The Master of all Traders' Portfolio - hng

Core portfolio

Protasco 49.3%
Hingyap 34.2%
Lonbisc 16.8%
Crestbld 2.2%

Trading portfolio
Axiata 41%
GENM 15%
Bjtoto 15%

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Hektar REIT in talks to buy new assets

By Chong Pooi KoonPublished: 2009/12/07

Most of the potential acquisitions are located in Peninsular Malaysia, says Hektar Asset Management chairman

Hektar Real Estate Investment Trust (REIT), an investor in shopping malls, says it is in talks to buy new assets and plans to sell more units to fund future purchases.

"We are in the midst of negotiating for new acquisitions, but cannot divulge any more details at this time," Hektar Asset Management Sdn Bhd chairman and chief executive officer Datuk Jaafar Abdul Hamid told Business Times in an interview.

Most of the potential buys are located in Peninsular Malaysia, he said, adding that it was in talks with township developers and other asset managers.

"The typical shopping acquisition is quite significant, starting from RM100 million and above, and will definitely require us to raise equity-financing to place that acquisition in the REIT."

While there was no firm plan yet to place out additional units, Jaafar said he was pleased that the capital markets had rebounded substantially in the past few months.

"Hopefully the timing would be conducive (for us to sell new units) when we close any acquisitions," he said.

Units of Hektar REIT have risen 36 per cent this year to end-November, but still trails the 44 per cent gain in the benchmark FTSE Bursa Malaysia KLCI in that period.

Hektar REIT owns the Subang Parade shopping centre in Subang Jaya, Selangor; Mahkota Parade in Malacca; and Wetex Parade in Muar, Johor. The fund's gearing ratio was 41 per cent as at end-June, quite close to the 50 per cent limit set by the regulator for a REIT.

Although a unit placement exercise will pare down its gearing and raise more cash for potential acquisitions, Jaafar said it was careful not to dilute the dividends received by existing unitholders.

"We believe it is important to deliver steady growth in the form of dividends to our unit-holders. We hope to establish a track record as an asset manager that delivers stable returns. So if we were to do a placement, it would be to acquire productive assets which would support the REIT's income and dividend growth."

While rival Axis REIT has garnered more investor attention after converting into an Islamic REIT, Jaafar said that Hektar had no plans to follow in Axis' footstep.

"We have studied the Islamic REIT model since before our initial public offering and will continue to monitor the feasibility of the model," he said.

"(But) we realised it was not a simple proposition for retail properties because it meant that we would eventually, over time, have to eliminate various types of tenants, such as conventional banks, conventional insurance branches, health clubs, cinema, to name a few.

"This is a challenge, especially for a shopping centre, to remain relevant without these amenities for consumers."

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REIT managers team up to form association

Published: 2009/12/03

THE managers of 11 Malaysian real estate investment trusts (REITs) have teamed up to set up the Malaysian REIT Managers Association (M-REITMA), allowing players in the sector to work closer with the authorities to grow the industry.

"For the purpose of registration with the Registrar of Societies (ROS), we have proceeded to form a protem committee comprising seed members from Am ARA REIT Managers Sdn Bhd and Axis REIT Managers Bhd when we handed in our application to register the association to the ROS on September 4," said protem committee chairman Steward Labrooy of Axis REIT in a statement.

"Without an official association representing members of the local REIT industry, it soon became apparent to all of us that we were unable to have effective dialogues with the regulators and the Ministry of Finance in order to communicate the issues facing the industry and to propose changes," it added.

The association, currently pending approval from ROS, will comprise AmFirst REIT, AmanahRaya REIT, Atrium REIT, Axis-REIT, Al-Hadharah Boustead REIT, Al-Aqar KPJ REIT, Hektar REIT, Quill Capita Trust, UOA REIT, Tower REIT and Starhill REIT.

The REIT sector is now over four years old, with the first REIT having listed in August 2005. Today, there are 13 listed REITS with a market capitalisation of RM5.4 billion.

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6 PRINCIPLES OF LIFE on Money

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How to diversify investments during this time of crisis

Personal Investing - By Ooi Kok Hwa

AS a result of the financial crisis, even though most commodities have not been performing well, gold has outperformed the conventional asset classes like equity and bond.
This has prompted some investors to consider commodities as one of their investment asset classes. In this article, we will look into how to invest in commodities.
Bruno H. Solnik and Dennis W. McLeavey in their book titled “International Investments” classified commodities in three major categories – agricultural products, energy and metals.
Examples of agricultural products are fibres (wood, cotton), grains (wheat, corn, soybean), food (coffee, cocoa, orange juice) and livestock (cattle, hogs, pork bellies). Energy products can be crude oil, heating oil and natural gas whereas examples of metal products are copper, aluminum, gold, silver and platinum.
The main reason behind investing in commodities is that they have negative correlation with stock and bond returns. This will provide a good way to diversify portfolio risks. Besides, given that commodities are positively co-related to inflation, they can help investors hedge against inflation.
Investors can consider investing directly in commodities or indirectly by buying into futures contracts, bonds indexed on some commodity price as well as stocks of commodity related companies.

