Are you in the right sector?

What would be your benchmark to measure whether a sector is good or bad? Anyway, I believe most of us use "salary" as the main or only benchmark. Obviously, salary or income is one of the main factor for fresh graduates nowadays to consider whether to take the job or not.

Yesterday, I attended a forum on Economic Transformation Programme (ETP) organized by Malaysia Financial Planning Council (MFPC). Of course, no one is more suitable to answer those questions other than the CEO of PEMANDU, which is the main backbone to the success of ETP.

Excerpt from TheStar newspaper

So, are you regretted of what you are practicing now?

The statement cannot just simply applied to every Malaysians, as that was just an average benchmark. In fact, there are many engineers who earns big-bucks out there. As long as you are determine and posses the right attitude and behavior, you could be a high income individual.

The interpretation should be:

"Along with the growing Malaysia economy, financial sector poised to outperform other sector especially when we're talking about high-income nation. When people are resourceful, they will save and invest, which ultimately benefiting the financial sector which provides services like investment, stock broking, insurance, personal wealth management..."

Also, please take note that the financial sector will not prosper, if Malaysia do not have enough professional, such as engineers, doctors, lawyers and accountants. Can our nation grows without these professionals? If a country were lacking behind, can financial sector prosper, subsequently can their employees? We should not simply jump into particular sector based on such survey.

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Insurance: Importance of Nomination (Part 2)

In Part 1, we have discussed the importance of nomination in insurance. But, what happens if it is someone else, like an uncle, niece or even a friend was named as nominee(s)?

www.financemalaysia.blogspot.com

 

When a nominee is not automatically a beneficiary

Under a non-Muslim's policy, the nominee in such a case is not entitled to the policy monies as a beneficiary. He or she only receives them as an executor, and must pass it on to the deceased's estate to be distributed according to the will.

1. If there is a will, but the nominee in this case is not named as a beneficiary under the will, he or she will not get a single sen.
2. If there is no will, then the property will be distributed according to the existing laws of distribution.

What if I named my siblings (brother or sister) as a nominee?

Well, it will form as a trust policy, and your siblings will act as an executor instead. So, please take note. Anyway, you can change your nomination, but must sought the consent from your said siblings who is a trustee in this case.

The lesson here is that if your intended beneficiary is not a spouse, child or parent, then you must write a will naming that person as a beneficiary. Once you do, your nominee will receive the policy monies subject to the laws of distribution -- once all your estate's debts have been settled.

When to nominate?

Of course, the sooner the better. I would suggest you did it when you fill-in the proposal forms. Or else, you may nominate after the application or after you get the policy.

Can I name more than one nominee?

Yes, you can. Normally, you can name up to 4 nominees in a policy. But, you should state the proportion to which each person is entitled. Otherwise, each will receives an equal share.

Can I change my nominee(s)?

You can make any changes on your nomination anytime as you like. There is no restriction on the number of changes. The latest nomination will supersede all previous nomination. A nomination will also be considered revoked upon the demise of nominee, or all of the nominees (if more than one nominee), during the lifetime of policy owner. However, in the case of a trust policy, a nomination cannot be revoked without the written consent of the trustee.

What is the nomination procedures?

1. Fill in nomination form:
•  It usually requires details of your nominee's name, date of birth, NRIC, and address
2. Witness
• It must be signed by a witness who is above 18 years old, of sound mind, and who is not named as one of your nominee
• Alternatively, your insurance agent can be the witness
3. Endorsement
• Ensure that your insurance company endorses the nomination
• For new policy, it is written in you policy document
• For existing policy, make sure you receives a letter highlighting any changes to your nomination

Source: Life Insurance Association of Malaysia (LIAM)

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Insurance: Importance of Nomination (Part 1)

Insurance: Importance of Nomination

Well, one of the most important objective of having an insurance policy is to ensure that our loved ones are always financially well-prepared. However, that objective will failed if we did not make the necessary nomination in our policy. By naming our loved ones as nominees, you can ensure that they will receive the monies from your policy fast and easy. This is where an insurance policy will be the most useful to them. Think about our loved ones !!!

