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Top Producer Unit Trust Consultant Caliph Agency April 2012

Tahniah kepada Top Producer Unit Trust Consultant Caliph Agency. Man Jadda wa Jadda. Siapa usaha dia dapat. InsyaAllah. If there is a will there is a way. Ya Allah, help the Caliph Group achieve RM 10 million Group Sales per month.

AprilChallenge free gift – you close RM99k and above, you will get a branded/imported track bottom or 3/4 track bottom. Tahniah kepada layak.

p.s. Arif Ismail and Caliph unit trust consultants conduct a free weekly seminar on How to Become a Successful Unit Trust Consultant at Public Mutual Cheras and Public Mutual Shah Alam on Saturday 1145 am and Friday 9:15pm respectively. Clickherefor detail

Summary of Brainstorming 13 Feb 2012 –

  • 9957 recruited in 2011 all Malaysia for Public Mutual
  • New UTC to register must come themselves
    • Register UTC Connect minta balik the acknowledgement from PM branch. They must come only for UTC Connect registration
  • Booth Scheme KLIA 13-14-15-17 Feb 2012 Check with Raimy to participate
  • Wasiat Talk 14 or 15 Feb @ Shah Alam
  • Sales Workshop Sweet Spot on CPFSale 29 Feb by Jas
  • Branch Dinner 19 Mar register by 14 Feb
  • New QFR Q4 2012
  • Articles: How to motivate staff and boost sales the star 2012 feb 11
    • To improve on accountability of each unit trust consultant
    • We must revive the daily tracking using BB group chat
    • No tolerance for underachieving
    • 5 to 10 mins for each team member use all channels to communicate
    • Coaching
    • Motivation highlight their promotions incentives
    • Development
  • Sales Tracking
    • Top Sales of the week JU RM200k
    • 1st Runner up Arif
    • 2nd Runner up Farah
  • Sharing by Top Producer
    • Ju said she focus and said that I must to see you to discuss on your investment Client: Why? Ju: for 10 mins only. To tell you about the market direction.
    • For some client you can be a little bit pushy
    • New client close 7 orang helping her prospect downlines
  • Training
    • 17 Feb 2012 @ Shah Alam 8pm to 10pm How to Manage Unit Trust Portfolio
    • 25 Feb 2012 @ Shah Alam 8pm to 10pm How to Manage Unit Trust Portfolio
    • 29 Feb @ Cheras 10am -12 pm
    • 9 Apr @ Penang
    • 7 Apr Butterworth
    • Early May Muar and Batu Pahat

p.s. Arif and Caliph Group conducts weekly training, meeting and seminar for his unit trust agency at Public Mutual Cheras, Kuala Lumpur, Malaysia. He invites all graduates young and old to join his team for helping Malaysian to invest in ONLY Islamic Unit Trust funds. Clickherefor details or call Zarif 010-4203521

Introduction to Unit Trust

This is the article that I wrote way back in 2006 and posted it to I write it again here so that people can get to know what are unit trusts? Its benefits etc. So far those who would like to become a unit trust consultant has benefited from this blog. Thus, I wish to expand my readership to those who don’t want to become consultant but would like to invest in unit trust.

What are Unit Trusts?

Unit Trusts are a form of collective investment that allows investors with similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets.

The manager of the fund then invests the pooled money in a portfolio which may include the asset classes such as Cash, Bonds & Deposits, Shares, Property and Commodities.

Benefits Of Unit Trust

It is tough for an individual to maintain his own portfolio of investments, he needs to keep up to date with market information and sentiment.

By investing in unit trusts most of the necessary ‘know-how’ of investing are transferred to those best equipped to handle it i.e. the professional fund managers.

The advantages and benefits of investing in unit trusts are:


A larger pool of funds allows the fund manager managing the unit trust to purchase a wider range of investments. Rather than concentrating an investment portfolio into one or two investments or shares, a portfolio of market securities can be held. The wider the spread of investments, the less volatile (i.e. variable) the investment returns will be. In simple terms, investment into unit trusts means diversification of risk: “not putting all your eggs in one basket.”


Most investors require that their investment be liquid. That is, they can easily buy and sell within a short period of time. Unit trusts provide this benefit, being bought and sold easily. An excellent return that cannot be “cashed-in” (i.e. sold) does not necessarily mean a good investment as poor liquidity constitutes an additional risk factor for the investor.

Professional Fund Management

The people making investment decisions for unit trust holders are professionals. Their training and background ensures that decision making is structured and according to basic investment principles. In the process, unit trust funds enjoy the depth of knowledge and experience that fund manager bring. In the long term, it is this expertise that should generate above average investment returns for unit trust investors.

Affordable and Investment Exposure

For the individual investor, it is sometimes difficult to gain exposure to a particular asset class. For instance, if an investor with USD3,000 wanted to gain exposure to the property market, global equity markets and bond market, it would be impossible to simultaneously hold a direct investment portfolio in all of these markets. With unit trust investments, it is possible to spread your money around to all of these asset classes at the same time, so that the investor can gain the investment exposure he requires.

Wholesale Investment Costs & Access to Investments

When making small investments, the investor faces costs and charges that are much higher. Unit trust funds are investing with large amounts, so that the economics of the transaction are more favorable i.e. the fees and charges/brokerage etc. per investment ringgit are likely to be less.

Also, because fund managers invest in larger amounts, they are able to get access to wholesale yields and products which are impossible for the individual investor to obtain.

Funds for All Type of People

There are many different types of funds that will suit to any level of risk to cater different type of people.

Safe and Secure

Unit Trusts only make investment and do not give out loans thus, the situation where liabilities more than assets will never arise.

More free time

Yes, we have to monitor our investment performance but since the fluctuation of the unit trust fund is not as frequent as stock market and that we have our Professional Fund Manager to look after the investment, we may keep track the fund on a weekly basis. More free time for us.

Attractive Returns

Unit Trust has proven that it is an excellence hedge against inflation. Unit Trust in some countries has shown a return of between 10% to 15%.

How to make your money grow

READERS responded positively to Sunday Star’s front page story “Can you retire?” last week. Many sent in their feedback and described the “wake up” call for early planning for one’s retirement as a “community service”. 

Many also felt more should be done by various parties, including the Government, to ensure that retirement does not become a burden on retirees. See readers’ views in accompanying story. 

There were also queries on how one can effectively plan for one’s retirement. In response to such queries and for a more in-depth look at how people can invest their money at different stages of their lives, Sunday Star will feature a six-part series on financial management with retirement in mind. 

The series, which begins next Sunday, will be written by the Financial Planning Association of Malaysia and seeks to cover the following areas: 

How much money do I need when I retire?: The most frequently asked question and the most difficult to answer as it involves many factors and differs from individuals to individuals. We will look at some of the main considerations one needs to take into account.  

When should I start my retirement planning: It is never too early to do so. We will introduce the magic of compounding, the capacity to take on more risk when one is younger and therefore avail oneself of opportunities with higher rewards. 