Some companies will invest in commodities that are extensively used as raw materials in their production processes. High commodity prices or raw material prices will affect those companies’ performance. However, if they have invested in their raw materials, even though their profitability might be affected by high raw material prices, the gains from their investment in those commodities will offset the losses in their operations.
Some investors will consider buying into commodity futures, such as crude palm oil (CPO) futures as this is one of the easiest and cheapest ways to get exposure to commodities.
However, investors need to understand that futures trading requires a high level of trading skills as most commodity players are well-equipped with the required market information, like total world supply and demand of CPO as well as the weather conditions in those producing countries. Some financial institutions may offer unit trust funds that invest directly in those commodities or indirectly through buying into commodity futures. In the United States, investors can buy into commodities via exchange traded funds (ETF) that are invested in commodities futures.
An ETF is a special type of fund that tracks some market indices and it is traded on a stock market like any common share. Given that the world economy may recover further and oil prices may go beyond US$100 per barrel again, buying into oil or other commodity related ETFs may provide retail investors an alternative to get exposure into commodities.
Since commodity cycles and the general business and stock market cycles are usually different, investing in commodities provides a good way of portfolio diversification.
Besides, investors can consider buying into collateralised futures funds (sometimes they are referred as structured products). A collateralised futures fund is a portfolio that takes a small long position in commodity futures and invests the rest of the money in government securities. Normally, it is capital guaranteed as the yield generated by government securities will be used to cover for the cost incurred for the futures contracts.
Lastly, investors can consider buying into listed companies that are commodity related. In Malaysia, if investors wish to gain from higher CPO prices, they can consider buying into plantation companies.
Given the current gold prices of more than US$1,150 per ounce, some investors are eager to know whether there are any further upsides to the gold prices. Some analysts and fund managers have predicted that the gold prices may go beyond US$1,200 to US$1,300 per ounce. Investors will rush into gold during a financial crisis, like the current financial crunch and the Great Depression in 1929-32, because gold can keep its value during those periods.
We believe that gold is a cyclical product. Even though nobody knows how high the gold prices can go, given that the world economy is showing signs of recovery, the upside potential for gold investing may be limited.
● Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

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Dubai impact on corporate names

What happened on 25th November?
A state-owned investment conglomerate - Dubai World Group, announced that they want to restructure its debt of US$59 billion including its property subsidiary, Nakheel. This sudden news caused a shudder in the financial markets and concerns about the ability of the UAE banking sector and foreign banks have on businesses related to Dubai World Group. Worries on how this would also affect the fledgling US real estate sector were evident as the Dow Jones U.S. Real Estate Index fell 2.9 percent, nearly twice the decline of broader U.S. market indexes on Friday 27th November.

Background of Dubai World and Nakheel
Dubai World, whose majority stakeholder is the emirate’s ruler, Sheikh Mohammad bin Rashid Al Maktoum, borrowed from more than 70 lenders to buy assets ranging from stakes in Las Vegas casino company MGM Mirage to upscale retailer Barneys New York through Istithmar. Their property arm, Nakheel is also perhaps best known as the developer of Dubai's palm-shaped islands, also carries the Mandarin Oriental and W hotels in New York in its portfolio, and has a 50 percent stake in the Fontainebleau Miami Beach resort. Dubai World's holdings go far beyond real estate. It has a 20 percent stake in Canada's Cirque du Soleil, and also invests in the global bank Standard Chartered Plc and New York boutique investment bank Perella Weinberg Partners.

Market reactions
The market over-reacted on Friday but over the weekend, the UAE showed support to Dubai's debt, and provided some assurances. Today, the global markets and banking shares are rebounding. In Hong Kong, shares of HSBC and Standard Chartered rebounded overnight as investors viewed Friday's reaction and fears of exposure to Dubai as overdone. However, stocks in the United Arab Emirates, trading for the first time (after a 4 day Hari Raya Haji holiday), fell with Dubai's index down 6.9 percent and Abu Dhabi's share benchmark 8.1 percent lower. Overall, the MSCI index of Asia Pacific stocks traded outside Japan rose 2.8 percent. Reflecting some of the calm, U.S. stock futures are up 0.4 percent pointing to a firm start at Wall Street, which had already started showing some signs of a recovery on Friday having erased some of the losses toward closing time. European stock index futures also point to a higher open, futures for the Eurostoxx 50, German DAX and French CAC gaining 0.3-0.4 percent.

