IME STOCK PORTFOLIO UPDATE

Quick update for our IME Portfolio

Added KANGER (0170) to our portfolio.

Purchased 6800 units at RM0.315.

Invested amount is RM2142.00

To get quicker updates from us, do follow us on Facebook at:

https://www.facebook.com/investmadeeasy

Cheers and Happy Investing

UNDERVALUED COUNTRY FOR INVESTING, IS THERE ANY LEFT?

I came across an interesting article from Morningstar UK published on the 11th of August 2014 that talks about identifying countries stocks which are still undervalued at that point of time. The countries fair value are rated according to Morningstar's own quantitative price/fair value [ratio] at the country level. Readers please don't ask me how Mornigstar does the calculation as I have no idea either.

The point is to identify countries with stocks that are still undervalued for investors to invest in at that point of time. The good thing is that instead of reading the post, the people at Morningstar were nice enough to illustrate their entire post into a single diagram as shown below:

Undervalued Countries
(Click to Enlarge)

As clearly shown, the lower the value the more undervalued the country is and vice versa. 

Let me just list down these countries from most undervalued to most overvalued as of 11th August 2014:

• Russia (-6.4)
• Brazil (-5.5)
• Australia (-1.2)
• China (-1.1)
• UK (-0.5)
• Chile (0.4)
• Japan (0.5)
• South Korea (1.2)
• France (1.7)
• Mexico (4.1)
• South Africa (4.3)
• New Zealand (4.6)
• Germany (5.1)
• Canada (5.2)
• United States (5.3)
• Sweden (5.5)
• Portugal (5.7)
• Spain (6.4)
• Norway (6.5)
• Finland (8.6)
• India (9.6)

Now the interesting point here is to see how the indices of these undervalued countries have performed ever since the article was published on the 11th of August 2014 (Approximately 8 months plus ago)

I shall be showing the performance of indexes of Brazil, Australia, China, UK, Japan and South Korea. Unfortunately Russia, Chile and France are left out as there are no mutual funds available to invest in these countries from Malaysia. 

Performance of Undervalued Indexes:

BRAZIL

IBOVESPA (Sao Paulo Stock Exchange)

Index : IBOVESPA

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : -1.72%

AUSTRALIA

ASX 200 (Australia Stock Exchange)

Index : ASX 200

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : +7.40%

CHINA

SSE CI (Shanghai Stock Exchange)

Index : SSE CI

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : +100.44%

UK

FTSE 100 (UK)

Index : FTSE 100

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : +7.02%

JAPAN

NIKKEI 225 (Japan)

Index : Nikkei 225

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : +36.24%

SOUTH KOREA

KOSPI CI (South Korea)

Index : KOSPI

Period : 11 Aug 2014 to 22 Apr 2015

Gain/Loss : +5.55%

Summary:

Ranking based on gains made from 11 Aug 2014 to 22 April 2015 for the above indexes are:

1. China (+100.44%)
2. Japan (+36.24%)
3. Australia (+7.40%)
4. UK (+7.02%)
5. South Korea (+5.55%)
6. Brazil (-1.72%)

For many of us, China and Japan have probably fallen into the Overvalued category as of date. At the same time it is easy to assume that there are opportunities for investment in Australia, UK, South Korea and Brazil as the gains are still single digits or negative in the case of Brazil.

On the other hand, if you look at a wider horizon, you may see an opportunity for further gains in the China equity market. China's SSE for example is still 1500 points away from the highs of 2007 as shown below:

Opportunity for growth in SSE

The same opportunity of gain might not apply for Japan's Nikkei which has just hit an all time high 15 year high as shown below:

Nikkei breaching 20,000 points

In a nutshell, we cannot simple assume that a coutry that has made large gain will not continue to do so. At the same time, we might want to find out why some indexes fail to take off. Are there issues in that particular country that makes it unattractive for investors? 

Hence, it is advisable for an investor like you to do further research and read up on the economic outlook of these countries before investing. Remember every effort and time you spent goes toward helping you to make better judgement and decisions!

Cheers and Happy Investing!

Helping You To Invest : 
Would you like the option of investing into unit trust funds with the following benefits:

1. Invest into any fund at only 2% Sales Charge (instead of the 5-6% as charged by Agents)?
2. No exit fees.
3. Have full control over your investment (buy, sell and manage your investment without the need to to through agents)?
4. Enjoy the option to invest in a vast variety of funds (>200 funds), thereby allowing you to invest in different countries and sectors!