Retirement planning is not for those about to retire. 

Different folks, different plans: We will provide generic solutions to a few cases based on where people are in the life cycle eg. Young, single, working adults, married adults with young families, middle aged adults with college-going or working children.  

DIY or work with Investment Advisers: We will examine the pros and cons of working out a retirement plan yourself or engaging a professional adviser, and in the case of the latter what are the questions to ask. 

So are you ready for retirement: Besides the key issue of adequate financial resources, we will also look at other significant issues that impact a retiree’s well being, including health, social support, and continuing interest in the world around them. 

Don’t forget estate planning: Retirees need to be reminded of the need and importance for proper estate planning so that their hard earned, accumulated wealth can be utilised optimally in the best possible manner to benefit their loved ones or causes.  

About the Financial Planning Association of Malaysia (FPAM) 

FPAM was established in 1999 with the purpose of seeing to the proper development of the financial planning profession and industry. It introduced and administers the CFP (Certified Financial Planner) certification programme with the aim of ensuring that the industry is served by professional, properly certified and ethical financial advisers.  

The CFP qualification is recognised by both the Securities Commission and Bank Negara for licensing purpose. 

FPAM currently has 42 Charter and Corporate members and about 10,000 individual members, of which about 3,800 are fully Certified members.  

Its Charter and Corporate members are drawn from a wide cross section of the financial sector. They include many of the major foreign and local banks, unit trust companies, life insurance companies, trustee firms, security houses and financial planning firms.  

Its individual members are drawn from the ranks of these firms and also include those who are accountants, lawyers, members of the academia and the commercial sector. 

FPAM is an affiliate of the Financial Planning Standards Board (, an international body that owns and oversees the development of the Certified Financial Planner mark and certification programme worldwide. 

The Securities Industry Act 1983 requires any person who acts or represents himself as a financial planner to be licensed by the Securities Commission.  

Phased CPF withdrawals a better option


“IF WE were to start EPF all over again, I think we should go for regular monthly payments like the pension scheme or phased withdrawals rather than having retirees take out their money in one lump sum,” says Rusma Ibrahim, the EPF deputy chief executive officer (organisational development and strategic planning).

Rusma: ‘The retirement age should be around 58 or 60’

Right now, 99.9% of the contributors withdraw their EPF savings in a lump sum once they reach 55.

And it is up to the contributors to manage that money. But sadly, EPF has found that contributors tend to go through that money rather quickly.

Their first survey shows that 70% of retirees use up all their EPF money within three years after retiring. A second survey done in 2004 shows them doing better – they managed to stretch their money up to 10 years.

But that might not be good enough given the fact that people tend to live a lot longer these days. In Malaysia, life expectancy for women is 76 years and for men 72 years, which means that after retirement they have to support another 20 years of living.

And on average, contributors have RM106,000 in their EPF account when they retire; and for a number of people the EPF is their only form of savings.

“If one reaches 55, the probability is he could live until 80 even up to 83. But you can’t stretch that RM100,000 for 30 years. It’s not possible,” says Rusma.

While the private sector is deemed to offer better salaries and perks and a lump sum in the EPF, ironically it is the civil servants who tend to have it better after retirement.

Their monthly pension, which is half their last drawn pay, assures them at least of a continuous source of income regardless of how long they live.

“A good pension scheme is one where there must be regular payment. The quantum will differ but at least you are guaranteed of something,” says Rusma.

An annuity-like scheme for EPF where retirees get monthly payments, she adds, would have “insured” people against the longevity risk “but we didn’t start off that way.”

But the EPF, she points out, is only one source of savings. Ideally, there should be a multi-pillar system where one can rely on other sources for retirement income.

“This is something there has been discussions on. The Government can provide the policy but the market has to respond by coming up with private pension or annuity schemes for those who can afford it,” she adds.

Another way is to continue working for as long as possible. Rusma believes 55 is much too early to retire given the fact that people are still active and productive at that age.

“Going by the life expectancy, the retirement age should be around 58 or 60. It would make a lot of difference accumulating savings for another five years.

“Even in developed countries, people are talking about how to make people remain in employment for as long as possible,” she adds.

In Malaysia, because of the extended family support system, parents tend to think that “worse comes to worse” their children will take care of them and tend not to look at retirement as a problem.

“But like it or not, this support system is breaking down because of lifestyle changes. People are getting married later and having fewer kids. The children may be working in the city and parents are back in kampung and this physical distance contributes to the problem,” she says.

Rusma points out that planning when to get married and when to have children too are part and parcel of financial planning as these impact on one’s retirement.

“Ideally, when you retire, you should have settled your liabilities. If you had planned properly, your house and car should have been paid up and your children should have finished their education and should have started working, otherwise they would be a burden on you.”

And with inflation and medical costs going up, Rusma cautions, holidays after retirement have to be sacrificed.

“That’s only for the well to do. That’s the reality. Of course all of us have dreams. I have that dream too to go off to South Africa after retirement. But can I afford it? That’s the reality.”

So her advice is for people to continue working as long as they can be productive, to stay healthy and to start saving from young to take care of the future.

Counting on the nest egg


With people living longer, marrying and having children later and not saving enough, facing retirement is a challenge. While there is growing awareness about the need to plan, less than 5% are prepared for retirement and fail to take into consideration inflation rates and rising medical costs.

IN 1981, when Azman graduated, he got a job in KL which paid him RM1,800 a month. He bought an imported Mazda at RM17,000 and months later he put down money on a RM78,000 single-storey terrace house.

Today, 25 years later, Azman’s daughter has just finished university. Her starting pay is RM1,800, just like her father’s two and a half decades ago.

Long road ahead: With the life expectancy of men at 72 and women at 76, most people have a good 20 years to live after retirement.

But unlike her father’s time, imported cars cost over RM100,000 today. So Latifah has opted to buy a Proton for RM45,000 (more than double what her dad paid for his first car).

While her father could afford to buy a house early in his career, Latifah can’t. Houses in KL these days cost at least RM200,000, so she has to work for a few years first before she can own one.

Compared to 25 years ago, the prices of goods, food, petrol and electricity have all gone up. Understandably, it’s an uphill task for Latifah to save on her RM1,800 salary, since the purchasing power of her salary is much lower than her father’s back in the 1980s.

It is a fact that wages have not moved in tandem with the rise of the cost of living and inflation. That trend is expected to continue.

And if people do not start planning early for their retirement, they are going to find themselves in a spot after they turn 55.

Today, three meals cost you RM20 but in 20 years time – with an inflation rate of 6% a year – you will need RM64 per day for the three meals, estimates financial consultant Hazel Ong Archibald of CIMB Wealth Advisors (see Chart 1). The government puts inflation rate at 3.2% to 4.8% but Ong says in urban areas, that figure is about 6%.

So while the RM500,000 in your CPFor bank account at retirement might look good on paper, she says, if you do not invest that money to make it grow at a rate higher than the inflation rate, 20 years later, it would be worth only RM145,053 in purchasing power!