Investors' Nerves Soothed
Investors were also placated by authorities' moves on Sunday (29 Nov) to prevent any major fallout from the looming debt default by Dubai World. The United Arab Emirates offered banks emergency support to ease fears in financial markets and to inject liquidity into Dubai's banks by the central bank, together with promises by neighboring city-state Abu Dhabi to provide selective support. The Central Bank of the United Arab Emirates said they would support domestic banks and foreign banks and would give banks a channel access to special liquidity which is tied to their current accounts at the Central Bank. This amount can be withdrawn at rates higher than 0.5% above the 3 month local inter-bank interest rate benchmark.The benchmark three-month Emirates interbank offered rate was at 1.919 per cent on Nov. 25, the last working day before the Raya Haji religious holiday.This is a very reassuring move by the central bank to limit the risk of any run on Dubai-based banks as it will alleviate any liquidity concerns by foreign banks about the banking system, mostly those based in Dubai.

What should we do ?
As usual, do not panic. For some reassurances, Asian markets rebounded sharply today. The Middle Eastern markets are down as today is their 1st trading today after a long public holiday. Investors should wait for the markets in the Middle East to calm down. You may want to do a portfolio review on your middle eastern positions (if you have any) after the storm subsides, hopefully by end of his week and realign them to more Asia centric positions

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Early retirement is possible

COMMENT By CAROL YIP

ANYONE contemplating an early exit from the rat race faces just as many rewards as they do risks. The most obvious reward: Early retirement means more time to live life instead of working. On the other hand, there is always the risk of running out of money needed to survive the later years of life.

If the purpose of early retirement is simply ceasing to work because you are tired of working, this in itself may not lead to a fulfilling retirement lifestyle. Be sure you have something to do that occupies your time, interests and takes advantage of your talents. It will be even better if you know your life goals and purpose for your early retirement because doing something meaningful will keep you mentally healthy. You don’t want to be waking up everyday wondering what to do with your life.

You may experience these different stages if you decide to retire early:
Stage 1. The active years: This phase may be typified by a “very active self-indulgent behavior”. You start doing things now that you were constrained from doing before. These new opportunities can require spending of your financial reserves.
Stage 2. The legacy years: In this period, you may to be less self-indulgent and more concerned with legacy or relationship building with people. This can also be a time of “giving service to others,” either to the community, family and friends. Otherwise, you may experience loneliness or mental depression, which can affect your physical health.
During this legacy phase, you also need to plan for a permanent dwelling including a support system and medical assistance for old age. You have to review your financial situation to ensure that your financial nest egg continues to generate growth for stage 3.
Stage 3. The golden years: This is when life’s endgame is played out. You may look back on life and feel a sense of fulfillment. Success at this stage leads to feelings of wisdom, while failure can result in regret, bitterness, despair and financial depression.
The risks of not having enough
You need to be “in the driver seat” of your investment portfolio to ensure constant growth because your retirement lifestyle will depend on what your investment portfolio can generate for you. Your investment profits must replace your career income. Hence, you cannot second guess in making financial decisions. You must know the answers to the following important questions about your financial reserves:
● What kind of retirement life do you want for yourself so that your financial reserves can last a lifetime?
● If you are presently single, would you want a family, children or companion during your retirement? Be aware that this may deplete your financial reserves.
● If you have a family now, what kind of lifestyle does your family want that can affect your financial reserves?
● How good are you in your investment skills and choosing the right investment products for your financial reserves?
● When your financial reserves run out, what is your contingency plan?
Actions speak louder than words
To the early retirement wannabes, realising your early retirement dream means investing your money and getting into a debt-free situation as soon as possible. It is about making sensible decisions about your life and financial matters.
You can begin by creating a process of gradual change with plenty of mental planning and making adjustments to fit an early retirement mindset and life expectations.
Mastering your investment skills and getting good advice will become your retirement priority. So, start your investment process today by considering the following:
● Can a bad economy and financial markets destroy the value of your financial nest egg?
You need to be cautious of being lulled into investment products that project average returns. An average doesn’t take into account the possibility that there may be several years of below-average returns that could force you to dip into your investment principal.
● Will inflation cut down your purchasing power? Watch out for the ravages of inflation.
A portfolio can earn handsome returns, but if the cost of living increases at a faster clip, retirement can be jeopardised.
So you will need assets that will grow over time and provide a hedge against inflation.
● How reliable is your investment income? Weigh this carefully when you need a continuous stream of income to pay your daily expenses.
When there is a need to cash out your investment principal during retirement, you will need to review your lifestyle and practice frugal living.
● What kind of investment choices will fit your financial needs? Take your time to understand the types of investment products in the marketplace because a choice of investments that are risky or not easily converted into cash can affect your retirement living. Unless you can quickly find a job, you can be caught in a cashless situation.
At the end of the day, only if you are proficient in your investment skills and can build sufficient wealth, will you be in control your retirement destiny. But a poorly planned and executed transition into retirement can mean you may end up living dangerously!

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Hey Traders ! Running out of idea what to trade ? See d list here.

hng said...
Both of my biggest core stocks Hingyap and Protasco are performing well. If everthing go as plan, portfolio stand to reap highest profit in this yr :D)

Core portfolio

Hingyap 69.6%

Protasco 66.3%

Lonbisc 11.4%

Crestbld 10.6%

Glomac 8.9%

Cheetah 3.3%

KSL 2.6%

Trading portfolio

Genting 8.4%

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