Then drop me an email at shanesee03@gmail.com to find out more!

TENCENT HOLDINGS.....DRIVING THE HONG KONG EQUITY MARKET!

Just a short sharing which has relevance with my previous post on "Invest In Hong Kong Equities And Stand To Make More Than 30% Return".

I read with interest an article posted in TheStar yesterday. Despite being a small article, the heading "China's Tencent hits US$200bil market cap for the first time" caught my attention immediately as I recalled seeing the company's name somewhere.

So I read the article as shared below (for your reading convenience) :

Tencent Holdings Hits US$200 billion market cap!

The portion (highlighted in the red box) once again mentioned that the recent surge in Hong Kong listed stocks such as Tencent Holdings was largely due to the influx of funds from China. The article also states that it is expected more money to come pouring into Hong Kong*

*Take caution that the "Expect more money going into Hong Kong" claim is posted by the article. I'm in no situation to tell you whether it is still early or it is too late to invest into Hong Kong. That decision to invests into Hong Kong or not lies in your own effort to do sufficient amount of research and due diligence before investing.

Now I mentioned earlier that the name Tencent Holdings looked pretty familiar and so I did some checking again. Lo behold, I discovered that Tencent Holding is one of the key holdings of the the fund that allocates more then 90% of its fund size into Hong Kong Equity market.  

As a matter of fact, Tencent Holding is the top holding of this fund at 10.63% as shown below:

Fund Holdings taken from the Fund Factsheet

As an investor whom has also invested in this fund since 2014, I am more then happy to give credit the Fund's Fund Manager for having the foresight to invest into Tencent Holdings even before the influx of China money started. Kudos and well done!

Cheers and  Happy Investing!

P/S : Like to know more about this fund? Feel free to drop me an email at shanesee03@gmail.com
P/P/S : I am unable to disclose the name of this fund as it would be deemed bias by other fund houses. So stop accusing me of being a salesman or creating a gimmick. What I am sharing are facts, and my honest opinions.
P/P/P/S : The fund has so far returned me a handsome +50% gain since investing into it from 2014.

INVEST IN HONG KONG EQUITIES AND STAND TO MAKE MORE THAN 30% RETURN? FIND OUT WHY....

A recent article from Reuters dated 8th April 2015 carrying the title "China investors aiming at arbitrage profits make Hong Kong shares soar" has certainly caught my attention in terms of creating an opportunity to invest.

The article states that the main reason for the sudden surge of interest in Hong Kong stocks by China's mutual and hedge funds was "to exploit a major pricing imbalance between the markets, the result of a mainland rally that until now showed little sign of spilling over into Hong Kong."

What it means here is that the Hong Kong equity market is currently playing catch up with the China equity market whereby:

• China-listed blue chips are now about one-third more expensive than their Hong Kong versions
• Chinese dual listed small-caps trade at a premium of 10 times the cost of the same company's shares in Hong Kong

IS THIS TRUE?

Let us reaffirm this scenario by comparing the performance of the Hang Seng Index (Hong Kong) versus the Shanghai Stock Exchange Composite Index (China) from 1st Dec 2014 till 9th April 2015.

Shanghai Stock Exchange (SSE) Composite Index 

(%) Gain from 1st Dec 2014 to 9th April 2015 : +47.66%

Hang Seng Index

(%) Gain from 1st Dec 2014 to 9th April 2015 : +15.31%

Clearly the (%) gain of the SSE Composite Index is about 3.11 times the (%) gain of the Hang Seng Index over the same period.

If the Hang Seng Index were to play catch up, then investors whom invest into Hong Kong equity now stand to make an additional +32.35%. 

IS IT SAFE FOR US TO INVEST?

Obviously for Hong Kong equity market to play catch up with China, a large amount of liquidity must come from China. By that, we are referring to continuous interest from China's mutual and hedge funds. 

From what was reported in the article, there's a huge interest by China mutual and hedge funds as quoted below:

More interest due to attractive evaluation as quoted below:

If there's truth that these mutual and hedge funds from China are going to invest into Hong Kong, then this creates an opportunity for us investors to jump onto the plane before it takes off.

HOW DO WE INVEST? 