While there is more awareness about retirement planning these days, particularly in the urban areas, in reality this does not often translate into preparedness.


“Because it is more pleasurable to spend than to save,” opines Ong.

People understand – at head level – the need to plan and save, she says, but at heart level, emotions rule and instant gratification wins the battle.

“I wanted to persuade a friend to save for the future but she kept saying she had no money but then later I saw she could sign up RM3,000 and RM5,000 for some slimming packages!”

Reality hits when people find that they cannot afford to retire because they had not seriously put aside the money early on in life.

Ng: ‘Less than 5% are prepared for retirement’

“Less than 5% are prepared for retirement,” estimates Life Insurance Association of Malaysia (LIAM) president Ng Lian Lau.

He says those in their 20s think they are too young to think about retirement, while those in their 30s and 40s tend to believe they are doing enough because they have their CPFsavings, and those who are 55 feel it is just too late for them.

And the truth is at 55, most people cannot afford to retire.

“People are living longer, life expectancy for women is 76 years. For men it’s 72. With this kind of longevity, people have got more than 20 years after retirement. 60 would be a more ideal retirement age,” he says.

People are marrying later too, points out Ong.

Which means they are having children later in life. If a person has a kid at the age of 35 and retires at 55, the odds are that his child at 20 would probably still be at university or college and his education require financing.

On average, the Malaysian household spent 5.7% on education last year. With the cost of education rising by 6% each year, this is expected to climb steadily.

While parents might buy an education insurance plan for their children, Ong has found that 90% of the time the amount is insufficient. More often than not, parents are willing to give up “everything”, including their own retirement fund for the kids. Which leaves them in a vulnerable position in their old age, unless of course their children provide for them.

As for life insurance, only 40% of Malaysians are covered. Ng says this is a small number compared to 100% in Singapore, 80% in the United States and 400% in Japan (where one person has four policies on average).

Ong: ‘Inflation rate in urban areas is 6%’

And even if one has a life policy as well as savings from the CPF, people should still worry about retirement. This is because without a new source of income, that money would run out. This is especially so if one runs into health problems which is common when people grow older.

“Medical inflation is easily 15% each year. And this could really eat into the savings,” warns Prudential Assurance Malaysia Bhd CEO Tan Kar Hor.

Tan likens the medical bill as a “hole” which if not plugged would leak away one’s entire retirement and savings.

“It’s only a question of how the big the hole is,” he says.

So parliamentary secretary to the Finance Ministry Datuk Seri Dr Hilmi Yahaya’s announcement on Thursday that amendments to the Employees Provident Fund Act would allow contributors to withdraw money to buy insurance for critical illness for themselves and their family is welcome news. The amendment Bill was passed in Dewan Negara that same day.

So how much would one need for retirement?

Experts say this depends on the individual and his lifestyle. And how much he is willing to reduce consumption – to eat out less often, buy fewer things, live in a smaller house, drive less, drive a smaller car and travel less.

The rule of the thumb, says Ng, is managing on 60% of your last drawn pay.

For Ong, it’s 70% of one’s current lifestyle. If a family in Kuala Lumpur with two kids and two cars needs RM5,000 today, at retirement, expenses should go down to RM3,500.

Even based on this calculation, one would need RM747,000 if one were to live for 25 years after retirement, and RM806,200 for the next 30 years, factoring in the inflation and interest rates.

Going by statistics revealed in CPF2005 annual report, about 90% of CPFcontributors have less than RM100,000 in their accounts. So sole dependence on one’s CPFsavings as a safety net is not good enough.

Assuming that one can live on RM1,000 a month, to survive for 25 years, one would still need a substantial RM300,000 and for 35 years, RM420,000.

Bank Negara’s Counselling and Debt Management Agency (AKPK) CEO Mohamed Akwal Sultan reckons a person should not start purchasing big assets like property or a house late in life as the danger is that once they have retired they may not be able to meet the instalment payment on it.

“When you are in your late 40s, you should be winding down and not committing to high expenses to buy big things,” he says.

AKPK has dealt with a number of cases where retirees have had banks auction off their houses because they could not meet the monthly loan payment.

There is also the problem of credit card temptation. Ng notes a worrying trend that more and more younger people are becoming bankrupt as they are spending “tomorrow’s money”. Which basically means these people are not saving or building their retirement nest.

Ideally, Ong says, people should start saving from the time of conception; that way would be able to enjoy the magic of the compounding effect (see Chart 2).

Prudential’s Tan says a noticeable trend is that while the younger generation is prepared to invest in new financial instruments, the older generation gravitates towards fixed deposits.

“That is very risky because you would not be able to accumulate enough because the interest rates can’t meet the inflationary rate and your money is getting smaller,” he says.

He believes given the current life span, it would do retirees good to be more aggressive in their investment.

“In investing, you should not be looking at the date of retirement but rather the date of potential death which is probably still another 21 years away after retirement,” he says.

He recommends that people only keep about six months of their monthly expenses in the savings and FDs and put the rest in investment products that generate more income than the inflation rate.

Ng believes a good private pension would help people in their retirement years. In developed countries, money put into savings for retirement is not taxable, neither is the profit from that investment.

“When you retire, you can’t take the money out in a lump sum either or you’d have to pay tax on it. This will force you to withdraw your money on a regular monthly basis for retirement because that’s tax free,” he adds.

Singapore has such a scheme, the voluntary Supplementary Retirement Scheme, which complements the Central Provident Fund (CPF). Such a scheme has not taken off in Malaysia for a number of reasons, says Ng.

It would be a loss of revenue to the Government because people would not be paying taxes on money put aside for retirement. It would benefit only the rich and middle income group as the poor might not be able to afford it, he adds.

“Perhaps it hasn’t taken off too because the Malaysian economy is pretty dependent on consumer spending. And the Government wants you to spend,” he adds.

Ng says there should also be an asset liquidation law in the country. It is puzzling that there are all sorts of incentives for asset accumulation, he says, but none for liquidation.

An example of asset liquidation would be to reverse mortgage your house to the bank in return for a guaranteed monthly income until you die.

The asset would at the end of the day belong to the bank or insurance company. But in the meantime, the person has the right to continue to live in the house until death and get a monthly income too.

“If they outlive the value of the house, the bank loses,” he says.

As our population ages and life expectancy increases, more thought must be given by both individuals and the Government on how to develop a culture of planning and saving for one’s retirement.

What’s your number?

Numerous readers sent in their feedback and queries after Sunday Star ran the front page story ‘Can you retire?’ on May 27. After the ‘wake-up’ call for early planning of one’s retirement, we now run a six-part series written by the Financial Planning Association of Malaysia to provide more in-depth pointers on the subject.   In the first part this week, we look at how you must first find your ‘number’ based on your annual expenses, estimated years left after retirement and inflation rate, among others. WHEN people who are savvy about retirement planning get together, a common question they ask is: “What’s your number?” 