What if I did not make a nomination?

Failure to do so means that the insurance company would not be able to make payment until a court has given your loved ones a Grant of Probate (where there is a will) or Letters of Administration (where there is no will). In other words, WAIT for months if not years.

What if I did make a nomination?

Good. If you are a non-Muslim and you have nominated your spouse, child or parent (where there is no surviving spouse or child), they are entitled to the policy monies without having to wait for the time-consuming Grant.

Moreover, a trust policy would be created for them under which these monies do not form part of your estate. As such, they are not subject to your estate's debts. This means your spouse, child or parent will receive the sum due in full.

Meanwhile, a trust policy does not apply in the case of a Muslim policyholder, in which case the nominee acts as an executor and must distribute the policy monies according to Islamic law.

You wait, or Your Loved Ones wait...

In order for a swift payout to your loved ones, please do not wait anymore. Making a nomination today, call up your insurance agent now, fill-in the nomination form. It's that simple. Or else, your loved ones would have to wait for your policy monies. Think about it !!!

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Stock Watch: Benalec Holdings Bhd (5190)

Being one of the most successful new listing this year, Benalec is consistently closing higher than its IPO price of RM1.00. Listed on the main board of Bursa Malaysia, Benalec was categorized as a construction counter with more than RM1 billion market capitalization.

Company Info

• Incorporated since 1978
• Principally involved in the provision of marine construction services mainly in the area of land reclamation and dredging, rock revetment works, shore protection works, beach nourishment, marine piling, and construction of marine structures.
• Providing vessel chartering on time and voyage charters as well as tow-age services to third parties.
• Owning a full-service shipyard to carry out any ship repair, ship maintenance, shipbuilding or fabrication works.
• Owning a large and diversified fleet of 91 vessels

Expertise?

Benalec strength lies in their ability to operate a 1-stop centre offering Total Service and Complete In-House expertise, ranging from marine construction, marine transportation and support services, shipyard and shipbuilding, and vessels maintenance, refurbishment and modification and steel fabrication.

In 2010, Benalec achieved another key milestone when it expanded to Singapore and subsequently obtained ISO 9001:2008 and OHSAS 18001:2007.

Currently, Benalec is bidding for marine construction projects worth RM 5.7bn in Melaka, Penang, Selangor and Johor, and expects contracts to be awarded within 1-2 years time. Being an integrated marine construction specialist, Benalec enjoys healthy profit margins due to its ability to maintain cost efficiency in its marine construction projects. The company achieved a high core net profit margin averaging at about 20.3% over the past 3 years, excluding gain on disposal of land and vessels. (RHB Research)

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MPHB seeks 100% ownership in Magnum

After much speculation on the reason of suspension since yesterday 2.30pm, Multi-Purpose Holdings Bhd (MPHB) finally unveil its answer. An memorandum of understanding (MOU) was signed with two parties (as elaborate further below) seeking to take over its associate Magnum Holdings Bhd. This would cost MPHB around RM1.65 billion to complete the exercise.

MOU with CVC Capital Partners Asia Pacific group

• To acquire the remaining 49% stake in Magnum
• To acquire RM674.65 mil nominal value RCULS-C
• Total costing RM1.627 billion
• Acquisitions via 343.82 mil new MPHB shares at RM2.30 each and RM 809.20 mil cash

MOU with Management of Magnum

• To acquire 2 mil magnum shares or 2% equity interest
• To acquire RM4.86 mil nominal value of RCULS-C together with all accrued interest remaining unpaid
• Total purchase costing RM37.20 mil
• Acquisitions via 16.17 mil new MPHB shares at RM2.30 each

What is the rationale behind?

MPHB said the proposed acquisition will enable MPHB to have 100% ownership in Magnum, thus making gaming as the core business of the group. "It would further improve and strengthen the future profitability and cash flow position of the MPHB group via the higher share of Magnum's earnings and cash flows," it said. The stock was last traded at RM2.68 before suspension.