There's the option of investing directly into stocks from Hong Kong through various trading facilities offered by our local bank or via international trading companies. These trading platform allows you to buy and sell stocks directly. However to do so, you need to actively manage your investment as well as spend time on researching the right stocks to invest in.

Another option is for you to invest into a mutual fund that invest directly into the Hong Kong equity market. If you are to select this option, the next question would be which fund should you invest into?

Those whom are familiar with mutual fund investing or follow my Top 10 Best Performing Funds Review would be aware that there's an abundance of mutual funds that invest into China equity market. Without a doubt that these funds have provide quite a profitable return to those whom have invested since early 2014.

Now the question is, what about investing in Hong Kong equity market? Is there a fund that invest into this market?

The answer is YES!

A FUND THAT INVEST IN HONG KONG EQUITY AND AVAILABLE FOR EVERYONE?

Out of the hundreds of mutual/unit trust funds available for Malaysian investors, I've discovered only one fund that allocates more then 90% of its fund size into Hong Kong Equity market. 

Here are some key information of this fund:

Fund Size: 

Approximately RM130 million

Fund Allocation:

Sector Allocation:

Performance as of 9th April 2015:

• 3 months : +15.2%
• 6 months : +37,7%
• 1 year : +43.3%

Unfortunately I'm unable to publish the name of this fund in this post to prevent any acquisition of bias towards a particular fund or fund house. However you may email me personally at shanesee03@gmail.com to find out more about this fund.

WARNING AND REMINDER

I am sharing this post as a notification/information to investors that there could exist an opportunity for one to invest into Hong Kong equities. 

In addition, I've also shared that we could invest passively into Hong Kong equities through a specific mutual fund in Malaysia. However there are some key risks that you might experience when investing into mutual funds such as:

• There is no guarantee of profit. In fact there is a possibility that you might suffer losses if the market crashes.
• Your capital is not protected by PIDM
• The fund manager fails to select performing stocks or the stocks selected by the fund manager does not perform well.

Therefore when making an investment that possesses such risk, one should allocate only a portion of your saving into if (if you intend to invest). Diversify your investment into different sectors and markets to safeguard your investment and to prevent total loss of your savings. To know more about diversifying your unit trust portfolio, you may read this article.

That is all for now! Cheers and Happy Investing!

LEMBAGA TABUNG HAJI 2014 DIVIDEND AND BONUS

Here's the latest dividend and bonus for the year 2014 by Lembaga Tabung Haji:

Dividend 2014 : 6.25% 

Bonus 2014 : 2.00%

Calculation of the Dividend and Bonus as shown below:

For historical dividend and bonus by Lembaga Tabung Haji, click HERE

Cheers and Happy Investing!

Like to know more about investing passively for retirement? Feel free to drop me an email at shanesee03@gmail.com

IME STOCK PORTFOLIO (TRIAL RUN)

I've been selecting and picking my own stocks for the past two years with the objective of mid to long term investment (1-5 years). Perhaps by a stroke of luck, the stocks I have picked over the past two years are doing decently well.

This has spurned/motivated me to share my picks for readers here. I do not claim myself to be an expert in stock investment and I do not guarantee that these picks would profit.

Never the less, I would like to share my picks in a portfolio that I would term as "IME Stock Portfolio".

Generally, I select stocks using a three (3) stage filtering process. These stages consist of:

1st Stage

• Filtering stocks based on ROE of that company. Only companies with ROE above 15% are selected.

2nd Stage

• Based on the filtered company from 1st Stage, a simple technical analysis is carried out to determine the sentiment of investors towards that stock.
• For example some stocks have high ROE but is not a popular stock among investors. These stocks would be eliminated from the list.

3rd Stage

• Stocks that passes Stage 1 and 2 will then be used to derived their Fair Value.
• The fair value of these stocks are then compared to their current market price.
• If fair value of these stocks are below or equal the current market price, I will include the stock into the IME Stock Portfolio

SUMMARY

As of date of publishing (6th April 2015), I have identified two stocks that passed Stage 1, Stage 2 and Stage 3. The two stocks are:

• OKA (7140) - Fair Value : RM0.945
• HUA YANG (5062) - Fair Value : RM2.10

These stocks will be parked under the portfolio "IME Stock Portfolio". The number of units purchased are shown below:

Total Value Invested : RM3990.00

I will further update the progress as time goes.

Stay tune and Happy Investing everyone!