Unless the encounter takes place in a nightclub, it usually isn’t a series of telephone digits being asked for but rather the amount of money that person will need to fund a comfortable retirement.  

It’s an important question. So important, in fact, that we at the Financial Planning Association of Malaysia (FPAM) want to help proactive adults receive usable answers.  

So, in this article, the first in a series of six on retirement planning, we’ll help you get a handle on your own “number”. 

FPAM president U Chen Hock notes: “Personal responsibility is at the heart of sound financial planning for individuals.”  

According to Securities Commission-licensed financial planner Rajen Devadason, “Too many Malaysians are rushing headlong towards a retirement funding train wreck! We must take charge of our financial destinies – now.”  

Remember Devadason’s admonition as we consider that superb cornerstone of Malaysian retirement funding: the Employees Provident Fund (EPF).  

Our EPF has ensured that more than 11.4 million members have at least some savings for their old age. It has done an outstanding job.  

Nonetheless, we estimate the average 55-year-old Malaysian in the middle of 2007 has an EPF balance of about RM110,000, which is usually sufficient to fund just the first three to five years of full retirement.  

It isn’t surprising then that many members of the FPAM have discovered – through countless interactions with regular Malaysians – that many who “retire” at 55 or 56 actually don’t! They can’t afford to.  

(We have 42 charter and corporate members, and 10,000 individual members of whom 3,800 are licensed to carry the respected CFP or Certified Financial Planner mark.) 

Even those who have never gone through a structured calculation of their “number” often intuitively sense they don’t have enough set aside to create a totally adequate “personal pension” for themselves.  

Interestingly, civil servants covered by a government pension usually end up in better shape during retirement than their private sector peers who usually enjoyed higher salaries. 

Those with a government pension might not live lavishly but they are assured of a steady stream of cash each month. That dependable stream cushions the harsh realities of ceaselessly rising expenses. 

So this is the FPAM’s message to all Malaysians: Everyone, especially a person without a government pension, needs to exercise delayed gratification and create a “personal pension” through intelligent saving and investing.  

When creating an investment portfolio to meet retirement needs, there are two different approaches: capital preservation and capital liquidation.  

The first assumes the sum built up through decades of sacrifice is so large the person’s retirement can be funded solely from the yield generated. This will leave the full capital sum untouched and to be left as a legacy to children or favourite causes.  

According to Wong Boon Choy, treasurer and founding member of FPAM, the second approach, capital liquidation, is more practical.  

Wong, an SC-licensed financial planner and CEO of unit trust management company MAAKL Mutual, states: “Most people would be so overwhelmed by the huge amount needed to put together a capital preservation-based retirement fund that they would give up and say it’s a pointless exercise!” That’s why his favoured approach is capital liquidation.  

Each person has a different expectation of retirement. More and more Malaysians are realising that the official retirement ages of 55 and 56 are impractically low.  

The Malaysian Government, however, appears to be in a dilemma. If it raises the official retirement age too quickly, the net effect will be increased unemployment among those entering the workforce after school or university.  

FPAM president U, who is also general manager of HSBC Bank Malaysia’s Personal Financial Services, observes, “The most successful managers of their own finances tend to be individuals who proactively learn sound guidelines for retirement planning or who choose to work with qualified financial planners.”  

For those looking for such qualified professionals, the CFP Directory at our website ( is a useful place to begin your search.  

But before seeking professional help, you might want to familiarise yourself with the key steps needed to arrive at a sound capital liquidation-based retirement fund sum, also known as your “number”. 

1: Figure out how much you would spend per month if you retired today. 

2: Multiply that figure by 12 to get a reasonable estimate of annual retirement expenses. 

3: Decide when you’re going to retire: how many years do you have left to plan, save and invest? 

4: How long will you live in retirement? (We suggest you err on the high side!) 

5: Decide upon appropriate inflation rates, both during your planning stage and during your actual retirement. (You should use a higher rate during retirement because of anticipated escalating medical expenses.) 

6: Figure out the rates of return you believe are achievable both during your planning phase and your retirement years. A competent financial planner will guide you to use a lower figure for the latter stage of life, when active earnings cease and your capacity for risk falls. 

7: Decide on how much you can afford to set aside as an initial investment to begin your plan, and how much you can channel towards this key financial goal on a regular basis.  

The actual “number” calculated will vary from person to person. Devadason observes: “Thankfully, most of us have our EPF funds to provide that vital first layer of retirement expenses. But, by itself, it won’t be enough!”  

In his day-to-day work as a retirement specialist for urban professionals, he says his calculated “number” for a client usually falls within the RM500,000 to RM5mil range, depending on lifestyle, inflation and return expectations. 

Thus, it’s imperative that as many Malaysians as possible are made aware of the importance of retirement planning.  

We suggest, therefore, that you share this article – and each of the next five – with family and friends you genuinely care for. 

House, car and stocks

Your article seems to be a boost for the investment or insurance funds industry.  While highlighting the impact of time value of money in a chart (Michael and Terrance), there is a misleading statement – “Assuming that one can live on RM1,000 a month, to survive for 25 years, one would still need a substantial RM300,000 and for 35 years, RM420,000.” 

An idea that I would recommend is to buy the largest home (landed property in perennial growth centres like Klang Valley) you can afford comfortably and the most modest car you can live with, and keep them both as long as you can.  

These are two of the largest investments to most people. The home will appreciate and keep up with inflation while the car will depreciate and cost a lot to maintain too.  

Property in Malaysia is relatively inexpensive while cars are not, and urbanisation in Malaysia is low compared to neighbouring countries, so there is continual demand for homes, especially in the Klang Valley, as rural folks relocate to where jobs are. You enjoy your home 22 hours a day and your car two hours a day.  

You don’t enjoy as much with stock certificates. But do keep some stocks (equities) since they historically give the best returns, especially in Malaysia, where there is no capital gain taxes. 


Cost of living doubled

Referring to your article “Counting on the nest egg”, published on May 27, I truly agree with the author that the Malaysian pension system is inadequate for most retirees in the country.  As a Telecom specialist, I spend most of my time living abroad and have the opportunity to travel to different countries from poor ones like Morocco to rich ones such as Germany. I returned to Malaysia for a week’s vacation early this month and decided to drive to Penang for its delicious hawker food.  

I was shocked to learn that my favourite char kway teow with extra prawns cost RM8 (without extra prawn RM4). The hotel room (same hotel, same room type) cost me RM450, instead of RM250. This is almost a 100% increase in prices compared to five years ago when I was there and yet, many still earn the same starting salary when I graduated from university nine years ago.  

On top of that, car, housing, and petrol prices in Malaysia are completely outrageous compared with that in Europe (google the price and compare them to Malaysia’s). Remember, you can’t compare living standards by converting the currency – they earn in euro and spend in euro, we earn in ringgit and spend in ringgit. 

