming August 5 when the Amanah Saham One Malaysia launches!

The much-awaited Amanah Saham 1 Malaysia will be launched on August 5. It is the biggest trust fund to date in Malaysia with 10 billion units going for RM1 per unit.

Distribution of the Amanah Saham One Malaysia Units

To ensure that the units were fairly distributed, 50% of the units are allocated to Bumiputras, 30% to the Chinese, 15% to the Indians and 5% to other races for the first 30 days of sale from Aug 5 to Sept 3. During this period, the maximum investment for an investor below 55 is 50,000 units, while investors above 55 can purchase a maximum of 100,000 units.

After the sale period, all unsold units will be available for sale to all Malaysians regardless of race and investment amounts.

Units can be purchased at ASNB offices and post offices from 8am to 5pm from Aug 5, and at Maybank, CIMB Bank and RHB Bank during the operating hours of the banks.

Source

Companies offering alternative investment options often have a similar modus operandi. They usually conduct their preview sessions in swanky 5-star hotels, provide free lunch or high tea and a free gift such as shopping vouchers to sweeten the deal. This was our experience when we were invited for a preview investment session with Jardin Smith International. Read on for our experience and to learn if these land banking companies are scams.

Investing in Land Banking

What’s the investment vehicle Jardin offers? Land.

But here’s the catch, the land isn’t in Malaysia or Asia but rather it is in the United Kingdom. Drawing similarities from Donald Trump and Li Ka-Shing, their marketing pitch encourages you to consider investing in land for it is the most stable and risk-free asset in today’s volatile world.

Jardin Smith basically sells sub-divisions of empty land in UK to international investors in a scheme popularly known as land banking. Their business is based on the potential of the land increasing exponentially in value once planning permission has been given by the UK local council in 6 to 8 years. According to them, even if that does not materialise, land continues to appreciate at a steady 12% per annum which makes it a more profitable investment compared to many others.

Risks In Land Banking

Minimal, according to Jardin Smith. However, if you are a careful investor, you might be concerned about the existence of the land in such a faraway country. Jardin allays your fears by providing you an individual sub-divided title for that plot you own. This allows you to sell it back to Jardin but not to any other third party. They also claim to have engaged some of the best planning experts in UK to expedite the planning approval process so the land value increases faster and they (holding 25% of the land) together with their investors can exit faster.

Is Land Banking A Scam?

There have been many recent reports about land banking being yet another investment scam. It does sound almost too good to be true as they promise profits of over 100% in just a few years. However, when pressed, Jardine Smith International is often ready to offer documentary evidence for most of the questions you ask for.

If uncertain, I would advise that you do your own due diligence on the company prior to investing. That way, you will be able to make a calculated decision after weighing all necessary risks and benefits. Land banking investment isn’t for everyone. It involves tying up a rather large sum of money (usually around GBP10,000) for at least 8 to 10 years. Do also be careful of the fact that UK Land Laws are very different from our local laws and we may not be well informed enough about them.

Ultimately, it is your choice but before you consider investing, engage independent land surveyors and solicitors to provide you with an independent view. They will rush you with the promise if huge discounts by signing up on that day itself but take your time to ensure you make an informed investment instead of getting swayed by the high returns and running in headfirst.

A large number of investors missed out on the previous launch of the Amanah Saham Malaysia fund as it was done within a really short time frame and right after the Sukuk Bonds were launched. It doesn’t help that the non-Bumiputra portion of the fund often gets sold out in less than 2 hours nationwide!

If you were one of those who lost out on the previous Amanah Saham Malaysia subscription, fret not because the government is opening up unsold Bumiputra lots for subscription by non-Bumiputra investors!

Permodalan Nasional Bhd (PNB) will offer the remaining 1.6 billion Amanah Saham Malaysia (ASM) units, including those initially set aside for bumiputras, for subscription by all Malaysians from July 21. (source)

Sales of the units will be launched on July 21st and available on a first come first served basis. Between the offer period of July 21st to July 27th, investments are capped at 20,000 units per person. If there are any remaining units after July 27th (which is unlikely!), no maximum limits will be imposed.

If you are interested, get your funds ready by July 21st so you don’t miss out on this investment! Previous dividend payouts for this fund averaged 7.8 cents to 6.25 cents per unit in 2008 and 2009, respectively. Still an improvement over fixed deposit rates!

Photo credits

To rent or buy my first property? That’s a popular question amongst many newly-weds or those who are planning to move out of the family home.

Should you rent or should you buy? Read on below for pros and cons of both alternatives and which might work out better in the long run.

High Up-Front Costs

Buying a home often involves large up-front costs for the deposit and legal fees which may make purchasing a home too expensive for newly weds who might have just blown a huge amount on their wedding. However, it is also important to remember that renting also has up-front costs (two months rental and a utilities deposit) which you will need still to budget for.

