Wednesday, 28 October 2015

Ringgit depreciation: what will I do?

A lot of people are (discussing about) converting MYR to foreign currency. You can see this from the foreign currency account offered by some banks, e.g., Maybank and Public bank. This was what I thought a few months ago. I have a second thought now: I decided to do nothing.

Firstly, the current exchange rate is about 4.2. I believe there is really not much room left for depreciation.

Secondly, it is really too little too late to convert to foreign currency now. This should have been done before it broke 3.8.

Thirdly, I speculated that the BNM will raise the overnight policy rate in September's meeting, as a move to "save" the currency. But BNM kept the interest rate unchanged. On surface, it shows that BNM does not want to intervene the movement of MYR. On a deeper level though, perhaps they see that MYR will go back to its reasonable value after those "exogenous factors" are gone?

Finally, I can profit from the KLSE to cover the currency depreciation. :D

Now that MYR seems to stabilize around this value, which is not that bad. A possible trend is to lingering around this point for sometime before changing direction. Whatever direction it goes, MYR should still be "safe" in a few years to come.

Wednesday, 21 October 2015

KL: FGV call warrants analysis

I traded FGV once -- on the first day when it was listed publicly. The IPO price was RM 4.55, but opened much higher on the first trading day. I bought @ RM 5.39 early in the morning. Seeing that the trend did not going well, I sold on the same day @ RM 5.40, incurring a small loss after brokerage fee. That was more than 3 years ago. Luckily I was determined to sell at that day, or else?

Now that FGV seems to rebound from the bottom. I am interesting to catch a rebound, thus I studied FGV call warrants.

*Credit to the Macquarie Group, an Australian based company, for having the very useful website Malaysia Warrants to enable me to summarize this in a few minutes.

Based on how I choose a call warrant, I look for CW with >180 days expiry. Thus the choice comes down to C6-C9. For low premium, FGV-C6 and C8 (newly listed) stands out. C6 has a lower premium and higher gearing but C8 has a lower conversion ratio. Although FGV-C9  has high gearing (also newly listed), the premium is way too high. Therefore, C6 and C8 will both be a good choice.

Both C8 and C9 were issued yesterday. Hence you can see the style of CW issued by different issuers. 

1. Macquarie exercise price is really high, while RHB is really nice.
2. Macquarie CWs always have relatively shorter expiry date.
3. A conversion ratio of 3.4 for a share price of RM 1.7x is too high. I am very impressed with the CW issued by RHB, for having such a low conversion ratio!

Disclaimer: at the time of posting, the author does not have any FGV nor FGV call warrants.

Saturday, 17 October 2015


It will be very rare of me to share a TV programme, but Australian Broadcasting Corporation (ABC)'s Q&A has impressed me so intensely that I think I should write something to promote it. Q&A is broadcasted live on ABC every Monday at 9:35 p.m. AEST.

Q&A invites a panel of 5 to answer questions from the audience which is made up of the public. While you would expect most of the issues discussed are about Australia (politics), there are other general topics that are "borderless".

Despite getting funding from the government, Q&A can discuss all kinds of issues openly, including criticism to the current government. No censor. No manipulation. No brainwash.

Below are some topics that I found interesting:

The discussion about death on 18 May 2015, minute 1:14

Death, something that we perceive as being in the distance, but in fact it is always just around the corner. The panel has given some insightful opinions on this topic.

The discussion about marriage equality and religion on 8 Jun 2015, minute 11:30

Dr. Cornel West talked about "Revolutionary Christianity". His view on religion has impressed me. Religion has increasing become something that, in my opinion, is used as a tool to manipulate the public. It's sad to see that religion has been twisted in so many different ways and levels, but it's glad to see that there are people whose mind remain open and wise. His response gained an applause from the audience -- when you can gain an applause from a public audience regarding a topic like this, you know how good the answer is.

A full hour of discussion on mental health issue 5 Oct 2015

I have to confess about my admiration to one of the panel Fay Jackson, with her ill condition yet she still has the courage and bravery to turn public. Bravo!

A full programme of Q&A can be found on ABC Q&A Website.
For the latest 4 episodes of Q&A, you can view it with closed-caption on ABC iView.

I hope you will enjoy the programme as I do.

Saturday, 10 October 2015

2015 Q3 Review

KLCI has not been performing well for this quarter. It took a roller-coaster ride to drop continuously in August before it finally rebounded in September. This round of adjustment is worse than Oct and Dec 2014, probably similar to Aug 2011 in terms of magnitude and pattern.

The Oct 2014 experience which cost me to vomit out everything is still lingering. Perhaps because of this, I have learnt from the past and "escaped" relatively unscathed in this adjustment.

On the bad side, I bought back SIGN not long after selling it.

On the good side, I bought MYEG-CK @ RM 0.055 in the morning of 25 Aug -- the lowest point of adjustment when KLCI was touching 1503. It wasn't an easy decision. The famous market quote of "buying fear, selling greed" is easier said than done. Seeing KLCI dropping everyday, it is tough to do the opposite. But if you have the confidence to do the opposite, the return can be very rewarding in a very short time.

The biggest lesson to learn from this big drop is to walk off after selling. My emotion remains wavering after selling. Making decision under this condition does not do me any good. If I could just walk off for 1-2 weeks after selling, things would have been much better now.

Past experience offers a chance to improve in the future. And this is a very good experience for me but to learn to walk off next time or history is destined to repeat itself.