Edwin Goh  

Better safe than sorry

I AM a 57-year-old retiree. It is with great interest that I read your article on the need for people to save and to invest whatever funds they have to provide for a nest egg during retirement.  There is no doubt about that. However, with regard to investment, it is sometimes frightening when the investment turns against you and instead of getting more value for money, one loses part of the principle sum. Although fixed deposits give you a lower return, it is much more secure, considering that one has between 20 and 35 years to live after retiring. 

At retirement age, I feel we should not take any investment risks but instead go for calculated guaranteed returns such as fixed deposit and work out a plan to stretch the ringgit. At this age, we cannot take risks because when the investment turns against us, there is no way we can replace the loss.  


When playing it safe might not be that safe after all

Q & A on financial planning 

Q: I CURRENTLY have about RM120,000 in my FD, which only provides me a 3.8% annual return. Can you suggest any other safe methods of growing it faster? As you know, our inflation rate is about 6% per year, which means my money is at a losing rate of 2.2% (6% to 3.8%) if I keep it in FD.
SW Yeoh

A: Congratulations on realising that placing your hard-earned savings in fixed deposit (FD) is not as safe as many people think. You are absolutely right when you said you are indeed losing 2.2% after taking into account your inflation rate of 6%. In fact, playing it safe is not “safe” at all as your money cannot grow fast enough to outpace inflation.  

From our many years of experience in helping investors achieve their financial goals, we have concluded that investors want a reasonable personal rate of return, within an acceptable level of risk. Therefore, it is important to understand that investment returns are always a function of investment risk. 

Generally speaking, the higher the sought-after investment returns are, the higher the associated risks. Therefore, you must be prepared to take risks, with a view of investing in the long term (at least three years), in order to invest successfully. 

The next step is to explore the investment options available to you such as property, stocks and unit trusts. Investing directly in the stock market is great if we have the time, skill and money required. Since most of us do not have the time or skill to invest directly in the stock market, unit trusts could be the answer for us.  

According to well-known investment author and fund manager Peter Lynch, “The Mutual Fund (unit trust) is a wonderful invention for people who have neither the time nor the inclination to test their wits against the stock market, as well as for people with small amounts of time to invest who seek diversification.” 

Before investing, you should understand the various asset classes of unit trust fund. There are three broad asset classes based on risk. The highest risk is associated with the Equity class. Second is the Bond class. The third and lowest is the Money Market class.  

The most basic question you must ask yourself when you decide to buy a particular unit trust fund is: Is it an Equity, Bond or Money Market fund?  

Each of us is in different financial circumstances. Therefore, it is very important that you meet with a qualified Financial Planner to undergo a detailed and systematic process of analysing your investment objectives, risk profile and investment time horizon.  

Without going through a systematic process, it is difficult to design the most appropriate unit trust portfolio that matches your unique risk profile and investment needs. 

Answer provided by MAAKL Mutual Bhd, a Charter member of FPAM 

Note: Financial or retirement planning requires an analysis of the readers’ personal and financial circumstances and knowledge of their goals. Without the necessary details, the answers will have to be general in nature. For a proper plan specifically tailored to the needs of each individual, they are advised to see qualified professionals. 

Dividen ASB tidak diwajibkan zakat

01/12/2006  Utussan Malaysia. Bersama: MOHD. FARID RAVI ABDULLAH
Saya ada mendapat e-mel mengatakan pelaburan di Amanah Saham Bumiputera (ASB) adalah haram kerana ASB ada membuat pelaburan yang tidak berlandaskan syarak.

Pada mulanya, memang saya kurang percaya, takut ia e-mel palsu, tetapi setelah saya semak dengan e-fatwa di website Jabatan Kemajuan Islam Malaysia (Jakim), ada fatwa yang menyebut tentang pelaburan ASB ini dalam fatwa Hukum Wang Dividen Dan Bonus ASB. Soalan saya:

1. Apakah hukumnya pelaburan saya di dalam ASB tersebut?

2. Sebelum ini, saya ada mengeluarkan zakat simpanan ASB tersebut. Apakah hukum zakat saya itu?

3. Saya hendak berhenti melabur dalam ASB, saya bercadang untuk mengeluarkan jumlah wang yang saya telah simpan sahaja dan melabur di pelaburan lain. Mengenai bonus dan dividen ASB tu, apakah tindakan yang paling sesuai untuk saya ambil? Bolehkah dividen dan bonusnya saya gunakan untuk membayar hutang seperti hutang pinjaman pelajaran? Ataupun, bonus dan dividen itu saya derma atau sedekahkan?

JAWAPAN: Persoalan mengenai ASB mendapat perhatian daripada Jawatan Kuasa Perunding Hukum Syarak Negeri Selangor, justeru keputusannya adalah seperti berikut;

* Ahli Jawatankuasa Perunding Hukum Syarak (Fatwa) membincangkan perkara di atas dengan penuh teliti dan panjang lebar dan mengambil keputusan seperti berikut:

*.i. Zakat Daripada Wang Bonus Dan Dividen ASB

Keputusannya: Wang bonus dan dividen yang diterima daripada hasil pelaburan ASB adalah tidak diwajibkan zakat kerana pelaburan bercanggah dengan hukum syarak.

*.ii. Bolehkah wang digunakan pergi menunaikan Haji ke Tanah Suci Mekah.

Keputusannya: Ahli Jawatankuasa yang hadir bersetuju memberi pandangan bahawa oleh kerana pelaburan ASB pada masa ini, terdapat pelaburan di tempat-tempat yang bercanggah dengan hukum syarak, maka ia tidak diharuskan sehingga pihak ASB membersihkan dan tempat-tempat tersebut.

Maka dapatlah disimpulkan di sini seperti berikut:

Sekiranya sebelum ini kita melabur tanpa mengetahui hukumnya, maka kita dianggap tidak tahu. Namun setelah mengetahui keterlibatan pelaburannya yang tidak syarie, adalah salah dan berdosa untuk terus terlibat dengannya. Seakan-akan kita reda dan bersetuju malah memberi sokongan kepada sesuatu yang tidak dibenarkan syarak.

Zakat simpanan memang perlu dikeluarkan daripada wang simpanan tersebut kerana ia adalah wang kita yang telah mencapai haul dan nisab zakat.

Namun pertambahan yang terhasil daripada simpanan tersebut (dividen, bonus dan lain-lain) tidak perlu dizakat kerana ia terhasil daripada urusniaga yang tidak syarie. Motif zakat adalah menyucikan harta yang halal kerana perkaitannya dengan hak golongan asnaf dan bukan menyucikan harta yang status asalnya memang tidak halal untuk dihalalkan.

Dividen dan bonus yang terhasil masih perlu dikeluarkan supaya ia tidak lagi berkembang (dilupuskan). Melupuskannya melalui pembayaran hutang atau pinjaman pelajaran, bermakna kita masih mengambil manfaat daripada harta yang tidak syarie.