Take Advantage Of Lower Interest Rates

The recent economic crisis which subsequently pushed down interest rates worldwide have made the cost of debt cheaper for new house owners. So there is really no better time than now to take advantage of these low rates to own your own home. Many often cringe at the word debt and are hesitant to owe the bank lots of money, however, do remember that each monthly payment made on your loan installment is equity invested in your own home which will one day be your asset.

Purchasing A Home Offers Stability

Renting a home often places you at the mercy of the landlord and while most rental contracts are valid for a year, the landlord is entitled to take possession of it at any point during the contract, with sufficient notice. Hence, with renting, you can never be sure if you can have the house for a long term period or if you might be required to pack your bags and move again in the near future.

Furnishing Your Home

You are often bound by various terms in a rental property which means no built-ins or any form of furnishing that might destroy the property. Some contracts even require permission before you nail or drill a hole in the wall! If you don’t like rules and have grand interior design plans for your home, renting is definitely not for you!

Rent Now, Buy My Dream Home Later

Many often prefer to rent in the short term until they find their dream home. Not tying up your money in a housing loan means you would have more debt ratio available for a bigger housing loan when you find your dream home. However, having your own property now might provide you with some leverage to upgrade in the future when your current property has appreciated.

Rental vs Buying, Which Is Better?

Ultimately, it is your choice on which you prefer. Rental often benefits in the short term as you save on upfront costs and may have access to properties in prime areas which may not be within your purchasing budget. However, in the long term, purchasing your home may be a better option as monthly rentals may be better put towards owning a home which is an appreciating asset. However, do weigh both options and your plans carefully before you commit to buying or renting your first home!

Many investors often tend to forget about our Amanah Saham investments as it is not our main option for quick cash due to its high dividend payouts.

However, if you need cash quickly, you will be very glad to know that it is actually very easy to sell your Amanah Saham investments without incurring any penalties. This, in fact, makes it a better investment compared to Term Deposits. Learn more on how and where you can redeem your Amanah Saham units below.

Where Can I Redeem My Amanah Saham Investments?

Redemption or selling back of units for cash can be done at any any ASNB offices or agents namely Maybank Berhad, CIMB Bank Berhad, RHB Bank Berhad, and Pos Malaysia Berhad.

How Do I Sell My Amanah Saham Units?

Simply bring your investment book with you and fill out the necessary withdrawal form. Some funds are priced at Net Asset Value (NAV) which may fluctuate over time, similar to a share price. However, others are priced at a flat rate of RM1 so you do not incur any losses from your purchase price during redemption. A comprehensive list of funds available and prices are available in the Top Guide To Investing In Amanah Saham Funds.

Are There Any Penalties or Charges For Redemption?

No charges or penalties will be imposed unlike a term deposit where the interest will be forfeited if you uplift before the maturity period. However, be reminded that you will no longer be paid dividends on the portion you have redeemed.

Is There Any Cooling Off Period Before I Can Redeem?

No, there is no cooling off period.

So, if you are looking for a flexible investment that offers relatively good dividend payouts and allow easy redemption for cash, do consider investing in the Amanah Saham funds when they are available. More information can be found at the Amanah Saham website (source).

Credits

Permodalan Nasional Berhad and Maybank recently did a tie up where investors can now purchase Amanah Saham units online through their Maybank2U.com accounts. This not only makes it easier for investors here who don’t have to go to the ASNB offices to purchase lots but also makes it a lot more accessible to overseas investors who wish to top up their investments.

However, are all funds available under this new facility?

Unfortunately not!

The only funds that are available to be purchased online are the Amanah Saham Bumiputra Units (ASB) which are only available for Malaysian Bumiputras aged 18 and above!

Non-bumiputra investors will still need to go through the nightmare of queuing at the banks everytime the Government feels deigned to offer them a portion of the Amanah Saham investments.

It is likely that only ASB units are offered online as Bumiputra allocated funds still have a high number of units left while the non-Bumiputra ones often sell out within the launch date. 

Nevertheless, if you are an ASB investor, this is how you can buy additional units online:

How To Purchase Amanah Saham Units Online

1. Login to Maybank2u.com. Then select the “Investment” tab.
2. Select “ASNB Unit Trust” from the menu.
3. Please read and understand the Declaration. Check on the box to acknowledge the terms and conditions. Click “Next”.
4. Request for TAC number. Select your “From Account” for payment and select ASB from the “Product Name” list. Key in Membership Number and Amount. Click “Continue”.
5. Key in TAC number and click “Confirm” to complete your transaction.
6. When the Payment Status page appears, click “Print Receipt” and keep it for your future reference.
7. Minimum investments are RM1 to a maximum of RM200,000 subject to the investor’s purchase limit and funds available in the investor’s account.

As we try to move towards a 1 Malaysia policy, why should there even be a distinction anymore and why should some sectors of society still be made to feel like second class citizens?