Bloomberg: Past 6 months share price of MPHB

However, Finance Malaysia reckon that the said corporate exercise was to facilitate the exit of CVC Capital, in order to path the way for the re-listing of Magnum on Bursa Malaysia, 3 years after it was privatized. At RM2.30 per new share to be issue, it was deemed fair for CVC Capital to cash out. Reportedly, MPHB believes that the re-listing of Magnum could fetch a high valuations, given the only listed number forecast operator (NFO) was BJTOTO currently. Another NFO under the umbrella of Tanjong (Da Ma Cai), was privatized last year.

Analyzing Latexx Partners' takeover offer

Just before CNY, Latexx surprisingly announcing that the company had accepted a non-binding takeover offer by two private equity funds. However, the deal looks unattractive with limited upside given the offer price of RM3.10 only. For your information, it is only 10.7% above the last trading price of RM2.80 only.

About the offer:

• The offer values Latexx at 8.2x P/E only versus sector's average of 11.7x
• The takeover offer needs to secure a 75% shareholders' approval as lay out by the new rules
• With RM3.10 per share, the offer was valued as RM 852.03 million (inclusive of 55.03 million warrants)

Would the deal materialize?

Finance Malaysia doubt the deal will go through, given the unattractive valuations attached. Please take note that Latexx was one of the largest medical examinations gloves producers globally. By taking over at a mere 8.2x P/E, it would be a very good buy, but not a good sell at all. Another issue which sparks our interest was that the background of the two private equity funds being the acquirers.

Navis Asia VI Management Company Limited (Navis), a wholly owned unit of Navis Capital Partners, a US$ 3bn investment firm. Meanwhile, Mettiz, a holding company owned by Michael Tang Vee Mun, was the provider of equity financing for KNM Group's failed management buyout early last year. (CIMB research)

Would it be another "failed" buyout by Mettiz? A repeat of the dramatic KNM's tumbling version? Finance Malaysia really can't predict the outcome from the EGM to be convened soon on the offer. It's all depends on Latexx's shareholders to decide.

But, judging from the "not so performing" share price the day after the said announcement, most probably the outcome is already been factor-in... which was "failed". Anyway, we may heed the advise from the independent adviser appointed by Latexx's board of directors -- Hong Leong Investment Bank -- before voting.

After all, I like Supermax and Kossan for its lower P/E and larger players in the same industry.

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Lastfartyg och dess finansiella betydelse – Del III

En av mina gamla studenter önskade sig lite mer bloggande om lastfartyg härom månaden och nu har jag fått tummarna loss! Det blir en hederlig gammal ”trading story” men det får duga, alltid finns det väl ngt man kan lära sig av det också. Inte minst med tanke på de supersvarta moln som tornar upp sig kring Suez-kanalen :(

I somras (26/7) skrev jag följande här på bloggen: ".....i bloggen från i mars var min huvudpoäng att jag trodde den gängse tolkningen av charterkostnaden som en indikator på världskonjunkturen för en tid kommer att vara förpassad till någon mörk och undanglömd plats. Tesen var att det var det stora utbudet av nya fartyg som sänkte charterkostnaden, inte ett lågt globalt efterfrågetryck. Jag tror fortfarande att så kan vara fallet och min tolkning är helt enkelt att de låga charterkostnaderna inte är en så stark bear-signal vad gäller globala aktier som man skulle kunna tro!" Se Lastfartyg eller stekarjolle för mer detaljer.

Sedan jag skrev min blog i somras har charterkostnaderna (återigen mätt som Baltic Dry Index, Capesize) sjunkit ännu mer MEN samtidigt har en global aktieportfölj (MSCI World) gått upp hela 20%! D.v.s min tes om att förpassa charterkostnaden (som indikator på världskonjunkturen och som positivt korrelerad med aktievärderingar) till en mörk och undangömd plats var sannerligen ”spot on”!

För att citera mig själv och bloggen Lastfartyg och dess finansiella betydelse ”den smarta investeraren kan få utlopp för sina tradingidéer genom att använda Baltic Dry Index som trigger för handel på andra marknader som aktier eller FX!” Det gäller bara att förstå när och hur man ska använda indexen! Hemligheten är att man alltid ska