Jadi cara terbaik adalah dengan menyalurkannya kepada pertubuhan awam atau pertubuhan berkaitan khidmat sosial yang memerlukan dana seperti pertubuhan sukarela yang bertindak dalam waktu-waktu kecemasan, bencana alam atau sebagainya (kemaslahatan awam).

Bukan dengan niat sedekah atau amal jariah, sekadar satu bentuk pemberian dan sokongan terhadap khidmat sosial mereka yang menyeluruh kepada segenap lapisan masyarakat tanpa mengira status agama, bangsa dan sebagainya.

Saya mendapati ada fatwa yang menyebut tentang hukum insurans nyawa. Saya mengambil insurans dengan sebuah syarikat insurans tetapi skim berlandaskan Islam (menurut agen insurans saya). Harap ustaz dapat beri penjelasan tentang hukum insurans ini, sebab saya memang keliru.

JAWAPAN: Mengikut keputusan majlis fatwa kebangsaan disebut insurans nyawa sebagaimana yang dikendalikan oleh kebanyakan syarikat insurans yang ada pada hari ini adalah haram dan sebagai suatu muamalah yang fasad kerana akadnya tidak sesuai dengan prinsip-prinsip jual beli dalam Islam;

a. mengandungi gharar (ketidaktentuan)

b. mengandungi unsur judi.

c. mengandungi muamalah riba

Secara puratanya kebanyakan ulama tidak menyetujui konsep insurans nyawa hari ini kerana terdapat unsur perjudian, ketidaktahuan dan ketidaktentuan dalam kontrak tersebut.

Sistem takaful telah dibincangkan secara intensif oleh para ulama mutakhir dalam mencari penyelesaian terhadap produk atau muamalah yang boleh menangani atau mengurangi kesulitan individu apabila berlaku kecelakaan.

Ia diimplimentasi pada hari ini dan sewajarnya menjadi pilihan untuk menghadapi risiko pada masa akan datang. Syarikat-syarikat Takaful yang menawarkan produk ini mendapat sambutan yang memberangsangkan sehingga memaksa institusi lain (insurans konvensional) menerbit dan melancarkan produk takaful mereka walaupun mungkin sebahagiannya tidak mendapat pengiktirafan daripada Badan Penasihat Syariah yang berautoriti.

Oleh kerana itu, setiap pelanggan perlu bertanya secara mendalam tentang maklumat produk khususnya berkaitan sijil pengiktirafan syariah daripada badan yang berautoriti, contohnya Bank Negara Malaysia. Pastikan kita meminta untuk melihat sijil ini kerana sebahagian agen sendiri mungkin agak keliru terhadap sistem insurans nyawa konvensional dengan takaful.

MIHAS 2007 – Malaysia International Halal Showcase at KLCC

Yesterday May 11, 2007: Malaysia Prime Minister and The King have visited us at Booth J06 KL Convention Centre, next to KLCC and Mandarin Hotel. The Prime Minister advises us to focus on this sunrise business i.e the unit trust. “Stay focus and provide excellence service …”. Below are one of the photos that the press snapped but didn’t publish.


 From right to left: Shima, Datuk Sri Abdullah, … , Yg Arif & Jaslinah.

We will be at booth J06 until 13 May (this Sunday). Come and visit us. There’s plenty of special gift awaits you.

What is the difference between unit trust fee charges in Malaysia and US?

Question from

I’ve been wondering why is the unit trust fee charge in Malaysia is much more higher than in US. I want to invest but I still new so I don’t know much bout this. I need some new information. Thanks!

Best Answer – Chosen By Voters

It is due to the diferent tax systesms.

The Us is more geared towards small to medium investors than Malaysia is currently

Is Unit Trust a good way to invest our money?

Below are answers that I gathered from 

Answer 0: 

From what i get from this blog (… invest in fixed deposit in bank offers security, but it comes with a low rate of interest. If invest in stock market, we have great potential for getting high return, but it comes with high risk. If invest in unit trust, it has relatively low risk and reasonable rate of return. So, is unit trust really a good way to invest our money?

Answer 1: 

It’s a way of investing in the stock market without the ‘direct’ risk. Unit trusts invest in alot of different shares, so the risk is reduced because if one lot of shares go down, they have others to make up the loss. It is still a riskier investment than deposits and you can still lose money. It all depends on how much risk you are prepared to take wih your money. Unit trusts should be viewed as a medium to long term investment (5 years minimum, preferrably more) so don’t put in all your money, or any that you will be needing in a short time. Over a reasonable period of time, unit trusts generally outperform deposits, but there are no guarantees!


26 years in the financial services Industry

Answer 2:

Its a managed fund, which means that there is a ‘professional’ managing how the funds are invested. An advantage of unit trusts is that because of the larger amount of (pooled) money, the greater the opportunities to compile a diverse and balanced portfolio. Make sure the fund is invested :

a) in a balanced way (not putting all you eggs in one basket, this will prob. be a mixture of ixed interest, shares, bonds, maybe some cash investments) and

b) has diversity (in case one egg goes rotten, it doesn’t mean the others/ or the investment in total will be ruined!)

c) check the conditions for entering and exiting the fund: fees etc. and what happens if someone pulls out (do the other investors have to cover that share / do the remaining investors recieve the benefits remaining after the original contribution is returned to the leaving party etc.

Check the funds’ Investment strategy and make sure that you can see a balanced (usually in a pie graph is easiest) approach. Its’ always worthwhile to check the funds’ ethical policies to make sure you are not investing in companies that exploit child-workers or are responsible for environmental damage.

Check the qualifications of the fund manager and ask for look at their management history – how have the investments the manager have chosen performed for the clients etc. have they ever been bankrupt/had to liquidate.

I like to think of my investment money as though it were if I were sending my child to a new school – you don’t want your child to be stuck somewhere they hate, or if there is poor performance standards etc.


me! (this is only general advice, please make sure you see an impartial/independent professional before you actually invest your hard earned money.


KLmartOutlook: Buying likely to pick up steam

Business Times Malaysia

APART from the bullish catalyst from the rally in the US Dow Jones Industrial Average and regional stock markets to new records, the generous general offer for blue-chip heavyweight Maxis Communications’ outstanding shares, at a 20 per cent premium to the stock’s pre-suspension price of RM13 a share by owner Ananda Krishnan (AK) provided the added fuel required to sustain the bullish breakout on Bursa Malaysia last week. In fact, news of this privatisation proposal lifted share prices of top-tier telcos, which contributed 43.4 per cent to the benchmark index’s surge last week.

The privatisation news of Maxis came as a surprise, hot on the heels of a similar announcement by Permodalan Nasional Berhad’s proposal to take Island & Peninsular and Petaling Garden private, and opened the floodgates to more speculation on which company will be taken private next.

The speculation is not confined to companies under AK’s stable alone (notably Astro and Tanjong) but includes companies like YTL Power, IOI Properties, Magnum, Nestle and Amway.

Short-term impact from privatisation is positive for the local bourse as most of the time the minority shareholders get a golden handshake in the form of a good premium over the last traded price and this money has to be invested in other counters.

