Showing posts with label AUD. Show all posts
Showing posts with label AUD. Show all posts

Monday, 16 May 2016

Transferwise: the best way to transfer money from overseas to Malaysia

Sometime ago I want to transfer some money from Australia to Malaysia. I researched for many companies to look for the best (cheap and effective) way. Here it is.

Trasnferwise is the best company you could possibly find for fund transfer from Australia to Malaysia (and I believe for other major currencies to MYR too). Established in the UK, Transferwise supports all major currencies and is invested by Sir RichardBranson, the founder of Virgin group. 


Advantages:

1. It uses mid-market rate. This means that your transfer rate is even better than BNM's buyer rate, i.e., the exchange rate they offer is exceptional. In contrast, traditional telegraphic transfer (TT) using banks comes with a 5-10% spread as compared to BNM forex rate.

2. Small transaction fee and no other hidden fee will be incurred. For AUD-MYR, you will be charged 0.7% of the amount you transfer. And because you do not "lose" in forex rate,  this means that the money you receive is only 0.7% less compared to the "optimal amount". I bet you can find any company doing better than this.

3. Fast and efficient. From my experience, the service is very impressive. I received the fund the next business day after they received my fund.

4. Reliable and secure. In the process of fund transfer, you will be updated at each stage about your fund status. This gives you peace of mind. You can read some review here. I am not surprised that this company receives 9.5/10 for their service. 

If you want to transfer fund from overseas to Malaysia, abandon the exorbitant fees charged by banks and start using Transferwise by registering here. Yes, I have to tell you that this is my referral link. If you signed up using this link you will have a free transfer of up to GBP 500. And if you successfully refer your friends and they have made a transfer, you will be rewarded with cash.



Saturday, 4 July 2015

News by media, view by myself (part 3)

Example 3: Index -- KLCI

This example is interesting.

Prior to 30th Jun 2015, there were rumours about a possibility of downgrade in Malaysia credit rating by Fitch. First the earliest rumour was during March published in Bloomborg: Fitch Sees More Than 50% Odds of Malaysia Downgrade on 1MDB. Since then, KLCI has been declining continuously.

Next, the "drama" has come to the point where a review will be completed by the end of June. When the due date is approaching, more negatives news about a possible downgrade since 1998 were released, causing fears in the market sentiment.

Now the review outcome was announced. As reported in The Edge, Fitch has maintained Malaysia rating at A- and upgraded the outlook from "negative" to "stable". This is in sharp contrast to the market's expectation.

What now? What did the news tell you prior to the outcome? The coverage was all about a high possibility of downgrade. What will you do if you trust the media? Knowing that the stock market would plummet, you would sell all, hold cash or buy put warrant. However what actually happened was on 1st July 2015, KLCI gained more than 20 points, something that you don't see for at least 6 months. 

What about myself? I don't buy any of this news. Think about this:

1. If they really want to downgrade, will they let you know in advance so that you have time to sell? Frankly, although Malaysia is a "commonwealth" country, but "wealth" is not meant to be "common" in reality.

2. Even if there will be a downgrade, provided that the media were covering this, the effect would have been "adsorbed" by the market since then, and the opposite trend may happen just like the case of AUD:USD.

3. Seriously, who cares about Malaysia rating? Perhaps they couldn't care less about this.

This comes from experience though. After reading all rumours, I recalled what happened in August 2011 where US was downgraded without any preceding news. That did cause a small bear in the global market. You will have no time to sell should there be a “real downgrade". This is why I know there would be no downgrade. However I did not dare to all in when the market dropped, but this is still better than previously where I just followed other people to panic sell.

[to be continued]

Sunday, 28 June 2015

News by media, view by myself (part 2)

Example 2: Foreign Exchange

If you keep an eye on the global financial market, you will observe that 20 countries have eased their economy policies by cutting interest rates in the first 2 months of 2015. This does not include Australia which cut its interest rate twice (Feb 2015 and May 2015) and New Zealand which cut its interest rate this month.

A currency should fall when a rate cut devalues it, as the rate cut makes it cheaper for banks to lend, and for borrowers to borrow. The following shows the movement of NZD:USD right after the rate cut was announced:

NZD:USD after surprise rate cut

In this case, nobody knows that the rate cut was coming. Because it came as a surprise, the currency movement fell sharply, as it should. You will have no time to sell if you were longing NZD:USD.

Now, for the case of AUD when the second rate cut came in May 2015. Research analysts have forecast a rate cut on May 2015. It was almost a certainty that a rate cut would be announced after the board meeting. The movement of AUD:USD right after the announcement went like this:


AUD:USD after rate cut

This rate cut has not come as a surprise. Everybody knows it. Because of this AUD rises despite of RBA's rate cut. The reason was that the effects have already been "adsorbed" and "digested" by the market sentiment. If you read the news before the rate cut announcement and went to short AUD:USD, then you will become "water fish". When it is something that everybody knows, it just wouldn't go the way it was expected to be going.

Both cases have the same rate cut decisions, yet completely different reactions. Why? The difference lies in whether the news has been made known to the public in advanced. In NZ, it came as a surprise. In AU, it was expected. If you tried to make money based on news that everybody knows, you aren't going to get it.

[to be continued]