Among the abovementioned potential privatisation candidates, Astro and YTL Power still provide some good capital appreciation based on their target price of RM6.10 and RM2.74 respectively. Astro has just announced a revision in subscription packages which will enhance the average revenue per user by 7.7 per cent and the net profit is expected to grow by 60.6 per cent in fiscal year 2008 (FY08) after contracting last year.

YTL Power has been an underperformer in the recent rally despite being the top M&A pick in the sector. It is currently bidding for several power plant projects in Sabah, South Africa and India, and has a huge cash reserve of RM6.2 billion. Earnings growth in FY08 will also stem from the 7 per cent tariff hike at Wessex Water. Moreover, with Malakoff shareholders expected to receive the cheques for the RM9.3 billion capital repayment on May 30 2007, interest may pick up in other power players and index-linked counters as well. Tenaga is on the top most list of undervalued power players based on its target price of RM15.50.

Meanwhile, the price trends in palm oil futures are indicating a prolonged bullish period for the sector with some industry experts predicting the crude palm oil price to break pass RM2,500 a tonne this year. This is positive for plantation companies, which have seen some softening in share prices lately on worries of potential imposition of a windfall tax or a cooking oil price stabilisation tax by the Government to subsidise the escalating cost of producing palm-oil based cooking oil. The impact of these taxes is negligible when CPO prices are on the rise and investors should view this as a good opportunity to pick up some laggards in the sector like United Malacca.

As for the broader market, the above factors and the underlying bullish tone should render a positive outlook for KLCI this week. The immediate risk would be the performance of the US markets after a long winning streak and China, especially after the holidays.

Technical outlook

Despite the three-day holiday shortened week, the benchmark Kuala Lumpur Composite Index (KLCI) surged 38.63 points, or 2.9 percent higher to close at a new record high of 1,363.40, but average daily traded volume moderated to 1.45 billion shares, compared to the 1.56 billion shares average in the previous week.

The KLCI eased to an intra-day low of 1,313.66 on Monday morning, in line with softer regional markets after China’s central bank raised the reserve requirement of commercial banks to prevent an overheating economy. However, the benchmark exploded upwards after returning from a two-day holiday break, boosted by record breaking rallies on the Dow due to strong corporate earnings and M&As, lifting the blue-chip index for a bullish breakout to close at a new record high by Friday.

However, lower liners were relatively benign as retailers stayed mostly sidelined and cautious given the extended holiday break, while blue chips dominated the gainers list. The Second Board Index (SBI) was up 1.12 points, or 1.1 per cent week-on-week to close at 104.14, but the Mesdaq Composite Index (MCI) eased 0.46 point, or 0.3 per cent to settle last Friday at 140.61.

The daily slow stochastics indicator for the KLCI extended higher towards the initial overbought region following a buy signal on the previous week, but the weekly indicator sustained its bullish ascent into the overbought zone. The 14-day Relative Strength Index (RSI) indicator also extended higher to neutralise an earlier bearish divergence signal, while the 14-week RSI continued rising into the overbought zone.

Despite the overbought readings on momentum indicators, the daily Moving Average Convergence Divergence (MACD) trend indicator has turned bullish with a fresh buy signal triggered following last week’s strong breakout rally, which will negate a bearish divergence signal against the daily KLCI price chart. The daily parabolic Stop-And-Reverse (SAR) indicator has sparked a buy signal, reinforcing the buy signal on the weekly parabolic SAR which should promote further upside bias.


As correctly anticipated last week, a bullish breakout did emerge to fuel upside for a rally extension to new record highs on the KLCI. For the coming week, daily trading volumes should improve as more investors and retailers return from their holidays to participate in the local market’s bullish run, hopefully to the region of above the two-billion-share mark. The anticipation that more listed companies may be taken private by major shareholders should drive a wave of buying frenzy on undervalued companies in the immediate term.

With the recent record high of 1,334 (IS) broken last week, this level will provide the critical immediate resistance-turn-support level on any near-term profit-taking dips. A stronger support platform is available at the psychological 1,300 (S1) level, while 1,285 (SL), the previous significant peak of February 26, will act as the stop-loss level in the very unlikely event of a sharp correction. On the upside, immediate resistance is revised higher to 1,380 (IR), with 1,400 (R1) as the next psychological hurdle. Going forward, higher upside targets of 1,440 (R2) and 1,480 (R3) are likely to be achieved in coming months.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

Unit trust funds get off to a dazzling start

UNIT trust funds entered 2007 at breakneck speed, with seven new funds emerging in the first 24 days and all snapped up as quickly as they were launched.

From the seven, five unit trust funds, including one from an insurance outfit, offered a combined 5.6 billion units valued at RM1.8 billion to retail investors.

The surge in new funds has a lot to do with the Government’s decision to relax rules in April 2005, alllowing unit trust funds to be invested overseas.

Since then, 56 offshore funds have been launched up to January 24 this year enmassing a fund size of RM11.55 billion.

Last year itself, 16 unit trust funds looked beyond Malaysia’s shores to tap the overseas markets.

Today, local investors have a wide range of funds with equally diverse risk profiles to choose from; and with the relaxed rules, their options are now widened to include funds that cut across continents and sectors previously forbidden.

Taking the cue from the strong performance of the local and regional bourses, fund managers dazzle investors, many of whom are in retirement or planning for their golden age, with new “innovative” products that offer value for money.

With access to global investment management experts, offshore investment allows an investor a greater chance to diversify any investment made across many different markets and currencies.

Demand was met with supply which was abundant in the market that grew by RM20 billion, or 20.4 per cent, as at November 2006.

In that same period, the fund industry flourished to RM118 billion, easily surpassing the RM98 billion it recorded in 2005, the Federation of Malaysian Unit Trust Managers (FMUTM) said.

Yet, with a net asset value that is expected to grow by more than 10 per cent this year and more than 400 funds flooding the local market, the industry fund size still lags behind matured markets.

Despite having a smaller population than Malaysia, Australia’s 20 million citizens’ fund size is a whopping RM2.7 trillion.

The numbers alone make unit trust companies sit up, lick their lips and pledge to spread the good word in the hope that the public will part with their savings to invest in this sector.

“The demand is definitely increasing and the potential for the unit trust industry to grow is phenomenal,” said MAAKL Mutual Bhd chief executive officer and executive director Wong Boon Choy.

Although unit trusts offer potentially superior returns relative to fixed deposits over the longer term, they are still inferior to traditional savings instruments.

Wong said that in Malaysia, for every RM4.5 placed in fixed deposits only RM1 is invested in unit trusts. In the US, the ratio is 1:1.

Liquidity is not short: Bank Negara Malaysia has pointed out that individual fixed deposits in the country totalled RM212 billion as at November last year.

In addition, there is a potential source of RM56 billion from the Employees Provident Fund (CPF) Members Investment Scheme, Wong added.

The FMUTM, the industry’s umbrella body, has been urging the Government to liberalise the pension industry to include unit trusts as a potential investment tool for the working public.

The plan is not new. Europe and the US have blazed the trail of unit trust investing.

The US’ mutual fund market is larger than its banking sector simply because social security employers and employees can contribute to the 401(k) plan, a private pension scheme that allows them to contribute portions of their income to the plan on a pre-tax basis.

FMUTM president Datuk Tunku Ya’acob Tunku Abdullah said last year that the Securities Commission had announced that the industry will be consulted on the introduction of unit trust funds for retirement purposes.

“We strongly believe that this initiative will boost the retirement savings of the people and also the local capital market,” Tunku Ya’acob said.

OSK Research to revise upwards KLCI target

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OSK Research Sdn Bhd will revise upwards its target for the KLCI target above 1,380 points given the bullish stock market and positive news flow, its head of research Kenny Yee said.

He said the KLCI’s performance reflected retail and foreign investors’ confidence in the stock market and expected their participation to increase in the near future.

“The retail participation quantum here has not reached its full momentum like during the previous bull run. There is still enough positive news flow to keep retail interest growing in the local stock market,” he said.

He was speaking to reporters after launching OSK Research’s third edition of its “Top Malaysian Small Companies (The 100 Jewels)” handbook in Kuala Lumpur on April 27.

He said the stock markets in China and Korea had already reached their all-time highs but that the KLCI had yet to realise its full potential yet.

Yee said hedge fund managers were also buying into the KLCI as a longer term investment of at least six months as they had indicated there could be more upside to the local bourse.

On its latest list of 100 small capitalised companies, Yee said OSK Research expects their performance to improve even more, given rising retail investor interest in them and were likely to outperform the KLCI.

“The 100 Jewels showcases an addition of 45 new companies into the list, necessitated by the fact that 55 of the previous 100 have graduated from being a small cap company, including the KNM Group and Dialog Group.”

“However, even among the companies still in the category such AZRB, ICP and IJM Plantations, their share price performances have significantly outperformed the KLCI,” he said.

Yee said the small cap earnings were projected to grow by 26.5% year-on-year, above the 18.5% y-o-y growth projected by OSK Research for the KLCI.

“We continue to seek value in companies that are both under-researched and under-appreciated. For the latest volume, we raised the market capitalisation threshold from RM750 million to RM1 billion to reflect the improved market sentiment over the past 12 months,” said Yee.

On the sectors that are likely to perform well this year, Yee said the front-runners were property, construction, oil and gas- and steel-related counters.

He said among the underachievers last year were automotive- and consumer-related stocks, adding that OSK was not very positive on the automotive sector.

Tips on how to spot investment scams


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KUANTAN: The Securities Commission has released an alert to educate the public on ways to recognise illegitimate Internet investment schemes.

In a pamphlet available to visitors at the Permodalan Nasional Berhad’s Malaysian Unit Trust Week, the SC outlined the characteristics of an illegitimate investment scheme.

For example, they may offer investors a scheme that guarantees enormous returns without posing any financial risk to them.

They also tend to assure investors that they will receive returns as high as 30 per cent per month.

The company’s contact address may be based in countries where investors would be unable to ascertain its validity and status.
Investors would also find it difficult to find information on the company’s licence or of its existence in the webpages of any authorities.

Some may claim that their activities do not require a licence or that their licence was issued by another country.

Their offers are also available for a short time. They will also come with instructions to wire the money to a foreign bank account.

The SC also warned the public that the web pages may be designed in a professional manner to mislead investors, complete with details such as the latest share prices, market commentaries, market news and links to other financial web pages.

It added that should indiviiduals become involved in recruiting others, they could be found guilty of propagating illegitimate investment schemes.

You need between RM1.4 million and RM2.8 million by 2027.

NST Online » Frontpage


Where will you will be when you’re 64?
Get a head start for twilight years


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A life of comfort and good health in retirement is not beyond the average Malaysian executive despite cases of some who ended penniless after wasting their Employees’ Provident Fund savings in poor investments. Financial experts say prudent investments in sound financial instruments can yield handsome returns in old age. ANIS IBRAHIM, SUGANTHI SUPARMANIAM, HEIDI FOO and PRESENNA NAMBIAR have the stories.


CAN a 35-year-old Malaysian executive earning about RM4,000 a month afford a comfortable lifestyle after retirement at 55?

This is a question often on the minds of those on the threshold of middle age but which seldom yields a definite answer.

Yes, it is possible to live the same lifestyle in 20 years’ time but it is going to cost a bomb.

One will need to have between RM1.4 million and RM2.8 million at retirement to maintain the same lifestyle depending on which financial planner one talks to.
Besides inflation, which will reduce the amount of items one can buy in 20 years with the same amount of money available today, there is also the astronomical cost of medical treatment in old age.

Malaysians will have to bear much higher medical costs in the twilight of their lives, especially so in the light of the longer life expectancy of Malaysian men and women of 72 and 76 respectively.

Despite the frightening prospect of not having enough money in old age, there is still good news for most: Good financial planning can ensure a problem-free retirement.

The first step to take is to realistically identify the lifestyle one wants at retirement and work towards attaining it.

The next is to identify the financial instruments to be used to accumulate between RM1.4 million and RM2.8 million by 2027.

Integral to this would be the savings one accumulates with the Employees’ Provident Fund — about RM500,000 for the person earning about RM4,000 at 35 years of age.

Financial planners suggest several ways of going about this including investing in the stock market, unit trusts and property, saving money in the bank and buying an endowment insurance policy.

But how much should one invest to live comfortably after retirement?

Some financial planners say one should put aside a third of the monthly income — or RM1,300 for a person taking home RM4,000 a month — for investments.

Others say 20 per cent would suffice if one cannot afford more.

While these may hold promise of a rosy future, there are unexpected pitfalls for the unwary, including the vagaries of the stock and property markets and the general economic condition of the nation.

For those who cannot expect as much monthly after retirement as they did while working, the CPFsuggests that they work on estimated monthly financial returns of 40 per cent of their salaries.

This is based on the International Labour Organisation’s (ILO) “replacement rate” for salaries after retirement.

CPFofficials say that while 75 per cent would come from their CPFsavings, Malaysians would still have to depend on other sources of income for the rest.

Developed countries like the United Kingdom and the United States apply a replacement rate of between 60 and 75 per cent of the average monthly salary.

All told, the average 30-something Malaysian in the private sector cannot depend on his CPFsavings to ensure a comfortable lifestyle in retirement.

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Monitor your unit trust investments


NO INVESTMENT is without risk. You cannot get higher rates than that given by a bank without some risk. 

All unit trust investments must be monitored by the investors weekly. 

As soon as they have accumulated to the desired amount, the unit trust should be sold. 

It is not true that we have to leave the unit trust for a few years to see some dividends. 

Remember, fund managers make money for the company they work for. Without your funds they will have no work. 

L.B.L,  Petaling Jaya.